Exhibit 10.1

 

Execution Version

 

FOURTH AMENDED AND RESTATED
CREDIT AGREEMENT

 

DATED AS OF
DECEMBER 31, 2013

 

AMONG

 

LAREDO PETROLEUM, INC.,
AS BORROWER

 

THE FINANCIAL INSTITUTIONS LISTED ON SCHEDULE 1 HERETO,
AS BANKS,

 

WELLS FARGO BANK, N.A., AS ADMINISTRATIVE AGENT,

 

BANK OF AMERICA, N.A. AND JPMORGAN CHASE BANK, N.A., AS CO-SYNDICATION AGENTS,

 

SOCIETE GENERALE, UNION BANK, N.A. AND BMO HARRIS FINANCING, INC., AS
CO-DOCUMENTATION AGENTS

 

AND

 

WELLS FARGO SECURITIES, LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
AND J.P. MORGAN SECURITIES LLC,

 

AS JOINT LEAD ARRANGERS

 

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TABLE OF CONTENTS

 

 

 

Page No.

 

 

 

ARTICLE I

TERMS DEFINED

2

 

 

 

Section 1.1

Definitions

2

Section 1.2

Accounting Terms and Determinations

26

Section 1.3

Classification of Loans and Borrowings

27

Section 1.4

Interpretation

27

 

 

 

ARTICLE II

THE CREDIT FACILITIES

27

 

 

 

Section 2.1

Commitments

27

Section 2.2

Method of Borrowing

31

Section 2.3

Method of Requesting Letters of Credit

32

Section 2.4

Notes

33

Section 2.5

Interest Rates; Payments

33

Section 2.6

Mandatory Prepayments

35

Section 2.7

Voluntary Prepayments

35

Section 2.8

Mandatory Termination of Commitments; Termination Date and Maturity

36

Section 2.9

Voluntary Reduction of Aggregate Maximum Credit Amount

36

Section 2.10

Application of Payments

36

Section 2.11

Commitment Fee

36

Section 2.12

Letter of Credit Fees and Letter of Credit Fronting Fees

37

Section 2.13

Agency and Other Fees

37

Section 2.14

Loans and Borrowings Under Existing Credit Agreement

37

Section 2.15

Automatic Debt Issuance Borrowing Base Adjustments

38

Section 2.16

Increases, Reductions and Terminations of Aggregate Elected Commitment Amount

38

 

 

 

ARTICLE III

GENERAL PROVISIONS

41

 

 

 

Section 3.1

The Notes

41

Section 3.2

General Provisions as to Payments

41

Section 3.3

Funding Losses

42

Section 3.4

Foreign Banks, Participants, and Assignees

43

Section 3.5

Non-Receipt of Funds by Administrative Agent

43

Section 3.6

Defaulting Banks

44

 

 

 

ARTICLE IV

BORROWING BASE

44

 

 

 

Section 4.1

Reserve Reports; Proposed Borrowing Base

44

Section 4.2

Periodic Determinations of the Borrowing Base; Procedures and Standards

45

Section 4.3

Special Determination of Borrowing Base

45

Section 4.4

Borrowing Base Deficiency

46

Section 4.5

Initial Borrowing Base

47

Section 4.6

Asset Disposition Adjustment

47

 

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ARTICLE V

COLLATERAL AND GUARANTIES

48

 

 

 

Section 5.1

Security

48

Section 5.2

Title Information

48

Section 5.3

Guarantees

49

Section 5.4

Additional Guarantors

49

 

 

 

ARTICLE VI

CONDITIONS TO BORROWINGS

49

 

 

 

Section 6.1

Conditions to Initial Borrowing and Participation in Letter of Credit Exposure

49

Section 6.2

Conditions to each Borrowing and each Letter of Credit

52

Section 6.3

Materiality of Conditions

53

 

 

 

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

53

 

 

 

Section 7.1

Existence and Power

53

Section 7.2

Corporate, Limited Liability Company, Partnership and Governmental
Authorization; Contravention

54

Section 7.3

Binding Effect

54

Section 7.4

Financial Information

54

Section 7.5

Litigation

54

Section 7.6

ERISA

55

Section 7.7

Taxes and Filing of Tax Returns

55

Section 7.8

Title to Properties; Liens

55

Section 7.9

Mineral Interests

56

Section 7.10

Business; Compliance

56

Section 7.11

Licenses, Permits, Etc.

56

Section 7.12

Compliance with Law

56

Section 7.13

Ownership Interests

56

Section 7.14

Full Disclosure

57

Section 7.15

Organizational Structure; Nature of Business

57

Section 7.16

Environmental Matters

57

Section 7.17

Burdensome Obligations

58

Section 7.18

Government Regulations

58

Section 7.19

No Default

58

Section 7.20

Gas Balancing Agreements and Advance Payment Contracts

58

Section 7.21

Qualified ECP Guarantor

58

 

 

 

ARTICLE VIII

AFFIRMATIVE COVENANTS

58

 

 

 

Section 8.1

Information

58

Section 8.2

Business of Credit Parties

62

Section 8.3

Maintenance of Existence

62

Section 8.4

Right of Inspection; Books and Records

62

Section 8.5

Maintenance of Insurance

63

Section 8.6

Payment of Obligations

63

Section 8.7

Compliance with Laws and Documents

63

Section 8.8

Operation of Properties and Equipment

64

Section 8.9

Further Assurances

64

 

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Section 8.10

Environmental Law Compliance and Indemnity

64

Section 8.11

Title Data

65

Section 8.12

ERISA Reporting Requirements

66

Section 8.13

Commodity Exchange Act Keepwell Provisions

66

 

 

 

ARTICLE IX

NEGATIVE COVENANTS

67

 

 

 

Section 9.1

Debt

67

Section 9.2

Restricted Payments

67

Section 9.3

Liens; Negative Pledge

67

Section 9.4

Consolidations and Mergers

68

Section 9.5

Asset Dispositions

68

Section 9.6

Use of Proceeds

68

Section 9.7

Investments

69

Section 9.8

Transactions with Affiliates

69

Section 9.9

ERISA

69

Section 9.10

Hedge Transactions

69

Section 9.11

Operating Leases

70

Section 9.12

Acquisition

70

Section 9.13

Repayment of Senior Notes; Amendment to Terms of Senior Indenture

70

Section 9.14

Non-Eligible Contract Participants

70

 

 

 

ARTICLE X

FINANCIAL COVENANTS

71

 

 

 

Section 10.1

Financial Covenants

71

 

 

 

ARTICLE XI

DEFAULTS

71

 

 

 

Section 11.1

Events of Default

71

 

 

 

ARTICLE XII

AGENTS

73

 

 

 

Section 12.1

Appointment and Authorization of Administrative Agent; Secured Hedge
Transactions

73

Section 12.2

Delegation of Duties

74

Section 12.3

Default; Collateral

74

Section 12.4

Liability of Administrative Agent

76

Section 12.5

Reliance by Administrative Agent

77

Section 12.6

Notice of Default

77

Section 12.7

Credit Decision; Disclosure of Information by Administrative Agent

77

Section 12.8

Indemnification of Agents

78

Section 12.9

Administrative Agent in its Individual Capacity

79

Section 12.10

Successor Administrative Agent and Letter of Credit Issuer

79

Section 12.11

Syndication Agent; Other Agents; Arrangers

80

Section 12.12

Administrative Agent May File Proof of Claim

80

Section 12.13

Secured Hedge Transactions

81

 

 

 

ARTICLE XIII

PROTECTION OF YIELD; CHANGE IN LAWS

81

 

 

 

Section 13.1

Basis for Determining Interest Rate Applicable to Eurodollar Tranches Inadequate

81

Section 13.2

Illegality of Eurodollar Tranches

81

 

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Section 13.3

Increased Cost of Eurodollar Tranche

82

Section 13.4

Adjusted Base Rate Tranche Substituted for Affected Eurodollar Tranche

83

Section 13.5

Capital Adequacy

83

Section 13.6

Taxes

85

Section 13.7

Discretion of Banks as to Manner of Funding

85

Section 13.8

Replacement of Banks

86

 

 

 

ARTICLE XIV

MISCELLANEOUS

86

 

 

 

Section 14.1

Notices; Effectiveness; Electronic Communications

86

Section 14.2

Waivers and Amendments; Acknowledgments

88

Section 14.3

Expenses; Documentary Taxes; Indemnification

90

Section 14.4

Right and Sharing of Set-Offs

91

Section 14.5

Survival

92

Section 14.6

Limitation on Interest

92

Section 14.7

Invalid Provisions

93

Section 14.8

Successors and Assigns

93

Section 14.9

Applicable Law and Jurisdiction

95

Section 14.10

Counterparts; Effectiveness

95

Section 14.11

No Third Party Beneficiaries

95

Section 14.12

COMPLETE AGREEMENT

96

Section 14.13

WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC.

96

Section 14.14

Confidential Information

96

Section 14.15

No Advisory or Fiduciary Responsibility

97

Section 14.16

USA Patriot Act Notice

98

Section 14.17

Corporate Reorganization

98

 

iv

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EXHIBITS

 

Exhibit A

—

Form of Note

Exhibit B

—

Form of Request for Borrowing

Exhibit C

—

Form of Request for Letter of Credit

Exhibit D

—

Form of Rollover Notice

Exhibit E

—

Form of Certificate of Ownership Interests

Exhibit F

—

Form of Financial Officer’s Compliance Certificate

Exhibit G

—

Form of Assignment and Assumption Agreement

Exhibit H

—

Form of Security Agreement

Exhibit I

—

Form of Facility Guaranty

Exhibit J

—

Form of Elected Commitment Increase Certificate

Exhibit K

—

Form of Additional Bank Certificate

 

SCHEDULES

 

Schedule 1

—

Banks

Schedule 2

—

Litigation

Schedule 3

—

Organizational Information and Structure

Schedule 4

—

Existing Letters of Credit

 

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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is entered into effective as
of December 31, 2013, among Laredo Petroleum, Inc., a Delaware corporation and
formerly known as Laredo Petroleum Holdings, Inc., Wells Fargo Bank, N.A., a
national banking association, as administrative agent, Bank of America, N.A., as
Co-Syndication Agent, JPMorgan Chase Bank, N.A., as Co-Syndication Agent,
Societe Generale, Union Bank, N.A., and BMO Harris Financing, Inc., as
Co-Documentation Agents, and the financial institutions listed on Schedule 1
hereto as Banks.

 

RECITALS:

 

WHEREAS, Laredo Petroleum, Inc., a Delaware corporation (“Predecessor
Borrower”), Administrative Agent and the financial institutions party thereto as
Banks are party to that certain Third Amended and Restated Credit Agreement
dated as of July 1, 2011 (as amended, supplemented or otherwise modified prior
to the Effective Date, the “Existing Credit Agreement”) pursuant to which the
banks thereunder provided Predecessor Borrower with a revolving credit facility;

 

WHEREAS, the full payment and performance of all of Predecessor Borrower’s
obligations under the Existing Credit Agreement have been guaranteed by Borrower
(as the sole stockholder of Predecessor Borrower) and each of Predecessor
Borrower’s wholly-owned subsidiaries, including (i) Laredo Gas Services, LLC, a
Delaware limited liability company, (ii) Laredo Petroleum Texas, LLC, a Texas
limited liability company (“Laredo Texas”), and (iii) Laredo Petroleum —
Dallas, Inc., a Delaware corporation formerly known as Broad Oak Energy, Inc.
(“Laredo Dallas”);

 

WHEREAS, prior to or on the date hereof, and in sequential order, (i) Laredo Gas
Services, LLC, a Delaware limited liability company, has changed its name to
Laredo Midstream Services, LLC (“Laredo Midstream”), (ii) Laredo Texas and
Laredo Dallas have each merged with and into Predecessor Borrower, with
Predecessor Borrower surviving such merger (such post-merger entity being the
“Post-Merger Predecessor Borrower”), (iii) the Post-Merger Predecessor Borrower
has merged with and into Borrower, with Borrower surviving such merger and
thereafter changing its name to Laredo Petroleum, Inc., and (iv) as a result of
the merger referred to in the foregoing clause (iii), Laredo Midstream has
become a wholly-owned subsidiary of Borrower (such transactions referred to in
the foregoing clauses (i), (ii), (iii) and (iv), collectively, the “Corporate
Reorganization”);

 

WHEREAS, the parties hereto desire to amend and restate in its entirety the
Existing Credit Agreement in the form of this Agreement to (i) renew and
rearrange the indebtedness outstanding under the Existing Credit Agreement (but
not to repay or pay off any such indebtedness), (ii) reflect and permit the
Corporate Reorganization, and (iii) amend certain other terms of the Existing
Credit Agreement in certain respects as provided in this Agreement.

 

NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower, Administrative Agent, and

 

1

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Banks hereby agree as follows, amending and restating the Existing Credit
Agreement in its entirety:

 

ARTICLE I
TERMS DEFINED

 

Section 1.1            Definitions.  The following terms, as used herein, have
the following meanings:

 

“Additional Bank” has the meaning given to such term in Section 2.16(a).

 

“Additional Bank Certificate” has the meaning given to such term in
Section 2.16(b)(vii).

 

“Adjusted Base Rate” means, on any day, the greatest of (a) the Base Rate in
effect on such day, (b) the sum of (i) the Federal Funds Rate in effect on such
day, plus (ii) one half of one percent (.5%), (c) the Adjusted LIBOR Rate for a
one month Interest Period on such day (or if such day is not a Eurodollar
Business Day, the immediately preceding Eurodollar Business Day) plus 1.0%, or
(d) zero percent (0%), provided that, for the avoidance of doubt, the Adjusted
LIBOR Rate for any day shall be based on the rate (rounded upwards, if
necessary, to the next 1/16 of 1%) at which dollar deposits of $5,000,000 with 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., London time, on such day (or the immediately
preceding Eurodollar Business Day if such day is not a day on which banks are
open for dealings in dollar deposits in the London interbank market).  Each
change in the Adjusted Base Rate shall become effective automatically and
without notice to Borrower or any Bank upon the effective date of each change in
the Federal Funds Rate, the Base Rate or the Adjusted LIBOR Rate, as the case
may be.

 

“Adjusted Base Rate Borrowing” means any Borrowing which will constitute an
Adjusted Base Rate Tranche.

 

“Adjusted Base Rate Tranche” means the portion of the principal of any Loan
bearing interest with reference to the Adjusted Base Rate.

 

“Adjusted LIBOR Rate” applicable to any Interest Period, means the greater of
(a) a rate per annum equal to the quotient obtained (rounded upwards, if
necessary, to the next higher 1/16 of 1%) by dividing (i) the applicable LIBOR
Rate by (ii) 1.00 minus the Eurodollar Reserve Percentage, and (b) zero percent
(0%).

 

“Administrative Agent” means Wells Fargo Bank, N.A. in its capacity as
Administrative Agent for Banks hereunder or any successor thereto.

 

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

 

“Advance Payment Contract” means any contract whereby any Credit Party either
(a) receives or becomes entitled to receive (either directly or indirectly) any
payment (an “Advance

 

2

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Payment”) to be applied toward payment of the purchase price of Hydrocarbons
produced or to be produced from Mineral Interests owned by any Credit Party and
which Advance Payment is paid or to be paid in advance of actual delivery of
such production to or for the account of the purchaser regardless of such
production, or (b) grants an option or right of refusal to the purchaser to take
delivery of such production in lieu of payment, and, in either of the foregoing
instances, the Advance Payment is, or is to be, applied as payment in full for
such production when sold and delivered or is, or is to be, applied as payment
for a portion only of the purchase price thereof or of a percentage or share of
such production; provided that inclusion of the standard “take or pay” provision
in any gas sales or purchase contract or any other similar contract shall not,
in and of itself, constitute such contract as an Advance Payment Contract for
the purposes hereof.

 

“Affiliate” means, as to any Person, any Subsidiary of such Person, or any other
Person which, directly or indirectly, controls, is controlled by, or is under
common control with, such Person.  For the purposes of this definition,
“control” (including with correlative meanings, the terms “controlled by” and
“under common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or partnership interests, or by contract or
otherwise.

 

“Agents” means Administrative Agent and any other agent appointed under this
Agreement.

 

“Aggregate Elected Commitment Amount” at any time shall equal the sum of the
Elected Commitments, as the same may be terminated, reduced or increased from
time to time in accordance with the terms hereof. As of the Effective Date, the
Aggregate Elected Commitment Amount is $825,000,000.

 

“Aggregate Maximum Credit Amount” at any time shall equal the sum of the Maximum
Credit Amounts, as the same may be increased, reduced or terminated from time to
time in accordance with the terms hereof.

 

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

 

“Applicable Environmental Law” means any Law, statute, ordinance, rule,
regulation, order or determination of any Governmental Authority or any board of
fire underwriters (or other body exercising similar functions), affecting any
real or personal property owned, operated or leased by any Credit Party or any
other operation of any Credit Party in any way pertaining to health, safety or
the environment, including all applicable zoning ordinances and building codes,
flood disaster Laws and health, safety and environmental Laws and regulations,
and further including (a) the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (as amended from time to time, herein referred
to as “CERCLA”), (b) the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Recovery Act of
1976, as amended by the Solid Waste Disposal Act of 1980, and the Hazardous

 

3

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and Solid Waste Amendments of 1984 (as amended from time to time, herein
referred to as “RCRA”), (c) the Safe Drinking Water Act, as amended, (d) the
Toxic Substances Control Act, as amended, (e) the Clean Air Act, as amended,
(f) the Occupational Safety and Health Act of 1970, as amended, (g) the Laws,
rules and regulations of any state having jurisdiction over any real or personal
property owned, operated or leased by any credit Party or any other operation of
any Credit Party which relates to health, safety or the environment, as each may
be amended from time to time, and (h) any federal, state or municipal Laws,
ordinances or regulations which may now or hereafter require removal of asbestos
or other hazardous wastes or impose any liability related to asbestos or other
hazardous wastes.  The terms “hazardous substance”, “petroleum”, “release” and
“threatened release” have the meanings specified in CERCLA, and the terms “solid
waste” and “disposal” (or “disposed”) have the meanings specified in RCRA;
provided that, in the event either CERCLA or RCRA is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment with respect to all
provisions of this Agreement; provided further that, to the extent the Laws of
the state in which any real or personal property owned, operated or leased by
any Credit Party is located establish a meaning for “hazardous substance”,
“petroleum”, “release”, “solid waste” or “disposal” which is broader than that
specified in either CERCLA or RCRA, such broader meaning shall apply in so far
as such broader meaning is applicable to the real or personal property owned,
operated or leased by any such Credit Party and located in such state.

 

“Applicable Margin” means, on any date, with respect to each Eurodollar Tranche
or Adjusted Base Rate Tranche, an amount determined by reference to the ratio of
Outstanding Revolving Credit to the Total Commitment, on such date, in
accordance with the table below:

 

Pricing
Level

 

Ratio of Outstanding
Revolving Credit to
Total Commitment

 

Applicable Margin
for Eurodollar
Tranches

 

Applicable Margin
for Adjusted Base
Rate Tranches

 

I

 

>90%

 

2.50%

 

1.50%

 

II

 

>75% but<90%

 

2.25%

 

1.25%

 

III

 

>50% but <75%

 

2.00%

 

1.00%

 

IV

 

>25% but <50%

 

1.75%

 

0.75%

 

V

 

<25%

 

1.50%

 

0.50%

 

 

Each change in the Applicable Margin shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding
the effective date of the next such change; provided that, if at any time
Borrower fails to deliver a Reserve Report pursuant to Section 4.1, then the
“Applicable Margin” means the rate per annum set forth on the grid when the
Ratio of Outstanding Revolving Credit to the Total Commitment is at its highest
level.

 

“Approved Petroleum Engineer” means Ryder Scott Company, L.P. or another
reputable firm of independent petroleum engineers as shall be selected by
Borrower and approved by Required Banks, such approval not to be unreasonably
withheld.

 

4

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“Arrangers” means, collectively, Wells Fargo Securities, LLC, Merrill Lynch,
Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, in their
capacities as joint lead arrangers and “Arranger” means any of them
individually.

 

“Asset Disposition” means the sale, assignment, lease, license, transfer,
exchange or other disposition by any Credit Party of all or any portion of its
right, title and interest in any Borrowing Base Property or the termination
(other than at its scheduled maturity) or monetization by any Credit Party of
any Borrowing Base Hedge or the Specified Oil and Gas Hedge Transaction.

 

“Assignee” has the meaning given such term in Section 14.8(b).

 

“Assignment and Assumption Agreement” has the meaning given such term in
Section 14.8(b).

 

“Authorized Officer” means, as to any Person, its Chairman, Chief Executive
Officer, Chief Financial Officer, Vice-Chairman, President, Executive Vice
President(s), Senior Vice President(s) or Vice President duly authorized to act
on behalf of such Person.

 

“Bank” means (a) any financial institution listed on Schedule 1 hereto as having
a Commitment and (b) any Person that shall have become a party to this Agreement
as an Additional Bank pursuant to Section 2.16, and in each case such Bank’s
successors and assigns, and “Banks” shall mean all Banks.

 

“Base Rate” means the fluctuating rate of interest in effect for such day as
publicly announced from time to time by Wells Fargo Bank, N.A. as its “prime
rate.”  The “prime rate” is a rate set by Wells Fargo Bank, N.A. based upon
various factors including Wells Fargo Bank, N.A.’s 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 such rate announced by Wells Fargo Bank, N.A. shall take
effect at the opening of business on the day specified in the public
announcement of such change.

 

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

 

“Borrower” means, after giving effect to the Corporate Reorganization, Laredo
Petroleum, Inc., a Delaware corporation.

 

“Borrowing” means any disbursement to Borrower under, or to satisfy the
obligations of any Credit Party under, any of the Loan Papers.

 

“Borrowing Base” means, at any time, an amount determined in accordance with
Article IV.

 

“Borrowing Base Hedge” means, at any time, any Oil and Gas Hedge Transaction
that has been incorporated into the determination of the Borrowing Base (as
determined by Administrative Agent) then in effect.

 

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“Borrowing Base Deficiency” means, as of any date, the amount, if any, by which
(a) the Outstanding Revolving Credit on such date, exceeds (b) the Borrowing
Base in effect on such date; provided that, for purposes of computing the
existence and amount of any Borrowing Base Deficiency, Letter of Credit Exposure
will not be deemed to be outstanding to the extent funds have been deposited
with Administrative Agent to secure such Letter of Credit Exposure pursuant to
Section 2.1(b).

 

“Borrowing Base Properties” means all Mineral Interests evaluated by Banks for
purposes of establishing the Borrowing Base.  The Borrowing Base Properties on
the Effective Date constitute all of the Mineral Interests described in the
Initial Reserve Report.

 

“Borrowing Date” means the Eurodollar Business Day or the Business Day, as the
case may be, upon which the proceeds of any Borrowing are made available to
Borrower or to satisfy the obligations of Borrower or any other Credit Party.

 

“Business Day” means any day except a Saturday, Sunday or other day on which
national banks in New York, New York or Dallas, Texas are authorized by Law to
close.

 

“Capital Lease” means, for any Person as of any date, any lease of property,
real or personal, which would be capitalized on a balance sheet of the lessee
prepared as of such date in accordance with GAAP.

 

“Certificate of Ownership Interests” means a Certificate of Ownership Interests
in the form of Exhibit E attached hereto to be executed and delivered by an
Authorized Officer of Borrower pursuant to Section 6.1(a)(vi).

 

“Change of Control” means the occurrence of any of the following whether
voluntary or involuntary, including by operation of law:  (a) any Credit Party
other than Borrower shall cease to be a wholly-owned Subsidiary of Borrower,
except as a result of a merger or consolidation permitted under Section 9.4,
(b) the acquisition of ownership, directly or indirectly, beneficially or of
record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder
as in effect on the date hereof) other than the Permitted Holders, of Equity
representing more than 50% of the aggregate ordinary voting power represented by
the issued and outstanding Equity of Borrower or (c) occupation of a majority of
the seats (other than vacant seats) on the board of directors of Borrower by
Persons who were not (i) on the board of directors on the Effective Date,
(ii) nominated by the board of directors of Borrower, or (iii) appointed by
directors a majority of whom were on the board of directors on the Effective
Date or so nominated.

 

“Closing Date” means December 31, 2013.

 

“Closing Transactions” means the transactions to occur on or prior to the
Effective Date pursuant to this Agreement and otherwise, including the Corporate
Reorganization.

 

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

 

“Commitment” means, with respect to any Bank, the commitment of such Bank to
make Loans and to acquire participations in Letters of Credit hereunder, as such
amount may be

 

6

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terminated, reduced or increased from time to time in accordance with the
provisions hereof.  The amount representing each Bank’s Commitment shall at any
time be the least of (a) such Bank’s Maximum Credit Amount, (b) such Bank’s
Commitment Percentage of the then effective Borrowing Base and (c) such Bank’s
Elected Commitment.

 

“Commitment Fee Percentage” means, on any date, the percentage determined
pursuant to the table below based on the ratio of the Outstanding Revolving
Credit on such date to the Total Commitment on such date:

 

Pricing
Level

 

Ratio of Outstanding
Revolving Credit to Total
Commitment

 

Commitment Fee
Percentage

 

I

 

>90%

 

0.500%

 

II

 

>75% but <90%

 

0.500%

 

III

 

>50% but <75%

 

0.500%

 

IV

 

>25% but <50%

 

0.375%

 

V

 

<25%

 

0.375%

 

 

“Commitment Percentage” means, with respect to any Bank at any time, the
fraction, expressed as a percentage, the numerator of which is such Bank’s
Maximum Credit Amount and the denominator of which is the Aggregate Maximum
Credit Amount.

 

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

 

“Consolidated Current Assets” means, for any Person at any time, the sum of
(a) the current assets of such Person and its Consolidated Subsidiaries at such
time, plus (b) in the case of Borrower, the Revolving Availability at such
time.  For purposes of this definition, any non-cash assets resulting from the
requirements of ASC 815 for any period of determination shall be excluded from
the determination of current assets of such Person and its Consolidated
Subsidiaries.

 

“Consolidated Current Liabilities” means, for any Person at any time, the
current liabilities of such Person and its Consolidated Subsidiaries at such
time.  For purposes of this definition, any non-cash liabilities resulting from
the requirements of ASC 815 for any period of determination shall be excluded
from the determination of current liabilities of such Person and its
Consolidated Subsidiaries.

 

“Consolidated EBITDAX” means, for any Person for any period, the Consolidated
Net Income of such Person for such period, (a) plus each of the following, to
the extent deducted in determining Consolidated Net Income, determined for such
Person and its Consolidated Subsidiaries on a consolidated basis for such
period:  (i) any provision for (or less any benefit from) income or franchise
Taxes; (ii) Consolidated Net Interest Expense; (iii) depreciation, depletion and
amortization expense; (iv) exploration expenses; and (v) other non-cash charges
to the extent not already included in the foregoing clauses (ii), (iii), or
(iv), and (b) minus all non-cash income to the extent included in determining
Consolidated Net Income.

 

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“Consolidated Net Income” means, for any Person as of any period, the net income
(or loss) of such Person and its Consolidated Subsidiaries for such period
determined in accordance with GAAP, but excluding:  (a) the income of any other
Person (other than its Consolidated Subsidiaries) in which such Person or any of
its Subsidiaries has an ownership interest, unless received by such Person or
its Consolidated Subsidiaries in a cash distribution; (b) any after-tax gains
attributable to asset dispositions; (c) to the extent not included in
clauses (a) and (b) above, any after-tax (i) extraordinary gains (net of
extraordinary losses), or (ii) non-cash nonrecurring gains; and (d) non-cash or
nonrecurring charges to the extent not already included in clauses (a), (b), or
(c) of this definition.

 

“Consolidated Net Interest Expense” means, for any Person for any period, the
remainder of the following for such Person and its Consolidated Subsidiaries for
such period:  (a) interest expense, minus (b) interest income.

 

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

 

“Conversion Date” has the meaning set forth in Section 2.5(c).

 

“Corporate Reorganization” has the meaning set forth in the Recitals hereto.

 

“Credit Parties” means, collectively, Borrower and each direct or indirect
Subsidiary of Borrower, and “Credit Party” means any one of the foregoing.

 

“Current Financials” means (a) the most recent annual audited consolidated
balance sheet of Borrower and the related consolidated statements of operations
and cash flow delivered to Banks hereunder, and (b) the most recent quarterly
unaudited consolidated balance sheet of Borrower and the related consolidated
statements of operations and cash flow delivered to Banks hereunder.

 

“Debt” of any Person means, without duplication:  (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) all other
indebtedness (including obligations under Capital Leases, other than Capital
Leases which are usual and customary oil and gas leases) of such Person on which
interest charges are customarily paid or accrued, (d) all Guarantees by such
Person, (e) the unfunded or unreimbursed portion of all letters of credit issued
for the account of such Person, (f) any amount owed by such Person representing
the deferred purchase price for property or services acquired by such Person
other than trade payables incurred in the ordinary course of business which are
not more than ninety (90) days past the invoice date, (g) all obligations of
such Person secured by a Lien on any property or asset owned or held by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is non-recourse to the credit of that Person, and
(h) all liability of such Person as a general partner of a partnership for
obligations of such partnership of the nature described in (a) through (g)
preceding.

 

“Debt Issuance Date” means any date on which a Credit Party issues Senior Notes.

 

8

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

 

“Default Rate” means a rate per annum during the period commencing on the due
date until such amount is paid in full equal to the sum of (a) two percent (2%),
plus (b) the Adjusted Base Rate plus the Applicable Margin then in effect for
Adjusted Base Rate Borrowings (provided that, if such amount in default is
principal of a Borrowing subject to a Eurodollar Tranche and the due date is a
day other than the last day of an Interest Period therefor, the “Default Rate”
for such principal shall be, for the period from and including the due date and
to but excluding the last day of the Interest Period therefor, (i) two percent
(2%), plus (ii) the Applicable Margin then in effect for Eurodollar Borrowings,
plus (iii) the LIBOR Rate for such Borrowing for such Interest Period as
provided in Section 2.5, and thereafter, the rate provided for above in this
definition).

 

“Defaulting Bank” means any Bank that (a) has failed, within two (2) Business
Days of the date required to be funded or paid, to (i) fund any portion of its
Loans, (ii) fund any portion of its participations in Letters of Credit or
(iii) pay over to any Credit Party any other amount required to be paid by it
hereunder; (b) has notified the Borrower or any Credit Party in writing, or has
made a public statement, to the effect that it does not intend or expect to
comply with any of its funding obligations under this Agreement or generally
under other agreements in which it commits to extend credit; (c) has failed,
within three (3) Business Days after request by the Administrative Agent or a
Credit Party, acting in good faith, to provide a certification in writing from
an authorized officer of such Bank that it will comply with its obligations to
fund prospective Loans and participations in then outstanding Letters of Credit
under this Agreement; provided that such Bank shall cease to be a Defaulting
Bank pursuant to this clause (c) upon such Credit Party’s receipt of such
certification in form and substance satisfactory to it and the Administrative
Agent; or (d) has (or whose bank holding company has) been placed into
receivership, conservatorship or bankruptcy; provided that a Bank shall not
become a Defaulting Bank solely as a result of the acquisition or maintenance of
an ownership interest in such Bank or Person controlling such Bank or the
exercise of control (other than through the appointment of a conservator or
receiver) over a Bank or Person controlling such Bank by a Governmental
Authority or an instrumentality thereof, so long as such ownership interest does
not result in or provide such Bank 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 Bank (or such Governmental Authority) to
reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Bank.

 

“Determination” means any Periodic Determination or Special Determination
(including any Determination pursuant to Section 4.6).

 

“Determination Date” means (a) each May 1 and November 1, commencing May 1,
2014, and (b) with respect to any Special Determination, the first day of the
first month which is not less than 30 days following the date of a request for a
Special Determination.  The Effective Date shall also constitute a Determination
Date for purposes of this Agreement.

 

9

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“Distribution” by any Person, means (a) with respect to any stock issued by such
Person or any partnership, joint venture, limited liability company, membership
or other equity ownership interest of such Person, the retirement, redemption,
purchase, or other acquisition for value of any such stock, partnership, joint
venture, limited liability company, membership or other equity ownership
interest, (b) the declaration or payment of any dividend or other distribution
on or with respect to any stock, partnership, joint venture, limited liability
company, membership or other equity ownership interest of any Person, and
(c) any other payment by such Person with respect to such stock, partnership,
joint venture, limited liability company, membership or other equity ownership
interest.

 

“Documentary Taxes” means any and all present or future stamp or documentary
taxes or any other excise or Property taxes, charges or similar levies arising
from any payment made by Borrower or any guarantor hereunder or from the
execution, delivery or enforcement of this Agreement or any other Loan Paper.

 

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

 

“Domestic Lending Office” means, as to each Bank, its office identified in such
Bank’s Administrative Questionnaire as its Domestic Lending Office or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to Borrower and Administrative Agent.

 

“EDGAR” means the Electronic Data Gathering, Analysis, and Retrieval computer
system for the receipt, acceptance, review and dissemination of documents
submitted to the SEC in electronic format.

 

“Effective Date” means the date on which the conditions specified in Section 6.1
are satisfied (or waived in accordance with Section 14.2).

 

“Elected Commitment” means, as to any Bank, the amount set forth opposite such
Bank’s name on Schedule 1 under the caption “Elected Commitment”, as the same
may be terminated, reduced or increased from time to time in accordance with the
provisions hereof.

 

“Elected Commitment Increase Certificate” has the meaning given to such term in
Section 2.16(b)(vi).

 

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

 

“Environmental Complaint” means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, proceeding, judgment, letter
or other communication from any federal, state or municipal authority or any
other party against any Credit Party involving (a) a Hazardous Discharge from,
onto or about any real property owned, leased or operated at any time by any
Credit Party, (b) a Hazardous Discharge caused, in whole or in part, by any
Credit Party or by any Person acting on behalf of or at the instruction of any
Credit Party, or (c) any violation of any Applicable Environmental Law by any
Credit Party.

