Exhibit 10.1

 

EXECUTION VERSION 

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

among

 

BREITBURN OPERATING LP,

as the borrower

 

and

 

BreitBurn Energy Partners LP,

as parent guarantor

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as administrative agent,

Swing line lender and issuing lender

 

AND THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,

as lenders

 

_________________

 

BANK OF AMERICA, N.A.

THE BANK OF MONTREAL

BARCLAYS BANK PLC

CITIBANK, N.A.

CREDIT SUISSE, AG, CAYMAN ISLANDS BRANCH

J.P. MORGAN CHASE BANK, N.A.

THE BANK OF NOVA SCOTIA

ROYAL BANK OF CANADA

UNION BANK, N.A.

U.S. BANK NATIONAL ASSOCIATION

Syndication Agents

 

_________________

 

WELLS FARGO SECURITIES, LLC

Sole Lead Arranger and Sole Bookrunner

 

__________________

 

Dated as of November 19, 2014

 

 

 

 

 

  

TABLE OF CONTENTS

    Page       Article I. DEFINITIONS 2       1.01 Certain Defined Terms 2      
1.02 Other Interpretive Provisions 28       1.03 Accounting Principles 28      
Article II. THE CREDIT 28       2.01 Amounts and Terms of the Commitments 28    
  2.02 Procedure for Borrowings 29       2.03 Conversion and Continuation
Elections 30       2.04 Optional Commitment Reductions and Optional Prepayments
31       2.05 Borrowing Base Determinations; Mandatory Prepayments of Loans 33  
    2.06 Repayment 35       2.07 Fees 35       2.08 Computation of Fees and
Interest 36       2.09 Payments by the Company; Borrowings Pro Rata 37      
2.10 Issuing the Letters of Credit 38       2.11 Payments to the Administrative
Agent; Several Obligations of the Lenders 41       2.12 Sharing of Payments 42  
    2.13 Swing Line Loans 43       2.14 Defaulting Lenders 45       Article III.
TAXES, YIELD PROTECTION AND ILLEGALITY;  replacement of lenders 48       3.01
Taxes 48       3.02 Illegality 51       3.03 Increased Costs and Reduction of
Return 52       3.04 Funding Losses 53       3.05 Inability to Determine Rates
53       3.06 Certificates of Lenders 54       3.07 Mitigation Obligations;
Replacement of Lenders 54       3.08 Survival 55       Article IV. SECURITY 55  
    4.01 The Security 55       4.02 Agreement to Deliver Security Documents 55

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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4.03 Perfection and Protection of Security Interests and Liens 55       4.04
Offset 56       4.05 Subsidiary Guaranty and Security Agreement 56       Article
V. CONDITIONS PRECEDENT 57       5.01 Conditions of Initial Credit Extensions 57
      5.02 Conditions to Extensions of Credit 60       Article VI.
REPRESENTATIONS AND WARRANTIES 61       6.01 Organization, Existence and Power
61       6.02 Corporate Authorization; No Contravention 61       6.03
Governmental Authorization 61       6.04 Binding Effect 61       6.05 Litigation
62       6.06 No Default 62       6.07 ERISA Compliance 62       6.08 Margin
Regulations 63       6.09 Title to Properties 63       6.10 Oil and Gas Reserves
63       6.11 Initial Reserve Report 64       6.12 Gas Imbalances 64       6.13
Taxes 64       6.14 Financial Condition 64       6.15 Environmental Matters 65  
    6.16 Regulated Entities 66       6.17 No Burdensome Restrictions 66      
6.18 Copyrights, Patents, Trademarks and Licenses, Etc 66       6.19
Subsidiaries and Other Equity Interests 66       6.20 Insurance 66       6.21
Derivative Contracts 66       6.22 Full Disclosure 66       6.23 Solvency 67    
  6.24 Improved Real Estate 67       6.25 Anti-Corruption Laws and Sanctions 67
      6.26 QR Energy Acquisition 67

 

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Article VII. AFFIRMATIVE COVENANTS 67       7.01 Financial Statements 68      
7.02 Certificates; Other Production and Reserve Information 69       7.03
Notices 71       7.04 Preservation of Company Existence, Etc. 71       7.05
Maintenance of Property 72       7.06 Title Information 72       7.07 Additional
Collateral 72       7.08 Insurance 72       7.09 Payment of Obligations 73      
7.10 Compliance with Laws 73       7.11 Compliance with ERISA 73       7.12
Inspection of Property and Books and Records 73       7.13 Environmental Laws 74
      7.14 Pledge of Equity in New Subsidiary 74       7.15 New Subsidiary
Guarantors 74       7.16 Use of Proceeds 75       7.17 Operating Accounts 75    
  7.18 Phase I Reports 75       7.19 Further Assurances 75       7.20 Keepwell
(Commodity Exchange Act) 76       7.21 Post-Closing Requirements 76      
Article VIII. NEGATIVE COVENANTS 76       8.01 Limitation on Liens 76       8.02
Disposition of Assets 78       8.03 Consolidations and Mergers 79       8.04
Loans and Investments 79       8.05 Limitation on Indebtedness 81       8.06
Transactions with Affiliates 82       8.07 Margin Stock 82       8.08 Contingent
Obligations 82       8.09 Restricted Payments 83       8.10 Derivative Contracts
83       8.11 Change in Business; Amendments to Organization Documents and
Certain Acquisition Agreements; Corporate Structure; Tax Status 85       8.12
Accounting Changes 85

 

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8.13 ERISA Compliance 85       8.14 Interest Coverage Ratio 87       8.15
Reserved. 87       8.16 Current Ratio 87       8.17 Negative Pledge 87      
8.18 Unrestricted Entities 87       Article IX. EVENTS OF DEFAULT 88       9.01
Event of Default 88       9.02 Remedies 90       9.03 Rights Not Exclusive 91  
    9.04 Lender and Lender Derivative Provider Action 91       Article X.
ADMINISTRATIVE AGENT 92       10.01 Appointment and Authority 92       10.02
Rights as a Lender 92       10.03 Exculpatory Provisions 92       10.04 Reliance
by Administrative Agent 93       10.05 Delegation of Duties 94       10.06
Resignation of Administrative Agent 94       10.07 Non-Reliance on
Administrative Agent and Other Lenders 95       10.08 Administrative Agent May
File Proofs of Claim 95       10.09 Authority of Administrative Agent to Release
Collateral and Liens 96       10.10 The Arrangers and other Agents 96      
Article XI. MISCELLANEOUS 96       11.01 Amendments and Waivers 96       11.02
Notices; Effectiveness; Electronic Communication. 97       11.03 No Waiver;
Cumulative Remedies 98       11.04 Costs and Expenses; Indemnity 99       11.05
Payments Set Aside 100       11.06 Successors and Assigns 101       11.07
Confidentiality 104       11.08 Right of Set-off 105       11.09 Interest. 105  
    11.10 Indemnity and Subrogation 106       11.11 Collateral Matters;
Derivative Contracts; Termination 106

 

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11.12 Renewal and Continuation of Existing Indebtedness 107       11.13 USA
PATRIOT Act Notice 107       11.14 Automatic Debits of Fees 107       11.15
Counterparts 108       11.16 Severability 108       11.17 No Third Parties
Benefited 108       11.18 Entire Agreement 108       11.19 Governing Law,
Jurisdiction and Waiver of Jury Trial 108       11.20 California Judicial
Reference 109       11.21 No Advisory or Fiduciary Responsibility 110      
11.22 NO ORAL AGREEMENTS 110

 

SCHEDULES

 

Schedule 2.01 Commitments Schedule 4.01 Security Documents Schedule 6.07 ERISA
Compliance Schedule 6.09 Title to Properties Schedule 6.13 Tax Matters Schedule
6.15 Environmental Matters Schedule 6.19 Subsidiaries Schedule 6.21 Derivative
Contracts Schedule 7.21 Post-Closing Requirements Schedule 8.01 Liens Schedule
8.04 Investments Schedule 8.05 Indebtedness Schedule 8.08 Contingent Obligations
Schedule 11.02 Lending Offices; Addresses for Notices

 

EXHIBITS

 

Exhibit A-1 Form of Notice of Revolving Credit Borrowing Exhibit A-2 Form of
Notice of Swing Line Loan Notice Exhibit B Form of Notice of
Conversion/Continuation Exhibit C Form of Compliance Certificate Exhibit D Form
of Assignment and Assumption Agreement Exhibit E Form of Note Exhibit F Form of
Pricing Grid Certificate Exhibit G Form of Continuing Guaranty Agreement
(Subsidiaries) Exhibit H Form of Security Agreement Exhibit I-1 Form of U.S. Tax
Compliance Certificate (Non-Partnership Foreign Lenders) Exhibit I-2 Form of
U.S. Tax Compliance Certificate (Non-Partnership Foreign Participants) Exhibit
I-3 Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)
Exhibit I-4 Form of U.S. Tax Compliance Certificate (Foreign Lender
Partnerships)

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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THIRD Amended and restated credit agreement

 

THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT is dated as of November 19,
2014, among BREITBURN OPERATING LP, a Delaware limited partnership (the
“Company”), BREITBURN ENERGY PARTNERS, LP, a Delaware limited partnership
(“Parent”), each of the financial institutions from time to time party hereto
(individually, a “Lender” and collectively, the “Lenders”), and WELLS FARGO
BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the “Administrative
Agent”), as Swing Line Lender (in such capacity, “Swing Line Lender”), and as
Issuing Lender (defined hereinafter).

 

RECITALS

 

A.           The Company, Parent, certain Subsidiaries of the Company, the
Administrative Agent and other lenders and agents are parties to that certain
Second Amended and Restated Credit Agreement dated as of May 7, 2010, as amended
by the First Amendment dated as of September 17, 2010, the Second Amendment
dated as of May 9, 2011, the Third Amendment dated as of August 3, 2011, the
Fourth Amendment dated as of October 5, 2011, the Fifth Amendment dated as of
May 25, 2012, the Sixth Amendment dated as of October 11, 2012, the Seventh
Amendment dated as of February 26, 2013, the Eighth Amendment dated as of
May 22, 2013, the Ninth Amendment dated as of July 15, 2013, the Tenth Amendment
dated as of November 6, 2013, the Eleventh Amendment dated as of February 21,
2014, and the Twelfth Amendment dated as of April 25, 2014 (the “Existing Credit
Agreement”);

 

B.           Pursuant to the Acquisition Agreement as herein defined, Parent
will acquire QR Energy, LP, a Delaware limited partnership, and promptly
thereafter will contribute the equity of that company to the capital of the
Company, with the result that QR Energy, LP will become a wholly-owned
Subsidiary of the Company;

 

C.           QRE Operating, LLC, a Delaware limited liability company, a
wholly-owned Subsidiary of QR Energy, LP, as Borrower, and QR Energy, LP, QRE
GP, LLC, Wells Fargo Bank, National Association, as administrative agent, and
other lenders (the “QR Energy Lenders”) and agents are parties to that certain
Credit Agreement, dated as of December 17, 2010, as amended by that certain
First Amendment dated as of October 3, 2011, Second Amendment dated as of March
16, 2012, Third Amendment dated as of April 11, 2012, Fourth Amendment dated as
of December 20, 2012, Fifth Amendment dated as of September 23, 2013, and Sixth
Amendment dated as of February 28, 2014 (the “QR Energy Credit Agreement”);

 

D.           The parties desire to, effective as of the Effective Date, (i)
repay outstanding indebtedness under the QR Energy Credit Agreement with the
proceeds of Loans under this Agreement and (ii) amend and restate the Existing
Credit Agreement in its entirety as set forth herein; and

 

E.           The amendment and restatement of the Existing Credit Agreement is
not intended by the parties hereto to constitute a novation, or discharge or a
satisfaction of Indebtedness outstanding under the Existing Credit Agreement,
which Indebtedness shall remain outstanding as amended and restated hereunder
pursuant to the terms and conditions of this Agreement;

 

F.           NOW THEREFORE, in consideration of the foregoing recitals, of the
representations, warranties, covenants and agreements contained herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree that the Existing Credit Agreement
is amended and restated to read in its entirety as follows:

 

Third Amended and Restated Credit Agreement — Breitburn Operating LP

 

  

Article I.

 

DEFINITIONS

 

1.01         Certain Defined Terms. The following terms have the following
meanings:

 

“Acquired Company” means QR Energy, LP, a Delaware limited partnership.

 

“Acquisition” means any transaction or series of related transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition of all
or substantially all of the assets of a Person, or of any business unit or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock of a corporation (or similar entity), which stock has ordinary voting
power for the election of the members of such entity’s board of directors or
persons exercising similar functions (other than stock having such power only by
reason of the happening of a contingency), or the acquisition of in excess of
50% of the partnership interests or equity of any Person not a corporation which
acquisition gives the acquiring Person the power to direct or cause the
direction of the management and policies of such Person, or (c) a merger or
consolidation or any other combination with another Person (other than a Person
that is a Subsidiary) provided that the Company or a Subsidiary of the Company
is the surviving entity.

 

“Acquisition Agreement” means that certain Agreement and Plan of Merger, dated
as of July 23, 2014, by and among Parent, Breitburn GP LLC, Merger Sub, the
Acquired Company and QRE GP, LLC.

 

“Administrative Agent” has the meaning specified in the introductory clause
hereto.

 

“Administrative Agent’s Payment Office” means the address for payments as the
Administrative Agent may from time to time specify.

 

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

 

“Affiliate” means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. A Person shall be deemed to control another Person if the
controlling Person possesses the power to direct or cause the direction of the
management and policies of the other Person, whether through the ownership of
voting securities, by contract, or otherwise.

 

“Aggregate Maximum Credit Amount” means the amount of $5,000,000,000.

 

“Agreement” means this Third Amended and Restated Credit Agreement.

 

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Parent, Company or their Subsidiaries from time
to time concerning or relating to bribery or corruption.

 

“Applicable Margin” means, with respect to Base Rate Loans, LIBOR Loans and
LIBOR Market Index Rate Loans, the respective margins therefor as determined
under the Pricing Grid.

 

“Approved Fund” means any Fund 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.

 

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“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.06), and accepted by the Administrative Agent, in
substantially the form of Exhibit D or any other form approved by the
Administrative Agent.

 

“Assumed Indebtedness” means Indebtedness of a Person which (a) is in existence
at the time such Person becomes a Subsidiary, or (b) is assumed in connection
with an investment in or acquisition of such Person, and has not been incurred
or created by such Person solely in contemplation of such Person becoming a
Subsidiary.

 

“Availability Period” has the meaning specified in Section 2.01(c).

 

“Available Borrowing Base” means, at the particular time in question, (i) the
lesser of (x) the Elected Commitment Amount and (y) the Borrowing Base then in
effect minus (ii) the Effective Amount at such time.

 

“Available Cash” means, with respect to Parent, “Available Cash” as defined in
Parent’s partnership agreement on the Effective Date, as such definition may be
amended in a manner reasonably acceptable to the Administrative Agent.

 

“Bankruptcy Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C.
§101, et seq.), as amended, and regulations promulgated thereunder.

 

“Base Rate” means, for any day, the fluctuating rate of interest in effect for
such day which rate per annum shall be equal to the greatest of (a) the rate of
interest as publicly announced from time to time by Administrative Agent as its
“reference rate,” (b) one-half of one percent (0.50%) per annum above the
Federal Funds Rate in effect from time to time, and (c) LIBOR for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus one percent (1.00%). (The “reference
rate” is a rate set by Administrative Agent based upon various factors including
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate.) Any change in the reference rate announced by
Administrative Agent, LIBOR or the Federal Funds Rate shall take effect on the
effective date of such change in the reference rate announced by Administrative
Agent, LIBOR or the Federal Funds Rate.

 

“Base Rate Loan” means a Loan that bears interest based at the Base Rate plus
the Applicable Margin.

 

“Borrowing” means a Revolving Credit Borrowing or a Swing Line Borrowing, as the
context may require.

 

“Borrowing Base” means at the particular time in question, the amount provided
for in Section 2.05; provided, however, in no event shall the Borrowing Base
ever exceed the Aggregate Maximum Credit Amount.

 

“Borrowing Base Deficiency” means at any time, the Effective Amount exceeds the
Borrowing Base then in effect.

 

“Borrowing Base Period” means the period from the Effective Date to the initial
Scheduled Borrowing Base Determination Date, and thereafter, each six-month
period between Scheduled Borrowing Base Determination Dates.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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“Borrowing Date” means any date on which a Borrowing occurs under Section 2.02.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in Houston, Texas, New York, New York, or San Francisco,
California are authorized or required by law to close and, if the applicable
Business Day relates to any LIBOR Loan or LIBOR Market Index Rate Loan, means
such a day on which dealings are carried on in the applicable offshore dollar
interbank market.

 

“Capital Lease” means, when used with respect to any Person, any lease in
respect of which the obligations of such Person constitute Capitalized Lease
Obligations and the amount thereof shall be the capitalized amount thereof
determined in accordance with GAAP.

 

“Capitalized Lease Obligations” means, when used with respect to any Person,
without duplication, all 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 shall have been
or should be, in accordance with GAAP, capitalized on the books of such Person.

 

“Cash Equivalents” means: (a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof and backed by the full
faith and credit of the United States and having maturities of not more than
twelve (12) months from the date of acquisition; (b) certificates of deposit,
time deposits, eurodollar time deposits, or bankers’ acceptances having in each
case a tenor of not more than twelve (12) months from the date of acquisition
issued by, and demand deposits with, any U.S. commercial bank or any branch or
agency of a non-U.S. commercial bank licensed to conduct business in the U.S.
having combined capital and surplus of not less than $500,000,000, whose long
term securities are rated at least A (or then equivalent grade) by S&P and A2
(or then equivalent grade) by Moody’s at the time of acquisition; (c) commercial
paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s at the time of
acquisition, and in either case having a tenor of not more than twelve (12)
months; (d) debt securities which are registered under the Securities Act of
1933, as amended (the “Securities Act”) (and not “restricted securities” in the
Company’s hands as defined in Rule 144 under the Securities Act), or adjustable
rate preferred stock traded on a national securities exchange and issued by a
corporation duly incorporated under the laws of a state of the United States, or
issued by any state, county or municipality located in the United States of
America; provided, however, that such debt securities are rated A2 by Moody’s
and A or better by S&P at the time of acquisition, and such debt securities have
a maturity not in excess of twelve (12) months from the date of creation
thereof; (e) repurchase agreements with a term of not more than seven (7) days
for underlying securities of the types described in clauses (a) and (b) above;
and (f) money market mutual or similar funds having assets in excess of
$100,000,000.

 

“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of the Company or any of its Subsidiaries
having a fair market value in excess of $20,000,000.

 

“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, implementation, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, guideline
or directive (whether or not having the force of law) by any Governmental
Authority; provided that notwithstanding anything herein to the contrary, (x)
the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or the United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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“Change of Control” means:

 

(a)          General Partner shall cease to own, directly or indirectly, all of
the general partner interest (including all outstanding securities convertible
to general partner interests) of the Company; or Breitburn GP LLC shall cease to
own, directly or indirectly, all of the general partner interest (including all
outstanding securities convertible to general partner interests) of Parent; or

 

(b)          Parent shall cease to own, directly or indirectly, all of the
limited partnership interests (including all outstanding Equity convertible to
limited partner interests) of the Company, or shall cease to own, directly or
indirectly, all of the general partnership interest (including all outstanding
Equity convertible to general partner interests) of the Company, or shall cease
to own, directly or indirectly, at least 51% of the member interest (including
all outstanding Equity convertible to limited partner interests) of Breitburn GP
LLC; or

 

(c)          a sale of all or substantially all of the assets of the Loan
Parties taken as a whole to any Person or group of Persons; or

 

(d)          the liquidation or dissolution of Parent or the Company; or

 

(e)          any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act, but excluding any employee benefit plan of such
person or its subsidiaries, and any person or entity acting in its capacity as
trustee, agent or other fiduciary or administrator of any such plan) becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a person or group shall be deemed to have “beneficial ownership” of
all securities that such person or group has the right to acquire, whether such
right is exercisable immediately or only after the passage of time (such right,
an “option right”)), directly or indirectly, of 50% or more of the equity
securities of the Parent or of the general partner of the Parent entitled to
vote for members of the board of directors or equivalent governing body of the
Parent or the general partner of the Parent on a fully-diluted basis (and taking
into account all such securities that such “person” or “group” has the right to
acquire pursuant to any option right); or

 

(f)          the first day on which a majority of the Board of Directors of
Breitburn GP LLC are not Continuing Directors. “Continuing Directors” means any
member of the board of directors (or managers, in the case of a limited
liability company) of Breitburn GP LLC, who (A) is a member of such board of
directors or managers as of the date of this Agreement or (B) was nominated for
election or elected to such board of directors or managers with the affirmative
vote of two-thirds of the Continuing Directors who were members of such board of
directors or managers at the time of such nomination or election (not including
as board nominees any directors which the board is obligated to nominate
pursuant to shareholders’ agreements, voting trust arrangements or similar
arrangements).

 

“Code” means the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder.

 

“Collateral” means all property of any kind which is subject to a Lien in favor
of Administrative Agent to secure the Obligations or which under the terms of
any Security Document is purported to be subject to such Lien.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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“Commitment” means, as to each Lender, such Lender’s obligation to make
Revolving Credit Loans and to participate in Letters of Credit and Swing Line
Loans up to such Lender’s Pro Rata Share of the least of (a) the then-effective
Borrowing Base, (b) the Elected Commitment Amount, as such commitment may be
increased from time to time in accordance with the provisions hereof or (c) the
Aggregate Maximum Credit Amount, as such commitment may be terminated and/or
reduced from time to time in accordance with the provisions hereof.

 

“Commitment Fee” means the variable fee as determined by the Pricing Grid
payable pursuant to Section 2.07(a).

 

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute, or any rule,
regulation or order of the U.S. Commodity Futures Trading Commission (or the
application or official interpretation of any thereof).

 

“Company” has the meaning specified in the introductory paragraph hereto.

 

“Compliance Certificate” means a certificate substantially in the form of
Exhibit C.

 

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

 

“Consolidated Interest Expense” means, with respect to the Loan Parties, for any
fiscal period, the aggregate amount of all costs, fees and expenses paid by the
Loan Parties in such fiscal period which are classified as interest expense on
the consolidated financial statements of the Loan Parties, all as determined in
conformity with GAAP.

 

“Consolidated Net Income” means, for any period, the net income (or net loss) of
Parent and its Consolidated Subsidiaries, on a consolidated basis, for such
period determined in accordance with GAAP; provided that (a) the effect, if any,
of non-cash gains, losses or adjustments under FAS 133 as a result of changes in
the fair market value of derivatives shall be excluded from the calculation of
net income (or net loss); and (b) there shall be excluded the net income of any
Subsidiary of Parent to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary is at the time restricted or not
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirements of Law applicable to such Subsidiary.

 

“Consolidated Subsidiaries” of Parent means all Restricted Subsidiaries and
Unrestricted Entities that are consolidated in accordance with GAAP.

 

“Contingent Obligation” means, as to any Person without duplication, any direct
or indirect liability of that Person with or without recourse, (a) with respect
to any Indebtedness, dividend, letter of credit or other similar obligation (the
“primary obligations”) of another Person (the “primary obligor”), including any
obligation of that Person (i) to purchase, repurchase or otherwise acquire such
primary obligations or any security therefor, (ii) to advance or provide funds
for the payment or discharge of any such primary obligation, or to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the holder
of any such primary obligation against loss in respect thereof (each, a
“Guaranty Obligation”); (b) with respect to any Surety Instrument issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments; or (c) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person,
other than in the ordinary course of business, if the relevant contract or other
related document or obligation requires that payment for such materials,
supplies or other property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered. The amount of any
Contingent Obligation shall, in the case of Guaranty Obligations, be deemed
equal to the lesser of (a) the stated maximum amount, if any, of such Contingent
Obligation and (b) the maximum stated or determinable amount of the primary
obligation in respect of which such Guaranty Obligation is made or, if not
stated or if indeterminable, the maximum reasonably anticipated liability in
respect thereof, and in the case of other Contingent Obligations, shall be equal
to the lesser of (a) the stated maximum amount, if any, of such Contingent
Obligation and (b) the maximum reasonably anticipated liability in respect
thereof.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 6

 

  

“Continuing Directors” has the meaning specified in the definition of “Change of
Control.”

 

“Contractual Obligation” means, as to any Person, any provision of any security
issued by such Person or of any agreement, undertaking, contract, indenture,
mortgage, deed of trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is bound.

 

“Conversion/Continuation Date” means any date on which, under Section 2.03, the
Company (a) converts Base Rate Loans to LIBOR Loans, (b) continues as LIBOR
Loans having Interest Periods expiring on such date as LIBOR Loans, with a new
Interest Period or (c) converts LIBOR Market Index Rate Loans to Base Rate Loans
or LIBOR Loans.

 

“Credit Extension” means and includes the making of any Loans or issuance,
extension of expiry date or increase in amount of any Letter of Credit
(including any Existing Letter of Credit) hereunder.

 

“Current Assets” means, at any time, the current assets of the Parent and its
Restricted Subsidiaries at such time which would be properly classified as
current assets in accordance with GAAP, plus, the Available Borrowing Base at
such time, less, for purposes of this definition, any non-cash gains for any
Derivative Contract resulting from the requirements of FAS 133 at such time.

 

“Current Liabilities” means, at any time, the current liabilities of the Parent
and its Restricted Subsidiaries at such time which would be properly classified
as current liabilities in accordance with GAAP, excluding (a) the current
portion of any maturities under this Agreement and (b) non-cash losses or
charges on any Derivative Contract resulting from the requirements of FAS 133 at
such time.

 

“Default” means any event or circumstance which, with the giving of notice, the
lapse of time, or both, would (if not cured or otherwise remedied during such
time) constitute an Event of Default.

 

“Default Rate” means a rate per annum equal to the lesser of (a) the Highest
Lawful Rate and (b)(i) with respect to LIBOR Loans and LIBOR Market Index Rate
Loans, the interest rate otherwise applicable to such Loans plus 2% per annum,
(ii) with respect to Letter of Credit Fees, the rate otherwise applicable plus
2% per annum, and (iii) with respect to all other Obligations other than (A)
those included in the preceding clauses (i) and (ii), and (B) Obligations under
Lender Derivative Contracts, the non-default interest rate then applicable to
the Base Rate Loans plus 2% per annum.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 7

 

  

“Defaulting Lender” means subject to Section 2.14(e), any Lender that (a) has
failed to (i) fund any portion of its Loans within three (3) Business Days of
the date required to be funded by it hereunder unless such Lender notifies the
Administrative Agent and the Company in writing that such failure is the result
of such Lender’s determination that one or more conditions precedent to funding
(each of which conditions precedent, together with any applicable default, shall
be specifically identified in such writing) has not been satisfied, or (ii) pay
to the Administrative Agent, the Issuing Lender, the Swing Line Lender or any
other Lender any other amount required to be paid by it hereunder (including in
respect of its participation in Letters of Credit and Swing Line Loans) within
three (3) Business Days of the date when due, (b) has notified the Company, the
Administrative Agent, the Issuing Lender, the Swing Line Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to that effect (unless such
writing or public statement relates to such Lender’s obligation to fund a Loan
hereunder and states that such position is based on such Lender’s determination
that a condition precedent to funding (which condition precedent, together with
any applicable default, shall be specifically identified in such writing or
public statement) cannot be satisfied), (c) has failed, within three (3)
Business Days after written request by the Administrative Agent or the Company,
to confirm in writing to the Administrative Agent and the Company that it will
comply with the terms of this Agreement relating to its obligations to fund
prospective Loans (provided that such Lender shall cease to be a Defaulting
Lender pursuant to this clause (c) upon receipt of such written confirmation by
the Administrative Agent and the Company), (d) has, or has a direct or indirect
parent company that has, (i) become the subject of any Insolvency Proceeding, or
(ii) had appointed for it a receiver, custodian, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged
with reorganization or liquidation of its business or assets, including the FDIC
or any other state or federal regulatory authority acting in such capacity;
provided that a Lender shall not be a Defaulting Lender solely by virtue of the
ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a Governmental Authority so long as such
ownership interest does not result in or provide such Lender with immunity from
the jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses (a)
through (d) above shall be conclusive and binding absent manifest error, and
such Lender shall be deemed to be a Defaulting Lender (subject to
Section 2.14(e)) upon delivery of written notice of such determination to the
Company, the Issuing Lender, the Swing Line Lender and each Lender.

 

“Derivative Contract” means any agreement with respect to any future, forward,
swap, cap or collar, option, hedging, derivative or similar transaction covering
oil and gas commodities or prices or financial, monetary or interest rate
instruments, including any and all trades and confirmations entered into
pursuant thereto.

 

“Dispositions” has the meaning specified in Section 8.02.

 

“Dollars”, “dollars” and “$” each mean lawful money of the United States.

 

“Domestic Subsidiary” means any Subsidiary organized under the laws of the
United States or any political subdivision thereof.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 8

 

  

“EBITDAX” means, for any period, the sum of Consolidated Net Income for such
period (a) plus, without duplication, the following expenses or charges to the
extent deducted in the determination of Consolidated Net Income in such period:
exploration expense, interest expense, depletion, depreciation, amortization,
unrealized loss on Derivative Contracts, non-cash charges (including non-cash
share-based payments under FASB Statement No. 123R), loss on sale of assets
(excluding monetization (to the extent permitted under Section 8.10) of
Derivative Contracts maturing within twelve (12) months), cumulative effect of
accounting changes, income taxes, and cash distributions actually received from
Unrestricted Entities and from any entity other than a Restricted Subsidiary;
(b) minus, without duplication, the following gains or credits to the extent
added in the determination of Consolidated Net Income in such period: unrealized
gain on Derivative Contracts, gain on sale of assets (excluding monetization (to
the extent permitted under Section 8.10) of Derivative Contracts maturing within
twelve (12) months), cumulative effect of accounting changes, income from
Unrestricted Entities, income from any other entity other than a Restricted
Subsidiary and other non-cash income.

 

All calculations of EBITDAX, for any applicable period during which a permitted
acquisition or Disposition is consummated shall be determined on a pro forma
basis (such pro forma calculation to be acceptable to the Administrative Agent)
as if such acquisition or Disposition was consummated on the first day of such
applicable period.

 

“Effective Amount” means on any date, the aggregate outstanding principal amount
of all Loans after giving effect to any prepayments or repayments of Loans
occurring on such date plus the LC Obligation.

 

“Effective Date” means the date on which all conditions precedent set forth in
Section 5.01 are satisfied or waived in accordance with Section 11.01.

 

“Elected Commitment Amount” means the aggregate Commitments of all Lenders, as
set forth on Schedule 2.01, as such Commitments may be increased or reallocated
from time to time pursuant to the terms hereof.

 

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 11.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 11.06(b)(iii)).

 

“Environmental Claims” means all material claims by any Governmental Authority
or other Person alleging potential liability or responsibility for violation of
any Environmental Law, or for release or injury to the environment.

 

“Environmental Laws” means all material federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
material administrative orders, requests, licenses, authorizations and permits
of, and agreements with, any Governmental Authorities, in each case having the
force and effect of law and relating to environmental, 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 the Company, any other Loan Party or any of their
respective Subsidiaries 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” means all shares, options, warrants, general or limited partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation, limited liability company, partnership or equivalent entity
whether voting or nonvoting, including common stock, preferred stock, or any
other “equity security” (as such term is defined in Rule 3a11-1 of the General
Rules and Regulations promulgated by the Securities and Exchange Commission
under the Exchange Act).

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 9

 

  

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and regulations promulgated thereunder.

 

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

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by Loan Party or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which
is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete
or partial withdrawal by the Loan Party or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate (other than
pursuant to Section 4041(b) of ERISA), the treatment of a Plan amendment as a
termination under Section 4041(c) or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e)
an event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA, upon the Company or any
ERISA Affiliate.

 

“Event of Default” means any of the events or circumstances specified in Section
9.01.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and
regulations promulgated thereunder.

 

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap
Obligation if, and to the extent that, all or a portion of the guaranty of such
Loan Party of, or the grant by such Loan Party of a security interest or lien to
secure, or the provision of other support by such Loan Party of, such Swap
Obligation (or any guarantee or provision of support thereof) is or becomes
illegal under the Commodity Exchange Act by virtue of such Loan Party’s failure
for any reason to constitute an “eligible contract participant” as defined in
the Commodity Exchange Act at the time such guaranty, grant of security interest
or lien or provision of support of, such Swap Obligation (or any guarantee or
provision of support thereof) becomes effective. If a Swap Obligation arises
under a Master Agreement governing more than one Swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to Swaps
for which such guaranty, grant of security interest or lien to secure or
provision of other support is or becomes illegal.

 

“Excluded Taxes” means, with respect to a Recipient of any payment to be made by
or on account of any Obligation of any Loan Party, (a) Taxes imposed on or
measured by its net income (however denominated), franchise Taxes imposed on it
(in lieu of net income Taxes), and branch profits Taxes, in each case, (i)
imposed by the jurisdiction (or any political subdivision thereof) under the
laws of which such Recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable Lending Office is
located, or (ii) that are Other Connection Taxes, (b) in the case of a Lender,
any U.S. federal withholding Tax that is imposed on amounts payable to such
Lender pursuant to a law in effect at the time such Lender becomes a party
hereto (for the avoidance of doubt, whether as an original party hereto or as an
Assignee) (or designates a new Lending Office), except to the extent that such
Lender (or its assignor, if any) was entitled, at the time of designation of a
new Lending Office (or assignment), to receive additional amounts from the
Company with respect to such withholding Tax pursuant to Section 3.01(a), (c)
Taxes attributable to a failure of a Recipient to comply with Section 3.01(f),
and (d) any Taxes imposed under FATCA.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 10

 

 

“Existing Credit Agreement” has the meaning specified in the recitals hereto.

 

“Existing Letters of Credit” means the Letters of Credit outstanding on the
Effective Date pursuant to the Existing Credit Agreement and the letters of
credit issued by Wells Fargo Bank, National Association outstanding on the
Effective Date pursuant to the QR Energy Credit Agreement.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof, any agreements entered into
pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement
between a non-U.S. jurisdiction and the United States with respect to the
foregoing and any law or regulation adopted pursuant to any such
intergovernmental agreement.

 

“FAS 133” means Statement No. 133 of the Financial Accounting Standards Board.

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“Federal Funds Rate” means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor,
“H.15(519)”) on the preceding Business Day opposite the caption “Federal Funds
(Effective)”; or, if for any relevant day such rate is not so published on any
such preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Administrative Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York, New York time)
on that day by each of three leading brokers of Federal funds transactions in
New York, New York selected by the Administrative Agent.

 

“Fee Letter” has the meaning specified in Section 2.07(c) hereof.

 

“Foreign” means organized under the laws of a jurisdiction other than the United
States or a political subdivision thereof.

 

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

 

“FRB” means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the Issuing Lender, such Defaulting Lender’s pro rata share of the
outstanding LC Obligation other than that portion of the LC Obligation as to
which such Defaulting Lender’s participation obligation has been reallocated to
other Lenders pursuant to Section 2.14 or cash collateralized in accordance with
the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting
Lender’s pro rata share of Swing Line Loans other than Swing Line Loans as to
which such Defaulting Lender’s participation obligation has been reallocated to
other Lenders pursuant to Section 2.14 or cash collateralized in accordance with
the terms hereof.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 11

 

  

“Fund” means any Person (other than a natural person that is (or will be))
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

 

“General Partner” means Breitburn Operating GP LLC, a Delaware limited liability
company.

 

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing and including the
European Union and the European Central Bank.

 

“Guaranties” means, collectively, each Continuing Guaranty Agreement,
substantially in the form of Exhibit G hereto, as applicable, executed by the
Guarantor or Guarantors in favor of Administrative Agent, as same may be
amended, supplemented or otherwise modified from time to time, and (b) the
Guaranties described on Schedule 4.01. “Guaranty” means, individually, any one
of the Guaranties.

 

“Guarantors” means, collectively, Parent and each Subsidiary of Parent that
executes, or has previously executed, a Guaranty pursuant to Section 7.15 hereof
or is party to a Guaranty in connection with the Existing Credit Agreement.
“Guarantor” means, individually, any one of the Guarantors.

 

“Guaranty Obligation” has the meaning specified in the definition of “Contingent
Obligation.”

 

“Hazardous Materials” means any substance regulated or as to which liability
might arise under any applicable Environmental Law, including as a “hazardous
substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic
waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,”
“pollutant,” or words of similar meaning or import, and including: (a) petroleum
hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil
and gas waste, crude oil, and any components, fractions, or derivatives thereof;
and (b) radioactive materials, asbestos containing materials in a friable
condition or polychlorinated biphenyls.

 

“Highest Lawful Rate” means, as of a particular date, with respect to any Loan,
the maximum nonusurious interest rate that under applicable federal and New York
law may then be contracted for, charged or received by the Lenders in connection
with the Obligations.

 

“Hydrocarbon Interests” means leasehold and other interests in or under oil, gas
and other liquid or gaseous hydrocarbon leases wherever located, mineral fee
interests, overriding royalty and royalty interests, net profit interests,
production payment interests relating to oil, gas or other liquid or gaseous
hydrocarbons wherever located including any reserved or residual interest of
whatever nature.

 

“Increase Effective Date” has the meaning specified in Section 2.04(b)(iv).

