Exhibit 10.4

 

Execution Version

 

 

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of June 10, 2015

 

among

 

SANDRIDGE ENERGY, INC.
as the Borrower,

 

ROYAL BANK OF CANADA,
as Administrative Agent, a Swing Line Lender

 

and

 

an L/C Issuer,

 

and

 

The Other Lenders Party Hereto

 

 

CAPITAL ONE, NATIONAL ASSOCIATION, CITIZENS BANK, N.A.,

NATIXIS, NEW YORK BRANCH, SUNTRUST BANK and

UBS SECURITIES LLC,
Documentation Agents

 

RBC CAPITAL MARKETS(1),

BARCLAYS BANK PLC

and

MORGAN STANLEY SENIOR FUNDING, INC.,
Joint Lead Arrangers and Joint Book Managers

 

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(1)  RBC Capital Markets is the global brand name of the corporate and
investment banking business of Royal Bank of Canada and its affiliates.

 

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TABLE OF CONTENTS

 

 

 

Page

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

 

 

Section 1.01

Defined Terms

1

Section 1.02

Other Interpretive Provisions

28

Section 1.03

Accounting Terms

29

Section 1.04

Petroleum Terms

29

Section 1.05

Rounding

29

Section 1.06

Times of Day

29

Section 1.07

Letter of Credit Amounts

29

Section 1.08

Available Amount Transactions

29

 

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

Section 2.01

Committed Loans

30

Section 2.02

Borrowings, Conversions and Continuations of Committed Loans

30

Section 2.03

Letters of Credit

31

Section 2.04

Swing Line Loans

39

Section 2.05

Borrowing Base

41

Section 2.06

Prepayments

43

Section 2.07

Termination or Reduction of Commitments

45

Section 2.08

Repayment of Loans

46

Section 2.09

Interest

46

Section 2.10

Fees

46

Section 2.11

Computation of Interest and Fees

47

Section 2.12

Evidence of Debt

47

Section 2.13

Payments Generally; Administrative Agent’s Clawback

48

Section 2.14

Sharing of Payments by Lenders

49

Section 2.15

Defaulting Lenders

50

 

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

 

Section 3.01

Taxes

52

Section 3.02

Illegality

54

Section 3.03

Inability to Determine Rates

54

Section 3.04

Increased Costs; Reserves on Eurodollar Rate Loans

54

Section 3.05

Compensation for Losses

56

Section 3.06

Mitigation Obligations; Replacement of Lenders

56

Section 3.07

Survival

57

 

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

Section 4.01

Effectiveness

57

Section 4.02

Conditions to All Credit Extensions

59

Section 4.03

Agreement to Deliver Mortgages

60

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES

 

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Section 5.01

Existence, Qualification and Power

60

Section 5.02

Authorization; No Contravention

60

Section 5.03

Governmental Authorization; Other Consents

61

Section 5.04

Binding Effect

61

Section 5.05

Financial Statements; No Material Adverse Effect

61

Section 5.06

Litigation

61

Section 5.07

No Default

62

Section 5.08

Ownership of Property; Liens

62

Section 5.09

Environmental Compliance

62

Section 5.10

Insurance

62

Section 5.11

Taxes

63

Section 5.12

ERISA Compliance

63

Section 5.13

Subsidiaries; Equity Interests; Loan Parties

63

Section 5.14

Margin Regulations; Investment Company Act

63

Section 5.15

Disclosure

64

Section 5.16

Compliance with Laws

64

Section 5.17

Solvency

64

Section 5.18

Casualty, Etc.

64

Section 5.19

Labor Matters

64

Section 5.20

Collateral Documents

64

Section 5.21

Engineered Oil and Gas Properties

65

Section 5.22

Sale of Production

65

Section 5.23

OFAC

67

Section 5.24

Anti-Corruption Laws

67

Section 5.25

Patriot Act

67

 

ARTICLE VI

AFFIRMATIVE COVENANTS

 

Section 6.01

Financial Statements

67

Section 6.02

Certificates; Other Information

69

Section 6.03

Notices

70

Section 6.04

Payment of Obligations

71

Section 6.05

Preservation of Existence, Etc.

71

Section 6.06

Maintenance of Properties

71

Section 6.07

Maintenance of Insurance

71

Section 6.08

Compliance with Laws

72

Section 6.09

Books and Records

72

Section 6.10

Inspection Rights

72

Section 6.11

Use of Proceeds

72

Section 6.12

Covenant to Guarantee Obligations and Give Security

72

Section 6.13

Compliance with Environmental Laws

74

Section 6.14

Further Assurances

74

Section 6.15

Production Proceeds

74

Section 6.16

Anti-Corruption, Anti-Terrorism and Anti-Money Laundering Laws

75

 

ARTICLE VII

NEGATIVE COVENANTS

 

Section 7.01

Liens

75

Section 7.02

Investments

77

Section 7.03

Indebtedness

78

Section 7.04

Fundamental Changes

80

 

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Section 7.05

Dispositions

81

Section 7.06

Restricted Payments

82

Section 7.07

Change in Nature of Business

83

Section 7.08

Transactions with Affiliates

83

Section 7.09

Burdensome Agreements

84

Section 7.10

Use of Proceeds

84

Section 7.11

Financial Covenants

84

Section 7.12

Hedge Transactions

84

Section 7.13

Sanctions

85

Section 7.14

Anti-Corruption Laws

85

Section 7.15

Prepayment of Restricted Debt

85

 

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

 

Section 8.01

Events of Default

85

Section 8.02

Remedies Upon Event of Default

87

Section 8.03

Application of Funds

88

 

ARTICLE IX

ADMINISTRATIVE AGENT

 

Section 9.01

Appointment and Authority

89

Section 9.02

Rights as a Lender

89

Section 9.03

Exculpatory Provisions

89

Section 9.04

Reliance by Administrative Agent

90

Section 9.05

Delegation of Duties

91

Section 9.06

Resignation of Administrative Agent

91

Section 9.07

Non-Reliance on Administrative Agent and Other Lenders

91

Section 9.08

No Other Duties, Etc.

92

Section 9.09

Administrative Agent May File Proofs of Claim

92

Section 9.10

Collateral and Guaranty Matters

92

 

ARTICLE X

MISCELLANEOUS

 

Section 10.01

Amendments, Etc.

94

Section 10.02

Notices; Effectiveness; Electronic Communication

95

Section 10.03

No Waiver; Cumulative Remedies

97

Section 10.04

Expenses; Indemnity; Damage Waiver

97

Section 10.05

Payments Set Aside

99

Section 10.06

Successors and Assigns

99

Section 10.07

Treatment of Certain Information; Confidentiality

103

Section 10.08

Right of Setoff

104

Section 10.09

Interest Rate Limitation

104

Section 10.10

Counterparts; Integration; Effectiveness

105

Section 10.11

Survival of Representations and Warranties

105

Section 10.12

Severability

105

Section 10.13

Replacement of Lenders

105

Section 10.14

Governing Law; Jurisdiction; Etc.