 

10

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“Environmental Liability” means any liability, loss, fine, penalty, charge,
Lien, damage, cost, or expense of any kind that results directly or indirectly,
in whole or in part (a) from the violation of any Applicable Environmental Law,
(b) from the release or threatened release of any Hazardous Substance, (c) from
removal, remediation, or other actions in response to the release or threatened
release of any Hazardous Substance, (d) from actual or threatened damages to
natural resources, (e) from the imposition of injunctive relief or other orders,
(f) from personal injury, death, or property damage which occurs as a result of
any Credit Party’s use, storage, handling, or the release or threatened release
of a Hazardous Substance, or (g) from any environmental investigation performed
at, on, or for any real property owned by any Credit Party.

 

“Equity” means shares of capital stock or a partnership, profits, capital or
member interest, or options, warrants or any other right to substitute for or
otherwise acquire the capital stock or a partnership, profits, capital or member
interest of any Credit Party.

 

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

 

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

 

“Eurodollar Borrowing” means any Borrowing which will constitute a Eurodollar
Tranche.

 

“Eurodollar Business Day” means any Business Day on which commercial banks are
open for international business (including dealings in dollar deposits) in
London.

 

“Eurodollar Lending Office” means, as to each Bank, its office, branch or
Affiliate located at its address identified in such Bank’s Administrative
Questionnaire as its Eurodollar Lending Office or such other office, branch or
Affiliate of such Bank as it may hereafter designate as its Eurodollar Lending
Office by notice to Borrower and Administrative Agent.

 

“Eurodollar Reserve Percentage” means for any day that percentage (expressed as
a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement for a member bank of the Federal Reserve System in
New York, New York in respect of “Eurocurrency liabilities” (or in respect of
any other category of liabilities which includes deposits by reference to which
the interest rate on Eurodollar Tranches is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of any Bank to United States residents).  The Adjusted LIBOR Rate shall
be adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.

 

“Eurodollar Tranche” means, with respect to any Interest Period, any portion of
the principal amount outstanding under the Loans which bears interest at a rate
computed by reference to the Adjusted LIBOR Rate for such Interest Period.

 

11

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“Event of Default” has the meaning set forth in Section 11.1.

 

“Excluded Swap Obligation” means, with respect to any Credit Party individually
determined on a Credit Party by Credit Party basis, any Obligations or other
obligation in respect of any Hedge Transaction if, and solely to the extent
that, all or a portion of the guarantee of such Credit Party of, or the grant by
such Credit Party of a security interest or other Lien to secure, such
Obligations or other obligation in respect of such Hedge Transaction (or any
guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any
rule, regulation or order of the Commodity Futures Trading Commission (or the
application or official interpretation of any thereof) by virtue of such Credit
Party’s failure for any reason to constitute an Eligible Contract Participant at
the time such guarantee or grant of a security interest or other Lien is entered
into or otherwise becomes effective with respect to, or any other time such
Credit Party is by virtue of such guarantee or grant of security interest or
other Lien otherwise deemed to enter into, such Obligations or other obligation
in respect of such Hedge Transaction (or guarantee thereof).  If such an
obligation arises under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such obligation that is
attributable to swaps the guarantee or grant of security interest or other Lien
for which (or for any guarantee of which) so is or becomes illegal.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Bank, any
Participant, any Assignee or any other recipient of any payment to be made by or
on account of any obligation of Borrower or any guarantor hereunder or under any
other Loan Papers, (a) taxes imposed on (or measured by) its net income, and
franchise taxes (including the Texas Margin Tax) imposed on it (in lieu of net
income taxes), in each case by the United States of America or such other
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Bank, in which its applicable
lending office is located, (b) any branch profits taxes imposed by the United
States of America or any similar tax imposed by any other jurisdiction in which
Borrower or any guarantor is located, (c) in the case of a Bank, Participant or
Assignee described in Section 3.4, any withholding tax attributable to such
Persons’ failure to comply with its representations, covenants or obligations
set forth in Section 3.4, except to the extent that such Bank, Participant or
Assignee was entitled, at the time of designation of a new lending office (or
Assignment or Participation) to receive additional amounts with respect to such
withholding tax pursuant to the second sentence of Section 13.6, and (d) any
U.S. federal withholding taxes imposed under FATCA.

 

“Exhibit” refers to an exhibit attached to this Agreement and incorporated
herein by reference, unless specifically provided otherwise.

 

“Existing Credit Agreement” has the meaning set forth in the Recitals hereto.

 

“Existing Letters of Credit” means the letters of credit listed on Schedule 4.

 

“Facility Guaranty” means the Fourth Amended and Restated Guaranty substantially
in the form of Exhibit I attached hereto to be executed by each existing and
future Subsidiary of Borrower in favor of Banks, pursuant to which each such
Subsidiary guarantees payment and performance in full of the Obligations, and
each joinder or supplement thereto now or hereafter executed.

 

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“FATCA” means Sections 1471 through 1474 of the Code as of the date of this
Agreement and any regulations thereunder or official interpretations thereof.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.

 

“Fee Letter” means the letter agreement dated as of December 31, 2013 between
Borrower and Wells Fargo Bank, N.A.

 

“First Measurement Period” has the meaning given to such term in Section 9.10.

 

“Fiscal Quarter” means the three-month periods ending March 31, June 30,
September 30 or December 31 of each Fiscal Year.

 

“Fiscal Year” means a twelve-month period ending December 31.

 

“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.2.

 

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

 

“Governmental Authority” means any court or governmental department, commission,
board, bureau, agency or instrumentality of any nation or of any province,
state, commonwealth, nation, territory, possession, county, parish or
municipality, whether now or hereafter constituted or existing (including any
central bank or any supra-national body exercising such powers or functions,
such as the European Union or the European Central Bank).

 

“Guarantee” by any Person means any obligation, contingent or otherwise, of such
Person directly or indirectly guaranteeing any Debt of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions, by “comfort letter” or other similar undertaking
of support or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part),

 

13

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provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business.

 

“Guarantor” means Laredo Midstream and each other existing and future Subsidiary
of Borrower.

 

“Hazardous Discharge” means any releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping of any Hazardous Substance from or onto any real property owned, leased
or operated at any time by any Credit Party or any real property owned, leased
or operated by any other party.

 

“Hazardous Substance” means any pollutant, toxic substance, hazardous waste,
compound, element or chemical that is defined as hazardous, toxic, noxious,
dangerous or infectious pursuant to any Applicable Environmental Law or which is
otherwise regulated by any Applicable Environmental Law.

 

“Hedge Agreement” means, collectively, any agreement, instrument, arrangement or
schedule or supplement thereto evidencing any Hedge Transaction.

 

“Hedge Transaction” means any commodity, interest rate, currency or other swap,
option, collar, futures contract or other contract pursuant to which a Person
hedges risks or manages costs related to commodity prices, interest rates,
currency exchange rates, securities prices or financial market conditions
(including any agreement, contract or transaction that constitutes a “swap”
within the meaning of section 1a(47) of the Commodity Exchange Act; provided,
that for purposes of Sections 8.1(c), 8.1(q), and 9.10, “Hedge Transactions”
shall refer to the underlying agreement and not include any separate guaranty or
separate document granting a security interest or other Lien in respect of the
obligations under such underlying agreement).  Hedge Transactions expressly
include Oil and Gas Hedge Transactions.

 

“Hedge Transaction Letters of Credit” means Letters of Credit issued to secure
Borrower’s obligations to counterparties under Oil and Gas Hedge Transactions.

 

“Hydrocarbons” means oil, gas, casinghead gas, drip gasolines, natural gasoline,
condensate, distillate, and all other liquid and gaseous hydrocarbons produced
or to be produced in conjunction therewith, and all products, by-products and
all other substances derived therefrom or the processing thereof, and all other
minerals and substances produced in conjunction with such substances, including
sulphur, geothermal steam, water, carbon dioxide, helium, and any other
minerals, ores, or substances of value, and the products and proceeds therefrom.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Initial Borrowing Base” means a Borrowing Base in the amount of $925,000,000,
which shall be in effect during the period commencing on the Effective Date and
continuing until the first Determination after the Effective Date.

 

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“Initial Reserve Report” means the “Reserve Report” most recently delivered by
Predecessor Borrower to the Administrative Agent under and as defined in the
Existing Credit Agreement.

 

“Interest Option” has the meaning given such term in Section 2.5(c).

 

“Interest Period” means, with respect to each Eurodollar Tranche, the period
commencing on the Borrowing Date or Conversion Date applicable to such Tranche
and ending one, two, three, six, or, if available to all Banks, twelve months
thereafter, as Borrower may elect in the applicable Request for Borrowing;
provided that:  (a) any Interest Period which would otherwise end on a day which
is not a Eurodollar Business Day shall be extended to the next succeeding
Eurodollar Business Day unless such Eurodollar Business Day falls in another
calendar month, in which case such Interest Period shall end on the next
preceding Eurodollar Business Day; (b) any Interest Period which begins on the
last Eurodollar 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, subject to clause (c) below, end on the last Eurodollar
Business Day of a calendar month; and (c) no Interest Period with respect to any
Eurodollar Tranche shall extend past the Termination Date.

 

“Investment” means, with respect to any Person, any loan, advance, extension of
credit, capital contribution to, investment in or purchase of the stock
securities of, or interests in, any other Person; provided that, “Investment”
shall not include current customer and trade accounts which are payable in
accordance with customary trade terms.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice, Inc. (or such later version thereof as may be in effect at the time of
issuance).

 

“Laredo Dallas” has the meaning set forth in the Recitals hereto.

 

“Laredo Midstream” has the meaning set forth in the Recitals hereto.

 

“Laredo Texas” has the meaning set forth in the Recitals hereto.

 

“Laws” means all applicable statutes, laws, ordinances, regulations, orders,
writs, injunctions or decrees of any state, commonwealth, nation, territory,
possession, county, township, parish, municipality or Governmental Authority.

 

“Lending Office” means, as to any Bank, its Domestic Lending Office or its
Eurodollar Lending Office, as the context may require.

 

“Letter of Credit Application” has the meaning given such term in
Section 2.1(b).

 

“Letter of Credit Exposure” of any Bank means, collectively, such Bank’s
aggregate participation in (a) the unfunded portion of Letters of Credit
outstanding at any time, and (b) the funded but unreimbursed (by Borrower)
portion of Letters of Credit outstanding at such time.  For all purposes of this
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of

 

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Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding”
in the amount so remaining available to be drawn.

 

“Letter of Credit Fee” means, for any date, with respect to any Letter of Credit
issued hereunder, a fee in an amount equal to a percentage of the average daily
aggregate amount of Letter of Credit Exposure of all Banks during the Fiscal
Quarter (or portion thereof) ending on the date such payment is due (calculated
on a per annum basis based on such average daily aggregate Letter of Credit
Exposure) determined by reference to the ratio of Outstanding Revolving Credit
to the Total Commitment on such date, in accordance with the table below:

 

Pricing
Level

 

Ratio of Outstanding
Revolving Credit to Total
Commitment

 

Per Annum Letter
of Credit Fee

 

I

 

>90%

 

2.500%

 

II

 

>75% but <90%

 

2.250%

 

III

 

>50% but <75%

 

2.000%

 

IV

 

>25% but <50

 

1.750%

 

V

 

<25%

 

1.500%

 

 

Such fee shall be payable in accordance with the terms of Section 2.12.

 

“Letter of Credit Fronting Fee” means, with respect to any Letter of Credit
issued hereunder, a fee equal to the greater of (a) $500 or (b) .125% per annum
of the average daily amount available to be drawn under such Letter of Credit
during the Fiscal Quarter (or portion thereof) ending on the date the payment of
such fee is due.

 

“Letter of Credit Issuer” means Wells Fargo Bank, N.A., Bank of America, N.A.,
and BOKF, NA dba Bank of Oklahoma, each in its capacity as an issuer of Letters
of Credit hereunder and the Existing Letters of Credit, as applicable, and each
such Person’s successors in such capacity, and any other Bank designated by
Administrative Agent which (without obligation to do so) consents to issue
Letters of Credit hereunder.

 

“Letter of Credit Period” means the period commencing on the Effective Date and
ending five (5) Business Days prior to the Termination Date.

 

“Letters of Credit” means, collectively, standby letters of credit issued for
the account of Borrower pursuant to Section 2.1(b) and shall include the
Existing Letters of Credit, in each case as extended or otherwise modified by
the applicable Letter of Credit Issuer from time to time.

 

“LIBOR Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor
or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Eurodollar Business Days prior to the commencement of such
Interest Period,

 

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as the rate for dollar deposits with a maturity comparable to such Interest
Period.  In the event that such rate is not available at such time for any
reason, then the “LIBOR Rate” with respect to such Eurodollar Borrowing for such
Interest Period shall be the rate (rounded upwards, if necessary, to the next
1/16 of 1%) at which dollar deposits of an amount comparable to such Eurodollar
Borrowing and for a maturity comparable to such Interest Period are offered by
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Eurodollar Business Days prior to the commencement of such Interest Period.

 

“Lien” means with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset.  For
purposes of this Agreement, a Credit Party shall be deemed to own subject to a
Lien any asset which is acquired or held subject to the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement relating to such asset.

 

“Loan” means a Revolving Loan, and “Loans” means all Revolving Loans.

 

“Loan Papers” means this Agreement, the Notes, the Facility Guaranty, the
Mortgages, the Security Agreement, each other guaranty, security agreement,
pledge agreement, or mortgage now or hereafter executed in connection with this
Agreement, the Fee Letter, each Letter of Credit now or hereafter executed
and/or delivered, and all other certificates, documents or instruments delivered
in connection with this Agreement, as the foregoing may be amended from time to
time.

 

“Margin Regulations” mean Regulations T, U and X of the Board of Governors of
the Federal Reserve System, as in effect from time to time.

 

“Margin Stock” means “margin stock” as defined in Regulation U.

 

“Material Adverse Change” means any circumstance or event that has or would
reasonably be expected to have a Material Adverse Effect.

 

“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, liabilities, condition (financial or otherwise), or results of
operations of the Credit Parties, taken as a whole, (b) the right or ability of
any Credit Party to fully, completely and timely perform its obligations under
the Loan Papers, (c) the validity or enforceability of any Loan Papers against
any Credit Party (to the extent a party thereto), or (d) the validity,
perfection or priority of any Lien on a material portion of the assets intended
to be created under or pursuant to any Loan Paper to secure the Obligations.

 

“Material Agreement” means any material written or enforceable oral agreement,
contract, commitment, or understanding to which a Person is a party, by which
such Person is directly or indirectly bound, or to which any assets of such
Person may be subject.

 

“Material Gas Imbalance” means, with respect to all Gas Balancing Agreements to
which any Credit Party is a party or by which any Mineral Interest owned by any
Credit Party is bound, a net gas imbalance to Borrower or any other Credit
Party, individually or taken as a whole in excess of $10,000,000.  Gas
imbalances will be determined based on written

 

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agreements, if any, specifying the method of calculation thereof, or,
alternatively, if no such agreements are in existence, gas imbalances will be
calculated by multiplying (a) the volume of gas imbalance as of the date of
calculation (expressed in thousand cubic feet) by (b) the heating value in btu’s
per thousand cubic feet, times the Henry Hub average daily spot price for the
month immediately preceding the date of calculation.

 

“Maximum Credit Amount” means, as to any Bank, the amount set forth opposite
such Bank’s name on Schedule 1 under the caption “Maximum Credit Amount”, as
such amount may be terminated, reduced or increased from time to time in
accordance with the provisions hereof.

 

“Maximum Lawful Rate” means, for each Bank, the maximum rate (or, if the context
so permits or requires, an amount calculated at such rate) of interest which, at
the time in question would not cause the interest charged on the portion of the
Loans owed to such Bank at such time to exceed the maximum amount which such
Bank would be allowed to contract for, charge, take, reserve, or receive under
applicable Law after taking into account, to the extent required by applicable
Law, any and all relevant payments or charges under the Loan Papers.

 

“Mineral Interests” means rights, estates, titles, and interests in and to oil
and gas leases and any oil and gas interests, royalty and overriding royalty
interests, production payments, net profits interests, oil and gas fee
interests, and other rights therein, including any reversionary or carried
interests relating to the foregoing, together with rights, titles, and interests
created by or arising under the terms of any unitization, communitization, and
pooling agreements or arrangements, and all properties, rights and interests
covered thereby, whether arising by contract, by order, or by operation of Law,
which now or hereafter include all or any part of the foregoing.

 

“Mortgages” means all mortgages, amendments to, and amendments and restatements
of, mortgages, deeds of trust, security agreements, pledge agreements and
similar documents, instruments and agreements creating, evidencing, perfecting
or otherwise establishing the Liens required by Article V as may have been
heretofore or may hereafter be granted or assigned to Administrative Agent to
secure payment of the Obligations or any part thereof, all as amended,
supplemented, or otherwise modified from time to time.  All Mortgages shall be
in form and substance reasonably satisfactory to Administrative Agent.

 

“Net Cash Proceeds” means the remainder of (a) the gross cash proceeds received
by any Credit Party from any Asset Disposition (including any associated Hedge
Transaction termination receipts) less (b) underwriter discounts and
commissions, investment banking fees, legal, accounting and other professional
fees and expenses, and other usual and customary transaction costs including
associated Hedge Transaction termination payments, in each case only to the
extent paid or payable by a Credit Party in cash and related to such Asset
Disposition.

 

“Note” means a promissory note of Borrower, payable to a Bank, in substantially
the form of Exhibit A hereto, evidencing the obligation of Borrower to repay to
such Bank its Commitment Percentage of the Revolving Loans, together with all
modifications, extensions, renewals and rearrangements thereof, and “Notes”
means all of the Notes.

 

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“Obligations” means, collectively, all present and future indebtedness,
obligations and liabilities, and all renewals and extensions thereof, or any
part thereof, of each Credit Party (a) to any Bank or to any Affiliate of any
Bank arising pursuant to the Loan Papers, and all interest accrued thereon and
costs, expenses and reasonable attorneys’ fees incurred in the enforcement or
collection thereof (including any interest that accrues after the commencement
of any case, proceeding or other action relating to the bankruptcy, insolvency
or reorganization of any Credit Party (or could accrue but for the operation of
applicable bankruptcy or insolvency laws), whether or not such interest is
allowed or allowable as a claim in any such case, proceeding or other action),
and (b) arising under or in connection with any Hedge Transaction (i) existing
on the date of this Agreement between a Credit Party and any counterparty that
is a Bank or an Affiliate of a Bank on the date of this Agreement or
(ii) entered into on or after the date of this Agreement between any Credit
Party and any counterparty that is or was, at the time such Hedge Transaction
was entered into, a Bank or an Affiliate of a Bank, in the case of this clause
(b) regardless of whether such counterparty ceases to be a Bank or an Affiliate
of a Bank and excluding any additional transactions or confirmations entered
into after such counterparty ceases to be a Bank or an Affiliate of a Bank, or
after assignment by such counterparty to another counterparty that is not a Bank
or an Affiliate of a Bank, regardless in the case of the foregoing clauses
(a) and (b) of whether such indebtedness, obligations and liabilities are
direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several or
joint and several; provided that solely with respect to any Guarantor that is
not an Eligible Contract Participant, Excluded Swap Obligations of such
Guarantor shall in any event be excluded from “Obligations” owing by such
Guarantor.

 

“Oil and Gas Hedge Transactions” means a Hedge Transaction pursuant to which any
Person hedges the price to be received by it for future production of
Hydrocarbons; provided, that for the sole purposes of Section 9.10, the term
“Oil and Gas Hedge Transactions” shall be deemed to exclude all purchased put
options or price floors for Hydrocarbons.

 

“Operating Lease” means any lease, sublease, license or similar arrangement
(other than a Capital Lease and other than leases with a primary term of one
year or less or which can be terminated by the lessee upon notice of one year or
less without incurring a penalty) pursuant to which a Person leases, subleases
or otherwise is granted the right to occupy, take possession of, or use property
whether real, personal or mixed; provided that, “Operating Lease” shall not
include oil, gas or mineral leases entered into or assigned to any Credit Party
in the ordinary course of such Credit Party’s business.

 

“Outstanding Revolving Credit” means, at any time, the sum of (a) the aggregate
Letter of Credit Exposure on such date, including the aggregate Letter of Credit
Exposure related to Letters of Credit to be issued on such date, plus (b) the
aggregate outstanding principal balance of the Revolving Loans on such date,
including the amount of any Borrowing to be made on such date.

 

“Participant” has the meaning given such term in Section 14.8(b).

 

“Periodic Determination” means any determination of the Borrowing Base pursuant
to Section 4.2.

 

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“Permitted Encumbrances” means with respect to any asset:

 

(a)                                 Liens securing the Obligations in favor of
Banks or their Affiliates under the Loan Papers;

 

(b)                                 easements, rights-of-way, and other similar
encumbrances, and minor defects in the chain of title that are customarily
accepted in the oil and gas financing industry, none of which interfere with the
ordinary conduct of the business of any Credit Party or materially detract from
the value or use of the property to which they apply;

 

(c)                                  inchoate statutory or operators’ Liens
securing obligations for labor, services, materials and supplies furnished to
Mineral Interests which are not delinquent;

 

(d)                                 mechanic’s, materialmen’s, warehouseman’s,
journeyman’s and carrier’s Liens and other similar Liens arising by operation of
Law or statute in the ordinary course of business which are not delinquent;

 

(e)                                  Liens arising under production sales
contracts, Gas Balancing Agreements and joint operating agreements, in each case
that are customary in the oil and gas business, entered into in the ordinary
course of business, and taken into account in computing the net revenue
interests and working interests of the Credit Parties, to the extent that any
such Lien referred to in this clause does not materially impair the use of the
property covered by such Lien for the purposes for which such property is held
by such Credit Party or materially impair the value of such property subject
thereto;

 

(f)                                   Liens for Taxes or assessments not yet due
or not yet delinquent, or, if delinquent, that are being contested in good faith
in the normal course of business by appropriate action, as permitted by
Section 8.6 and for which adequate reserves under GAAP are being maintained;

 

(g)                                  royalties, overriding royalties, net
profits interests, production payments, reversionary interests, calls on
production, preferential purchase rights and other burdens on or deductions from
the proceeds of production which are granted in the ordinary course of business
in the oil and gas industry, that do not secure Debt for borrowed money and that
are taken into account in computing the net revenue interests and working
interests of Borrower or any of its Subsidiaries; and

 

(h)                                 Liens securing Permitted Purchase Money
Debt, provided that (i) such Liens shall not extend to or encumber any asset of
any Credit Party other than those whose purchase was financed with such
Permitted Purchase Money Debt and (ii) such Liens shall attach to such purchased
assets substantially simultaneously with the purchase of such assets;

 

provided that, Liens described in clauses (b) through (g) shall remain
“Permitted Encumbrances” only for so long as no action to enforce such Lien has
been commenced and no intention to subordinate the first priority Lien granted
in favor of the Administrative Agent and the Banks is to be hereby implied or
expressed by the permitted existence of such Permitted Encumbrances.

 

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“Permitted Holders” means, collectively, Warburg Pincus & Co., Warburg Pincus
Private Equity IX, L.P., Warburg Pincus Private Equity X O&G, L.P. and Warburg
Pincus X Partners, L.P. and any of the foregoing Persons’ Affiliates and any
fund managed or administered by any such Person or any of their Affiliates and
members of management of Borrower.

 

“Permitted Investment” means:

 

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

 

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

 

(c)                                  commercial paper maturing within one year
from the date of creation thereof rated in the highest grade by Standard and
Poor’s Corporation or Moody’s Investors Service;

 

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

 

(e)                                  deposits in money market funds investing
not less than 90% of their assets in Investments described in clauses (b), (c),
or (d) above;

 

(f)                                   Investments made by a Credit Party in or
to another Credit Party;

 

(g)                                  subject to the limits of
Section 8.2, Investments (including capital contributions) in general or limited
partnerships or other types of entities (each a “venture”) entered into by any
Credit Party with others in the ordinary course of business; provided that
(i) any such venture is engaged primarily in oil and gas exploration,
development, production, processing and related activities, including
transportation, (ii) the interest in such venture is acquired in the ordinary
course of business and on fair and reasonable terms, and (iii) such venture
interests acquired and capital contributions made (valued as of the date such
interest was acquired or the contribution made) do not exceed, in the aggregate
at any time outstanding, when aggregated with Investments permitted pursuant to
this clause (g)(iii) an amount equal to $10,000,000;

 

(h)                                 subject to the limits of
Section 8.2, Investments in direct ownership interests in additional Mineral
Interests and gas gathering systems related thereto or related to farm-out,
farm-in, joint operating, joint venture or area of mutual interest agreements,
gathering systems, pipelines or other similar arrangements which are usual

 

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and customary in the oil and gas exploration and production business located
within the geographic boundaries of the United States of America;

 

(i)                                     entry into operating agreements, working
interests, royalty interests, mineral leases, processing agreements, farm-out
agreements, contracts for the sale, transportation or exchange of oil and
natural gas, unitization agreements, pooling arrangements, area of mutual
interest agreements, production sharing agreements or other similar or customary
agreements, transactions, properties, interests or arrangements, and Investments
and expenditures in connection therewith or pursuant thereto, in each case made
or entered into in the ordinary course of the oil and gas business, excluding,
however, Investments in other Persons; provided that, none of the foregoing
shall involve the incurrence of any Debt not permitted by Section 9.1;

 

(j)                                    loans and advances to directors, officers
and employees permitted by applicable Law not to exceed $2,000,000 in the
aggregate at any time;

 

(k)                                 Investments in stock, obligations or
securities received in settlement of debts arising from Investments permitted
under this definition, owing to a Credit Party as a result of a bankruptcy or
other insolvency proceeding of the obligor in respect of such debts or upon the
enforcement of any Lien in favor of such Credit Party; provided that such Credit
Party shall give the Administrative Agent prompt written notice in the event
that the aggregate amount of all investments held at any one time under this
clause (k) exceeds $5,000,000; and

 

(l)                                     other Investments not to exceed
$10,000,000 in the aggregate at any time.

 

“Permitted Purchase Money Debt” means Debt incurred by a Credit Party in the
ordinary course of business to finance the purchase of assets, including the
interests of a lessor under a Capital Lease, provided that (a) the principal
amount of the Debt secured by Liens on the purchased asset shall not exceed 100%
of the purchase price of such asset and (b) the aggregate amount of all Debt
secured by such Liens shall not exceed $10,000,000.

 

“Permitted Refinancing Debt” means any Debt of the Borrower, and Debt
constituting Guarantees thereof by other Credit Parties, incurred or issued in
exchange for, or the net proceeds of which are used to extend, refinance, repay,
renew, replace (whether or not contemporaneously), defease, discharge, redeem,
or refund, outstanding Permitted Senior Debt, in whole or in part from time to
time; provided that (i) the principal amount of such Permitted Refinancing Debt
(or if such Permitted Refinancing Debt is issued at a discount, the initial
issuance price of such Permitted Refinancing Debt) does not exceed the then
outstanding principal amount of the Permitted Senior Debt so exchanged for,
extended, refinanced, repaid, renewed, replaced, defeased, discharged, redeemed,
or refunded (plus the amount of any premiums and accrued interest paid and fees
and expenses incurred in connection therewith), (ii) such Permitted Refinancing
Debt has a stated maturity no earlier than the first anniversary of the
Termination Date, (iii) no scheduled principal payments or mandatory prepayments
or redemptions are required under such Permitted Refinancing Debt prior to the
stated maturity of such Permitted Refinancing Debt (other than pursuant to
customary change of control or asset sale tender offer provisions), (iv)as
determined in good faith by senior management of Borrower,

 

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such Permitted Refinancing Debt does not contain covenants or events of default
that, taken as a whole, are materially more restrictive on the Credit Parties
than those in this Agreement, (v) such Permitted Refinancing Debt and any
Guarantee in respect thereof is unsecured, and (vi) no later than the date of
issuance thereof the Borrower delivers a written notice to the Administrative
Agent as to the issuance of such Permitted Refinancing Debt and specifying the
Permitted Senior Debt (and principal amount thereof) so exchanged for, extended,
refinanced, repaid, renewed, replaced, defeased, discharged, redeemed or
refunded.

 

“Permitted Senior Debt” means any Senior Notes or Permitted Refinancing Debt
incurred under and in accordance with Section 9.1(d).

 

“Person” means an individual, a corporation, a partnership, a limited liability
company, an association, a trust or any other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.

 

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

 

“Platform” has the meaning specified in Section 8.1.

 

“Post-Merger Predecessor Borrower” has the meaning set forth in the Recitals
hereto.

 

“Predecessor Borrower” has the meaning set forth in the Recitals hereto.

 

“Proved Mineral Interests” means, collectively, Proved Producing Mineral
Interests, Proved Non-producing Mineral Interests, and Proved Undeveloped
Mineral Interests.

 

“Proved Non-producing Mineral Interests” means all Mineral Interests which
constitute proved developed non-producing reserves.

 

“Proved Producing Mineral Interests” means all Mineral Interests which
constitute proved developed producing reserves.

 

“Proved Undeveloped Mineral Interests” means all Mineral Interests which
constitute proved undeveloped reserves.

 

“Public Bank” has the meaning specified in Section 8.1.

 

“Qualified ECP Guarantor” means, with respect to any Benefitting Guarantor, in
respect of any Hedge Transaction, each Credit Party that, at the time the
guaranty by such Benefitting Guarantor of, or the grant by such Benefitting
Guarantor of a security interest or other Lien securing, obligations under such
Hedge Transaction is entered into or becomes effective with respect to, or at
any other time such Benefitting Guarantor is by virtue of such guaranty or grant
of a security interest or other Lien otherwise deemed to enter into, such Hedge
Transaction, constitutes an Eligible Contract Participant and can cause such
Benefitting

 

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Guarantor 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.

 

“Recognized Value” means, with respect to Mineral Interests, the value
attributed to such Mineral Interests in the most recent Determination of the
Borrowing Base pursuant to Article IV (or for purposes of determining the
Initial Borrowing Base in the event no such Determination has occurred), based
upon the present value discounted at 10% per annum of the estimated net cash
flow to be realized from the production of Hydrocarbons from such Mineral
Interests.

 

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

 

“Register” has the meaning specified in Section 14.8(d).

 

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.

 

“Rentals” means amounts payable by a lessee under an Operating Lease.

 

“Request for Borrowing” means a request by Borrower for a Borrowing in
accordance with Section 2.2.

 

“Request for Letter of Credit” means a request by Borrower for a Letter of
Credit in accordance with Section 2.3.

 

“Required Banks” means (a) as long as the Commitments are in effect, Banks
having an aggregate Commitment Percentage of 66-2/3% or more of the Aggregate
Maximum Credit Amount, and (b) following termination or expiration of the
Commitments, Banks holding 66-2/3% or more of the Outstanding Revolving Credit.

 

“Required Reserve Value” means Proved Mineral Interests that have a Recognized
Value of not less than 80% of the Recognized Value of all Proved Mineral
Interests held by Borrower and its Subsidiaries.

 

“Reserve Report” means an unsuperseded engineering analysis of the Mineral
Interests owned by Borrower and its Subsidiaries in form and substance
reasonably acceptable to the Administrative Agent prepared in accordance with
customary and prudent practices in the petroleum engineering industry and
Financial Accounting Standards Board Statement 69.  Each Reserve Report required
to be delivered by March 31 of each year pursuant to Section 4.1 shall be
audited or prepared by the Approved Petroleum Engineer.  Each other Reserve
Report shall be prepared by Borrower’s in-house staff.  Notwithstanding the
foregoing, in connection with any Special Determination requested by Borrower,
the Reserve Report shall be in form and scope mutually acceptable to Borrower
and the Administrative Agent.  For purposes of Section 4.1, and until
superseded, the Initial Reserve Report shall be considered a Reserve Report.

 

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“Restricted Payment” means, with respect to any Person:  (a) any Distribution by
such Person, (b) the retirement, redemption or prepayment prior to the scheduled
maturity by such Person or any of the Affiliates of such Person of any
subordinated Debt of such Person, and (c) the redemption of such Person’s stock
or Equity (other than, in each case, (i) the Obligations and (ii) any
Distribution by a Subsidiary of Borrower to Borrower or any other Subsidiary of
Borrower).

 

“Revolving Availability” means, at any time:  (a) the Total Commitment in effect
at such time minus (b) the Outstanding Revolving Credit at such time.

 

“Revolving Loans” means the revolving loans, in an aggregate amount outstanding
at any time not to exceed the amount of the Total Commitment then in effect, to
be made by Banks to Borrower pursuant to the Commitments of the Banks.

 

“Rollover Notice” has the meaning given such term in Section 2.5(c).

 

“Schedule” means a “schedule” attached to this Agreement and incorporated herein
by reference, unless specifically indicated otherwise.

 

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

 

“Security Agreement” means an amended and restated security and pledge agreement
substantially in the form of Exhibit H hereto to be executed by Borrower and
each existing and future Subsidiary of Borrower, together with each other
security and pledge agreement or joinder or supplement thereto delivered
pursuant to Article V or otherwise, in each case as amended, supplemented, or
otherwise modified from time to time.

 

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

 

“Senior Notes Indenture” means any indenture among Borrower or Predecessor
Borrower, as applicable, as issuer, the subsidiary guarantors party thereto and
the trustee named therein, pursuant to which Senior Notes are issued, as the
same may be amended or supplemented in accordance with Section 9.13.

 

“Special Determination” means any determination of the Borrowing Base pursuant
to Article IV or Section 8.11 other than a Periodic Determination.

 

“Specified Oil and Gas Hedge Transaction” means that certain Commodity Swap —
Cash Settlement entered into between Predecessor Borrower and JPMorgan Chase
Bank, N.A. (as used in this definition, “Counterparty”) on August 15, 2013,
effective as of July 1, 2014 with a termination date of June 30, 2018 (the
period from and including July 1, 2014 and to and including June 30, 2018 being
the “Payment Term” for purposes of this definition), pursuant to which Borrower
(as successor by merger to Predecessor Borrower) is obligated to pay
Counterparty Price A on a total of 10,000 barrels of oil per day, for each
calendar month during the Payment Term and Counterparty is obligated to pay
Borrower Price B for a total of 10,000 barrels of oil per day for each calendar
month during the Payment Term.   Price A is described

 

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therein as “OIL-LLS-ARGUS”, as further defined therein, minus $4.90 per barrel. 
Price B is described as “OIL-BRENT-IPE, as further defined therein, minus $7.75
per barrel.