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 12

 

  

“Indebtedness” of any Person means, without duplication, (a) all indebtedness
for borrowed money; (b) all obligations issued, undertaken or assumed as the
deferred purchase price of property or services (other than trade payables
entered into in the ordinary course of business on ordinary terms); (c) all
undrawn amounts under letters of credit; (d) all non-contingent reimbursement or
payment obligations with respect to Surety Instruments; (e) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses; (f) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person (even
though the rights and remedies of the seller or Lender under such agreement in
the event of default are limited to repossession or sale of such property)
including production payments, net profit interests and other Hydrocarbon
Interests subject to repayment out of future Oil and Gas production; (g) Capital
Leases; (h) all net obligations with respect to Derivative Contracts; (i) all
indebtedness referred to in clauses (a) through (g) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property (including accounts
and contracts rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness; and (j) all
Guaranty Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (h) above. The Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture (other
than a joint venture that is itself a corporation or limited liability company)
in which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person.

 

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

 

“Indemnitee” has the meaning specified in Section 11.04.

 

“Independent Auditor” has the meaning specified in Section 7.01(a).

 

“Independent Engineer” means each of (a) Netherland, Sewell and Associates,
Inc., (b) Cawley Gillespie and Associates, Inc., (c) Schlumberger Limited , (d)
Miller and Lents, LTD and (e) any other independent oil and natural gas reserve
engineers selected by the Company and reasonably acceptable to the
Administrative Agent.

 

“Initial Reserve Report” has the meaning specified in Section 6.11.

 

“Insolvency Proceeding” means (a) any case, action or proceeding relating to
bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshaling of assets for creditors, or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; undertaken under U.S. federal, state or foreign law, including
the Bankruptcy Code.

 

“Interest Payment Date” (a) as to any Base Rate Loan (including a Swing Line
Loan) and any LIBOR Market Index Rate Loan, means the last Business Day of each
fiscal quarter prior to the Termination Date and the Termination Date, and (b)
as to any LIBOR Loan, the last day of each Interest Period applicable to such
Loan, provided, however, that if any Interest Period for a LIBOR Loan exceeds
three months, the date that falls three months after the beginning of such
Interest Period, and the date that falls three months after each Interest
Payment Date thereafter for such Interest Period, is also an Interest Payment
Date.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 13

 

  

“Interest Period” means, as to any LIBOR Loan, the period commencing on the
Borrowing Date of such Revolving Credit Loan or on the Conversion/Continuation
Date on which the Revolving Credit Loan is converted into or continued as LIBOR
Loan, and ending on the date one, two, three or six months thereafter as
selected by the Company in its Notice of Revolving Credit Borrowing or Notice of
Conversion/Continuation; provided that: (a) if any Interest Period would
otherwise end on a day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day; (b) any Interest
Period that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the calendar
month at the end of such Interest Period; and (c) no Interest Period shall
extend beyond the Termination Date.

 

“Interest Rate Type” means, with respect to any Revolving Credit Loan, the
interest rate, being the Base Rate, LIBOR or the LIBOR Market Index Rate forming
the basis upon which interest is charged against such Revolving Credit Loan
hereunder.

 

“Investments” has the meaning set forth in Section 8.04.

 

“IRS” means the Internal Revenue Service, and any Governmental Authority
succeeding to any of its principal functions under the Code.

 

“Issue” means with respect to any Letter of Credit, to issue or extend the
expiry of, or to renew or increase the amount of, such Letter of Credit; and the
terms “Issued,” “Issuing” and “Issuance” have corresponding meanings.

 

“Issuing Lender” shall mean (i) Wells Fargo Bank, National Association in its
capacity as the issuer of the Existing Letters of Credit and other Letters of
Credit pursuant to Section 2.10 and (ii) any other Lender to the extent it has
agreed in its sole discretion to act as an “Issuing Lender” hereunder and that
has been approved in writing by Company and the Administrative Agent as an
“Issuing Lender” hereunder, in each case in its capacity as issuer of any Letter
of Credit. As used herein, “the Issuing Lender” means the applicable Issuing
Lender, any Issuing Lender or all Issuing Lenders, as the context may require.

 

“LC Application” means an application or agreement for a standby Letter of
Credit in such form as shall be acceptable to the Issuing Lender in its sole
discretion, and duly executed by the Company pursuant to Section 2.10(b).

 

“LC Collateral Account” means a blocked deposit account held by the
Administrative Agent.

 

“LC Obligation” means, at the time in question, the sum of the Matured LC
Obligations plus the aggregate amount available to be drawn under all Letters of
Credit then outstanding.

 

“LC Related Document” means the Letters of Credit, LC Applications and any other
document relating to any Letter of Credit including any of the Issuing Lender’s
standard form documents for Letter of Credit issuances.

 

“Lead Arranger” means Wells Fargo Securities, LLC acting alone or through or
with affiliates selected by it, in its capacity as the sole bookrunner and sole
lead arranger with respect to this Agreement.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 14

 

  

“Lender” has the meaning specified in the introductory clause hereto and, unless
the context otherwise requires, includes the Swing Line Lender.

 

“Lender Derivative Contracts” means all Derivative Contracts (including those
listed on Schedule 6.21) made or entered into, whether directly or indirectly,
and whether as a result of assignment or transfer or otherwise, between any Loan
Party or any Subsidiary and a Lender Derivative Provider.

 

“Lender Derivative Provider” means (a) any Person that is a party to a
Derivative Contract with any Loan Party or any Subsidiary, provided that such
Person is or was a Lender hereunder (or under the Existing Credit Agreement) or
an Affiliate of a Lender hereunder (or under the Existing Credit Agreement) at
the time it entered into such Derivative Contract and (b) with respect to any
Derivative Contract listed on Schedule 6.21 to which the Acquired Company or a
Subsidiary of the Acquired Company is a party that is in effect on the Effective
Date, each Person (other than a Loan Party or a Subsidiary) that is a party
thereto on the Effective Date that is a Lender or an Affiliate of a Lender or is
a “Lender” under the QR Energy Credit Agreement or an Affiliate thereof.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
specified as its “Lending Office” or “Domestic Lending Office” or “Offshore
Lending Office”, as the case may be, on Schedule 11.02, or such other office or
offices as such Lender may from time to time notify the Company and the
Administrative Agent.

 

“Letter of Credit” means the Existing Letters of Credit and any stand-by letter
of credit issued by the Issuing Lender pursuant to this Agreement and upon an LC
Application.

 

“Letter of Credit Fee” means the fee specified in Section 2.07(b).

 

“Letter of Credit Sublimit” means the lesser of (x) $75,000,000 and (y) the
Available Borrowing Base.

 

“LIBOR” means:

 

(a)          for any interest rate calculation with respect to a LIBOR Rate
Loan, the rate of interest per annum determined on the basis of the rate for
deposits in Dollars for a period equal to the applicable Interest Period which
appears on Reuters Screen LIBOR01 Page (or any applicable successor page) at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable Interest Period (rounded upward, if necessary, to the
nearest 1/100th of 1%), provided that if such rate that appears on such screen
or page shall be less than zero, such rate shall be deemed to be zero for the
purposes of this Agreement. If, for any reason, such rate does not appear on
Reuters Screen LIBOR01 Page (or any applicable successor page), then “LIBOR”
shall be determined by the Administrative Agent to be the arithmetic average of
the rate per annum at which deposits in Dollars in minimum amounts of at least
$5,000,000 would be offered by first class banks in the London interbank market
to the Administrative Agent at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period.

 

 

1 Schedule 6.21 will be updated on the Effective Date.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 15

 

  

(b)          for any interest rate calculation with respect to a Base Rate Loan,
the rate of interest per annum determined on the basis of the rate for deposits
in Dollars in minimum amounts of at least $5,000,000 for a period equal to one
month (commencing on the date of determination of such interest rate) which
appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at
approximately 11:00 a.m. (London time) on such date of determination, or, if
such date is not a Business Day, then the immediately preceding Business Day
(rounded upward, if necessary, to the nearest 1/100th of 1%), provided that if
such rate that appears on such screen or page shall be less than zero, such rate
shall be deemed to be zero for the purposes of this Agreement. If, for any
reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any
applicable successor page) then “LIBOR” for such Base Rate Loan shall be
determined by the Administrative Agent to be the arithmetic average of the rate
per annum at which deposits in Dollars in minimum amounts of at least $5,000,000
would be offered by first class banks in the London interbank market to the
Administrative Agent at approximately 11:00 a.m. (London time) on such date of
determination for a period equal to one month commencing on such date of
determination.

 

Each calculation by the Administrative Agent of LIBOR shall be conclusive and
binding for all purposes, absent manifest error.

 

“LIBOR Loan” means a Loan that bears interest based on LIBOR plus the Applicable
Margin.

 

“LIBOR Market Index Rate” means, for any day with respect to any LIBOR Market
Index Rate Loan, a rate per annum equal to the greater of: (a) 0% and (b) the
rate appearing on Reuters Screen LIBOR01 Page (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 on such day (or if such day is not a Business Day, then
the immediately preceding Business Day), as the rate for dollar deposits with a
one-month maturity. In the event that such rate is not available at such time
for any reason, then the “LIBOR Market Index Rate” with respect to such LIBOR
Market Index Rate Loan shall be the rate (rounded upwards, if necessary, to the
next 1/100 of 1%) at which dollar deposits of an amount comparable to such Loan
and for a one-month maturity are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m. on such day (or if such day is not a Business
Day, then the immediately preceding Business Day).

 

“LIBOR Market Index Rate Loan” means a Loan that bears interest based on the
LIBOR Market Index Rate plus the Applicable Margin.

 

“Lien” means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement and the
interest of a lessor under a Capital Lease), any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law and any
contingent or other agreement to provide any of the foregoing, but not including
(a) the interest of a lessor under a lease on Oil and Gas Properties and (b) the
interest of a lessor under an Operating Lease.

 

“Loan” means an extension of credit by a Lender to the Company under Article II
in the form of a Revolving Credit Loan or a Swing Line Loan.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 16

 

  

“Loan Documents” means this Agreement, the Notes, each Guaranty, the Security
Documents, each LC Application and Letter of Credit, the Fee Letter and each
other document executed by a Loan Party in connection herewith that by its terms
states that it is a Loan Document.

 

“Loan Parties” means collectively the Company, the General Partner and each of
the Guarantors. “Loan Party” means individually, any of the Company, the General
Partner or a Guarantor.

 

“Majority Lenders” means, at any time, the Lenders holding more than fifty
percent (50%) of the sum of the Effective Amount or, if there is no Effective
Amount, the Lenders holding more than fifty percent (50%) of the sum of the
Commitments of all of the Lenders, provided that, the Commitment of, and the
portion of the Effective Amount held or deemed held by, any Defaulting Lender
shall be excluded for purposes of making a determination of Majority Lenders
unless all Lenders are Defaulting Lenders.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation U or X
of the FRB.

 

“Master Agreement” means any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master derivatives agreement, and any
schedules to any of the foregoing.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, properties or financial condition
of the Loan Parties taken as a whole, or as to the Company, including any
material adverse change in reserve estimates of the Oil and Gas Properties of
the Loan Parties taken as a whole; (b) a material impairment of the ability of
any Loan Party to perform its material obligations under the Loan Documents; or
(c) a material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any material Loan Document.

 

“Matured LC Obligation” means, at any time, the aggregate amount of payments
theretofore made by the Issuing Lender in respect of Letters of Credit and not
theretofore reimbursed by or on behalf of the Company to the Issuing Lender.

 

“Merger Sub” means Boom Merger Sub, LLC, a Delaware limited liability company.

 

“Mortgaged Properties” means such Oil and Gas Properties upon which the Loan
Parties have granted the Administrative Agent for the benefit of the Lenders and
the Lender Derivative Providers a Lien pursuant to the Mortgages.

 

“Mortgages” means the mortgages from the Loan Parties in favor of Administrative
Agent, for the benefit of the Lenders and the Lender Derivative Providers
described on Schedule 4.01 hereto and all additional mortgages delivered by the
Loan Parties pursuant to Article IV of this Agreement, and all supplements,
assignments, amendments and restatements thereto (or any agreement in
substitution therefor) as the same may be released in whole or in part from time
to time which are executed and delivered to Administrative Agent for benefit of
the Lenders and the Lender Derivative Providers pursuant to Article IV of this
Agreement.

 

“Multiemployer Plan” means a “multiemployer plan”, within the meaning of Section
4001(a)(3) of ERISA, to which a Loan Party or any ERISA Affiliate makes, is
making, or is obligated to make contributions or, during the preceding three
calendar years, has made, or been obligated to make, contributions.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 17

 

  

“Notes” means the promissory notes, whether one or more, specified in Section
2.01, substantially in the same form as Exhibit E including any amendments,
modifications, renewals or replacements of such promissory notes.

 

“Notice of Conversion/Continuation” means a notice in substantially the form of
Exhibit B.

 

“Notice of Revolving Credit Borrowing” means a notice in substantially the form
of Exhibit A-1.

 

“Obligations” means all advances, debts, liabilities, obligations, covenants and
duties owing or to be owing, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising or incurred, by the Company or any other Loan
Party: (a) to any Lender, the Issuing Lender, the Administrative Agent, or any
Indemnitee under any Loan Document; (b) to any Lender Derivative Provider under
any Lender Derivative Contract (but excluding any Excluded Swap Obligation); and
(c) all renewals, extensions and rearrangements of the foregoing; in each case
including interest accruing subsequent to the filing of a petition or other
proceeding under the Bankruptcy Code or other similar proceeding.

 

“Oil and Gas” means petroleum, natural gas and other related hydrocarbons or
minerals or any of them and all other substances produced or extracted in
association therewith.

 

“Oil and Gas Liens” means Liens reserved under oil and gas leases, overriding
royalty agreements, net profits agreements, royalty trust agreements, farm-out
agreements, division orders, contracts for the sale, purchase, exchange,
transportation, gathering or processing of oil, gas or other hydrocarbons,
unitizations and pooling designations, declarations, orders and agreements,
development agreements, Operating Agreements, production sales contracts, area
of mutual interest agreements, gas balancing or deferred production agreements,
injection, repressuring and recycling agreements, salt water or other disposal
agreements, seismic or geophysical permits or agreements, and other agreements
that are customary in the oil and gas business and are entered into by any Loan
Party in the ordinary course of business, provided in all instances that such
Liens are limited to the assets that are the subject of the relevant agreement.

 

“Oil and Gas Properties” means Hydrocarbon Interests now owned by the Loan
Parties or any Subsidiary thereof and contracts executed in connection therewith
and all tenements, hereditaments, appurtenances, and properties belonging,
affixed or incidental to such Hydrocarbon Interests, including any and all
property, real or personal, now owned by the Loan Parties and situated upon or
to be situated upon, and used, built for use, or useful in connection with the
operating, working or developing of such Hydrocarbon Interests, including any
and all petroleum and/or natural gas wells, buildings, structures, field
separators, liquid extractors, plant compressors, pumps, pumping units, field
gathering systems, pipelines, tank and tank batteries, fixtures, valves,
fittings, machinery and parts, engines, boilers, liters, apparatus, equipment,
appliances, tools, implements, cables, wires, towers, taping, tubing and rods,
surface leases, rights-of-way, easements and servitudes, and all additions,
substitutions, replacements for, and fixtures and attachments to, any and all of
the foregoing owned directly or indirectly by the Loan Parties or any Subsidiary
thereof.

 

“Operating Agreements” mean those agreements now or hereafter executed by any
Loan Party and other working interest owners of the Oil and Gas Properties in
connection with the operation of the Oil and Gas Properties.

 

“Operating Lease” means an operating lease determined in accordance with GAAP.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 18

 

  

“Organization Documents” means (a) for any corporation: the articles of
incorporation, the bylaws, any certificate of determination or instrument
relating to the rights of the shareholders of such corporation, any shareholder
rights agreement, and all applicable resolutions of the board of directors (or
any committee thereof) of such corporation; (b) for any limited liability
company: the articles of organization, the regulations or operating agreement,
certificate of organization and all applicable resolutions of the members of
such company; and (c) for any limited partnership: the limited partnership
agreement and all Organization Documents for its general partner, as any of the
foregoing have been amended or supplemented from time to time.

 

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

 

“Other Taxes” means any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Documents.

 

“Parent” has the meaning specified in the introductory clause hereto.

 

“Partnership Material Adverse Effect” means any change, event, development,
circumstance, condition, occurrence or effect that, individually or in the
aggregate, would reasonably be expected to have a material adverse effect on the
business, condition (financial or otherwise), assets (tangible or intangible),
liabilities (contingent or otherwise) or results of operations of the Acquired
Company and its subsidiaries taken as a whole, but none of the following
changes, events, developments, conditions, occurrences or effects (either alone
or in combination) will be taken into account for purposes of determining
whether or not a Partnership Material Adverse Effect has occurred:

 

(a)          changes in the general economic, financial, credit or securities
markets, including prevailing interest rates or currency rates, or regulatory or
political conditions and changes in oil, natural gas, condensate or natural gas
liquids prices or prices of other commodities, including changes in price
differentials;

 

(b)          changes in general economic conditions in the:

 

(i)          oil and gas exploration and production industry;

 

(ii)         the natural gas gathering, compressing, treating, processing and
transportation industry generally;

 

(iii)        the natural gas liquids fractionating and transportation industry
generally;

 

(iv)        the crude oil and condensate logistics and marketing industry
generally; and

 

(v)         the natural gas marketing and trading industry generally (including
in each case changes in law affecting such industries);

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 19

 

  

(c)         the outbreak or escalation of hostilities involving the United
States, the declaration by the United States of a national emergency or war or
the occurrence of any other calamity or crisis, including acts of terrorism;

 

(d)         any hurricane, tornado, flood, earthquake or other natural disaster;

 

(e)         with respect to Acquired Company only, actions or omissions of
Company, or its affiliates, or any action taken at the request of or with the
consent of Company;

 

(f)          the announcement or pendency of the Acquisition Agreement
(including, for the avoidance of doubt, performance of obligations under the
Acquisition Agreement);

 

(g)         any change in the market price or trading volume of the common units
representing limited partner interests of such person (it being understood and
agreed that the exception in this clause (g) shall not preclude any party to the
Acquisition Agreement from asserting that the facts, circumstances, changes,
events, developments, conditions, occurrences or effects giving rise to such
change should be deemed to constitute, or be taken into account in determining
whether there has been a Partnership Material Adverse Effect);

 

(h)         any failure to meet any financial projections or estimates or
forecasts of revenues, earnings or other financial metrics for any period (it
being understood and agreed that the exception in this clause (h) shall not
preclude any party to the Acquisition Agreement from asserting that the facts,
circumstances, changes, events, developments, conditions, occurrences or effects
giving rise to such failure should be deemed to constitute, or be taken into
account in determining whether there has been, a Partnership Material Adverse
Effect);

 

(i)          changes in any laws or regulations applicable to such person or
applicable accounting regulations or the interpretations thereof; and

 

(j)          any legal proceedings commenced by or involving any current or
former member, partner, unitholder or stockholder of such person (on their own
behalf or on behalf of such person) arising out of or related to the Acquisition
Agreement or the transactions contemplated thereby;

 

provided, however, that any change, event, development, circumstance, condition,
occurrence or effect referred to in clauses (a), (b), (c) or (d) will be taken
into account for purposes of determining whether or not a Partnership Material
Adverse Effect has occurred if and to the extent that such change, event,
development, circumstance, condition, occurrence or effect disproportionately
and adversely affects such person, as compared to other similarly situated
persons operating in the industries in which such person operates.

 

“Participant” has the meaning specified in Section 11.06(d).

 

“PATRIOT Act” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)).

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any Governmental
Authority succeeding to any of its principal functions under ERISA.

 

“Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA)
subject to Title IV of ERISA, other than a Multiemployer Plan, which a Loan
Party or any of its Subsidiaries sponsors, maintains, or to which it makes, is
making, or is obligated to make contributions, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding five (5) plan years.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 20

 

  

“Permitted Liens” has the meaning specified in Section 8.01.

 

“Person” means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture or Governmental Authority.

 

“Phase I Report” means a report detailing the findings of an environmental site
assessment conducted by a qualified third party that satisfies the standards set
forth in the current American Standards and Testing Materials designated
protocol for Phase I Environmental Site Assessments, E1527-05, or any subsequent
edition thereof.

 

“Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to ERISA, other than a Multiemployer Plan, which any Loan Party
sponsors, maintains, or to which it makes, is making, or is obligated to make
contributions, or in the case of a multiple employer plan (as described in
Section 4064(a) of ERISA) has made contributions at any time during the
immediately preceding five (5) plan years.

 

“Pricing Grid” means the annualized variable rates (stated in terms of basis
points (“bps”)) set forth below for the Applicable Margin, Commitment Fee and
Letter of Credit Fee, based upon the ratio of Effective Amount to the Borrowing
Base Amount, as follows: 

 

    Applicable Margin          Effective Amount/
Borrowing Base  LIBOR and
LIBOR
Market Index
Rate
(bps)   Base
Rate
(bps)   Commitment
Fee
(bps)   Letter of Credit
Fee
(bps)  ³90%   250.00    150.00    50.00    250.00  <90% ³ 75%   225.00  
 125.00    50.00    225.00  <75% ³ 50%   200.00    100.00    50.00    200.00 
<50% ³ 25%   175.00    75.00    37.50    175.00  <25%   150.00    50.00  
 37.50    150.00 

 

The Pricing Grid for any date shall be determined by reference to the ratio of
the Effective Amount and Borrowing Base and any change (a) shall become
effective upon the delivery to the Administrative Agent of a Pricing Grid
Certificate of a Responsible Officer of the Company (which certificate shall be
delivered simultaneously with (i) the delivery of each Notice of Borrowing, any
notice required under Section 2.04, Notice of Conversion/Continuation or a
request for issuance of a Letter of Credit and (ii) any change in the amount of
the Borrowing Base), and (b) shall apply (i) in the case of the Base Rate Loans
and LIBOR Market Index Rate Loans, to Base Rate Loans and LIBOR Market Index
Rate Loans outstanding on such delivery date or made on and after such delivery
date and (ii) in the case of the LIBOR Loans, to LIBOR Loans made, continued or
converted on and after such delivery date. Notwithstanding the foregoing, at any
time during which the Company has failed to deliver the Pricing Grid Certificate
when due, the ratio of Effective Amount to the Borrowing Base shall be deemed,
solely for the purposes of this definition, to be greater than 90% until such
time as the Company shall deliver such certificate.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 21

 

  

“Pricing Grid Certificate” means a Pricing Grid Certificate substantially in the
form of Exhibit F hereto.

 

“Principal Business” means the business of (a) the exploration for, and
development, acquisition, production, processing and upstream marketing and
transportation of Oil and Gas; and (b) the business of providing services in
connection with the production of Oil and Gas.

 

“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.

 

“Pro Rata Share” means, as to any Lender at any time, the percentage set forth
opposite its name on Schedule 2.01 hereto, as modified by any Assignment and
Assumption, subject to adjustment as provided in Section 2.04(b) and Section
2.14.

 

“Proved Producing Reserves” means, with respect to the Oil and Gas Properties
covered under the most recent Reserve Report delivered to the Administrative
Agent and any Oil and Gas Properties acquired by the Loan Parties after the
effective date of such Reserve Report, the reasonably anticipated production for
each month for the total Oil and Gas classified as “proved producing” for such
Oil and Gas Properties.

 

“QRE Refinancing” means the repayment of the Indebtedness and other obligations
outstanding under (a) the QR Energy Credit Agreement on the Effective Date and
termination of the commitments of the QR Energy Lenders thereunder and (b)
solely to the extent that the Company elects to refinance such Indebtedness on
or prior to the Effective Date, the QR Energy Indenture and the notes issued
thereunder (which repayment may include a satisfaction and discharge of such
Indebtedness effected on or prior to the Effective Date).

 

“QR Energy Acquisition” means the acquisition of the Acquired Company and its
subsidiaries pursuant to the Acquisition Agreement in which (a) Merger Sub will
merge with and into the Acquired Company with the Acquired Company surviving as
a wholly-owned subsidiary of Parent and (ii) the existing equity holders of the
Acquired Company will receive either equity interests of Parent or cash. In
connection with the foregoing transactions, Parent intends to contribute the
Acquired Company and its subsidiaries to the Company with the result that the
Acquired Company and its subsidiaries become wholly-owned subsidiaries of the
Company.

 

“QR Energy Credit Agreement” has the meaning specified in the recitals hereto.

 

“QR Energy Indenture” means that certain indenture, dated as of July 30, 2012,
by and among the Acquired Company and QRE Finance Corporation, as issuers, the
guarantors identified therein and U.S. Bank National Association, as trustee,
with respect to the issuers’ 9/25% senior notes due 2020 from time to time
issued thereunder.

 

“QR Energy Lenders” has the meaning specified in the recitals hereto.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 22

 

  

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan
Party that has total assets exceeding $10,000,000 at the time the relevant
guaranty of such Loan Party, or the grant by such party of a security interest
or lien to secure, or the provision of other support of, such Swap Obligation
becomes effective with respect to such Swap Obligation or such other person as
constitutes an “eligible contract participant” under the Commodity Exchange Act
and can cause another person to qualify as an “eligible contract participant” at
such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

 

“Quarterly Status Report” for a fiscal quarter means a status report prepared
quarterly by the Company in form, scope and content acceptable to the
Administrative Agent, setting forth as of the last day of each month during such
quarter (a) detailing production from the Oil and Gas Properties, the volumes of
Oil and Gas produced and saved, the volumes of Oil and Gas sold, gross revenue,
net income, related leasehold operating expenses, severance taxes, other taxes,
capital costs and any production imbalances incurred during such period, (b)
information concerning any Derivative Contracts entered into by the Company or
its Subsidiaries, and (c) such additional information with respect to any of the
Oil and Gas Properties as may be reasonably requested by Administrative Agent.

 

“Recipient” means (a) the Administrative Agent, (b) any Lender (including the
Swing Line Lender) and (c) the Issuing Lender, as applicable.

 

“Regulation U” and “Regulation X” means Regulation U and Regulation X,
respectively, of the FRB from time to time in effect and shall include any
successor or other regulations or official interpretations of the FRB relating
to the subject matter addressed therein.

 

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

 

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

 

“Remedial Work” has the meaning assigned to such term in Section 7.13.

 

“Reportable Event” means, any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.

 

“Required Lenders” means, at any time, Lenders holding more than sixty-six and
two-thirds percent (66⅔%) of the sum of the Effective Amount or, if there is no
Effective Amount, Lenders holding more than sixty-six and two-thirds percent
(66⅔%) of the sum of the Commitments of all of the Lenders; provided that, the
Commitment of, and the portion of the Effective Amount held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders unless all Lenders are Defaulting Lenders.

 

“Requirement of Law” means, as to any Person, any law (statutory or common),
treaty, rule or regulation or determination of a Governmental Authority, in each
case applicable to or binding upon the Person or any of its property or to which
the Person or any of its property is subject.

 

“Reserve Report” means a report, in form, scope and content acceptable to the
Administrative Agent, covering proved developed and proved undeveloped Oil and
Gas reserves attributable to the Oil and Gas Properties owned by the Company and
its Subsidiaries and setting forth with respect thereto, (a) the total quantity
of proved developed and proved undeveloped reserves (separately classified as to
producing, shut-in, behind pipe, and undeveloped), (b) the estimated future net
revenues and cumulative estimated future net revenues, (c) the present
discounted value of future net revenues, and (d) such other information and data
with respect to such Oil and Gas Properties as the Administrative Agent may
reasonably request.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 23

 

  

“Responsible Officer” of a Person means any chief executive officer or co-chief
executive officer, president, vice president with responsibility for financial
matters, chief financial officer or treasurer of (1) such Person, if such Person
is a corporation or limited liability company, or (2) the general partner of
such Person, if such Person is a partnership.

 

“Restricted Subsidiary” means all subsidiaries of the Parent (other than the
Company) and all subsidiaries of the Company, other than Unrestricted Entities.

 

“Revolving Credit Borrowing” means a borrowing hereunder consisting of Revolving
Credit Loans of the same Interest Rate Type made to the Company on the same day
by the Lenders under Article II, and, other than in the case of Base Rate Loans,
having the same Interest Period.

 

“Revolving Credit Loan” has the meaning specified in Section 2.01.

 

“Sanctioned Country” means, at any time, a country or territory which itself is
the subject or target of any Sanctions.

 

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

 

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the U.S. government, including
those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury, the U.S. Department of Commerce or the U.S.
Department of State, or (b) the United Nations Security Council, the European
Union, any European Union member state or Her Majesty’s Treasury of the United
Kingdom.

 

“Scheduled Borrowing Base Determination” means a redetermination of the
Borrowing Base in accordance with Section 2.05(a) on each Scheduled Borrowing
Base Determination Date.

 

“Scheduled Borrowing Base Determination Date” means April 1, 2015 and thereafter
April 1 and October 1 of each calendar year.

 

“SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.

 

“Security Agreements” means collectively, (a) each agreement in substantially
the form of Exhibit H executed by a Loan Party in favor of Administrative Agent
for the benefit of the Lenders and the Lender Derivative Providers, and (b) each
Security Agreement described on Schedule 4.01.

 

“Security Documents” means the Mortgages, the Security Agreements and related
financing statements as same may be amended from time to time and any and all
other instruments heretofore, now or hereafter executed in connection with or as
security for the payment of the Obligations.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 24

 

  

“Senior Secured Indebtedness” means, at any date, all Indebtedness of the
Company under this Agreement, but excluding Indebtedness of the type described
in clause (h) of the definition thereof (obligations with respect to Derivative
Contracts).

 

“Senior Unsecured Notes” means unsecured notes issued by the Company, Breitburn
Finance Corporation, or the Parent after the Effective Date; provided that, the
agreements and instruments governing such Indebtedness shall not contain (a) any
affirmative or negative covenant (including financial covenants) that is more
restrictive than those set forth in this Agreement; provided that the inclusion
of any covenant that is customary with respect to such type of Indebtedness and
that is not found in this Agreement shall not be deemed to be more restrictive
for purposes of this clause (a), (b) any restriction on the ability of the
Company or any of its Restricted Subsidiaries to amend, modify, restate or
otherwise supplement this Agreement or the other Loan Documents, (c) any
restrictions on the ability of any Subsidiary of the Company or Parent to
guarantee the Obligations (as such Obligations may be amended, supplemented,
modified, or amended and restated), (d) any restrictions on the ability of any
Subsidiary, the Parent or the Company to pledge assets as collateral security
for the Obligations (as such Obligations may be amended, supplemented, modified,
or amended and restated), (e) a scheduled maturity date that is earlier than
first anniversary of the Termination Date, (f) any amortization or other
mandatory principal payments by way of a sinking fund or similar arrangement
other than at the scheduled maturity thereof, or (g) any Lien securing such
Indebtedness.

 

“Solvent” means, as to any Person at any time, that (a) the fair value of all of
the property of such Person is greater than the amount of such Person’s
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(32) of the Bankruptcy Code; (b) the present fair salable value of all of the
property of such Person is not less than the amount that will be required to pay
the probable liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay as such debts and
liabilities mature; and (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute unreasonably small capital.

 

“Special Borrowing Base Determination” has the meaning specified in Section
2.05(b).

 

“Specified Acquisition” means an Acquisition for which: (a) a binding and
enforceable purchase and sale agreement has been signed by a Loan Party; and (b)
at all times until the Oil and Gas Properties subject to the applicable purchase
and sale agreement are acquired by the applicable Loan Party, the Available
Borrowing Base is greater than or equal to ten percent (10%) of the then-current
Borrowing Base.

 

“Specified Acquisition Agreement Representations” means the representations and
warranties relating to the Acquired Company in the Acquisition Agreement that
are material to the interests of the Lenders, but only to the extent that the
Parent or its Affiliates have the right to terminate its or their obligations
under the Acquisition Agreement as a result of a breach of any such
representations and warranties.

 

“Specified Representations” means representations and warranties made by the
Parent, the Company and the other Loan Parties on the Effective Date in Sections
6.01(a) (but solely with respect to corporate or other company existence),
6.01(b) (but solely with respect to corporate or other company authority to
execute, deliver and perform the Loan Documents required to be delivered on the
Effective Date), 6.02(a), 6.04, 6.08, 6.16 (but solely with respect to the first
sentence thereof), 6.23(b) (after giving effect to the Transactions) and 6.25 of
this Agreement.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 25

 

  

“subsidiary” of a Person means any corporation, limited liability company,
association, partnership, joint venture or other business entity of which more
than 50% of the voting stock or other Equity (in the case of Persons other than
corporations) having ordinary voting power for the election of directors or
other governing body are owned, or the management of which is controlled
directly or indirectly by such Person, or by one or more of the subsidiaries of
such Person, or a combination thereof. All references in this Agreement and in
the other Loan Documents to the capitalized terms “Subsidiary” or “Subsidiaries”
shall mean Restricted Subsidiaries and shall not include any Unrestricted
Entity.

 

“Surety Instruments” means all letters of credit (including standby), banker’s
acceptances, bank guaranties, shipside bonds, surety bonds and similar
instruments.

 

“Swap” means any “swap” within the meaning of section 1a(47) of the Commodity
Exchange Act.

 

“Swap Obligation” means any obligation to pay or perform under any Swap (whether
or not such obligation is an Obligation under a Lender Derivative Contract).

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.13.

 

“Swing Line Lender” has the meaning specified in the introductory clause hereto.

 

“Swing Line Loan” has the meaning specified in Section 2.13(a).

 

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.13, which, if in writing, shall be substantially in the form of
Exhibit A-2.

 

“Swing Line Settlement Date” means the 15th day and the last day of each
calendar month, provided however, that if any such day is not a Business Day,
the applicable Swing Line Settlement Date shall be the Business Day immediately
preceding such day.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $50,000,000 and
(b) the Borrowing Base.

 

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

 

“Termination Date” means the earlier of (a) November 19, 2019, or (b) the date
on which the Lenders’ Commitments terminate in accordance with the provisions of
this Agreement.

 

“Total Proved Reserves” means, with respect to the Oil and Gas Properties
covered under the most recent Reserve Report delivered to the Administrative
Agent and any Oil and Gas Properties acquired by the Loan Parties after the
effective date of such Reserve Report, the reasonably anticipated production for
each month for the total Oil and Gas classified as “total proved” for such Oil
and Gas Properties; provided, however, the “proved developed non-producing”
reserves and “proved undeveloped” reserves included in such calculation shall
not exceed 25% of the “total proved” reserves.

 

“Transactions” means, collectively, (a) the QR Energy Acquisition, (b) the
funding of the initial Loans under this Agreement, (c) the QRE Refinancing, (d)
incurrence of Indebtedness by the Parent, the Company or any of their
Subsidiaries on or before the Effective Date, a portion of the net proceeds of
which are used to fund a portion of the foregoing clauses (a) and/or (c), and
(e) the payment of fees and expenses incurred in connection with the foregoing.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 26

 

  

“Unfunded Pension Liability” means the excess of a Plan’s benefit liabilities
under Section 4001(a)(16) of ERISA, over the current value of that Plan’s
assets, determined in accordance with the assumptions used for funding the
Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

 

“United States” and “U.S.” each means the United States of America.

 

“Unrestricted Entity” means (1) the entities listed on Schedule 6.19 under the
heading “Unrestricted Entities”, and (2) in the event an entity that is not a
Wholly Owned Subsidiary becomes, after the Effective Date, a subsidiary of
Parent, then such entity shall be an Unrestricted Entity; provided, however, in
the event that (a) any of the foregoing entities (other than the Unrestricted
Utica Shale Subsidiary) becomes a Wholly Owned Subsidiary of Parent, or (b) any
of the foregoing entities guarantees, or grants any Lien to secure, any
Indebtedness of Parent or any Restricted Subsidiary of Parent, then such entity
shall no longer be an Unrestricted Entity and shall be a Restricted Subsidiary,
and all of the covenants and other provisions of this Agreement applicable to
Restricted Subsidiaries shall apply to such Subsidiary. In addition, Parent or
Company may, by notice given to the Administrative Agent, designate an
Unrestricted Entity as a Restricted Subsidiary, provided that the requirements
of this Agreement pertaining to the granting of Collateral and the giving of a
Guaranty by such Subsidiary (including Sections 4.01, 4.02, 7.14 and 7.15) shall
be satisfied as a condition of such designation.

 

“Unrestricted Utica Shale Subsidiary” means Breitburn Collingwood Utica LLC, a
Delaware limited liability company.

 

“Unrestricted Salt Water Disposal Subsidiary” means East Texas Salt Water
Disposal Company, a Texas corporation.

 

“U.S. Person” means a United States person as defined under Section 7701(a)(30)
of the Code.

 

“Utica Shale Properties” means the Oil and Gas Properties in Alpina, Antrim,
Cheboygan, Crawford, Kalkaska, Montmorency, Otsego, Oscoda, Alcona and Presque
Isle Counties, Michigan in the interval defined as being from the top of the
Cincinnatian formation down to 100 feet above the top of the Glenwood formation,
including the Collingwood Utica Shale.