106

Section 10.15

Waiver of Jury Trial

107

Section 10.16

No Advisory or Fiduciary Responsibility

107

Section 10.17

USA PATRIOT Act Notice

108

Section 10.18

Electronic Execution of Assignments and Certain Other Documents

108

 

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Section 10.19

Amendment and Restatement

108

 

Schedules and Exhibits

 

Schedule 1.01A

Existing Swap Obligations

Schedule 1.01B

Existing Treasury Management Services Agreements

Schedule 2.01

Commitments and Applicable Percentages

Schedule 2.01S

Swing Line Commitments

Schedule 5.03

Governmental Authorizations

Schedule 5.06

Litigation

Schedule 5.09

Environmental Matters

Schedule 5.13

Subsidiaries, Other Equity Investments and Loan Party Information

Schedule 5.22

Sale of Production

Schedule 7.01

Existing Liens

Schedule 7.02(n)

Existing Investments

Schedule 7.03

Existing Indebtedness

Schedule 10.02

Administrative Agent’s Office; Certain Addresses for Notices

 

 

Exhibit A

Form of Committed Loan Notice

Exhibit B

Form of Swing Line Loan Notice

Exhibit C

Form of Prepayment Notice

Exhibit D

Form of Note

Exhibit E

Form of Compliance Certificate

Exhibit F

Form of Assignment and Assumption

Exhibit G

Form of Opinion of Counsel to the Loan Parties

Exhibit H

Form of Opinion of General Counsel of the Borrower

 

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FOURTH AMENDED AND RESTATED CREDIT AGREEMENT

 

This FOURTH AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of June 10,
2015 among SANDRIDGE ENERGY, INC., a Delaware corporation (the “Borrower”), each
LENDER from time to time party hereto (collectively, the “Lenders” and
individually, a “Lender”), and ROYAL BANK OF CANADA., as Administrative Agent, a
Swing Line Lender and an L/C Issuer.

 

PRELIMINARY STATEMENTS:

 

The Borrower has requested that the Lenders amend and restate the Existing
Credit Agreement, and the Lenders are willing to do so on the terms and
conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.01     Defined Terms.  As used in this Agreement, the following terms
shall have the meanings set forth below:

 

“6% Convertible Preferred Stock” means the Borrower’s 6% Convertible Perpetual
Preferred Stock issued on December 21, 2009, par value $0.001 per share,
liquidation preference of $100 per share and with the terms set forth in the
Certificate of Designation of the 6% Convertible Perpetual Preferred Stock.

 

“7% Convertible Preferred Stock” means the Borrower’s 7% Convertible Perpetual
Preferred Stock issued on November 10, 2010, par value $0.001 per share,
liquidation preference of $100 per share and with the terms set forth in the
Certificate of Designation of the 7% Convertible Perpetual Preferred Stock.

 

“8.5% Convertible Preferred Stock” means the Borrower’s 8.5% Convertible
Perpetual Preferred Stock issued on January 21, 2009, par value $0.001 per
share, liquidation preference of $100 per share and with the terms set forth in
the Certificate of Designation of the 8.5% Convertible Perpetual Preferred
Stock.

 

“Administrative Agent” means Royal Bank of Canada in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.

 

“Administrative Agent Fee Letter” means that certain Administrative Agent Fee
Letter, dated as of May 19, 2015, among the Administrative Agent and the
Borrower.

 

“Administrative Agent’s Office” means the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule 10.02, or such other address or
account as the Administrative Agent may from time to time notify to the Borrower
and the Lenders.

 

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

 

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“Affiliate” means, with respect to any Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified.

 

“Agent Parties” has the meaning specified in Section 10.02(c).

 

“Aggregate Commitments” means the Commitments of all the Lenders.

 

“Agreement” means this Credit Agreement, as the same may be further amended from
time to time.

 

“Applicable Percentage” means with respect to any Lender at any time, the
percentage (carried out to the ninth decimal place) of the Aggregate Commitments
represented by such Lender’s Commitment at such time.  If the commitment of each
Lender to make Loans and the obligation of each L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02 or if the Aggregate
Commitments have expired, then the Applicable Percentage of each Lender shall be
determined based on the Applicable Percentage of such Lender most recently in
effect, giving effect to any subsequent assignments.  The initial Applicable
Percentage of each Lender is set forth opposite the name of such Lender on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.

 

“Applicable Rate” means, at any date, the applicable percentage per annum set
forth below, based upon the Borrowing Base Utilization Ratio at such date:

 

 

 

 

 

Applicable Margin

 

 

 

Level

 

Borrowing Base
Utilization Ratio

 

Base Rate

 

Eurodollar Rate + 
Letters of Credit

 

Commitment Fee

 

1

 

> 90%

 

1.750

%

2.750

%

0.500

%

2

 

> 75% and < 90%

 

1.500

%

2.500

%

0.500

%

3

 

> 50% and < 75%

 

1.250

%

2.250

%

0.500

%

4

 

> 25% and < 50%

 

1.000

%

2.000

%

0.500

%

5

 

< 25%

 

0.750

%

1.750

%

0.500

%

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arranger” means each of RBC Capital Markets(2), Barclays Bank PLC and Morgan
Stanley Senior Funding, Inc., in its capacity as a joint lead arranger and joint
book manager in respect of this Agreement.

 

“Assignee Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.06(b)), and accepted by the Administrative Agent, in
substantially the form of Exhibit F or any other form approved by the
Administrative Agent.

 

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(2)  RBC Capital Markets is the global brand name of the corporate and
investment banking business of Royal Bank of Canada and its affiliates

 

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“Attributed Value” means, with respect to any Engineered Oil and Gas Property,
the portion of the Borrowing Base attributed by the Administrative Agent to such
Engineered Oil and Gas Property for purposes of the most recent determination of
the Borrowing Base, based upon the discounted present value of the estimated net
cash flow to be realized from the production of Hydrocarbons from such
Engineered Oil and Gas Property.

 

“Attributable Indebtedness” means, on any date, (a) in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.

 

“Audited Financial Statements” means the audited consolidated balance sheet of
the Borrower and its Subsidiaries for the fiscal year ended December 31, 2014,
and the related consolidated statements of income or operations, shareholders’
equity and cash flows for such fiscal year of the Borrower and its Subsidiaries,
including the notes thereto.

 

“Auto-Extension Letter of Credit” has the meaning specified in
Section 2.03(b)(iii).

 

“Auto-Reinstatement Letter of Credit” has the meaning specified in
Section 2.03(b)(iv).

 

“Availability Period” means the period from and including the Closing Date to
the earliest of (a) the Maturity Date, (b) the date of termination of the
Aggregate Commitments pursuant to Section 2.07 and (c) the date of termination
of the commitment of each Lender to make Loans and of the obligation of the L/C
Issuers to make L/C Credit Extensions pursuant to Section 8.02.

 

“Available Amount” means, at any time (the “Reference Date”), the sum of
(without duplication):

 

(a)                                 $25,000,000; plus

 

(b)                                 an amount (which amount shall not be less
than zero) equal to 50% of cumulative Consolidated Net Income (or minus 100% of
cumulative Consolidated Net Income, if a loss) for the Available Amount
Reference Period; plus

 

(c)                                  the amount of any capital contributions
made in cash after the Closing Date or Net Cash Proceeds from the issuance of
Equity Interests (other than Disqualified Stock) of the Borrower or any
Restricted Subsidiary after the Closing Date (or issuances after the Closing
Date of debt securities that have been converted into or exchanged for Qualified
Stock) received by or contributed to the Borrower (or any direct or indirect
parent thereof and contributed by such parent to the Borrower) during the period
from and including the Business Day immediately following the Closing Date
through and including the Reference Date; plus

 

(d) an amount equal to any returns (including dividends, distributions, returns
of principal, repayments and similar amounts) actually received in cash or Cash
Equivalents, and any Net Cash Proceeds of any sales or other dispositions
actually received, by the Borrower or any of its Subsidiaries in respect of any
Investments made after the Closing Date pursuant to Section 7.02(q); provided
that such amount may not exceed the original Investment made using the Available
Amount pursuant to Section 7.02(q); minus

 

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(e)                                  the aggregate amount of Investments made
pursuant to Section 7.02(q), Restricted Payments made pursuant to
Section 7.06(h) and payments in respect of Restricted Debt made pursuant to
clause (iv) of Section 7.15(a), all during the period commencing on the Closing
Date and ending on the Reference Date (but excluding the intended usage of the
Available Amount on such Reference Date by the particular Investment or
Restricted Payment).