 

“Subsidiary” means, for any Person, any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
(including that of a general partner) are at the time directly or indirectly
owned, collectively, by such Person and any Subsidiaries of such Person.  The
term “Subsidiary” shall include Subsidiaries of Subsidiaries (and so on).

 

“Taxes” means all taxes, assessments, filing or other fees, levies, imposts,
duties, deductions, withholdings, stamp taxes, interest equalization taxes,
capital transaction taxes, foreign exchange taxes or other charges, or other
charges of any nature whatsoever, from time to time or at any time imposed by
Law or any federal, state or local governmental agency.  “Tax” means any one of
the foregoing.

 

“Termination Date” means November 4, 2018, or any earlier date on which the
Commitments are terminated in full pursuant to Section 2.9 or Section 11.1.

 

“Total Commitment” means all of the Banks’ Commitments.

 

“Tranche” means an Adjusted Base Rate Tranche or a Eurodollar Tranche and
“Tranches” means Adjusted Base Rate Tranches or Eurodollar Tranches or any
combination thereof.

 

“Type” means with reference to a Tranche, the characterization of such Tranche
as an Adjusted Base Rate Tranche or a Eurodollar Tranche based on the method by
which the accrual of interest on such Tranche is calculated.

 

“Withholding Agent” means any Credit Party or the Administrative Agent.

 

Section 1.2                                    Accounting Terms and
Determinations.  Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent with the most recent audited consolidated financial statements
of Borrower and its Consolidated Subsidiaries delivered to Banks except for
changes in which Borrower’s independent certified public accountants concur and
which are disclosed to Administrative Agent on the next date on which financial
statements are required to be delivered to Banks pursuant to Section 8.1(a) and
Section 8.1(b); provided that, unless Borrower and Required Banks shall
otherwise agree in writing, no such change shall modify or affect the manner in
which compliance with the covenants contained in Article X are computed such
that all such computations shall be conducted utilizing financial information
presented consistently with prior periods.  Any financial ratios required to be
maintained by Borrower pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).

 

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Section 1.3                                    Classification of Loans and
Borrowings.  For purposes of this Agreement, Loans may be classified and
referred to by Type (e.g., a “Eurodollar Loan”).  Borrowings also may be
classified and referred to by Type (e.g., a “Eurodollar Borrowing”).

 

Section 1.4                                    Interpretation.  As used herein,
the term “including” in its various forms means including without limitation. 
The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined.  The word “will” shall be construed to have the same
meaning and effect as the word “shall”.  Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth in the Loan Papers), (b) any reference herein to any Law shall be
construed as referring to such Law as amended, modified, codified or reenacted,
in whole or in part, and in effect from time to time, (c) any reference herein
to any Person shall be construed to include such Person’s successors and assigns
(subject to the restrictions contained in the Loan Papers), (d) the words
“herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) with respect to the determination of any time period, the
word “from” means “from and including” and the word “to” means “to and
including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Annexes, Exhibits and Schedules to, this Agreement.  Unless otherwise specified,
all references herein to times of day shall be references to Eastern time
(daylight or standard, as applicable).  No provision of this Agreement or any
other Loan Paper shall be interpreted or construed against any Person solely
because such Person or its legal representative drafted such provision.

 

ARTICLE II
THE CREDIT FACILITIES

 

Section 2.1                                    Commitments.

 

(a)                                 Subject to Section 2.1(c) and the other
terms and conditions set forth in this Agreement, each Bank severally agrees to
lend to Borrower from time to time prior to the Termination Date amounts not to
exceed in the aggregate at any one time outstanding, the amount of such Bank’s
Commitment less such Bank’s Letter of Credit Exposure, to the extent any such
Loan would not cause the Outstanding Revolving Credit to exceed the Total
Commitment.  Each Borrowing shall (i) be in an aggregate principal amount of
$1,000,000 or any larger integral multiple of $100,000, and (ii) be made from
each Bank ratably in accordance with its respective Commitment Percentage. 
Subject to the foregoing limitations and the other provisions of this Agreement,
Borrower may borrow under this Section 2.1(a), repay amounts borrowed under this
Section 2.1(a) and request new Borrowings under this Section 2.1(a).

 

(b)                                 The Letter of Credit Issuers will issue
Letters of Credit, from time to time during the Letter of Credit Period upon
request by Borrower, for the account of Borrower, so long as (i) the sum of
(A) the total Letter of Credit Exposure of all Banks then existing, and (B) the
amount of the requested Letter of Credit, does not exceed $20,000,000, and
(ii) Borrower would be entitled to a Borrowing under Section 2.1(c) and
Section 6.2 in the amount of the

 

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requested Letter of Credit; provided that, the Letter of Credit Issuers shall
not be under any obligation to issue any Letter of Credit if a default of any
Bank’s obligations to fund under Section 2.1 exists or any Bank is at such time
a Defaulting Bank hereunder, unless the Letter of Credit Issuer has entered into
arrangements satisfactory to Letter of Credit Issuer with Borrower or such Bank
to eliminate the Letter of Credit Issuer’s risk with respect to such Bank.  Not
less than three Business Days prior to the requested date of issuance of any
such Letter of Credit, Borrower shall execute and deliver to Letter of Credit
Issuer, Letter of Credit Issuer’s customary letter of credit application
(“Letter of Credit Application”).  Each Letter of Credit shall be in form and
substance acceptable to Letter of Credit Issuer. Unless otherwise expressly
agreed by the Letter of Credit Issuer and the Borrower when a Letter of Credit
is issued (including any such agreement applicable to an Existing Letter of
Credit), the rules of the ISP shall apply to each standby Letter of Credit.  No
Letter of Credit shall have an expiration date later than the earlier of
(1) five Business Days prior to the Termination Date and (2) one year from the
date of issuance and no Letter of Credit shall be issued in a currency other
than U.S. Dollars.  Upon the date of issuance of a Letter of Credit, Letter of
Credit Issuer shall be deemed to have sold to each other Bank, and each other
Bank shall be deemed to have unconditionally and irrevocably purchased from
Letter of Credit Issuer, a non-recourse participation in the related Letter of
Credit and Letter of Credit Exposure equal to such Bank’s Commitment Percentage
of such Letter of Credit and Letter of Credit Exposure.  Upon request of any
Bank, Administrative Agent shall provide notice to each Bank by telephone or
facsimile setting forth each Letter of Credit issued and outstanding pursuant to
the terms hereof and specifying the Letter of Credit Issuer, beneficiary and
expiration date of each such Letter of Credit, each Bank’s participation
percentage of each such Letter of Credit and the actual dollar amount of each
Bank’s participation held by Letter of Credit Issuer(s) thereof for such Bank’s
account and risk.  In connection with the issuance of Letters of Credit
hereunder, Borrower shall pay to Administrative Agent in respect of such Letters
of Credit (a) the applicable Letter of Credit Fee in accordance with
Section 2.12, (b) the applicable Letter of Credit Fronting Fee in accordance
with Section 2.12, and (c) all customary administrative, issuance, amendment,
payment, and negotiation charges of the Letter of Credit Issuer; provided that,
no such Letter of Credit Fee shall accrue or be deemed to have accrued, or be
owing or payable by Borrower to the Administrative Agent or any Letter of Credit
Issuer for the account of any Defaulting Bank with respect to its share of such
Letter of Credit Fee in the event Borrower has entered into an arrangement with
or provided cash collateral to the applicable Letter of Credit Issuer with
respect to such Letter of Credit Issuer’s risk with respect to such Bank’s
obligation to fund its Commitment Percentage share of the aggregate existing
Letter of Credit Exposure with respect to such Letter of Credit. Administrative
Agent shall distribute the Letter of Credit Fee to Banks in accordance with
their respective Commitment Percentages, and Administrative Agent shall
distribute the Letter of Credit Fronting Fee, and the charges described in
clause (c) of the immediately preceding sentence, to the Letter of Credit Issuer
for its own account.  Any amendment, modification, renewal or extension of any
Letter of Credit shall be deemed to be the issuance of a new Letter of Credit
for purposes of this Section 2.1(b).

 

Upon the occurrence of an Event of Default, Borrower shall, on the next
succeeding Business Day, deposit with Administrative Agent such funds as
Administrative Agent may request, up to a maximum amount equal to the aggregate
existing Letter of Credit Exposure of all Banks.  Any funds so deposited shall
be held by Administrative Agent for the ratable benefit of all Banks as security
for the outstanding Letter of Credit Exposure and the

 

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other Obligations, and Borrower will, in connection therewith, execute and
deliver such security agreements and other security documents in form and
substance satisfactory to Administrative Agent which it may, in its discretion,
require.  As drafts or demands for payment are presented under any Letter of
Credit, Administrative Agent shall apply such funds to satisfy such drafts or
demands.  When all Letters of Credit have expired and the Obligations have been
repaid in full (and the Commitments of all Banks have terminated) or such Event
of Default has been cured to the satisfaction of Required Banks, Administrative
Agent shall release to Borrower any remaining funds deposited under this
Section 2.1(b).  Whenever Borrower is required to make deposits under this
Section 2.1(b) and fails to do so on the day such deposit is due, Administrative
Agent or any Bank may, without notice to Borrower, make such deposit (whether by
application of proceeds of any collateral for the Obligations, by transfers from
other accounts maintained with any Bank or otherwise) using any funds then
available to any Bank of Borrower, any guarantor, or any other Person liable for
all or any part of the Obligations.

 

In the event there exists one or more Defaulting Bank, Borrower shall, on the
next succeeding Business Day following request from the Administrative Agent,
deposit with Administrative Agent such funds as Administrative Agent may
reasonably request, up to a maximum Letter of Credit Exposure attributable to
such Defaulting Bank(s) as security for such Defaulting Bank’s Letter of Credit
Exposure.  As drafts or demands for payment are presented under any Letter of
Credit, Administrative Agent shall apply such funds to satisfy drafts or demands
attributable to such Defaulting Bank(s).  When there are no longer any
Defaulting Banks or no longer any Letters of Credit outstanding, the
Administrative Agent shall release to Borrower any remaining funds deposited
under this paragraph.

 

Notwithstanding anything to the contrary contained herein, Borrower hereby
agrees to reimburse each Letter of Credit Issuer, in immediately available
funds, for any payment or disbursement made by such Letter of Credit Issuer
under any Letter of Credit issued by it (x) on the same Business Day such Letter
of Credit Issuer makes demand for such reimbursement if such demand is made at
or prior to 11:00 a.m. (New York, New York time) and (y) on the next Business
Day after such demand for reimbursement if such demand is made after 11:00 a.m.
(New York, New York time).  Payment shall be made by Borrower with interest on
the amount so paid or disbursed by Letter of Credit Issuer from and including
the date payment is made under any Letter of Credit to but excluding the date of
payment, at the lesser of (i) the Maximum Lawful Rate, or (ii) the Default
Rate.  The obligations of Borrower under this paragraph will continue until all
Letters of Credit have expired and all reimbursement obligations with respect
thereto have been paid in full by Borrower and until all other Obligations shall
have been paid in full.

 

The reimbursement obligations of Borrower under this Section 2.1(b) shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of the Loan Papers (including any Letter of Credit
Application executed pursuant to this Section 2.1(b)) under and in all
circumstances whatsoever and Borrower hereby waives any defense to the payment
of such reimbursement obligations based on any circumstance whatsoever,
including in any case, the following circumstances:  (i) any lack of validity or
enforceability of any Letter of Credit; (ii) the existence of any claim,
set-off, counterclaim, defense or other rights which Borrower or any other
Person may have at any time against any beneficiary of any Letter of Credit,
Administrative Agent, any Bank or any other Person,

 

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whether in connection with any Letter of Credit or any unrelated transaction;
(iii) any statement, draft or other documentation presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
(iv) payment by the Letter of Credit Issuer under any Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; or (v) any other circumstance whatsoever, whether or not
similar to any of the foregoing.

 

As among Borrower on the one hand, Administrative Agent, and each Bank, on the
other hand, Borrower assumes all risks of the acts and omissions of, or misuse
of Letters of Credit by, the beneficiary of such Letters of Credit.  In
furtherance and not in limitation of the foregoing, neither Administrative
Agent, Letter of Credit Issuer nor any Bank shall be responsible for:

 

(A)                               the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any Person in
connection with the application for and issuance of and presentation of drafts
with respect to any Letter of Credit, even if it should prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged;

 

(B)                               the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign the Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason;

 

(C)                               the failure of the beneficiary of the Letter
of Credit to comply duly with conditions required in order to draw upon such
Letter of Credit;

 

(D)                               errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, or
otherwise, whether or not they be in cipher;

 

(E)                                errors in interpretation of technical terms;

 

(F)                                 any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit or of the proceeds thereof;

 

(G)                               the misapplication by the beneficiary of the
Letter of Credit of the proceeds of any drawing under such Letter of Credit; or

 

(H)                              any consequences arising from causes beyond the
control of the Administrative Agent or any Bank.

 

Borrower shall be obligated to reimburse each Letter of Credit Issuer through
the Administrative Agent upon demand for all amounts paid under Letters of
Credit as set forth in the third paragraph of this Section 2.1(b); provided
that, if Borrower for any reason fails to reimburse such Letter of Credit Issuer
in full when such reimbursement is required under such

 

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paragraph, Banks shall reimburse such Letter of Credit Issuer in accordance with
each Bank’s Commitment Percentage for amounts due and unpaid from Borrower as
set forth hereinbelow; provided further that, no such reimbursement made by
Banks shall discharge Borrower’s obligations to reimburse Letter of Credit
Issuer.  All reimbursement amounts payable by any Bank under this Section 2.1(b)
shall include interest thereon at the Federal Funds Rate, from the date of the
payment of such amounts by any Letter of Credit Issuer to but excluding the date
of reimbursement by such Bank.  No Bank shall be liable for the performance or
nonperformance of the obligations of any other Bank under this paragraph.  The
reimbursement obligations of Banks under this paragraph shall continue after the
Termination Date and shall survive termination of this Agreement and the other
Loan Papers.

 

On the Effective Date, without further action by any party hereto, the
applicable Letter of Credit Issuer for each Existing Letter of Credit shall be
deemed to have granted to each Bank, and each Bank shall be deemed to have
acquired from such Letter of Credit Issuer, a participation in each of the
Existing Letters of Credit equal to such Bank’s Commitment Percentage of (a) the
aggregate amount available to be drawn under such Existing Letters of Credit and
(b) the aggregate amount of any outstanding reimbursement obligations in respect
thereof.  On and after the Effective Date, each of the Existing Letters of
Credit shall be a Letter of Credit issued hereunder.

 

Unless otherwise specified herein, the amount of a Letter of Credit at any time
shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided that, with respect to any Letter of Credit that, by its
terms or the terms of any Letter of Credit Application or other document related
to such Letter of Credit, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.

 

In the event of any conflict between the terms hereof and the terms of any
Letter of Credit Application, the terms hereof shall control.

 

(c)                                  No Bank will be obligated to lend to
Borrower or incur Letter of Credit Exposure under this Section 2.1, and Borrower
shall not be entitled to borrow hereunder or obtain Letters of Credit hereunder
(i) if the amount of the Outstanding Revolving Credit exceeds the Total
Commitment at such time, or (ii) in an amount which would cause the Outstanding
Revolving Credit to exceed the Total Commitment.  Nothing in this
Section 2.1(c) shall be deemed to limit any Bank’s obligation to reimburse any
Letter of Credit Issuer with respect to such Bank’s participation in Letters of
Credit issued by such Letter of Credit Issuer as provided in Section 2.1(b).

 

Section 2.2                                    Method of Borrowing.

 

(a)                                 In order to request any Borrowing hereunder,
Borrower shall hand deliver or telecopy to Administrative Agent a duly completed
Request for Borrowing (i) prior to 10:00 a.m. (Central time) at least one
(1) Business Day before the Borrowing Date of a proposed Adjusted Base Rate
Borrowing, and (ii) prior to 10:00 a.m. (Central time) at least three
(3) Eurodollar Business Days before the Borrowing Date of a proposed Eurodollar
Borrowing.  Each

 

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such Request for Borrowing shall be substantially in the form of Exhibit B
hereto, and shall specify:

 

(A)                               whether such Borrowing is to be an Adjusted
Base Rate Borrowing or a Eurodollar Borrowing;

 

(B)                               the Borrowing Date of such Borrowing, which
shall be a Business Day in the case of an Adjusted Base Rate Borrowing, or a
Eurodollar Business Day in the case of a Eurodollar Borrowing;

 

(C)                               the aggregate amount of such Borrowing;

 

(D)                               in the case of a Eurodollar Borrowing, the
duration of the Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period;

 

(E)                                the Outstanding Revolving Credit exposure on
the date thereof; and

 

(F)                                 the pro forma Outstanding Revolving Credit
exposure (giving effect to the requested Borrowing).

 

(b)                                 Upon receipt of a Request for Borrowing
described in Section 2.2(a), Administrative Agent shall promptly notify each
Bank (as applicable) of the contents thereof and the amount of the Borrowing to
be loaned by such Bank pursuant thereto, and such Request for Borrowing shall
not thereafter be revocable by Borrower.

 

(c)                                  Not later than 12:00 noon (Central time) on
the date of each Borrowing, each Bank shall make available its Commitment
Percentage of such Borrowing, in funds immediately available to Administrative
Agent at its address set forth on Schedule 1 hereto.  Unless Administrative
Agent determines that any applicable condition specified in Section 6.2 has not
been satisfied, Administrative Agent will make the funds so received from Banks
available to Borrower at Administrative Agent’s aforesaid address.

 

Section 2.3                                    Method of Requesting Letters of
Credit.

 

(a)                                 In order to request any Letter of Credit
hereunder, Borrower shall hand deliver or telecopy to the proposed Letter of
Credit Issuer with a copy to the Administrative Agent a duly completed Request
for Letter of Credit prior to 10:00 a.m. (Central time) at least three Business
Days before the date specified for issuance of such Letter of Credit.  Each
Request for Letters of Credit shall be substantially in the form of Exhibit C
hereto, shall be accompanied by the applicable Letter of Credit Issuer’s duly
completed and executed Letter of Credit Application and agreement and shall
specify:

 

(i)                                     the requested date for issuance of such
Letter of Credit;

 

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(ii)                                  the terms of such requested Letter of
Credit, including the name and address of the beneficiary, the stated amount,
the expiration date and the conditions under which drafts under such Letter of
Credit are to be available;

 

(iii)                               the purpose of such Letter of Credit;

 

(iv)                              the Outstanding Revolving Credit exposure on
the date thereof; and

 

(v)                                 the pro forma total Outstanding Revolving
Credit exposure (giving effect to the requested Letter of Credit issuance).

 

(b)                                 Upon receipt of a Request for Letter of
Credit described in Section 2.3(a), Administrative Agent shall promptly notify
each Bank of the contents thereof, including the amount of the requested Letter
of Credit, and such Request for Letter of Credit shall not thereafter be
revocable by Borrower.

 

(c)                                  No later than 12:00 noon (Central time) on
the date specified for the issuance of such Letter of Credit, unless
Administrative Agent notifies the applicable Letter of Credit Issuer that any
applicable condition precedent set forth in Section 6.2 has not been satisfied,
the applicable Letter of Credit Issuer will issue and deliver such Letter of
Credit pursuant to the instructions of Borrower.

 

Section 2.4                                    Notes.  Each Bank’s Commitment
Percentage of the Revolving Loans shall be evidenced by a single Note payable to
such Bank in an amount equal to such Bank’s Maximum Credit Amount.

 

Section 2.5                                    Interest Rates; Payments.

 

(a)                                 The principal amount of the Loans
outstanding from day to day which is the subject of an Adjusted Base Rate
Tranche shall bear interest (computed on the basis of actual days elapsed in a
365 or 366 day year, as applicable) at a rate per annum equal to the sum of
(i) the Adjusted Base Rate, plus (ii) the Applicable Margin; provided that in no
event shall the rate charged hereunder or under the Notes exceed the Maximum
Lawful Rate.  Interest on any portion of the principal of the Loans subject to
an Adjusted Base Rate Tranche shall be payable as it accrues on the last day of
each Fiscal Quarter.

 

(b)                                 The principal amount of the Loans
outstanding from day to day which is the subject of a Eurodollar Tranche shall
bear interest (computed on the basis of actual days elapsed and as if each
calendar year consisted of 360 days, unless such computation would exceed the
Maximum Lawful Rate in which case interest shall be computed on the basis of
actual days elapsed in a 365 or 366 day year, as applicable) for the Interest
Period applicable thereto at a rate per annum equal to the sum of (i) the
Adjusted LIBOR Rate, plus (ii) the Applicable Margin; provided, that in no event
shall the rate charged hereunder or under the Notes exceed the Maximum Lawful
Rate.  Interest on any portion of the Loans subject to a Eurodollar Tranche
having an Interest Period of six (6) or twelve (12) months shall be payable on
the last day of such Interest Period and on the last day of the initial
three-month period and, as applicable, each subsequent, three-month period
during such Interest Period.

 

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(c)                                  So long as no Default or Event of Default
shall be continuing, subject to the provisions of this Section 2.5, Borrower
shall have the option of having all or any portion of the principal outstanding
under the Loans borrowed by it be the subject of an Adjusted Base Rate Tranche
or one or more Eurodollar Tranches, which shall bear interest at rates based
upon the Adjusted Base Rate and the Adjusted LIBOR Rate, respectively (each such
option is referred to herein as an “Interest Option”); provided that each
Tranche shall be in a minimum amount of $1,000,000 and shall be in an amount
which is an integral multiple of $100,000.  Each change in an Interest Option
made pursuant to this Section 2.5(c) shall, for purposes of determining how much
of the Loans are the subject of an Adjusted Base Rate Tranche and how much of
the Loans are the subject of Eurodollar Tranches only, be deemed both a payment
in full of the portion of the principal of the Loans which was the subject of
the Adjusted Base Rate Tranche or Eurodollar Tranche from which such change was
made and a Borrowing (notwithstanding that the unpaid principal amount of the
Loans is not changed thereby) of the portion of the principal of the Loans which
is the subject of the Adjusted Base Rate Tranche or Eurodollar Tranche into
which such change was made.  Prior to the termination of each Interest Period
with respect to each Eurodollar Tranche, Borrower shall give written notice (a
“Rollover Notice”) in the form of Exhibit D attached hereto to Administrative
Agent of the Interest Option which shall be applicable to such portion of the
principal of the Loans upon the expiration of such Interest Period.  Such
Rollover Notice shall be given to Administrative Agent at least one (1) Business
Day, in the case of an Adjusted Base Rate Tranche selection and at least three
(3) Eurodollar Business Days, in the case of a Eurodollar Tranche selection,
prior to the termination of the Interest Period then expiring.  If Borrower
shall specify a Eurodollar Tranche, such Rollover Notice shall also specify the
length of the succeeding Interest Period (subject to the provisions of the
definitions of such term) selected by Borrower.  Each Rollover Notice shall be
irrevocable and effective upon notification thereof to Administrative Agent.  If
the required Rollover Notice shall not have been timely received by
Administrative Agent, Borrower shall be deemed to have elected that the
principal of any Revolving Loan subject to the Interest Period then expiring be
the subject of an Adjusted Base Rate Tranche upon the expiration of such
Interest Period, and Borrower will be deemed to have given Administrative Agent
notice of such election.  Subject to the limitations set forth in this
Section 2.5(c) on the minimum amount of Eurodollar Tranches, Borrower shall have
the right to convert all or part of the Adjusted Base Rate Tranche to a
Eurodollar Tranche by giving Administrative Agent a Rollover Notice of such
election at least three (3) Eurodollar Business Days prior to the date on which
Borrower elects to make such conversion (a “Conversion Date”).  The Conversion
Date selected by Borrower shall be a Eurodollar Business Day.  Notwithstanding
anything in this Section 2.5 to the contrary, no portion of the principal of any
Revolving Loan which is the subject of an Adjusted Base Rate Tranche may be
converted to a Eurodollar Tranche and no Eurodollar Tranche may be continued as
such when any Default or Event of Default has occurred and is continuing, but
each such Tranche shall be automatically converted to an Adjusted Base Rate
Tranche on the last day of each applicable Interest Period.  No Eurodollar
Tranche may be converted by Borrower into an Adjusted Base Rate Tranche, except
at the end of an Interest Period.  In no event shall more than ten (10) Interest
Periods be in effect with respect to the Loans at any time.

 

(d)                                 Notwithstanding anything to the contrary set
forth in Section 2.5(a) or Section 2.5(b), all overdue principal of and, to the
extent permitted by Law, overdue interest on the Loans and all other Obligations
which are not paid in full when due (whether at stated maturity, by acceleration
or otherwise), for the period from and including the due date thereof to

 

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but excluding the date the same is paid in full, shall bear interest, at a rate
per annum equal to the lesser of (i) the Default Rate, and (ii) the Maximum
Lawful Rate.  Interest payable as provided in this Section 2.5(d) shall be
payable from time to time on demand.

 

(e)                                  Administrative Agent shall determine each
interest rate applicable to the Loans in accordance with the terms hereof. 
Administrative Agent shall promptly notify Borrower and Banks by telecopy or
e-mail of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.

 

(f)                                   Notwithstanding the foregoing, if at any
time the rate of interest calculated with reference to the Adjusted Base Rate or
the LIBOR Rate hereunder (as used in this sub-section, the “contract rate”) is
limited to the Maximum Lawful Rate, any subsequent reductions in the contract
rate shall not reduce the rate of interest on the Loans below the Maximum Lawful
Rate until the total amount of interest accrued equals the amount of interest
which would have accrued if the contract rate had at all times been in effect. 
In the event that at maturity (stated or by acceleration), or at final payment
of any Note, the total amount of interest paid or accrued on such Note is less
than the amount of interest which would have accrued if the contract rate had at
all times been in effect with respect thereto, then at such time, to the extent
permitted by Law, Borrower shall pay to the holder of such Note an amount equal
to the difference between (i) the lesser of the amount of interest which would
have accrued if the contract rate had at all times been in effect and the amount
of interest which would have accrued if the Maximum Lawful Rate had at all times
been in effect, and (ii) the amount of interest actually paid on such Note.

 

Section 2.6                                    Mandatory Prepayments.

 

(a)                                 Promptly after the consummation by any
Credit Party of any Asset Disposition that creates a Borrowing Base Deficiency
pursuant to Section 4.6, Borrower shall apply a portion of the Net Cash Proceeds
equal to such Borrowing Base Deficiency as a mandatory prepayment on the Loans. 
Promptly after the consummation by any Credit Party of any Asset Disposition
that requires a prepayment pursuant to Section 9.5(c), Borrower shall prepay the
Loans in accordance therewith.  Notwithstanding the foregoing, if a Default or
Event of Default exists on the date of the consummation of any Asset
Disposition, all Net Cash Proceeds from any such Asset Disposition shall be
applied as a mandatory prepayment on the Loans in accordance with
Section 3.2(c).

 

(b)                                 Upon any reduction of the Aggregate Maximum
Credit Amount or the Aggregate Elected Commitment Amount that results in the
Outstanding Revolving Credit exceeding the Total Commitment, Borrower shall make
a mandatory prepayment to the extent required under Section 2.9.

 

(c)                                  Promptly after any automatic adjustment to
the Borrowing Base pursuant to Section 2.15 that creates a Borrowing Base
Deficiency, Borrower shall effect a mandatory prepayment of the Loans equal to
such Borrowing Base Deficiency.

 

Section 2.7                                    Voluntary Prepayments.  Borrower
may, subject to Section 3.3 and the other provisions of this Agreement, upon
(a) same-Business Day advance notice (no later than 11:00 a.m. (Central time))
to Administrative Agent with respect to Adjusted Base Rate

 

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Borrowings, and (b) three (3) Business Days advance notice (no later than
11:00 a.m. (Central time)) to Administrative Agent with respect to Eurodollar
Borrowings, prepay the principal of the Loans in whole or in part.  Any partial
prepayment shall be in a minimum amount of $100,000 and shall be in an integral
multiple of $100,000.

 

Section 2.8                                    Mandatory Termination of
Commitments; Termination Date and Maturity.  The Total Commitment (and the
Commitment of each Bank) shall terminate on the Termination Date.  The
outstanding principal balance of the Loans, all accrued but unpaid interest
thereon, and all other Obligations shall be due and payable in full on the
Termination Date.

 

Section 2.9                                    Voluntary Reduction of Aggregate
Maximum Credit Amount.  Borrower may, by notice to Administrative Agent three
(3) Business Days prior to the effective date of any such reduction, permanently
reduce the Aggregate Maximum Credit Amount (and thereby permanently reduce the
Maximum Credit Amount and, if applicable, the Commitment of each Bank ratably in
accordance with such Bank’s Commitment Percentage); provided that any reduction
shall be in amounts not less than $500,000 or any larger multiple of $500,000 or
shall be in an amount equal to the entire Aggregate Maximum Credit Amount.  On
the effective date of any such reduction in the Aggregate Maximum Credit Amount
and on the effective date of any reduction in the Aggregate Elected Commitment
Amount pursuant to Section 2.16(f), Borrower shall, to the extent required as a
result of any such reduction, make a principal payment on the Loans (together
with accrued interest thereon) in an amount sufficient to cause the Outstanding
Revolving Credit to be equal to or less than the Total Commitment as thereby
reduced (and Administrative Agent shall distribute to each Bank in like funds
that portion of any such payment as is required to cause the principal balance
of the Loans held by such Bank to be not greater than its Commitment as thereby
reduced), and any such payment shall be accompanied by amounts due under
Section 3.3.  Notwithstanding the foregoing, Borrower shall not be permitted to
voluntarily reduce the Aggregate Maximum Credit Amount to an amount less than
the aggregate Letter of Credit Exposure of all Banks. Upon any reduction of the
Aggregate Maximum Credit Amount that results in the Aggregate Maximum Credit
Amount being less than the Aggregate Elected Commitment Amount, the Aggregate
Elected Commitment Amount shall be automatically reduced (ratably among the
Banks) so that it equals the Aggregate Maximum Credit Amount as so reduced.

 

Section 2.10                             Application of Payments.  Each
repayment pursuant to Section 2.6, Section 2.7, Section 2.9 and Section 4.4
shall be made together with accrued interest to the date of payment, and shall
be applied to payment of the Loans in accordance with Section 3.2 and the other
provisions of this Agreement.

 

Section 2.11                             Commitment Fee.  On the Termination
Date, and on the last day of each Fiscal Quarter prior to the Termination Date,
and in the event the Commitments are terminated in their entirety prior to the
Termination Date, on the date of such termination, commencing with the Fiscal
Quarter ending on December 31, 2013, Borrower shall pay to Administrative Agent,
for the ratable benefit of each Bank based on each Bank’s Commitment Percentage,
a commitment fee equal to the Commitment Fee Percentage (computed on the basis
of actual days elapsed and as if each calendar year consisted of 360 days) of
the average daily Revolving Availability for the Fiscal Quarter (or portion
thereof) then ended; provided that, the

 

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aforementioned commitment fee shall cease to accrue on the unfunded portion of
the Commitment of any Defaulting Bank.

 

Section 2.12                             Letter of Credit Fees and Letter of
Credit Fronting Fees.  On the Termination Date, and on the last day of each
Fiscal Quarter prior to the Termination Date, commencing with the Fiscal Quarter
ending on December 31, 2013, and, in the event the Commitments are terminated in
their entirety prior to the Termination Date, on the date of such termination,
Borrower shall pay to Administrative Agent (to be distributed by Administrative
Agent in accordance with Section 2.1(b)) (a) the Letter of Credit Fee which
accrued during such Fiscal Quarter (or portion thereof) and (b) the Letter of
Credit Fronting Fee which accrued during such Fiscal Quarter (or portion
thereof), in each case computed on the basis of actual days elapsed and as if
each calendar year consisted of 360 days.

 

Section 2.13                             Agency and Other Fees.  Borrower shall
pay (a) to Administrative Agent and its Affiliates such fees and other amounts
as Borrower shall be required to pay to such Persons from time to time pursuant
to the Fee Letter and (b) to Banks such fees as shall have been separately
agreed upon in writing in the amounts and at the times so specified.

 

Section 2.14                             Loans and Borrowings Under Existing
Credit Agreement.  On the Effective Date:

 

(a)                                 Borrower shall pay all accrued and unpaid
commitments fees, break funding fees (if any) and all other fees that are
outstanding under the Existing Credit Agreement for the account of each “Bank”
under the Existing Credit Agreement;

 

(b)                                 each “Adjusted Base Rate Borrowing”
outstanding under the Existing Credit Agreement shall be extended and renewed so
as to continue as a new Adjusted Base Rate Borrowing under this Agreement;

 

(c)                                  each “Eurodollar Borrowing” outstanding
under the Existing Credit Agreement shall be deemed repaid on the Effective Date
and funded as a new Eurodollar Borrowing under this Agreement;

 

(d)                                 each Existing Letter of Credit shall
constitute a Letter of Credit in accordance with Section 2.1 hereof; and

 

(e)                                  the Existing Credit Agreement and the
commitments thereunder shall be superseded by this Agreement and such
commitments shall terminate.

 

It is the intent of the parties hereto that (i) this Agreement not constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement or evidence repayment of any such obligations and liabilities and that
this Agreement amend and restate in its entirety the Existing Credit Agreement
and re-evidence the obligations of Predecessor Borrower outstanding thereunder
as obligations of Borrower assumed by operation of law as a result of the
Corporate Reorganization and (ii) the Liens securing the “Obligations” under and
as defined in the Existing Credit Agreement and granted pursuant to the “Loan
Papers” as defined in the Existing Credit Agreement and the liabilities and
obligations of Predecessor Borrower shall not be extinguished,

 

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but shall be carried forward, and such Liens shall secure such “Obligations”
under the Existing Credit Agreement, in each case, as renewed, amended, restated
and modified hereby.