 

“Wholly Owned” means, when used to describe a Subsidiary, that all of the Equity
of such Subsidiary is owned, directly or indirectly, by Parent or the Company.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 27

 

  

1.02        Other Interpretive Provisions. The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms. Unless
otherwise specified or the context clearly requires otherwise, the words
“hereof,” “herein,” “hereunder” and similar words refer to this Agreement as a
whole and not to any particular provision of this Agreement; and subsection,
Section, Schedule and Exhibit references are to this Agreement. The term
“documents” includes any and all instruments, documents, agreements,
certificates, indentures, notices and other writings, however evidenced. The
term “including” is not limiting and means “including without limitation.” In
the computation of periods of time from a specified date to a later specified
date, the word “from” means “from and including,” the words “to” and “until”
each mean “to but excluding,” and the word “through” means “to and including.”
Unless otherwise expressly provided herein, (a) references to agreements
(including this Agreement) and other contractual instruments shall be deemed to
include all subsequent amendments and other modifications thereto, but only to
the extent such amendments and other modifications are not prohibited by the
terms of any Loan Document, and (b) references to any statute or regulation are
to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation. The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement. This
Agreement and other Loan Documents may use several different limitations, tests
or measurements to regulate the same or similar matters. All such limitations,
tests and measurements are cumulative and shall each be performed in accordance
with their terms. This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the
Administrative Agent merely because of the Administrative Agent’s or Lenders’
involvement in their preparation.

 

1.03        Accounting Principles.

 

(a)          Unless the context otherwise clearly requires, all accounting terms
not expressly defined herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with GAAP,
consistently applied as in effect from time to time, applied in a manner
consistent with that used in preparing the audited financial statements for the
fiscal year ended December 31, 2013. Notwithstanding the foregoing, for purposes
of determining compliance with any covenant (including the computation of any
financial covenant) contained herein, Indebtedness of Parent and its
subsidiaries shall be deemed to be carried at 100% of the outstanding principal
amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial
liabilities shall be disregarded. References to “consolidated,” when it precedes
any accounting term, means such term as it would apply to the Loan Parties on a
consolidated basis, determined in accordance with GAAP.

 

(b)          If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Company or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Company shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Company shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.

 

Article II.

 

THE CREDIT

 

2.01        Amounts and Terms of the Commitments.

 

(a)          Each Lender severally agrees, on the terms and conditions set forth
herein, to make loans denominated in dollars to the Company (each such loan, a
“Revolving Credit Loan”) from time to time on any Business Day during the period
from the Effective Date to the Termination Date, so long as (a) with respect to
any Lender, such Revolving Credit Loans then requested to be made by such Lender
do not exceed such Lender’s Pro Rata Share of the aggregate amount of all Loans
then requested from the Lenders, and (b) the sum of the aggregate principal
amount of all Revolving Credit Loans by all Lenders hereunder plus the aggregate
principal amount of all Swing Line Loans plus the LC Obligation outstanding at
any time does not exceed the lesser of the Borrowing Base and the Elected
Commitment Amount in effect at such time. Subject to the terms and conditions
hereof, until the Termination Date, Company may borrow, repay, and reborrow
hereunder.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 28

 

  

(b)          Upon the request of any Lender made through the Administrative
Agent, the Company shall execute and deliver to such Lender (through the
Administrative Agent) a promissory note from the Company payable to such Lender
or its registered assigns (herein called such Lender’s “Note” and collectively,
the “Notes”). The amount of principal owing on any Lender’s Note at any given
time shall be the aggregate amount of all Loans theretofore made by such Lender
minus all payments of principal theretofore received by such Lender on such
Note. Interest on each Note shall accrue and be due and payable as provided
herein and therein.

 

(c)          Subject to the terms and conditions of Section 2.10 below and
relying upon the agreements of the Lenders set forth herein, the Issuing Lender
agrees to issue Letters of Credit as support for Derivative Contracts covering
Oil and Gas commodities as approved by the Administrative Agent and other
purposes permitted hereunder, upon the request of the Company at any time and
from time to time on and after the Effective Date and up to, but excluding, the
Termination Date (the “Availability Period”). The Lenders severally agree to
participate in all Letters of Credit and drawings thereunder. No Letter of
Credit will be issued in a face amount which, after giving effect to the
issuance of such Letter of Credit, would cause the LC Obligation to exceed
$75,000,000 or the Effective Amount to exceed the Borrowing Base then in effect.

 

(d)          On the Effective Date (a) the commitments of the lenders under the
Existing Credit Agreement that are Lenders under this Agreement are reallocated
among such Lenders and, as applicable, increased as set forth on Schedule 2.01,
and (b) the commitment of any lender under the Existing Credit Agreement that is
not a Lender hereunder is terminated.

 

2.02        Procedure for Borrowings.

 

(a)          Each Revolving Credit Borrowing of Revolving Credit Loans shall be
made upon the Company’s irrevocable written notice delivered to the
Administrative Agent in the form of a Notice of Revolving Credit Borrowing duly
completed; which notice must be received by the Administrative Agent (x) prior
to 1:00 p.m. (Houston, Texas time) three (3) Business Days prior to the
requested Borrowing Date, in the case of LIBOR Loans, (y) prior to 9 a.m.
(Houston, Texas time) on the requested Borrowing Date, in the case of LIBOR
Market Index Rate Loans to be borrowed on the Effective Date, and (z) prior to
1:00 p.m. (Houston, Texas time) one (1) Business Day prior to the requested
Borrowing Date, in the case of Base Rate Loans; provided, however, the Notice of
Revolving Credit Borrowing with respect to the Loans to be borrowed on the
Effective Date may be conditioned on the actual consummation of the QR Energy
Acquisition, subject to the Company’s obligations under Section 3.04(b) with
respect to LIBOR Loans.

 

(b)          Each Notice of Revolving Credit Borrowing shall specify (i) the
amount of the Revolving Credit Borrowing, which shall be in an aggregate minimum
amount (A) for Base Rate Loans equal to the lesser of (y) $500,000 or any
multiple integrals of $100,000 in excess thereof or (z) the unadvanced portion
of the Available Borrowing Base, except that clause (y) shall not apply in the
case of Loans to fund reimbursement obligations under drawings under Letters of
Credit, and (B) for LIBOR Loans and LIBOR Market Index Rate Loans, $3,000,000 or
any multiple integrals of $1,000,000 in excess thereof (if the Available
Borrowing Base as of such Borrowing Date will be less than $3,000,000, then the
Company may not request a LIBOR Loan or a LIBOR Market Index Rate Loan); (ii)
the requested Borrowing Date, which shall be a Business Day; (iii) the Interest
Rate Type of Loans comprising the Revolving Credit Borrowing; and (iv) for LIBOR
Loans the duration of the Interest Period applicable to such Revolving Credit
Loans. If the Notice of Revolving Credit Borrowing fails to specify the duration
of the Interest Period for any Revolving Credit Borrowing comprised of LIBOR
Loans, such Interest Period shall be one month.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 29

 

  

(c)          The number of tranches outstanding of Base Rate Loans, LIBOR Loans
and LIBOR Market Index Rate Loans, whether under a Borrowing, conversion or
continuation shall not exceed ten (10) at any one time.

 

(d)          The Administrative Agent will promptly notify each Lender of its
receipt of any Notice of Revolving Credit Borrowing and of the amount of such
Lender’s Pro Rata Share of that Revolving Credit Borrowing.

 

(e)          A Notice of Revolving Credit Borrowing shall not request a
Revolving Credit Borrowing of LIBOR Market Index Rate Loans for any day other
than the Effective Date.

 

(f)          Provided the applicable conditions in Article V are met, each
Lender will make the amount of its Pro Rata Share of each Revolving Credit
Borrowing available to the Administrative Agent for the account of the Company
at the Administrative Agent’s Payment Office by 11:00 a.m. (Houston, Texas time)
on the Borrowing Date requested by the Company in funds immediately available to
the Administrative Agent. The proceeds of all such Loans will then be made
available to the Company by the Administrative Agent to the Company’s operating
account with the Administrative Agent or by wire transfer in accordance with
written instructions provided to the Administrative Agent by the Company of like
funds as received by the Administrative Agent.

 

2.03        Conversion and Continuation Elections.

 

(a)          During the period from the Effective Date to the Termination Date,
the Company may, upon irrevocable written notice to the Administrative Agent in
accordance with Section 2.03(b): (i) elect, as of any Business Day, in the case
of Base Rate Loans or LIBOR Market Index Rate Loans, or as of the last day of
the applicable Interest Period, in the case of LIBOR Loans, to convert any such
Revolving Credit Loans into Revolving Credit Loans of any other Interest Rate
Type (provided that the LIBOR Market Index Rate shall be available for Loans
made on the Effective Date only, and no Loans may be converted into LIBOR Market
Index Rate Loans); or (ii) elect as of the last day of the applicable Interest
Period, to continue any Revolving Credit Loans having Interest Periods expiring
on such day; provided, that if at any time a LIBOR Loan or LIBOR Market Index
Rate Loan in respect of any Revolving Credit Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to less than $3,000,000, such LIBOR
Loan or LIBOR Market Index Rate Loan shall automatically convert into a Base
Rate Loan.

 

(b)          The Company shall deliver a Notice of Conversion/Continuation to be
received by the Administrative Agent not later than 1:00 p.m. (Houston, Texas
time) at least (i) three (3) Business Days in advance of the
Conversion/Continuation Date, if the Revolving Credit Loans are to be converted
into or continued as LIBOR Loans; and (ii) one (1) Business Day in advance of
the Conversion/Continuation Date, if the Revolving Credit Loans are to be
converted into Base Rate Loans, specifying: (A) the proposed
Conversion/Continuation Date; (B) the aggregate amount of Revolving Credit Loans
to be converted or continued; (C) the Interest Rate Type of Loans resulting from
the proposed conversion or continuation; and (D) other than in the case of
conversions into Base Rate Loans, the duration of the requested Interest Period.

 

(c)          If upon the expiration of any Interest Period applicable to LIBOR
Loans the Company has failed to select timely a new Interest Period to be
applicable to LIBOR Loans, or if any Default or Event of Default then exists,
the Company shall be deemed to have elected to convert such LIBOR Loans into
Base Rate Loans effective as of the expiration date of such Interest Period.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 30

 

  

(d)          The Administrative Agent will promptly notify each Lender of its
receipt of a Notice of Conversion/Continuation, or, if no timely notice is
provided by the Company, the Administrative Agent will promptly notify each
Lender of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective Lender’s Pro
Rata Share of outstanding principal amounts of the Revolving Credit Loans with
respect to which the notice was given.

 

2.04        Optional Commitment Reductions and Optional Prepayments.

 

(a)          The Company shall have the right to terminate or to permanently
reduce the amount of the Aggregate Maximum Credit Amount, the Swing Line
Sublimit or the Letter of Credit Sublimit, at any time, or from time to time,
upon notice given to the Administrative Agent (which shall promptly notify the
Lenders) not less than 12 Noon Houston, Texas time three (3) Business Days'
prior to the date of termination or reduction, which notice shall specify the
effective date thereof and the amount of any such reduction (which shall not be
less than (i) $5,000,000.00 or any whole multiple of $1,000,000.00 in excess
thereof for any reduction of the Aggregate Maximum Credit Amount, and (ii)
$1,000,000 or any whole multiple of $500,000 in excess thereof for any reduction
of the Swing Line Sublimit or the Letter of Credit Sublimit). Any such notice
given shall be irrevocable and effective only upon receipt by the Administrative
Agent. The Aggregate Maximum Credit Amount, the Swing Line Sublimit and the
Letter of Credit Sublimit once terminated or reduced may not be reinstated.

 

(b)          Request for Increase.

 

(i)          Provided no Default has occurred and is continuing, upon notice to
the Administrative Agent (which shall promptly notify the Lenders), the Company
may from time to time deliver a request for an increase in the Elected
Commitment Amount; provided that (a) any such request for an increase shall be
in a minimum amount of $5,000,000, (b) the Company may make a maximum of two (2)
such requests between Scheduled Borrowing Base Determinations and (c) after
giving effect to such request the Elected Commitment Amount does not exceed the
lesser of (A) the Aggregate Maximum Credit Amount, as such amount may be reduced
pursuant to Section 2.04(a) and (B) the Borrowing Base then in effect. The
request from the Company shall include the amount of the requested increase, the
effective date for the increase and certify that, before and after giving effect
to such increase, the representations and warranties contained in Article 6 and
the other Loan Documents are true and correct as of the date of such request.

 

(ii)         The Administrative Agent shall notify each of the Lenders of the
Company’s request and determine whether each such Lender agrees to increase its
Commitment (which agreement may be given or withheld at such Lender’s sole and
absolute discretion) and, if so, whether by an amount equal to, greater than, or
less than its Pro Rata Share of such requested increase. Any Lender not
responding within the time period specified in such notice for responses shall
be deemed to have declined to increase its Commitment.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 31

 

  

(iii)        The Administrative Agent shall notify the Company and each Lender
of the Lenders’ responses to each request made under this Section 2.04(b). To
achieve the full amount of a requested increase and subject to the approval of
the Swing Line Lender and each Issuing Lender (which approvals shall not be
unreasonably withheld), the Administrative Agent, in consultation and with the
consent of the Company, may also invite additional Persons who qualify as
Eligible Assignees to become Lenders pursuant to a joinder agreement in form and
substance satisfactory to the Administrative Agent. It shall not be a condition
to obtaining an increase in the Elected Commitment Amount that the full amount
of such increase requested by the Company be approved by the Lenders or any
additional Eligible Assignees. If less than the full amount of the increase
requested by the Company is approved by the Lenders and Eligible Assignees, if
any, the Company may, at its option, accept the amount of the increase so
approved, or the Company may withdraw its request for such increase, in which
case the Company shall be deemed not to have made a request for such increase.

 

(iv)        If the Elected Commitment Amount is increased in accordance with
this Section 2.04(b), the Administrative Agent and the Company shall determine
the effective date (the “Increase Effective Date”) and the allocation of the
final Pro Rata Shares, after giving effect to such increase. The Administrative
Agent shall promptly notify the Company and the Lenders of (i) the final amount
and allocation of the Pro Rata Shares after giving effect to such increase and
the Increase Effective Date and (ii) the amount of Loans of each Interest Rate
Type and the applicable Interest Period thereof. On the Increase Effective Date,
all outstanding Loans and Commitments shall be reallocated among the Lenders
(including any newly added Lenders) in accordance with the Lenders’ respectively
revised Pro Rata Shares, after giving effect to such increase in the Elected
Commitment Amount and the Lenders shall make purchases and adjustments among
themselves with respect to the Loans and Commitments then outstanding and
amounts of principal, interest, fees and other amounts paid or payable with
respect thereto as shall be necessary, in the opinion of the Administrative
Agent, in order to effect such reallocation of the Pro Rata Shares and the
Elected Commitment Amount. In connection with such reallocation among the
Lenders, on the Increase Effective Date, the Loan Parties shall promptly
reimburse the Lenders for losses and expenses incurred in respect of LIBOR Loans
in accordance with Section 3.04. Upon the Increase Effective Date, after giving
effect to the allocation of such increase, Schedule 2.01 shall be deemed amended
and restated to reflect the Elected Commitment Amount and Pro Rata Shares then
in effect.

 

(c)          Subject to Section 3.04, the Company may, at any time or from time
to time,

 

(i)          prepay Revolving Credit Loans that are Base Rate Loans or LIBOR
Market Index Rate Loans, without premium or penalty, upon notice to the
Administrative Agent of not less than one (1) Business Day, ratably as to each
Lender, in whole or in part, in aggregate minimum principal amounts of
$1,000,000 or multiple integrals thereof (unless the outstanding principal
amount of all Revolving Credit Loans that are Base Rate Loans or LIBOR Market
Index Rate Loans (as the case may be) is less than $1,000,000, then such
prepayments shall be equal to such outstanding principal amount),

 

(ii)         prepay Revolving Credit Loans that are LIBOR Loans, without premium
or penalty (but subject to Section 3.04) upon notice to the Administrative Agent
not less than three (3) Business Days, ratably as to each Lender, prepay
Revolving Credit Loans, in whole or in part, in aggregate minimum principal
amounts of $1,000,000 (or, if less, the remaining outstanding principal amount
thereof) or multiple integrals thereof plus all interest and expenses then
outstanding on the amount prepaid, and

 

(iii)        upon notice to the Swing Line Lender (with a copy to the
Administrative Agent), voluntarily prepay Swing Line Loans in whole or in part
without premium or penalty; provided that (i) such notice must be received by
the Swing Line Lender and the Administrative Agent not later than 3:00 p.m.
Houston, Texas time on the date of the prepayment, and (ii) any such prepayment
shall be in a minimum principal amount of $200,000 (or, if less, the remaining
outstanding principal amount thereof). Each such notice shall specify the date
and amount of such prepayment. If such notice is given by the Company, the
Company shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 32

 

  

Any notice of prepayment pursuant to clause (i) or (ii) above shall specify the
date and amount of such prepayment and the Interest Rate Type(s) of Revolving
Credit Loans to be prepaid and shall be irrevocable; provided that (subject to
Section 3.04) a notice of prepayment made in connection with any refinancing of
this Agreement (or any other transaction that is intended to provide the funds
for such prepayment) may be conditioned upon the consummation of such
refinancing (or other transaction). The Administrative Agent will promptly
notify each Lender of its receipt of any such notice, and of such Lender’s Pro
Rata Share of such prepayment. The payment amount specified in such notice shall
be due and payable on the date specified therein, together with, in the case of
a prepayment pursuant to clauses (ii) and (iii) above, accrued interest to each
such date on the amount prepaid and any amounts required pursuant to Section
3.04.

 

2.05        Borrowing Base Determinations; Mandatory Prepayments of Loans.

 

(a)          Scheduled Borrowing Base Determinations. At all times prior to the
Termination Date the Effective Amount shall not exceed the Borrowing Base then
in effect. Subject to Section 8.05(e)(ii), from and after the Effective Date,
the initial Borrowing Base hereunder shall be $2,500,000,000.00, until
redetermined pursuant to the terms of this Section 2.05. Upon notice to the
Company, the Borrowing Base shall be redetermined for each succeeding Borrowing
Base Period on each Scheduled Borrowing Base Determination Date, and each such
redetermination shall be effective as of the date set forth in such notice of
redetermination. The Borrowing Base shall be determined based upon the loan
collateral value assigned to the Oil and Gas Properties owned by the Company and
its Subsidiaries and such other credit factors (including the assets,
liabilities, cash flow, business, properties, prospects, management and
ownership of the Loan Parties) that the Lenders deem significant. The Lenders’
determination of the Borrowing Base shall be in their sole discretion. Upon each
redetermination of the Borrowing Base, the Administrative Agent shall recommend
to the Lenders a new Borrowing Base and the Lenders in accordance with their
customary policies and procedures for extending credit to Oil and Gas
reserve-based customers shall (by unanimous agreement in the case of Borrowing
Base increases and by agreement of the Required Lenders in the case of Borrowing
Base decreases or affirmations) establish the redetermined Borrowing Base. If
the Company does not furnish the Reserve Reports or all such other information
and data by the date required, the Lenders may nonetheless determine a new
Borrowing Base. It is expressly understood that the Lenders shall have no
obligation to determine the Borrowing Base at any particular amount, either in
relation to the Aggregate Maximum Credit Amount or the Elected Commitment
Amount.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 33

 

  

(b)          Special Borrowing Base Determinations. In addition to Scheduled
Borrowing Base Determinations pursuant to Section 2.05(a), the Company and the
Required Lenders may each request one (1) additional redetermination of the
Borrowing Base during each Borrowing Base Period (“Special Borrowing Base
Determination”). In the event the Company requests a Special Borrowing Base
Determination pursuant to this Section 2.05(b), the Company shall deliver
written notice of such request to the Lenders which shall include: (i) Reserve
Report(s) prepared as of a date not more than thirty (30) calendar days prior to
the date of such request, for the benefit of the Lenders, and (ii) such other
information as the Lenders shall request prepared as of a date not more than
thirty (30) calendar days prior to the date of such request. Likewise, in the
event the Required Lenders exercise their option for a Special Borrowing Base
Determination, the Administrative Agent shall give the Company notice of the
redetermined Borrowing Base.

 

(c)          Mandatory Prepayment of Loans.

 

(i)          If, after giving effect to any termination or reduction of the
Aggregate Maximum Credit Amounts pursuant to Section 2.04(a), the Effective
Amount exceeds the Elected Commitment Amount, then the Company shall prepay the
Loans on the date of such termination or reduction (or, to the extent no Loans
are outstanding, including after giving effect to this Section 2.04(c)(i), pay
to the Administrative Agent on behalf of the Lenders cash or Cash Equivalents to
be held as cash collateral in the LC Collateral Account pursuant to Section
2.10(h)) in an aggregate amount necessary to eliminate such excess.

 

(ii)         If a Borrowing Base Deficiency shall exist at the time of a
Borrowing Base redetermination or adjustment pursuant to the terms of this
Agreement, then the Company shall, within thirty (30) days after notice from the
Administrative Agent to the Company of the new or adjusted Borrowing Base,
exercise any one or combination of the following: (A) make a mandatory principal
prepayment in an amount equal to (x) the amount of the Borrowing Base
Deficiency, after giving effect to any action taken under (B) hereof, or (y)
five (5) monthly installments equal to one-fifth of the amount of the Borrowing
Base Deficiency, after giving effect to any action taken under (B) hereof, with
the first such installment due thirty (30) days after notice from the
Administrative Agent to the Company of the new or adjusted Borrowing Base, and
each following installment due thirty (30) days after the preceding installment;
or (B) pledge, or cause its Subsidiaries to pledge, additional unencumbered
collateral of sufficient value and character (as determined by the Lenders in
their sole discretion) that when added to the existing Collateral shall cause
the Borrowing Base to equal or exceed the Effective Amount, after giving effect
to any action taken under (A) hereof. If, because of the LC Obligation, a
Borrowing Base Deficiency remains after prepaying all of the Loans, the Company
shall pay to the Administrative Agent on behalf of the Lenders an amount equal
to such remaining Borrowing Base Deficiency to be held as collateral for so long
as a Borrowing Base Deficiency remains as provided in Section 2.10(h).

 

(iii)        Each prepayment of Loans pursuant to this Section 2.05(c) shall be
applied, first, ratably to any Base Rate Borrowings of Base Rate Loans then
outstanding, second, ratably to any LIBOR Market Index Rate Borrowings of LIBOR
Market Index Rate Loans then outstanding, and, third, to any LIBOR Borrowings of
LIBOR Loans then outstanding as the Company may direct.

 

(iv)        Each prepayment of the Loans pursuant to this Section 2.05(c) shall
be applied, first, to the outstanding Swing Line Loans and, second, to
outstanding Revolving Credit Loans.

 

(v)         Each prepayment of a Borrowing pursuant to this Section 2.05(c)
shall be applied to the Loans included in such prepaid Borrowing in accordance
with each Lender’s Pro Rata Share thereof. Prepayments of LIBOR Borrowings
pursuant to this Section 2.05(c) shall be accompanied by accrued interest on the
principal amount prepaid.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 34

 

  

(vi)        Prepayments permitted or required under this Section 2.05(c) shall
be without premium or penalty, but shall be subject to payment of amounts due
pursuant to Section 3.04.

 

2.06        Repayment.

 

(a)          Revolving Credit Loans. The Company shall repay to the
Administrative Agent (for the account of the Lenders in their respective Pro
Rata Shares) the aggregate principal amount of Revolving Credit Loans
outstanding on the Termination Date, on which date all principal amounts
outstanding, plus all accrued but unpaid interest and other amounts then due
hereunder or under the other Loan Documents, if not sooner paid, shall be due
and payable in full.

 

(b)          Swing Line Loans. The Company shall repay each Swing Line Loan on
the earlier to occur of (i) the first Swing Line Settlement Date to occur after
such Loan is made and (ii) the Termination Date.

 

(c)          Interest.

 

(i)          Each LIBOR Loan shall bear interest on the aggregate outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the lesser of (A) LIBOR, plus the Applicable Margin, or (B) the Highest Lawful
Rate. Each Revolving Credit Loan that is a Base Rate Loan and each Swing Line
Loan shall bear interest on the aggregate outstanding principal amount thereof
from the applicable Borrowing Date or date of conversion or continuation
pursuant to Section 2.03, as the case may be, at a rate per annum equal to the
lesser of (A) the Base Rate plus the Applicable Margin or (B) the Highest Lawful
Rate. Each LIBOR Market Index Rate Loan shall bear interest on the aggregate
outstanding principal amount thereof from the applicable Borrowing Date at a
rate per annum equal to the lesser of (A) the LIBOR Market Index Rate plus the
Applicable Margin or (B) the Highest Lawful Rate.

 

(ii)         Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of Loans
under Section 2.04(c) or 2.05(c) (except in the case of Base Rate Loans and
LIBOR Market Index Rate Loans) for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of any
Event of Default, interest shall be paid on demand of the Administrative Agent.

 

(iii)        Notwithstanding Section 2.06(c)(i), the Company shall pay interest
(after, as well as before, entry of judgment thereon, to the extent permitted by
law) on the principal amount of all outstanding Loans, at a rate per annum equal
to the Default Rate (A) while any Event of Default under Section 9.01(a)(i)
exists and (B) if required by the Majority Lenders by notice to the Company
given through the Administrative Agent, while any Event of Default (other than
an Event of Default under Section 9.01 (a)(i)) exists.

 

2.07        Fees.

 

(a)          Commitment Fee. The Company shall pay to the Administrative Agent,
for the account of the Lenders, an aggregate commitment fee at a per annum rate
equal to the then-applicable Commitment Fee indicated in the Pricing Grid times
the actual daily amount by which the total Commitments exceed the sum of (i) the
outstanding amount of Revolving Credit Loans and (ii) the outstanding amount of
LC Obligations. Such commitment fee shall accrue from the Effective Date to the
Termination Date and shall be due and payable quarterly in arrears on the first
Business Day of the first month of each quarter commencing on the first such
Business Day that occurs after the Effective Date through the Termination Date,
with the final payment to be made on the Termination Date. The commitment fee
provided in this subsection shall accrue at all times after the Effective Date
up to the Termination Date, including at any time during which one or more
conditions in Section 5.02 are not met.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 35

 

  

(b)          Letter of Credit Fee. The Company agrees to pay (i) to the
Administrative Agent (for the ratable account of the Lenders in their respective
Pro Rata Shares), a fee for each Letter of Credit, to be paid quarterly in
arrears following the Issuance of such Letter of Credit (including the initial
Issuance and any renewal, extension or increase in the amount thereof) in the
amount equal to the greater of (A) $500.00 and (B) the product equal to the
Letter of Credit Fee set forth on the Pricing Grid multiplied by the undrawn
amount available under such Letter of Credit (such fee shall be deemed to be
fully earned and owing upon the Issuance of such Letter of Credit, and no refund
shall be due in the event such Letter of Credit is terminated prior to its
expiry date), provided, however, if any Letter of Credit exists at the time a
Lender becomes a Defaulting Lender (X) if the Company has cash collateralized
any portion of such Defaulting Lender’s Fronting Exposure pursuant to Section
2.14(b), then the Company shall not be required to pay any fees to such
Defaulting Lender pursuant to this Section 2.07 with respect to such Defaulting
Lender’s Fronting Exposure during the period such Defaulting Lender’s Fronting
Exposure is cash collateralized, (Y) if the non-Defaulting Lenders’ exposure to
Letters of Credit is reallocated pursuant to Section 2.14(d), then the fees
payable to the Lenders pursuant to this Section 2.07 shall be adjusted in
accordance with the non-Defaulting Lenders’ exposure to Letters of Credit as so
allocated, or (Z) if such Defaulting Lender’s Fronting Exposure is neither cash
collateralized pursuant to Section 2.14(b) nor reallocated pursuant to Section
2.14(d), then, without prejudice to any rights or remedies of the Issuing Lender
or any Lender hereunder, all fees that otherwise would have been payable to such
Defaulting Lender pursuant to this Section 2.07 with respect to such Defaulting
Lender’s Fronting Exposure shall be payable to the Issuing Lender until such
Fronting Exposure is cash collateralized and/or reallocated, (ii) to the Issuing
Lender for its account a fee for the issuance of each Letter of Credit
(including the initial Issuance and any renewal, extension or increase in the
amount thereof), at the Issuance of such Letter of Credit, in an amount equal to
the greater of (A) $500.00 and (B) one-eighth of one percent (0.125%) multiplied
by the aggregate amount available under each Letter of Credit (such fees shall
be prorated for any period less than a full year but shall not be refunded in
the event any such Letter of Credit is terminated prior to its expiry date) and
(iii) to the Issuing Lender for its account, the Issuing Lender’s usual and
customary fees for amendment to transfer of or negotiation of the terms of each
Letter of Credit. The Administrative Agent shall pay to each Lender its Pro Rata
Share of the Letter of Credit Fee paid pursuant to Section 2.07(b)(i).

 

(c)          Agency Fees. The Company shall pay fees to the Administrative Agent
for the Administrative Agent’s own account, as required by that certain letter
agreement (“Fee Letter”) between the Company and the Administrative Agent dated
as of July 23, 2014.

 

2.08        Computation of Fees and Interest.

 

(a)          All computations of interest for Base Rate Loans shall be made on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed. All other computations of fees and interest shall be made on the basis
of a 360-day year and actual days elapsed (which results in more interest being
paid than if computed on the basis of a 365-day year). Interest and fees shall
accrue during each period during which interest or such fees are computed from
the first day thereof to the last day thereof.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 36

 

  

(b)          Each determination of an interest rate by the Administrative Agent
shall be conclusive and binding on the Company and the Lenders in the absence of
manifest error.

 

2.09        Payments by the Company; Borrowings Pro Rata.

 

(a)          All payments to be made by the Company shall be made without
set-off, recoupment or counterclaim. All payments by the Company shall be made
in immediately available funds to the Administrative Agent by credit to the
Company’s operating account at the Administrative Agent’s Payment Office for the
account of the Administrative Agent or the Lender to whom such payment is owed,
and shall be made in dollars and in immediately available funds, no later than
12 Noon (Houston, Texas time) on the date specified herein. Except to the extent
otherwise provided herein, (i) each payment by the Company of fees shall be made
pro rata in accordance with their respective Pro Rata Shares, (ii) each payment
of principal of Revolving Credit Loans shall be made for the account of the
Lenders pro rata in accordance with their respective outstanding principal
amount of Revolving Credit Loans, and (iii) each payment of interest on
Revolving Credit Loans shall be made for the account of the Lenders pro rata in
accordance with their respective shares of the aggregate amount of interest due
and payable to the Lenders. Notwithstanding the foregoing, to the extent money
is received by the Administrative Agent pursuant to the exercise of remedies
under the Security Documents such money shall be applied to the pro rata payment
of the Obligations.

 

(b)          The Administrative Agent will promptly distribute to each Lender
its applicable share of such payment in like funds as received. Any payment
received by the Administrative Agent later than 12 Noon (Houston, Texas time)
may be deemed by the Administrative Agent to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue. When
the Administrative Agent collects or receives money on account of the
Obligations or otherwise pursuant to the Security Documents if such money is
insufficient to pay all such Obligations, such money shall be applied first to
any reimbursements due Administrative Agent under Section 11.04 or 11.05.

 

(c)          Subject to the provisions set forth in the definition of “Interest
Period” herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.

 

(d)          Unless the Administrative Agent receives notice from the Company
prior to the date on which any payment is due to the Administrative Agent for
the account of the Lenders or the Issuing Lender hereunder that the Company will
not make such payment, the Administrative Agent may assume that the Company has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders or the Issuing Lender, as the case
may be, the amount due. In such event, if the Company has not in fact made such
payment, then each of the Lenders or the Issuing Lender, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or the Issuing Lender, 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 Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.

 

(e)          Except to the extent otherwise expressly provided herein, each
borrowing of Revolving Credit Loans hereunder shall be from the Lenders pro rata
in accordance with their respective Pro Rata Shares.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 37

 

  

2.10        Issuing the Letters of Credit.

 

(a)          Subject to the terms and conditions set forth herein, the Company
may request the Issuing Lender to issue Letters of Credit for its own account or
for any of its Subsidiaries, in a form reasonably acceptable to the
Administrative Agent and the Issuing Lender, at any time and from time to time
during the Availability Period; provided that the Company may not request the
issuance, amendment, renewal or extension of Letters of Credit hereunder if (i)
the Effective Amount exceeds the Borrowing Base at such time or would exceed the
Borrowing Base as a result thereof, or (ii) the aggregate LC Obligation exceeds
the Letter of Credit Sublimit or would exceed the Letter of Credit Sublimit as a
result thereof.

 

(b)          In order to request the issuance of a Letter of Credit, the Company
shall submit a Notice of Revolving Credit Borrowing and a LC Application in
writing by telecopy (or electronic communication, if arrangements for doing so
have been approved by the recipient) to the Administrative Agent (who shall
promptly notify the Issuing Lender) not later than 1:00 p.m., Houston, Texas
time, three (3) Business Days before the requested date of issuance of such
Letter of Credit. Each such Notice of Revolving Credit Borrowing and LC
Application shall be (i) signed by the Company, (ii) specify the Business Day on
which such Letter of Credit is to be issued, (iii) specify the purpose for the
requested Letter of Credit, (iv) specify the availability for Letters of Credit
under (A) the Borrowing Base and (B) the $75,000,000 aggregate LC Obligation
limitation, as of the date of issuance of such Letter of Credit, (v) specify the
expiry date thereof, which shall not be later than the earlier of (A) twelve
(12) months from the date of issuance of such Letter of Credit and (B) seven (7)
Business Days prior to the Termination Date, and (vi) specify such other matters
as may be reasonably required by the Issuing Lender.

 

Notwithstanding Section 2.10(b)(v)(A), but subject to the other terms and
conditions hereof, if the Company so requests in a LC Application, the Issuing
Lender shall issue a Letter of Credit that has automatic extension provisions
(each, an “Auto-Extension Letter of Credit”). Any such Auto-Extension Letter of
Credit must permit the Issuing Lender to prevent any such extension at least
once in each twelve-month period (commencing with the date of issuance of such
Letter of Credit) by giving prior notice to the beneficiary thereof not later
than a day (the “Non-Extension Notice Date”) in each such twelve-month period to
be agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by the Issuing Lender, the Company shall not be required to make a
specific request to the Issuing Lender for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the Issuing Lender to permit the extension
of such Letter of Credit at any time to an expiry date not later than the latest
date for expiry of Letters of Credit permitted by this Section 2.10(b);
provided, however, that the Issuing Lender shall not be required to permit any
such extension if (1) the Issuing Lender has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof, or (2) it has
received notice (which may be by telephone or in writing) on or before the day
that is seven Business Days before the Non-Extension Notice Date from the
Administrative Agent, any Lender or the Company that one or more of the
applicable conditions specified in Section 5.02 is not then satisfied, and in
each such case directing the Issuing Lender not to permit such extension.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 38

 

 

(c)          Unless the Issuing Lender has received written notice from any
Lender, the Administrative Agent or any Loan Party, at least one Business Day
prior to the requested date of issuance or amendment of the applicable Letter of
Credit, that one or more applicable conditions set forth in Article V shall not
have been satisfied, then, subject to the terms and conditions hereof, the
Issuing Lender shall issue such Letter of Credit or amendment, as the case may
be, to the specified beneficiary, in each case in accordance with the Issuing
Lender’s usual and customary business practices. The Issuing Lender shall
provide the Company with a copy of each Letter of Credit so issued. Each such
Letter of Credit shall, unless otherwise expressly agreed by the Issuing Lender
and the Company at the time such Letter of Credit is issued, be subject to the
rules of the “International Standby Practices 1998” or such later version as may
be published by the Institute of International Banking Law and Practice (the
“ISP 1998”), or any successor entity, and shall, as to matters not governed by
the ISP 1998, be governed by, and construed and interpreted in accordance with,
the laws of the State of New York. The Issuing Lender shall have no obligation
to issue any Letter of Credit if any Lender is at such time a Defaulting Lender
hereunder (unless the Issuing Lender has entered into satisfactory arrangements
with the Company or such Defaulting Lender to eliminate the Issuing Lender’s
risk with respect to such Defaulting Lender).

 

(d)          Upon the issuance date of each Letter of Credit and on the
Effective Date with respect to Existing Letters of Credit, the Issuing Lender
shall be deemed, without further action by any party hereto, to have sold to
each other Lender, and each other Lender shall be deemed, without further action
by any party hereto, to have purchased from the Issuing Lender, a participation,
to the extent of such Lender’s Pro Rata Share, in such Letter of Credit, the
obligations thereunder and in the reimbursement obligations of the Company due
in respect of drawings made under such Letter of Credit. If requested by the
Issuing Lender, the other Lenders will execute any other documents reasonably
requested by the Issuing Lender to evidence the purchase of such participation.
Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Agreement 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 Event of Default, the
existence of a Borrowing Base Deficiency or reduction or termination of the
Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.