 

“Available Amount Conditions” shall be satisfied, with respect to any
transaction at any time, if (a) no Default or Event of Default shall have
occurred and be continuing or shall result from the applicable transaction;
(b) (i) the Borrower and its Restricted Subsidiaries shall be in compliance with
each of the provisions of Section 7.11 and (ii) without limitation of the
preceding clause (i), the Consolidated First Lien Leverage Ratio shall be no
greater than 2.0:1.0; in each case determined on a pro forma basis as of the end
of the most recent fiscal quarter for which the Consolidated First Lien Leverage
Ratio has been tested but giving effect to any Loans or other Indebtedness
incurred, prepaid or repaid after such date and the pro forma incurrence of any
proposed Borrowing of Loans (and the use of proceeds thereof); and (c) after
giving effect to such transaction, the Available Borrowing Base shall not be
less than 10.0% of the Facility Limit.

 

“Available Amount Reference Period” means, with respect to any Reference Date,
the period (taken as one accounting period) commencing with, and including, the
fiscal quarter ending June 30, 2015 and ending on the last day of the most
recent fiscal quarter or fiscal year, as applicable, for which financial
statements required to be delivered pursuant to Section 6.01(a) or
Section 6.01(b), and the related Compliance Certificate required to be delivered
pursuant to Section 6.02(a), have been received by the Administrative Agent.

 

“Available Borrowing Base” means, at any time of determination, the remainder of
(a) the Facility Limit minus (b) the Total Outstandings.

 

“Base Rate” means for any day a fluctuating rate per annum equal to the highest
of (i) the Federal Funds Rate plus 1/2 of 1%, (ii) the rate of interest in
effect for such day as publicly announced from time to time by the
Administrative Agent as its “prime rate” and (iii) the Eurodollar Rate for such
day plus 1% per annum.  The “prime rate” is a rate set by the Administrative
Agent based upon various factors including the Administrative Agent’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 prime rate announced by the
Administrative Agent shall take effect at the opening of business on the day
specified in the public announcement of such change.

 

“Base Rate Committed Loan” means a Committed Loan that is a Base Rate Loan.

 

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

 

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

 

“Borrower Materials” has the meaning specified in Section 6.02.

 

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

 

“Borrowing Base” means, on any date, either the amount provided for in
Section 2.05(a) or the amount determined in accordance with the provisions of
Section 2.05(b), as the same may be reduced from time to time pursuant to
Section 7.03(l).

 

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“Borrowing Base Cap” means an amount equal to 65% of the discounted future net
revenue before state or federal income taxes from Proved Reserves of the
Borrower and its Restricted Subsidiaries calculated using Modified ACNTA Prices
(after giving effect to commodity derivatives contracts in effect as of the date
of determination) but otherwise calculated in accordance with SEC guidelines, as
estimated in the most recent Engineering Report after giving effect to
exploration and production activities, acquisitions, dispositions and production
since the date of such Engineering Report in the same manner as would be given
in calculating Modified ACNTA.

 

“Borrowing Base Deficiency” means, as of any date, the amount, if any, by which
the Total Outstandings on such date exceeds the Borrowing Base in effect on such
date.

 

“Borrowing Base Utilization Ratio” means at any time the ratio (expressed as a
percentage) determined by taking the Total Outstandings and dividing by the
Borrowing Base.

 

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the Laws of, or are in fact
closed in, Oklahoma City, Oklahoma and the State of New York, and, if such day
relates to any Eurodollar Rate Loan, means any such day on which dealings in
Dollar deposits are conducted by and between banks in the London interbank
eurodollar market.

 

“Cash Collateral” has the meaning specified in Section 2.03(g).

 

“Cash Collateralize” has the meaning specified in Section 2.03(g).

 

“Cash Equivalents” means any of the following types of Investments, to the
extent owned by the Borrower or any of its Restricted Subsidiaries free and
clear of all Liens (other than Liens permitted under Section 7.01):

 

(a)                                 readily marketable obligations issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof having maturities of not more than 360 days
from the date of acquisition thereof; provided that the full faith and credit of
the United States of America is pledged in support thereof;

 

(b)                                 time deposits with, or insured certificates
of deposit or bankers’ acceptances of, any commercial bank that (A) is a Lender
or (B)(i) is organized under the laws of the United States of America, any state
thereof or the District of Columbia or is the principal banking subsidiary of a
bank holding company organized under the laws of the United States of America,
any state thereof or the District of Columbia, and is a member of the Federal
Reserve System, (ii) issues (or the parent of which issues) commercial paper
rated as described in clause (c) of this definition and (iii) has combined
capital and surplus of at least $1,000,000,000, in each case with maturities of
not more than 90 days from the date of acquisition thereof;

 

(c)                                  commercial paper issued by any Person
organized under the laws of any state of the United States of America and rated
at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1”
(or the then equivalent grade) by S&P, in each case with maturities of not more
than 180 days from the date of acquisition thereof; and

 

(d)                                 Investments, classified in accordance with
GAAP as current assets of the Borrower or any of its Restricted Subsidiaries, in
money market investment programs registered under the Investment Company Act of
1940, which are administered by financial institutions that have the highest
rating

 

5

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assigned at that time from either Moody’s or S&P, and the portfolios of which
are limited solely to Investments of the character, quality and maturity
described in clauses (a), (b) and (c) of this definition.

 

“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Engineered Oil and Gas Property of the Borrower or
any of its Restricted Subsidiaries having a fair market value in excess of
$1,000,000.

 

“CERCLIS” means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

 

“CFC” means a Person that is a controlled foreign corporation under Section 957
of the Code.

 

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

 

“Change of Control” means an event or series of events by which:

 

(a)                                 any “person” or “group” (as such terms are
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries, and any
person or entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the “beneficial owner” (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have “beneficial ownership” of all securities
that such person or group has the right to acquire, whether such right is
exercisable immediately or only after the passage of time (such right, an
“option right”)), directly or indirectly, of more than 35% of the equity
securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and taking into account all such securities that such “person” or “group” has
the right to acquire pursuant to any option right); or

 

(b)                                 during any period of 24 consecutive months,
a majority of the members of the board of directors or other equivalent
governing body of the Borrower cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of such
period, (ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of that board or
equivalent governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body.

 

“Closing Date” means the first date all the conditions precedent in Section 4.01
are satisfied or waived in accordance with Section 10.01.

 

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“Code” means the Internal Revenue Code of 1986.