 

Section 2.15                             Automatic Debt Issuance Borrowing Base
Adjustments.  In addition to the redeterminations of the Borrowing Base pursuant
to Section 4.2, Section 4.3, and Section 4.6 and adjustments of the Borrowing
Base pursuant to Section 8.11, and notwithstanding anything to the contrary
contained herein, if the Borrower issues any Senior Notes on any Debt Issuance
Date, to the extent any portion of such Senior Notes does not constitute
Permitted Refinancing Debt, the Borrowing Base shall automatically reduce on
such Debt Issuance Date by an amount equal to twenty-five percent (25%) of the
aggregate stated principal amount of any Senior Notes issued by the Credit
Parties on such Debt Issuance Date (other than the portion of such Senior Notes
constituting Permitted Refinancing Debt).  For the avoidance of doubt, the
stated amount of the portion of any Senior Notes that constitutes Permitted
Refinancing Debt shall not be included for purposes of determining the reduction
in the Borrowing Base required by this Section 2.15 and only the stated amount
of the portion of such Senior Notes not constituting Permitted Refinancing Debt
shall be included in calculating the adjustment required by this Section 2.15. 
For the purposes of this Section 2.15, if any such Senior Notes are issued at a
discount or otherwise sold for less than “par”, the reduction shall be
calculated based upon the stated principal amount without reference to such
discount.

 

Section 2.16                             Increases, Reductions and Terminations
of Aggregate Elected Commitment Amount.

 

(a)                                 Subject to the conditions set forth in
Section 2.16(b), Borrower may increase the Aggregate Elected Commitment Amount
then in effect by increasing the Elected Commitment of a Bank or by causing a
Person that is acceptable to Administrative Agent that at such time is not a
Bank to become a Bank (any such Person that is not at such time a Bank and
becomes a Bank, an “Additional Bank”).  Notwithstanding anything to the contrary
contained in this Agreement, in no case shall an Additional Bank be Borrower, an
Affiliate of Borrower or a natural person.

 

(b)                                 Any increase in the Aggregate Elected
Commitment Amount shall be subject to the following additional conditions
(provided that the conditions set forth in the following clauses (i) and
(ii) shall not apply in connection with any increase in the Aggregate Elected
Commitment Amount made substantially contemporaneously with any redetermination
or other adjustment to the Borrowing Base hereunder):

 

(i)                                     such increase shall not be less than
$50,000,000 unless Administrative Agent otherwise consents, and no such increase
shall be permitted if after giving effect thereto the Aggregate Elected
Commitment Amount exceeds the Borrowing Base then in effect (for the sake of
clarity, all increases in the Elected Commitments of the respective Banks and
any Additional Banks effective on a single date shall be included in the
increase of the Aggregate Elected Commitment Amount for purposes of this
Section 2.16(b)(i));

 

(ii)                                  following any Periodic Determination,
Borrower may not increase the Aggregate Elected Commitment Amount more than once
before the next Periodic

 

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Determination (for the sake of clarity, all increases in the Aggregate Elected
Commitment Amount effective on a single date shall be deemed a single increase
in the Aggregate Elected Commitment Amount for purposes of this
Section 2.16(b)(ii));

 

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

 

(iv)                              on the effective date of such increase, no
Eurodollar Borrowings shall be outstanding or if any Eurodollar Borrowings are
outstanding, then the effective date of such increase shall be the last day of
the Interest Period in respect of such Eurodollar Borrowings unless Borrower
pays compensation required by Section 3.3;

 

(v)                                 no Bank’s Elected Commitment may be
increased without the consent of such Bank;

 

(vi)                              if Borrower elects to increase the Aggregate
Elected Commitment Amount by increasing the Elected Commitment of a Bank,
Borrower and such Bank shall execute and deliver to Administrative Agent a
certificate substantially in the form of Exhibit J (an “Elected Commitment
Increase Certificate”); and

 

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

 

(c)                                  Subject to acceptance and recording thereof
pursuant to Section 2.16(d), from and after the effective date specified in the
Elected Commitment Increase Certificate or the Additional Bank Certificate (or,
in each case, if any Eurodollar Borrowings are outstanding, then the last day of
the Interest Period in respect of such Eurodollar Borrowings, unless Borrower
has paid compensation required by Section 3.3):  (i) the amount of the Aggregate
Elected Commitment Amount shall be increased as set forth therein, and (ii) in
the case of an Additional Bank Certificate, any Additional Bank party thereto
shall be a party to this Agreement and have the rights and obligations of a Bank
under this Agreement and the other Loan Papers.  In addition, the Bank or the
Additional Bank, as applicable, shall purchase a pro rata portion of the
outstanding Loans (and participation interests in Letters of Credit) of each of
the other Banks (and such Banks hereby agree to sell and to take all such
further action to effectuate such sale) such that each Bank (including any
Additional Bank, if applicable) shall hold its Commitment Percentage of the
outstanding Loans (and participation interests) after giving effect to the
increase in the Aggregate Elected Commitment Amount (and the resulting
modifications of each Bank’s Maximum Credit Amount pursuant to Section 2.16(e)).

 

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(d)                                 Upon its receipt of a duly completed Elected
Commitment Increase Certificate or an Additional Bank Certificate, executed by
Borrower and the Bank or by Borrower and the Additional Bank party thereto, as
applicable, the processing and recording fee referred to in Section 2.16(b), the
Administrative Questionnaire referred to in Section 2.16(b) and the
break-funding payments from Borrower, if any, required by Section 3.3,
Administrative Agent shall accept such Elected Commitment Increase Certificate
or Additional Bank Certificate and record the information contained therein in
the Register required to be maintained by Administrative Agent pursuant to
Section 14.8(d).  No increase in the Aggregate Elected Commitment Amount shall
be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this Section 2.16(d).

 

(e)                                  Upon any increase in the Aggregate Elected
Commitment Amount pursuant to this Section 2.16, (i) each Bank’s Maximum Credit
Amount shall be automatically deemed amended to the extent necessary so that
each Bank’s Commitment Percentage equals the percentage of the Aggregate Elected
Commitment Amount represented by such Bank’s Elected Commitment, in each case
after giving effect to such increase, and (ii) Schedule 1 to this Agreement
shall be deemed amended to reflect the Elected Commitment of any Bank (including
any Additional Bank) whose Elected Commitment is increased, any changes in the
Banks’ Maximum Credit Amounts pursuant to the foregoing clause (i), and any
resulting changes in the Banks’ respective Commitment Percentages.

 

(f)                                   Borrower may from time to time terminate
or reduce the Aggregate Elected Commitment Amount; provided that (i) each
reduction of the Aggregate Elected Commitment Amount shall be in an amount that
is an integral multiple of $1,000,000 and not less than $1,000,000 and
(ii) Borrower shall not reduce the Aggregate Elected Commitment Amount if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.9, the total Outstanding Revolving Credit would exceed the Aggregate
Elected Commitment Amount.

 

(g)                                  Borrower shall notify Administrative Agent
of any election to terminate or reduce the Aggregate Elected Commitment Amount
under Section 2.16(f) at least three Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof.  Promptly following receipt of any notice, Administrative Agent
shall advise the Banks of the contents thereof.  Each notice delivered by
Borrower pursuant to this Section 2.16(g) shall be irrevocable.  Any termination
or reduction of the Aggregate Elected Commitment Amount shall be permanent and
may not be reinstated, except pursuant to Section 2.16(a).  Each reduction of
the Aggregate Elected Commitment Amount shall be made ratably among the Banks in
accordance with each Bank’s Commitment Percentage.

 

(h)                                 Upon any redetermination or other adjustment
in the Borrowing Base pursuant to the Credit Agreement that would otherwise
result in the Borrowing Base becoming less than the Aggregate Elected Commitment
Amount, the Aggregate Elected Commitment Amount shall be automatically reduced
(ratably among the Banks in accordance with each Bank’s Commitment Percentage)
so that they equal such redetermined Borrowing Base (and Schedule 1 shall be
deemed amended to reflect such amendments to each Bank’s Elected Commitment and
the Aggregate Elected Commitment Amount).

 

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ARTICLE III
GENERAL PROVISIONS

 

Section 3.1                                    The Notes.  Simultaneously with
the execution of this Agreement, Administrative Agent shall deliver to each Bank
the Note or Notes payable to such Bank.  Each Bank may record (and prior to any
transfer of its Note shall record) on the schedule attached to its Note
appropriate notations to evidence the date and amount of each advance of funds
made by it in respect of any Borrowing, the Interest Period (if any) applicable
thereto, and the date and amount of each payment of principal received by such
Bank with respect to the Loans; provided that the failure by any Bank to so
record its Note shall not affect the liability of Borrower for the repayment of
all amounts outstanding under such Notes together with interest thereon.  Each
Bank is hereby irrevocably authorized by Borrower to record its Note and to
attach to and make a part of any Note a continuation of any such schedule as
required.

 

Section 3.2                                    General Provisions as to
Payments.

 

(a)                                 Borrower shall make each payment of
principal of, and interest on, the Loans and all fees payable by Borrower
hereunder not later than 10:00 a.m. (Central time) on the date when due, in
funds immediately available to Administrative Agent at its address set forth on
Schedule 1 hereto.  Administrative Agent will promptly (and if such payment is
received by Administrative Agent by 11:00 a.m. (Central time), and otherwise if
reasonably possible, on the same Business Day) distribute to each Bank its
Commitment Percentage of each such payment received by Administrative Agent for
the account of Banks.  Whenever any payment of principal of, or interest on,
that portion of the Loans subject to an Adjusted Base Rate Tranche or of fees
shall be due on a day which is not a Business Day, the date for payment thereof
shall be extended to the next succeeding Business Day (subject to the definition
of Interest Period).  Whenever any payment of principal of, or interest on, that
portion of the Loans subject to a Eurodollar Tranche shall be due on a day which
is not a Eurodollar Business Day, the date for payment thereof shall be extended
to the next succeeding Eurodollar Business Day (subject to the definition of
Interest Period).  If the date for any payment of principal is extended by
operation of Law or otherwise, interest thereon shall be payable for such
extended time.  Borrower hereby authorizes Administrative Agent to charge from
time to time against Borrower’s account or accounts with Administrative Agent
any amount then due by Borrower.  All amounts payable by Borrower under the Loan
Papers (whether principal, interest, fees, expenses, or otherwise) shall be paid
in full, without set-off or counterclaim.

 

(b)                                 Prior to the occurrence of an Event of
Default, all principal payments received by Banks with respect to the Loans
shall be applied as instructed by Borrower and, in the absence of such
instructions, first to Eurodollar Tranches outstanding under the Revolving Loans
with Interest Periods ending on the date of such payment, then to Adjusted Base
Rate Tranches, then to Eurodollar Tranches outstanding under the Revolving Loans
next maturing, and then to Eurodollar Tranches outstanding under the Revolving
Loans next maturing until all such Eurodollar Tranches are repaid until such
principal payment is fully applied, with such adjustments in such order of
payment as Administrative Agent shall specify in order that each Bank receives
its ratable share of each such payment.

 

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(c)                                  After the occurrence of an Event of
Default, all amounts collected or received by Administrative Agent or any Bank
from any Credit Party or in respect of any of the assets of any Credit Party
shall be applied in the following order:

 

(i)                                     first, to the payment of all fees,
indemnities, expenses and other amounts payable to the Administrative Agent
(including fees, expenses, and disbursements of counsel to Administrative
Agent);

 

(ii)                                  second, to the payment of all fees,
indemnities, expenses and other amounts (other than principal, interest, and
Letter of Credit Fees) payable to Banks (including fees, expenses, and
disbursements of counsel to Banks), ratably among them in proportion to the
respective amounts described in this clause second payable to them;

 

(iii)                               third, to the reimbursement of any advances
made by Banks to effect performance of any unperformed covenants of any Credit
Party under any of the Loan Papers;

 

(iv)                              fourth, to payment of that portion of the
Obligations constituting (A) accrued and unpaid Letter of Credit Fees and
interest on the Revolving Loans and other Obligations, (B) unpaid principal of
the Revolving Loans in the order specified in Section 3.2(b), (C) any amounts
funded but unreimbursed under Letters of Credit, and (D) amounts owing under
Hedge Agreements (to the extent such amounts are Obligations), ratably among the
Banks, the Letter of Credit Issuer, and the holders of such Obligations under
Hedge Agreements in proportion to the respective amounts described in this
clause fourth payable to them;

 

(v)                                 fifth, to establish the deposits required by
Section 2.1(b) if any; and

 

(vi)                              last, the balance, if any, after all of the
Obligations have been indefeasibly paid in full, to Borrower or as otherwise
required by Law.

 

All payments received by a Bank after the occurrence of an Event of Default for
application to the principal of the Loans pursuant to this Section 3.2(c) shall
be applied by such Bank in the manner provided in Section 3.2(b).

 

Notwithstanding the foregoing, amounts received from Borrower or any Guarantor
that is not an Eligible Contract Participant shall not be applied to any
Excluded Swap Obligations (it being understood, that in the event that any
amount is applied to Obligations other than Excluded Swap Obligations as a
result of this clause, Administrative Agent shall make such adjustments as it
determines are appropriate to distributions pursuant to clause fourth above from
amounts received from Eligible Contract Participants to ensure, as nearly as
possible, that the proportional aggregate recoveries with respect to Obligations
described in clause fourth above by the holders of any Excluded Swap Obligations
are the same as the proportional aggregate recoveries with respect to other
Obligations pursuant to clause fourth above).

 

Section 3.3                                    Funding Losses.  If Borrower
makes or is deemed to make any payment of principal subject to a Eurodollar
Tranche (whether pursuant to Section 2.6, Section 2.7, Section

 

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2.8, Section 2.9, Section 4.4, Article XI or Article XIII, whether as a
voluntary or mandatory prepayment or otherwise, and including due to
reallocation of Loans due to syndication during the period of 180 days after the
Effective Date) on any day other than the last day of an Interest Period
applicable thereto, or if Borrower fails to borrow any Eurodollar Borrowing,
after notice has been given to any Bank in accordance with Section 2.2, Borrower
shall reimburse each Bank on demand for any resulting loss or expense incurred
by it, including any loss incurred in obtaining, liquidating or employing
deposits from third parties, or any loss arising from the reemployment of funds
at rates lower than the cost to such Bank of such funds and related costs, which
in the case of the payment or prepayment prior to the end of the Interest Period
for any Eurodollar Tranche, shall include the amount, if any, by which (a) the
interest which such Bank would have received absent such payment or prepayment
for the applicable Interest Period exceeds (b) the interest which such Bank
would receive if its Commitment Percentage of the amount of such Eurodollar
Borrowing were deposited, loaned, or placed by such Bank in the interbank
eurodollar market on the date of such payment or prepayment for the remainder of
the applicable Interest Period.  Such Bank shall promptly deliver to Borrower
and Administrative Agent a certificate as to the amount of such loss or expense,
which certificate shall be conclusive in the absence of manifest error.

 

Section 3.4                                    Foreign Banks, Participants, and
Assignees.  Each Bank, Participant (by accepting a participation interest under
this Agreement), and Assignee (by executing an Assignment and Assumption
Agreement) that is not organized under the Laws of the United States of America
or one of its states (a) represents to Administrative Agent and Borrower that
(i) no Taxes are required to be withheld by Administrative Agent or Borrower
with respect to any payments to be made to it in respect of the Obligations, and
(ii) it has furnished to Administrative Agent and Borrower two (2) duly
completed copies of either U.S. Internal Revenue Service Form W-8, or other form
acceptable to Administrative Agent that entitles it to exemption from U.S.
federal withholding Tax on all interest payments under the Loan Papers, and
(b) covenants to (i) provide Administrative Agent and Borrower a new Form W-8,
or other form acceptable to Administrative Agent upon the expiration or
obsolescence of any previously delivered form according to applicable Laws and
regulations, duly executed and completed by it, and (ii) comply from time to
time with all applicable Laws and regulations with regard to the withholding Tax
exemption.  If any of the foregoing is not true or the applicable forms are not
provided, then Borrower and Administrative Agent (but without duplication) may
deduct and withhold from interest payments under the Loan Papers any United
States federal-income Tax at the maximum rate under the Code.  Notwithstanding
the foregoing, the representation regarding the exemption from withholding Taxes
and delivery of forms and the covenant with respect to delivery of new forms and
compliance with applicable Laws and regulations shall not apply with respect to
FATCA.

 

Section 3.5                                    Non-Receipt of Funds by
Administrative Agent.  Unless Administrative Agent shall have been notified by a
Bank or Borrower (as used in this Section, “Payor”) prior to the date on which
such Bank is to make payment to Administrative Agent hereunder or Borrower is to
make a payment to Administrative Agent for the account of one or more Banks, as
the case may be (as used in this Section, such payment being herein called the
“Required Payment”), which notice shall be effective upon receipt, that Payor
does not intend to make the Required Payment to Administrative Agent,
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make

 

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the amount thereof available to the intended recipient on such date and, if
Payor has not in fact made the Required Payment to Administrative Agent, (a) the
recipient of such payment shall, on demand, pay to Administrative Agent the
amount made available to it together with interest thereon in respect of the
period commencing on the date such amount was so made available by
Administrative Agent until the date Administrative Agent recovers such amount at
a rate per annum equal to the Adjusted Base Rate then in effect for such period,
and (b) Administrative Agent shall be entitled to offset against any and all
sums to be paid to such recipient, the amount calculated in accordance with the
foregoing clause (a).

 

Section 3.6                                    Defaulting Banks.

 

(a)                                 Notwithstanding anything to the contrary
contained herein, the Maximum Credit Amount of a Defaulting Bank shall not be
included in determining whether all Banks or the Required Banks have taken or
may take any action hereunder (including approval of any redetermination of the
Borrowing Base pursuant to Article IV and any consent to any amendment or waiver
pursuant to Section 14.2); provided that, any waiver, amendment or modification
requiring the consent of all Banks or each affected Bank which affects such
Defaulting Bank differently than other affected Banks shall require the consent
of such Defaulting Bank; and provided further that in no event shall (i) the
Commitment, Elected Commitment or Maximum Credit Amount of any Defaulting Bank
be increased without the consent of such Defaulting Bank, or (ii) the
Termination Date or any date fixed for any payment of principal of or interest
on the Loan or any fees hereunder be postponed without the consent of such
Defaulting Bank.

 

(b)                                 If any Bank shall fail to make any payment
referenced in clause (a) of the definition of “Defaulting Bank”, then the
Administrative Agent may, in its discretion and notwithstanding any contrary
provision hereof, (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Bank and for the benefit of the
Administrative Agent or any Letter of Credit Issuer to satisfy such Bank’s
obligations hereunder until all such unsatisfied obligations are fully paid,
and/or (ii) hold any such amounts in a segregated account as cash collateral
for, and application to, any future funding obligations of such Bank hereunder;
in the case of each of (i) and (ii) above, in any order as determined by the
Administrative Agent in its discretion.

 

(c)                                  Borrower shall not be obligated to pay the
Administrative Agent any Defaulting Bank’s ratable share of the fees described
in Sections 2.11, 2.12 or 2.13 (notwithstanding anything to the contrary in such
sections) for the period commencing on the day such Defaulting Bank becomes a
Defaulting Bank and continuing for so long as such Bank continues to be a
Defaulting Bank.

 

ARTICLE IV
BORROWING BASE

 

Section 4.1                                    Reserve Reports; Proposed
Borrowing Base.  As soon as available and in any event by March 31 and
September 30 of each year, commencing March 31, 2014, Borrower shall deliver to
each Bank a Reserve Report prepared as of the immediately preceding December 31
and June 30, respectively.  Simultaneously with the delivery to Administrative

 

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Agent and each Bank of each Reserve Report, Borrower shall notify Administrative
Agent of the Borrowing Base which Borrower requests become effective for the
period commencing on the next Determination Date.

 

Section 4.2                                    Periodic Determinations of the
Borrowing Base; Procedures and Standards.  Based in part on the Reserve Report
made available to Banks pursuant to Section 4.1, Banks shall redetermine the
Borrowing Base on or prior to the next Determination Date or such date promptly
thereafter as reasonably possible (i) based on the engineering and other
information available to Banks, and (ii) in accordance with, and consistent
with, the subsequent provisions of this Section 4.2.  Any Borrowing Base which
becomes effective as a result of any Determination of the Borrowing Base shall
be subject to the following restrictions:  (A) such Borrowing Base shall not
exceed the Borrowing Base requested by Borrower pursuant to Section 4.1 or
Section 4.3 (as applicable), (B) such Borrowing Base shall not exceed the
Aggregate Maximum Credit Amount then in effect, (C) to the extent such Borrowing
Base represents an increase from the Borrowing Base in effect prior to such
Determination such Borrowing Base shall be approved by all Banks, and (D) any
Borrowing Base which represents a decrease in the Borrowing Base in effect prior
to such Determination, or a reaffirmation of such prior Borrowing Base, shall
require approval of Required Banks.  The Administrative Agent shall propose such
redetermined Borrowing Base to Banks within fifteen (15) days following receipt
by the Banks of a Reserve Report (or such date promptly thereafter as reasonably
practicable).  After having received notice of such proposal by the
Administrative Agent, Required Banks (or all Banks in the event of a proposed
increase) shall have fifteen (15) days to agree or disagree with such proposal. 
If at the end of such 15-day period, any Bank has not communicated its approval
or disapproval, such silence shall be deemed an approval.  If sufficient Banks
notify Administrative Agent within such 15-day period of their disapproval such
that Required Banks have neither approved nor been deemed to approve such
Borrowing Base (or, in the event of a proposed increase, any Bank notifies
Administrative Agent within such 15-day period of its disapproval), Required
Banks (or all Banks in the event of a proposed increase) shall, within a
reasonable period of time, agree on a new Borrowing Base.

 

In taking the above actions, the Administrative Agent and the Banks shall act in
accordance with their normal and customary procedures for evaluating oil and gas
reserves and other related assets as such exist at that particular time and will
otherwise act in their sole discretion.  It is further acknowledged and agreed
that each Bank may consider such other credit factors as it deems appropriate
which are consistent with its normal and customary procedures for evaluating oil
and gas reserves and shall have no obligation in connection with any
Determination to approve any change in the Borrowing Base in effect prior to
such Determination.  Promptly following any Determination of the Borrowing Base,
Administrative Agent shall notify Borrower of the amount of the Borrowing Base
as redetermined, which Borrowing Base shall be effective as of the date
specified in such notice, and shall remain in effect for all purposes of this
Agreement until the next Determination.

 

Section 4.3                                    Special Determination of
Borrowing Base.  In addition to the redeterminations of the Borrowing Base
pursuant to Section 4.2 and Section 4.6, and adjustments of the Borrowing Base
pursuant to Section 2.15 and Section 8.11, Borrower and Required Banks may each
request Special Determinations of the Borrowing Base from time to time; provided
that Required Banks may not request more than one Special Determination

 

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between Periodic Determinations of the Borrowing Base, and Borrower may not
request more than two Special Determinations in any Fiscal Year.  In addition,
Borrower may request Special Determinations from time to time as significant
development, exploration or acquisition opportunities are presented to
Borrower.  In the event Required Banks request such a Special Determination,
Administrative Agent shall promptly deliver notice of such request to Borrower
and Borrower shall, within 20 days following the date of such request, deliver
to Banks a Reserve Report prepared as of the last day of the calendar month
preceding the date of such request.  In the event Borrower requests a Special
Determination, Borrower shall deliver written notice of such request to Banks
which shall include (i) a Reserve Report prepared as of a date not more than 30
days prior to the date of such request, and (ii) the amount of the Borrowing
Base requested by Borrower and to become effective on the Determination Date
applicable to such Special Determination.  Upon receipt of such Reserve Report,
Administrative Agent shall, subject to approval of Required Banks, or all Banks
in the event of a proposed increase in the Borrowing Base, redetermine the
Borrowing Base in accordance with the procedure set forth in Section 4.2 which
Borrowing Base shall become effective on the Determination Date applicable to
such Special Determination (or as soon thereafter as Administrative Agent and
Required Banks, or all Banks in the event of a proposed increase in the
Borrowing Base, approve such Borrowing Base and provide notice thereof to
Borrower).

 

Section 4.4                                    Borrowing Base Deficiency.  If a
Borrowing Base Deficiency exists at any time (other than as a result of any
reduction and/or redetermination of the Borrowing Base pursuant to Section 2.15
and/or Section 4.6), Borrower shall, within 30 days following notice thereof
from Administrative Agent, provide written notice (the “Election Notice”) to
Administrative Agent stating the action which Borrower proposes to take to
remedy such Borrowing Base Deficiency, and Borrower shall thereafter, at its
option, do one or a combination of the following:  (a) within 45 days following
the delivery of such Election Notice, make a prepayment of principal on the
Revolving Loans in an amount sufficient to eliminate 50% of such Borrowing Base
Deficiency, with a payment or payments to eliminate the remainder of such
Borrowing Base Deficiency due within 90 days following the delivery of such
Election Notice, and if such Borrowing Base Deficiency cannot be eliminated by
prepaying the Revolving Loans in full (as a result of outstanding Letter of
Credit Exposure), Borrower shall also at such time or times deposit with
Administrative Agent sufficient funds to be held by Administrative Agent as
security for outstanding Letter of Credit Exposure in the manner contemplated by
Section 2.1(b) as necessary to eliminate the required portions of such Borrowing
Base Deficiency on the dates required therefor, (b) within 90 days following the
delivery of such Election Notice, submit additional oil and gas properties owned
by Borrower and its Subsidiaries for consideration in connection with the
determination of the Borrowing Base which Administrative Agent and Required
Banks deem sufficient in their sole discretion to eliminate such Borrowing Base
Deficiency, or (c) eliminate such deficiency by making six consecutive mandatory
prepayments of principal on the Revolving Loans, each of which shall be in the
amount of one sixth of the amount of such Borrowing Base Deficiency, commencing
on the date that is 30 days after notice of such Borrowing Base Deficiency is
delivered to Borrower and continuing thereafter on each monthly anniversary of
such first payment, and in connection therewith, Borrower shall dedicate a
sufficient amount (as determined by Administrative Agent) of the monthly cash
flow from Borrower’s oil and gas properties to satisfy such payments. 
Notwithstanding the foregoing, upon any reduction and/or redetermination of the
Borrowing Base pursuant to Section 4.6 which results in a Borrowing Base
Deficiency (or increase in any

 

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existing Borrowing Base Deficiency), Borrower shall promptly, but in all events
within two Business Days after such Borrowing Base Deficiency first occurs (or
earlier if required by such sections), make a mandatory prepayment of principal
on the Revolving Loans and/or cash collateralize the Letter of Credit Exposure
in accordance with Section 2.1(b), as applicable, in an amount sufficient to
eliminate such Borrowing Base Deficiency (or increase in any previously existing
Borrowing Base Deficiency).

 

Section 4.5                                    Initial Borrowing Base.  Subject
to the terms of Section 4.6 and Section 8.11, the Borrowing Base in effect
during the period from the Effective Date until the date of the first Special or
Periodic Determination after the Closing Date shall be the Initial Borrowing
Base.

 

Section 4.6                                    Asset Disposition Adjustment.  In
addition to the redeterminations of the Borrowing Base pursuant to Section 4.2
and Section 4.3 and adjustments of the Borrowing Base pursuant to Section 8.11,
simultaneously with the completion by any Credit Party of any Asset Disposition
(other than any Asset Disposition in connection with the termination or other
monetization, in whole or in part, of the Specified Oil and Gas Hedge
Transaction, whether at or before its scheduled maturity), the assets and/or
Borrowing Base Hedges subject to which, when aggregated with the assets and/or
Borrowing Base Hedges subject to all other Asset Dispositions (other than any
Asset Disposition in connection with the termination or other monetization, in
whole or in part, of the Specified Oil and Gas Hedge Transaction, whether at or
before its scheduled maturity) since the Determination Date of the Borrowing
Base then in effect, have a fair market value in excess of 5% of the Borrowing
Base then in effect, the Borrowing Base shall be automatically reduced as set
forth in this Section 4.6; provided, that, for purposes of this Section 4.6, a
termination or other monetization, in whole or in part, of an Oil and Gas Hedge
Transaction shall be deemed not to be an “Asset Disposition” to the extent that
(x) such Oil and Gas Hedge Transaction is novated, in whole or in part, from the
existing counterparty to another counterparty, with the Borrower or the
applicable Credit Party being the “remaining party” for purposes of such
novation, or (y) upon its termination, in whole or in part, it is replaced, in a
substantially contemporaneous transaction, with one or more Oil and Gas Hedge
Transactions covering Hydrocarbons of the type that were hedged pursuant to such
replaced Oil and Gas Hedge Transaction with notional volumes, prices and tenors
not less favorable to the Borrower or such Credit Party as those set forth in
such replaced Oil and Gas Hedge Transaction, and without cash payments to any
Credit Party in connection therewith (except to the extent that such cash
payments are paid to the counterparties on such replacement transactions upon
the relevant Credit Party entering into such replacement transactions).  Such
reduction shall be in an amount equal to the sum of (a) the net value given to
the Borrowing Base Properties and/or Borrowing Base Hedges (to the extent so
terminated and not so replaced) subject to such Asset Disposition in the
Borrowing Base then in effect (taking into consideration any negative Borrowing
Base value attributed to any out-of-the money Borrowing Base Hedges so
terminated), and (b) the net reduction in the Borrowing Base value realized or
resulting from any such replacement of Borrowing Base Hedges (taking into
consideration any negative Borrowing Base value attributed to any
out-of-the-money Borrowing Base Hedges so replaced).  For the sake of clarity,
the termination or other monetization of a Borrowing Base Hedge at its scheduled
maturity does not constitute an Asset Disposition and notwithstanding anything
to the contrary in this Section 4.6, the termination or monetization of a
Borrowing Base Hedge at its scheduled maturity shall not result in any reduction
of the Borrowing Base.

 

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ARTICLE V
COLLATERAL AND GUARANTIES

 

Section 5.1                                    Security.

 

(a)                                 The Obligations shall be secured by first
and prior Liens covering and encumbering (i) the Mineral Interests owned by
Borrower and its Subsidiaries specified by Administrative Agent or Required
Banks which shall in all events include not less than the Required Reserve Value
of all Proved Mineral Interests owned by Borrower and its Subsidiaries on and
after the Closing Date, (ii) one hundred percent (100%) of the issued and
outstanding Equity of each existing and future Subsidiary of Borrower, and
(iii) substantially all of the other material assets of the Credit Parties,
except that Permitted Encumbrances may exist.  On or before the Effective Date,
Borrower shall deliver to Administrative Agent, for the ratable benefit of each
Bank, Mortgages in form and substance acceptable to Administrative Agent and
duly executed by such Credit Party, together with such other assignments,
conveyances, amendments, agreements and other writings, including the Security
Agreement, UCC-1 financing statements and UCC-3 financing statement amendments
(each duly authorized and, as applicable, executed) as Administrative Agent
shall deem necessary or appropriate to grant, evidence and perfect first and
prior Liens in all Borrowing Base Properties and other interests of Borrower and
the Credit Parties required by this Section 5.1(a).  Borrower hereby authorizes
Administrative Agent, and its agents, successors and assigns, to file any and
all necessary financing statements under the Uniform Commercial Code,
assignments and/or continuation statements as necessary from time to time (in
Administrative Agent’s discretion) to perfect (or continue perfection of) the
Liens granted pursuant to the Loan Papers.

 

(b)                                 On or before the Effective Date and on or
before each Determination Date after the Closing Date and at such other times as
Administrative Agent or Required Banks shall request, Borrower shall, and shall
cause its Subsidiaries to, deliver to Administrative Agent, for the ratable
benefit of each Bank, Mortgages in form and substance acceptable to
Administrative Agent and duly executed by Borrower and such Subsidiaries (as
applicable) together with such other assignments, conveyances, amendments,
agreements and other writings, including UCC-1 financing statements (each duly
authorized and, as applicable, executed) as Administrative Agent shall deem
necessary or appropriate to grant, evidence and perfect the Liens required by
Section 5.1(a)(i) above with respect to Mineral Interests then held by Borrower
and such Subsidiaries (as applicable) which are not the subject of existing
first and prior, perfected Liens securing the Obligations as required by
Section 5.1(a)(i).

 

Section 5.2                                    Title Information.  At any time
Borrower or any of its Subsidiaries are required to execute and deliver
Mortgages to Administrative Agent pursuant to Section 5.1, Borrower shall also
deliver to Administrative Agent such opinions of counsel (including, if so
requested, title opinions, and in each case addressed to Administrative Agent)
or other evidence of title as Administrative Agent shall deem necessary or
appropriate to verify (a) Borrower’s (or any such Subsidiary’s (as applicable))
title to the Required Reserve Value of the Proved Mineral Interests which are
subject to such Mortgages, and (b) the validity and perfection of the Liens
created by such Mortgages.

 

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Section 5.3                                    Guarantees.  Payment and
performance of the Obligations shall be fully guaranteed by each existing or
hereafter acquired or formed Subsidiary of Borrower pursuant to the Facility
Guaranty.

 

Section 5.4                                    Additional Guarantors.  In
connection with the creation or acquisition of any new Subsidiary of Borrower,
promptly (and in no event less than 30 days) following such creation or
acquisition, Borrower shall, or shall cause (a) the applicable Subsidiary to
execute and deliver a joinder to the Facility Guaranty and the Security
Agreement executed by such Subsidiary, (b) the holder of the Equity in such
Subsidiary to pledge all of the Equity of such Subsidiary (including delivery of
original stock certificates evidencing the Equity of such Subsidiary, together
with appropriate undated stock powers for each certificate duly executed in
blank by the registered owner thereof), and (c) execute and deliver, or cause
any other Credit Party to execute and deliver, such other additional UCC-1
financing statements, closing documents, certificates, and legal opinions as
shall reasonably be requested by the Administrative Agent, in the case of each
of clause (a), (b), and (c) above, in form and substance reasonably satisfactory
to Administrative Agent.