 

(e)          Upon the presentment of any draft for honor under any Letter of
Credit by the beneficiary thereof which the Issuing Lender determines is in
compliance with the conditions for payment thereunder, the Issuing Lender shall
promptly notify the Company and the Administrative Agent thereof, but failure to
so notify the Company shall not in any way affect the Company’s obligations
hereunder. The Company hereby promises and agrees, at the Company’s option, to
either (i) pay to the Administrative Agent for the account of the Issuing
Lender, by 2:00 p.m., Houston, Texas time, on the date payment is due as
specified in such notice, the full amount of such draft in immediately available
funds or (ii) request a Loan pursuant to the provisions of Section 2.01(a) and
Section 2.02 of this Agreement in the full amount of such draft, which request
shall specify that the Borrowing Date is to be the date payment is due under the
Letter of Credit as specified in the Issuing Lender’s notice. The Company will
be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on
the intended date of honor in an amount equal to the unreimbursed drawing, but
subject to the conditions set forth in Section 5.02 (other than delivery of a
Notice of Borrowing). If the Company fails timely to make such payment because a
Loan cannot be made pursuant to Section 2.01(a) and/or Section 5.02, each Lender
shall, notwithstanding any other provision of this Agreement (including the
occurrence and continuance of a Default or an Event of Default), make available
to the Administrative Agent for the benefit of the Issuing Lender an amount
equal to its Pro Rata Share of the presented draft on the day the Issuing Lender
is required to honor such draft. If such amount is not in fact made available to
the Administrative Agent by such Lender on such date, such Lender shall pay to
the Administrative Agent for the account of the Issuing Lender, on demand made
by the Issuing Lender, in addition to such amount, interest thereon at the
Federal Funds Rate for the first two days following demand and thereafter until
paid at the Base Rate. Upon receipt by the Administrative Agent from the Lenders
of the full amount of such draft, notwithstanding any other provision of this
Agreement (including the occurrence and continuance of a Default or an Event of
Default) the full amount of such draft shall automatically and without any
action by the Company, be deemed to have been a Base Rate Loan as of the date of
payment of such draft. Nothing in this Section 2.10(e) or elsewhere in this
Agreement shall diminish the Company’s obligation under this Agreement to
provide the funds for the payment of, or on demand to reimburse the Issuing
Lender for payment of, any draft presented to, and duly honored by, the Issuing
Lender under any Letter of Credit, and the automatic funding of a Loan as
provided in this Section 2.10(e) shall not constitute a cure or waiver of the
Event of Default for failure to timely provide such funds as required in this
Section 2.10(e).

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 39

 

  

(f)          The Company’s obligation to reimburse the Issuing Lender for
amounts paid on account of drafts honored under Letters of Credit 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 (1) any lack of validity or enforceability of any
Letter of Credit, any LC Application, or any term or provision therein, (2) 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, (3) payment by the Issuing Lender under a Letter of
Credit issued by the Issuing Lender against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit or any LC
Application, or (4) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.10(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Company’s obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Lender, 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 Lender; provided that the foregoing shall not be construed to excuse the
Issuing Lender from liability to the Company to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Company to the extent permitted by applicable law) suffered by the
Company that are caused by the Issuing Lender’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 Lender (as finally determined by a court of competent jurisdiction),
such Issuing Lender shall be deemed to have exercised all requisite care in each
such determination. In furtherance of the foregoing and without limiting the
generality thereof, the parties agree that, with respect to documents presented
which appear on their face to be in substantial compliance with the terms of a
Letter of Credit, the Issuing Lender that issued such Letter of Credit may, in
its sole discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless 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. The Company hereby waives presentment for payment (except the
presentment required by the terms of any Letter of Credit) and notice of
dishonor, protest and notice of protest with respect to drafts honored under the
Letters of Credit.

 

(g)          In the event that any provision of a LC Application is inconsistent
with, or in conflict of, any provision of this Agreement, including provisions
for the rate of interest applicable to drawings thereunder or rights of setoff
or any representations, warranties, covenants or any events of default set forth
therein, the provisions of this Agreement shall govern.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 40

 

  

(h)          If the Obligations, or any part thereof, are declared or otherwise
become immediately due and payable pursuant to Article IX of this Agreement,
then all LC Obligations shall become immediately due and payable without regard
for actual drawings or payments on the Letters of Credit, and the Company shall
be obligated to pay to the Administrative Agent immediately an amount equal to
the LC Obligations. All amounts made due and payable by the Company under this
Subsection 2.10(h) may be applied as the Issuing Lender elects to any of the
various LC Obligations; provided, however, that such amounts applied to the LC
Obligations shall be (i) first, applied to the LC Obligation, and (ii) second,
held by the Administrative Agent for the benefit of the Issuing Lender and the
Lenders as Collateral in the LC Collateral Account until all remaining LC
Obligations have been satisfied. This Subsection 2.10(h) shall not limit or
impair any rights which the Administrative Agent, the Issuing Lender or any of
the Lenders may have under any other document or agreement relating to any
Letter of Credit or LC Obligation, including any LC Application.

 

(i)          The Company hereby grants a security interest in and lien on all
cash and other funds paid to the Administrative Agent to be held as cash
collateral pursuant to this Section, the LC Collateral Account and all funds
therein, and all proceeds of the foregoing, to the Administrative Agent for and
on behalf of the Lenders as security for the Obligations. The Company agrees to
execute and deliver from time to time such documentation as the Administrative
Agent may reasonably request to further assure such security interest. The
Company shall also deposit cash collateral pursuant to this paragraph as and to
the extent required by Section 2.05(c).

 

(j)          If the Company is required to provide cash collateral hereunder as
a result of the occurrence of an Event of Default, such amount (to the extent
not applied as provided in Section 2.10(h)) shall be returned to the Company
promptly after all Defaults and Events of Default have been waived or cured. If
the Company is required to provide an amount of cash collateral hereunder
pursuant to Section 2.05(c), in the event that there exists excess cash
collateral, upon the request of the Company the Administrative Agent shall
promptly return such excess amount to the Company provided that no Event of
Default shall have occurred and be continuing.

 

(k)          As of the Effective Date, each Existing Letter of Credit shall
constitute, for all purposes of this Agreement and the other Loan Documents, a
Letter of Credit issued and outstanding hereunder.

 

2.11        Payments to the Administrative Agent; Several Obligations of the
Lenders.

 

(a)          Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Revolving Credit Borrowing of LIBOR
Loans (or, in the case of any Revolving Credit Borrowing of Base Rate Loans or
LIBOR Market Index Rate Loans, prior to 10:00 a.m. Houston, Texas time on the
date of such Revolving Credit Borrowing) that such Lender will not make
available to the Administrative Agent such Lender’s share of such Revolving
Credit Borrowing, the Administrative Agent may assume that such Lender has made
such share available on such date in accordance with Section 2.02 (or, in the
case of a Revolving Credit Borrowing of Base Rate Loans, that such Lender has
made such share available in accordance with and at the time required by Section
2.02) and may, in reliance upon such assumption, make available to the Company a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Revolving Credit Borrowing available to the Administrative
Agent, then the applicable Lender and the Company severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Company to but excluding the date of payment to the Administrative Agent,
at (i) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the
Administrative Agent in connection with the foregoing, and (ii) in the case of a
payment to be made by the Company, the interest rate applicable to the other
Loans included in such Borrowing. If the Company and such Lender shall pay such
interest to the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Company the amount of such
interest paid by the Company for such period. If such Lender pays its share of
the applicable Revolving Credit Borrowing to the Administrative Agent, then the
amount so paid shall constitute such Lender’s Revolving Credit Loan included in
such Revolving Credit Borrowing. Any payment by the Company shall be without
prejudice to any claim the Company may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 41

 

  

(b)          Unless the Administrative Agent shall have received notice from the
Company prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Lender hereunder that the
Company will not make such payment, the Administrative Agent may assume that the
Company has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Lender,
as the case may be, the amount due. In such event, if the Company has not in
fact made such payment, then each of the Lenders or the Issuing Lender, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or the Issuing Lender, 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 Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.

 

(c)          The failure of any Lender to make any Loan on any Borrowing Date,
to fund any participation or to make a payment pursuant to Section 11.04(c)
shall not relieve any other Lender of its obligation to do so, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on any Borrowing Date, to fund any participation to be
funded by such other Lender, or to make any payment pursuant to Section 11.04(c)
to be made by such Lender.

 

2.12        Sharing of Payments. If any Lender shall, by exercising any right of
setoff or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Revolving Credit Loans or the participations in LC
Obligations or in Swing Line Loans held by it resulting in such Lender’s
receiving payment of a proportion of the aggregate amount of its Revolving
Credit Loans or participations and accrued interest thereon greater than its pro
rata share thereof as provided herein, then the Lender receiving such greater
proportion shall

 

(a)          notify the Administrative Agent of such fact, and

 

(b)          purchase (for cash at face value) participations in the Revolving
Credit Loans and participations in LC Obligations and Swing Line Loans of the
other Lenders, or make such other adjustments as shall be equitable, 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 Revolving Credit Loans and other amounts owing them, 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

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 42

 

  

(ii)         the provisions of this Section 2.12 shall not be construed to apply
to (x) any payment made by or on behalf of the Company pursuant to and in
accordance with the express terms of this Agreement (including the application
of funds arising from the existence of a Defaulting Lender, (y) the application
of cash collateral provided for in Section 2.14 or (z) any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Revolving Credit Loans or participations in LC Obligations or Swing Line
Loans to any assignee or participant.

 

Each Loan Party 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 each
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of each Loan Party in the
amount of such participation.

 

2.13        Swing Line Loans.

 

(a)          The Swing Line. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees, in reliance upon the agreements of the
other Lenders set forth in this Section 2.13(a), to make loans (each such loan,
a “Swing Line Loan”), to the Company from time to time on any Business Day
during the period from the Effective Date to the Termination Date in an
aggregate amount not to exceed at any time outstanding the amount of the Swing
Line Sublimit, notwithstanding the fact that such Swing Line Loans, when
aggregated with the Pro Rata Share of the outstanding amount of Revolving Credit
Loans and LC Obligations of the Swing Line Lender, may exceed the amount of such
Lender’s Commitment; provided, however, that after giving effect to any Swing
Line Loan, (A) the sum of the aggregate outstanding amount of the Revolving
Credit Loans plus the Swing Line Loans plus LC Obligations shall not exceed the
aggregate Commitments at such time, and (B) the sum of the aggregate outstanding
amount of the Revolving Credit Loans of any Lender at such time, plus such
Lender’s Pro Rata Share of the outstanding amount of all LC Obligations at such
time, plus such Lender’s Pro Rata Share of the outstanding amount of all Swing
Line Loans at such time shall not exceed such Lender’s Commitment. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Company may borrow under this Section 2.13(a), prepay under Section
2.04(c)(iii), and reborrow under this Section 2.13(a). Each Swing Line Loan
shall bear interest at a rate based on the Base Rate. Immediately upon the
making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender’s Pro Rata Share times the amount of such Swing Line Loan.
Notwithstanding anything to the contrary contained herein, the Swing Line Lender
shall not at any time be obligated to make any Swing Line Loan hereunder if any
Lender is at such time a Defaulting Lender, unless the Company has entered into
arrangements satisfactory to the Swing Line Lender to eliminate the Swing Line
Lender’s risk with respect to such Lender.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 43

 

 

(b)          Borrowing Procedures. Each Swing Line Borrowing shall be made upon
the Company’s irrevocable notice to the Swing Line Lender and the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 3:00 p.m.,
Houston, Texas time on the requested borrowing date, and shall specify (i) the
amount to be borrowed, which shall be a minimum of $200,000 or any whole
multiple of $50,000 in excess thereof, and (ii) the requested borrowing date,
which shall be a Business Day. Each such telephonic notice must be confirmed
promptly by delivery to the Swing Line Lender and the Administrative Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a
Responsible Officer of the Company. Promptly after receipt by the Swing Line
Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will
confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has also received such Swing Line Loan Notice and, if not,
the Swing Line Lender will notify the Administrative Agent (by telephone or in
writing) of the contents thereof. Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Administrative Agent (including at
the request of any Lender) prior to 4:00 p.m., Houston, Texas time on the date
of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to
make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of Section 2.13(a), (B) that one or more of the
applicable conditions specified in Article V is not then satisfied, or (C) any
Lender is at such time a Defaulting Lender hereunder (unless the Swing Line
Lender has entered into satisfactory arrangements with the Company or such
Lender to eliminate the Swing Line Lender’s risk with respect to such
Lender),then subject to the terms and conditions hereof, the Swing Line Lender
will, not later than 5:00 p.m., Houston, Texas time on the borrowing date
specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan
available to the Company at its office by crediting the account of the Company
on the books of the Swing Line Lender in immediately available funds.

 

(c)          Refinancing of Swing Line Loans.

 

(i)          The Swing Line Lender at any time in its sole and absolute
discretion, may request, on behalf of the Company (which hereby irrevocably
authorizes the Swing Line Lender to so request on its behalf), that each Lender
make a Revolving Credit Loan (which shall be a Base Rate Loan) in an amount
equal to such Lender’s Pro Rata Share of the amount of Swing Line Loans then
outstanding. Such request shall be made in writing (which written request shall
be deemed to be a Notice of Revolving Credit Borrowing for purposes hereof) and
in accordance with the requirements of Section 2.02, without regard to the
minimum and multiples specified therein for the principal amount of Base Rate
Loans, but subject to the unutilized portion of the aggregate Commitments and
the conditions set forth in Section 5.02. The Swing Line Lender shall furnish
the Company with a copy of the applicable borrowing notice promptly after
delivering such notice to the Administrative Agent. Each Lender shall make an
amount equal to its Pro Rata Share of the amount specified in such notice
available to the Administrative Agent in immediately available funds for the
account of the Swing Line Lender at the Administrative Agent’s Payment Office
not later than 2:00 p.m. Houston, Texas time on the day specified in such
borrowing notice, whereupon, subject to Section 2.13(c)(ii), each Lender that so
makes funds available shall be deemed to have made a Revolving Credit Loan that
is a Base Rate Loan to the Company in such amount. The Administrative Agent
shall remit the funds so received to the Swing Line Lender.

 

(ii)         If for any reason any Swing Line Loan cannot be refinanced by such
a Revolving Credit Loan in accordance with Section 2.13(c)(i), the request for
Revolving Credit Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Lenders fund its risk participation in the relevant Swing Line Loan and each
Lender’s payment to the Administrative Agent for the account of the Swing Line
Lender pursuant to Section 2.13(c)(i) shall be deemed payment in respect of such
participation.

 

(iii)        If any Lender fails to make available to the Administrative Agent
for the account of the Swing Line Lender any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.13(c) by the time
specified in Section 2.13(c)(i), the Swing Line Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the Swing
Line Lender at a rate per annum equal to the greater of the Federal Funds Rate
and a rate determined by the Swing Line Lender in accordance with banking
industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by the Swing Line Lender in connection with the
foregoing. If such Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Lender’s Revolving Credit
Loan included in the relevant borrowing or funded participation in the relevant
Swing Line Loan, as the case may be. A certificate of the Swing Line Lender
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (iii) shall be conclusive absent manifest error.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 44

 

  

(iv)        Each Lender’s obligation to make Revolving Credit Loans or to
purchase and fund risk participations in Swing Line Loans pursuant to this
Section 2.13(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Company or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing. No such funding of risk
participations shall relieve or otherwise impair the obligation of the Company
to repay Swing Line Loans, together with interest as provided herein.

 

(d)          Repayment of Participations.

 

(i)          At any time after any Lender has purchased and funded a risk
participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Pro Rata Share thereof in the same funds as those
received by the Swing Line Lender.

 

(ii)         If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be refunded by the
Swing Line Lender under any of the circumstances described in Section 11.05
(including pursuant to any settlement entered into by the Swing Line Lender in
its discretion), each Lender shall pay to the Swing Line Lender its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned, at a rate per annum
equal to the Federal Funds Rate. The Administrative Agent will make such demand
upon the request of the Swing Line Lender. The obligations of the Lenders under
this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e)          Interest for Account of Swing Line Lender. The Swing Line Lender
shall be responsible for invoicing the Company for interest on the Swing Line
Loans. Until each Lender funds it Revolving Credit Loan or risk participation
pursuant to this Section 2.13(e) to refinance such Lender’s Pro Rata Share of
any Swing Line Loan, interest in respect of such Pro Rata Share shall be solely
for the account of the Swing Line Lender.

 

(f)          Payments Directly to Swing Line Lender. The Company shall make all
payments of principal and interest in respect of the Swing Line Loans directly
to the Swing Line Lender.

 

2.14        Defaulting Lenders.

 

(a)          Notwithstanding any provision of this Agreement to the contrary, if
any Lender becomes a Defaulting Lender, then the following provisions shall
apply for so long as such Lender is a Defaulting Lender, to the extent permitted
by Requirements of Law:

 

(i)          fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 2.07(a) and the Company
shall not be required to pay any such fee that otherwise would have been
required to have been paid to that Defaulting Lender; and

 

(ii)         the Commitment and the sum of the outstanding principal amount of
the Loans of such Defaulting Lender shall not be included in determining whether
all Lenders, the Majority Lenders, or the Required Lenders have taken or may
take any action hereunder (including any consent to any amendment or waiver
pursuant to Section 11.01), provided that the Commitment of such Defaulting
Lender may not be increased or extended without the consent of such Defaulting
Lender.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 45

 

  

(b)          Cash Collateral.

 

(i)          At any time that there shall exist a Defaulting Lender, if the
reallocation described in Section 2.14(d) cannot, or can only partially, be
effected then, within three Business Days of the request of the Administrative
Agent, the Issuing Lender or the Swing Line Lender, the Company shall deliver to
the Administrative Agent cash collateral in an amount sufficient to cover all
Fronting Exposure after taking into account any reallocation pursuant to Section
2.14(d). Notwithstanding anything to the contrary contained in this Agreement,
cash collateral provided under Section 2.05(c)(i), this Section 2.14, or Section
9.02 in respect of Letters of Credit or Swing Line Loans shall be held and
applied to the satisfaction of the specific LC Obligation, Swing Line Loans,
obligations to fund participations therein and other obligations for which the
cash collateral was so provided, prior to any other application of such property
as may be provided for herein.

 

(ii)         Cash collateral (or the appropriate portion thereof) provided to
reduce Fronting Exposure shall be released promptly following (i) the
elimination of the applicable Fronting Exposure or other obligations giving rise
thereto (including by the termination of Defaulting Lender status of the
applicable Lender or by replacement of the applicable Defaulting Lender by
assignment made in accordance with this Agreement) or (ii) the Administrative
Agent’s good faith determination that there exists excess cash collateral;
provided, however, that cash collateral furnished by or on behalf of a Loan
Party shall not be released during the continuance of a Default or Event of
Default (and following application as provided in this Section 2.14 may be
otherwise applied in accordance with Section 9.02 during the continuance of a
Default or Event of Default).

 

(c)          Reallocation of Payments. Any payment of principal, interest, fees
or other amounts received by the Administrative Agent for the account of that
Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to
Article VIII or otherwise, and including any amounts made available to the
Administrative Agent by that Defaulting Lender pursuant to Section 10.08), shall
be applied at such time or times as may be determined by the Administrative
Agent as follows:

 

first, to the payment of any amounts owing by that Defaulting Lender to the
Administrative Agent hereunder;

 

second, to the payment on a pro rata basis of any amounts owing by that
Defaulting Lender to the Issuing Lender or Swing Line Lender hereunder;

 

third, if so determined by the Administrative Agent or requested by the Issuing
Lender or Swing Line Lender, to be held as cash collateral for future funding
obligations of that Defaulting Lender of any participation in any Swing Line
Loan or Letter of Credit in accordance with Section 2.14(b), unless the
Administrative Agent has previously received cash collateral in an amount
sufficient to cover future funding obligations after taking into account any
reallocation of the Defaulting Lender’s participation obligation;

 

fourth, as the Company may request (so long as no Default or Event of Default
exists), to the funding of any Loan in respect of which that Defaulting Lender
has failed to fund its portion thereof as required by this Agreement, as
determined by the Administrative Agent;

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 46

 

  

fifth, if so determined by the Administrative Agent and the Company, to be held
in a deposit account and released pro rata in order to (i) satisfy such
Defaulting Lender’s potential future funding obligations with respect to Loans
and funded participations under this Agreement and (ii) cash collateralize the
Issuing Lender’s future Fronting Exposure with respect to such Defaulting Lender
with respect to future Letters of Credit and Swing Line Loans issued under this
Agreement, in accordance with Section 2.14(b);

 

sixth, to the payment of any amounts owing to the Lenders, the Issuing Lender or
the Swing Line Lender as a result of any final and non-appealable judgment of a
court of competent jurisdiction obtained by any Lender, the Issuing Lender or
the Swing Line Lender against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement;

 

seventh, so long as no Default or Event of Default exists, to the payment of any
amounts owing to the Company as a result of any final and non-appealable
judgment of a court of competent jurisdiction obtained by the Company against
such Defaulting Lender as a result of such Defaulting Lender's breach of its
obligations under this Agreement or against such Defaulting Lender’s Affiliate
that is a Lender Derivative Provider under any Derivative Contract as a result
of such Affiliate’s breach of its obligations under such Derivative Contract;
and

 

eighth, to such Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided that if (x) such payment is a payment of the
principal amount of any Loans or Matured LC Obligations in respect of which that
Defaulting Lender has not fully funded its appropriate share and (y) such Loans
or Matured LC Obligations were made at a time when the conditions set forth in
Section 5.02 were satisfied or waived, such payment shall be applied solely to
pay the Loans of, and Matured LC Obligations owed to, all non-Defaulting Lenders
on a pro rata basis prior to being applied to the payment of any Loans of, or
Matured LC Obligations owed to, that Defaulting Lender. Any payments,
prepayments or other amounts paid or payable to a Defaulting Lender that are
applied (or held) to pay amounts owed by a Defaulting Lender or to post cash
collateral pursuant to this Section 2.14(c) shall be deemed paid to and
redirected by that Defaulting Lender, and each Lender irrevocably consents
hereto.

 

(d)          Reallocation of Participations to Reduce Fronting Exposure. During
any period in which there is a Defaulting Lender, such Defaulting Lenders’
participation in LC Obligations and Swing Line Loans shall be reallocated among
the non-Defaulting Lenders in accordance with the Pro Rata Shares (computed
without giving effect to the Commitment of that Defaulting Lender), and for
purposes of computing the amount of the obligation of each non-Defaulting Lender
to acquire, refinance or fund participations in Letters of Credit or Swing Line
Loans pursuant to Sections 2.10 and 2.13, the “Pro Rata Share” of each
non-Defaulting Lender shall be computed without giving effect to the Commitment
of that Defaulting Lender; provided, that the aggregate obligation of each
non-Defaulting Lender to acquire, refinance or fund participations in Letters of
Credit and Swing Line Loans shall not exceed the positive difference, if any, of
(1) the Commitment of that non-Defaulting Lender minus (2) the outstanding
principal amount of Loans owed to such non-Defaulting Lender and its
participations in LC Obligations and Swing Line Loans.

 

(e)          Defaulting Lender Cure. If the Company, the Administrative Agent,
the Issuing Lender and the Swing Line Lender agree in writing that a Lender is
no longer a Defaulting Lender, the Administrative Agent shall notify the Lender
and on the effective date specified in such notice and subject to any conditions
set forth therein (which may include arrangements with respect to any cash
collateral), such Lender will, to the extent applicable, purchase at par that
portion of outstanding Loans of the other Lenders or take such other actions as
the Administrative Agent shall determine to be necessary to cause the Loans and
funded and unfunded participations in Letters of Credit and Swing Line Loans to
be held pro rata by the Lenders in accordance with their Pro Rata Shares
(without giving effect to Section 2.14(d)), whereupon such Lender will cease to
be a Defaulting Lender; provided that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Company
while that Lender was a Defaulting Lender; and provided, further, that except to
the extent otherwise expressly agreed by the affected parties, no change
hereunder from Defaulting Lender to Lender will constitute a waiver or release
of any claim of any party hereunder arising from that Lender’s having been a
Defaulting Lender.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 47

 

  

Article III.

 

TAXES, YIELD PROTECTION AND ILLEGALITY;

replacement of lenders

 

3.01        Taxes.

 

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

 

(b)          Payment of Other Taxes by the Company. Without limiting the
provisions of Section 3.01(a) above, the Company shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with Requirements of
Law.

 

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

 

(d)          Indemnification by the Lenders. Each Lender shall severally
indemnify the Administrative Agent, within ten (10) days after demand therefor,
for (i) any Indemnified Taxes attributable to such Lender (but only to the
extent that any Loan Party has not already indemnified the Administrative Agent
for such Indemnified Taxes and without limiting the obligation of the Loan
Parties to do so), (ii) any Taxes attributable to such Lender’s failure to
comply with the provisions of Section 11.06(d) relating to the maintenance of a
Participant Register and (iii) any Excluded Taxes attributable to such Lender,
in each case, that are payable or paid by the Administrative Agent in connection
with any Loan Document, and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to any Lender by the Administrative Agent
shall be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this paragraph (d).

 

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(e)          Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Company to a Governmental Authority, the
Company 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.

 

(f)          Status of Lenders.

 

(i)          Any Lender that is entitled to an exemption from or reduction of
withholding Tax under the law of the jurisdiction in which the Company is
resident for Tax purposes, or any treaty to which such jurisdiction is a party,
with respect to payments hereunder or under any other Loan Document shall
deliver to the Company (with a copy to the Administrative Agent), at the time or
times prescribed by Requirements of Law or reasonably requested by the Company
or the Administrative Agent, such properly completed and executed documentation
prescribed by Requirements of Law as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any
Lender, if requested by the Company or the Administrative Agent, shall deliver
such other documentation prescribed by Requirements of Law or reasonably
requested by the Company or the Administrative Agent as will enable the Company
or the Administrative Agent to determine whether or not such Lender is subject
to backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 3.01(f)(ii) and Section 3.01(f)(iii)(A) through Section
3.01(f)(iii)(E)) shall not be required if in the Lender’s reasonable judgment
such completion, execution or submission would subject such Lender to any
material unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender.

 

(ii)         Without limiting the generality of the first paragraph of this
Section (f), any Lender, Issuing Lender or Administrative Agent that is a U.S.
Person shall deliver to the Company and the Administrative Agent (in such number
of copies as shall be requested by the recipient) on or prior to the date on
which such Person becomes a party to this Agreement (and from time to time
thereafter upon the request of the Company or the Administrative Agent), duly
completed copies of Internal Revenue Service Form W-9 certifying that such
Person is exempt from U.S. federal backup withholding tax.

 

(iii)        Without limiting the generality of the first paragraph of this
Section (f), any Foreign Lender shall deliver to the Company and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a party
to this Agreement (and from time to time thereafter upon the request of the
Company or the Administrative Agent, but only if such Foreign Lender is legally
entitled to do so), whichever one or more of the following is applicable:

 

(A)         duly completed copies of Internal Revenue Service Form W-8BEN or
W-8BEN-E claiming eligibility for benefits of an income tax treaty to which the
United States of America is a party,

 

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(B)         duly completed copies of Internal Revenue Service Form W-8ECI or
W-8EXP,

 

(C)         in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit I-1 to the effect that such
Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of
the Code, (B) a “10-percent shareholder” of the Company within the meaning of
section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation”
described in section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance
Certificate”) and (y) duly completed copies of Internal Revenue Service Form
W-8BEN or W-8BEN-E, as applicable,

 

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

 

(E)         if a payment made to a Foreign Lender under any Loan Document would
be subject to a withholding Tax imposed by FATCA as a result of such Foreign
Lender failing to comply with the applicable reporting requirements of FATCA
(including those contained in Sections 1471(b) or 1472(b) of the Code, as
applicable), such Foreign Lender shall deliver such documentation or
certifications as are required to evidence compliance by the Foreign Lender with
FATCA for purposes of determining if the Foreign Lender is subject to such
withholding Tax and such additional documentation reasonably requested by the
Company or the Administrative Agent as may be necessary for the Company and the
Administrative Agent to comply with their obligations under FATCA and to
determine that such Foreign Lender has complied with such Foreign Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment (solely for purposes of this clause (E), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement), or

 

(F)         any other form prescribed by Requirements of Law as a basis for
claiming exemption from or a reduction in United States Federal withholding Tax
duly completed together with such supplementary documentation as may be
prescribed by Requirements of Law to permit the Company to determine the
withholding or deduction required to be made.

 

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

 

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(g)          Treatment of Certain Refunds. If the Administrative Agent, a Lender
or the Issuing 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 a Loan
Party or with respect to which a Loan Party has paid additional amounts pursuant
to this Section, it shall pay to such Loan Party an amount equal to such refund
(but only to the extent of indemnity payments made, or additional amounts paid,
by the Loan Party under this Section with respect to the Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or the Issuing Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund), provided that the Loan Party, upon the
request of the Administrative Agent, such Lender or the Issuing Lender, agrees
to repay the amount paid over to such Loan Party (plus any penalties, interest
or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or the Issuing Lender in the event the
Administrative Agent, such Lender or the Issuing Lender is required to repay
such refund to such Governmental Authority. This Section 3.01(g) shall not be
construed to require the Administrative Agent, any Lender or the Issuing Lender
to make available its tax returns (or any other information relating to its
Taxes that it deems confidential) to the Company or any other Person.

 

(h)          Survival. Each party’s obligations under this Section 3.01 shall
survive the resignation or replacement of Administrative Agent or any assignment
of rights by, or the replacement of, a Lender, the termination of the
Commitments and the repayment, satisfaction or discharge of all other
Obligations.

 

(i)          Lender. For purposes of this Section 3.01, the term Lender shall
include the Swing Line Lender.

 

3.02        Illegality.

 

(a)          If any Lender determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has, on or after the Effective Date,
made it unlawful, or that, on or after the Effective Date, any central bank or
other Governmental Authority has asserted that it is unlawful, for any Lender or
its applicable Lending Office to make LIBOR Loans or LIBOR Market Index Rate
Loans, then, on notice thereof by the Lender to the Company through the
Administrative Agent, any obligation of that Lender to make LIBOR Loans or LIBOR
Market Index Rate Loans, as applicable, shall be suspended until the Lender
notifies the Administrative Agent and the Company that the circumstances giving
rise to such determination no longer exist; such notice to be promptly given
upon the determination that such circumstances no longer exist.

 

(b)          If a Lender determines that it is unlawful to maintain any LIBOR
Loan or any LIBOR Market Index Rate Loan, the Company shall, upon its receipt of
notice of such fact and demand from such Lender (with a copy to the
Administrative Agent), convert such LIBOR Loans or LIBOR Market Index Rate
Loans, as applicable, of that Lender then outstanding into a Base Rate Loan
without regard to conditions precedent described in Section 5.02(b), either on
the last day of the Interest Period thereof, if the Lender may lawfully continue
to maintain such LIBOR Loans or LIBOR Market Index Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such LIBOR Loan
or LIBOR Market Index Rate Loan. Upon any such conversion, the Company shall pay
accrued interest on the amount so converted. In addition, with respect to LIBOR
Loans, if any such conversion occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Company shall pay the
affected Lender such amounts, if any, as may be required pursuant to Section
3.04.

 

(c)          If the obligation of any Lender to make or maintain LIBOR Loans or
LIBOR Market Index Rate Loans has been so terminated or suspended, all Loans
which would otherwise be made or maintained by the Lender as LIBOR Loans or
LIBOR Market Interest Rate Loans shall be instead Base Rate Loans.

 

(d)          Before giving any notice to the Administrative Agent under this
Section, the affected Lender shall designate a different Lending Office with
respect to its LIBOR Loans or LIBOR Market Index Rate Loans if such designation
will avoid the need for giving such notice or making such demand and will not,
in the judgment of the Lender, be illegal or otherwise disadvantageous to the
Lender.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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3.03        Increased Costs and Reduction of Return.

 

(a)          Increased Costs Generally. If any Change in Law shall:

 

(i)          impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender or the Issuing Lender; or

 

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

 

(iii)        impose on any Lender or the Issuing Lender or the London interbank
market any other condition, cost or expense (other than Taxes) affecting this
Agreement or LIBOR Loans or LIBOR Market Index Rate Loans made by such Lender or
any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall be to increase the cost to such
Lender or other Recipient of making or maintaining any Loan (or of maintaining
its obligation to make any such Loan), or to increase the cost to such Lender or
the Issuing Lender of participating in, issuing or maintaining any Letter of
Credit (or of maintaining its obligation to participate in or to issue any
Letter of Credit), or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Lender hereunder (whether of principal, interest or
any other amount) then, upon request of such Lender or the Issuing Lender, the
Company will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender, as the case may be, for such additional costs incurred or reduction
suffered.

 

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

 

(c)          Certificates for Reimbursement. A certificate of a Lender or the
Issuing Lender setting forth the amount or amounts necessary to compensate such
Lender or the Issuing Lender or its holding company, as the case may be, as
specified in Sections 3.03(a) or (b) and delivered to the Company shall be
conclusive absent manifest error. The Company shall pay such Lender or the
Issuing Lender, as the case may be, the amount shown as due on any such
certificate within 10 days after receipt thereof.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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(d)          Delay in Requests. Failure or delay on the part of any Lender or
the Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender’s or the Issuing Lender’s right to demand
such compensation, provided that the Company shall not be required to compensate
a Lender or the Issuing Lender pursuant to this Section for any increased costs
incurred or reductions suffered more than nine months prior to the date that
such Lender or the Issuing Lender, as the case may be, notifies the Company of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the Issuing Lender’s intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).

 

3.04        Funding Losses. The Company shall reimburse each Lender and hold
each Lender harmless from any loss or expense excluding consequential losses
which the Lender may sustain or incur as a consequence of: (a) the failure of
the Company to make on a timely basis any payment of principal of any LIBOR
Loan; (b) the failure of the Company to borrow, continue or convert a Loan after
the Company has given (or is deemed to have given) a Notice of Revolving Credit
Borrowing or a Notice of Conversion/Continuation (including by reason of the
failure to satisfy any condition precedent thereto); (c) the failure of the
Company to make any prepayment in accordance with any notice delivered under
Section 2.04; (d) the prepayment (including pursuant to Section 2.05 or 2.06) or
other payment (including after acceleration thereof) of a LIBOR Loan on a day
that is not the last day of the relevant Interest Period; (e) the reallocation
of any LIBOR Loan pursuant to Section 2.04(b); or (f) the automatic conversion
under Section 2.03 of any LIBOR Loan to a Base Rate Loan on a day that is not
the last day of the relevant Interest Period; including any such loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
its LIBOR Loans or from fees payable to terminate the deposits from which such
funds were obtained but excluding any loss of Applicable Margin after the date
of such failure, prepayment or conversion. For purposes of calculating amounts
payable by the Company to the Lenders under this Section and under Section
3.03(a), each LIBOR Loan made by a Lender (and each related reserve, special
deposit or similar requirement) shall be conclusively deemed to have been funded
at the LIBOR used in determining the interest rate for such LIBOR Loan by a
matching deposit or other borrowing in the interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such LIBOR Loan is
in fact so funded.

 

3.05        Inability to Determine Rates. If Administrative Agent determines
that for any reason adequate and reasonable means do not exist for determining
the LIBOR for any requested Interest Period with respect to a proposed LIBOR
Loan, or if the Majority Lenders notify the Administrative Agent that the LIBOR
applicable pursuant to Section 2.06(c) for any requested Interest Period with
respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Company and each Lender. Thereafter, the obligation of the Lenders to
make or maintain LIBOR Loans hereunder shall be suspended until the
Administrative Agent upon the instruction of the Majority Lenders revokes such
notice in writing; such written revocation to be promptly given upon
determination that such circumstances no longer exist. Upon receipt of such
notice, the Company may revoke any Notice of Revolving Credit Borrowing or
Notice of Conversion/Continuation then submitted by it. If the Company does not
revoke such notice, the Lenders shall make, convert or continue the Loans, as
proposed by the Company, in the amount specified in the applicable notice
submitted by the Company, but such Loans shall be made, converted or continued
as Base Rate Loans instead of LIBOR Loans.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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3.06        Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article III shall deliver to the Company (with a copy to
the Administrative Agent) a certificate setting forth in reasonable detail the
amount payable to the Lender hereunder and such certificate shall be conclusive
and binding on the Company in the absence of manifest error provided, however,
that such Lender shall only be entitled to collect amounts incurred within 180
days of such notice.

 

3.07        Mitigation Obligations; Replacement of Lenders.

 

(a)          Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.03, or requires the Company to pay any Indemnified
Taxes or any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 3.01, 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 3.01 or 3.03, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender in its sole discretion. The
Company hereby agrees to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.

 

(b)          Replacement of Lenders. If (i) any Lender requests compensation
under Section 3.03, (ii) the Company is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 3.01, (iii) the obligation of any Lender to make, continue or convert
Base Rate Loans into LIBOR Loans is suspended under Section 3.02, (iv) any
Lender is a Defaulting Lender, or (v) any Lender refuses to consent to any
amendment, waiver or other modification of any Loan Document requested by the
Company that requires the consent of a greater percentage of the Lenders than
the Majority Lenders and such amendment, waiver or other modification is
consented to by the Majority Lenders, then the Company 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, and consents required by, Section
11.06), all of its interests, rights (other than its existing rights to payments
pursuant to Section 3.03 or Section 3.01) and obligations under this Agreement
and the related Loan Documents to an Eligible Assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment), provided that:

 

(i)          the Company shall have paid to the Administrative Agent the
assignment fee specified in Section 11.06;

 

(ii)         such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Obligations, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder and
under the other Loan Documents (including any amounts under Section 3.04) from
the assignee (to the extent of such outstanding principal and accrued interest
and fees) or the Company (in the case of all other amounts);

 

(iii)        in the case of any such assignment resulting from a claim for
compensation under Section 3.03 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and

 

(iv)        such assignment does not conflict with applicable law.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Company to require such assignment and delegation
cease to apply. If any Lender required to make an assignment and delegation
pursuant to this Section 3.07(b) shall refuse or fail to execute and deliver an
Assignment and Assumption, such Lender shall be deemed, effective as of the date
upon which such Lender shall have received payment of the amounts required to be
paid pursuant to clause (ii) of the proviso to Section 3.07(b), to have executed
and delivered such Assignment and Assumption.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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3.08        Survival. The agreements and obligations of the Company in this
Article III shall survive the payment of all other Obligations.

 

Article IV.