 

“Collateral” means all of the “Collateral” and “Mortgaged Property” referred to
in the Collateral Documents and all of the other property that is or is intended
under the terms of the Collateral Documents to be subject to Liens in favor of
the Administrative Agent for the benefit of the Secured Parties. 
Notwithstanding anything else to the contrary, “Collateral” shall not include
any Building (as defined in the applicable Flood Insurance Regulation) or
Manufactured (Mobile) Home (as defined in the applicable Flood Insurance
Regulation) included in the definition of “Mortgaged Property” and no Building
or Manufactured (Mobile) Home is hereby encumbered by this Mortgage. As used
herein, “Flood Insurance Regulations” shall mean (i) the National Flood
Insurance Act of 1968 as now or hereafter in effect or any successor statute
thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in
effect or any successor statue thereto, (iii) the National Flood Insurance
Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended
or recodified from time to time, and (iv) the Flood Insurance Reform Act of 2004
and any regulations promulgated thereunder.

 

“Collateral Documents” means, collectively, the Security Agreement, the
Mortgages, each of the mortgages, collateral assignments, Security Agreement
Supplements, security agreements, pledge agreements or other similar agreements
delivered to the Administrative Agent pursuant to the Security Agreement or
Section 6.12, and each of the other agreements, instruments or documents that
creates or purports to create a Lien in favor of the Administrative Agent for
the benefit of the Secured Parties.

 

“Commitment” means, as to each Lender, its obligation to (a) make Committed
Loans to the Borrower pursuant to Section 2.01, (b) purchase participations in
L/C Obligations and (c) purchase participations in Swing Line Loans, in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement.

 

“Committed Borrowing” means a borrowing consisting of simultaneous Committed
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Lenders pursuant to Section 2.01.

 

“Committed Loan” has the meaning specified in Section 2.01.

 

“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a
conversion of Committed Loans from one Type to the other, or (c) a continuation
of Eurodollar Rate Loans, pursuant to Section 2.02(a), which shall be
substantially in the form of Exhibit A or such other form as may be approved by
the Administrative Agent (including any form on an electronic platform or
electronic transmission system as shall be approved by the Administrative
Agent), appropriately completed and signed by a Responsible Officer of the
Borrower.

 

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

 

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

 

“Consolidated” refers to the consolidation of any Person, in accordance with
GAAP, with its properly consolidated subsidiaries. References herein to a
Person’s Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.

 

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“Consolidated Current Assets” means, for any period, the aggregate amount of all
assets of Borrower and its Consolidated Restricted Subsidiaries which would be
properly classified as current assets in accordance with GAAP plus any Available
Borrowing Base, but excluding any unrealized assets resulting from compliance
with the Financial Accounting Standards Board’s Statement 133 concerning
mark-to-market requirements on hedging transactions.

 

“Consolidated Current Liabilities” means, for any period, the aggregate amount
of all liabilities of Borrower and its Consolidated Restricted Subsidiaries
which would be properly classified as current liabilities in accordance with
GAAP, but excluding current maturities under this Agreement and any unrealized
liabilities resulting from compliance with the Financial Accounting Standards
Board’s Statement 133 concerning mark-to-market requirements on hedging
transactions.

 

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

 

“Consolidated EBITDA” means for any period, the Consolidated Net Income of
Borrower for such period; plus each of the following (without duplication)
determined for Borrower and its Consolidated Restricted Subsidiaries on a
Consolidated basis for such period: (a) any provision for (or less any benefit
from) income or franchise taxes included in determining Consolidated Net Income;
(b) any interest expense, premium payments, debt discount and financing fees and
expenses of the Borrower or its Restricted Subsidiaries deducted in determining
Consolidated Net Income; (c) any depreciation, depletion or amortization expense
deducted in determining Consolidated Net Income; (d) any non-cash loss on change
in fair value of derivative instruments deducted in determining Consolidated Net
Income; (e) any other non-cash charge, expense or loss deducted in determining
Consolidated Net Income; and (f) one-time cash expenses and restructuring,
severance, termination and other one-time costs, expenses or charges (whether
cash or non-cash) incurred in connection with the acquisition or disposition of
any entity or line of business permitted hereunder, the closure or consolidation
of facilities, the termination or modification of contracts or any benefit or
employee plans, or the institution of cost savings initiatives or other business
optimization or restructuring programs; and minus each of the following (without
duplication) determined for Borrower and its Consolidated Restricted
Subsidiaries on a Consolidated basis for such period, to the extent included in
determining such Consolidated Net Income for such period: (a) any non-cash gain
on change in fair value of derivative instruments included in determining
Consolidated Net Income; (b) any interest income included in determining
Consolidated Net Income; and (c) any other non-cash income or gains included in
determining Consolidated Net Income; provided however, that in determining
Consolidated Net Income for the purposes of this definition for any period in
which Borrower or any of its Consolidated Restricted Subsidiaries has acquired
or acquires additional Consolidated Restricted Subsidiaries (whether by
purchase, merger or otherwise) or has acquired or disposed of or acquires or
disposes of producing Oil and Gas Properties, (1) the Consolidated Net Income of
such acquired Consolidated Restricted Subsidiaries shall be included in such
calculation on a pro forma basis as if they had been owned by Borrower and its
Consolidated Restricted Subsidiaries throughout such period, (2) the revenues
attributable to the oil and gas production from such acquired Oil and Gas
Properties during such period, less the direct operating expenses and severance
and ad valorem taxes incurred with respect to such properties during such
period, shall be included in such calculation on a pro forma basis as if they
had been owned by Borrower and its Consolidated Restricted Subsidiaries
throughout such period and (3) the revenues attributable to the oil and gas
production from producing Oil and Gas Properties disposed of during such period,
less the direct operating expenses and severance and ad valorem taxes incurred
with respect to such properties during such period, shall be deducted in such
calculation on a pro forma basis as if they had not been owned by Borrower and
its Consolidated Restricted Subsidiaries throughout such period.  Pro forma
adjustments made in connection with Subsidiaries or Oil and Gas Properties
acquired or disposed of shall be consistent with Article 11 of Regulation S-X
and certified by the Borrower’s chief financial officer.

 

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“Consolidated First Lien Leverage Ratio” means, as of any date of determination,
the ratio of (a) Total Outstandings as of such date to (b) Consolidated EBITDA
for the period of the four fiscal quarters most recently ended on or prior to
such date.

 

“Consolidated Net Income” means, for any period, the net income (or loss) of
Borrower and its Consolidated Restricted Subsidiaries for such period determined
in accordance with GAAP, provided that the following shall be excluded in
calculating Consolidated Net Income and Consolidated EBITDA: (i) any
extraordinary items of gain or loss, (ii) any gain or loss from the sale of
assets other than in the ordinary course of business, (iii) any non-cash income,
gains, losses or charges resulting from the requirements of SFAS 133 or 143 and
(iv) the net income (or loss) of any Royalty Trust, any master limited
partnership or any person accounted for on the equity method, except to the
extent of cash distributions received by the Borrower or a Consolidated
Restricted Subsidiary for such period.

 

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

 

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

 

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C
Credit Extension.

 

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

 

“Default” means any event or condition that constitutes an Event of Default or
that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.

 

“Default Rate” means (a) when used with respect to Obligations other than Letter
of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum;
provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate
shall be an interest rate equal to the interest rate (including any Applicable
Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used
with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus
2% per annum.