 

ARTICLE VI
CONDITIONS TO BORROWINGS

 

Section 6.1                                    Conditions to Initial Borrowing
and Participation in Letter of Credit Exposure.  The obligation of each Bank to
loan its Commitment Percentage of the initial Borrowing hereunder, and the
obligation of Administrative Agent to issue (or cause another Bank to issue) the
initial Letter of Credit issued hereunder (other than the Existing Letters of
Credit), is subject to the satisfaction of each of the following conditions:

 

(a)                                 Closing Deliveries.  Administrative Agent
shall have received each of the following documents, instruments and agreements,
each of which shall be in form and substance and executed in such counterparts
as shall be acceptable to Administrative Agent and Required Banks and each of
which shall, unless otherwise indicated, be dated the Closing Date:

 

(i)                                     this Agreement, duly executed and
delivered by Borrower, each Bank, Letter of Credit Issuer, and Administrative
Agent;

 

(ii)                                  a Note payable to each Bank requesting a
Note in the amount of such Bank’s Maximum Credit Amount, in each case duly
executed and delivered by Borrower;

 

(iii)                               the Facility Guaranty, duly executed and
delivered by each Credit Party other than Borrower;

 

(iv)                              the Security Agreement, duly executed and
delivered by Borrower and each other Credit Party;

 

(v)                                 the Mortgages, each duly executed and
delivered by the appropriate Credit Party, together with such other assignments,
conveyances, amendments, merger and/or name change affidavits, agreements and
other writings,

 

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including UCC-1 financing statements, in form and substance satisfactory to
Administrative Agent;

 

(vi)                              a Certificate of Ownership Interests
substantially in the form of Exhibit E duly executed and delivered by an
Authorized Officer of Borrower;

 

(vii)                           an opinion of Akin Gump Strauss Hauer & Feld
LLP, counsel to Borrower, favorably opining as to such New York and Texas
law-matters as Administrative Agent or Required Banks may request, in form and
substance satisfactory to Administrative Agent and Required Banks;

 

(viii)                        an opinion of the general counsel to Borrower,
favorably opining as to such matters as Administrative Agent or Required Banks
may request, in form and substance satisfactory to Administrative Agent and
Required Banks;

 

(ix)                              such UCC Lien search reports as Administrative
Agent shall require, conducted in such jurisdictions and reflecting such names
as Administrative Agent shall request;

 

(x)                                 copies of the certificate of incorporation
or certificate of formation, and all amendments thereto, of Borrower and each
other Credit Party accompanied by a certificate that such copy is true, correct
and complete issued by the appropriate Governmental Authority of the State of
Delaware and accompanied by a certificate of the Secretary or comparable
Authorized Officer of Borrower and each other Credit Party that such copy is
true, correct and complete as of the Closing Date after giving effect to the
Corporate Reorganization;

 

(xi)                              copies of the bylaws or limited liability
company agreement, and all amendments thereto, of Borrower and each other Credit
Party, accompanied by a certificate of the Secretary or comparable Authorized
Officer of Borrower and each other Credit Party that each such copy is true,
correct and complete as of the Closing Date after giving effect to the Corporate
Reorganization;

 

(xii)                           certain certificates and other documents issued
by the appropriate Governmental Authorities of the states of formation and the
other states listed on Schedule 3 hereto, as applicable, relating to the
existence of each Credit Party and to the effect that each applicable Credit
Party is organized or qualified to do business in such jurisdiction is in good
standing with respect to the payment of franchise and similar Taxes and is duly
qualified to transact business in such jurisdictions;

 

(xiii)                        a certificate of incumbency of all officers of
Borrower and each other Credit Party who will be authorized to execute or attest
to any Loan Paper, dated the Closing Date, executed by the Secretary or
comparable Authorized Officer of Borrower and each other Credit Party;

 

(xiv)                       copies of resolutions or comparable authorizations
and consents approving the Loan Papers and authorizing the transactions
contemplated by this Agreement and the other Loan Papers, duly adopted by the
Board of Directors (or similar

 

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managing body) of Borrower and each other Credit Party, accompanied by
certificates of the Secretary or comparable officer of Borrower and each other
Credit Party that such copies are true and correct copies of resolutions duly
adopted at a meeting of or (if permitted by applicable Law and, if required by
such Law, by the Bylaws, or other charter documents of Borrower and each other
Credit Party) by the unanimous written consent of the Board of Directors (or
similar managing body) of Borrower and each other Credit Party, and that such
resolutions constitute all the resolutions adopted with respect to such
transactions, have not been amended, modified, or revoked in any respect, and
are in full force and effect as of the Closing Date;

 

(xv)                          certificates from the Credit Parties’ insurance
providers setting forth the insurance maintained by the Credit Parties, showing
that insurance meeting the requirements of Section 8.5 is in full force and
effect and that all premiums due with respect thereto have been paid, showing
Administrative Agent as loss payee with respect to all such property or casualty
policies and as additional insured with respect to all such liability policies,
and stating that such insurer will provide Administrative Agent with at least 30
days’ advance notice of cancellation of any such policy;

 

(xvi)                       certificates, together with undated, blank stock
powers (or the equivalent for Persons that are not corporations) for each
certificate, representing all of the certificated issued and outstanding Equity
of each direct or indirect Subsidiary of Borrower;

 

(xvii)                    a solvency certificate of the chief financial officer
or chief executive officer of Borrower in form and substance reasonably
satisfactory to the Administrative Agent, certifying the solvency of Borrower
and its Subsidiaries, on a consolidated basis, after giving effect to the
Closing Transactions; and

 

(xviii)                 to the extent requested by any Bank, all documentation
and other information required by regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including the
USA Patriot Act.

 

(b)                                 Fees and Expenses.  All fees and expenses of
Administrative Agent, the Arrangers, the Banks and their respective Affiliates
in connection with the credit facilities provided herein (including those
payable pursuant to Section 2.13) shall have been paid.

 

(c)                                  Title Review.  Administrative Agent or its
counsel shall have completed a review of title regarding that portion of the
Borrowing Base Properties which results in evidence of title satisfactory to
Administrative Agent and its counsel covering not less than the Required Reserve
Value of all Borrowing Base Properties, and such review shall not have revealed
any condition or circumstance which would reflect that the representations and
warranties contained in Section 7.8 and Section 7.9 are inaccurate in any
respect.

 

(d)                                 No Legal Prohibition.  The transactions
contemplated by this Agreement and the other Loan Papers shall be permitted by
applicable Law and regulation and such Laws and regulations shall not subject
Administrative Agent, any Bank, or any Credit Party to any Material Adverse
Change.

 

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(e)                                  No Litigation.  No litigation, arbitration
or similar proceeding shall be pending which calls into question the validity or
enforceability of this Agreement and/or the other Loan Papers.

 

(f)                                   Review of Properties.  Administrative
Agent or its counsel shall have completed a due diligence review of the Credit
Parties’ Mineral Interests and other operations, including a review of facts or
circumstances known to them which would constitute a material violation of any
Applicable Environmental Law or which would likely to result in a material
liability to any Credit Party, and/or otherwise reveal any condition or
circumstance which would reflect that the representations and warranties
contained in Section 7.16 are inaccurate in any material respect.

 

(g)                                  Corporate Reorganization.  The Corporate
Reorganization shall have been, or shall contemporaneously with the
effectiveness hereof be, consummated in its entirety and the Administrative
Agent shall have received a copy of all documents, certificates and/or other
instruments related to the merger and name changes contemplated by the Corporate
Reorganization, each of which shall be (i) certified by an Authorized Officer of
Borrower as being a true, correct and complete copy thereof and (ii) to the
extent applicable, filed with the appropriate offices of the Secretaries of
State of Delaware and/or Texas substantially contemporaneously with the
effectiveness hereof.

 

(h)                                 Collateral Security.  The Administrative
Agent shall be reasonably satisfied that the requirements of Section 5.1 are
satisfied as of the Effective Date.

 

(i)                                     Consents and Approvals.  All
governmental and third party consents and all equityholder and board of
directors (or comparable entity management body) authorizations shall have been
obtained and shall be in full force and effect.

 

(j)                                    Other Matters.  All matters related to
this Agreement, the other Loan Papers, any Credit Party and the Closing
Transactions shall be acceptable to Administrative Agent, and Borrower shall
have delivered to Administrative Agent and each Bank such evidence as they shall
request to substantiate any matters related to this Agreement, the other Loan
Papers, any Credit Party or the Closing Transactions as Administrative Agent or
any Bank shall request.

 

For purposes of determining compliance with the conditions specified in this
Section 6.1, each Bank that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required under this Section 6.1 to be consented to or approved by
or acceptable or satisfactory to a Bank unless the Administrative Agent shall
have received notice from such Bank prior to the Effective Date specifying its
objection thereto.  All documents executed or submitted pursuant to this
Section 6.1 by and on behalf of the Borrower or any of its Subsidiaries shall be
in form and substance satisfactory to the Administrative Agent and its counsel. 
The Administrative Agent shall notify the Banks of the Effective Date, and such
notice shall be conclusive and binding.

 

Section 6.2                                    Conditions to each Borrowing and
each Letter of Credit.  The obligation of each Bank to loan its Commitment
Percentage of each Borrowing and the obligation of any

 

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Letter of Credit Issuer to issue Letters of Credit on the date any Letter of
Credit is to be issued is subject to the further satisfaction of the following
conditions:

 

(a)                                 timely receipt by Administrative Agent of a
Request for Borrowing or Request for Letter(s) of Credit (as applicable);

 

(b)                                 immediately before and after giving effect
to such Borrowing or issuance of such Letter(s) of Credit, no Default or Event
of Default shall have occurred and be continuing and neither such Borrowing nor
the issuance of such Letter(s) of Credit (as applicable) shall cause a Default
or Event of Default;

 

(c)                                  the representations and warranties of each
Credit Party contained in this Agreement and the other Loan Papers shall be true
and correct in all material respects on and as of the date of such Borrowing or
the issuance of such Letter(s) of Credit (as applicable), except to the extent
such representations and warranties are expressly stated as of a certain date,
in which case such representations and warranties shall be true and correct in
all material respects as of such date.

 

(d)                                 the funding of such Borrowing or the
issuance of such Letter(s) of Credit (as applicable) and all other Borrowings to
be made and/or Letter(s) of Credit to be issued (as applicable) on the same day
under this Agreement, shall not cause the total Outstanding Revolving Credit to
exceed the Total Commitment; and

 

(e)                                  following the issuance of any Letter(s) of
Credit, the aggregate Letter of Credit Exposure of all Banks shall not exceed
$20,000,000.

 

Each Borrowing and the issuance of each Letter of Credit hereunder shall
constitute a representation and warranty by Borrower that on the date of such
Borrowing or issuance of such Letter of Credit (as applicable) the statements
contained in subclauses (b), (c), (d) and (e) above are true.

 

Section 6.3                                    Materiality of Conditions.  Each
condition precedent herein is material to the transactions contemplated herein,
and time is of the essence in respect of each thereof.

 

ARTICLE VII
REPRESENTATIONS AND WARRANTIES

 

Borrower represents and warrants that each of the following statements (a) is
true and correct on the Closing Date, on the Effective Date and, when made as of
the Closing Date and/or as of the Effective Date, shall be deemed made after
giving effect to the Closing Transactions, and (b) will be true and correct on
the occasion of each Borrowing and the issuance of each Letter of Credit, except
to the extent such representations and warranties are expressly stated as of a
certain date, in which case such representations and warranties shall be true
and correct in all material respects as of such certain date:

 

Section 7.1                                    Existence and Power.  Each of the
Credit Parties (a) is a corporation, limited liability company or partnership
duly incorporated or organized (as applicable), and is validly existing and in
good standing under the Laws of its jurisdiction of incorporation or

 

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organization (as applicable), (b) has all corporate, limited liability company
or partnership power (as applicable) and all material governmental licenses,
authorizations, consents and approvals required to carry on its businesses as
now conducted and as proposed to be conducted, and (c) is duly qualified to
transact business as a foreign corporation, foreign limited liability company or
foreign partnership (as applicable) in each jurisdiction where a failure to be
so qualified could reasonably be expected to have a Material Adverse Effect.

 

Section 7.2                                    Corporate, Limited Liability
Company, Partnership and Governmental Authorization; Contravention.  The
execution, delivery and performance of this Agreement, the Notes, the Mortgages
and the other Loan Papers by each Credit Party (as applicable) (a) are within
such Credit Party’s corporate, partnership, or limited liability company powers
(as applicable), (b) have been duly authorized by all necessary corporate,
partnership, or limited liability company action (as applicable), (c) require no
action by or in respect of, or filing with, any Governmental Authority or
official, and (d) do not contravene, or constitute a default under, any
provision of applicable Law or regulations (including the Margin Regulations) or
of the articles of association, partnership agreement, certificate of limited
partnership, articles of incorporation, certificate of incorporation, bylaws,
regulations or other organizational documents (as applicable) of any such Credit
Party or of any agreement, judgment, injunction, order, decree or other
instrument binding upon any such Credit Party or result in the creation or
imposition of any Lien on any asset of any such Credit Party except Liens
securing the Obligations.

 

Section 7.3                                    Binding Effect.  (a) Each of this
Agreement and the Notes constitutes a valid and binding agreement of Borrower;
(b) the Mortgages, the Security Agreement, the Facility Guaranty and the other
Loan Papers when executed and delivered in accordance with this Agreement, will
then constitute valid and binding obligations of each Credit Party party
thereto; and (c) each Loan Paper is enforceable against each Credit Party party
thereto in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar Laws affecting creditors
rights generally, and (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability.

 

Section 7.4                                    Financial Information.

 

(a)                                 The Current Financials fairly present, in
conformity with GAAP, the consolidated financial position of Borrower and its
consolidated results of operations and cash flows as of the date and for the
periods covered thereby.

 

(b)                                 There has been no material adverse effect on
the business, assets, liabilities, financial condition or results of operations
of the Credit Parties, taken as a whole, relative to that set forth in the
financial statements of the Predecessor Borrower and its consolidated
Subsidiaries as at December 31, 2012.

 

Section 7.5                                    Litigation.  Except for matters
disclosed on Schedule 2 hereto, there is no action, suit or proceeding pending
against, or to the knowledge of any Credit Party, threatened against or
affecting any Credit Party before any court, arbitrator, Governmental Authority
or official in which there is a reasonable possibility of an adverse decision
which could reasonably be expected to have a Material Adverse Effect, which
could in any manner draw into question the validity of the Loan Papers.

 

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Section 7.6                                    ERISA.

 

(a)                                 Each Credit Party and each ERISA Affiliate
have complied in all material respects with ERISA and, where applicable, the
Code regarding each Plan.

 

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

 

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

 

(d)                                 Full payment when due has been made of all
amounts which Borrower, the Subsidiaries of Borrower or any ERISA Affiliate is
required under the terms of each Plan or applicable Law to have paid as
contributions to such Plan as of the Closing Date.

 

(e)                                  Neither any Credit Party nor any ERISA
Affiliate sponsors, maintains, or contributes to an employee welfare benefit
plan, as defined in section 3(1) of ERISA, including any such plan maintained to
provide benefits to former employees of such entities, that may not be
terminated by any Credit Party or any ERISA Affiliate in its sole discretion at
any time without any material liability.

 

(f)                                   Neither any Credit Party nor any ERISA
Affiliate sponsors, maintains or contributes to, or has at any time in the
six-year period preceding the Closing Date sponsored, maintained or contributed
to, any employee pension benefit plan, as defined in section 3(2) of ERISA, that
is subject to Title IV of ERISA, section 302 of ERISA or section 412 of the
Code.

 

Section 7.7                                    Taxes and Filing of Tax Returns. 
Each Credit Party has filed all material tax returns required to have been filed
and has paid all Taxes shown to be due and payable on such returns, including
interest and penalties, and all other Taxes which are payable by such party, to
the extent the same have become due and payable other than Taxes with respect to
which a failure to pay would not reasonably be expected to have a Material
Adverse Effect.  Borrower does not know of any proposed material Tax assessment
against any Credit Party, and each Credit Party maintains adequate reserves in
accordance with GAAP with respect to all of its Tax liabilities of and those of
its predecessors.  Except as disclosed in writing to Banks, no Tax liability of
any Credit Party, or any of their predecessors, has been asserted by the
Internal Revenue Service for Taxes, in excess of those already paid.

 

Section 7.8                                    Title to Properties; Liens.  Each
Credit Party has good and valid title to all material assets purported to be
owned by it except for Permitted Encumbrances.  Without limiting the foregoing,
(a) Borrower and/or its applicable Subsidiaries have good, valid and defensible
title to all Borrowing Base Properties (except for Borrowing Base Properties
disposed of in compliance with, and to the extent permitted by Section 9.5 to
the extent this representation and warranty is made or deemed made after the
Closing Date), free and clear of all Liens, except for Permitted Encumbrances,
and (b) each Credit Party has good and valid title to all material assets
reflected in the Current Financials, except for Permitted Encumbrances.

 

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Section 7.9                                    Mineral Interests.  All Borrowing
Base Properties are valid, subsisting, and in full force and effect, and all
rentals, royalties, and other amounts due and payable in respect thereof have
been duly paid.  Without regard to any consent or non-consent provisions of any
joint operating agreement covering any Credit Party’s Proved Mineral Interests,
each Credit Party’s share of (a) the costs attributable to each Borrowing Base
Property is not greater than the decimal fraction set forth in the Reserve
Report, before and after payout, as the case may be, and described therein by
the respective designations “working interests”, “WI”, “gross working interest”,
“GWI”, or similar terms, and (b) production from, allocated to, or attributed to
each such Borrowing Base Property is not less than the decimal fraction set
forth in the Reserve Report, before and after payout, as the case may be, and
described therein by the designations “net revenue interest,” “NRI,” or similar
terms.

 

Section 7.10                             Business; Compliance.  Each Credit
Party has performed and abided by all obligations required to be performed under
each license, permit, order, authorization, grant, contract, agreement, or
regulation to which such Credit Party is a party or by which such Credit Party
or any of the assets of such Credit Party are bound to the extent a failure to
perform and abide by such obligations could reasonably be expected to have a
Material Adverse Effect; provided that, to the extent Mineral Interests owned by
any such Credit Party are operated by operators other than such Credit Party or
an Affiliate of such Credit Party, Borrower does not have any knowledge that any
such obligation remains unperformed in any material respect, and the appropriate
Person has enforced the contractual obligations of such operators in accordance
with reasonable commercial practices in the industry in order to ensure
performance.

 

Section 7.11                             Licenses, Permits, Etc.  Each Credit
Party possesses such valid franchises, certificates of convenience and
necessity, operating rights, licenses, permits, consents, authorizations,
exemptions and orders of tribunals, as are necessary to carry on its businesses
as now being conducted except to the extent a failure to obtain any such item
would not reasonably be expected to have a Material Adverse Effect; provided
that, to the extent Mineral Interests owned by any Credit Party are operated by
operators other than such Credit Party or an Affiliate of such Credit Party,
Borrower does not have any knowledge that possession of such items has not been
obtained, and the appropriate Person has enforced and shall enforce the
contractual obligations of such operators in accordance with reasonable
commercial practices in the industry in order to obtain such items.

 

Section 7.12                             Compliance with Law.  The business and
operations of each Credit Party have been and are being conducted in accordance
with all applicable Laws, rules and regulations including, without limitation
all Margin Regulations, of all tribunals and Governmental Authorities, other
than Laws, rules and regulations the violation of which could not (either
individually or collectively) reasonably be expected to have a Material Adverse
Effect; provided that to the extent Mineral Interests owned by any Credit Party
are operated by operators other than any Credit Party or an Affiliate of any
Credit Party, Borrower does not have any knowledge of non-compliance, and the
appropriate Person has diligently enforced all contractual obligations of such
operators in accordance with reasonable commercial practices in the industry in
order to ensure compliance.

 

Section 7.13                             Ownership Interests.  The Reserve
Reports most recently provided to Banks accurately reflect, and all Reserve
Reports hereafter delivered pursuant to this Agreement

 

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will accurately reflect, in all material respects, the ownership interests in
the Mineral Interests referred to therein (including all before and after payout
calculations).

 

Section 7.14                             Full Disclosure.  All information
heretofore furnished by or on behalf of any Credit Party to Administrative
Agent, any Arranger, or any Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such information
hereafter furnished by or on behalf of any Credit Party to Administrative Agent,
any Arranger, or any Bank will be, true, complete, and accurate in every
material respect and based on reasonable estimates on the date as of which such
information is stated or certified (it being understood that actual results may
vary materially from the financial projections provided hereunder).  Borrower
has disclosed to Banks in writing any and all facts (other than facts of general
public knowledge) which might reasonably be expected to have a Material Adverse
Effect, or might adversely affect (to the extent Borrower can now reasonably
foresee), the business, operations, prospects or condition, financial or
otherwise, of each Credit Party or the ability of each Credit Party to perform
its obligations under this Agreement and the other Loan Papers.

 

Section 7.15                             Organizational Structure; Nature of
Business.  The primary business of each Credit Party is the acquisition,
exploration, development and operation of Mineral Interests, and/or the
production and/or marketing of Hydrocarbons and accompanying elements
therefrom.  As of the Closing Date, Schedule 3 hereto accurately reflects
(a) the jurisdiction of incorporation or organization of each Credit Party,
(b) each jurisdiction in which each Credit Party is qualified to transact
business as a foreign corporation, foreign partnership or foreign limited
liability company, (c) the authorized, issued and outstanding stock, partnership
or limited liability interests of each Subsidiary of Borrower, including the
names of (and number of shares or other equity interests held by) the record and
beneficial owners of such interests, and (d) all outstanding warrants, options,
subscription rights, convertible securities or other rights to purchase capital
stock, partnership or limited liability company interests of each Subsidiary of
Borrower.  Except as set forth in this Section 7.15 and in Schedule 3 hereto, as
of the Closing Date, no Person holds record or beneficial ownership of any
capital stock or other equity interest in any Subsidiary of Borrower or any
other right or option to acquire any capital stock or other equity interest in
any Subsidiary of Borrower and, without limiting the foregoing, there are not
outstanding any warrants, options, subscription rights or other rights to
purchase stock or other equity interests in any Subsidiary of Borrower.  No
Credit Party has made or presently holds any Investments other than Permitted
Investments.  Except as set forth in Schedule 3 hereto, as of the Closing Date,
Borrower does not have any Subsidiaries, and no Credit Party is a partner or
joint venturer in any partnership or joint venture or a member of any
unincorporated association.

 

Section 7.16                             Environmental Matters.  No real or
personal property owned or leased by any Credit Party (including Mineral
Interests) and no operations conducted thereon, and no operations of any prior
owner, lessee or operator of any such properties, is or has been in violation of
any Applicable Environmental Law other than violations which neither
individually nor in the aggregate will have a Material Adverse Effect, nor is
any such property or operation the subject of any existing, pending or, to
Borrower’s knowledge, threatened Environmental Complaint which could,
individually or in the aggregate, have a Material Adverse Effect.  All notices,
permits, licenses, and similar authorizations, if any, required to be obtained
or filed in connection with the ownership or operation of any and all real and
personal property owned,

 

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leased or operated by any Credit Party, including notices, licenses, permits and
authorizations required in connection with any past or present treatment,
storage, disposal, or release of Hazardous Substances into the environment, have
been duly obtained or filed except to the extent the failure to obtain or file
such notices, licenses, permits and authorizations would not reasonably be
expected to have a Material Adverse Effect.  All Hazardous Substances, if any,
generated at any and all real and personal property owned, leased or operated by
any Credit Party have been transported, treated, and disposed of only by
carriers maintaining valid permits under RCRA and all other Applicable
Environmental Laws.  There have been no Hazardous Discharges which were not in
compliance with Applicable Environmental Laws other than Hazardous Discharges
which would not, individually or in the aggregate, have a Material Adverse
Effect.  No Credit Party has any contingent liability in connection with any
Hazardous Discharges which could reasonably be expected to have a Material
Adverse Effect.

 

Section 7.17                             Burdensome Obligations.  No Credit
Party is a party to or bound by any agreement (other than the Loan Papers and
any Senior Notes Indenture), or subject to any Law or order of any Governmental
Authority, which prohibits or restricts in any way the right of such party to
(a) grant Liens to the Administrative Agent and the Banks on or in respect of
their assets and properties to secure the Obligations and the Loan Papers or
(b) make Distributions.

 

Section 7.18                             Government Regulations.  No Credit
Party is subject to regulation under the Federal Power Act, the Interstate
Commerce Act, the Investment Company Act of 1940 (as any of the preceding acts
have been amended) or any other Law or regulation which regulates the incurring
by it of Debt, including Laws relating to common carriers or the sale of
electricity, gas, steam, water or other public utility services.

 

Section 7.19                             No Default.  Neither a Default nor an
Event of Default has occurred and is continuing.

 

Section 7.20                             Gas Balancing Agreements and Advance
Payment Contracts.  As of the Closing Date, (a) there is no Material Gas
Imbalance, and (b) the aggregate amount of all Advance Payments received by any
Credit Party under Advance Payment Contracts which have not been satisfied by
delivery of production does not exceed $250,000.

 

Section 7.21                             Qualified ECP Guarantor.  Borrower has
total assets exceeding $10,000,000 and is a Qualified ECP Guarantor.

 

ARTICLE VIII
AFFIRMATIVE COVENANTS

 

Borrower agrees that, so long as any Bank has any commitment to lend or
participate in Letter of Credit Exposure hereunder or any amount payable under
any Note remains unpaid or any Letter of Credit remains outstanding:

 

Section 8.1                                    Information.  Borrower will
deliver, or cause to be delivered, to each Bank:

 

(a)                                 as soon as available and in any event within
120 days after the end of each Fiscal Year of Borrower, consolidated balance
sheets of Borrower as of the end of such Fiscal

 

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Year and the related consolidated statements of income and cash flow for such
Fiscal Year, setting forth in each case in comparative form the figures for the
previous Fiscal Year of Borrower or Predecessor Borrower, as applicable, all
reported on by independent public accountants of recognized national standing
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;

 

(b)                                 as soon as available and in any event within
60 days after the end of each of the first three Fiscal Quarters of each Fiscal
Year of Borrower or Predecessor Borrower, as applicable, commencing with the
Fiscal Quarter ending March 31, 2014, consolidated balance sheets of Borrower as
of the end of such Fiscal Quarter and the related consolidated statements of
income and cash flow for such Fiscal Quarter and for the portion of Borrower’s
Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each case
in comparative form the figures for the corresponding quarter and the
corresponding portion of Borrower’s previous Fiscal Year;

 

(c)                                  simultaneously with the delivery of each
set of financial statements referred to in Section 8.1(a) and Section 8.1(b), a
certificate of the chief financial officer or chief executive officer of
Borrower in the form of Exhibit F hereto, (i) setting forth in reasonable detail
the calculations required to establish whether Borrower was in compliance with
the requirements of Article X on the date of such financial statements,
(ii) stating whether there exists on the date of such certificate any Default
and, if any Default then exists, setting forth the details thereof and the
action which Borrower is taking or proposes to take with respect thereto,
(iii) stating whether or not such financial statements fairly present in all
material respects the results of operations and financial condition of Borrower
as of the date of the delivery of such financial statements and for the period
covered thereby, (iv) setting forth (A) whether as of such date there is a
Material Gas Imbalance and, if so, setting forth the amount of net gas
imbalances under Gas Balancing Agreements to which any Credit Party is a party
or by which any Mineral Interests owned by any Credit Party are bound, and
(B) the aggregate amount of all Advance Payments received under Advance Payment
Contracts to which Borrower or any Subsidiary is a party or by which any Mineral
Interests owned by any Credit Party are bound which have not been satisfied by
delivery of production, if any, and (v) a summary of the Hedge Transactions to
which any Credit Party is a party on such date;

 

(d)                                 immediately upon any Authorized Officer of
any Credit Party becoming aware of the occurrence of any Default under any of
the Loan Papers, including a Default under Article X, a certificate of an
Authorized Officer of Borrower setting forth the details thereof and the action
which Borrower is taking or proposes to take with respect thereto;

 

(e)                                  prompt notice of any Material Adverse
Change in the financial condition of any Credit Party;

 

(f)                                   promptly upon receipt of same, any notice
or other information received by any Credit Party indicating any potential,
actual or alleged (i) non-compliance with or violation of the requirements of
any Applicable Environmental Law which could result in liability to any Credit
Party for fines, clean up or any other remediation obligations or any other

 

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liability in excess of $2,000,000 in the aggregate; (ii) release or threatened
release of any Hazardous Discharge which release would impose on any Credit
Party a duty to report to a Governmental Authority or to pay cleanup costs or to
take remedial action under any Applicable Environmental Law which could result
in liability to any Credit Party for fines, clean up and other remediation
obligations or any other liability in excess of $2,000,000 in the aggregate; or
(iii) the existence of any Lien arising under any Applicable Environmental Law
securing any obligation to pay fines, clean up or other remediation costs or any
other liability in excess of $2,000,000 in the aggregate; without limiting the
foregoing, Borrower shall provide to Banks promptly upon receipt of same copies
of all environmental consultants or engineers reports received by any Credit
Party which would render the representations and warranties contained in
Section 7.16 untrue or inaccurate in any respect;

 

(g)                                  in the event any notification is provided
by any Credit Party to any Bank or Administrative Agent pursuant to
Section 8.1(f) or Administrative Agent or any Bank otherwise learns of any event
or condition under which any such notice would be required, then, upon request
of Required Banks, Borrower shall, within ninety (90) days of such request,
cause to be furnished to each Bank a report by an environmental consulting firm
acceptable to Administrative Agent and Required Banks, stating that a review of
such event, condition or circumstance has been undertaken (the scope of which
shall be acceptable to Administrative Agent and Required Banks) and detailing
the findings, conclusions, and recommendations of such consultant; Borrower
shall bear all expenses and costs associated with such review and updates
thereof, as well as all remediation or curative action recommended by any such
environmental consultant;

 

(h)                                 prompt notice of any actions, suits,
proceedings, claims or disputes pending or, to the knowledge of Borrower after
due and diligent investigation, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, by or against any Credit
Party or against any of their properties or revenues that (i) purport to affect
or pertain to this Agreement or any other Loan Paper, or the consummation of the
Closing Transactions or any transaction governed by the Loan Papers, or
(ii) either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect;

 

(i)                                     simultaneously with the delivery of each
set of financial statements referred to in Section 8.1(a) and Section 8.1(b),
but in no event later than sixty (60) days after then end of the applicable
Fiscal Year or Fiscal Quarter, a report setting forth, for each calendar month
during the then current fiscal year to date, the volume of production and sales
attributable to production (and the prices at which such sales were made and the
revenues derived from such sales) for each such calendar month from the Mineral
Interests, and setting forth the related ad valorem, severance and production
taxes and lease operating expenses attributable thereto and incurred for each
such calendar month, such information being reported on a property by property
basis and otherwise in form and substance acceptable to the Administrative
Agent;

 

(j)                                    prompt notice of any material change in
accounting policies or financial reporting practices by any Credit Party;

 

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(k)                                 from time to time such additional
information regarding the financial position or business of each Credit Party
(including any Plan and any reports or other information required to be filed
with respect thereto under the Code or under ERISA and a list of all Persons
purchasing Hydrocarbons from any Credit Party) as Administrative Agent, at the
request of any Bank, may reasonably request;

 

(l)                                     prompt written notice, and in any event
within three (3) Business Days, of (i) the occurrence of any loss, casualty or
other damage to, or any nationalization, taking under power of eminent domain or
by condemnation or similar proceeding of, any property of Borrower or any other
Credit Party having a fair market value in excess of $5,000,000 or (ii) the
commencement of any action or proceeding that could reasonably be expected to
result in a such an event;

 

(m)                             in the event Borrower or any other Credit Party
enters into a letter of intent, term sheet or other document, agreement or
understanding evidencing its intent to sell, transfer, assign or otherwise
dispose of any Mineral Interests, prompt (and in any event within five
(5) Business Days) written notice of such (together with a copy of any such
document), the price thereof and the anticipated date of closing and any other
details thereof requested by the Administrative Agent or any Bank;

 

(n)                                 promptly, but in any event within five
(5) Business Days after the execution thereof, copies of any amendment,
modification or supplement to the certificate or articles of incorporation,
by-laws, any preferred stock designation or any other organic document of
Borrower or any other Credit Party;

 

(o)                                 prompt written notice (and in any event no
less than thirty (30) days prior thereto) of any change (i) in Borrower or any
Credit Party’s company 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 Borrower or any Credit Party’s chief executive office or principal
place of business, (iii) in Borrower or any Credit Party’s identity or company
structure or in the jurisdiction in which such Person is incorporated or formed,
(iv) in Borrower or any Credit Party’s jurisdiction of organization or such
Person’s organizational identification number in such jurisdiction of
organization, and (v) in Borrower or any Credit Party’s federal taxpayer
identification number;

 

(p)                                 prompt written notice of all created or
acquisition of any new Subsidiary of Borrower and to comply, and cause such
Subsidiary to comply, with Article V; and

 

(q)                                 prompt written notice of the amendment,
modification or termination of any Hedge Agreement or the termination of any
Hedge Transaction.

 

Any information that Borrower is required to deliver to the Administrative Agent
or any, or all, Banks pursuant to the foregoing clauses (a) and (b) of this
Section 8.1 shall be deemed delivered if and when such information is filed on
EDGAR or the equivalent thereof with the SEC.