 

SECURITY

 

4.01        The Security. The Obligations will be secured by the Security
Documents described in Schedule 4.01 and any additional Security Documents
hereafter delivered by the Loan Parties and accepted by the Administrative
Agent.

 

4.02        Agreement to Deliver Security Documents. The Loan Parties agree to
deliver to further secure the Obligations whenever reasonably requested by the
Administrative Agent in its sole and absolute discretion, deeds of trust,
mortgages, chattel mortgages, security agreements, financing statements and
other Security Documents in form and substance reasonably satisfactory to the
Administrative Agent for the purpose of granting, confirming, and perfecting
first and prior liens or security interests on substantially all assets of
Parent, the Company and their present and future Subsidiaries, including Oil and
Gas Properties representing not less than 80% of the total net present value
(determined by a discount factor of 10%) of the Oil and Gas Properties evaluated
in the most recently delivered Reserve Report. The Loan Parties also agree to
deliver whenever reasonably requested by the Administrative Agent, title
opinions from legal counsel reasonably acceptable to the Administrative Agent or
such other evidence of title reasonably satisfactory to the Administrative Agent
with respect to the Mortgaged Properties designated by the Administrative Agent,
based upon abstract or record examinations to dates reasonably acceptable to the
Administrative Agent and (a) stating that the Loan Party, as applicable, has
good and defensible title to such properties and interests, free and clear of
all Liens except Permitted Liens, (b) confirming that such Oil and Gas
Properties are subject to Security Documents securing the Obligations that
constitute and create legal, valid and duly perfected deed of trust or mortgage
liens in such Oil and Gas Properties and assignments of and security interests
in the Oil and Gas attributable to such Oil and Gas Properties and the proceeds
thereof, in each case subject only to Permitted Liens, and (c) covering such
other matters as the Administrative Agent may reasonably request.

 

4.03        Perfection and Protection of Security Interests and Liens.

 

(a)          The Loan Parties will from time to time deliver to the
Administrative Agent any financing statements, amendment, assignment and
continuation statements, extension agreements and other documents, properly
completed and executed (and acknowledged when required) by each Loan Party, as
applicable, in form and substance reasonably satisfactory to the Administrative
Agent, which the Administrative Agent reasonably requests for the purpose of
perfecting, confirming, or protecting any Liens or other rights in Collateral
securing any Obligations.

 

(b)          In the case of properties other than Oil and Gas Properties, this
Agreement and the other Loan Documents shall not require the creation or
perfection of Liens in particular properties or assets if and for so long as, in
the reasonable judgment of the Administrative Agent, the cost of creating or
perfecting such Liens in such property shall be excessive in view of the
benefits to be obtained by the Lenders therefrom. The Administrative Agent may
grant extensions of time for the creation and perfection of Liens in particular
assets or property where it determines, in consultation with the Company, that
such action cannot be accomplished without undue effort or expense by the time
or times at which it would otherwise be required by this Agreement or the other
Loan Documents.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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4.04        Offset. To secure the repayment of the Obligations the Company
hereby grants the Administrative Agent and each Lender a security interest, a
lien, and a right of offset, each of which shall be in addition to all other
interests, liens, and rights of the Administrative Agent at common law, under
the Loan Documents, or otherwise, and each of which shall be upon and against
(a) any and all moneys, securities or other property (and the proceeds
therefrom) of the Company now or hereafter held or received by or in transit to
the Administrative Agent or any Lender from or for the account of the Company,
whether for safekeeping, custody, pledge, transmission, collection or otherwise,
(b) any and all deposits (general or special, time or demand, provisional or
final) of the Company with the Administrative Agent or any Lender, and (c) any
other credits and claims of the Company at any time existing against the
Administrative Agent or any Lender, including claims under certificates of
deposit. During the existence of any Event of Default, the Administrative Agent
or any Lender is hereby authorized to foreclose upon, offset, appropriate, and
apply, at any time and from time to time, without notice to the Company, any and
all items hereinabove referred to against the Obligations then due and payable.

 

4.05        Subsidiary Guaranty and Security Agreement.

 

(a)          Each Subsidiary of a Loan Party now existing or created, acquired
or coming into existence after the date hereof, including each of the
Guarantors, shall pursuant to Section 7.15, promptly upon request by the
Administrative Agent, execute and deliver to the Administrative Agent an
absolute and unconditional guaranty of the timely repayment, and the due and
punctual performance, of the Obligations of the Company hereunder, which
Guaranty (or joinder thereto) shall be substantially in the form and substance
of Exhibit G, a Security Agreement (or joinder thereto) substantially in the
form of Exhibit H, and Security Documents (or joinder thereto, as applicable) as
required by Section 4.02. The Company and its Subsidiaries will cause each of
their Subsidiaries to deliver to the Administrative Agent, simultaneously with
its delivery of such Guaranty and Security Agreement (or joinder), (x) written
evidence satisfactory to the Administrative Agent that such Subsidiary has taken
all organizational action necessary to duly approve and authorize its execution,
delivery and performance of such Guaranty, Security Agreement and any other
documents which it is required to execute, and (y) such additional closing
documents, certificates and opinions of counsel as the Administrative Agent
shall reasonably require.

 

(b)          Each Loan Party is mutually dependent on each other in the conduct
of their respective businesses, with the credit needed from time to time by each
often being provided by another or by means of financing obtained by one such
Affiliate with the support of the other for their mutual benefit and the ability
of each to obtain such financing is dependent on the successful operations of
the other. The board of directors, managers or general partner, where
applicable, of each Guarantor has determined that such Guarantor’s execution,
delivery and performance of this Agreement may reasonably be expected to
directly or indirectly benefit such Guarantor and is in the best interests of
such Guarantor.

 

(c)          The direct or indirect value of the consideration received and to
be received by such Guarantor in connection herewith is reasonably worth at
least as much as the liability and obligations of each Guarantor hereunder, and
the incurrence of such liability and obligations in return for such
consideration may reasonably be expected to benefit such Guarantor, directly or
indirectly.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 56

 

  

Article V.

 

CONDITIONS PRECEDENT

 

5.01        Conditions of Initial Credit Extensions. The effectiveness of this
Agreement and the obligation of each Lender to make its initial Loan hereunder
and the obligation of the Issuing Lender to issue Letters of Credit hereunder,
are subject to the satisfaction of each of the following conditions precedent:

 

(a)          Credit Agreement and other Loan Documents. This Agreement, the
Notes, the Guaranties and the Security Documents described on Schedule 4.01 will
have been executed and delivered, or substantially simultaneously with the
funding of the initial Loans, will be executed and delivered, by each party
thereto.

 

(b)          Resolutions; Incumbency; Organization Documents, Good Standing. The
Administrative Agent will have received a certificate of the Secretary,
Assistant Secretary or a Responsible Officer with similar responsibilities of
each Loan Party, or in the event that such Loan Party is a limited partnership,
of such Person’s general partner, certifying as of the Effective Date: (i)
Resolutions of its board of directors or members, authorizing the transactions
contemplated hereby; (ii) the names and genuine signatures of the Responsible
Officers of such Person, authorized to execute, deliver and perform, as
applicable, this Agreement, the Notes, the Guaranties, the Security Documents,
and all other Loan Documents to be delivered by such Person; (iii) the
Organization Documents of such Person as in effect as of the Effective Date;
(iv) the good standing certificate for such Person, from its state of
incorporation, formation or organization, as applicable, dated as of a recent
date; and (v) as may be reasonably required by the Administrative Agent,
certificate(s) of authority for such Person from states wherein such Person is
required to be qualified to conduct business, evidencing such Person’s
qualification to do business in such state, dated as of a recent date, provided
that, if requested by the Company, the certificates described in this clause (v)
may be provided within a reasonable period of time after the Effective Date,
such period of time to be agreed by the Company and the Administrative Agent.

 

(c)          Certificates of a Responsible Officer; Pricing Grid Certificate.
The Administrative Agent will have received the following, each in form and
substance reasonably satisfactory to the Administrative Agent:

 

(i)          a certificate executed by a Responsible Officer of Company
certifying that the Company and its subsidiaries on a consolidated basis are
Solvent, and a certificate executed by a Responsible Officer of the Parent
certifying that the Parent and its subsidiaries on a consolidated basis are
Solvent, in each case after giving effect to the Transactions and any other
Indebtedness that is being incurred on the Effective Date;

 

(ii)         a certificate signed by a Responsible Officer of Company attaching
and certifying insurance certificates from the Company’s insurance carriers
reflecting insurance policies required under Section 7.08 including any
necessary endorsements to reflect the Administrative Agent as additional insured
and loss payee, provided that, if requested by the Company, such certificates
evidencing insurance may be provided within a reasonable period of time after
the Effective Date, such period of time to be agreed by the Company and the
Administrative Agent;

 

(iii)        a certificate executed by a Responsible Officer of Company
certifying as to the matters set forth in clauses (h), (i), (j), (m), (n), (o),
(p) and (q) of this Section 5.01; and

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 57

 

  

(iv)        a Pricing Grid Certificate, prepared by giving effect to the
Transactions and any other Indebtedness being incurred by the Parent and its
Subsidiaries on the Effective Date.

 

(d)          Payments under Existing Credit Agreement. The Company (i) will have
repaid or shall repay substantially simultaneously with funding of the initial
Loans under this Agreement the principal amount of all Loans outstanding under
the Existing Credit Agreement, and (ii) will have paid or arrangements
satisfactory to the Administrative Agent shall have been made for payment (on
the Effective Date) of accrued interest, fees and other amounts which are
required by the terms of the Existing Credit Agreement to be paid on the
Effective Date. Without limiting the foregoing, all amounts owed under the
Existing Credit Agreement to “Lenders” under the Existing Credit Agreement that
will not be Lenders hereunder shall have been paid or arrangements satisfactory
to the Administrative Agent shall have been made for payment thereof on the
Effective Date.

 

(e)          Opinions of Counsel. The Administrative Agent will have received
opinions of Company’s special counsel, Latham & Watkins LLP, as counsel for the
Loan Parties, and opinions of local counsel for the Loan Parties as set forth on
Schedule 4.01, addressed to the Administrative Agent and the Lenders and
covering such matters as the Administrative Agent may require and in form and
substance satisfactory to the Administrative Agent, dated as of the Effective
Date.

 

(f)          Notice of Borrowing. The Administrative Agent shall have received a
Notice of Revolving Credit Borrowing pursuant to Section 2.02 with respect to
Revolving Credit Loans requested to be funded on the Effective Date, a request
for a Letter of Credit pursuant to Section 2.10 with respect to any Letter of
Credit to be issued on the Effective Date, and a request for a Swing Line Loan
pursuant to Section 2.13 with respect to any Swing Line Loan requested to be
funded on the Effective Date.

 

(g)          QR Energy Acquisition Agreement. The Administrative Agent will have
received a copy of the fully executed Acquisition Agreement together with all
exhibits and schedules, and all amendments, waivers, supplements and other
modifications thereto, which shall have been certified by a Responsible Officer
of the Parent as being true and correct.

 

(h)          QR Energy Acquisition. The QR Energy Acquisition will have been
consummated (or shall be consummated substantially concurrently with the funding
of the initial Loans under this Agreement) on the Effective Date in accordance
with the terms and conditions of the Acquisition Agreement, without giving
effect to any modifications, amendment, waiver, supplement, addition or consent
that is materially adverse to the Lenders (as reasonably determined by the Lead
Arranger, provided that, (i) any change in the amount or form of the
consideration for the QR Energy Acquisition, (ii) any consent relating to
Section 4.1(d) or Section 4.2(d) of the Acquisition Agreement, and (ii) any
waiver of a Partnership Material Adverse Effect (as defined in the Acquisition
Agreement), shall be considered materially adverse to the Lenders) unless
approved by the Lead Arranger (such approval not to be unreasonably withheld,
delayed or conditioned).

 

(i)          Asset Sales. Any asset sales by the Parent during the period
beginning July 23, 2014 through the Effective Date shall not exceed the amount
specified in Section 4.2(d) of the Acquisition Agreement as in effect on July
23, 2014.

 

(j)          Financial Statements. The Administrative Agent will have received
(i) a pro forma statement of consolidated results of operations for the Parent
and its Consolidated Subsidiaries for the period of four consecutive fiscal
quarters ending on the most recent fiscal quarter-end date for which financial
statements have been delivered pursuant to Section 7.01 of the Existing Credit
Agreement (referred to in this paragraph as a “Most Recent Reporting Date”),
giving pro forma effect to the Transactions (and any other Indebtedness being
incurred by the Parent or any of its subsidiaries on the Effective Date) as if
the Transactions had occurred (and such Indebtedness had been incurred) on the
first day of such period and (ii) a pro forma balance sheet of the Parent and
its subsidiaries as of the Most Recent Reporting Date, giving pro forma effect
to the Transactions (and any other Indebtedness being incurred by the Parent or
any of its subsidiaries on the Effective Date) as if the Transactions had
occurred (and such Indebtedness had been incurred) as of such date.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 58

 

  

(k)          QRE Refinancing. The Administrative Agent shall have received a
customary payoff letter with respect to the QR Energy Credit Agreement, and the
principal amount of all Loans thereunder and all other amounts due and owing
thereunder shall have been repaid, or substantially simultaneously with the
funding of the initial Loans under this Agreement are being repaid, and all
commitments of the lenders thereunder shall have been, or substantially
simultaneously with the funding of the initial Loans under this Agreement are
being, terminated.

 

(l)          Indebtedness. On the Effective Date, after giving effect to the
Transactions and any other Indebtedness being incurred by the Parent or any of
its Subsidiaries on the Effective Date, neither the Parent nor any of its
Subsidiaries shall have any outstanding Indebtedness (other than Indebtedness
that is permitted by the terms of this Agreement).

 

(m)          Representations. The Specified Acquisition Agreement
Representations and the Specified Representations shall be true and correct in
all material respects (provided that, such representations shall be true and
correct in all respects to the extent already qualified by materiality).

 

(n)          No Partnership Material Adverse Effect. Since March 31, 2014, there
shall not have been any change, event, development, circumstance, condition,
occurrence or effect that has had or would reasonably be expected to have,
individually or in the aggregate, a Partnership Material Adverse Effect with
respect to the Acquired Company and its subsidiaries, taken as a whole, and
which results in the failure of a condition precedent to the obligation of the
Company and its subsidiaries to consummate the QR Energy Acquisition pursuant to
the terms of the Acquisition Agreement or which gives the Company and its
subsidiaries the right to terminate or not consummate their obligations under
the Acquisition Agreement.

 

(o)          Liquidity. The Parent and its Consolidated Subsidiaries shall
demonstrate liquidity of not less than $250,000,000 on the Effective Date after
giving effect to the Transactions and any other Indebtedness being incurred by
the Parent or any of its subsidiaries on the Effective Date.

 

(p)          Indentures. No default will exist (i) under any indenture to which
the Parent is a party or under any notes issued pursuant thereto or (ii) to the
extent that notes remain outstanding thereunder, under any indenture to which
the Acquired Company is a party or under any notes issued pursuant thereto.

 

(q)          Derivative Contracts. The will be no modification or early
termination of oil and gas Derivative Contracts of Company or the Acquired
Company that are in existence on July 23, 2014, unless the hedges under such
modified or early-terminated oil and gas Derivative Contracts are replaced with
hedges of substantially equivalent value that support the initial Borrowing Base
hereunder.

 

(r)          KYC; Anti-Money-Laundering Rules and Regulations. The
Administrative Agent shall have received, at least three Business Days prior to
the Effective Date, all documentation and other information required by
regulatory authorities under applicable “know your customer” and
anti-money-laundering rules and regulations, including the PATRIOT Act, that is
requested by the Administrative Agent in writing at least ten Business Days
prior to the Effective Date.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 59

 

  

(s)          Payment of Fees and Expenses. The Company shall have paid Lender
fees and Arranger and Administrative Agent fees and expenses required to be paid
on the Effective Date, including fees and expenses of counsel to the
Administrative Agent, to the extent invoiced at least two business days prior to
the Effective Date.

 

Notwithstanding the foregoing, the obligations of the Lenders to make Loans and
of the Issuing Lender to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 11.01) at or prior to 10:59 p.m., Houston time, on March 31,
2015, and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time.

 

5.02        Conditions to Extensions of Credit. The obligation of each Lender to
make any Loan (other than Loans made on the Effective Date) or to convert any
Revolving Credit Loan into a LIBOR Loan under Section 2.03 (but specifically
excluding the continuation of LIBOR Loans on the last day of the Interest Period
therefor), and the obligation of the Issuing Lender to issue, amend, renew or
extend any Letter of Credit, is subject to the satisfaction of the following
conditions precedent:

 

(a)          Notice. The Administrative Agent shall have received a Notice of
Revolving Credit Borrowing, a Notice of Conversion/Continuation, a request for a
Letter of Credit pursuant to Section 2.10 or a request for a Swing Line Loan
pursuant to Section 2.13, as applicable;

 

(b)          Continuation of Representations and Warranties. The representations
and warranties of the Company and the Guarantors in Article VI and in the other
Loan Documents shall be true and correct in all material respects on and as of
the date of such Credit Extension or conversion, as applicable, before and after
giving effect to such Credit Extension or conversion (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct in all material respects as of such earlier date,
and except that for purposes of this Section 5.02(b), the representations and
warranties contained in subsections (a) and (b) of Section 6.14 shall be deemed
to refer to the most recent statements furnished pursuant to subsections (a) and
(b) of Section 7.01);

 

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

 

(d)          No Existing Default. At the time of and immediately after giving
effect to such Borrowing or conversion or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, no Default or Event of
Default shall exist.

 

Each Notice of Revolving Credit Borrowing, Notice of Conversion/Continuation
(other than a Notice of Conversion/Continuation requesting only continuation of
LIBOR Loans on the last day of the Interest Period therefor) and request for
issuance, amendment, renewal or extension of a Letter of Credit submitted by the
Company hereunder shall constitute a representation and warranty by the Company
on the date thereof that the conditions in Section 5.02 are (or will be)
satisfied on and as of the date of the applicable Credit Extension.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 60

 

  

Article VI.

 

REPRESENTATIONS AND WARRANTIES

 

Each of the Loan Parties represents and warrants to the Administrative Agent and
each Lender, as of the Effective Date before and after giving effect to the
Transactions, and thereafter as of each date required by Section 5.02, that:

 

6.01         Organization, Existence and Power. Each Loan Party and each of its
Subsidiaries: (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization or formation except to the
extent, in the case of any Subsidiary, that any such failure of such Subsidiary
to be in good standing would not reasonably be expected to have a Material
Adverse Effect; (b) has the power and authority and all material governmental
licenses, authorizations, consents and approvals to execute, deliver, and
perform its obligations under the Loan Documents and, except to the extent that
any failure to have any thereof could not reasonably be expected to have a
Material Adverse Effect, to own its assets and carry on its business; (c) is
duly qualified as a foreign corporation and is licensed and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification or license,
except where failure to do so would not reasonably be expected to have a
Material Adverse Effect; and (d) is in compliance in all material respects with
all Requirements of Law, except to the extent that the failure to be in
compliance could not reasonably be expected to have a Material Adverse Effect.

 

6.02         Corporate Authorization; No Contravention. The execution, delivery
and performance by each Loan Party of this Agreement and each other Loan
Document to which such Person is a party, have been duly authorized by all
necessary organizational action, and do not and will not: (a) contravene the
terms of any of that Person’s Organization Documents; (b) conflict with or
result in any breach or contravention of, or the creation of any Lien under, any
document evidencing any Contractual Obligation to which such Person is a party
that would be prior to the Liens granted to the Administrative Agent for the
benefit of the Lenders and the Lender Derivative Providers or otherwise that
would constitute a Material Adverse Effect or, except to the extent that any
such conflict, breach or contravention would not reasonably be expected to have
a Material Adverse Effect, any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject; or (c)
violate any Requirement of Law, that would constitute a Material Adverse Effect,
including any California Requirement of Law promulgated with respect to
preparedness and damage prevention associated with earthquakes.

 

6.03         Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party of
this Agreement or any other Loan Document to which it is a party, except for
filings necessary to obtain and maintain perfection of Liens; routine filings
related to the Loan Parties and the operation of their business; and such
filings as may be necessary in connection with Lenders’ exercise of its remedies
hereunder.

 

6.04         Binding Effect. This Agreement and each other Loan Document to
which any Loan Party is a party constitute the legal, valid and binding
obligations of such Person to the extent it is a party thereto, enforceable
against such Person in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, or similar laws affecting creditors’ rights
generally and general equitable principles.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 61

 

  

6.05        Litigation. There are no actions, suits, proceedings, claims or
disputes pending, or to the knowledge of the Loan Parties, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against any Loan Party or any of its subsidiaries, or any of their
respective Properties which: (a) purport to affect or pertain to this Agreement
or any other Loan Document, or any of the transactions contemplated hereby or
thereby; or (b) either individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect. To the knowledge of each Loan Party,
no injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.

 

6.06        No Default.

 

(a)          No Default or Event of Default exists or would be reasonably
expected to result from the incurring of any Obligations by the Loan Parties.

 

(b)          No Loan Party or any Restricted Subsidiary or any Unrestricted
Entity is in default under or with respect to any Contractual Obligation in any
respect which, individually or together with all such defaults, would reasonably
be expected to have a Material Adverse Effect, or that would create an Event of
Default under Section 9.01(e). Each Loan Party and its subsidiaries is in
compliance with all requirements of any Governmental Authority applicable to it
or its Property and all agreements and other instruments binding upon it or its
Property, and possesses all licenses, permits, franchises, exemptions, approvals
and other authorizations granted by Governmental Authorities necessary for the
ownership of its Property and the present conduct of its business, except in
each case where the failure to do so, individually or in the aggregate, could
not reasonably be expected to result in a Material Adverse Effect.

 

6.07        ERISA Compliance. Except as specifically disclosed in Schedule 6.07:

 

(a)          Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
Each Loan Party and each ERISA Affiliate has made all required contributions to
any Plan subject to Section 412 of the Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.

 

(b)          There are no pending or, to the knowledge of any Loan Party,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
violation of the fiduciary responsibility rules with respect to any Plan which
has resulted or could reasonably be expected to result in a Material Adverse
Effect.

 

(c)          (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) no Loan Party nor
any ERISA Affiliate has incurred, or reasonably expects to incur, any liability
under Title IV of ERISA with respect to any Pension Plan (other than premiums
due and not delinquent under Section 4007 of ERISA); (iv) no Loan Party nor any
ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and
no event has occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) no Loan Party nor any ERISA Affiliate
has engaged in a transaction that could be subject to Section 4069 or 4212(c) or
ERISA.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 62

 

  

6.08         Margin Regulations. The proceeds of the Loans shall be used solely
for the purposes set forth in and permitted by Section 7.16. No Loan Party is
generally engaged in the business of purchasing or selling Margin Stock or
extending credit for the purpose of purchasing or carrying Margin Stock. No
proceeds of any Loan shall be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U) or to extend credit to others for the
purpose of purchasing or carrying margin stock or to refund indebtedness
originally incurred for such purpose.

 

6.09         Title to Properties. Subject to Permitted Liens, the Loan Parties
and their Subsidiaries shall each have good and defensible title to all of their
respective Oil and Gas Properties evaluated in the most recently delivered
Reserve Report (other than the interests that have been disposed of in one or
more Dispositions permitted hereunder), and except for such defects in title as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and each Loan Party and its Subsidiaries shall have
good title to all other Oil and Gas Properties necessary or used in the ordinary
conduct of their respective businesses. After giving full effect to the
Permitted Liens, any Loan Party or Subsidiary thereof specified as the owner
under the most recently delivered Reserve Report owns the net interests in
production attributable to the Oil and Gas Properties as reflected in the most
recently delivered Reserve Report (other than the interests that have been
disposed of in one or more Dispositions permitted hereunder), and the ownership
of such Properties shall not in any material respect obligate such Loan Party or
Subsidiary thereof to bear the costs and expenses relating to the maintenance,
development and operations of each such Property in an amount in excess of the
working interest of each Property set forth in the most recently delivered
Reserve Report that is not offset by a corresponding proportionate increase in
such Loan Party’s or Subsidiary’s net revenue interest in such Property. Other
than as set forth on Schedule 6.09, no consents or rights of first refusal exist
or remain outstanding with respect to such Loan Party’s or Subsidiary’s interest
in the Mortgaged Properties assigned to it pursuant to any Acquisition of Oil
and Gas Properties other than Permitted Liens. Other than as set forth on
Schedule 6.09, as of the Effective Date, the property of the Loan Parties and
their Subsidiaries is subject to no Liens, other than Permitted Liens.

 

6.10         Oil and Gas Reserves. Each Loan Party and each of its Subsidiaries
is and will hereafter be, in all material respects, the owner of the Oil and Gas
that it purports to own from time to time in and under its Oil and Gas
Properties, together with the right to produce the same. The Oil and Gas
Properties are not subject to any Lien other than as set forth in the financial
statements referred to in Section 6.14, as disclosed to the Lenders in writing
prior to the date of this Agreement and Permitted Liens. All Oil and Gas have
been and will hereafter be produced, sold and delivered in accordance in all
material respects with all applicable laws and regulations of any Governmental
Authority; each of the Loan Parties and its Subsidiaries has complied in all
material respects and will hereafter use commercially reasonable efforts to
comply with all material terms of each oil, gas and mineral lease and any other
agreement comprising its Oil and Gas Properties; and all such oil, gas and
mineral leases and other agreements have been and will hereafter be maintained
in full force and effect; provided, however that nothing in this Section 6.10
shall prevent any Loan Party or its Subsidiaries from (i) abandoning any well or
forfeiting, surrendering, releasing or defaulting under any lease in the
ordinary course of business which is not disadvantageous in any material respect
to the Lenders and which, in the opinion of such Loan Party, is in its best
interest, and such Loan Party and its Subsidiaries is and will hereafter be in
compliance with all obligations hereunder and (ii) making any Disposition
permitted hereunder. All of the Loan Parties’ and their Subsidiaries’ Operating
Agreements and Operating Leases with respect to their Oil and Gas Properties are
and will hereafter be enforceable in all material respects in accordance with
their terms except as such may be modified by applicable bankruptcy law or an
order of a court in equity.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 63

 

  

6.11        Initial Reserve Report. The Company has heretofore delivered to the
Lenders a true and complete copy of (x) reserve reports, each dated effective as
of July 1, 2014 prepared by the Company (the “Initial Reserve Report”) relating
to an evaluation of the Oil and Gas attributable to the Oil and Gas Properties
described therein. To the knowledge of the Company, (a) the assumptions stated
or used in the preparation of the Initial Reserve Report are reasonable, (b) all
information furnished by the Company for use in the preparation of the Initial
Reserve Report, was accurate in all material respects, (c) there has been no
material adverse change in the amount of the estimated Oil and Gas shown in the
Initial Reserve Report since the date thereof, except for changes which have
occurred as a result of production in the ordinary course of business, and (d)
the Initial Reserve Report does not omit any material statement or information
necessary to cause the same not to be misleading to the Lenders.

 

6.12        Gas Imbalances. There are no gas imbalances, take or pay or other
prepayments with respect to any of the Oil and Gas Properties which would
require the Loan Parties or their Subsidiaries to deliver Oil and Gas produced
from any of the Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor exceeding 5,000,000 Mcf of gas (on an
Mcf equivalent basis) in the aggregate.

 

6.13        Taxes. Unless specifically disclosed on Schedule 6.13, the Loan
Parties and their Subsidiaries have filed all federal tax returns and reports
required to be filed by them, including any filing extensions together with
payments for any estimated taxes due thereon on or before the time the extension
is due, and have paid all federal taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP. The Loan Parties and their Subsidiaries have
filed all material state and other non-federal tax returns and reports required
to be filed by them, and have paid all material state and other non-federal
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets prior to delinquency thereof, except
those which are being contested in good faith by appropriate proceedings and for
which adequate reserves have been provided in accordance with GAAP. To the
knowledge of the Loan Parties, there is no proposed tax assessment against any
Loan Party or any of its subsidiaries that would, if made, reasonably be
expected to have a Material Adverse Effect.

 

6.14        Financial Condition.

 

(a)          The audited consolidated balance sheet of the Parent and its
Consolidated Subsidiaries as of December 31, 2013, the related consolidated
statement of income, partners’ equity and cash flow of the Parent and its
Consolidated Subsidiaries for the fiscal year ended on said date, (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; (ii) fairly
present the financial condition of the Parent and its Consolidated Subsidiaries
as of the date thereof and their results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein; and (iii) show all
material indebtedness and other liabilities, direct or contingent, of the Parent
and its Consolidated Subsidiaries as of the date thereof, including liabilities
for taxes, material commitments and Indebtedness.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 64

 

  

(b)          The unaudited consolidated balance sheets of the Parent and its
Consolidated Subsidiaries dated September 30, 2014 and the related consolidated
statements of income or operations, partners’ equity and cash flow for the
fiscal quarter ended on that date (i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein, and (ii) fairly present the financial condition of the
Parent and its Consolidated Subsidiaries as of the date thereof and their
results of operations for the period covered thereby, subject to the absence of
footnotes and to normal year-end audit adjustment.

 

(c)          Since December 31, 2013, (i) there has been no event, development
or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect, and (ii) the business of Parent and the other Loan Parties have
been conducted only in the ordinary course consistent with past business
practices.

 

6.15        Environmental Matters. Except as described on Schedule 6.15 hereto
or that, either individually or in the aggregate, could not be reasonably
expected to have a Material Adverse Effect (or with respect to (c) and (d)
below, where the failure, either individually or in the aggregate, to take such
actions could not be reasonably expected to have a Material Adverse Effect):

 

(a)          neither any Property of any Loan Party or any of its Subsidiaries,
nor the operations conducted thereon, violate Environmental Laws.

 

(b)          no Property of any Loan Party or any of its Subsidiaries, nor the
operations currently conducted thereon by any Loan Party, or, to the knowledge
of such Loan Party, no operations conducted thereon by any prior owner or
operator of such Property, are in violation of or subject to any existing, or to
the knowledge of such Loan Party, pending or threatened action, suit,
investigation, inquiry or proceeding by or before any Governmental Authority
under Environmental Laws.

 

(c)          all notices, permits, licenses, exemptions, and approvals, if any,
required to be obtained or filed under any Environmental Law in connection with
the operation or use of any and all Property by each Loan Party, including any
treatment, storage, disposal or Release of any Hazardous Materials into the
environment, have been duly obtained or filed or requested, and each Loan Party
and its Subsidiaries is in compliance with the material terms and conditions of
all such notices, permits, licenses, exemptions and approvals.

 

(d)          Hazardous Materials, if any, generated by the Loan Parties or any
of their Subsidiaries at any and all Property of any such Subsidiary have in the
past been transported, treated and disposed of in compliance with Environmental
Laws then in effect, and, to the knowledge of such Loan Party, transport
carriers and treatment and disposal facilities known by such Loan Party to have
been used by it are not the subject of any existing action, investigation or
inquiry by any Governmental Authority under any Environmental Laws.

 

(e)          no Hazardous Materials have been disposed of or otherwise Released
by any Loan Party or any Subsidiary thereof on or to any Property of such Loan
Party or Subsidiary except in compliance with Environmental Laws.

 

(f)          no Loan Party has any known pending assessment, investigation,
monitoring, removal or remedial obligations under applicable Environmental Laws
in connection with any Release or threatened Release of any Hazardous Materials
into the environment by any Loan Party or any Subsidiary thereof.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 65

 

  

6.16         Regulated Entities. Neither Parent nor any of its Subsidiaries is
an “investment company” or is a company “controlled by” an “investment company”
within the meaning of the Investment Company Act of 1940. None of the Loan
Parties, or any Person controlling the Company or the Guarantors, is subject to
regulation under the Federal Power Act, the Interstate Commerce Act, any state
public utilities code, or any other Federal or state statute or regulation
limiting its ability to incur Indebtedness.

 

6.17         No Burdensome Restrictions. No Loan Party or any of its
Subsidiaries is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which
would reasonably be expected to have a Material Adverse Effect.

 

6.18         Copyrights, Patents, Trademarks and Licenses, Etc. Except to the
extent that any failure, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect, each Loan Party and each of its
Subsidiaries owns or is licensed or otherwise has the right to use all of the
material patents, trademarks, service marks, trade names, copyrights,
contractual franchises, authorizations and other rights that are reasonably
necessary for the operation of its business, without material conflict with the
rights of any other Person. To the knowledge of any Loan Party, no slogan or
other advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by any Loan Party or
any Subsidiary thereof infringes in a material respect upon any rights held by
any other Person. No claim or litigation regarding any of the foregoing is
pending or threatened, and no patent, invention, device, application, principle
or any statute, law, rule, regulation, standard or code is pending or, to the
knowledge of any Loan Party, proposed, which, in either case, could reasonably
be expected to have a Material Adverse Effect.

 

6.19         Subsidiaries and Other Equity Interests. No Loan Party has any
Subsidiary, Unrestricted Entity or other equity investment other than those
specifically disclosed in Schedule 6.19 hereto. The Company owns the percentage
interest of all issued and outstanding Equity in each Subsidiary, Unrestricted
Entity or other material equity investment described on Schedule 6.19. Parent
owns one hundred percent (100%) of the issued and outstanding equity in the
Company. The Company may update and replace Schedule 6.19 from time to time to
reflect changes resulting from transactions or other events permitted hereunder.

 

6.20         Insurance. The Properties of each Loan Party and its Subsidiaries
are insured with financially sound and reputable insurance companies that are
not Affiliates of the Company, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Company or such
Loan Party or Subsidiary operates.

 

6.21         Derivative Contracts. As of the date hereof, Schedule 6.21 sets
forth, a true and complete list of all Derivative Contracts of the Loan Parties
and their Subsidiaries in effect as of the Effective Date, the material terms
thereof (including the type, term, effective date, termination date and notional
amounts or volumes), the net mark-to-market value thereof, all credit support
agreements relating thereto (including any margin required or supplied) and the
counterparty to each such agreement.

 

6.22         Full Disclosure. None of the representations or warranties made by
any Loan Party in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, written statement or certificate (other than any financial
projections, forecasts or estimates) furnished by or on behalf of any Loan Party
in connection with the Loan Documents, taken as whole, contains any untrue
statement of a material fact known to any Loan Party, or omits any material fact
known to any Loan Party, required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 66

 

  

6.23        Solvency.

 

(a)          Each of the Parent and the Company is Solvent.

 

(b)          The Loan Parties, on a consolidated basis, are Solvent.

 

6.24        Improved Real Estate. To the knowledge of each Loan Party, the Oil
and Gas Properties that are not Mortgaged Properties do not include any
“buildings” (as defined under Section 4000 et. Seq. of the National Flood
Insurance Reform Act of 1994, as amended) that are critical to operating any
Mortgaged Properties for the exploration and production of oil and gas.

 

6.25        Anti-Corruption Laws and Sanctions. The Parent has implemented and
maintains in effect policies and procedures designed to ensure compliance by the
Parent, its subsidiaries and their respective directors, officers, employees and
agents with Anti-Corruption Laws and applicable Sanctions. The Parent, its
subsidiaries and their respective officers and employees and, to the knowledge
of the Parent, its directors and agents, are in compliance with Anti-Corruption
Laws and applicable Sanctions in all material respects. None of (a) the Parent,
any of its subsidiaries or, to the knowledge of the Parent, any of their
respective directors, officers or employees, is a Sanctioned Person, or (b) to
the knowledge of the Parent, any agent of the Parent or any subsidiary that will
act in any capacity in connection with or benefit from the credit facility
established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit,
use of proceeds or other Transaction contemplated by this Agreement will violate
any Anti-Corruption Laws or applicable Sanctions.

 

6.26        QR Energy Acquisition.

 

(a)          All governmental and shareholder consents (including
Hart-Scott-Rodino clearance) and approvals necessary in connection with the QR
Energy Acquisition have been received.

 

(b)          The QR Energy Acquisition has been consummated (or is being
consummated substantially concurrently with the funding of the initial Loans
under this Agreement) on the Effective Date in accordance with the terms and
conditions of the Acquisition Agreement, without giving effect to any
modifications, amendment, waiver, supplement, addition or consent that is
materially adverse to the Lenders (as reasonably determined by the Lead
Arranger) unless approved by the Lead Arranger (such approval not to be
unreasonably withheld, delayed or conditioned).

 

(c)          The Parent’s assets sales after July 23, 2014 until the Effective
Date do not exceed the amount in Section 4.2(d) of the Acquisition Agreement as
in effect on July 23, 2014.

 

Notwithstanding the foregoing, it is understood and agreed that the accuracy of
the above representations and warranties shall not be a condition to the
effectiveness of this Agreement or the funding of the requested Loans on the
Effective Date, except to the extent specifically set forth in Section 5.01(n).

 

Article VII.