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
(i) the Committed Loans within two Business Days of the date such Loans were
required to be funded hereunder unless such Lender notifies the Administrative
Agent and the Borrower in writing that such failure is the result of such
Lender’s determination that one or more conditions precedent to funding (each of
which conditions precedent, together with any applicable default, shall be
specifically identified in such writing) has not been satisfied, or
(ii) participations in L/C Obligations or participations in Swing Line Loans
required to be funded by it hereunder within two (2) Business Days of the date
required to be funded by it hereunder unless such failure has been cured,
(b) has otherwise failed to pay over to the Administrative Agent or any other
Lender any other amount required to be paid by it hereunder within two Business
Days of the date when due, unless the subject of a good faith dispute or unless
such failure has been cured, (c) has been deemed insolvent or become the subject
of a bankruptcy or insolvency proceeding, provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of

 

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any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority so long as such ownership interest does not
result in or provide such Lender with immunity from the jurisdiction of courts
within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender or (d) any Lender (i) that has failed, within three Business Days
after written request by an L/C Issuer, to confirm that it will comply with the
terms of this Agreement relating to its obligations to fund under Section 2.01;
provided that any such Lender shall cease to be a Defaulting Lender under this
clause (d)(i) upon receipt of such confirmation by the applicable L/C Issuer or
(ii) that has (or is controlled by an entity that has) become the subject of a
bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee, administrator, assignee for the benefit of the creditors or similar
Persons charged with reorganization or liquidation of its business or custodian,
appointed for it, or has taken any action in furtherance of, or indicated its
consent to, approval of or acquiescence in any such proceeding or appointment.

 

“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.

 

“Determination Date” has the meaning specified in Section 2.05(b).

 

“Disposition” or “Dispose” means the sale, transfer, license, lease or other
disposition (including any sale and leaseback transaction but excluding all
events described in the definition of “Casualty Event” regardless of the value
thereof) of any property by any Person (or the granting of any option or other
right to do any of the foregoing), including any sale, assignment, transfer or
other disposal, with or without recourse, of any notes or accounts receivable or
any rights and claims associated therewith.  The issuance of Equity Interests by
any Restricted Subsidiary to any Person other than the Borrower or a
wholly-owned Restricted Subsidiary shall be deemed a Disposition by the Borrower
of its direct or indirect Equity Interest in such Restricted Subsidiary to the
extent of the resulting dilution.

 

“Disqualified Stock” means any capital stock that, by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable),
or upon the happening of any event (other than a change in control), matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
or redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is one year after the latest final maturity of the Loans,
except to the extent that such capital stock is redeemable with, or solely
exchangeable for, any capital stock of such Person that is not Disqualified
Stock.

 

“Dollar” and “$” mean lawful money of the United States.

 

“Electrical Assets” means (i) assets used primarily for the transmission and
delivery of electricity, including electrical substations, power lines and other
electrical infrastructure assets, and (ii) Equity Interests of any Person that
has no substantial assets other than assets referred to in clause (i).

 

“Election Notice” has the meaning specified in Section 2.05(c).

 

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii), (v), (vi) and (vii) (subject to such
consents, if any, as may be required under Section 10.06(b)(iii)).

 

“Engineered Oil and Gas Property” means any Oil and Gas Property listed in the
most recent Engineering Report other than any Oil and Gas Property (i) to which
no value has been attributed by the Administrative Agent in the most recent
determination of the Borrowing Base or (ii) that has been

 

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Disposed of as part of or in connection with any Disposition to a Person other
than a Loan Party that is permitted hereunder or under any other Loan Document.

 

“Engineering Report” means the Initial Engineering Report and each engineering
report delivered pursuant to Section 2.05 or Section 6.01.  To the extent that
two or more engineering firms prepare reports as of the same date for portions
of the properties required to be reported on, such reports will collectively
constitute a single “Engineering Report” for the purposes hereof.

 

“Environmental Laws” means any and all Federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.

 

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

 

“Environmental Permit” means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

 

“Equity Interests” means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of
determination.  For the avoidance of doubt, debt instruments that are
convertible into Equity Interests shall not be deemed to be Equity Interests
until they are so converted.

 

“ERISA” means the Employee Retirement Income Security Act of 1974.

 

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

 

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer
(as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is
treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or
partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the
filing of a notice of intent to terminate, the treatment of a Plan amendment as
a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an

 

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event or condition which constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.

 

“Eurodollar Rate” means:

 

(a)                                 for any Interest Period with respect to a
Eurodollar Rate Loan, the rate per annum equal to the ICE Benchmark
Administration Limited LIBOR rate (“LIBOR”) or a comparable or successor rate,
which rate is approved by the Administrative Agent, as published on the
applicable Reuters screen page (or, if such Reuters screen page is not
available, such other commercially available source providing such quotations as
may be designated by the Administrative Agent from time to time) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for Dollar deposits (for delivery on the
first day of such Interest Period) with a term equivalent to such Interest
Period; and

 

(b)                                 for any interest calculation with respect to
a Base Rate Loan on any date, the rate per annum equal to LIBOR, at or about
11:00 a.m., London time determined two Business Days prior to such date for
Dollar deposits with a term of one month commencing that day.

 

Notwithstanding the foregoing, (i) to the extent a comparable or successor rate
is approved by the Administrative Agent in connection herewith, the approved
rate shall be applied in a manner consistent with market practice; provided,
that to the extent such market practice is not administratively feasible for the
Administrative Agent, such approved rate shall be applied in a manner as
otherwise reasonably determined by the Administrative Agent; and (ii) if the
Eurodollar Rate shall be less than zero, such rate shall be deemed to be zero
for purposes of this Agreement.

 

“Eurodollar Rate Loan” means a Committed Loan that bears interest at a rate
based on the Eurodollar Rate.

 

“Event of Default” has the meaning specified in Section 8.01.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, (a) any Swap
Obligation in respect of a Swap Contract if, and to the extent that, and only
for so long as, all or a portion of the guarantee of such Guarantor of, or the
grant by such Guarantor of a security interest to secure, as applicable, such
Swap Obligation (or any guarantee thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure to constitute an “eligible
contract participant,” as defined in the Commodity Exchange Act and the
regulations thereunder, at the time the guarantee of (or grant of such security
interest by, as applicable) such Guarantor becomes or would become effective
with respect to such Swap Obligation or (b) any other Swap Obligation designated
as an “Excluded Swap Obligation” of such Guarantor as specified in any agreement
between the relevant Loan Parties and counterparty applicable to such Swap
Obligations, and agreed by the Administrative Agent.  If a Swap Obligation
arises under a master agreement governing more than one Swap Contract, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to Swap Contracts for which such Guarantee or security interest is
or becomes illegal.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
any L/C Issuer or any other recipient of any payment to be made by or on account
of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by
its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision

 

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thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Borrower is located, (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under Section 10.13), any
withholding tax that is imposed on amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or is attributable to such Foreign Lender’s failure or inability (other
than as a result of a Change in Law) to comply with Section 3.01(e), except to
the extent that such Foreign Lender (or its assignor, if any) was entitled, at
the time of designation of a new Lending Office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 3.01(a), and (d) any U.S. federal withholding Taxes imposed
under FATCA.

 

“Existing Credit Agreement” means the Third Amended and Restated Credit
Agreement, dated as of October 22, 2014, among the Borrower, each lender party
thereto from time to time and Bank of America, N.A., as administrative agent,
Swing Line Lender and L/C Issuer, as amended.

 

“Existing Notes” has the meaning set forth in the definition of Principal Debt
Obligations.

 

“Facility Limit” means, at any time, the lesser of (a) $1,000,000,000 and
(b) the Borrowing Base.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any intergovernmental
agreements entered into by the United States that implement or modify the
foregoing (together with the portions of any law implementing such
intergovernmental agreements.

 

“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 the
Administrative Agent on such day on such transactions as determined by the
Administrative Agent.

 

“Flood Insurance Regulations” has the meaning set forth in the definition of
Collateral.