 

Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Banks and the Letter of Credit Issuer
materials and/or information

 

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provided by or on behalf of Borrower hereunder (collectively, “Borrower
Materials”) by posting Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Banks (each, a “Public
Bank”) may have personnel who do not wish to receive material non-public
information with respect to Borrower or its Affiliates, or the respective
securities of any of the foregoing, and who may be engaged in investment and
other market-related activities with respect to such Persons’ securities. 
Borrower hereby agrees that (i) it will use commercially reasonable efforts to
identify that portion of the Borrower Materials that may be distributed to the
Public Banks; (ii) all such Borrower Materials shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word
“PUBLIC” shall appear prominently on the first page thereof; (iii) by marking
Borrower Materials “PUBLIC,” Borrower shall be deemed to have authorized the
Administrative Agent, the Arrangers, the Letter of Credit Issuers and the Banks
to treat such Borrower Materials as not containing any material non-public
information (although it may be sensitive and proprietary) with respect to
Borrower or its securities for purposes of United States Federal and state
securities laws (provided that, to the extent such Borrower Materials constitute
confidential information subject to Section 14.14, they shall be treated as set
forth in Section 14.14); (iv) all Borrower Materials marked “PUBLIC” are
permitted to be made available through a portion of the Platform designated
“Public Investor”; and (v) the Administrative Agent and the Arrangers shall be
entitled to treat any Borrower Materials that are not marked “PUBLIC” as being
suitable only for posting on a portion of the Platform not designated “Public
Investor.”

 

Section 8.2                                    Business of Credit Parties.  The
primary business of each Credit Party will continue to be the acquisition,
exploration, development and operation of Mineral Interests, and/or the
production and/or marketing of Hydrocarbons and accompanying elements therefrom.

 

Section 8.3                                    Maintenance of Existence. 
Borrower shall, and shall cause each of the other Credit Parties to, at all
times (a) maintain its corporate, partnership or limited liability company
existence (as applicable) in its state of organization, and (b) maintain its
good standing and qualification to transact business in all jurisdictions where
the failure to maintain good standing or qualification to transact business
could reasonably be expected to have a Material Adverse Effect; provided that,
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 9.4.

 

Section 8.4                                    Right of Inspection; Books and
Records.

 

(a)                                 Borrower will permit, and will cause each
other Credit Party to permit, any officer, employee or agent of Administrative
Agent or any Bank to visit and inspect any of the assets of any Credit Party,
examine each Credit Party’s books of record and accounts, take copies and
extracts therefrom, and discuss the affairs, finances and accounts of each
Credit Party with any of such Credit Party’s officers, accountants and auditors,
all upon reasonable advance notice and at such reasonable times and as often as
Administrative Agent or any Bank may desire, all at the expense of Borrower;
provided that, prior to the occurrence of an Event of Default, neither
Administrative Agent nor any Bank will require any Credit Party to incur any
unreasonable expense as a result of the exercise by Administrative Agent or any
Bank of its rights pursuant to this Section 8.4.

 

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(b)                                 Borrower will, and will cause each other
Credit Party 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 Borrower or such other Credit Party, as the case may be.

 

Section 8.5                                    Maintenance of Insurance. 
Borrower will, and will cause each other Credit Party to, at all times maintain
or cause to be maintained insurance covering such risks as are customarily
carried by businesses similarly situated (including self-insurance where
appropriate), including the following:  (a) workmen’s compensation insurance;
(b) employer’s liability insurance; (c) comprehensive general public liability
and property damage insurance in respect of all activities in which any Credit
Party might incur personal liability for the death or injury of an employee or
third person, or damage to or destruction of another’s property;
(d) comprehensive automobile liability insurance; and (e) property and casualty
insurance with respect to its assets.  All loss payable clauses or provisions in
all policies of insurance maintained by the Credit Parties pursuant to this
Section 8.5 shall be endorsed in favor of and made payable to Administrative
Agent for the ratable benefit of Banks, as their interests may appear. 
Administrative Agent shall be named an additional insured with respect to all of
the Credit Parties’ liability policies to the extent permitted by Law. 
Administrative Agent for the ratable benefit of Banks shall have the right to
collect, and Borrower hereby assigns to Administrative Agent for the ratable
benefit of Banks, any and all monies that may become payable under any such
policies of insurance by reason of damage, loss or destruction of any property
which stands as security for the Obligations or any part thereof, and
Administrative Agent may, at its election (which election shall be made in the
reasonable discretion of Administrative Agent with the consent of Required
Banks), either apply for the ratable benefit of Banks all or any part of the
sums so collected toward payment of the Obligations (or the portion thereof with
respect to which such property stands as security), whether or not such
Obligations are then due and payable, in such manner as Administrative Agent may
elect or release same to Borrower.

 

Section 8.6                                    Payment of Obligations.  Borrower
will, and will cause each other Credit Party to, pay and discharge as the same
shall become due and payable, all its obligations and liabilities, including
(a) all Taxes imposed upon it or any of its assets or with respect to any of its
franchises, business, income or profits, unless the same are being contested in
good faith by appropriate proceedings diligently conducted and adequate reserves
in accordance with GAAP are being maintained by the applicable Credit Party and
the Credit Parties have notified Administrative Agent of such circumstances, in
detail satisfactory to Administrative Agent, (b) all material claims (including
claims for labor, services, materials and supplies) for sums which have become
due and payable and which by Law have or might become a Lien (other than a
Permitted Encumbrance) on any of its assets, and (c) all Debt, as and when due
and payable, but subject to any subordination provisions contained in any
instrument or agreement evidencing such Debt.

 

Section 8.7                                    Compliance with Laws and
Documents.  Borrower will, and will cause each other Credit Party to, comply
with all Laws, its articles or certificate of incorporation, certificate of
limited partnership, partnership agreement, bylaws, regulations and similar
organizational documents and all Material Agreements to which any Credit Party
is a party, if a violation, alone or when combined with all other such
violations, could reasonably be expected to have a Material Adverse Effect.

 

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Section 8.8                                    Operation of Properties and
Equipment.

 

(a)                                 Borrower will, and will cause each other
Credit Party to, maintain, develop and operate its Mineral Interests in a good
and workmanlike manner, and observe and comply with all of the terms and
provisions, express or implied, of all oil and gas leases relating to such
properties so long as such oil and gas leases are capable of producing
Hydrocarbons and accompanying elements in paying quantities, to the extent that
the failure to so observe and comply could reasonably be expected to have a
Material Adverse Effect.

 

(b)                                 Borrower will, and will cause each other
Credit Party to, comply in all respects with all contracts and agreements
applicable to or relating to its Mineral Interests or the production and sale of
Hydrocarbons and accompanying elements therefrom, except to the extent a failure
to so comply could not reasonably be expected to have a Material Adverse Effect.

 

(c)                                  Borrower will, and will cause each other
Credit Party to, maintain, preserve and keep all operating equipment used with
respect to its Mineral Interests in proper repair, working order and condition,
and make all necessary or appropriate repairs, renewals, replacements, additions
and improvements thereto so that the efficiency of such operating equipment
shall at all times be properly preserved and maintained; provided that, no item
of operating equipment need be so repaired, renewed, replaced, added to or
improved, if a Credit Party shall in good faith determine that such action is
not necessary or desirable for the continued efficient and profitable operation
of the business of such Credit Party.

 

(d)                                 With respect to Mineral Interests of any
Credit Party which are operated by operators other than such Credit Party, no
Credit Party shall be obligated itself to perform any undertakings contemplated
by the covenants and agreements contained in this Section 8.8 which are
performable only by such operators and are beyond the control of such Credit
Party, but shall be obligated to seek to enforce such operators’ contractual
obligations to maintain, develop and operate the Mineral Interests in accordance
with such operating agreements.

 

Section 8.9                                    Further Assurances.  Borrower
will, and will cause each other Credit Party to, execute and deliver or cause to
be executed and delivered such other and further instruments or documents and
take such further action as in the judgment of Administrative Agent may be
required to carry out the provisions and purposes of the Loan Papers, including
to create, preserve, protect and perfect the Liens of the Administrative Agent
for the ratable benefit of the Banks and other holders of Obligations as
required by Article V.

 

Section 8.10                             Environmental Law Compliance and
Indemnity.  Borrower will, and will cause each other Credit Party to, comply
with all Applicable Environmental Laws, including (a) all licensing, permitting,
notification and similar requirements of Applicable Environmental Laws, and
(b) all provisions of Applicable Environmental Law regarding storage, discharge,
release, transportation, treatment and disposal of Hazardous Substances, except
where the failure to comply could not reasonably be expected to have a Material
Adverse Effect.  Borrower will, and will cause each other Credit Party to,
promptly pay and discharge when due all debts, claims, liabilities and
obligations with respect to any clean-up or remediation measures necessary to
comply with Applicable Environmental Laws.  Borrower hereby indemnifies and
agrees to defend and hold Banks and their successors and assigns harmless from
and against any and all

 

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claims, demands, causes of action, loss, damage, liabilities, costs and expenses
(including reasonable attorneys’ fees and court costs) of any and every kind or
character, known or unknown, fixed or contingent, asserted against or incurred
by any Bank at any time and from time to time, including those asserted or
arising subsequent to the payment or other satisfaction of the Loans, by reason
of or arising out of the ownership, construction, occupancy, operation, use and
maintenance of any of the collateral for the Loans, including matters arising
out of the negligence of any Bank; provided that, this indemnity shall not apply
with respect to matters caused by or arising out of (i) with respect to each
Bank, the gross negligence or willful misconduct of such Bank, as determined by
a court of competent jurisdiction in a final, non-appealable judgment (IT BEING
THE EXPRESS INTENTION HEREBY THAT BANKS SHALL BE INDEMNIFIED FROM THE
CONSEQUENCES OF THEIR NEGLIGENCE); and (ii) the construction, occupancy,
operation, use and maintenance of the collateral for the Loans by any owner,
lessee or party in possession of the collateral for the Loans subsequent to the
ownership of the collateral for the Loans by Borrower; provided further that,
this subclause (ii) shall not exclude from the foregoing indemnity and
agreement, liability, claims, demands, causes of action, loss, damage, costs and
expenses imposed by reason of the ownership of the collateral for the Loans by
Banks after purchase by Banks at any foreclosure sale or transfer in lieu
thereof from any Credit Party in partial or entire satisfaction of the Loans
(unless the same shall be solely attributable to the subsequent use of the
collateral by Banks during their ownership thereof).  The foregoing indemnity
and agreement applies to the violation of any Applicable Environmental Law prior
to the payment or other satisfaction of the Loans and any act, omission, event
or circumstance existing or occurring on or about the collateral for the Loans
(including the presence on the collateral for the Loans or release from the
collateral for the Loans of asbestos or other Hazardous Substances disposed of
or otherwise present in or released prior to the payment or other satisfaction
of the Loans).  It shall not be a defense to the covenant of Borrower to
indemnify that the act, omission, event or circumstance did not constitute a
violation of any Applicable Environmental Law at the time of its existence or
occurrence.  The provisions of this Section 8.10 shall survive the repayment of
the Loans and shall continue thereafter in full force and effect.  In the event
of the transfer of the Loans or any portion thereof, Banks or any prior holder
of the Loans and any participants shall continue to be benefited by this
indemnity and agreement with respect to the period of such holding of the Loans.

 

Section 8.11                             Title Data.  In addition to the title
information required by Section 5.2 and Section 6.1(c), Borrower shall, upon the
request of Required Banks, cause to be delivered to Administrative Agent such
title opinions or other information regarding title to Mineral Interests owned
by Borrower or any other Credit Party as are appropriate to determine the status
thereof; provided that, Banks may not require Borrower to furnish title opinions
(except pursuant to Section 5.2 and Section 6.1(c)) unless (a) an Event of
Default shall have occurred and be continuing, or (b) Required Banks have reason
to believe that there is a defect in or encumbrance upon Borrower’s title to
such Mineral Interests that is not a Permitted Encumbrance.  If Borrower has
failed to provide title information requested under this Section 8.11 within a
90-day period following a request therefor or if Borrower is unable to cure any
title defect requested by the Administrative Agent or the Banks to be cured
within a 90-day period following such request, such default shall not be a
Default, but instead the Administrative Agent and/or the Required Banks shall
have the right to exercise the following remedy in their sole discretion from
time to time, and any failure to so exercise this remedy at any time shall not
be a waiver as to future exercise of the remedy by the Administrative Agent or
the Banks.  To the extent that the

 

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Administrative Agent or the Required Banks are not satisfied with title to any
Mineral Interest after the 90-day period has elapsed, such unacceptable Mineral
Interest shall not count towards the requirement to evidence good title to
Mineral Interests constituting the Required Reserve Value, and the
Administrative Agent may send a notice to Borrower and the Banks that the then
outstanding Borrowing Base shall be reduced by an amount as determined by the
Required Banks to cause Borrower to be in compliance with the requirement to
provide acceptable title information on Mineral Interests constituting the
Required Reserve Value.  This new Borrowing Base shall become effective
immediately after receipt of such notice and any resulting Borrowing Base
Deficiency shall be cured in accordance with Section 4.4.

 

Section 8.12                             ERISA Reporting Requirements.  Borrower
will promptly furnish and will cause the other Credit Parties and any ERISA
Affiliate to promptly furnish to the Administrative Agent (a) promptly after the
filing thereof with the United States Secretary of Labor or the Internal Revenue
Service, copies of each annual and other report with respect to each Plan or any
trust created thereunder, and (b) immediately upon becoming aware of the
occurrence of any “prohibited transaction,” as described in section 406 of ERISA
or in section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by the President or the principal Financial
Officer, the Credit Party or the ERISA Affiliate, as the case may be, specifying
the nature thereof, what action Borrower, Credit Party or ERISA Affiliate is
taking or proposes to take with respect thereto, and, when known, any action
taken or proposed by the Internal Revenue Service or the Department of Labor
with respect thereto.

 

Section 8.13                             Commodity Exchange Act Keepwell
Provisions.

 

(a)                                 Borrower hereby guarantees the payment and
performance of all Obligations of each Credit Party (other than Borrower) and
absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support as may be needed from time to time by each Benefitting Guarantor
in order for such Benefitting Guarantor to honor its obligations (without giving
effect to(b)) under the Facility Guaranty and any other Loan Paper including
obligations with respect to Hedge Transactions (provided, however, that Borrower
shall only be liable under this Section 8.13(a) for the maximum amount of such
liability that can be hereby incurred without rendering its obligations under
this Section 8.13(a), or otherwise under this Agreement or any Loan Paper, as it
relates to such Benefitting Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount).
The obligations of Borrower under this Section 8.13(a) shall remain in full
force and effect until all Obligations are paid in full to the Banks,
Administrative Agent and all other Persons to whom Obligations are owing, and
all of the Banks’ Commitments are terminated. Borrower intends that this
Section 8.13(a) constitute, and this Section 8.13(a) shall be deemed to
constitute, a “keepwell, support, or other agreement” for the benefit of each
Benefitting Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the
Commodity Exchange Act.

 

(b)                                 Notwithstanding any other provisions of this
Agreement or any other Loan Paper, Obligations guaranteed by any Guarantor, or
secured by the grant of any Lien by such Guarantor under any Loan Paper, shall
exclude all Excluded Swap Obligations with respect to such Guarantor.

 

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ARTICLE IX
NEGATIVE COVENANTS

 

Borrower agrees that, so long as any Bank has any commitment to lend or
participate in Letter of Credit Exposure hereunder or any amount payable under
any Note remains unpaid or any Letter of Credit remains outstanding:

 

Section 9.1                                    Debt.  Borrower will not, nor
will Borrower permit any other Credit Party to, incur, become or remain liable
for any Debt other than (a) the Obligations, (b) Debt of any Credit Party to any
other Credit Party, (c) Permitted Purchase Money Debt, (d) subject to any
adjustment to the Borrowing Base required under Section 2.15, Senior Notes and
any guarantees thereof and any Permitted Refinancing Debt, provided that, solely
with respect to Senior Notes not constituting Permitted Refinancing Debt,
(i) such Senior Notes do not have any scheduled amortization prior to the stated
maturity of such Senior Notes, (ii) such Senior Notes do not mature sooner than
a date that is at least 180 days following the Termination Date in effect on the
date of issuance of such Senior Notes, (iii) such Senior Notes and any
guarantees thereof are on market terms for similar instruments of issuers of
similar size and credit quality given the then prevailing market conditions,
(iv) as determined in good faith by the senior management of Borrower, such
Senior Notes and any guarantees thereof are on terms, taken as a whole, no more
restrictive or burdensome than this Agreement, provided that (A) the financial
maintenance covenants with respect to such Senior Notes are not more restrictive
than those in this Agreement and (B) the representations and warranties,
covenants (other than financial maintenance covenants) and events of default of
such Senior Notes are not, taken as a whole, more restrictive or burdensome than
those in this Agreement, and (v) such Senior Notes do not have any mandatory
prepayment or redemption provisions (other than customary change of control or
asset sale tender offer provisions) which would require a mandatory prepayment
or redemption in priority to the Obligations, and (e) other Debt in an amount
not to exceed at any time $10,000,000 in the aggregate.

 

Solely for purposes of clause (d) of this Section 9.1, any Permitted Senior Debt
for the payment of which the proceeds of other Senior Notes or Permitted
Refinancing Debt has been deposited in trust or otherwise set aside shall be
deemed no longer “outstanding” so long as such Permitted Senior Debt is repaid
within sixty (60) days after the Credit Parties’ receipt of proceeds of such
other Senior Notes or Permitted Refinancing Debt.

 

Section 9.2                                    Restricted Payments.  Borrower
will not, nor will Borrower permit any other Credit Party to, declare, pay or
make, or incur any liability to declare, pay or make, any Restricted Payment,
except that Borrower may declare and pay dividends with respect to its Equity
payable solely in additional shares of its Equity (or in de minimis amounts of
cash payable in lieu of partial shares of its Equity).

 

Section 9.3                                    Liens; Negative Pledge.  Borrower
will not, nor will Borrower permit any other Credit Party to, create, assume or
suffer to exist any Lien on any asset owned by it (other than Permitted
Encumbrances).  Borrower will not, nor will Borrower permit any other Credit
Party to, enter into or become subject to any agreement that prohibits or
otherwise restricts the right of any Credit Party to create, assume or suffer to
exist any Lien in favor of Administrative Agent or any Bank on any Credit
Party’s assets.

 

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Section 9.4                                    Consolidations and Mergers. 
Without the prior written consent of Required Banks, Borrower will not, nor will
Borrower permit any other Credit Party to, consolidate or merge with or into any
other Person; provided that, so long as no Default or Event of Default exists or
will result, Borrower or any wholly owned Subsidiary of Borrower that is a
Credit Party may merge or consolidate with any other Credit Party, provided
further that, if Borrower is a party to any such merger or consolidation,
Borrower must be the surviving entity of such merger or consolidation.

 

Section 9.5                                    Asset Dispositions.  Borrower
will not, nor will Borrower permit any other Credit Party to, sell, lease,
transfer, abandon or otherwise dispose of any asset other than (a) the sale in
the ordinary course of business of Hydrocarbons produced from any Credit Party’s
Mineral Interests, (b) the sale, lease, transfer, abandonment or other
disposition of machinery, equipment and other personal property and fixtures
which are (i) made in connection with a release, surrender or abandonment of a
well, or (ii) (A) obsolete for their intended purpose and disposed of in the
ordinary course of business, or (B) replaced by articles of comparable
suitability owned by any Credit Party, free and clear of all Liens except
Permitted Encumbrances and (c) Asset Dispositions at no less than fair market
value (as reasonably determined by Borrower); provided that, (A) no Asset
Disposition shall be permitted pursuant to this clause (c) unless all mandatory
prepayments required by Section 2.6 in connection with such Asset Disposition
are made concurrently with the closing thereof, and (B) Borrower or other
applicable Credit Party shall within 30 days following the closing of each Asset
Disposition novate, unwind or terminate Oil and Gas Hedge Transactions as needed
to comply with Section 9.10.  In no event will Borrower issue, sell, transfer or
dispose of, or permit any other Credit Party to issue, sell, transfer or dispose
of, any capital stock or other equity interest in any Subsidiary of such Credit
Party, nor will Borrower permit any other Credit Party to issue or sell any
capital stock in such Credit Party or other equity interest or any option,
warrant or other right to acquire such capital stock or equity interest or
security convertible into such capital stock or equity interest to any Person
other than the Person which is the direct parent of such issuer on the Closing
Date.

 

Section 9.6                                    Use of Proceeds.  The proceeds of
Borrowings will not be used for any purpose other than to finance the
acquisition, exploration, and development of Mineral Interests, for working
capital and general corporate purposes, and to pay fees and expenses incurred in
connection with the Closing Transactions.  None of the proceeds of the Loans or
any Letter of Credit issued hereunder will be used, directly or indirectly,
(a) for the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock, or (b) in violation of applicable Law or regulation
(including the Margin Regulations).  Letters of Credit will be issued hereunder
only for the purpose of securing bids, tenders, bonds, contracts and other
obligations entered into in the ordinary course of Borrower’s business and to
secure obligations of Borrower and its Subsidiaries under Oil and Gas Hedge
Transactions; provided that, the aggregate Letter of Credit Exposure of all
Banks under all Hedge Transaction Letters of Credit shall not exceed $10,000,000
at any time.  Without limiting the foregoing, with the exception of Hedge
Transaction Letters of Credit permitted pursuant to the preceding sentence, no
Letters of Credit will be issued hereunder for the purpose of or providing
credit enhancement with respect to any Debt or equity security of any Credit
Party or to secure any Credit Party’s obligations with respect to Hedge
Transactions other than Hedge Transactions with a Bank or an Affiliate of a
Bank.

 

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Section 9.7                                    Investments.  Borrower will not,
nor will Borrower permit any other Credit Party to, directly or indirectly, make
any Investment other than Permitted Investments.

 

Section 9.8                                    Transactions with Affiliates. 
Borrower will not, nor will Borrower permit any other Credit Party to, engage in
any material transaction with any of their Affiliates (other than transactions
among Credit Parties unless such transaction is generally as favorable to such
Credit Party as could be obtained in an arm’s length transaction with an
unaffiliated Person in accordance with prevailing industry customs and
practices.  Notwithstanding the foregoing, the restrictions set forth in this
Section 9.8 shall not apply to the payment of reasonable and customary fees to
directors of any Credit Party who are not employees of any Credit Party.

 

Section 9.9                                    ERISA.  Borrower will not, and
will not permit any Credit Party to, at any time:

 

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

 

(b)                                 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, Borrower,
any Credit Party or any ERISA Affiliate is required to pay as contributions
thereto.

 

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

 

Section 9.10                             Hedge Transactions.  Borrower will not,
nor will Borrower permit any other Credit Party to, enter into or, subject to
clause (B) of the proviso in the first sentence of Section 9.5, permit to exist
any Oil and Gas Hedge Transactions (other than purchased put options or price
floors with respect to Hydrocarbons) (a) with a duration longer than five years
from the date the applicable Oil and Gas Hedge Transaction is entered into or
(b) whereby the volume of Hydrocarbons with respect to which a settlement
payment is calculated would exceed (i) for the first 24 months after the date of
execution of such Hedge Transaction (the “First Measurement Period”), 100% and
(ii) for the first 36 months immediately following the First Measurement Period,
75%, in each case, (x) of Borrower’s anticipated production (assuming no
curtailment or interruption of transportation for such anticipated production)
from Proved Mineral Interests and (y) without duplication of the “put” and
“call”, notional quantities of any collars.  Borrower will not, nor will
Borrower permit any other Credit Party to, enter into any commodity, interest
rate, currency or other swap, option, collar or other derivative transaction
pursuant to which any Credit Party speculates on the movement of commodity
prices, securities prices, interest rates, financial markets, currency markets
or other items; provided that, nothing

 

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contained in this Section 9.10 shall prohibit any Credit Party from (a) entering
into interest rate swaps or other interest rate hedge transactions pursuant to
which such Credit Party hedges interest rate risk with respect to the interest
reasonably anticipated to be incurred pursuant to this Agreement, (b) entering
into Oil and Gas Hedge Transactions otherwise permitted by this Section 9.10, or
(c) making Permitted Investments.

 

Section 9.11                             Operating Leases.  Borrower will not,
nor will Borrower permit any other Credit Party to, incur, become, or remain
liable under any Operating Lease which would cause the aggregate amount of all
Rentals payable by any Credit Party in any Fiscal Year to be greater than
$10,000,000.

 

Section 9.12                             Acquisition.  Without the prior written
consent of Required Banks, Borrower will not, nor will Borrower permit any other
Credit Party to, acquire, in a single transaction or a series of related
transactions, all or substantially all of the assets or capital stock (or other
outstanding equity interests) of any Person, or all or substantially all of the
assets comprising a division of any Person; provided that, nothing contained in
this Section 9.12 shall prohibit Borrower or any other Credit Party from making
any acquisition of assets consisting of oil and gas properties or any other
acquisition which is permitted by the terms of this Agreement, including any
Permitted Investment.

 

Section 9.13                             Repayment of Senior Notes; Amendment to
Terms of Senior Indenture.  Borrower will not, and will not permit any other
Credit Party to: (a) except with the proceeds of Permitted Senior Debt, prior to
the date that is one-hundred and eighty (180) days after the Termination Date,
call, make or offer to make any optional or voluntary Redemption of or otherwise
optionally or voluntarily Redeem (whether in whole or in part) the Senior Notes,
or (b) amend, modify, waive or otherwise change, consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Senior Notes or the Senior Notes Indenture if (i) the effect thereof would be to
shorten the maturity of the Senior Notes or shorten the average life or increase
the amount of any payment of principal thereof or increase the rate or scheduled
recurring fee or add call or pre-payment premiums or shorten any period for
payment of interest thereon, (ii) such action requires the payment of a consent
fee (howsoever described), (iii) such action increases the interest rate margins
applicable to the Senior Notes or alters the calculation of interest thereunder,
(iv) such action adds or amends any representations and warranties, covenants or
events of default to be more restrictive or burdensome than this Agreement
without this Agreement being contemporaneously amended to add similar provisions
or (v) adds or changes any redemption, put or prepayment provisions; provided
that the foregoing shall not prohibit the execution of supplemental agreements
to add guarantors if required by the terms thereof (provided that any such
guarantor also guarantees the Obligations pursuant to the Facility Guaranty and
each of Borrower and such guarantor otherwise complies with Section 5.4); and
provided further that nothing in this Section 9.13 shall prohibit the Redemption
of any of Borrower’s Senior Notes pursuant to a “change of control offer” under
any Senior Notes Indenture of Borrower in connection with the Corporate
Reorganization.

 

Section 9.14                             Non-Eligible Contract Participants. 
Borrower shall not permit any Credit Party that is not an Eligible Contract
Participant to own, at any time, any Mineral Interests or any Equity in any
Subsidiaries.

 

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ARTICLE X
FINANCIAL COVENANTS

 

Section 10.1                             Financial Covenants.  Borrower agrees
that, so long as any Bank has any commitment to lend or participate in Letter of
Credit Exposure hereunder or any amount payable under any Note remains unpaid or
any Letter of Credit remains outstanding:

 

(a)                                 As of the end of any Fiscal Quarter,
commencing with the Fiscal Quarter ending December 31, 2013, Borrower will not
permit its ratio of Consolidated Current Assets to Consolidated Current
Liabilities to be less than 1.00 to 1.00; and

 

(b)                                 As of the end of any Fiscal Quarter,
commencing with the Fiscal Quarter ending December 31, 2013, Borrower will not
permit its ratio of (i) Consolidated EBITDAX (for the four Fiscal Quarters
ending on such date) to (ii) the sum of (A) Consolidated Net Interest Expense
(for the four Fiscal Quarters ending on such date) plus (B) Letter of Credit
Fees (accruing during the four Fiscal Quarters ending on such date) to be less
than 2.50 to 1.00.

 

ARTICLE XI
DEFAULTS

 

Section 11.1                             Events of Default.  If one or more of
the following events (collectively “Events of Default” and individually an
“Event of Default”) shall have occurred and be continuing:

 

(a)                                 Borrower shall fail to pay when due any
principal of any Note or any reimbursement obligation with respect to any
Letters of Credit when due;

 

(b)                                 Borrower shall fail to pay any accrued
interest due and owing on any Note or any fees or any other amount payable
hereunder when due and such failure shall continue for a period of five
(5) Business Days following the due date;

 

(c)                                  any Credit Party shall fail to observe or
perform any covenant or agreement applicable thereto contained in Section 4.4,
Section 8.1(d), Section 8.3(a), Section 8.5, Article IX, or Article X;

 

(d)                                 any Credit Party shall fail to observe or
perform any covenant or agreement contained in this Agreement or the other Loan
Papers (other than those covered by Section 11.1(a), Section 11.1(b) and
Section 11.1(c)) and such failure continues for a period of 30 days after the
earlier of (i) the date any Authorized Officer of any Credit Party acquires
knowledge of such failure, or (ii) written notice thereof has been given to any
such Credit Party by Administrative Agent at the request of any Bank;

 

(e)                                  any representation, warranty, certification
or statement made or deemed to have been made by any Credit Party in this
Agreement or by any Credit Party or any other Person on behalf of any Credit
Party in any other Loan Paper or any other certificate, financial statement or
other document delivered pursuant to this Agreement shall prove to have been
incorrect in any material respect when made, deemed made, or confirmed.

 

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(f)                                   (i) any Credit Party shall fail to make
any payment when due on any Debt in a principal amount equal to or greater than
$25,000,000, or any event or condition (A) shall occur which results in the
acceleration of the maturity of any Debt (other than Debt under or in connection
with a Hedge Agreement) of any such Credit Party in a principal amount equal to
or greater than $25,000,000 individually or in the aggregate, or (B) shall occur
which entitles (or, with the giving of notice or lapse of time or both, would
unless cured or waived, entitle) the holder of such Debt to accelerate the
maturity thereof; or (ii) there occurs under any Hedge Agreement an Early
Termination Date (as defined in such Hedge Agreement if applicable), or such
Hedge Agreement is otherwise terminated prior to the scheduled term of the
applicable transaction, in each case, resulting from (A) any event of default
under such Hedge Agreement as to which any Credit Party is the defaulting party
or (B) any Termination Event (as defined in such Hedge Agreement, if applicable)
under such Hedge Agreement as to which any Credit Party is an Affected Party (as
so defined, if applicable) and, in either event, the net hedging obligation owed
by such Credit Party as a result thereof is greater than $25,000,000;

 

(g)                                  any Credit Party shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar Law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate or partnership action to authorize any
of the foregoing;

 

(h)                                 an involuntary case or other proceeding
shall be commenced against any Credit Party seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar Law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against any Credit Party under the federal bankruptcy
Laws as now or hereafter in effect;

 

(i)                                     one (1) or more judgments or orders for
the payment of money aggregating in excess of $25,000,000 (to the extent not
covered by independent third party insurance provided by insurers of the highest
claims paying rating or financial strength as to which the insurer does not
dispute coverage and is not subject to an insolvency proceeding) shall be
rendered against any Credit Party and such judgment or order (i) shall continue
unsatisfied and unstayed (unless bonded with a supersedeas bond at least equal
to such judgment or order) for a period of 60 days, or (ii) is not fully paid
and satisfied at least 10 days prior to the date on which any of its assets may
be lawfully sold to satisfy such judgment or order;

 

(j)                                    any Credit Party shall incur
Environmental Liabilities which, individually or when considered in the
aggregate, exceed $25,000,000 (to the extent not covered by independent third
party insurance provided by insurers of the highest claims paying rating or
financial strength as to which the insurer does not dispute coverage and is not
subject to an insolvency proceeding);

 

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(k)                                 this Agreement or any other Loan Paper shall
cease to be in full force and effect or shall be declared null and void or the
validity or enforceability thereof shall be contested or challenged by any
Credit Party, or any Credit Party shall deny that it has any further liability
or obligation under any of the Loan Papers, or any Lien created by the Loan
Papers shall for any reason (other than the express release thereof by a written
instrument executed by Administrative Agent in accordance with the Loan Papers)
cease to be a valid, first priority, perfected Lien (other than Permitted
Encumbrances) upon any of the property purported to be covered thereby;

 

(l)                                     Borrower shall fail to cure any
Borrowing Base Deficiency in accordance with Section 2.6 or Section 4.4;

 

(m)                             a Change of Control shall occur; or

 

(n)                                 an Event of Default (as defined in the
Senior Notes Indenture) shall occur under the Senior Notes Indenture;

 

then, and in every such event, Administrative Agent shall without presentment,
notice or demand (unless expressly provided for herein) of any kind (including
notice of intention to accelerate and acceleration), all of which are hereby
waived, (i) if requested by Required Banks, terminate the Commitments and they
shall thereupon terminate, and (ii) if requested by Required Banks, take such
other actions as may be permitted by the Loan Papers including, declaring the
Notes, or any of them, (together with accrued interest thereon) to be, and the
Notes, or any of them, shall thereupon become, immediately due and payable;
provided that (iii) in the case of any of the Events of Default specified in
Section 11.1(g) or Section 11.1(h), without any notice to Borrower or any other
Credit Party or any other act by Administrative Agent or Banks, the Commitments
shall thereupon terminate and the Notes (together with accrued interest thereon)
shall become immediately due and payable.

 

ARTICLE XII
AGENTS

 

Section 12.1                             Appointment and Authorization of
Administrative Agent; Secured Hedge Transactions.

 

(a)                                 Each Bank hereby irrevocably (subject to
Section 12.10) appoints, designates and authorizes the Administrative Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Paper and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Paper, together with such powers as are reasonably incidental thereto. 
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Paper, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Bank or participant, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Agreement or any
other Loan Paper or otherwise exist against the Administrative Agent.  Without
limiting the generality of the foregoing sentence, the use of the term “agent”
herein and in the other Loan Papers with

 

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reference to the Administrative Agent, any syndication agent or documentation
agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law.  Instead, such
term is used merely as a matter of market custom, and is intended to create or
reflect only an administrative relationship between independent contracting
parties.

 

(b)                                 Each Letter of Credit Issuer shall act on
behalf of the Banks with respect to any Letters of Credit issued by it and the
documents associated therewith until such time (and except for so long) as the
Administrative Agent may agree at the request of the Required Banks to act for
such Letter of Credit Issuer with respect thereto; provided, however, that each
Letter of Credit Issuer shall have all of the benefits and immunities
(i) provided to the Administrative Agent in this Article XII with respect to any
acts taken or omissions suffered by a Letter of Credit Issuer in connection with
Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term “Administrative Agent” as used in this
Article XII included each Letter of Credit Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to each Letter
of Credit Issuer.