 

AFFIRMATIVE COVENANTS

 

So long as the Issuing Lender or any Lender shall have any Commitment or any
obligation to issue or participate in Letters of Credit hereunder, or any Loan,
Letter of Credit or other Obligation (other than Obligations in respect of (i)
indemnification, expense reimbursement, tax gross-up or yield protection for
which no claim has been made or (ii) Lender Derivative Contracts) shall remain
unpaid or unsatisfied, or any Letter of Credit remains outstanding:

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 67

 

  

7.01        Financial Statements. Each of the Loan Parties shall maintain, for
itself and each of its Consolidated Subsidiaries, on a consolidated basis, a
system of accounting established and administered in accordance with GAAP and
deliver, or cause to be delivered, to Administrative Agent, with sufficient
copies for each Lender:

 

(a)          no later than fifteen (15) days following the date required by
applicable SEC rules (without giving effect to any extensions available
thereunder) for the filing of such financial statements:

 

(i)          the audited consolidated balance sheet and related statements of
income, partners equity and cash flows of Parent 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 (A) reported on by a nationally recognized independent
public accounting firm (the “Independent Auditor”) (without a “going concern” or
like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition,
results of operations and cash flows of Parent and its Consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied, and (B)
certified by a Responsible Officer as fairly presenting in all material
respects, the financial condition, results of operations and cash flows of
Parent and its Consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied;

 

(ii)         unaudited annual consolidating balance sheet and consolidating
statement of income for Parent and its Consolidated Subsidiaries as of the end
of such year, certified by a Responsible Officer as fairly presenting in all
material respects, the financial condition, results of operations of Parent and
its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied; and

 

(iii)        the unaudited consolidated balance sheet and related statements of
income, partners equity and cash flows of the Company as of the end of and for
such year, setting forth in each case in comparative form the figures for the
previous final year, and unaudited consolidating balance sheets and statements
of income, all certified by a Responsible Officer as fairly presenting in all
material respects, the financial condition, results of operations and cash flows
of the Company and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to the absence of footnotes.

 

(b)          fifteen (15) days following the date required by applicable SEC
rules (without giving effect to any extensions available thereunder) for the
filing of such financial statements after the end of each of the first three
fiscal quarters of each fiscal year of Parent:

 

(i)          the unaudited consolidated balance sheet and related statements of
income, partners equity and cash flows of Parent 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 fairly
presenting in all material respects, the financial condition, results of
operations and cash flows of Parent and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to the
absence of footnotes; and

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 68

 

  

(ii)         the unaudited consolidated balance sheet and related statements of
income, partners equity and cash flows of the Company 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 fairly
presenting in all material respects, the financial condition, results of
operations and cash flows of the Company and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to the
absence of footnotes.

 

7.02        Certificates; Other Production and Reserve Information. The Company
shall furnish to the Administrative Agent, with sufficient copies for each
Lender:

 

(a)          As soon as available, but not later than 45 days after the close of
each fiscal quarter of Parent (including the fourth quarter), a Quarterly Status
Report covering each of the three months during such fiscal quarter;

 

(b)          Concurrently with any delivery of financial statements under
Sections 7.01(a) and 7.01(b), a certificate of a Responsible Officer, in form
and substance reasonably satisfactory to the Administrative Agent, setting forth
as of the last Business Day of such fiscal quarter or fiscal year, a true and
complete list of all Derivative Contracts of each Loan Party, the material terms
thereof (including the type, term, effective date, termination date and notional
amounts or volumes), the net mark-to-market value therefor, any new credit
support agreements relating thereto not listed on Schedule 8.05, any margin
required or supplied under any credit support document, and the counterparty to
each such agreement;

 

(c)          Concurrently with the delivery of the financial statements referred
to in Sections 7.01(a) and 7.01(b), a Pricing Grid Certificate executed by a
Responsible Officer of Parent;

 

(d)          Concurrently with the delivery of the statements and reports
referred to in Sections 7.01(a) and 7.01(b), a Compliance Certificate executed
by a Responsible Officer of Parent;

 

(e)          Annually commencing March 1, 2015, dated as of January 1st of such
year, a Reserve Report prepared by the Independent Engineer or other independent
petroleum engineer reasonably acceptable to Administrative Agent and the
Company, and annually, commencing September 1, 2015, a Reserve Report prepared
by personnel of the Company and certified by a Responsible Officer of the
Company as true and correct in all material respects. Each Reserve Report shall
be in form and substance reasonably satisfactory to the Lenders. With the
delivery of each Reserve Report, the Company shall provide to the Administrative
Agent and the Lenders a certificate from a Responsible Officer certifying that
in all material respects: (i) the information contained in the Reserve Report
and any other information delivered in connection therewith is true and correct
in all material respects, (ii) the Loan Parties own good and defensible title to
the Oil and Gas Properties evaluated in such Reserve Report, and such Properties
are free of all Liens except for Permitted Liens, (iii) except as set forth on
an exhibit to the certificate, on a net basis there are no gas imbalances, take
or pay or other prepayments in excess of the volume specified in Section 6.12
with respect to their Oil and Gas Properties evaluated in such Reserve Report
that would require any Loan Party to deliver Oil and Gas either generally or
produced from such Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor, (iv) none of their proved Oil and
Gas Properties have been sold since the date of the last Borrowing Base
determination except as set forth on an exhibit to the certificate, which
certificate shall list all of its proved Oil and Gas Properties sold and in such
detail as reasonably required by the Administrative Agent, (v) attached to the
certificate is a list of all marketing agreements entered into subsequent to the
most recently delivered Reserve Report and (vi) attached thereto is a schedule
of the Oil and Gas Properties evaluated by such Reserve Report that are
Mortgaged Properties and demonstrating the percentage of the present value that
such Mortgaged Properties represent;

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 69

 

  

(f)          Promptly after the furnishing thereof, copies of any financial
statement, report or notice furnished to or by any Person pursuant to the terms
of any preferred stock designation, indenture, loan or credit or other similar
agreement, other than this Agreement and not otherwise required to be furnished
to the Lenders pursuant to any other provision of this Section 7.02;

 

(g)          Concurrently with the delivery of any Reserve Report to the
Administrative Agent pursuant to Section 7.02(e), or after an Event of Default,
upon request, a list of all Persons purchasing Oil and Gas from any of the Loan
Parties;

 

(h)          Prompt written notice, and in any event within three (3) Business
Days, of the occurrence of any Casualty Event;

 

(i)          Prompt written notice (and in any event within thirty (30) days
prior thereto (or such shorter period as the Administrative Agent may agree)) of
any change (i) in any Loan Party’s organizational name or in any trade name used
to identify such Person in the conduct of its business or in the ownership of
its Properties, (ii) in the location of any Loan Party’s chief executive office
or principal place of business, (iii) in any Loan Party’s identity or
organizational structure or in the jurisdiction in which such Person is
incorporated or formed, (iv) in any Loan Party’s jurisdiction of organization or
such Person’s organizational identification number in such jurisdiction of
organization, and (v) in any Loan Party’s federal taxpayer identification
number, if any;

 

(j)          Promptly upon the request of the Administrative Agent, such copies
of all geological, engineering and related data contained in any of Loan
Parties’ files or readily accessible to the Loan Party relating to the Oil and
Gas Properties as may reasonably be requested;

 

(k)          On request by the Administrative Agent, based upon the
Administrative Agent’s or Lenders’ good faith belief that any Loan Party’s title
to the Mortgaged Properties or the Administrative Agent’s Lien on the Loan
Parties’ properties is subject to claims of third parties, or if required by
regulations to which the Administrative Agent or any of the Lenders is subject,
title and mortgage lien evidence reasonably satisfactory to the Administrative
Agent covering such Mortgaged Property as may be designated by the
Administrative Agent, covering such Loan Party’s title thereto and evidencing
that the Obligations are secured by liens and security interests as provided in
this Agreement and the Security Documents;

 

(l)          As soon as available, and in any event within 90 days after the end
of each fiscal year, a business and financial plan for Parent (in form
reasonably satisfactory to the Administrative Agent), prepared by a Responsible
Officer, setting forth for the current fiscal year, quarterly financial
projections and budgets for Parent, and for three fiscal years thereafter yearly
financial projections and budgets; and

 

(m)          Promptly, such additional information regarding the business,
financial or corporate affairs of the Loan Parties as the Administrative Agent,
at the reasonable request of any Lender, may from time to time request.

 

Documents required to be delivered pursuant to Sections 7.01 and 7.02 (other
than Section 7.02(d)) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which the Company posts such
documents, or provides a link thereto on the Company's website on the Internet
or (ii) on which such documents are posted on the Company'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, however, that (x) the
Company shall deliver paper copies of such documents to the Administrative Agent
or any Lender that requests the Company to deliver such paper copies until a
written request to cease delivering paper copies is given by the Administrative
Agent or such Lender and (y) the Company 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 Company shall be required to provide
paper copies of the compliance certificates required by Section 7.02(d) to the
Administrative Agent.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 70

 

  

7.03        Notices. The Company shall promptly notify the Administrative Agent:

 

(a)          of the occurrence of any Default, Event of Default, or any event or
circumstance that would reasonably be expected to become a Default or Event of
Default of which a Responsible Officer of the Company has actual knowledge;

 

(b)          of any matter that has resulted or would reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of Parent, the Company or any
subsidiary thereof; (ii) any dispute, litigation, investigation, proceeding or
suspension between Parent, the Company or any subsidiary thereof and any
Governmental Authority; (iii) the commencement of, or any material development
in, any litigation, proposed legislation, ordinance or regulation of a
Governmental Authority, or proceeding affecting Parent, the Company or any
subsidiary thereof; including pursuant to any applicable Environmental Laws; or
(iv) revocation, cancellation or failure to renew any license, permit or
franchise, where such breach, non-performance, default, dispute, litigation,
investigation, proceeding, suspension, proposed legislation, ordinance or
regulation, revocation, failure or loss could reasonably be expected to have a
Material Adverse Effect;

 

(c)          of any material change in accounting policies or financial
reporting practices by Parent, the Company or any Consolidated Subsidiary; or

 

(d)          of the formation or acquisition of any Restricted Subsidiary or
Unrestricted Entity.

 

Each notice under this Section 7.03 shall be accompanied by a written statement
by a Responsible Officer setting forth details of the occurrence referred to
therein, and stating what action such Loan Party proposes to take with respect
thereto and at what time. Each notice under Section 7.03(a) shall describe with
particularity any and all clauses or provisions of this Agreement or other Loan
Document that have been (or foreseeably will be) breached or violated.

 

7.04        Preservation of Company Existence, Etc. Each Loan Party shall, and
shall cause its Subsidiaries to:

 

(a)          preserve and maintain in full force and effect its legal existence,
and, except to the extent that the failure to do so would not reasonably be
expected to have a Material Adverse Effect, maintain its good standing under the
laws of its state or jurisdiction of formation, provided, however, that (i) the
liquidation, dissolution or wind-up of any Subsidiary shall be permitted either
to the extent assets of such Subsidiary are not transferred to any party other
than the Company or another Subsidiary, and (ii) the merger or consolidation of
any Subsidiary shall be permitted to the extent set forth in Section 8.03;

 

(b)          preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except where the failure to
do so would not reasonably be expected to have a Material Adverse Effect;

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 71

 

  

(c)          use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill except where the failure to do
so would not reasonably be expected to have a Material Adverse Effect; and

 

(d)          preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.

 

7.05        Maintenance of Property. Each Loan Party shall, and shall cause its
Subsidiaries to, maintain and preserve all its Property which is used or useful
in its business in good working order and condition, ordinary wear and tear
excepted and to use the standard of care typical in the industry in the
operation and maintenance of its facilities except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect; provided,
however, that nothing in this Section 7.05 shall prevent such Loan Party or its
Subsidiaries from abandoning any well or forfeiting, surrendering, releasing or
defaulting under any lease in the ordinary course of business which is not
materially disadvantageous in any way to the Lenders and which, in its opinion,
is in the best interest of such Loan Party, and each such Loan Party is and will
hereafter be in compliance with all obligations hereunder.

 

7.06        Title Information. On or before the delivery to the Administrative
Agent and the Lenders of each Reserve Report required by Section 7.02(e), the
Company will deliver title information in form and substance acceptable to the
Administrative Agent covering enough of the Oil and Gas Properties evaluated by
such Reserve Report that were not included in the immediately preceding Reserve
Report, so that the Administrative Agent shall have received together with title
information previously delivered to the Administrative Agent, satisfactory title
information on at least 80% of the total net present value (determined by a
discount factor of 10%) of the proved Oil and Gas Properties evaluated by such
Reserve Report.

 

7.07        Additional Collateral. In connection with each redetermination of
the Borrowing Base, the Company shall review the Reserve Report and the list of
current Mortgaged Properties (as described in Section 7.02(e)) to ascertain
whether the Mortgaged Properties represent at least 80% of the total net present
value (determined by a discount factor of 10%) of the Oil and Gas Properties
evaluated in the most recently completed Reserve Report after giving effect to
exploration and production activities, acquisitions, dispositions and
production. In the event that the Mortgaged Properties do not represent at least
80% of such total net present value, then the Company shall, and shall cause
each Loan Party to, grant, within thirty (30) days of delivery of the
certificate required under Section 7.02(e), to the Administrative Agent or its
designee as security for the Obligations a first-priority Lien on additional Oil
and Gas Properties not already subject to a Lien of the Security Documents such
that after giving effect thereto, the Mortgaged Properties will represent at
least 80% of such total net present value. All such Liens will be created and
perfected by and in accordance with the provisions of deeds of trust, security
agreements and financing statements or other Security Documents, all in form and
substance reasonably satisfactory to the Administrative Agent or its designee
and in sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes.

 

7.08        Insurance. Each Loan Party shall, and shall cause its Subsidiaries
to, maintain, with financially sound and reputable independent insurers,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons except where the failure to do so
would not reasonably be expected to have a Material Adverse Effect. The loss
payable clauses or provisions in said insurance policy or policies insuring any
of the Collateral for the Loan shall be endorsed in favor of and made payable to
the Administrative Agent as its interests may appear and such policies shall
name the Administrative Agent and the Lenders as “additional insured” and
provide that the insurer will give at least 30 days prior notice of any
cancellation to the Administrative Agent.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 72

 

  

7.09         Payment of Obligations. Each Loan Party shall, and shall cause its
Subsidiaries to, pay and discharge prior to delinquency, all their respective
obligations and liabilities, including: (a) all tax liabilities, assessments and
governmental charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by such Loan Party or its
Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien
upon its Property; and (c) all Indebtedness, as and when due and payable, but
subject to any subordination provisions contained in any instrument or agreement
evidencing such Indebtedness; except in each of (a), (b) and (c), where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.

 

7.10         Compliance with Laws. Each Loan Party shall, and shall cause its
Subsidiaries to, comply in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including Environmental Laws, the Federal Fair Labor Standards Act and any
California Requirement of Law promulgated with respect to earthquakes), except
(a) such as may be contested in good faith or as to which a bona fide dispute
may exist or (b) where the failure to do so would not reasonably be expected to
have a Material Adverse Effect. Parent shall, and shall cause its subsidiaries
to, maintain in effect and enforce policies and procedures designed to ensure
compliance by Parent and its subsidiaries and their respective directors,
officers, employees and agents with applicable Anti-Corruption Laws and
applicable Sanctions.

 

7.11         Compliance with ERISA. Each Loan Party shall, and shall cause each
of its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.

 

7.12         Inspection of Property and Books and Records. Each Loan Party
shall, and shall cause its Subsidiaries to, maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of such Loan Party or its Subsidiary, as
applicable. Each Loan Party shall, and shall cause its Subsidiaries to, permit
representatives and independent contractors of the Administrative Agent or any
Lender to visit and inspect any of their respective properties, to examine their
respective company, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss their respective affairs, finances and
accounts with their respective managers, directors, officers, and independent
public accountants, all at the expense of the Loan Parties and at such
reasonable times during normal business hours and as often as may be reasonably
desired, upon reasonable advance notice to such Loan Party; provided, however,
when an Event of Default exists the Administrative Agent or any Lender may do
any of the foregoing at the expense of the Company at any time during normal
business hours and without advance notice.

 

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7.13        Environmental Laws.

 

(a)          Each Loan Party shall, and shall cause its Subsidiaries to, comply
with all applicable Environmental Laws and maintain all environmental, health
and safety permits, licenses and authorizations necessary for its operations and
will maintain such in full force and effect except where such noncompliance or
the failure to maintain such permits, licenses and authorizations would not
reasonably be expected to have a Material Adverse Effect. Each Loan Party shall,
and shall cause its Subsidiaries to, promptly commence and diligently prosecute
to completion, any assessment, evaluation, investigation, monitoring,
containment, cleanup, removal, repair, restoration, remediation or other
remedial obligations (collectively, the “Remedial Work”) in the event any
Remedial Work is required under applicable Environmental Laws because of or in
connection with the actual or suspected past, present or future Release of any
Hazardous Materials on, under, about or from any of the Loan Parties’
Properties, which failure to commence and diligently prosecute to completion
could reasonably be expected to have a Material Adverse Effect.

 

(b)          Each Loan Party shall, and shall cause its Subsidiaries to,
establish and implement, such procedures as may be reasonably necessary to
continuously determine and assure that the Loan Party’s obligations under this
Section 7.13 are timely and fully satisfied, which failure to establish and
implement could reasonably be expected to have a Material Adverse Effect.

 

(c)          Each Loan Party will, and will cause its Subsidiaries to, promptly
furnish to the Administrative Agent all written notices of violation, orders,
claims, citations, complaints, penalty assessments, suits or other proceedings
received by such Loan Party or Subsidiary, or of which it has notice, pending or
threatened against such Loan Party or any of its Subsidiaries, by any
Governmental Authority with respect to any alleged violation of or
non-compliance with any Environmental Laws or any permits, licenses or
authorizations related to Environmental Laws in connection with its ownership or
use of its Properties or the operation of its business, except where any such
alleged violations or incidents of non-compliance would not, individually or in
the aggregate, result in a penalty, assessment, fine or other cost or liability
exceeding $2,000,000.

 

(d)          Each Loan Party will, and will cause its Subsidiaries to, promptly
furnish to the Administrative Agent all requests for information, notices of
claim, demand letters, and other notifications, received by such Loan Party or
Subsidiary in connection with its ownership or use of its Properties or the
conduct of its business, relating to potential responsibility with respect to
any investigation or clean-up of Hazardous Materials at any location, except
where any such alleged responsibility would not, individually or in the
aggregate, result in a penalty, assessment, fine or other cost or liability
exceeding $2,000,000.

 

7.14        Pledge of Equity in New Subsidiary. If, at any time after the date
of this Agreement, any new Subsidiary (other than Breitburn GP LLC, for so long
as it is the general partner of the Parent) is acquired or created, then the
applicable Loan Party shall pledge all of the Equity of such Subsidiary and
deliver such documentation as the Administrative Agent requires in connection
with such pledge, including original stock or other ownership certificates
evidencing such Equity, together with undated stock powers for each such
certificate duly executed in blank and such additional closing documents,
certificates and legal opinions as the Administrative Agent shall reasonably
require.

 

7.15        New Subsidiary Guarantors. If, at any time after the date of this
Agreement, there exists any subsidiary of a Loan Party (other than the
Unrestricted Entities) that is not a Guarantor hereunder, or if any Unrestricted
Entity becomes a Wholly Owned Subsidiary of a Loan Party, then such Loan Party
shall cause each such Subsidiary, as applicable, to execute and deliver to the
Administrative Agent a Guaranty or supplement to existing Guaranty, and a
Security Agreement or supplement to existing Security Agreement, and other
documents and opinions as required pursuant to Sections 4.02 and 4.05.

 

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7.16        Use of Proceeds. The Company may use the proceeds of the Loans (a)
to finance a portion of the purchase price of the QR Energy Acquisition, (b) for
the QRE Refinancing, (c) to pay fees and expenses incurred in connection with
the QR Energy Acquisition, the QRE Refinancing, this Agreement and any other
financing or refinancing that occurs on or before the Effective Date, (d) to
reimburse the Issuing Lender for drawings made under Letters of Credit, (e) for
working capital purposes (including capital expenditures made for the
exploration and development of Oil and Gas Properties) of the Company and its
Subsidiaries, (f) for general company purposes of the Company and its
Subsidiaries, and (g) to make Loans and Investments permitted under Section 8.04
and Restricted Payments permitted under Section 8.09. The Company shall use
Letters of Credit as support for Derivative Contracts and for other general
company purposes of the Company and its Subsidiaries. The Company will not
request any Borrowing, and the Company shall not use, and shall procure that its
subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Borrowing (A) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Sanctioned Person, or in
any Sanctioned Country, or (C) in any manner that would result in the violation
of any Sanctions applicable to any party hereto.

 

7.17        Operating Accounts. The Loan Parties and their Subsidiaries shall
maintain with Administrative Agent all primary operating and depository
accounts.

 

7.18        Phase I Reports. In the event such is obtained in connection with
the acquisition of Oil and Gas Properties directly or indirectly through a
Subsidiary, each Loan Party shall deliver to the Lenders a copy of a Phase I
Report covering such Oil and Gas Properties, and in the event such is not
obtained, each Loan Party will provide a Phase I Report upon request by
Administrative Agent or any Lender and no more than once per year in the absence
of any Event of Default (or as otherwise required to be obtained by
Administrative Agent or any Lender by any Governmental Authority), in connection
with any future acquisition of any Oil and Gas Properties.

 

7.19        Further Assurances.

 

(a)          Each Loan Party will promptly cure any defects in the creation and
issuance of the Notes and the execution and delivery of this Agreement, the
Security Documents or any other instruments referred to or mentioned herein or
therein. The Company at its expense will promptly do all acts and things, and
will execute and file or record, all instruments reasonably requested by the
Administrative Agent, to establish, perfect, maintain and continue the perfected
security interest of the Administrative Agent in or the Lien of the
Administrative Agent on the Mortgaged Properties. Upon request by the
Administrative Agent, each Loan Party shall promptly execute such additional
Security Documents covering any new Oil and Gas Properties reflected on the
Quarterly Status Reports or any new Subsidiaries of the Loan Parties. The
Company will pay the costs and expenses of all filings and recordings and all
searches deemed necessary by the Administrative Agent to establish and determine
the validity and the priority of the Liens created or intended to be created by
the Security Documents; and such Loan Party will satisfy all other claims and
charges which in the reasonable opinion of the Administrative Agent might
prejudice, impair or otherwise affect any of the Mortgaged Properties or any
Liens thereon in favor of the Administrative Agent for the benefit of the
Issuing Lender and the Lenders.

 

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(b)          Each Loan Party hereby authorizes the Administrative Agent to file
one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Mortgaged Property without the signature of
such Loan Party where permitted by law. A carbon, photographic or other
reproduction of the Security Documents or any financing statement covering the
Mortgaged Property or any part thereof shall be sufficient as a financing
statement where permitted by law. The Administrative Agent will promptly send
such Loan Party any financing or continuation statements it files without the
signature of such Loan Party and the Administrative Agent will promptly send the
Company the filing or recordation information with respect thereto.

 

7.20        Keepwell (Commodity Exchange Act). Each Loan Party that is a
Qualified ECP Guarantor shall, and shall cause each of its Subsidiaries which is
a Qualified ECP Guarantor to, undertake to provide such funds or other support
as may be needed from time to time by each other Loan Party to honor all of its
obligations under any Guaranty in respect of Swap Obligations (provided,
however, that each Qualified ECP Guarantor shall only be liable under this
Section 7.20 for the maximum amount of such liability that can be hereby
incurred without rendering its obligations under this Section 7.20 voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount). The obligations of each Qualified ECP Guarantor
under this Section 7.20 shall remain in full force and effect until this
Agreement is terminated. Each Qualified ECP Guarantor intends that this Section
7.20 shall constitute, and this Section 7.20 shall be deemed to constitute, a
“keepwell, support, or other agreement” for the benefit of each other Loan Party
for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

7.21        Post-Closing Requirements. The Company shall, or shall cause its
relevant Subsidiaries to, complete each of the actions described on Schedule
7.21 as soon as commercially reasonable and by no later than the date set forth
in Schedule 7.21 with respect to such action or such later date as the
Administrative Agent may reasonably agree.

 

Article VIII.

 

NEGATIVE COVENANTS

 

So long as the Issuing Lender or any Lender shall have any Commitment or any
obligation to issue or participate in Letters of Credit hereunder, or any Loan,
Letter of Credit or other Obligation (other than Obligations in respect of (i)
indemnification, expense reimbursement, tax gross-up or yield protection for
which no claim has been made or (ii) Lender Derivative Contracts) shall remain
unpaid or unsatisfied, or any Letter of Credit remains outstanding:

 

8.01        Limitation on Liens. Each Loan Party agrees that it shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, make,
create, incur, assume or suffer to exist any Lien upon or with respect to any
part of its property, whether now owned or hereafter acquired, other than the
following (“Permitted Liens”):

 

(a)          any Lien created under any Loan Document;

 

(b)          Liens for Taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.09;

 

(c)          carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s,
repairmen’s or other similar Liens arising in the ordinary course of business
(whether by law or by contract) which are not delinquent or remain payable
without penalty or which are being contested in good faith and by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture or
sale of the property subject thereto;

 

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(d)          Liens consisting of pledges or deposits required in the ordinary
course of business in connection with workers’ compensation, unemployment
insurance and other social security legislation;

 

(e)          Liens on the Property of such Loan Party securing (i) the
non-delinquent performance of bids, trade contracts (other than for borrowed
money), and statutory or regulatory obligations, (ii) contingent obligations on
surety, performance and appeal bonds, and (iii) other non-delinquent obligations
of a like nature; in each case, incurred in the ordinary course of business;

 

(f)          easements, rights-of-way, restrictions, defects or other exceptions
to title (including, but not limited to, the contractual nature of the Company’s
interest in the Brea Oil Field, Orange County, California, and the failure of
certain Indian Tribes to act on assignment consents in certain Wyoming
properties in connection with the acquisition by the Company of Properties from
Nautilus Resources, LLC and Phoenix Production Company) and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, are not incurred to secure
Indebtedness, and which do not in any case materially detract from the value of
the Property subject thereto or interfere with the ordinary conduct of the
businesses of the Loan Parties;

 

(g)          Liens arising solely by virtue of any statutory or common law
provision relating to bankers’ liens, rights of set-off or similar rights and
remedies as to deposit accounts maintained with a depository institution; or
under any deposit account agreement entered into in the ordinary course of
business; provided that, with respect to each such deposit account and funds
held therein: (i) no such deposit account or funds constitute a dedicated cash
collateral account or cash collateral or are subject to restrictions against
access by the applicable Loan Party, (ii) the Loan Party maintains (subject to
such right of set off) dominion and control over such account(s) and funds,
(iii) no such deposit account or funds are intended by any Loan Party to provide
cash collateral to the depository institution, and (iv) if the balance in a
deposit account exceeds $500,000, then the following additional provision shall
apply: except during such times as the institution holding such account is a
Lender, no such deposit account or any funds contained therein shall at any time
secure any obligations under Derivative Contracts, other Indebtedness, or any
obligations other than the obligation to pay fees, expenses and other amounts
owed to the account-holding depository institution associated with the
maintenance of such deposit account;

 

(h)          Oil and Gas Liens;

 

(i)          judgment Liens securing judgments that do not constitute Events of
Default under Section 9.01(i);

 

(j)          deposits of cash or Cash Equivalents in the ordinary course of
business not to exceed the amount of $20,000,000 in the aggregate to secure the
performance of leases and contracts entered into in the ordinary course of
business, but only to the extent securing performance obligations that do not
constitute Indebtedness;

 

(k)          existing Liens described on Schedule 8.01;

 

(l)          Liens granted to secure payment of Capitalized Lease Obligations
and purchase money Indebtedness of the Loan Parties, so long as such
Indebtedness is permitted under Section 8.05(g), provided that such Liens (i)
attach only to the assets acquired with the proceeds of such Indebtedness and
(ii) do not cover any Hydrocarbon Interests or equity interests in Persons
owning direct or indirect interests in Hydrocarbon Interests);

 

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(m)          Liens securing reimbursement obligations of the Loan Parties
permitted to be incurred by the Loan Parties pursuant to the terms of this
Agreement, and related expenses, in respect of letters of credit issued for the
account of the Loan Parties in connection with the purchase of goods by the Loan
Parties in the ordinary course of business and on payment terms of no more than
90 days after the date of delivery of such goods, provided that such Liens (i)
attach only to the specific goods so purchased and title documents in respect
thereof and (ii) do not cover any Hydrocarbon Interests; and provided further
that the aggregate amount of reimbursement obligations secured by Liens
permitted by this Section 8.01(m) at any time outstanding, when added to the
aggregate amount of obligations then outstanding that are secured by Liens
permitted under Section 8.01(n), shall not exceed $20,000,000;

 

(n)          Liens of sellers of goods to the Loan Parties arising by operation
of law under Article 2 of the UCC or similar provisions of applicable law in the
ordinary course of business, covering only the goods sold and title documents in
respect thereof and securing only the unpaid purchase price for such goods and
related expenses; provided that such Liens do not cover any Hydrocarbon
Interests or equity interests in Persons owning direct or indirect interests in
Hydrocarbon Interests; and provided further that the aggregate amount of
obligations at any time outstanding that are secured by Liens permitted by this
Section 8.01(n), when added to the aggregate amount of reimbursement obligations
then outstanding secured by Liens permitted under Section 8.01(m), shall not
exceed $20,000,000;

 

(o)          other Liens on property or assets (other than Oil and Gas
Properties and equity interests in Persons owning direct or indirect interests
in Oil and Gas Properties) securing obligations not exceeding at any time, in
the aggregate, $10,000,000;

 

(p)          Liens on assets (other than Oil and Gas Properties and equity
interests in Persons owning direct or indirect interests in Oil and Gas
Properties) securing Assumed Indebtedness as permitted under Section 8.05(h)
provided that such Liens do not attach to any other assets; and

 

(q)          Liens in favor of the Issuing Lender and/or Swing Line Lender,
including pursuant to Section 2.14, to cash collateralize or otherwise secure
the obligations of a Defaulting Lender to fund risk participations hereunder.

 

8.02        Disposition of Assets. Each Loan Party agrees that it shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, sell,
assign, lease, convey, transfer or otherwise dispose of (whether in one or a
series of transactions) (collectively, “Dispositions”) any interests owned by
any Loan Party or by any Subsidiary of a Loan Party in Oil and Gas Properties or
in other Property used or useful by the Loan Parties or Subsidiaries in
connection with such Oil and Gas Properties (including accounts and notes
receivable, with or without recourse) or enter into any agreement to do any of
the foregoing, except:

 

(a)          as permitted under Sections 7.05, 8.03, 8.04 or 8.09;

 

(b)          Dispositions of inventory, including produced Oil and Gas, in the
ordinary course of business;

 

(c)          Dispositions by the Company or any of its Subsidiaries to the
Company or to a Guarantor provided that a Disposition of any Mortgaged Property
otherwise permitted under this Section 8.02(c) shall be permitted only if such
Mortgaged Property remains subject to a Lien in favor of the Administrative
Agent for the benefit of the Lenders and the Lender Derivative Providers
pursuant to documentation executed by the transferee reasonably satisfactory to
the Administrative Agent, and in the case of a Disposition to a Guarantor that
is a Subsidiary, (x) the transferee Subsidiary is engaged in the Principal
Business and (y) the transferee Subsidiary is Solvent prior to and after giving
effect to such Disposition;

 

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(d)          used, worn-out or surplus equipment in the ordinary course of
business; and

 

(e)          Dispositions not otherwise permitted under Sections 8.02(a) – (d)
above; provided that, (i) no Event of Default shall exist at the time of such
Disposition or result therefrom, and (ii) the aggregate value (as determined by
the Administrative Agent to be the value assigned to such Properties under the
most recent Reserve Report) of all Dispositions of Oil and Gas Properties made
by the Loan Parties, plus the net effect of hedge modifications permitted under
Section 8.10(d) during such period, together, shall not exceed in any Borrowing
Base Period five percent (5%) of the Borrowing Base then in effect; further
provided that, the Borrowing Base shall be automatically reduced by an amount
equal to the aggregate Borrowing Base value of such Oil and Gas Properties (as
determined by the Administrative Agent to be the value assigned to such
properties under the most recent Borrowing Base) and to the extent a Borrowing
Base Deficiency results from such reduction, up to one-hundred percent (100%) of
the proceeds of such Dispositions, net of reasonable fees, expenses and taxes,
shall be applied, as necessary, to cure such Borrowing Base Deficiency.

 

8.03        Consolidations and Mergers. No Loan Party shall, or permit any of
its Subsidiaries to, merge, consolidate with or into, or convey, transfer, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except:

 

(a)          any Subsidiary may merge with any Loan Party, provided that the
Company or other Loan Party, as applicable, shall be the continuing or surviving
entity;

 

(b)          any Subsidiary may sell, convey, transfer, lease or otherwise
dispose of all or substantially all of its assets (upon voluntary liquidation or
otherwise), to the Company or any other Subsidiary that is a Guarantor;

 

(c)          Dispositions permitted under Section 8.02(e); and

 

(d)          (i) pursuant to the Acquisition Agreement, the merger of Boom
Merger Sub, LLC, a Subsidiary of Parent, with and into the Acquired Company, and
(ii) the contribution of the Equity of the Acquired Company by Parent to the
Company, with the result that the Acquired Company becomes a wholly-owned
Subsidiary of the Company within the time period set forth on Schedule 7.21.

 

8.04        Loans and Investments. No Loan Party shall, or permit any of its
Subsidiaries to, purchase, acquire, or own, or permit any of its Subsidiaries to
purchase, acquire, or own any capital stock, equity interest, or any obligations
or other securities of, or any interest in, any Person (including any
Unrestricted Entity), or make any Acquisition, or make any advance, loan,
extension of credit or capital contribution to or any other investment in
(collectively, “Investments”) any Person including any Restricted Subsidiary,
Unrestricted Entity or Affiliate of the Company, except for:

 

(a)          (i) Investments made on or prior to the Effective Date in the
entities described in Schedule 6.19, and (ii) existing Investments described in
Schedule 8.04;

 

(b)          Investments in Cash Equivalents;

 

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(c)          extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;

 

(d)          Investments (i) by Parent in or to the Company, and (ii) by the
Company or any Subsidiary in or to a Domestic Subsidiary that is a Guarantor or
that becomes a Guarantor upon the making of such Investments, provided, however,
that in the case of this clause (ii), during the continuation of an Event of
Default, no such Investments shall be made except to the extent determined by
the Company in the exercise of its good faith judgment to be reasonably
necessary to preserve the Mortgaged Properties;

 

(e)          Investments permitted under Section 8.02(c);

 

(f)          Investments in Derivative Contracts permitted under Section 8.10;

 

(g)          Investments with third parties that (i) are customary in the oil
and gas business, (ii) are made in the ordinary course of such Person’s
business, and (iii) are made in the form of or pursuant to Operating Agreements,
process agreements, farm-in agreements, farm-out agreements, development
agreements, unitization agreements, pooling agreements, joint bidding
agreements, service contracts and other similar agreements;

 

(h)          extensions of credit by the Company to any of its full time
employees which do not exceed $5,000,000 at any time outstanding in the
aggregate to all such employees;

 

(i)          non-hostile Acquisitions of Equity or other Acquisitions; provided
that: (i) immediately prior to and after giving effect to each such Acquisition,
no Default or Event of Default exists or would result therefrom; (ii) if such
Acquisition is of Equity of a Person, (x) all of the Equity of such Person is
acquired and such Person becomes a Guarantor and grants a Lien on its assets,
and all the Equity in such Person is pledged as Collateral for the Obligations,
in accordance with Section 4.01 and (y) such Person is principally engaged in
the same business as the Loan Parties; and (iii) the Company shall be in pro
forma compliance with the covenants set forth in Sections 8.14 and 8.16 based on
the trailing four (4) quarters and as adjusted on a pro forma basis for such
Acquisition;

 

(j)          (i) pursuant to the Acquisition Agreement, the merger of Boom
Merger Sub, LLC, a Subsidiary of Parent, with and into the Acquired Company, and
(ii) the contribution of the Equity of the Acquired Company by Parent to the
Company, with the result that the Acquired Company becomes a wholly-owned
Subsidiary of the Company within the time period set forth on Schedule 7.21;

 

(k)          to the extent not otherwise permitted under this Section 8.04,
Investments in the Unrestricted Entities approved by the Majority Lenders;

 

(l)          (i) Investments received in connection with the bankruptcy or
reorganization of suppliers and customers; and (ii) Investments consisting of
extensions of credit in the form of notes receivable received in settlement of
delinquent obligations of and other disputes with suppliers and customers, to
the extent reasonably necessary in order to prevent or limit loss; and in the
case of clauses (i) and (ii), arising in the ordinary course of business;
provided that the aggregate principal amount of notes received pursuant to
clause (ii) shall not exceed $20,000,000 in principal amount outstanding at any
time;

 

(m)          Investments consisting of extensions of credit in the form of notes
receivable (“Seller Notes”) received as consideration for any Disposition
permitted under Section 8.02(e) (other than Dispositions of interests under
Derivative Contracts), but only to the extent that such consideration is not
prohibited by such Section provided that, (i) after giving effect to any such
Disposition, there shall be no Borrowing Base Deficiency; and (ii) the aggregate
principal amount outstanding under such Seller Notes (excluding any Seller Notes
with respect to the sale of assets other than Oil and Gas Properties and
excluding equity interests in Subsidiaries that do not own, directly or
indirectly, any Oil and Gas Properties) shall not at any time exceed
$10,000,000;

 

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(n)          Contingent Obligations permitted under Section 8.08;

 

(o)          Investments in the Unrestricted Salt Water Disposal Subsidiary in
an amount not exceed $10,000,000 in the aggregate; and

 

(p)          other Investments made after the Effective Date in an amount not to
exceed $20,000,000 in the aggregate.