 

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

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to any L/C Issuer, such Defaulting Lender’s Applicable Percentage of the
outstanding L/C Obligations with respect to Letters of Credit issued by such L/C
Issuer other than L/C Obligations as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof, and (b) with respect to any
Swing Line Lender, such Defaulting Lender’s Applicable Percentage of outstanding
Swing Line Loans made by such Swing Line Lender other than Swing Line Loans as
to which such Defaulting Lender’s participation obligation has been reallocated
to other Lenders.

 

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

 

“GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.

 

“Governmental Authority” means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).

 

“Granting Lender” has the meaning specified in Section 10.06(h).

 

“Guarantee” means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness payable or performable by another Person (the
“primary obligor”) in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness,
(ii) to purchase or lease property, securities or services for the purpose of
assuring the obligee in respect of such Indebtedness of the payment or
performance of such Indebtedness, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in part)
or (b) any Lien on any assets of such Person securing any Indebtedness of any
other Person, whether or not such Indebtedness is assumed by such Person (or any
right, contingent or otherwise, of any holder of such Indebtedness to obtain any
such Lien).  The amount of any Guarantee shall be deemed to be an amount equal
to the stated or determinable amount of the related primary obligation, or
portion thereof, in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the guaranteeing Person in good faith.  The term “Guarantee” as a
verb has a corresponding meaning.

 

“Guarantors” means, collectively, (i) SandRidge Holdings, Inc., SandRidge
Exploration and Production, LLC, SandRidge Gathering LLC, SandRidge Midstream
Inc., SandRidge Operating Company, Integra Energy, L.L.C. and Lariat, and
(ii) each Person which becomes a Guarantor after the Closing Date pursuant to
Section 6.12.

 

“Guaranty” means the Guaranty made by the Guarantors in favor of the
Administrative Agent and the Lenders.

 

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

 

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“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 related to commodity prices, interest rates, currency exchange
rates, securities prices or financial market conditions.  Hedge Transactions
expressly include Oil and Gas Hedge Transactions.

 

“Honor Date” has the meaning specified in Section 2.03(c)(i).

 

“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, including, but not limited to, sulphur, lignite, coal,
uranium, thorium, iron, geothermal steam, water, carbon dioxide, helium and any
and all other minerals, ores or substances of value, and the products and
proceeds therefrom, including, without limitation, all gas resulting from the in
situ combustion of coal or lignite.

 

“Immaterial Subsidiary” means any Subsidiary of the Borrower with less than
$5,000,000 in total assets on a Consolidated basis.

 

“Immaterial Title Deficiencies” means, with respect to specified Proved
Reserves, defects or clouds on title, discrepancies in reported net revenue and
working interest ownership percentages, inaccuracies of representations and
warranties in Sections 5.21 and 5.22 that are qualified by reference to this
term, and other Liens, defects, discrepancies and similar matters which do not,
in the aggregate, reduce the PV9 Pricing of all Proved Reserves of the Borrower
by more than four percent (4%) of PV9 Pricing of all such Proved Reserves.

 

“Indebtedness” means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:

 

(a)                                 all obligations of such Person for borrowed
money and all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments;

 

(b)                                 all direct or contingent obligations of such
Person arising under letters of credit (including standby and commercial),
bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c)                                  net obligations of such Person under any
Swap Contract;

 

(d)                                 all obligations of such Person to pay the
deferred purchase price of property or services (other than trade accounts
payable in the ordinary course of business and, in each case, not past due for
more than 90 days after the date on which such trade account payable was
created);

 

(e)                                  indebtedness (excluding prepaid interest
thereon) secured by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse;

 

(f)                                   capital leases and Synthetic Lease
Obligations;

 

(g)                                  the mandatory redemption price of all
Disqualified Stock of such Person; and

 

(h)                                 all Guarantees of such Person in respect of
any of the foregoing.

 

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For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person.  The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date. The amount of any non-recourse
Indebtedness described in clause (e) of this definition shall, for the purposes
of this Agreement,  be deemed to be equal to the lesser of (i) the aggregate
unpaid amount of such Indebtedness and (ii) the fair market value of the
property or asset encumbered, as determined by such Person in good faith.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitees” has the meaning specified in Section 10.04(b).

 

“Information” has the meaning specified in Section 10.07.

 

“Initial Engineering Report” means the engineering report concerning Oil and Gas
Properties of Loan Parties dated as of December 31, 2014 prepared by Netherland,
Sewell & Associates and Cawley, Gillespie and Associates, Inc.

 

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan,
the last day of each Interest Period applicable to such Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the last Business
Day of each March, June, September and December and the Maturity Date.

 

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing
on the date such Eurodollar Rate Loan is disbursed or converted to or continued
as a Eurodollar Rate Loan and ending on the date one, two, three or six months
thereafter, as selected by the Borrower in its Committed Loan Notice, or such
other period that is twelve months or less requested by the Borrower and
commercially available to all the Lenders; provided that:

 

(i)                                     any Interest Period that would otherwise
end on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;

 

(ii)                                  any Interest Period that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the end of
such Interest Period; and

 

(iii)                               no Interest Period shall extend beyond the
Maturity Date.

 

“Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. 

 

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For purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

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

 

“Issuer Documents” means with respect to any Letter of Credit, the Letter of
Credit Application, and any other document, agreement and instrument entered
into by the applicable L/C Issuer and the Borrower (or any Restricted
Subsidiary) or in favor the applicable L/C Issuer and relating to such Letter of
Credit.

 

“Junior Lien Debt” means Indebtedness (i) of the Borrower and the Guarantors
secured solely by the Collateral on a junior lien basis on the terms and
conditions set forth in (and with a Junior Lien Representative at all times
party to) a Junior Lien Intercreditor Agreement and not secured by any property
or assets of the Borrower or any of its Subsidiaries other than the Collateral
(on such junior basis), and (ii) as to which a representative of the holders of
such Indebtedness, acting on behalf of such holders, shall have become party to
the Junior Lien Intercreditor Agreement as a Junior Lien Representative, and
shall include the Senior Secured Notes.

 

“Junior Lien Financing Documentation” means any documentation governing any
Junior Lien Debt including, without limitation, any Junior Lien Intercreditor
Agreement.

 

“Junior Lien Intercreditor Agreement” means an intercreditor agreement in form
and substance reasonably satisfactory to the Administrative Agent, the Majority
Lenders and the Borrower, among the Borrower, the Guarantors and the
Administrative Agent, as a representative of the Secured Parties, and one or
more collateral agents or representatives for the holders of the relevant Junior
Lien Debt (for any issuance, the “Junior Lien Representative”).

 

“Junior Lien Representative” has the meaning set forth in the definition of
Junior Lien Intercreditor Agreement.

 

“Lariat” means Lariat Services, Inc., a Texas corporation and a wholly-owned
Subsidiary of the Borrower.

 

“Laws” means, collectively, all international, foreign, Federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or
judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, licenses, authorizations and permits of, and agreements
with, any Governmental Authority.

 

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its
participation in any L/C Borrowing in accordance with its Applicable Percentage.

 

“L/C Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Committed Borrowing.

 

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance
thereof or extension of the expiry date thereof, or the increase of the amount
thereof.