 

Section 12.2                             Delegation of Duties.  The
Administrative Agent may execute any of its duties under this Agreement or any
other Loan Paper by or through agents, sub-agents, employees or attorneys in
fact and shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties.  Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or attorney in
fact that it selects in the absence of gross negligence or willful misconduct.

 

Section 12.3                             Default; Collateral.

 

(a)                                 Upon the occurrence and continuance of a
Default or Event of Default, the Banks agree to promptly confer in order that
Required Banks or the Banks, as the case may be, may agree upon a course of
action for the enforcement of the rights of the Banks; and the Administrative
Agent shall be entitled to refrain from taking any action (without incurring any
liability to any Person for so refraining) unless and until the Administrative
Agent shall have received instructions from Required Banks or the Banks, as the
case may be.  All rights of action under the Loan Papers and all right to the
collateral under the Loan Papers, if any, hereunder may be enforced by the
Administrative Agent and any suit or proceeding instituted by the Administrative
Agent in furtherance of such enforcement shall be brought in its name as the
Administrative Agent without the necessity of joining as plaintiffs or
defendants any other Bank, and the recovery of any judgment shall be for the
benefit of the Banks (and, with respect to certain Hedge Transactions that are
secured under the Loan Papers, Affiliates, if applicable) subject to the
expenses of the Administrative Agent.  In actions with respect to any property
of Borrower or any other Credit Party, the Administrative Agent is acting for
the ratable benefit of each Bank (and, with respect to certain Hedge
Transactions that are secured under the Loan Papers, Affiliates, if
applicable).  Any and all agreements to subordinate (whether made heretofore or
hereafter) other indebtedness or obligations of Borrower to the Obligations
shall be construed as being for the ratable benefit of each Bank (and, with
respect to certain Hedge Transactions that are secured under the Loan Papers,
Affiliates, if applicable).

 

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(b)                                 Each Bank authorizes and directs the
Administrative Agent to enter into the other Loan Papers on behalf of and for
the benefit of such Bank (and, with respect to certain Hedge Transactions that
are secured under the Loan Papers, Affiliates, if applicable) (or if previously
entered into, hereby ratifies the Administrative Agent’s (or any predecessor
administrative agent’s) previously entering into such agreements and other Loan
Papers).

 

(c)                                  Except to the extent unanimity (or other
percentage set forth in Section 14.2) is required hereunder, each Bank agrees
that any action taken by the Required Banks in accordance with the provisions of
the Loan Papers, and the exercise by the Required Banks of the power set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Banks.

 

(d)                                 The Administrative Agent is hereby
authorized on behalf of the Banks, without the necessity of any notice to or
further consent from any Bank, from time to time to take any action with respect
to any collateral under the Loan Papers or any Loan Papers which may be
necessary to perfect and maintain perfected the Liens upon such collateral
granted pursuant to the other Loan Papers.

 

(e)                                  The Administrative Agent shall not have any
obligation whatsoever to any Bank or to any other Person to assure that such
collateral exists or is owned by the Person purporting to own it or is cared
for, protected, or insured or has been encumbered or that the Liens granted to
the Administrative Agent (or any predecessor administrative agent) herein or
pursuant thereto have been properly or sufficiently or lawfully created,
perfected, protected, or enforced, or are entitled to any particular priority,
or to exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the rights granted or
available to the Administrative Agent in this Section 12.3 or in any of the
other Loan Papers; IT BEING UNDERSTOOD AND AGREED THAT IN RESPECT OF THE
COLLATERAL UNDER THE LOAN PAPERS, OR ANY ACT, OMISSION, OR EVENT RELATED
THERETO, THE ADMINISTRATIVE AGENT MAY (AS BETWEEN THE ADMINISTRATIVE AGENT AND
THE BANKS) ACT IN ANY MANNER IT MAY DEEM APPROPRIATE, IN ITS SOLE DISCRETION,
GIVEN THE ADMINISTRATIVE AGENT’S OWN INTEREST IN SUCH COLLATERAL AS ONE OF THE
BANKS AND THAT THE ADMINISTRATIVE AGENT SHALL HAVE NO DUTY OR LIABILITY
WHATSOEVER TO ANY BANK (AND, WITH RESPECT TO CERTAIN HEDGE TRANSACTIONS THAT ARE
SECURED UNDER THE LOAN PAPERS, AFFILIATES, IF APPLICABLE), OTHER THAN TO ACT
WITHOUT GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

(f)                                   The Banks hereby irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any collateral under the
Loan Papers:  (A) constituting property in which neither Borrower nor any other
Credit Party owned an interest at the time the Lien was granted or at any time
thereafter; (B) constituting property leased to Borrower or any other Credit
Party under a lease which has expired or been terminated in a transaction
permitted under the Loan Papers or is about to expire and which has not been,
and is not intended by Borrower or such Credit Party to be, renewed; or
(C) consisting of an instrument or other possessory collateral evidencing Debt
or other obligations pledged to the Administrative Agent (for the benefit of the
Banks), if the Debt or obligations evidenced thereby has been paid in full or
otherwise superseded.  In addition, the

 

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Banks irrevocably authorize the Administrative Agent to release Liens upon
collateral under the Loan Papers as contemplated herein, or if approved,
authorized, or ratified in writing by the requisite Banks.  Upon request by the
Administrative Agent at any time, the Banks will confirm in writing the
Administrative Agent’s authority to release particular types or items of such
collateral pursuant to this Section 12.3.

 

(g)                                  In furtherance of the authorizations set
forth in this Section 12.3, each Bank hereby irrevocably appoints the
Administrative Agent its attorney-in-fact, with full power of substitution, for
and on behalf of and in the name of each such Bank (i) to enter into the other
Loan Papers (including, without limitation, any appointments of substitute
trustees under any such Loan Papers), (ii) to take action with respect to the
other Loan Papers and the collateral thereunder to perfect, maintain, and
preserve Banks’ Liens, and (iii) to execute instruments of release or to take
other action necessary to release Liens upon any such collateral to the extent
authorized in paragraph (f) hereof.  This power of attorney shall be liberally,
not restrictively, construed so as to give the greatest latitude to the
Administrative Agent’s power, as attorney, relative to the matters described in
this Section 12.3 relating to collateral.  The powers and authorities herein
conferred on the Administrative Agent may be exercised by the Administrative
Agent through any Person who, at the time of the execution of a particular
instrument, is an officer of the Administrative Agent (or any Person acting on
behalf of the Administrative Agent pursuant to a valid power of attorney).  The
power of attorney conferred by this Section 12.3(g) to the Administrative Agent
is granted for valuable consideration and is coupled with an interest and is
irrevocable so long as the Obligations, or any part thereof, shall remain unpaid
or the Banks are obligated to make any Loan or issue any Letter of Credit under
the Loan Papers.

 

Section 12.4                             Liability of Administrative Agent.  NO
INDEMNIFIED ENTITY OF THE ADMINISTRATIVE AGENT SHALL (a) BE LIABLE FOR ANY
ACTION TAKEN OR OMITTED TO BE TAKEN BY ANY OF THEM UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER LOAN PAPER OR THE TRANSACTIONS CONTEMPLATED HEREBY
(EXCEPT FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT IN CONNECTION WITH
ITS DUTIES EXPRESSLY SET FORTH HEREIN), or (b) be responsible in any manner to
any Bank or participant for any recital, statement, representation or warranty
made by Borrower or any other Credit Party or any officer thereof, contained
herein or in any other Loan Paper, or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Paper, or
the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Paper, or for the creation, perfection or priority
of any Liens purported to be created by any of the Loan Papers, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, or to make any inquiry respecting the performance by Borrower of its
obligations hereunder or under any other Loan Paper, or for any failure of
Borrower or any other Credit Party or any other party to any Credit Party to
perform its obligations hereunder or thereunder.  No Indemnified Entity of the
Administrative Agent shall be under any obligation to any Bank or participant to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Paper, or to inspect the properties, books or records of Borrower or any other
Credit Party or any Affiliate thereof.

 

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Section 12.5                             Reliance by Administrative Agent.

 

(a)                                 The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, electronic mail, or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to Borrower or any other Credit Party), independent accountants and
other experts selected by the Administrative Agent.  The Administrative Agent
shall be fully justified in failing or refusing to take any action under any
Loan Paper unless it shall first receive such advice or concurrence of the
requisite Required Banks as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.  The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any other Loan Paper in accordance with a request or consent of the requisite
Required Banks or all the Banks, if required hereunder, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Banks and participants.  Where this Agreement expressly permits or prohibits an
action unless the requisite Required Banks otherwise determine, the
Administrative Agent shall, and in all other instances, the Administrative Agent
may, but shall not be required to, initiate any solicitation for the consent or
a vote of the requisite Banks.

 

(b)                                 For purposes of determining compliance with
the conditions specified in Section 6.1, each Bank that has funded its
Commitment Percentage of the initial Loan on the Effective Date (or, if there is
no Loan made on such date, each Bank other than Banks who gave written objection
to the Administrative Agent prior to such date) shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter either sent by the Administrative Agent to such Bank (or otherwise
made available for such Bank on SyndTrak Online, DXSyndicate™ or any similar
website) for consent, approval, acceptance or satisfaction, or required
hereunder to be consented to or approved by or acceptable or satisfactory to a
Bank.

 

Section 12.6                             Notice of Default.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of any
Default or Event of Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Banks, unless the Administrative Agent shall have received
written notice from a Bank or Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of
default.” The Administrative Agent will notify the Banks of its receipt of any
such notice.  The Administrative Agent shall take such action with respect to
such Default or Event of Default as may be directed by the Required Banks in
accordance with this Agreement; provided, however, that unless and until the
Administrative Agent has received any such direction, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable or in the best interest of the Banks.

 

Section 12.7                             Credit Decision; Disclosure of
Information by Administrative Agent.  Each Bank acknowledges that no Indemnified
Entity of the Administrative Agent has made any

 

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representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of Borrower or any other Credit Party or any Affiliate
thereof, shall be deemed to constitute any representation or warranty by any
Indemnified Entity of the Administrative Agent to any Bank as to any matter,
including whether Indemnified Entities of the Administrative Agent have
disclosed material information in their possession.  Each Bank represents to the
Administrative Agent that it has, independently and without reliance upon any
Indemnified Entity of the Administrative Agent and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrower and each other Credit Party,
and all applicable bank or other regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to Borrower hereunder.  Each Bank also represents that it will,
independently and without reliance upon any Indemnified Entity of the
Administrative Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Papers, and to make such investigations as it deems necessary to
inform itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of Borrower and the other Credit Parties. 
In this regard, each Bank acknowledges that Vinson & Elkins L.L.P. is acting in
this transaction as counsel to the Administrative Agent.  Each other party
hereto will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Papers and the matters contemplated
therein. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Administrative Agent herein, the Administrative
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Credit
Parties or any of their respective Affiliates which may come into the possession
of any Indemnified Entity of the Administrative Agent.

 

Section 12.8                             Indemnification of Agents.  WHETHER OR
NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED, THE BANKS SHALL
INDEMNIFY UPON DEMAND EACH INDEMNIFIED ENTITY OF THE ADMINISTRATIVE AGENT (TO
THE EXTENT NOT REIMBURSED BY OR ON BEHALF OF BORROWER AND WITHOUT LIMITING THE
OBLIGATION OF BORROWER TO DO SO), IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT
PERCENTAGES, AND HOLD HARMLESS EACH INDEMNIFIED ENTITY OF THE ADMINISTRATIVE
AGENT FROM AND AGAINST ANY AND ALL INDEMNIFIED LIABILITIES INCURRED BY IT
(INCLUDING SUCH INDEMNIFIED ENTITY OF THE ADMINISTRATIVE AGENT’S OWN
NEGLIGENCE); PROVIDED, HOWEVER, THAT NO BANK SHALL BE LIABLE FOR THE PAYMENT TO
ANY INDEMNIFIED ENTITY OF THE ADMINISTRATIVE AGENT OF ANY PORTION OF SUCH
INDEMNIFIED LIABILITIES RESULTING FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT; provided, however, that no action taken in accordance with the
directions of the Required Banks shall be deemed to constitute gross negligence
or willful misconduct for purposes of this Section 12.8.  Without limitation of
the foregoing, each Bank shall reimburse the Administrative Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including counsel
fees) incurred by the Administrative Agent in connection with the

 

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preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Paper, or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is not reimbursed for such expenses by
or on behalf of Borrower.  The undertaking in this Section 12.8 shall survive
termination of the Commitments, the payment of all Obligations hereunder and the
resignation or replacement of the Administrative Agent.

 

Section 12.9                             Administrative Agent in its Individual
Capacity.  Wells Fargo Bank, N.A. and its Affiliates may make loans to, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with Borrower
and its Affiliates as though Wells Fargo Bank, N.A. were not the Administrative
Agent or a Letter of Credit Issuer hereunder and without notice to or consent of
the Banks.  The Banks acknowledge that, pursuant to such activities, Wells Fargo
Bank, N.A. or its Affiliates may receive information regarding Borrower or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of Borrower or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them.  With respect to its Loans, Wells Fargo Bank, N.A. shall have the same
rights and powers under this Agreement as any other Bank and may exercise such
rights and powers as though it were not the Administrative Agent or a Letter of
Credit Issuer, and the terms “Bank” and “Banks” include Wells Fargo Bank, N.A.
in its individual capacity.

 

Section 12.10                      Successor Administrative Agent and Letter of
Credit Issuer.  The Administrative Agent or a Letter of Credit Issuer may,
subject to the acceptance of the appointment of a successor as provided herein,
resign at any time upon 30 days’ notice to the Banks with a copy of such notice
to Borrower.  In addition, Borrower may, if no Event of Default exists and is
continuing, request the designation by the Banks of a successor administrative
agent or letter of credit issuer.  Upon any such request by Borrower or notice
by the Administrative Agent or a Letter of Credit Issuer, the Required Banks
shall, with the consent of Borrower at all times other than during the existence
of an Event of Default (which consent of Borrower shall not be unreasonably
withheld, delayed or conditioned) appoint from among the Banks a successor
administrative agent or letter of credit issuer.  If no successor administrative
agent or letter of credit issuer has both been appointed by the Required Banks
and accepted within 30 days after the retiring Administrative Agent’s or Letter
of Credit Issuer’s notice of resignation, the Administrative Agent may appoint a
successor administrative agent and/or letter of credit issuer which shall (a) be
a commercial bank organized under the Laws of the United States of America or of
any State thereof and having a combined capital surplus of at least $500,000,000
and (b) unless the successor administrative agent and/or letter of credit issuer
is a Bank, be reasonably acceptable to the Borrower.  Upon the acceptance of its
appointment as successor administrative agent and/or letter of credit issuer
hereunder, (x) such successor administrative agent and/or letter of credit
issuer shall succeed to all the rights, powers and duties of the retiring
Administrative Agent or Letter of Credit Issuer, (y) the terms “Administrative
Agent” and “Letter of Credit Issuer” shall respectively mean such successor
administrative agent and letter of credit issuer, and (z) the retiring
Administrative Agent’s or Letter of Credit Issuer’s appointment, powers and
duties as Administrative Agent or Letter of Credit Issuer shall be terminated.
The retiring Letter of Credit Issuer shall remain the Letter of Credit Issuer
with respect to any Letters of Credit outstanding on the effective date of its
resignation and the

 

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provisions affecting such Letter of Credit Issuer with respect to Letters of
Credit shall inure to the benefit of the resigning Letter of Credit Issuer until
the termination of all such Letters of Credit.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article XII and Sections 14.3 and 14.5 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

 

Section 12.11                      Syndication Agent; Other Agents; Arrangers. 
None of the Banks or other Persons identified on the facing page or signature
pages of this Agreement as a “syndication agent,” as a “documentation agent,”
any other type of agent (other than the Administrative Agent), “arranger,” or
“bookrunner” shall have any right, power, obligation, liability, responsibility
or duty under this Agreement other than those applicable to all Banks as such. 
Without limiting the foregoing, none of the Banks so identified shall have or be
deemed to have any fiduciary relationship with any Bank.  Each Bank acknowledges
that it has not relied, and will not rely, on any of the Banks so identified in
deciding to enter into this Agreement or in taking or not taking action
hereunder.

 

Section 12.12                      Administrative Agent May File Proof of
Claim.  In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to Borrower or any other Credit Party, the
Administrative Agent (irrespective of whether the principal of any Loan or
Letter of Credit Exposure 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 Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:

 

(a)                                 to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
Letter of Credit Exposures 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 Banks, the Letter of Credit Issuers and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Banks, the Letter of Credit Issuers
and the Administrative Agent and their respective agents and counsel and all
other amounts due the Banks, the Letter of Credit Issuers and the Administrative
Agent under Section 14.3) 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 Bank and Letter of Credit Issuer 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 Banks and Letter of
Credit Issuers, 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 14.3.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Bank or Letter of
Credit Issuer any

 

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plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Bank or to authorize the Administrative Agent
to vote in respect of the claim of any Bank in any such proceeding.

 

Section 12.13                      Secured Hedge Transactions.  To the extent
any Affiliate of a Bank is a party to a Hedge Transaction with Borrower or any
other Credit Party and thereby becomes a beneficiary of the Liens pursuant to
any Loan Paper, such Affiliate of a Bank shall be deemed to appoint the
Administrative Agent its nominee and agent to act for and on behalf of such
Affiliate in connection with such Loan Papers and to be bound by the terms of
this Article XII, and the other provisions of this Agreement.

 

ARTICLE XIII
PROTECTION OF YIELD; CHANGE IN LAWS

 

Section 13.1                             Basis for Determining Interest Rate
Applicable to Eurodollar Tranches Inadequate.  If Banks having at least 50% of
the Aggregate Maximum Credit Amounts then in effect (or, if the Commitments
shall have been terminated, holding Notes evidencing at least 50% of the
aggregate principal amount of the Loans and Letters of Credit then outstanding)
(as used in this Section 13.1, the “Majority Banks”) determine that for any
reason in connection with any request for a Loan or a conversion to or
continuation thereof that (a) dollar deposits are not being offered to banks in
the London interbank eurodollar market for the applicable amount and Interest
Period of such Loan, (b) adequate and reasonable means do not exist for
determining the LIBOR Rate for any requested Interest Period with respect to a
proposed Eurodollar Loan or in connection with an Adjusted Base Rate Loan, or
(c) the LIBOR Rate for any requested Interest Period with respect to a proposed
Eurodollar Loan or in connection with an Adjusted Base Rate Loan does not
adequately and fairly reflect the cost to such Banks of funding such Loan, the
Administrative Agent will promptly so notify Borrower and each Bank. 
Thereafter, the obligation of the Banks to make or maintain Eurodollar Loans and
Adjusted Base Rate Loans as to which the interest rate is determined with
reference to the LIBOR Rate shall be suspended until the Administrative Agent
(upon the instruction of the Majority Banks) revokes such notice.  Upon receipt
of such notice, Borrower may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Loans or, failing that, will be
deemed to have converted such request into a request for a Borrowing of Adjusted
Base Rate Loans in the amount specified therein.

 

Section 13.2                             Illegality of Eurodollar Tranches.

 

(a)                                 If, after the date of this Agreement, the
adoption of any applicable Law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Eurodollar Lending
Office) with any request or directive (whether or not having the force of Law)
of any such authority, central bank or comparable agency shall make it unlawful
or impossible for any Bank (or its Eurodollar Lending Office) to make, maintain
or fund any portion of the Loans subject to a Eurodollar Tranche and such Bank
shall so notify Administrative Agent, Administrative Agent shall forthwith give
notice thereof to the other Banks and Borrower.  Until such Bank notifies
Borrower and Administrative Agent that the circumstances giving rise to such
suspension no

 

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longer exist, the obligation of such Bank to maintain or fund any portion of the
Loans subject to a Eurodollar Tranche shall be suspended.  Before giving any
notice to Administrative Agent pursuant to this Section 13.2, such Bank shall
designate a different Eurodollar Lending Office if such designation will avoid
the need for giving such notice and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank.  If such Bank shall determine that it
may not lawfully continue to maintain and fund any portion of the Loans
outstanding subject to a Eurodollar Tranche to maturity and shall so specify in
such notice, Borrower shall immediately convert the principal amount of the
Loans which is subject to a Eurodollar Tranche to an Adjusted Base Rate Tranche
of an equal principal amount from such Bank (on which interest and principal
shall be payable contemporaneously with the unaffected Eurodollar Tranches of
the other Banks).

 

(b)                                 No Bank shall be required to make any Loan
(or any portion thereof) hereunder if the making of such Loan (or any portion
thereof) would be in violation of any Law applicable to such Bank.

 

Section 13.3                             Increased Cost of Eurodollar Tranche. 
If after the Closing Date, the adoption of any applicable Law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Bank (or its Lending Office) with any request or directive (whether or
not having the force of Law) of any such authority, central bank or comparable
agency:

 

(a)                                 shall subject any Bank (or its Lending
Office) to any tax, duty or other charge with respect to maintaining or funding
any portion of the Loans subject to a Eurodollar Tranche, its Note or its
obligation to allow interest to be computed by reference to the Adjusted LIBOR
Rate shall change the basis of taxation of payments to any Bank (or its Lending
Office) of the principal of or interest on any portion of the Loans which is
subject to any Eurodollar Tranche or any other amounts due under this Agreement
in respect of any portion of any Loan which is subject to any Eurodollar Tranche
or its obligation to allow interest to be computed by reference to the Adjusted
LIBOR Rate (except for changes in the rate of Tax on the overall net income of
such Bank or its Lending Office imposed by the jurisdiction in which such Bank’s
principal executive office or Lending Office is located); or

 

(b)                                 shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including any such requirement
imposed by the Board of Governors of the Federal Reserve System, but excluding
with respect to any Eurodollar Tranche any such requirement included in an
applicable Eurodollar Reserve Percentage) against assets of, deposits with or
for the account of or credit extended by, any Bank’s Lending Office or shall
impose on any Bank (or its Lending Office) or the applicable interbank
eurodollar market or any other condition affecting Eurodollar Tranches, its Note
or its obligation to allow interest to be computed by reference to the Adjusted
LIBOR Rate;

 

and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of funding or maintaining any portion of any Loan subject to
a Eurodollar Tranche, or to reduce the amount of any sum received or receivable
by such Bank (or its Lending Office) under this Agreement or under its Note with
respect thereto, by an amount deemed by such Bank to be

 

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material, then, within five (5) days after demand by such Bank setting forth the
calculation of such sum in reasonable detail (with a copy to the Administrative
Agent), Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or reduction.  Each Bank will
promptly notify Borrower and Administrative Agent of any event of which it has
knowledge, occurring after the Closing Date, which will entitle such Bank to
compensation pursuant to this Section 13.3 and will designate a different
Lending Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank.  A certificate of any Bank claiming compensation
under this Section 13.3 and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest error.  In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.

 

Section 13.4                             Adjusted Base Rate Tranche Substituted
for Affected Eurodollar Tranche.  If (a) the obligation of any Bank to fund or
maintain any portion of any Loan subject to a Eurodollar Tranche has been
suspended pursuant to Section 13.2, or (b) any Bank has demanded compensation
under Section 13.3 and Borrower shall, by at least five Eurodollar Business Days
prior notice to such Bank through the Administrative Agent, have elected that
the provisions of this Section 13.4 shall apply to such Bank, then, unless and
until such Bank notifies Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer apply:

 

(i)                                     any Tranche which would otherwise be
characterized by such Bank as a Eurodollar Tranche shall instead be deemed an
Adjusted Base Rate Tranche (on which interest and principal shall be payable
contemporaneously with the unaffected Eurodollar Tranches of the other Banks);
and

 

(ii)                                  after all of its Eurodollar Tranches have
been repaid, all payments of principal which would otherwise be applied to repay
Eurodollar Tranches shall be applied to repay its Adjusted Base Rate Tranches
instead.

 

Section 13.5                             Capital Adequacy.  If after the Closing
Date, the adoption of any applicable Law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof, by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
Lending Office) with any request or directive (whether or not having the force
of Law), shall:

 

(a)                                 impose, modify or deem applicable any
reserve, special deposit, compensatory loan, deposit insurance, capital
adequacy, liquidity requirement, minimum capital, capital ratio or similar
requirement against all or any assets held by, deposits or accounts with, credit
extended by or to, or commitments to extend credit or any other acquisition of
funds by any Bank (or its Lending Office), or impose on any Bank (or its Lending
Office) any other condition, with respect to the maintenance by such Bank of all
or any part of its Commitment; or

 

(b)                                 subject any Bank (or its Lending Office) to,
or cause the termination or reduction of a previously granted exemption with
respect to, any Tax with respect to the maintenance by such Bank of all or any
part of its Commitment (other than Taxes assessed against such Bank’s overall
net income); and the result of any of the foregoing is to increase the

 

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cost to such Bank (or its Lending Office) of maintaining its Commitment or to
reduce the amount of any sums received or receivable by it (or its Lending
Office) under this Agreement or any other Loan Paper, or to reduce the rate of
return on such Bank’s equity in connection with this Agreement, as the case may
be, by an amount which such Bank deems material then, in any such case, within
five days of demand by such Bank (or its Lending Office) (with a copy to
Administrative Agent), Borrower shall pay to such Bank (or its Lending Office)
such additional amount or amounts as will compensate such Bank for any
additional cost, reduced benefit, reduced amount received or reduced rate of
return.  Each Bank will promptly notify Borrower and Administrative Agent of any
event of which it has knowledge, occurring after the Closing Date, which will
entitle such Bank to compensation pursuant to this Section 13.5.  A certificate
of any Bank claiming compensation under this Section 13.5 and setting forth the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error.  In determining such amount, such Bank may use
any reasonable averaging and attribution methods.  For all purposes under this
Agreement, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, guidelines or directives in connection therewith or promulgated by the
Bank for International Settlements, the Basel Committee on Banking Supervision
or the United States or foreign regulatory authorities, in each case, pursuant
to Basel III, shall be deemed to have gone into effect and to have been adopted
after the Closing Date.

 

(c)                                  Without limiting the foregoing, in the
event any event or condition described in this Section 13.5 shall occur or arise
which relates to the maintenance by any Bank of that part of its Commitment
which is in excess of its Commitment Percentage of the Total Commitment then in
effect (such excess portion of such Commitment of any Bank is hereinafter
referred to as its “Surplus Commitment”), such Bank shall notify Administrative
Agent and Borrower of the occurrence of such event or the existence of such
condition and of the amount of a fee (to be computed on a per annum basis with
respect to such Bank’s Surplus Commitment) which such Bank determines in good
faith will compensate such Bank for such additional cost, reduced benefit,
reduced amount received or reduced rate of return.  Within five Business Days
following receipt of such notice, Borrower shall notify such Bank whether it
accepts or rejects such fee (if Borrower fails to timely respond to such notice
it will be deemed to have accepted such fee).  If Borrower rejects such fee, the
applicable Commitment of each Bank will be automatically and permanently reduced
to such Bank’s Commitment Percentage of the Total Commitment then in effect.  If
Borrower accepts such fee, such fee shall accrue from and after the date of such
Bank’s notice and shall be payable in arrears (based on the daily average
balance of such Bank’s Surplus Commitment) on the last day of each Fiscal
Quarter and on the Termination Date.  Such fee shall be in lieu of any amounts
to which such Bank would otherwise be entitled in respect of its Surplus
Commitment pursuant to the other provisions of this Section 13.5 for the period
on and after the date of such notice unless such Bank determines that such fee
is not adequate to fully compensate such Bank for any additional cost, reduced
benefit, reduced amount received or reduced rate of return such Bank may
thereafter incur in respect of such Bank’s Surplus Commitment.  In that event
such Bank shall be entitled to such additional compensation to which such Bank
is otherwise entitled pursuant to this Section 13.5.

 

(d)                                 Failure or delay on the part of any Bank to
demand compensation pursuant to this Section 13.5 or Section 13.3 shall not
constitute a waiver of such Bank’s right to demand such compensation; provided
that Borrower shall not be required to compensate any Bank pursuant to this
Section 13.5 or Section 13.3 for any increased costs or reductions incurred more

 

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than 365 days prior to the date that such Bank notifies Borrower of the change
in Law or other event giving rise to such increased costs or reductions and of
such Bank’s intention to claim compensation therefor; provided further that, if
the change in Law or other event giving rise to such increased costs or
reductions is retroactive, then the 365-day period referred to above shall be
extended to include the period of retroactive effect hereof.

 

Section 13.6                             Taxes.

 

(a)                                 All amounts payable by Borrower under the
Loan Papers (whether principal, interest, fees, expenses, or otherwise) to or
for the account of each Bank shall be paid in full, free of any deductions or
withholdings for or on account of any Indemnified Taxes and Documentary Taxes. 
If Borrower is prohibited by Law from paying any such amount free of any such
deductions and withholdings, then (at the same time and in the same manner that
such original amount is otherwise due under the Loan Papers) Borrower shall pay
to or for the account of such Bank such additional amount as may be necessary in
order that the actual amount received by such Bank after deduction and/or
withholding (and after payment of any additional Indemnified Taxes and
Documentary Taxes due as a consequence of the payment of such additional amount,
and so on) will equal the amount such Bank would have received if such deduction
or withholding were not made.  If a payment made to a Bank under this Agreement
would be subject to United States Federal withholding tax imposed by FATCA if
such Bank fails to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the Code, as
applicable), such Bank shall deliver to the Withholding Agent, at the time or
times prescribed by law and at such time or times reasonably requested by the
Withholding Agent, such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Withholding Agent as may be necessary
for the Withholding Agent to comply with its obligations under FATCA, to
determine that such Bank has complied with such Bank’s obligations under FATCA
or to determine the amount to deduct and withhold from such payment.

 

(b)                                 Each Bank shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (i) any
Indemnified Taxes attributable to such Bank (but only to the extent that
Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrower to do so),
and (ii) any Excluded Taxes attributable to such Bank, in each case, that are
payable or paid by the Administrative Agent in connection with any Loan Paper,
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 Bank by the Administrative Agent shall be conclusive
absent manifest error.  Each Bank hereby authorizes the Administrative Agent to
set off and apply any and all amounts at any time owing to such Bank under any
Loan Paper or otherwise payable by the Administrative Agent to the Bank from any
other source against any amount due to the Administrative Agent under this
paragraph (b).

 

Section 13.7                             Discretion of Banks as to Manner of
Funding.  Notwithstanding any provisions of this Agreement to the contrary, each
Bank shall be entitled to fund and maintain its funding of all or any part of
its Commitment in any manner it sees fit, it being understood,

 

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however, that for the purposes of this Agreement all determinations hereunder
shall be made as if such Bank had actually funded and maintained the Loans (or
any portion thereof) subject to a Eurodollar Tranche during the Interest Period
for the Loans (or any portion thereof) through the purchase of deposits having a
maturity corresponding to the last day of such Interest Period and bearing an
interest rate equal to the Adjusted LIBOR Rate for such Interest Period.

 

Section 13.8                             Replacement of Banks.  If (a) any Bank
requests compensation under Section 13.3, (b) the obligation of any Bank to make
Eurodollar Loans or continue Loans as Eurodollar Loans has been suspended
pursuant to Section 13.4, (c) Borrower is required to pay any additional amount
to any Bank or any Governmental Authority for the account of any Bank pursuant
to Section 13.5, (d) any Bank is a Defaulting Bank or (e) any Bank has voted
against an amendment, modification or waiver of any provision of this Agreement
proposed by Borrower, which proposed amendment, modification or waiver (i) was
approved by Banks representing no less than 90% of the aggregate Commitments
(or, following termination or expiration of the Commitments, the Outstanding
Revolving Credit) but (ii) required the approval of all Banks and did not get
such approval, then Borrower may, at its sole expense and effort, upon notice to
such Bank and the Administrative Agent, require such Bank to assign and
delegate, without recourse (in accordance with and subject to the restrictions
in Section 14.8(b)) all its interests, rights and obligations under this
Agreement at par (plus all accrued and unpaid interest and fees) to an assignee
that shall assume such obligations (which assignee may be another Bank, if a
Bank accepts such assignment); provided, that in the case of any such assignment
resulting from a request for compensation under Section 13.3, the suspension of
an obligation to make Eurodollar Loans or continue Loans as Eurodollar Loans
under Section 13.4, or the requirement that Borrower pay any additional amount
under Section 13.5, such assignment will result in a reduction of such
compensation, a resumption of such obligation in whole or in part, or the
reduction of such payments, as applicable.

 

ARTICLE XIV
MISCELLANEOUS

 

Section 14.1                             Notices; Effectiveness; Electronic
Communications.

 

(a)                                 Notices Generally.  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 as follows, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

 

(i)                                     if to Borrower or any other Credit
Party, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on the signature pages hereof;

 

(ii)                                  the Administrative Agent, to the address,
telecopier number, electronic mail address or telephone number specified for
such Person on Schedule 1; and

 

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(iii)                               if to the Letter of Credit Issuer or any
Bank, to the address, telecopier number, electronic mail address or telephone
number specified on the most recently delivered Administrative Questionnaire.

 

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 (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 such
subsection (b).

 

(b)                                 Electronic Communications.  Notices and
other communications to the Banks and the Letter of Credit Issuer 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 Bank or the Letter of Credit Issuer pursuant to Article II if such Bank or
the Letter of Credit Issuer, as applicable, has notified the Administrative
Agent that it is incapable of receiving notices under such Article by electronic
communication.  The Administrative Agent or Borrower may, in its discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.  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)                                  The Platform.  THE PLATFORM IS PROVIDED “AS
IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE
PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE
BORROWER MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON- INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR
OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of
its Affiliates (collectively, the “Agent Parties”) have any liability to
Borrower, any other Credit Party, any Bank, the Letter of Credit Issuer or any
other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses

 

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are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided that, in no event shall any Agent Party have any
liability to Borrower, any other Credit Party, any Bank, the Letter of Credit
Issuer or any other Person for indirect, special, incidental, consequential or
punitive damages (as opposed to direct or actual damages).