 

8.05        Limitation on Indebtedness. No Loan Party shall, or permit any of
its Subsidiaries to, create, incur, assume, suffer to exist, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:

 

(a)          Indebtedness incurred pursuant to this Agreement or the other Loan
Documents;

 

(b)          Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.08;

 

(c)          Indebtedness incurred in connection with the issuance of Derivative
Contracts permitted under Section 8.10 hereof;

 

(d)          specific Indebtedness outstanding on the date hereof and listed in
Schedule 8.05 hereto; and

 

(e)          Senior Unsecured Notes and guaranties given by the Company, the
Parent or any Subsidiary that is a guarantor hereunder with respect thereto;
provided that the principal amount of such Senior Unsecured Notes shall not
exceed the Borrowing Base in effect at the time of issuance (before giving pro
forma effect to the attendant automatic reduction in the Borrowing Base required
by the second proviso of this clause (e)), further provided that, the Borrowing
Base shall automatically reduce on the date of such issuance of Senior Unsecured
Notes by an amount equal to 25% of the stated principal amount of such Senior
Unsecured Notes, except to the extent that the proceeds from the issuance of
such Senior Unsecured Notes are used:

 

(i)           to refinance Senior Unsecured Notes existing at such time
(provided that the amount of such refinancing does not exceed the principal
amount being refinanced plus interest, underwriting discount, make-whole premium
and offering expenses paid in connection therewith); or

 

(ii)          to refinance on or within ninety (90) days after the Effective
Date not more than $300,000,000 principal amount of senior unsecured notes of QR
Energy, LP and QRE Finance Corporation (or to repay amounts drawn under this
Agreement after the Effective Date to refinance such notes) (provided that the
amount of such refinancing does not exceed the principal amount being refinanced
plus interest, underwriting discount, make-whole premium and offering expenses
paid in connection therewith); provided, however that if the aggregate principal
amount of Senior Unsecured Notes issued after the Effective Date (including
Senior Unsecured Notes described in this clause (ii) but not Senior Unsecured
Notes described in clause (i) above), when added to the aggregate principal
amount of Senior Unsecured Notes issued after July 23, 2014 through the
Effective Date (including Senior Unsecured Notes described in this clause (ii)
but excluding Senior Unsecured Notes described in clause (i) above), exceeds
$450,000,000, then the initial Borrowing Base hereunder shall be reduced by 25%
of such excess;

 

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(f)          Indebtedness constituting Investments that are permitted pursuant
to Section 8.04(d);

 

(g)          Capitalized Lease Obligations and purchase money Indebtedness in an
aggregate principal amount not to exceed $10,000,000 outstanding at any time;

 

(h)          Assumed Indebtedness, in an aggregate principal not to exceed
$10,000,000 outstanding at any time; and

 

(i)          Unsecured Indebtedness not otherwise permitted under Sections
8.05(a) – (h) above in an aggregate principal amount not exceeding $20,000,000
at any time outstanding.

 

8.06        Transactions with Affiliates. No Loan Party shall, or permit any of
its Subsidiaries to, enter into any transaction with or make any payment or
transfer to any Affiliate of the Company or such Loan Party, except in the
ordinary course of business and upon fair and reasonable terms no less favorable
to the Company or such other Person than would obtain in a comparable
arm’s-length transaction with a Person not an Affiliate of the Company;
provided, however that the foregoing restriction shall not apply to transactions
between or among Loan Parties. Nothing in this Section 8.06 shall restrict the
Company’s ability to make Restricted Payments permitted under Section 8.09.

 

8.07        Margin Stock.

 

(a)          No Loan Party shall use any portion of the Loan proceeds, directly
or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act (provided that the QR Energy
Acquisition shall be permitted). If requested by the Administrative Agent, the
Company will furnish to the Administrative Agent and each Lender a statement to
the foregoing effect in conformity with the requirements of FR Form U-1 or such
other form referred to in Regulation U or Regulation X of the FRB, as the case
may be.

 

(b)          The Loan Parties, individually or in the aggregate, shall not at
any time own Margin Stock the value of which, for purposes of Regulation U,
would exceed 10% of the value of the Collateral unless (i) such Margin Stock
shall have been pledged to the Administrative Agent to secure the Obligations
and the relevant Loan Party shall have delivered such documentation as the
Administrative Agent requires in connection with such pledge and (ii) the
Company shall have furnished to the Administrative Agent and each Lender a
statement in conformity with the requirements of FR Form U-1 or such other form
referred to in Regulation U or Regulation X of the FRB, as the case may be.

 

8.08        Contingent Obligations. No Loan Party shall, or permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Contingent
Obligations except:

 

(a)          endorsements for collection or deposit in the ordinary course of
business;

 

(b)          Derivative Contracts permitted under Section 8.10 hereof;

 

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(c)          Contingent Obligations of the Loan Parties listed in Schedule 8.08
hereto, not to exceed $5,000,000 in the aggregate outstanding at any time;

 

(d)          plugging bonds, performance bonds and fidelity bonds issued for the
account of the Company or its Subsidiaries, obligations to indemnify or make
whole any surety and similar agreements incurred in the ordinary course of
business, provided that such obligations shall not exceed $100,000,000 in the
aggregate;

 

(e)          this Agreement and the Loan Documents;

 

(f)          Contingent Obligations of any Loan Party in respect of obligations
of any other Loan Party to the extent such Obligations are permitted under the
Loan Documents; and

 

(g)          any other Contingent Obligations of the Loan Parties to the extent
not described in Sections 8.08(a) - (f) not to exceed an aggregate amount of
$30,000,000 outstanding at any time.

 

8.09        Restricted Payments. No Loan Party shall, or permit any of its
Subsidiaries to, purchase, redeem or otherwise acquire for value any membership
interests, partnership interests, capital accounts, shares of its capital stock
or any warrants, rights or options to acquire such membership interest,
partnership interest or shares, now or hereafter outstanding from its members,
partners or stockholders or declare or pay any distribution, dividend or return
capital to its members, partners or stockholders, or make any distribution of
assets in cash or in kind to its members, partners or stockholders (collectively
“Restricted Payments”); except (a) Parent may declare and pay dividends with
respect to its Equity payable solely in additional shares of its Equity, (b)
Subsidiaries of the Company may declare and pay dividends ratably with respect
to their Equity, (c) the Company may declare and pay dividends to Parent, and
(d) Parent may declare and pay to its Equity owners periodic cash dividends of
Available Cash or otherwise purchase, redeem or acquire for value any membership
interests, partnership interests, capital accounts, shares of its capital stock
or any warrants, rights or options to acquire such membership interest,
partnership interest or shares from its members, partners or stockholders in
accordance with its partnership agreement, so long as no Event of Default exists
or would result therefrom, and after giving effect to such Restricted Payment,
the Loan Parties exhibit pro-forma compliance with all terms and conditions of
this Agreement. By making a Restricted Payment pursuant to clause (d) above,
Parent represents and warrants to Administrative Agent and the Lenders that the
conditions for making such Restricted Payment have been satisfied.

 

8.10        Derivative Contracts. No Loan Party shall, or permit any of its
Subsidiaries to, enter into or in any manner be liable on any Derivative
Contract except:

 

(a)          Derivative Contracts entered into by the Company with the purpose
and effect of limiting or reducing the market price risk of Oil and Gas expected
to be produced by the Company, the Acquired Company and their respective
Subsidiaries provided that at all times: (i) each such Derivative Contract
limits or reduces such market price risk for a term of no more than sixty (60)
months; (ii) no such contract, at the time it is entered into, when aggregated
with all Derivative Contracts permitted under this Section 8.10(a) (but
excluding put option contracts or similar “floor” arrangements) requires the
Loan Parties, collectively, to deliver volumes in excess of the greater of (x)
85% of Total Proved Reserves or (y) the following percentages of Proved
Producing Reserves:

  

Year  Volumes  1   100% 2   100% 3   90% 4   90% 5   85%

 

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provided, however, that with regard to a "costless collar" that involves the
purchase of a put and the sale of a call for the same volumes and dates and
commodities, only the volumes associated with the put or the call (but not both)
will be included in calculating the applicable percentage threshold, and (iii)
each such contract shall be between the Company and a Lender Derivative
Provider, or with an unsecured counterparty or have a guarantor of the
obligation of the unsecured counterparty who, at the time the contract is made,
has long-term obligations rated BBB+ or Baal or better, respectively, by
Standard & Poor’s Corporation or Moody’s Investors Services, Inc. (or a
successor credit rating agency) (excluding Derivative Contracts offered by
national commodity exchange for which no credit rating is required);

 

(b)          Derivative Contracts entered into by the Company with the purpose
and effect of fixing interest rates on a principal amount of Indebtedness of the
Company that is accruing interest at a variable rate, provided that (i) the
floating rate index of each such contract generally matches the index used to
determine the floating rates of interest on the corresponding Indebtedness of
the Company to be hedged by such contract, (ii) no such contract, except those
with a Lender or its Affiliate, when aggregated with all Derivative Contracts
permitted under Sections 8.10(a) and (b), requires the Company to put up money,
assets, letters of credit, or other security against the event of its
non-performance prior to actual default by the Company in performing obligations
thereunder, and (iii) each such contract shall be with a Lender Derivative
Provider, or with an unsecured counterparty or have a guarantor of the
obligation of an unsecured counterparty who, at the time the contract is made,
has long-term obligations rated BBB+ or Baa1 or better, respectively, by
Standard & Poor’s Corporation or Moody’s Investors Services, Inc. (or a
successor credit rating agency);

 

(c)          In the event of a Derivative Contract between the Company and any
of the Lenders, the Contingent Obligation evidenced under such Derivative
Contract shall not be applied against such Lender’s Commitment nor against the
Effective Amount. Any obligation of a Loan Party under any Lender Derivative
Contract shall be treated as an Obligation pari passu and secured pro rata under
the Security Documents with all other Obligations as more particularly provided
under Section 9.02 and 11.11; and

 

(d)          The Company shall not modify in any material respect to the extent
it adversely affects the then-current Borrowing Base or terminate any Derivative
Contracts to which it is currently a party or subsequently becomes a party
without the consent of the Administrative Agent, except that (i) Derivative
Contracts with a party who ceases to be a Lender (or an Affiliate of a Lender)
may be terminated in connection with the assignment, amendment or other
transaction pursuant to which such party ceases to be a Lender or an Affiliate
of a Lender, and (ii) so long as no Default or Event of Default exists,
Derivative Contracts may be modified or terminated, provided that, the net
effect of the modifications or terminations of such Derivative Contracts (after
giving effect to any new Derivative Contracts entered into during such Borrowing
Base Period prior to or in connection with, such modification or termination),
as determined by the Administrative Agent, plus the aggregate value (as
determined by the value assigned to such properties under the most recent
Reserve Report) of all Dispositions of Oil and Gas Properties made by the Loan
Parties during such period, together, shall not exceed in any Borrowing Base
Period five percent (5%) of the Borrowing Base then in effect; further provided
that, the Borrowing Base shall be automatically reduced by an amount equal to
the net effect of the modifications or terminations of such Derivative Contracts
(after giving effect to any new Derivative Contracts entered into during such
Borrowing Base Period prior to or in connection with, such modification or
termination) and to the extent a Borrowing Base Deficiency results from such
reduction, up to one-hundred percent (100%) of the cash and cash equivalent
proceeds of such modifications or terminations of Derivative Contracts received
by the Loan Parties, net of payment of, or provisions for reasonable
out-of-pocket fees, expenses and taxes incurred by the Company in connection
with such transaction, shall be applied, as necessary, to cure such Borrowing
Base Deficiency;

 

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(e)          Derivative Contracts that would be permitted by Section 8.10(a)
pertaining to Oil and Gas Properties to be acquired pursuant to a Specified
Acquisition; provided that Derivative Contracts pursuant to this Section 8.10(e)
must be terminated within thirty (30) days of the earlier to occur of: (i) the
date that is 90 days after the execution of the purchase and sale agreement
relating to the Specified Acquisition if the Specified Acquisition has not
closed and (ii) the Company or the Parent obtaining knowledge with reasonable
certainty that the Specified Acquisition will not be consummated; and

 

(f)          Derivative Contracts entered into with the purpose and effect of
fixing prices for greenhouse gas (GHG) allowances related to expected emissions
of GHG from the Company’s and its Subsidiaries’ facilities located in the State
of California, provided that at all times: (i) no such Derivative Contract fixes
a price for a term of more than sixty (60) months; (ii) the aggregate monthly
notional amounts covered by all such Derivative Contract (determined, in the
case of Derivative Contracts that are not settled on a monthly basis, by a
monthly proration reasonably acceptable to Administrative Agent) for any single
month does not in the aggregate exceed 100% of the Company’s and its
Subsidiaries’ aggregate projected GHG emissions from such facilities for such
month, (iii) except for Letters of Credit and the Collateral under the Security
Documents with respect to Obligations to Lender Derivative Providers, no such
Derivative Contract requires the Company or any of its Subsidiaries to put up
money, assets or other security against the event of its nonperformance prior to
actual default in performing its obligations thereunder, and (iv) each such
Derivative Contract is with a counterparty or has a guarantor of the obligation
of the counterparty who (unless such counterparty is a Lender Derivative
Provider) at the time the Derivative Contract is made has long-term obligations
rated A+ or A1, or better, respectively, by Standard & Poor’s Corporation or
Moody’s Investors Services, Inc. (or a successor credit rating agency).

 

8.11        Change in Business; Amendments to Organization Documents and Certain
Acquisition Agreements; Corporate Structure; Tax Status.

 

(a)          The Loan Parties shall not, and shall not permit any of their
Subsidiaries to, (i) own Equity of any Foreign Person, or make any expenditure
in or related to Oil and Gas Properties not located within the geographic
boundaries of the United States, or (ii) enter into, or allow any Subsidiary to
enter into, any joint ventures except as permitted by Section 8.04.

 

(b)          The Loan Parties shall not, and shall not permit any subsidiary to,
engage in any business or activity other than its Principal Business.

 

(c)          The Loan Parties shall not alter, amend or modify in any manner
materially adverse to the Lenders any of its Organization Documents.

 

(d)          Parent shall not alter, and shall take such actions as may be
required in order to maintain, its status as a partnership for United States
federal income tax purposes.

 

8.12        Accounting Changes. Except as expressly permitted by the Lenders, no
Loan Party shall, or permit any Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change the fiscal year of any Loan Party.

 

8.13        ERISA Compliance. Except as would not reasonably be expected to
result in a Material Adverse Effect, no Loan Party will, or permit any
Subsidiary to, at any time:

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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(a)          engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which any Loan Party or any ERISA Affiliate could
be subjected to either a civil penalty assessed pursuant to subsections (c), (i)
or (l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of
the Code;

 

(b)          terminate, or permit any ERISA Affiliate to terminate, any Pension
Plan in a manner, or take any other action with respect to any Pension Plan,
which could result in any liability of such Loan Party or any ERISA Affiliate to
the PBGC;

 

(c)          fail to make, or permit any ERISA Affiliate to fail to make, full
payment when due of all amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, any Loan Party or any ERISA
Affiliate is required to pay as contributions thereto;

 

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

 

(e)          permit, or allow any ERISA Affiliate to permit, the actuarial
present value of the benefit liabilities under any Plan maintained by any Loan
Party or any ERISA Affiliate which is regulated under Title IV of ERISA to
exceed the current value of the assets (computed on a plan termination basis in
accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities. The term “actuarial present value of the benefit liabilities” shall
have the meaning specified in section 4041 of ERISA;

 

(f)          incur, or permit any ERISA Affiliate to incur, any withdrawal
liability pursuant to Section 4201 or 4202 of ERISA;

 

(g)          acquire, or permit any ERISA Affiliate to acquire, an interest in
any Person that causes such Person to become an ERISA Affiliate with respect to
such Loan Party or with respect to any ERISA Affiliate of such Loan Party if
such Person sponsors, maintains or contributes to, or at any time in the
six-year period preceding such acquisition has sponsored, maintained, or
contributed to, (i) any Multiemployer Plan with respect to which such Person has
an outstanding withdrawal liability under Section 4201 or 4202 of ERISA, or (ii)
any other Plan that is subject to Title IV of ERISA under which the actuarial
present value of the benefit liabilities under such Plan exceeds the current
value of the assets (computed on a plan termination basis in accordance with
Title IV of ERISA) of such Plan allocable to such benefit liabilities;

 

(h)          incur, or permit any ERISA Affiliate to incur, a liability to or on
account of a Plan under sections 515, 4062, 4063, 4064, or 4204 of ERISA;

 

(i)          contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any employee welfare benefit plan, as defined in section 3(1) of ERISA, that
provides retiree benefits to former employees of such entities (other than
coverage mandated by applicable law), that may not be terminated by such
entities in their sole discretion at any time without any material liability;
and

 

(j)          amend, or permit any ERISA Affiliate to amend, a Plan resulting in
an increase in current liability such that such Loan Party or any ERISA
Affiliate is required to provide security to such Plan under section 401(a)(29)
of the Code.

 

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8.14        Interest Coverage Ratio. Parent shall not permit the ratio of
EBITDAX to Consolidated Interest Expense for the four fiscal quarters ending on
the last day of each fiscal quarter beginning with the fiscal quarter ended
December 31, 2014, to be less than 2.50 to 1.00.

 

8.15        Reserved.

 

8.16        Current Ratio. Parent shall not permit, as of the last day of any
fiscal quarter beginning with the fiscal quarter ending on December 31, 2014,
the ratio of Current Assets to Current Liabilities to be less than 1.00 to 1.00.

 

8.17        Negative Pledge. No Loan Party or any of its Subsidiaries shall
enter into or permit to exist any contractual obligation (other than this
Agreement or any other Loan Document) that limits the ability (a) of any
Subsidiary to make Restricted Payments to or otherwise transfer property to
Parent, the Company or any Guarantor, (b) of Parent to guarantee the
Indebtedness of the Company, or any Subsidiary to guarantee the Indebtedness of
the Company, or (c) of Parent, the Company, or any Subsidiary to create, incur,
assume or suffer to exist Liens on property of such Person to secure the
Obligations.

 

8.18        Unrestricted Entities.

 

(a)          No Loan Party or any of its Subsidiaries shall incur, assume,
guarantee or otherwise become liable in respect of any Indebtedness or any other
obligations, or grant or permit to exist any Lien on any of its Property to
secure any Indebtedness of or other obligations of, or provide any other form of
credit support to any Unrestricted Entity.

 

(b)          At all times when the Unrestricted Utica Shale Subsidiary is
wholly-owned directly or indirectly by the Parent, the Parent (and the Company,
if the Unrestricted Utica Shale Subsidiary is a subsidiary of the Company) will
cause the management, business, operations and affairs of the Unrestricted Utica
Shale Subsidiary to be conducted in such a manner so that the Unrestricted Utica
Shale Subsidiary will be treated as an entity separate and distinct from the
Parent, the Company and each of their Restricted Subsidiaries, including: (i)
keeping separate books of account and financial statements, showing the assets
and liabilities of the Unrestricted Utica Shale Subsidiary separate and apart
from those of the Parent, the Company and the Restricted Subsidiaries, (ii)
furnishing separate financial statements of the Unrestricted Utica Shale
Subsidiary to creditors and potential creditors thereof, (iii) not permitting
any properties or assets of the Parent, the Company or any Restricted Subsidiary
to be commingled with properties of the Unrestricted Utica Shale Subsidiary, and
holding assets and properties in proper legal names, (iv) conducting business
under separate names, and (v) holding the Unrestricted Utica Shale Subsidiary
out to be separate and apart from the Parent, the Company and the Restricted
Subsidiaries. Notwithstanding the foregoing, it is understood and agreed that
the Unrestricted Utica Shale Subsidiary may be required to be consolidated with
the Parent or the Company under GAAP or for reporting purposes by the SEC or
other Governmental Authorities, and such consolidation and/or reporting shall
not be a violation of this Section 8.18.

 

(c)          At all times when the Unrestricted Utica Shale Subsidiary is
wholly-owned directly or indirectly by the Parent, the Parent (and the Company,
if the Unrestricted Utica Shale Subsidiary is a subsidiary of the Company) will
not, and will not permit any of their Restricted Subsidiaries to, (i) permit the
Unrestricted Utica Shale Subsidiary to incur or be liable for any Indebtedness
in excess of $5,000,000 principal amount at any time outstanding; or (ii) permit
the Unrestricted Utica Shale Subsidiary to own any Property other than (A)
Property of the type described in the definition of “Oil and Gas Properties”
which is associated with Utica Shale Properties, (B) cash and Cash Equivalents,
(C) equity in a joint venture or similar entity that owns a portion of the Utica
Shale Properties and (D) equity of the Parent.

 

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Page 87

 

  

Article IX.

 

EVENTS OF DEFAULT

 

9.01        Event of Default. Any of the following shall constitute an “Event of
Default”:

 

(a)          Non-Payment. The Company or any other Loan Party fails to pay (i)
when and as required to be paid herein, any amount of principal of any Loan,
(ii) fails to pay within three (3) days of when due, interest on any Loan, or
(ii) fails to pay within five (5) Business Days of when due any fee or other
amount payable hereunder or under any other Loan Document; or

 

(b)          Representation or Warranty. Any representation or warranty by any
Loan Party made or deemed made herein, in any other Loan Document, or which is
contained in any certificate, document or financial or other statement by the
Company, any other Loan Party, or any Responsible Officer of such Person,
furnished at any time under this Agreement, or in or under any other Loan
Document, is incorrect in any material respect on or as of the date made or
deemed made; or

 

(c)          Specific Defaults. Any Loan Party fails to perform or observe any
term, covenant or agreement contained in Section 7.03(a) or Article VIII (except
for such Liens under Section 8.01 other than arising by consensual action of
such Loan Party); or

 

(d)          Other Defaults. An Event of Default as defined in any Security
Document shall occur, or any Loan Party fails to perform or observe any other
term or covenant contained in this Agreement (other than described in any other
clause of this Section 9.01) or any other Loan Document, and same shall continue
unremedied for a period of 30 days after the earlier of (i) the date upon which
a Responsible Officer knew thereof or (ii) the date upon which written notice
thereof is given to the Company by the Administrative Agent or any Lender; or

 

(e)          Cross-Acceleration. (i) Any Loan Party, any Subsidiary thereof or
any combination thereof fails to make any payment in respect of any Indebtedness
or Contingent Obligation in an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) of more than $40,000,000
when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) and such failure continues after the applicable grace
period, if any, specified in the relevant document on the date of such failure;
or (ii) any Loan Party, any Subsidiary thereof or any combination thereof fails
after the applicable grace or notice period, if any, specified in the relevant
document on the date of such failure to perform or observe any other condition
or covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent
Obligation in an aggregate principal amount of more than $40,000,000 which
results in such Indebtedness or such Contingent Obligation being declared due
and payable (or becoming subject to mandatory repurchase or redemption) prior to
its stated maturity; or

 

(f)          Insolvency; Voluntary Proceedings. Any Loan Party, any Subsidiary
thereof or Breitburn GP LLC (i) generally fails to pay, or admits in writing its
inability to pay, its debts as they become due, subject to applicable grace
periods, if any, whether at stated maturity or otherwise; (ii) commences any
Insolvency Proceeding with respect to itself; or (iii) takes any action to
effectuate or authorize any of the foregoing; or

 

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(g)          Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding
is commenced or filed against any Loan Party, any Subsidiary thereof or
Breitburn GP LLC, or any writ, judgment, warrant of attachment, execution or
similar process, is issued or levied against all or a substantial part of any
such Person’s properties, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or similar
process shall not be released, vacated or fully bonded within 60 days after
commencement, filing or levy; (ii) any Loan Party, any Subsidiary thereof or
Breitburn GP LLC admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) any Loan Party, any
Subsidiary thereof or Breitburn GP LLC acquiesces in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee in possession
(or agent therefor), or other similar Person for itself or a substantial portion
of its property or business; or

 

(h)          Change of Control. There shall occur a Change of Control; or

 

(i)          Monetary Judgments. One or more non-interlocutory judgments,
non-interlocutory orders, decrees or arbitration awards is entered against any
Loan Party, any Subsidiary thereof, General Partner or any combination thereof
involving in the aggregate liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage) of
$40,000,000 or more, and the same shall remain unsatisfied, unvacated and
unstayed pending appeal for a period of 60 days after the entry thereof; or

 

(j)          Loss of Permit. Any Governmental Authority revokes or fails to
renew any material license, permit or franchise of any Loan Party, or any Loan
Party for any reason loses any material license, permit or franchise, or any
Loan Party suffers the imposition of any restraining order, escrow, suspension
or impounding of funds in connection with any proceeding (judicial or
administrative) with respect to any material license, permit or franchise; and,
in each case such revocation, failure or loss could reasonably be expected to
have a Material Adverse Effect; and such default remains unremedied for a period
of 30 days after the earlier of (i) the date upon which a Responsible Officer
knew or reasonably should have known of such default or (ii) the date upon which
written notice thereof is given to the Company by the Administrative Agent or
any Lender; or

 

(k)          Invalidity of Loan Documents. A Guaranty or any other Loan Document
is for any reason partially (including with respect to future advances) or
wholly revoked or invalidated, or otherwise ceases to be in full force and
effect other than in accordance with its terms or the terms of this Agreement,
or a Guarantor or any other Person contests in any manner the validity or
enforceability thereof or any Loan Party denies that it has any further
liability or obligation thereunder; or

 

(l)          ERISA. The occurrence of any of the following events: (i) the
happening of a Reportable Event which has resulted or could reasonably be
expected to result in a Material Adverse Effect (if not waived by the PBGC or by
the Majority Lenders, or if such event can be avoided by any corrective action
of the Loan Party affected thereby, such corrective action is not completed
within ninety (90) days after the occurrence of such Reportable Event) with
respect to any Pension Plan; (ii) the termination of any Pension Plan in a
“distress termination” under the provisions of Section 4041 of ERISA; (iii) the
appointment of a trustee by an appropriate United States District Court to
administer any Pension Plan; and (iv) the institution of any proceedings by the
PBGC to terminate any Pension Plan or to appoint a trustee to administer any
such plan; or

 

(m)          Environmental Claims. An Environmental Claim shall have been
asserted against any Loan Party or any subsidiary thereof which could reasonably
be expected to have a Material Adverse Effect.

 

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9.02        Remedies.

 

(a)          If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the
Majority Lenders:

 

(i)          declare the Commitment, if any, of each Lender to make Loans and
issue Letters of Credit to be terminated, and/or declare all or any part of the
unpaid principal of the Loans, all interest accrued and unpaid thereon and all
other amounts payable under the Loan Documents to be immediately due and
payable, whereupon the same shall become due and payable, without presentment,
demand, protest, notice of intention to accelerate, notice of acceleration or
any other notice of any kind, all of which are hereby expressly waived by each
Loan Party;

 

(ii)         require that the Company deposit cash collateral pursuant to
Section 2.10(h); and

 

(iii)        exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law;

 

provided, however, that upon the occurrence of any event specified in clauses
(f) or (g) of Section 9.01 (in the case of clause (i) of clause (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each
Lender to make Loans and issue Letters of Credit shall automatically terminate
and the unpaid principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and payable, and the
obligation of the Company to cash collateralize Letters of Credit shall
automatically become effective, without further act of the Administrative Agent,
or any Lender and without presentment, demand, protest, notice of intention to
accelerate, notice of acceleration or any other notice of any kind, all of which
are hereby expressly waived by each Loan Party.

 

(b)          All proceeds realized from the liquidation or other disposition of
Collateral and any amounts otherwise received on account of the Obligations
after the exercise of remedies provided for in Section 9.02 (or after any of the
Loans have automatically become immediately due and payable and the LC
Obligations have automatically been required to be cash collateralized) shall be
applied:

 

first, to the payment of that portion of the Obligations constituting
reimbursement of fees, expenses, indemnities and other amounts (including fees
and disbursements of counsel to the Administrative Agent) payable to the
Administrative Agent in its capacity as such;

 

second, to the payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal, interest and Letter of
Credit Fees) payable to the Lenders and the Issuing Lender (including fees and
expenses of counsel), ratably among them in proportion to the respective amounts
described in this clause second payable to them;

 

third, to the payment of that portion of the Obligations constituting accrued
and unpaid Letter of Credit Fees and interest on the Obligations, ratably among
the Lenders and the Issuing Lender in proportion to the respective amounts
described in this clause third payable to them;

 

fourth, to the Administrative Agent for the account of the Issuing Lender, to
cash collateralize that portion of the LC Obligations comprised of the aggregate
undrawn amount of Letters of Credit (to the extent not otherwise cash
collateralized pursuant Section 2.14) and to the payment of that portion of the
Obligations constituting of unpaid principal of the Loans, unpaid drawings under
Letters of Credit, and Indebtedness owed to Lender Derivative Providers under
any Lender Derivative Contracts, ratably among the Lenders, the Issuing Lenders
and the Lender Derivative Providers in proportion to the respective amounts
described in this clause fourth; provided that, to the extent that any Excluded
Swap Obligation exists, payments or the proceeds of any Collateral provided by a
Loan Party that is not a Qualified ECP Guarantor may not be shared with a Lender
Derivative Provider to the extent that doing so would violate the Commodity
Exchange Act;

 

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fifth, to payment of other unpaid Obligations, ratably to the holders thereof in
proportion to the respective amounts described in this clause fifth; and

 

sixth, any excess shall be paid to the Company or as otherwise required by law.

 

Notwithstanding the foregoing, the Administrative Agent shall have no obligation
to distribute funds in respect of Obligations under Lender Derivative Contracts
if the Administrative Agent has not received written notice thereof, together
with such supporting documentation as the Administrative Agent may request, from
the applicable Lender Derivative Provider. Each Lender Derivative Provider that
has given the notice contemplated by the preceding sentence shall, by such
notice, be deemed to have acknowledged and accepted the appointment of the
Administrative Agent pursuant to the terms of Article IX hereof for itself and
its Affiliates to the same extent as a “Lender” party hereto.

 

9.03        Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.

 

9.04        Lender and Lender Derivative Provider Action. Without limiting the
provisions of Section 11.03(b) or Section 11.08, the Issuing Lender and each
Lender, in its capacity as a Lender and in its capacity as a Lender Derivative
Provider, and each other Lender Derivative Provider, by its acceptance of the
benefits of the Security Documents creating Liens to secure Lender Derivative
Obligations, agrees that:

 

(a)          it will not, without the prior written consent of the
Administrative Agent, exercise any right to set off or apply any deposits of any
kind, or any other obligations owing by it to or for the order of the Company or
any of its Subsidiaries, against any Obligations under Lender Derivative
Contracts (“Lender Derivative Obligations”) or any other amounts secured by
Liens on Collateral; provided that nothing contained in this Section or
elsewhere in this Agreement shall impair the right of any Lender Derivative
Provider to declare an early termination date in respect of any Lender
Derivative Contracts, or to undertake payment or close-out netting or to
otherwise setoff trades or transactions then existing under such Lender
Derivative Contracts;

 

(b)          it will not, without the prior written consent of the
Administrative Agent, take any judicial or other action against the Company or
any Subsidiary, or against any Collateral or any other collateral pledged to
secure any Lender Derivative Obligations, of the type that would invoke the
application of the “security first” rule contained in Section 726 of the
California Code of Civil Procedure or any subsequent replacement statutory
provision;

 

(c)          it will not, without the prior written consent of the
Administrative Agent, (x) pursue or attempt to realize upon any Collateral or
any part or portion thereof, (y) do anything or take any action with respect to
any Collateral which would constitute an “action” for purposes of California
law, or (z) bid on any Collateral at a foreclosure sale, or take possession or
operate any portion of the Collateral which constitutes real property;

 

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(d)          it will not transfer any portion of its rights in respect of any
Lender Derivative Contract or Lender Derivative Obligations, unless the assignee
agrees in writing to be bound by the terms of this Section 9.04 and a copy of
such writing is delivered to the Administrative Agent; and

 

(e)          if it exercises any right of setoff in contravention of this
Section 9.04 or in contravention of Section 11.03, it shall indemnify the
Administrative Agent and each other Lender, the Issuing Lender and each Lender
Derivative Provider, from any and all losses, expenses and damages (including
attorneys’ fees and costs) it shall suffer or incur by reason of such setoff or
other action, including losses, expenses and damages (including attorneys’ fees
and costs) caused by or resulting from the release, loss or waiver of any
Collateral or any Lien thereon securing Obligations, or the unenforceability of
any Security Document or Loan Document or any assertions that any Collateral or
Lien securing Obligations thereon was released, lost or waived.

 

The provisions of this Section 9.04 shall apply to the Issuing Lender, all
Lenders and all Lender Derivative Providers and their respective successors and
assigns. The provisions of this Section 9.04 are solely for the benefit of the
Administrative Agent, the Issuing Lender, the Lenders and the Lender Derivative
Providers, and neither the Company nor any Subsidiary shall have rights as a
third party beneficiary of any such provisions.

 

Article X.

 

ADMINISTRATIVE AGENT

 

10.01        Appointment and Authority. Each of the Lenders and the Issuing
Lender hereby irrevocably appoints Administrative Agent to act on its behalf as
the Administrative Agent hereunder and under the other Loan Documents 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 or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit of
the Administrative Agent, the Lenders and the Issuing Lender, and neither the
Company nor any other Loan Party shall have rights as a third party beneficiary
of any of such provisions. It is understood and agreed that the use of the term
“agent” herein or in any other Loan Documents (or any other similar term) with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
Requirement of Law. Instead such term is used as a matter of market custom, and
is intended to create or reflect only an administrative relationship between
contracting parties.

 

10.02        Rights as a Lender. The Person 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 the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with Parent or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders.

 

10.03        Exculpatory Provisions. The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:

 

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(a)          shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;

 

(b)          shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as shall be
expressly provided for herein or in the other Loan Documents), provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose the Administrative Agent to
liability or that is contrary to any Loan Document or applicable law; and

 

(c)          shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company or any of its
Affiliates that is communicated to or obtained by the Person serving as the
Administrative Agent or any of its Affiliates in any capacity.

 

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 9.02 and 11.01) or (ii) in the absence of
its own gross negligence or willful misconduct as determined by a court of
competent jurisdiction by final and nonappealable judgment. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
notice describing such Default is given to the Administrative Agent in writing
by the Company, a Lender or the Issuing Lender.

 

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document (v) the existence,
priority or perfection of the Administrative Agent’s Lien on any Collateral, or
(vi) 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, nor shall the Administrative Agent be
responsible or liable to the Lenders for any failure to monitor or maintain any
portion of the Collateral.

 

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

 

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10.05         Delegation of Duties. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Administrative Agent. The Administrative Agent and any such sub agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article 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.

 

10.06         Resignation of Administrative Agent. The Administrative Agent may
at any time give notice of its resignation to the Lenders, the Issuing Lender
and the Company. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Company, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required 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 Lender, appoint a successor Administrative
Agent meeting the qualifications set forth above provided that if the
Administrative Agent shall notify the Company and the Lenders that no qualifying
Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the Issuing Lender under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the Issuing
Lender directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section 10.06. Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring (or retired) Administrative Agent, and the
retiring Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this Section 10.06). The fees payable
by the Company to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Company and such
successor. After the retiring Administrative Agent’s resignation hereunder and
under the other Loan Documents, the provisions of this Article X and Section
11.04 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 the retiring
Administrative Agent was acting as Administrative Agent. Any resignation by, or
removal of, Wells Fargo Bank, National Association, as Administrative Agent
pursuant to this Section 10.06 shall also constitute its resignation as an
Issuing Lender and Swing Line Lender. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring Issuing Lender, if in its sole discretion it elects to, and Swing
Line Lender, (b) the retiring Issuing Lender and Swing Line Lender shall be
discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (c) the successor Issuing Lender, if in its
sole discretion it elects to, shall issue letters of credit in substitution for
the Letters of Credit, if any, outstanding at the time of such succession or
make other arrangement satisfactory to the retiring Issuing Lender to
effectively assume the obligations of the retiring Issuing Lender with respect
to such Letters of Credit.

 

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

 

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

 

(a)          to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, the LC Obligation and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders, the
Issuing Lender and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders,
the Issuing Lender and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders, the Issuing Lender and the
Administrative Agent under Section 2.07, Section 2.08 or Section 11.04(a))
allowed in such judicial proceeding; and

 

(b)          to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders and
the Issuing Lender, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 11.04(a).

 

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

 

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10.09       Authority of Administrative Agent to Release Collateral and Liens.
The Issuing Lender, each Lender (including in its capacity as a Lender
Derivative Provider), and each other Lender Derivative Provider, by its
acceptance of the benefits of the Liens created by the Security Documents,
hereby authorize and instruct the Administrative Agent to release any Collateral
that is permitted to be sold or released pursuant to the terms of the Loan
Documents, upon written request of the Company certifying the consummation of
such sale or the satisfaction of the conditions to such release, accompanied by
such supporting documentation as the Administrative Agent may reasonably
request, and each Lender, Issuing Lender and Lender Derivative Provider hereby
authorizes the Administrative Agent to execute and deliver to the Company, at
the Company’s sole cost and expense, any and all releases of Liens, termination
statements, assignments, or other documents reasonably requested by the Company
in connection with any sale or other disposition of property to the extent such
sale or other disposition is permitted by the terms of Section 8.02 or is
otherwise authorized by the terms of the Loan Documents.

 

10.10       The Arrangers and other Agents. Anything herein to the contrary
notwithstanding, no Person listed as an Arranger or as a Syndication Agent on
the cover page of this Agreement shall have any powers, duties or
responsibilities in such capacity under this Agreement or any of the other Loan
Documents.

 

Article XI.