 

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“L/C Issuer” means (a) Royal Bank of Canada and (b) any other Lender
satisfactory to the Borrower and the Administrative Agent that may agree to
issue Letters of Credit hereunder pursuant to an instrument in form reasonably
satisfactory to such L/C Issuer and the Borrower, in the case of each of (a) and
(b), in their respective capacities as issuers of Letters of Credit hereunder,
or any successor issuers of Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of determination, the aggregate amount
available to be drawn under all outstanding Letters of Credit plus the aggregate
of all Unreimbursed Amounts, including all L/C Borrowings.  For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with
Section 1.07.  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 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.

 

“Lender” has the meaning specified in the introductory paragraph hereto and, as
the context requires, includes the Swing Line Lenders.

 

“Lender Counterparty” means any counterparty under a (i) Swap Contract that
(A) was a Lender (or an Affiliate of a Lender), at the time such Swap Contract
was entered into and (B) solely with respect to the Swap Contracts listed on
Schedule 1.01A, the institution named in such Schedule and/or (ii) Treasury
Management Services Agreement that was (x) a Lender (or an Affiliate of a
Lender) at the time such Treasury Management Services Agreement was entered into
and (y) solely with respect to the Treasury Management Services Agreement listed
on Schedule 1.01B, the institution named in such Schedule.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“Letter of Credit” means any standby letter of credit issued hereunder providing
for the payment of cash upon the honoring of a presentation thereunder.

 

“Letter of Credit Application” means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the applicable L/C Issuer.  In the event of any inconsistency between the
provisions of any Letter of Credit Application and the provisions of this
Agreement, the provisions of this Agreement shall prevail.

 

“Letter of Credit Expiration Date” means the day that is seven days prior to the
Maturity Date then in effect (or, if such day is not a Business Day, the next
preceding Business Day).

 

“Letter of Credit Fee” has the meaning specified in Section 2.03(i).

 

“Letter of Credit Sublimit” means an amount equal to $100,000,000.  The Letter
of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.

 

“Lien” means any mortgage, pledge, hypothecation, assignment, encumbrance, lien
(statutory or other), charge, or other security interest or preferential
arrangement in the nature of a security interest of any kind or nature
whatsoever (including any conditional sale or other title retention agreement,
any easement, right of way or other encumbrance on title to real property, and
any financing lease having substantially the same economic effect as any of the
foregoing).

 

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“Loan” means an extension of credit by a Lender to the Borrower under Article 2
in the form of a Committed Loan or a Swing Line Loan.

 

“Loan Documents” means this Agreement, each Note, each Issuer Document, the
Guaranty and the Collateral Documents.

 

“Loan Parties” means, collectively, the Borrower and each Guarantor.

 

“Majority Lenders” means, as of any date of determination, Lenders having more
than 50% of the Aggregate Commitments or, if the commitment of each Lender to
make Loans and the obligation of the L/C Issuers to make L/C Credit Extensions
have been terminated pursuant to Section 8.02, Lenders holding in the aggregate
more than 50% of the Total Outstandings (with the aggregate amount of each
Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this
definition); provided that the Commitment of, and the portion of the Total
Outstandings held or deemed held by, any Defaulting Lender shall be excluded for
purposes of making a determination of Majority Lenders.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, assets, properties, liabilities
or condition (financial or otherwise) of the Borrower and its Restricted
Subsidiaries taken as a whole; (b) a material impairment of (i) the rights and
remedies of the Administrative Agent or the Lenders under the Loan Documents or
(ii) the ability of the Loan Parties to perform their obligations under the Loan
Documents; or (c) a material adverse effect upon the legality, validity, binding
effect or enforceability against the Loan Parties of the Loan Documents.

 

“Maturity Date” means the earliest of (a) March 2, 2020, (b) 91 days prior to
the earliest date of (i) any mandatory offer to repurchase the Existing Notes in
full or (ii) maturity under the Existing Notes and (c) 91 days prior to the
earliest date of (i) any mandatory offer to repurchase the Senior Secured Notes
in full or (ii) maturity under the Senior Secured Notes; provided that if such
date is not a Business Day, the Maturity Date shall be the next preceding
Business Day.

 

“Maximum Rate” has the meaning set forth in Section 10.09.

 

“Modified ACNTA” has the meaning assigned such term in the Senior Secured
Indenture as in effect on the date hereof, and any component definition used
therein has the meaning set forth in the Senior Secured Indenture as of the date
hereof.

 

“Modified ACNTA Prices” has the meaning assigned such term in the Senior Secured
Indenture as in effect on the date hereof, and any component definition used
therein has the meaning set forth in the Senior Secured Indenture as of the date
hereof.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“Mortgage” means any of the mortgages and deeds of trust heretofore delivered
pursuant to the Existing Credit Agreement or hereafter delivered pursuant to
Section 4.03, Section 6.12 or Section 6.14 hereof.

 

“Multiemployer Plan” means any employee benefit plan of the type described in
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or been obligated to make contributions.

 

“Net Cash Proceeds” means:

 

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(a)                                 with respect to any Disposition by the
Borrower or any of its Restricted Subsidiaries, the excess, if any, of (i) the
sum of cash and Cash Equivalents received in connection with such transaction
(including any cash or Cash Equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as
and when so received) over (ii) the sum of (A) the principal amount of any
Indebtedness that is secured by the applicable asset and that is required to be
repaid in connection with such transaction (other than Indebtedness under the
Loan Documents), (B) the reasonable and customary out-of-pocket expenses
incurred by the Borrower or such Restricted Subsidiary in connection with such
transaction, (C) income taxes reasonably estimated to be actually payable within
two years of the date of the relevant transaction as a result of any gain
recognized in connection therewith and (D) the Swap Termination Value, if any,
associated with such transaction; provided that, if the amount of any estimated
taxes pursuant to subclause (C) exceeds the amount of taxes actually required to
be paid in cash in respect of such Disposition, the aggregate amount of such
excess shall constitute Net Cash Proceeds if such aggregate amount exceeds
$1,000,000;

 

(b)                                 with respect to the incurrence or issuance
of any Indebtedness by the Borrower or any of its Restricted Subsidiaries, the
excess of (i) the sum of the cash and Cash Equivalents received in connection
with such transaction over (ii) the underwriting discounts and commissions, and
other reasonable and customary out-of-pocket expenses, incurred by the Borrower
or such Restricted Subsidiary in connection therewith; and

 

(c)                                  with respect to the termination of any
Hedge Transaction by the Borrower or any of its Restricted Subsidiaries, the
excess of (i) the sum of the cash and Cash Equivalents received in connection
with such transaction over (ii) the sum of (A) the reasonable and customary
out-of-pocket expenses incurred by the Borrower or such Restricted Subsidiary in
connection with such transaction and (B) income taxes reasonably estimated to be
actually payable within two years of the date of the relevant transaction as a
result of any gain recognized in connection therewith; provided that, if the
amount of any estimated taxes pursuant to subclause (B) exceeds the amount of
taxes actually required to be paid in cash in respect of such termination, the
aggregate amount of such excess shall constitute Net Cash Proceeds if such
aggregate amount exceeds $1,000,000.

 

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

 

“Non-Extension Notice Date” has the meaning set forth in Section 2.03(b)(iii).

 

“Non-Reinstatement Deadline” has the meaning set forth in Section 2.03(b)(iv).

 

“Note” means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of Exhibit D.

 

“Obligations” means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit or any Swap Contract or
Treasury Management Services Agreement with a Lender Counterparty, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Restricted Subsidiary thereof of any proceeding under any
Debtor Relief Laws naming such Person as the debtor in such proceeding,
regardless of whether such interest and fees are allowed claims in such
proceeding; provided that the term “Obligations” shall not, with respect to any
Guarantor, include any Excluded Swap Obligation with respect to such Guarantor.