 

(d)                                 Change of Address, Etc.  Each of Borrower,
each other Credit Party, the Administrative Agent, and the Letter of Credit
Issuer may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the other parties hereto.  Each
other Bank may change its address, telecopier or telephone number for notices
and other communications hereunder by notice to Borrower, the Administrative
Agent, and the Letter of Credit Issuer.  In addition, each Bank agrees to notify
the Administrative Agent from time to time to ensure that the Administrative
Agent has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Bank. 
Furthermore, each Public Bank agrees to cause at least one individual at or on
behalf of such Public Bank to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Bank or its delegate, in accordance with
such Public Bank’s compliance procedures and applicable Law, including United
States Federal and state securities Laws, to make reference to Borrower
Materials that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to Borrower or its securities for purposes of United States Federal
or state securities laws.

 

(e)                                  Reliance by Administrative Agent, Letter of
Credit Issuer and Banks.  The Administrative Agent, the Letter of Credit Issuer
and the Banks shall be entitled to rely and act upon any notices (including
telephonic Requests for Borrowing) purportedly given by or on behalf of Borrower
even if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the recipient,
varied from any confirmation thereof.  Borrower shall indemnify the
Administrative Agent, the Letter of Credit Issuer, each Bank and the Affiliates
of each of them from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
Borrower.  All telephonic notices to and other telephonic communications with
the Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.

 

Section 14.2                             Waivers and Amendments;
Acknowledgments.

 

(a)                                 No failure or delay (whether by course of
conduct or otherwise) by any Bank or Administrative Agent in exercising any
right, power or remedy which they may have under any of the Loan Papers shall
operate as a waiver thereof or of any other right, power or remedy, nor shall
any single or partial exercise by any Bank or Administrative Agent of any such
right, power or remedy preclude any other or further exercise thereof or of any
other right, power or remedy.  No waiver of any provision of any Loan Paper and
no consent to any departure therefrom shall ever be effective unless it is in
writing and signed by Required Banks and/or Administrative Agent in accordance
with Section 14.2(c), and then such waiver or consent shall

 

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be effective only in the specific instances and for the purposes for which given
and to the extent specified in such writing.  No notice to or demand on Borrower
shall in any case of itself entitle Borrower to any other or further notice or
demand in similar or other circumstances.  This Agreement and the other Loan
Papers set forth the entire understanding and agreement of the parties hereto
and thereto with respect to the transactions contemplated herein and therein and
supersede all prior discussions and understandings with respect to the subject
matter hereof and thereof, and no modification or amendment of or supplement to
this Agreement or the other Loan Papers shall be valid or effective unless the
same is in compliance with Section 14.2(c).

 

(b)                                 Borrower acknowledges and agrees, and
acknowledges its Affiliates understanding, that (i) it has been advised by
counsel in the negotiation, execution and delivery of the Loan Papers to which
it is a party, (ii) it has made an independent decision to enter into this
Agreement and the other Loan Papers to which it is a party, without reliance on
any representation, warranty, covenant or undertaking by Banks or Agents whether
written, oral or implicit, other than as expressly set out in this Agreement or
in another Loan Paper delivered on or after the Closing Date, (iii) there are no
representations, warranties, covenants, undertakings or agreements by any Bank
or any Agent as to the Loan Papers except as expressly set out in this Agreement
or in another Loan Paper delivered on or after the Closing Date, (iv) neither
any Bank nor any Agent owes any fiduciary duty to Borrower or any other Credit
Party with respect to any Loan Paper or the transactions contemplated thereby,
(v) the relationship pursuant to the Loan Papers between Borrower, on one hand,
and Banks and Agents, on the other hand, is and shall be solely that of debtor
and creditor, respectively, (vi) no partnership or joint venture exists with
respect to the Loan Papers between Borrower and any Bank or any Agent,
(vii) should an Event of Default or Default occur or exist each Bank and each
Agent will determine in its sole and absolute discretion and for its own reasons
what remedies and actions it will or will not exercise or take at that time,
(viii) without limiting any of the foregoing, Borrower is not relying upon any
representation or covenant by any Bank or any Agent or any representative
thereof, and no such representation or covenant has been made, that any Bank or
any Agent will, at the time of an Event of Default, or at any other time, waive,
negotiate, discuss, or take or refrain from taking any action permitted under
the Loan Papers with respect to any such Event of Default or Default or any
other provision of the Loan Papers, and (ix) each Bank has relied upon the
truthfulness of the acknowledgments in this Section 14.2(b) in deciding to
execute and deliver this Agreement and to make the Loans.

 

(c)                                  The Aggregate Elected Commitment Amount, a
Bank’s Elected Commitment Amount, a Bank’s Maximum Credit Amount, the Commitment
Percentage of each Bank, and Schedule 1 to this Agreement may be amended as set
forth in Section 2.16 and Schedule 1 to this Agreement may be amended as set
forth in Section 14.8(b).  Any other provision of this Agreement, the Notes or
the other Loan Papers may be amended or waived if, but only if such amendment or
waiver is in writing and is signed by Borrower and Required Banks (and, if the
rights or duties of Administrative Agent are affected thereby, by Administrative
Agent); provided that, (i) no such amendment or waiver shall (A) increase the
Commitment, Maximum Credit Amount and Elected Commitment of any Bank,
(B) subject any Bank to any additional obligation, or (C) amend or waive any of
the provisions of Article IV or the definitions contained in Section 1.1
applicable thereto without the written consent of such Bank and (ii) no such
amendment or waiver shall unless signed by all Banks (or, in the case of
clauses (C) and (D), each Bank affected thereby):  (A) increase the Borrowing
Base, (B) amend

 

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or waive any of the provisions of Article IV or the definitions contained in
Section 1.1 applicable thereto, (C) forgive any of the principal of or reduce
the rate of interest on the Loans or any fees hereunder, (D) postpone the
Termination Date or any date fixed for any payment of principal of or interest
on the Loan or any fees hereunder, (E) change the percentages of the Aggregate
Maximum Credit Amount or the number of Banks which shall be required for the
Banks or any of them to take any action under this Section 14.2(c) or any other
provision of this Agreement, (F) permit Borrower to assign any of its rights
hereunder, (G) provide for the release or substitution of collateral for the
Obligations or any part thereof other than releases required pursuant to sales
of collateral which are expressly permitted by Section 9.5, (H) provide for the
release of any Credit Party from its Facility Guaranty, except in connection
with a transaction expressly permitted under Section 9.4, or (I) amend any
provisions governing the pro rata sharing of payments among Banks in a manner to
permit non-pro rata sharing of payments among Banks.  Borrower, Administrative
Agent and each Bank further acknowledge that any decision by Administrative
Agent or any Bank to enter into any amendment, waiver or consent pursuant hereto
shall be made by such Bank or Administrative Agent in its sole discretion, and
in making any such decision Administrative Agent and each such Bank shall be
permitted to give due consideration to any credit or other relationship
Administrative Agent or any such Bank may have with Borrower, any other Credit
Party or any Affiliate of any Credit Party.

 

Section 14.3                             Expenses; Documentary Taxes;
Indemnification.

 

(a)                                 Borrower shall pay (i) all out-of-pocket
expenses of Administrative Agent, including reasonable fees and disbursements of
special counsel for Administrative Agent, in connection with the preparation of
this Agreement and the other Loan Papers and, if appropriate, the recordation of
the Loan Papers, any waiver or consent hereunder or any amendment hereof or any
Default or alleged Default hereunder, and (ii) if an Event of Default occurs,
all out-of-pocket expenses incurred by Administrative Agent and each Bank,
including fees and disbursements of counsel in connection with such Event of
Default and collection and other enforcement proceedings resulting therefrom,
fees of auditors and consultants incurred in connection therewith and
investigation expenses incurred by Administrative Agent and each Bank in
connection therewith.  Without duplication of Section 13.6, Borrower shall
indemnify each Bank against any Documentary Taxes.

 

(b)                                 Borrower agrees to indemnify each
Indemnified Entity (as defined below), upon demand, from and against any and all
liabilities, obligations, claims, losses, damages, penalties, fines, actions,
judgments, suits, settlements, costs, expenses or disbursements (including
reasonable fees of attorneys, accountants, experts and advisors) of any kind or
nature whatsoever (in this section collectively called “liabilities and costs”)
which to any extent (in whole or in part) may be imposed on, incurred by, or
asserted against such Indemnified Entity growing out of, resulting from or in
any other way associated with any of the collateral for the Loans, the Loan
Papers, or the transactions and events (including the enforcement or defense
thereof) at any time associated therewith or contemplated therein (including any
violation or noncompliance with any applicable environmental Laws by any Credit
Party or any liabilities or duties of any Credit Party or of any Indemnified
Entity with respect to Hazardous Substances found in or released into the
environment).

 

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THE FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND
COSTS ARE IN ANY WAY OR TO ANY EXTENT OWED, IN WHOLE OR IN PART, UNDER ANY CLAIM
OR THEORY OF STRICT LIABILITY OR ARE IN ANY EXTENT CAUSED, IN WHOLE OR IN PART,
BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND BY ANY INDEMNIFIED ENTITY,

 

provided only that, no Indemnified Entity shall be entitled under this
Section 14.3(b) to receive indemnification for that portion, if any, of any
liabilities and costs which is caused by its own individual gross negligence or
willful misconduct, as determined by a court of competent jurisdiction in a
final, non-appealable judgment, or by its own individual actions with respect to
the collateral for the Loans in its possession.  As used herein, the term
“Indemnified Entity” refers to each Bank, Administrative Agent, Letter of Credit
Issuer, and each director, officer, agent, trustee, manager, attorney, employee,
representative, partner and Affiliate of any such Person.

 

(c)                                  The agreements in this Section 14.3 shall
survive the resignation of the Administrative Agent, the Letter of Credit
Issuer, the replacement of any Bank, the termination of the Total Commitment,
the repayment, satisfaction or discharge of all the other Obligations, and the
termination of the Loan Papers.

 

Section 14.4                             Right and Sharing of Set-Offs.

 

(a)                                 Upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of any Credit Party against any and all of the
obligations now or hereafter existing under this Agreement and any Note held by
such Bank, irrespective of whether or not such Bank shall have made any demand
under this Agreement or such Note and although such obligations may be
unmatured.  Each Bank agrees promptly to notify such Credit Party after any such
setoff and application made by such Bank, provided that the failure to give such
notice shall not affect the validity of such setoff and application.  The rights
of each Bank under this Section 14.4(a) are in addition to other rights and
remedies (including other rights of setoff) which such Bank may have.

 

(b)                                 Each Bank agrees that if it shall, by
exercising any right of setoff or counterclaim or otherwise, receive payment
after the occurrence and during the continuance of an Event of Default of a
proportion of the aggregate amount of principal and interest due with respect to
the Loans which is greater than the proportion received by any other Bank in
respect of the Loans, the Bank receiving such proportionately greater payment
shall purchase such participations in the interests in the Loans held by the
other Banks, and such other adjustments shall be made, as may be required so
that all such payments of principal and interest with respect to the Loans held
by Banks shall be shared by Banks ratably in accordance with their respective
Commitment Percentages; provided that nothing in this Section 14.4(b) shall
impair the right of any Bank to exercise any right of setoff or counterclaim it
may have and to apply the amount subject to such exercise to the payment of
indebtedness of any Credit Party other than its indebtedness under the Loans. 
Borrower agrees, to the fullest extent it may effectively do so

 

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under applicable Law, that Participants may exercise rights of setoff or
counterclaim and other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of Borrower in the amount
of such participation.

 

Section 14.5                             Survival.  All of the various
representations, warranties, covenants, indemnities and agreements in the Loan
Papers shall survive the execution and delivery of this Agreement and the other
Loan Papers and the performance hereof and thereof, including the making or
granting of the Loans and the delivery of the Notes and the other Loan Papers,
and shall further survive until all of the Obligations are paid in full to Banks
and Administrative Agent and all of Banks’ obligations to Borrower are
terminated; provided that, to the extent expressly provided in any
indemnification clause contained herein or in any other Loan Paper, such
indemnification obligation shall survive payment in full of the Obligations and
termination of the obligations of Banks to Borrower hereunder.  All statements
and agreements contained in any certificate or other instrument delivered by
Borrower to any Bank or Administrative Agent under any Loan Paper shall be
deemed representations and warranties by Borrower or agreements and covenants of
Borrower under this Agreement.  The representations, warranties and covenants
made by any Credit Party (as applicable) in the Loan Papers, and the rights,
powers and privileges granted to Banks and Administrative Agent in the Loan
Papers, are cumulative, and, except for expressly specified waivers and
consents, no Loan Paper shall be construed in the context of another to
diminish, nullify, or otherwise reduce the benefit to Banks and Administrative
Agent of any such representation, warranty, covenant, right, power or
privilege.  In particular and without limitation, no exception set out in this
Agreement to any representation, warranty or covenant herein contained shall
apply to any similar representation, warranty or covenant contained in any other
Loan Paper, and each such similar representation, warranty or covenant shall be
subject only to those exceptions which are expressly made applicable to it by
the terms of the various Loan Papers.

 

Section 14.6                             Limitation on Interest.  Each Bank,
each Agent, Borrower, each other Credit Party and any other parties to the Loan
Papers intend to contract in strict compliance with applicable usury Law from
time to time in effect.  In furtherance thereof such Persons stipulate and agree
that none of the terms and provisions contained in the Loan Papers shall ever be
construed to create a contract to pay, for the use, forbearance or detention of
money, interest in excess of the Maximum Lawful Rate.  None of Borrower, any
other Credit Party, nor any present or future guarantors, endorsers, or other
Persons hereafter becoming liable for payment of any Obligation shall ever be
liable for unearned interest thereon or shall ever be required to pay interest
thereon in excess of the Maximum Lawful Rate and the provisions of this
Section 14.6 shall control over all other provisions of the Loan Papers which
may be in conflict or apparent conflict herewith.  Each Bank and Administrative
Agent expressly disavow any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of any Obligation is
accelerated.  If (a) the maturity of any Obligation is accelerated for any
reason, (b) any Obligation is prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the Maximum Lawful Rate,
or (c) any Bank or any other holder of any or all of the Obligations shall
otherwise collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Obligations to an amount in
excess of the Maximum Lawful Rate, then all such sums determined to constitute
interest in excess of the Maximum Lawful Rate shall, without penalty, be
promptly applied to reduce the then outstanding principal of the related
Obligations or, at any Bank’s or such holder’s option,

 

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promptly returned to Borrower or the other payor thereof upon such
determination.  In determining whether or not the interest paid or payable,
under any specific circumstance, exceeds the Maximum Lawful Rate, Administrative
Agent, Banks, Borrower and the other Credit Parties (and any other payors or
payees thereof) shall to the greatest extent permitted under applicable Law,
(i) characterize any non-principal payment as an expense, fee or premium rather
than as interest, (ii) exclude voluntary prepayments and the effects thereof,
and (iii) amortize, prorate, allocate, and spread the total amount of interest
throughout the entire contemplated term of the instrument evidencing the
Obligations in accordance with the amounts outstanding from time to time
thereunder and the Maximum Lawful Rate in order to lawfully charge the Maximum
Lawful Rate.

 

Section 14.7                             Invalid Provisions.  If any provision
of the Loan Papers is held to be illegal, invalid, or unenforceable under
present or future Laws effective during the term thereof, such provision shall
be fully severable, the Loan Papers shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part thereof,
and the remaining provisions thereof shall remain in full force and effect and
shall not be affected by the illegal, invalid, or unenforceable provision or by
its severance therefrom.  Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of the Loan
Papers a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid and enforceable.

 

Section 14.8                             Successors and Assigns.

 

(a)                                 Each Loan Paper binds and inures to the
parties to it, any intended beneficiary of it, and each of their respective
successors and permitted assigns.  Neither Borrower nor any other Credit Party
may assign or transfer any rights or obligations under any Loan Paper without
first obtaining all Banks’ consent, and any purported assignment or transfer
without all Banks’ consent is void.  No Bank may transfer, pledge, assign, sell
any participation in, or otherwise encumber its portion of the Obligations
except as permitted by clauses (b) or (b) below.

 

(b)                                 Any Bank may (subject to the provisions of
this section, in accordance with applicable Law, in the ordinary course of its
business, and at any time) sell to one or more Persons (each a “Participant”)
participating interests in its portion of the Obligations.  The selling Bank
remains a “Bank” under the Loan Papers, the Participant does not become a “Bank”
under the Loan Papers, and the selling Bank’s obligations under the Loan Papers
remain unchanged.  The selling Bank remains solely responsible for the
performance of its obligations and remains the holder of its share of the
outstanding Loans for all purposes under the Loan Papers.  Borrower and
Administrative Agent shall continue to deal solely and directly with the selling
Bank in connection with that Bank’s rights and obligations under the Loan
Papers, and each Bank must retain the sole right and responsibility to enforce
due obligations of Borrower and/or any other Credit Party.  Participants have no
rights under the Loan Papers except certain voting rights as provided below. 
Subject to the following, each Bank may obtain (on behalf of its Participants)
the benefits of Article XIII with respect to all participations in its part of
the Obligations outstanding from time to time so long as Borrower is not
obligated to pay any amount in excess of the amount that would be due to that
Bank under Article XIII calculated as though no participations have been made. 
No Bank may sell any participating interest under

 

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which the Participant has any rights to approve any amendment, modification, or
waiver of any Loan Paper except to the extent such amendment, modification or
waiver would (i) extend the Termination Date, (ii) reduce the interest rate or
fees applicable to the Commitments or any portion of the Loans in which such
Participant is participating, or postpone the payment of any thereof, or
(iii) release all or substantially all of the collateral or guarantees securing
any portion of the Aggregate Maximum Credit Amount or the Loans in which such
Participant is participating.  In addition, each agreement creating any
participation must include an agreement by the Participant to be bound by the
provisions of Section 14.14.

 

(c)                                  Each Bank may make assignments to the
Federal Reserve Bank or any central bank having jurisdiction over such Bank. 
Each Bank may also assign to one or more assignees (each an “Assignee”) all or
any part of its rights and obligations under the Loan Papers so long as (i) the
Administrative Agent consents in writing thereto (such consent not to be
unreasonably withheld), provided that no such consent shall be required for an
assignment to a Bank, (ii) Borrower consents in writing thereto (such consent
not to be unreasonably withheld), provided that no such consent shall be
required for an assignment to a Bank, an Affiliate of a Bank, or, if an Event of
Default exists, any other assignee, (iii) the assignor Bank and Assignee execute
and deliver to Administrative Agent an assignment and assumption agreement in
substantially the form of Exhibit G (an “Assignment and Assumption Agreement”)
and pay to Administrative Agent a processing fee of $3,500, (iv) the Assignee
acquires an identical percentage interest in the Maximum Credit Amount and
Elected Commitment of the assignor Bank and an identical percentage of the
interests in the outstanding Loans held by such assignor Bank, and (v) the
conditions (including minimum amounts of the Aggregate Maximum Credit Amount
that may be assigned or that must be retained) for that assignment set forth in
the applicable Assignment and Assumption Agreement are satisfied.  The
“Effective Date” in each Assignment and Assumption Agreement must (unless a
shorter period is agreeable to Borrower and Administrative Agent) be at least
five Business Days after it is executed and delivered by the assignor Bank and
Assignee to Administrative Agent and Borrower for acceptance.  Once that
Assignment and Assumption Agreement is accepted by Administrative Agent and
Borrower, then, from and after the Effective Date stated in it (A) Assignee
automatically becomes a party to this Agreement and, to the extent provided in
that Assignment and Assumption Agreement, has the rights and obligations of a
Bank under the Loan Papers, (B) the assignor Bank, to the extent provided in
that Assignment and Assumption Agreement, is released from its obligations to
fund Borrowings under this Agreement and its reimbursement obligations under
this Agreement and, in the case of an Assignment and Assumption Agreement
covering all of the remaining portion of the assignor Bank’s rights and
obligations under the Loan Papers, that Bank ceases to be a party to the Loan
Papers, (C) Borrower shall execute and deliver to the assignor Bank and Assignee
the appropriate Notes in accordance with this Agreement following the transfer,
(D) upon delivery of the Notes under clause (C) preceding, the assignor Bank
shall return to Borrower all Notes previously delivered to that Bank under this
Agreement, and (E) Schedule 1 hereto is automatically deemed to be amended to
reflect the name, Maximum Credit Amount and Elected Commitment of Assignee and
the remaining Maximum Credit Amount or Elected Commitment (if any) of the
assignor Bank, and Administrative Agent shall prepare and circulate to Borrower
and Banks an amended Schedule 1, reflecting those changes.

 

(d)                                 The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a copy
of each Assignment and Assumption

 

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Agreement delivered to it and a register for the recordation of the names and
addresses of the Banks, and the Maximum Credit Amount and Elected Commitment of,
and principal amount (and stated interest) of the Loans and payments made in
respect of Letter of Credit disbursements owing to, each Bank pursuant to the
terms hereof from time to time (the “Register”).  The entries in the Register
shall be conclusive absent manifest error, and the Borrower, the Administrative
Agent, each Letter of Credit Issuer and the Banks may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the Borrower, each
Letter of Credit Issuer and any Bank, at any reasonable time and from time to
time upon reasonable prior notice.

 

Section 14.9                             Applicable Law and Jurisdiction.  THIS
AGREEMENT (INCLUDING THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.  Any
legal action or proceeding against Borrower with respect to this Agreement or
any Loan Paper may be brought in the courts of the State of New York, the U.S.
Federal Courts in such state, sitting in the County of New York, and Borrower
hereby irrevocably accepts the exclusive jurisdiction of such courts for the
purpose of any action or proceeding.  Borrower irrevocably consents to the
service of process out of said courts by the mailing thereof by Administrative
Agent by U.S. registered or certified mail postage prepaid to Borrower at its
address designated on the signature pages hereto.  Borrower agrees that a final
judgment in any action or proceeding shall be conclusive and may be enforced in
any other jurisdiction by suit on the judgment or in any other manner provided
by Law.  Nothing in this Section 14.9 shall affect the rights of any Bank or
Administrative Agent to serve legal process in any other manner permitted by Law
or affect the right of any Bank or Administrative Agent to bring any action or
proceeding against Borrower or its properties in the courts of any other
jurisdiction.  To the extent that Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to either itself or its
property, Borrower hereby irrevocably waives such immunity in respect of its
obligations under this Agreement and the other Loan Papers.  Borrower hereby
irrevocably waives any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any Loan Paper brought in the Supreme Court of the State of
New York, County of New York or the U.S. District Court for the Southern
District of New York, and hereby further irrevocably waives any claims that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.

 

Section 14.10                      Counterparts; Effectiveness.  This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.  This Agreement shall become effective when Administrative Agent
shall have received counterparts hereof signed by all of the parties hereto or,
in the case of any Bank as to which an executed counterpart shall not have been
received, Administrative Agent shall have received telegraphic or other written
confirmation from such Bank of execution of a counterpart hereof by such Bank.

 

Section 14.11                      No Third Party Beneficiaries.  It is
expressly intended that there shall be no third party beneficiaries of the
covenants, agreements, representations or warranties herein

 

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contained other than Participants and Assignees permitted pursuant to
Section 14.8 and Affiliates of any Bank which hold any part of the Obligations.

 

Section 14.12                      COMPLETE AGREEMENT.  THIS AGREEMENT AND THE
OTHER LOAN PAPERS COLLECTIVELY REPRESENT THE FINAL AGREEMENT BY AND AMONG BANKS,
ADMINISTRATIVE AGENT AND BORROWER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF BANKS, ADMINISTRATIVE
AGENT AND BORROWER. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG
BANKS, ADMINISTRATIVE AGENT AND BORROWER.

 

Section 14.13                      WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC. 
BORROWER, ADMINISTRATIVE AGENT, AND EACH BANK HEREBY (a) KNOWINGLY,
VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF,
UNDER OR IN CONNECTION WITH THE LOAN PAPERS OR ANY TRANSACTION CONTEMPLATED
THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER MATURITY; (b) IRREVOCABLY
WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY “SPECIAL DAMAGES,” AS DEFINED BELOW;
(c) CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR
ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS, AND (d) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER LOAN PAPERS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION.  AS USED IN THIS SECTION, “SPECIAL DAMAGES” INCLUDES ALL
SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW
NAMED), BUT DOES NOT INCLUDE ANY PAYMENT OR FUNDS WHICH ANY PARTY HERETO HAS
EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.

 

Section 14.14                      Confidential Information.  Administrative
Agent and each Bank agree that all documentation and other information made
available by any Credit Party to any Agent or any Bank under the terms of this
Agreement shall (except to the extent such documentation or other information is
publicly available or hereafter becomes publicly available other than by action
of Administrative Agent or such Bank, or was therefore known or hereinafter
becomes known to Administrative Agent or such Bank independent of any disclosure
thereto by any Credit Party) be held in the strictest confidence by
Administrative Agent or such Bank and used solely in the administration and
enforcement of the Loans from time to time outstanding from such Bank to
Borrower and in the prosecution or defense of legal proceedings arising in
connection herewith; provided that (a) Administrative Agent or such Bank may
disclose documentation and information to Administrative Agent and/or any Bank
which is a party to this Agreement or any Affiliates thereof, and
(b) Administrative Agent or such Bank may disclose such documentation

 

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or other information to (x) any other bank or other Person to which such Bank
sells or proposes to make an assignment or sell a participation in the Loans
hereunder and (y) any actual or prospective party to any swap, derivative or
similar transaction under which payments are to be made by reference to the
Borrower and its obligations, this Agreement or payments hereunder, if, in each
case, such other bank or Person, prior to such disclosure, agrees in writing to
be bound by the terms of the confidentiality statement customarily employed by
Administrative Agent in connection with such potential transfers or such other
confidentiality agreement not less restrictive than this Section 14.14. 
Notwithstanding the foregoing, nothing contained herein shall be construed to
prevent Administrative Agent or a Bank from (i) making disclosure of any
information (A) if required to do so by applicable Law or regulation or accepted
banking practices, (B) to any governmental agency or regulatory body having or
claiming to have authority to regulate or oversee any aspect of such Bank’s
business or that of such Bank’s corporate parent or Affiliates in connection
with the exercise of such authority or claimed authority, (C) pursuant to any
subpoena or if otherwise compelled in connection with any litigation or
administrative proceeding, (D) to correct any false or misleading information
which may become public concerning such Person’s relationship to any Credit
Party, or (E) to the extent Administrative Agent or such Bank or its counsel
deems necessary or appropriate to effect or preserve its security for the
Obligations or any portion thereof or to enforce any remedy provided in this
Agreement, or any other Loan Paper, or otherwise available by law; or
(ii) making, on a confidential basis, such disclosures (1) as such Bank
reasonably deems necessary or appropriate to its legal counsel, agents, advisors
or accountants (including outside auditors) and (2) to (x) any rating agency in
connection with rating Borrower or its Subsidiaries or the credit facility
provided hereunder or (y) the CUSIP Service Bureau or any similar agency in
connection with the issuance and monitoring of CUSIP numbers with respect to the
credit facility provided hereunder.  If Administrative Agent or such Bank is
compelled to disclose such confidential information in a proceeding requesting
such disclosure, Administrative Agent or such Bank shall seek to obtain
assurance that such confidential treatment will be accorded such information;
provided that, neither Administrative Agent nor any Bank shall have any
liability for the failure to obtain such treatment.

 

Section 14.15                      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 Paper), Borrower acknowledges and agrees, and acknowledges its
Affiliates’ understanding, that:  (a)(i) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arrangers,
are arm’s-length commercial transactions between Borrower and its Affiliates, on
the one hand, and the Administrative Agent and the Arrangers, on the other hand,
(ii) Borrower has consulted its own legal, accounting, regulatory and tax
advisors to the extent it has deemed appropriate, and (iii) Borrower is capable
of evaluating, and understands and accepts, the terms, risks and conditions of
the transactions contemplated hereby and by the other Loan Papers; (b)(i) each
of the Administrative Agent, each Arranger and each Bank 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 Borrower or any of its Affiliates, or any other Person and
(ii) neither the Administrative Agent nor any Arranger or any Bank has any
obligation to Borrower or any of its Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Papers; and (c) the Administrative Agent, the Arrangers and the
Banks and their respective Affiliates may be

 

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engaged in a broad range of transactions that involve interests that differ from
those of Borrower and its Affiliates, and neither the Administrative Agent nor
any Arranger or any Bank has any obligation to disclose any of such interests to
Borrower or its Affiliates.  To the fullest extent permitted by law, Borrower
hereby waives and releases any claims that it may have against the
Administrative Agent, the Arrangers and the Banks with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

 

Section 14.16                      USA Patriot Act Notice.  Each Bank that is
subject to the Act (as hereinafter defined) hereby notifies Borrower that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain,
verify and record information that identifies each Credit Party, which
information includes the name and address of each Credit Party and other
information that will allow such Bank or the Administrative Agent, as
applicable, to identify each Credit Party in accordance with the Act.

 

Section 14.17                      Corporate Reorganization.  Each Bank that is
a “bank” under and as defined in the Existing Credit Agreement (each an
“Existing Credit Agreement Bank”) hereby consents in its capacity as an Existing
Credit Agreement Bank to the Corporate Reorganization notwithstanding any
provision of the Existing Credit Agreement or any other “Loan Paper” (as defined
therein) that otherwise may prohibit the Corporate Reorganization.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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

 

 

BORROWER:

 

 

 

LAREDO PETROLEUM, INC., a Delaware corporation (formerly known as Laredo
Petroleum Holdings, Inc.)

 

 

 

 

By:

/s/ Richard C. Buterbaugh

 

Name:

Richard C. Buterbaugh

 

Title:

Executive V.P. & Chief Financial Officer

 

 

 

 

 

Address for Notice:

 

 

 

Laredo Petroleum, Inc.

 

15 W. 6th Street, Suite 1800

 

Tulsa, OK 74119

 

Attn: Randy A. Foutch

 

Telephone:

918-513-4570

 

Telecopy:

918-513-4571

 

Email: randy@laredopetro.com

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —
LAREDO PETROLEUM, INC.]

 

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ADMINISTRATIVE AGENT AND BANK:

 

 

 

WELLS FARGO BANK, N.A., as

 

Administrative Agent, a Bank and Letter of Credit Issuer

 

 

 

 

 

 

By:

/s/ Bancroft Mattei

 

Name:

Bancroft Mattei

 

Title:

Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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BANKS:

 

 

 

BANK OF AMERICA, N.A., as a Bank and Letter of Credit Issuer

 

 

 

 

 

 

By:

/s/ Bryan Heller

 

Name:

Bryan Heller

 

Title:

Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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JPMORGAN CHASE BANK, N.A., as a Bank

 

 

 

 

 

 

By:

/s/ Mark E. Olson

 

Name:

Mark E. Olson

 

Title:

Authorized Officer

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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SOCIETE GENERALE, as a Bank

 

 

 

 

 

 

By:

/s/ Elena Robciuc

 

Name:

Elena Robciuc

 

Title:

Managing Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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UNION BANK, N.A., as a Bank

 

 

 

 

 

 

By:

/s/ Lara Sorokolit

 

Name:

Lara Sorokolit

 

Title:

Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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BMO HARRIS FINANCING, INC., as a Bank

 

 

 

 

 

 

 

By:

/s/ Gumaro Tijerina

 

Name:

Gumaro Tijerina

 

Title:

Managing Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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BARCLAYS BANK PLC, as a Bank

 

 

 

 

 

 

 

By:

/s/ Vanessa A. Kurbatskiy

 

Name:

Vanessa A. Kurbatskiy

 

Title:

Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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CITIBANK, N.A., as a Bank

 

 

 

 

 

 

 

By:

/s/ Ryan Watson

 

Name:

Ryan Watson

 

Title:

Senior Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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THE BANK OF NOVA SCOTIA, as a Bank

 

 

 

 

 

 

 

By:

/s/ Terry Donovan

 

Name:

Terry Donovan

 

Title:

Managing Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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CAPITAL ONE, NATIONAL ASSOCIATION, as a Bank

 

 

 

 

 

 

 

By:

/s/ Matthew L. Molero

 

Name:

Matthew L. Molero

 

Title:

Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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COMPASS BANK, as a Bank

 

 

 

 

 

 

 

By:

/s/ Ann Van Wagener

 

Name:

Ann Van Wagener

 

Title:

Senior Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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BOKF, NA dba BANK OF OKLAHOMA, as a Bank and Letter of Credit Issuer

 

 

 

 

 

 

 

By:

/s/ Pam Perrin Schloeder

 

Name:

Pam Perrin Schloeder

 

Title:

Senior Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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BRANCH BANKING AND TRUST COMPANY, as a Bank

 

 

 

 

 

 

 

By:

/s/ Parul June

 

Name:

Parul June

 

Title:

Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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COMERICA BANK, as a Bank

 

 

 

 

 

 

 

By:

/s/ John S. Lesikar

 

Name:

John S. Lesikar

 

Title:

Vice President

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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GOLDMAN SACHS BANK USA, as a Bank

 

 

 

 

 

 

 

By:

/s/ Michelle Latzoni

 

Name:

Michelle Latzoni

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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CREDIT SUISSE AG, CAYMAN ISLANDS
BRANCH, as a Bank

 

 

 

 

 

By:

/s/ Kevin Buddhdew

 

Name:

Kevin Buddhdew

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

By:

/s/ Michael Spaight

 

Name:

Michael Spaight

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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ING CAPITAL LLC, as a Bank

 

 

 

 

 

By:

/s/ Charles Hall

 

Name:

Charles Hall

 

Title:

Managing Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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SUNTRUST BANK, as a Bank

 

 

 

 

 

By:

/s/ Carmen Malizia

 

Name:

Carmen Malizia

 

Title:

Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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

 

 

SCOTIABANC INC., as a Bank

 

 

 

 

 

By:

/s/ J. F. Todd

 

Name:

J. F. Todd

 

Title:

Managing Director

 

[SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT —

LAREDO PETROLEUM, INC.]

 

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