 

MISCELLANEOUS

 

11.01       Amendments and Waivers. No amendment, modification, termination or
waiver of any provision of this Agreement or any other Loan Document, and no
consent with respect to any departure by the Company or any applicable Loan
Party therefrom, shall be effective unless the same shall be in writing and
signed by the Majority Lenders (or by the Administrative Agent at the written
request of the Majority Lenders) and the Company and acknowledged by the
Administrative Agent, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such waiver, amendment, modification, termination or
consent shall:

 

(a)          increase or extend the Commitment of any Lender, without the
written consent of such Lender (or reinstate any Commitment terminated pursuant
to Section 9.02);

 

(b)          postpone the final maturity date of any Loan, or postpone or delay
any date fixed by this Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document, without the written consent of each
Lender directly and adversely affected thereby;

 

(c)          reduce the principal of, or the rate of interest specified herein
on any Loan, or any fees or other amounts payable hereunder or under any other
Loan Document, without the written consent of each Lender directly and adversely
affected thereby;

 

(d)          change in any manner the definition of “Majority Lenders” or
“Required Lenders” or change Section 2.12 or Section 9.02(b) in a manner that
would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender;

 

(e)          amend this Section 11.01 or any provision of this Agreement which,
by its terms, expressly requires the approval or concurrence of all Lenders,
without the written consent of each Lender;

 

(f)          release all, substantially all, or any material portion of the
Collateral (except for releases in connection with dispositions of assets which
are permitted hereunder or under any Loan Document), or release any Subsidiary
from any Guaranty, except for releases in connection with sales of Subsidiaries
permitted hereunder, without the written consent of each Lender; provided that
the Administrative Agent may release Collateral as permitted by Section 10.09
and Section 11.11(c);

 

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(g)          increase the Borrowing Base pursuant to Section 2.05, without the
written consent of each Lender, provided, the Required Lenders may maintain or
decrease the Borrowing Base pursuant to Section 2.05; or

 

(h)          amend the definition of “Lender Derivative Contracts” or “Lender
Derivative Provider” or clause (b) of the definition of “Obligations” in a
manner materially adverse to any Lender Derivative Provider who is a Lender at
such time or who is an Affiliate of a Lender at such time, without the written
consent of each such Lender;

 

and provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Lender in addition to the Majority Lenders or
all the Lenders, as the case may be, affect the rights or duties of the Issuing
Lender under this Agreement or any LC Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Swing Line Lender in addition to the
Majority Lenders or all the Lenders, as the case may be, affect the rights or
duties of the Swing Line Lender under this Agreement, (iii) no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Majority Lenders or all the Lenders, as the case may be, affect
the rights or duties of the Administrative Agent under this Agreement or any
other Loan Document, and (iv) the Fee Letter may be amended and terms thereof
may be waived by a writing signed by the parties thereto. Notwithstanding
anything to the contrary herein, no Defaulting Lender shall have any right to
approve or disapprove any amendment, waiver or consent hereunder (and any
amendment, waiver or consent which by its terms requires the consent of all
Lenders or each affected Lender may be effected with the consent of the
applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such Lender and (y) any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender that by its terms affects any
Defaulting Lender disproportionately adversely relative to other affected
Lenders shall require the consent of such Defaulting Lender.

 

If any Lender refuses to consent to any amendment, waiver or other modification
of any Loan Document requested by the Company that requires the consent of a
greater percentage of the Lenders than the Majority Lenders and such amendment,
waiver or other modification is consented to by the Majority Lenders, then the
Company may replace such Lender in accordance with the provisions of Section
3.07(b).

 

11.02      Notices; Effectiveness; Electronic Communication.

 

(a)          General. Except in the case of notices and other communications
expressly permitted to be given by telephone (and except as provided in
subsection (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 telecopier, or delivered by
electronic mail to the electronic mail address, specified for notices on
Schedule 11.02 (for the Company, the Guarantors, the Issuing Lender, the Swing
Line Lender and the Administrative Agent) or on the Administrative Questionnaire
(for the Lenders). Notices sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given when
received; notices sent by telecopier shall be deemed to have been given when
sent if the sender receives an acknowledgment of receipt (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection(b) below, shall be effective as provided in said
subsection (b).

 

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(b)          Electronic Communications. Notices and other communications to the
Lenders and the Issuing Lender hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or the Issuing Lender
pursuant to Article II if such Lender or the Issuing Lender, as applicable, has
notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Company may, in its discretion, agree to accept notices and other communications
to it hereunder by electronic communications pursuant to procedures approved by
it, provided that approval of such procedures may be limited to particular
notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

(c)          Change of Address, Etc. Each of the Company, the Administrative
Agent, the Issuing Lender and the Swing Line Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other parties hereto. Each other Lender may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the Company, Administrative Agent, the Issuing Lender and the Swing
Line Lender.

 

(d)          Notice to Administrative Agent. Each Lender shall notify the
Administrative Agent in writing of any changes in the address to which notices
to the Lender should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Administrative Agent shall reasonably
request.

 

(e)          Effectiveness of Facsimile and PDF Documents and Signatures. Loan
Documents may be transmitted and/or signed by facsimile and PDF. The
effectiveness of any such documents and signatures shall, subject to applicable
Law, have the same force and effect as manually-signed originals and shall be
binding on all Loan Parties, the Administrative Agent and the Lenders. The
Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the
failure to request or deliver the same shall not limit the effectiveness of any
facsimile or PDF document or signature.

 

11.03      No Waiver; Cumulative Remedies.

 

(a)          No failure to exercise and no delay in exercising, on the part of
the Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.

 

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(b)          Notwithstanding anything to the contrary contained herein or in any
other Loan Document, and without limiting the provisions of Section 9.04, the
authority to enforce rights and remedies hereunder and under the other Loan
Documents against the Loan Parties or any of them shall be vested exclusively
in, and all actions and proceedings at law in connection with such enforcement
shall be instituted and maintained exclusively by, the Administrative Agent in
accordance with Section 9.02 for the benefit of all the Lenders, the Issuing
Lender, and the Lender Derivative Providers; provided, however, that the
foregoing shall not prohibit (a) the Administrative Agent from exercising on its
own behalf the rights and remedies that inure to its benefit (solely in its
capacity as Administrative Agent) hereunder and under the other Loan Documents,
(b) the Issuing Lender or the Swing Line Lender from exercising, with the
consent of the Administrative Agent, the rights and remedies that inure to its
benefit (solely in its capacity as Issuing Lender or Swing Line Lender, as the
case may be) hereunder and under the other Loan Documents, (c) any Lender from
exercising, with the consent of the Administrative Agent, setoff rights in
accordance with Section 11.08 (subject to the limitations set forth therein and
subject to terms of Section 2.12 and Section 9.04), or (d) any Lender or Lender
Derivative Provider from filing proofs of claim or appearing and filing
pleadings on its own behalf during the pendency of a proceeding relative to any
Loan Party under the Bankruptcy Code or other debtor relief law.

 

11.04      Costs and Expenses; Indemnity.

 

(a)          Costs and Expenses. The Company 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, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Lender 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, any Lender or the
Issuing Lender (including the fees, charges and disbursements of any counsel for
the Administrative Agent, any Lender or the Issuing Lender) in connection with
the enforcement or protection of its rights (A) in connection with this
Agreement and the other Loan Documents, including its rights under this Section,
or (B) 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)          Indemnification by the Company. The Company shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the Issuing
Lender, and each Related Party of any of the foregoing Persons (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from,
any and all losses, claims, damages, liabilities and related expenses (including
the fees, charges and disbursements of any counsel for any Indemnitee) incurred
by any Indemnitee or asserted against any Indemnitee by any third party or by
the Company or any other Loan Party arising out of, in connection with, or as a
result of, any actual, threatened or prospective claim, litigation,
investigation or proceeding relating to (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or
proposed use of the proceeds therefrom (including any refusal by the Issuing
Lender to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), or (iii) any actual or alleged presence or Release of
Hazardous Materials on or from any property owned or operated by the Company or
any of its Subsidiaries, or any Environmental Liability related in any way to
the Company or any of its Subsidiaries, whether based on contract, tort or any
other theory, whether brought by a third party or by the Company or any other
Loan Party, 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
(x) 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 or (y) result from a claim brought by the Company
or any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Company or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction. This
Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that
represent losses, claims, damages, etc. arising from any non-Tax claim.

 

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(c)          Reimbursement by Lenders. To the extent that the Company for any
reason fails to indefeasibly pay any amount required under paragraph (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the Issuing Lender or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the Issuing Lender or such Related Party, as the case may be, such
Lender’s Pro Rata Share (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 (or any such sub-agent) or the Issuing Lender
in its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or Issuing Lender in
connection with such capacity. The obligations of the Lenders under this
paragraph (c) are several.

 

(d)          Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, the Company shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in paragraph (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.

 

(e)          Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.

 

(f)          Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent, the Issuing Lender and the Swing Line
Lender, the replacement of any Lender, the termination of the Commitments and
the repayment, satisfaction or discharge of all other Obligations.

 

11.05      Payments Set Aside. To the extent that the Company makes a payment to
the Administrative Agent or the Lenders, or the Administrative Agent or the
Lenders exercise their right of set-off, and such payment or the proceeds of
such set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any Insolvency Proceeding or otherwise, then (a) to the extent
of such recovery the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its Pro Rata
Share of any amount so recovered from or repaid by the Administrative Agent.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
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11.06      Successors and Assigns.

 

(a)          Successors and Assigns Generally. 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, except that neither the
Company nor any other Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in
accordance with the provisions of Section 11.06(b), (ii) by way of participation
in accordance with the provisions of Section 11.06(d) or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of Section
11.06(f) (and any other attempted assignment or transfer by any party hereto
shall be null and void). 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, Participants to the extent
provided in Section 11.06(d) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)          Assignments by Lenders. Any Lender may at any time 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); provided that any such assignment shall be subject to the
following conditions:

 

(i)          Minimum Amounts.

 

(A)         in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund,
no minimum amount need be assigned; and

 

(B)         in any case not described in Section 11.06(b)(i)(A), the aggregate
amount of the Commitment (which for this purpose includes Loans outstanding
thereunder) or, if the Commitment is not then in effect, the principal
outstanding balance of the 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 or, if “Trade Date”
is specified in the Assignment and Assumption, as of the Trade Date) shall not
be less than $5,000,000, unless each of the Administrative Agent and, so long as
no Event of Default has occurred and is continuing, the Company otherwise
consents (each such consent not to be unreasonably withheld or delayed).

 

(ii)         Proportionate Amounts. Each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this Section 11.06(b)(ii) shall not apply to Swing Line
Lender’s rights and obligations in respect of Swing Line Loans.

 

(iii)        Required Consents. No consent shall be required for any assignment
except to the extent required by Section 11.06(b)(i)(B) and, in addition:

 

(A)         the consent of the Company (such consent not to be unreasonably
withheld or delayed) shall be required unless (x) an Event of Default has
occurred and is continuing at the time of such assignment, (y) such assignment
is to a Lender, an Affiliate of a Lender or an Approved Fund or (z) the
assignment is made in connection with the primary syndication of this Agreement
and during the period commencing on the Effective Date and ending on the date
that is sixty (60) days following the Effective Date; provided, that the Company
shall be deemed to have consented to an assignment unless it shall object
thereto by written notice to the Administrative Agent within 5 Business Days
after having received notice thereof;

 

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(B)         the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender, an Affiliate of such Lender or an Approved Fund
with respect to such Lender;

 

(C)         the consent of the Issuing Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment; and

 

(D)         the consent of the Swing Line Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment.

 

(iv)        Assignment and Assumption. 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 $3,000.00 and the assignee, if
it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

(v)         No Assignment to Certain Persons. No such assignment shall be made
to (A) the Company or any of the Company’s Affiliates or Subsidiaries or (B) any
Defaulting Lender or any of its subsidiaries, or any Person who, upon becoming a
Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B).

 

(vi)        No Assignment to Natural Persons. No such assignment shall be made
to a natural person.

 

(vii)       Certain Additional Payments. In connection with any assignment of
rights and obligations of any Defaulting Lender hereunder, no such assignment
shall be effective unless and until, in addition to the other conditions thereto
set forth herein, the parties to the assignment shall make such additional
payments to the Administrative Agent in an aggregate amount sufficient, upon
distribution thereof as appropriate (which may be outright payment, purchases by
the assignee of participations, or other compensating actions, including
funding, with the consent of the Company and the Administrative Agent, the
applicable pro rata share of Loans previously requested but not funded by the
Defaulting Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment liabilities
then owed by such Defaulting Lender to the Administrative Agent or any Lender
hereunder (and interest accrued thereon) and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans and participations in Letters
of Credit and Swing Line Loans in accordance with its Pro Rata Share.
Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under
applicable Law without compliance with the provisions of this paragraph, then
the assignee of such interest shall be deemed to be a Defaulting Lender for all
purposes of this Agreement until such compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) below, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement 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 Sections 3.01, 3.04, 3.04, and 11.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with Section 11.06(d).

 

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(c)          Register. The Administrative Agent, acting solely for this purpose
as a non-fiduciary agent of the Company, shall maintain at the Administrative
Agent’s office listed on Schedule 11.02 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 Commitments of, and principal amounts (and stated interest)
of the Loans 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
Company, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Company and any
Lender but only to the extent of entries in the Register that are applicable to
such Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(d)          Participations. Any Lender may at any time, without the consent of,
or notice to, the Company or the Administrative Agent, sell participations to
any Person (other than a natural person or the Company or any of the Company’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans owing to it); provided that (i) such
Lender’s obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Company, the Administrative Agent
and the Lenders, and Issuing Lender 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 Section 11.01 that affects
such Participant. Subject to Section 11.06(e), the Company agrees that each
Participant shall be entitled to the benefits of Sections 3.01, 3.03, and 3.07
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 11.06(b). 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 2.12 as
though it were a Lender.

 

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

 

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(e)          Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Sections 3.01 and 3.03 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Company’s prior written consent. A Participant
shall not be entitled to the benefits of Section 3.01 unless the Company is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Company, to comply with Section 3.01(f) and
Section 3.07 as though it were a Lender.

 

(f)          Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank or other central banking authority have
jurisdiction over such Lender; provided that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto.

 

11.07      Confidentiality. Each of the Administrative Agent, the Lenders and
the Issuing Lender agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its Affiliates
and to its and its Affiliates’ respective managers, administrators, trustees,
partners, directors, officers, employees, agents, advisors, and other
representatives (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 purporting to have jurisdiction over it (including
any self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, 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 managers, administrators,
trustees, partners, directors, officers, employees, agents, advisors and other
representatives) to any swap or derivative or similar transaction under which
payments are to be made by reference relating to Parent, the Company or any
Guarantor and their respective obligations, this Agreement or payments
hereunder, (iii) any rating agency, or (iv) the CUSIP Service Bureau or any
similar organization, (g) with the consent of the Company, or (h) to the extent
such Information (x) becomes publicly available other than as a result of a
breach of this Section or (y) becomes available to the Administrative Agent, any
Lender, the Issuing Lender or any of their respective Affiliates on a
nonconfidential basis from a source other than the Company.

 

For purposes of this Section, “Information” means all information received from
the Company or any of its Subsidiaries relating to Parent, the Company or any of
its Subsidiaries or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Lender on a nonconfidential basis prior to disclosure by the Company or
any of its Subsidiaries. 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.

 

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11.08         Right of Set-off. Subject to Section 9.04, if an Event of Default
shall have occurred and be continuing, each Lender, the Issuing Lender, and each
of their respective Affiliates is hereby authorized at any time and from time to
time, after obtaining the prior written consent of the Administrative Agent, to
the fullest extent permitted by applicable law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Lender, the Issuing Lender or any such Affiliate to or for
the credit or the account of the Company or any other Loan Party against any and
all of the obligations of the Company or such Loan Party now or hereafter
existing under this Agreement or any other Loan Document to such Lender or the
Issuing Lender, irrespective of whether or not such Lender or the Issuing Lender
shall have made any demand under this Agreement or any other Loan Document and
although such obligations of the Company or such Loan Party may be contingent or
unmatured or are owed to a branch or office of such Lender or the Issuing Lender
different from the branch or office holding such deposit or obligated on such
indebtedness provided, that in the event that any Defaulting Lender shall
exercise any such right of setoff, all amounts so set off shall be paid over
immediately to the Administrative Agent for further application in accordance
with the provisions of Section 2.14(c) and, pending such payment, shall be
segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent and the Lenders. The rights of
each Lender, the Issuing Lender and their respective Affiliates under this
Section 11.08 are in addition to other rights and remedies (including other
rights of setoff) that such Lender, the Issuing Lender or their respective
Affiliates may have. Each Lender and the Issuing Lender agrees to notify the
Company and the Administrative Agent promptly after any such setoff and
application, provided that the failure to give such notice shall not affect the
validity of such setoff and application.

 

11.09         Interest. It is the intention of the parties hereto to comply with
applicable usury laws, if any; accordingly, notwithstanding any provision to the
contrary in this Agreement, the Notes or in any of the other Loan Documents
securing the payment hereof or otherwise relating hereto, in no event shall this
Agreement, the Notes or such other Loan Documents require or permit the payment,
taking, reserving, receiving, collection, or charging of any sums constituting
interest under applicable laws which exceed the maximum amount permitted by such
laws. If any such excess interest is called for, contracted for, charged, taken,
reserved, or received in connection with the Loans evidenced by the Notes or in
any of the Loan Documents securing the payment thereof or otherwise relating
thereto, or in any communication by the Administrative Agent, the Issuing Lender
or the Lenders or any other Person to the Company or any other Person, or in the
event all or part of the principal or interest thereof shall be prepaid or
accelerated, so that under any of such circumstances or under any other
circumstance whatsoever the amount of interest contracted for, charged, taken,
reserved, or received on the amount of principal actually outstanding from time
to time under the Notes or any other Loan Document shall exceed the maximum
amount of interest permitted by applicable usury laws, then in any such event it
is agreed as follows: (i) the provisions of this paragraph shall govern and
control, (ii) neither any Company nor any other Person now or hereafter liable
for the payment of the Notes or any Obligation shall be obligated to pay the
amount of such interest to the extent such interest is in excess of the maximum
amount of interest permitted by applicable usury laws, (iii) any such excess
which is or has been received notwithstanding this paragraph shall be credited
against the then unpaid principal balance of the Notes or other Obligations, as
applicable, or, if the Notes or other Obligations, as applicable, have been or
would be paid in full, refunded to the Company, and (iv) the provisions of this
Agreement, the Notes and the other Loan Documents securing the payment thereof
and otherwise relating thereto, and any communication to the Company, shall
immediately be deemed reformed and such excess interest reduced, without the
necessity of executing any other document, to the maximum lawful rate allowed
under applicable laws as now or hereafter construed by courts having
jurisdiction hereof or thereof. Without limiting the foregoing, all calculations
of the rate of the interest contracted for, charged, collected, taken, reserved,
or received in connection with the Notes, this Agreement or any other Loan
Document which are made for the purpose of determining whether such rate exceeds
the maximum lawful rate shall be made to the extent permitted by applicable laws
by amortizing, prorating, allocating and spreading during the period of the full
term of the Loans or other Obligations, as applicable, including all prior and
subsequent renewals and extensions, all interest at any time contracted for,
charged, taken, collected, reserved, or received. The terms of this paragraph
shall be deemed to be incorporated in every document and communication relating
to the Notes, the Loans or any other Loan Document.

 

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11.10      Indemnity and Subrogation. In addition to all such rights of
indemnity and subrogation as any Guarantor may have under applicable law, the
Company agrees that in the event a payment shall be made by any Guarantor under
a Guaranty in respect of a Loan to the Company the Company shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the person to whom such payment shall have been made
to the extent of such payment subject to the provisions of the Guaranty executed
by such Guarantor. Notwithstanding any provision of this Agreement to the
contrary, all rights of any Guarantor under this Section 11.10 and all other
rights of indemnity, contribution or subrogation under applicable law or
otherwise shall be fully subordinated to the payment in full of the Obligations,
and no payments may be made in respect of such rights of indemnity, contribution
or subrogation until all the Obligations have been paid in full and all
Commitments have expired. No failure on the part of the Company to make the
payments required by this Section 11.10 (or any other payments required under
applicable law or otherwise) shall in any respect limit the obligations and
liability of any Guarantor with respect to any Guaranty, and Guarantor shall
remain liable for the full amount of the obligation of such Guarantor under each
such Guaranty in accordance therewith.

 

11.11      Collateral Matters; Derivative Contracts; Termination.

 

(a)          The benefit of the Security Documents and of the provisions of this
Agreement relating to any collateral securing the Obligations shall also extend
to and be available to any Lender or any Affiliate of a Lender that is
counterparty to any Derivative Contract (including the Derivative Contracts
listed on Schedule 6.21) with any Loan Party or any of their Subsidiaries, on a
pro rata basis, in respect of any obligations of the Loan Parties and their
Subsidiaries which arise under any such Derivative Contract; provided that if
such Lender or Affiliate ceases to be a Lender or an Affiliate of a Lender such
Derivative Contract obligations shall be secured pari passu with the Obligations
of the Loan Parties under this Agreement and the other Loan Documents but only
to the extent such Derivative Contract obligations arise under Derivative
Contracts (including the Derivative Contracts listed on Schedule 6.21) that are
entered into at the time such counterparty was a Lender hereunder (or under the
Existing Credit Agreement) or a “Lender” under the QR Energy Credit Agreement or
an Affiliate of a Lender hereunder (or under the Existing Credit Agreement) or
an “Affiliate” of a “Lender” as such terms are defined in the QR Energy Credit
Agreement.

 

(b)          Such counterparty shall have no voting rights under any Loan
Documents as a result of the existence of obligations owed to it under any such
Derivative Contract. For the avoidance of doubt, a Person ceases to be a Lender
hereunder if (i) pursuant to an assignment, such Person ceases to have any
Commitment, Loans or LC Obligation hereunder or (ii) the Commitments of all of
the Lenders hereunder have been terminated and all principal, interest and other
amounts outstanding under this Agreement have been paid in full in cash (whether
as a result of repayment at maturity, prepayment in connection with the
refinancing of this Agreement or otherwise).

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 106

 

  

(c)          If the Obligations are paid and satisfied in full (other than
Obligations in respect of indemnification, expense reimbursement, tax gross-up
or yield protection for which no claim has been made), including all Obligations
arising under Lender Derivative Contracts, all Commitments of the Lenders have
terminated and are no longer in effect, no Letters of Credit remain outstanding,
and no Lender Derivative Contracts remain outstanding, the Administrative Agent
and the Lenders shall execute and deliver or cause to be executed and delivered
such instruments of satisfaction and reassignment as may be appropriate in order
to release all liens and security interests created by the Security Documents;
provided, however, that in lieu of terminating and repaying any such Obligations
arising under any Lender Derivative Contracts with any Lender Derivative
Provider, the Company may provide substitute credit support under a standard
form ISDA Credit Support Annex or other credit support documents acceptable to
such Lender Derivative Provider, to cover its then current exposure under such
Lender Derivative Contract and such Lender Derivative Provider shall provide
written notice to the Administrative Agent to the effect that such substitute
credit support has been provided to it and that such Lender Derivative Provider
no longer claims any right, title or interest in any collateral security arising
under the Loan Documents to secure any obligations or indebtedness of Company or
any of its Subsidiaries arising under or related to such Lender Derivative
Contract.

 

11.12      Renewal and Continuation of Existing Indebtedness.

 

(a)          All Obligations under the Notes are in renewal, extension and
modification, but not novation or discharge of the “Obligations” as defined in
the Existing Credit Agreement. All liens and security interests under the
Security Documents are in renewal, amendment and extension of the Liens created
under the Existing Credit Agreement and the Security Documents as therein
defined executed in connection therewith. The Company acknowledges and affirms
that the Liens granted by it under each of the Security Documents to secure its
obligations under the Existing Credit Agreement will secure the Obligations.

 

(b)          The Lenders waive any notice of prepayment required pursuant to
Section 2.04 of the Existing Credit Agreement in respect of the prepayment of
Loans on the Effective Date hereunder, subject to the obligations of the Company
pursuant to Section 3.04.

 

11.13      USA PATRIOT Act Notice. Each Lender hereby notifies the Loan Parties
that pursuant to the requirements of the PATRIOT Act, it is required to obtain,
verify and record information that identifies such Loan Party, which information
includes the name and address of such Loan Party and other information that will
allow such Lender to identify the Loan Party, insofar as it is needed to comply
with the PATRIOT Act, in accordance with the PATRIOT Act. Each Loan Party hereby
represents and warrants to Administrative Agent and each Lender that such Loan
Party is not a country, individual or entity named on the “Specifically
Designated National and Blocked Persons” list issued by the Office of Foreign
Asset Control of the Department of the Treasury of the United States of America.

 

11.14      Automatic Debits of Fees. With respect to any commitment fee,
arrangement fee, letter of credit fee or other fee, or any other cost or expense
due and payable to the Administrative Agent under the Loan Documents (including
attorneys’ fees and expenses that are payable pursuant to this Agreement or the
other Loan Documents), the Company hereby irrevocably authorizes the
Administrative Agent, after giving reasonable prior notice to the Company, to
debit any deposit account of the Company with the Administrative Agent in an
amount such that the aggregate amount debited from all such deposit accounts
does not exceed such fee or other cost or expense. If there are insufficient
funds in such deposit accounts to cover the amount of the fee or other cost or
expense then due, such debits will be reversed (in whole or in part, in the
Administrative Agent’s sole discretion) and such amount not debited shall be
deemed to be unpaid. No such debit under this Section shall be deemed a set-off.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 107

 

  

11.15      Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.

 

11.16      Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.

 

11.17      No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the other Loan
Parties, the Lenders, the Administrative Agent (including in its capacity as
agent for Lender Derivative Providers with respect to Collateral), the
Indemnitees, and their permitted successors and assigns, and no other Person
shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of
the other Loan Documents.

 

11.18      Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Loan
Parties, the Lenders and the Administrative Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof. The Existing Credit
Agreement is amended and restated in its entirety by this Agreement and upon the
effectiveness hereof, all terms and provisions of this Agreement shall supersede
the terms and provisions of the Existing Credit Agreement.

 

11.19      Governing Law, Jurisdiction and Waiver of Jury Trial.

 

(a)          THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK AND APPLICABLE FEDERAL LAW; AND THE
ADMINISTRATIVE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.

 

(b)          EACH LOAN PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ITS ADDRESS SET FORTH FOR NOTICES PURSUANT TO SECTION 11.02.
SUCH SERVICE TO BECOME EFFECTIVE TEN DAYS AFTER SUCH MAILING. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 108

 

  

(c)          EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL
NOT COMMENCE any action, litigation or proceeding of any kind or description,
whether in law or equity, whether in contract or in tort or otherwise, against
the Administrative Agent, any Lender, any Issuing Lender, any Swing line Lender,
or any Related Party of the foregoing WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT or the transactions relating hereto or thereto, in any forum
other than the courts of the state of New York sitting in NEW YORK COUNTY, and
of the United States District Court of the Southern District of New York, and
any appellate court from any thereof. each of the parties hereto irrevocably and
unconditionally submits to the jurisdiction of such courts and agrees that all
claims in respect of any such action, litigation or proceeding may be heard and
determined in such New York State court or, to the fullest extent permitted by
applicable law, in such federal court. Each of the parties hereto agrees that a
final judgment in any such action, litigation 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 or in any other Loan
Document shall affect any right that the Administrative Agent, any Lender, any
Issuing Lender or any Swing line Lender may otherwise have to bring any action
or proceeding relating to this Agreement or any other Loan Document against the
COMPANY, any other Loan Party OR BREITBURN GP LLC or THEIR RESPECTIVE properties
in the courts of any jurisdiction. EACH LOAN PARTY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH LOAN PARTY WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, AND CONSENTS TO THE SERVICE
OF PROCESS IN ANY SUCH LEGAL ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS
FOR NOTICES SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE TEN DAYS AFTER
SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT
OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

(d)          WAIVER OF JURY TRIAL. EACH LOAN PARTY AND EACH OTHER PARTY HERETO
HEREBY IRREVOCABLY 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 ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH LOAN PARTY AND EACH OTHER PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER LOAN PARTIES AND OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

11.20      California Judicial Reference. If any action or proceeding is filed
in a court of the State of California by or against any party hereto in
connection with any of the transactions contemplated by this Agreement or any
other Loan Document, (a) the court shall, and is hereby directed to, make a
general reference pursuant to California Code of Civil Procedure Section 638 to
a referee (who shall be a single active or retired judge) to hear and determine
all of the issues in such action or proceeding (whether of fact or of law) and
to report a statement of decision, provided that at the option of any party to
such proceeding, any such issues pertaining to a “provisional remedy” as defined
in California Code of Civil Procedure Section 1281.8 shall be heard and
determined by the court, and (b) without limiting the generality of Section
10.04, the Company shall be solely responsible to pay all fees and expenses of
any referee appointed in such action or proceeding.

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 109

 

  

11.21         No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Company and each other Loan Party acknowledges and agrees, and
acknowledges its Affiliates’ understanding, that: (a) (i) the arranging and
other services regarding this Agreement provided by the Administrative Agent,
the Lead Arranger, and the Lenders are arm’s-length commercial transactions
between the Company, each other Loan Party and their respective Affiliates, on
the one hand, and the Administrative Agent, the Lead Arranger and the Lenders,
on the other hand, (ii) each of the Company and the other Loan Parties has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate, and (iii) the Company and each other Loan Party is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Loan
Documents; (b) (i) the Administrative Agent, the Lead Arranger and each Lender
is and has been acting solely as a principal and, except as expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary for the Company, any other Loan Party or any of
their respective Affiliates, or any other Person and (ii) neither the
Administrative Agent, the Lead Arranger nor any Lender has an obligation to the
Company, any other Loan Party or any of their respective Affiliates with respect
to the transactions contemplated hereby except those obligations expressly set
forth herein and in the other Loan Documents; and (c) the Administrative Agent,
the Lead Arranger and the Lenders and their respective Affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Company, the other Loan Parties and their respective Affiliates, and
neither the Administrative Agent, the Lead Arranger nor any Lender has any
obligation to disclose any of such interests to the Company, any other Loan
Party or any of their respective Affiliates.

 

11.22         NO ORAL AGREEMENTS. THIS WRITTEN LOAN AGREEMENT, TOGETHER WITH THE
OTHER WRITTEN LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH, REPRESENTS 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.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

Third Amended and Restated Credit Agreement – Breitburn Operating LP
Page 110

 

  

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

 

  THE COMPANY:       BREITBURN OPERATING LP,   a Delaware limited partnership  
    By:  Breitburn Operating GP LLC, its general partner         By: /s/ James
G. Jackson   Name: James G. Jackson   Title: Executive Vice President and Chief
Financial Officer         PARENT:       BREITBURN ENERGY PARTNERS LP,   a
Delaware limited partnership       By:  Breitburn GP LLC, its general partner  
      By: /s/ James G. Jackson   Name: James G. Jackson   Title: Executive Vice
President and Chief Financial Officer

 

Signature Page to

Third Amended and Restated Credit Agreement – Breitburn Operating LP

 

 

 

  

  WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swing Line
Lender, Issuing Lender and a Lender       By:  /s/ Michael Real     Name:
Michael Real     Title: Director

 

  BANK OF AMERICA, N.A.,   as a Lender               By:  /s/ Joseph Scott    
Name: Joseph Scott     Title: Director

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  BANK OF MONTREAL,   as a Lender               By:  /s/ Gumaro Tijerina    
Name: Gumaro Tijerina     Title: Managing Director

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  BARCLAYS BANK PLC,   as a Lender               By:  /s/ Vanessa A. Kurbatskiy
    Name: Vanessa A. Kurbatskiy     Title: Vice President

  

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  CITIBANK, N.A.,   as a Lender               By:  /s/ Phil Ballard     Name:
Phil Ballard     Title: Vice President

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender               By:   /s/
Nupur Kumar     Name: Nupur Kumar     Title: Authorized Signatory              
By: /s/ Lingzi Huang     Name: Lingzi Huang     Title: Authorized Signatory

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  JPMORGAN CHASE BANK, N.A.,   as a Lender               By:  /s/ Anson D.
Williams     Name: Anson D. Williams     Title: Authorized Officer

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  ROYAL BANK OF CANADA,   as a Lender               By:  /s/ Mark Lumpkin, Jr.  
  Name: Mark Lumpkin, Jr.     Title: Authorized Signatory

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  THE BANK OF NOVA SCOTIA,   as a Lender               By:  /s/ Alan Dawson    
Name: Alan Dawson     Title: Director

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  MUFG UNION BANK, N.A.,   as a Lender               By:  /s/ Lara Sorokolit    
Name: Lara Sorokolit     Title: Vice President

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  U.S. BANK NATIONAL ASSOCIATION,   as a Lender               By:  /s/ Daniel K.
Hansen     Name: Daniel K. Hansen     Title: Vice President

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  COMPASS BANK,   as a Lender               By:  /s/ Rhianna Disch     Name:
Rhianna Disch     Title: Vice President

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  CAPITAL ONE, N.A.,   as a Lender               By:  /s/ Nancy Mak     Name:
Nancy Mak     Title: Senior Vice President

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,   as a Lender              
By:  /s/ Michael Willis     Name: Michael Willis     Title: Managing Director  
            By: /s/ Dixon Schultz     Name: Dixon Schultz     Title: Managing
Director

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  MORGAN STANLEY BANK, N.A.,   as a Lender               By:  /s/ Michael King  
  Name: Michael King     Title: Authorized Signatory

  

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  CITIZENS BANK, N.A.,   as a Lender               By:  /s/ R. Scott Donaldson  
  Name: R. Scott Donaldson     Title: Senior Vice President

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  SANTANDER BANK, N.A.,   as a Lender               By:  /s/ Aidan John Lanigan
    Name: Aidan John Lanigan     Title: Senior Vice President               By:
/s/ Puiki Lok     Name: Puiki Lok     Title: Vice President

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  TORONTO DOMINION (NEW YORK) LLC,   as a Lender               By:  /s/ Masoon
Fikree     Name: Masood Fikree     Title: Authorized Signatory

  

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  UBS AG, STAMFORD BRANCH,   as a Lender               By:  /s/ Lana Gifas    
Name: Lana Gifas     Title: Director         By: /s/ Jennifer Anderson     Name:
Jennifer Anderson     Title: Associate Director

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  ABN AMRO CAPITAL USA LLC,   as a Lender               By:  /s/ Darrell Holley
    Name: Darrell Holley     Title: Managing Director         By: /s/ Elizabeth
Johnson     Name: Elizabeth Johnson     Title: Director

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  BRANCH BANKING AND TRUST COMPANY,   as a Lender               By:  /s/ Parul
June     Name: Parul June     Title: Vice President

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  BNP PARIBAS,   as a Lender               By:  /s/ Juan Carlos Sandoval    
Name: Juan Carlos Sandoval     Title: Director         By: /s/ Julien
Pecoud-Bouvet     Name: Julian Pecoud-Bouvet     Title: Vice President

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH,   as a Lender            
  By:  /s/ Trudy Nelson     Name: Trudy Nelson     Title: Authorized Signatory  
      By: /s/ William M. Reid     Name: William M. Reid     Title: Authorized
Signatory

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  COMERICA BANK,   as a Lender               By:  /s/ Devin S. Eaton     Name:
Devin S. Eaton     Title: Relationship Manager

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  ING CAPITAL LLC,   as a Lender               By:  /s/ Charles Hall     Name:
Charles Hall     Title: Managing Director         By: /s/ Juli Bieser     Name:
Juli Bieser     Title: Director

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  MIZUHO BANK LTD.,   as a Lender               By:  /s/ Leon Mo     Name: Leon
Mo     Title: Authorized Signatory

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  NATIXIS, NEW YORK BRANCH   as a Lender               By:  /s/ Stuart Murray  
  Name: Stuart Murray     Title: Managing Director               By: /s/ Mary
Lou Allen     Name: Mary Lou Allen     Title: Director

  

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  PNC BANK, NATIONAL ASSOCIATION,   as a Lender               By:  /s/ Sandra
Aultman     Name: Sandra Aultman     Title: Managing Director

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  SUMITOMO MITSUI BANKING CORPORATION,   as a Lender               By:  /s/
James D. Weinstein     Name: James D. Weinstein     Title: Managing Director

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  SUNTRUST BANK,   as a Lender               By:  /s/ Chulley Bogle     Name:
Chulley Bogle     Title: Vice President

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  CADENCE BANK, N.A.,   as a Lender               By:   /s/ Eric Broussard    
Name: Eric Broussard     Title: Executive Director

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  FIFTH THIRD BANK,   as a Lender               By:  /s/ Richard Butler    
Name: Richard Butler     Title: Senior Vice President

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  ASSOCIATED BANK, N.A.,   as a Lender               By:  /s/ Kyle Lewis    
Name: Kyle Lewis     Title: AVP

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  THE HUNTINGTON NATIONAL BANK,   as a Lender               By:  /s/ Margaret
Niekrash     Name: Margaret Niekrash     Title: Vice President

 

 

Signature Page to Third Amended and Restated Credit Agreement – Breitburn
Operating LP

 

 

  ONEWEST BANK, N.A.,   as a Lender               By:  /s/ Whitney Randolph    
Name: Whitney Randolph     Title: Senior Vice President

  

Signature Page to

Third Amended and Restated Credit Agreement – Breitburn Operating LP

 

 

 

  

[LENDER SIGNATURE PAGES HAVE BEEN POSTED SEPARATELY]