 

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

 

“Oil and Gas Business” means the business of acquiring, exploring, or developing
and operating Oil and Gas Properties and the production, marketing, processing
and transporting of Hydrocarbons therefrom, and providing services to the oil
and gas upstream and midstream segments.

 

“Oil and Gas Hedge Transaction” means a Hedge Transaction pursuant to which any
Person hedges the price to be received by it for future production of
Hydrocarbons.

 

“Oil and Gas Properties” means all oil, gas and/or mineral leases, oil, gas or
mineral properties, mineral servitudes and/or mineral rights of any kind
(including, without limitation, mineral fee interests, lease interests, farmout
interests, overriding royalty and royalty interests, net profits interests, oil
payment interests, production payment interests and other types of mineral
interests), and all oil and gas gathering, treating, storage, processing,
monitoring and handling assets and all other assets directly related thereto.

 

“Oklahoma Properties” means (a) the office buildings located at (i) 120 Robert
S. Kerr Avenue, Oklahoma City, OK 73102, (ii) 123 Robert S. Kerr Avenue,
Oklahoma City, OK 73102 and (iii) 324 N. Robinson Avenue, Oklahoma City, OK
73102, (b) the Broadway-Kerr Parking Garage located at the northeast corner of
the intersection of Broadway Avenue and Robert S. Kerr Avenue in downtown
Oklahoma City and (c) the three surface parking lots located on Broadway Avenue
in downtown Oklahoma City.

 

“Organization Documents” means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

 

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

 

“Outstanding Amount” means (i) with respect to Committed Loans and Swing Line
Loans on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of Committed Loans
and Swing Line Loans, as the case may be, occurring on such date; and (ii) with
respect to any L/C Obligations on any date, the amount by which such L/C
Obligations exceed the Cash Collateral held by the Administrative Agent on such
date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such
date, including as a result of any reimbursements by the Borrower of
Unreimbursed Amounts.

 

“Patriot Act” has the meaning specified in Section 5.25.

 

“Participant” has the meaning specified in Section 10.06(d).

 

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“Participant Register” has the meaning specified in Section 10.06(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation.

 

“PCAOB” means the Public Company Accounting Oversight Board.

 

“Pension Plan” means any “employee pension benefit plan” (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.

 

“Permitted Debt Restrictions” means, an instrument or instruments governing
indebtedness which imposes limitations on or requirements with respect to
Indebtedness, Restricted Payments or Liens of the type described in Section 7.09
that are substantially the same as or less restrictive than the corresponding
limitations or requirements, if any, with respect to such matters contained in
any of the Principal Debt Obligations.

 

“Permitted Encumbrances” has the meaning specified in the Mortgages.

 

“Permitted Refinancing” means, in respect of any Indebtedness otherwise
permitted hereunder (the “Refinanced Indebtedness”), any refinancing, refunding,
renewal or extension (any of the foregoing, a “Refinancing”, and any such new
Indebtedness, “Refinancing Indebtedness”) of such Refinanced Indebtedness;
provided that (i) the amount of such Refinanced Indebtedness is not increased at
the time of such Refinancing except by an amount equal to a reasonable premium
or other reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such refinancing and by an amount equal to any existing
commitments unutilized thereunder and the direct or any contingent obligor with
respect thereto is not changed, as a result of or in connection with such
Refinancing, (ii) the terms relating to principal amount, amortization,
maturity, collateral (if any) (except that any of the Existing Notes may be
refinanced or refunded with Junior Lien Debt) and subordination (if any), and
other material terms taken as a whole, of any such Refinancing Indebtedness, and
of any agreement entered into and of any instrument issued in connection
therewith, are no less favorable taken as a whole in any material respect to the
Loan Parties or the Lenders than the terms of any agreement or instrument
governing the Refinanced Indebtedness and the interest rate applicable to the
Refinancing Indebtedness does not exceed the then applicable market interest
rate, (iii) no Default would result from such Refinancing after giving effect
thereto and (iv) such Refinancing Indebtedness does not mature and requires no
scheduled amortization prior to the 91st day following the Maturity Date.

 

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

 

“Plan” means any “employee benefit plan” (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.

 

“Platform” has the meaning specified in Section 6.02.

 

“Pledged Equity” has the meaning specified in the Security Agreement.

 

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“Principal Debt Obligations” means all existing long-term debt issued by the
Borrower including the (i) 8.75% Senior Notes due 2020, (ii) 7.5% Senior Notes
due 2021, (iii) 8.125% Senior Notes due 2022, (iv) 7.5% Senior Notes due 2023
(the senior notes referred to in clauses (i) through (iv), collectively, the
“Existing Notes”) and (v) any Junior Lien Debt.

 

“Proceeding” has the meaning specified in Section 10.04(b).

 

“Proved Reserves” means, collectively, proved developed nonproducing reserves,
proved developed producing reserves and proved undeveloped reserves.

 

“PV9 Pricing” means the net present value, discounted at 9% per annum, of the
future net revenues expected to accrue to the Borrower’s and its Restricted
Subsidiaries’ collective interests in Proved Reserves expected to be produced
from Oil and Gas Properties during the remaining expected economic lives of such
reserves made in accordance with the then existing standards of the Society of
Petroleum Engineers (with appropriate adjustments made for hedging operations)
as follows:

 

(a)                                 for anticipated sales of oil and gas that
are fixed in a firm fixed price sales contract with an investment grade
counterparty or a counterparty guaranteed, or for whom a letter of credit has
been issued, by an investment grade party (or another counterparty approved by
Administrative Agent), the fixed price or prices provided for in such sales
contract during the term thereof; and

 

(b)                                 for anticipated sales of oil and gas, if
such sales are not under a sales contract that is described in paragraph (a)
above, for the date of calculation (or, if such date is not a Business Day, for
the first Business Day thereafter), the prices provided in the most recent price
deck provided to the Borrower by the Administrative Agent, adjusted in each case
for historical location and quality differentials during the twelve months
preceding such date of determination.

 

“Qualified Stock” means Equity Interests which are not Disqualified Stock.

 

“Reference Date” has the meaning specified in the definition of “Available
Amount”.

 

“Refinancing Indebtedness” has the meaning set forth in the definition of
Permitted Refinancing.

 

“Register” has the meaning specified in Section 10.06(c).

 

“Registered Public Accounting Firm” has the meaning specified in the Securities
Laws and shall be independent of the Borrower as prescribed by the Securities
Laws.

 

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

 

“Reportable Event” means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.

 

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion
or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to
an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to
a Swing Line Loan, a Swing Line Loan Notice.

 

“Required Lenders” means, as of any date of determination, Lenders having at
least 66-2/3% of the Aggregate Commitment or, if the commitment of each Lender
to make Loans and the obligation of the

 

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L/C Issuers to make L/C Credit Extensions have been terminated pursuant to
Section 8.02, Lenders holding in the aggregate at least 66-2/3% of the Total
Outstandings (with the aggregate amount of each Lender’s risk participation and
funded participation in L/C Obligations and Swing Line Loans being deemed “held”
by such Lender for purposes of this definition); provided that the Commitment
of, and the portion of the Total Outstandings held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.

 

“Responsible Officer” means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or controller of a Loan Party,
and solely for purposes of the delivery of incumbency certificates pursuant to
Section 4.01, the secretary or any assistant secretary of a Loan Party and,
solely for purposes of notices given pursuant to Article 2, any other officer or
employee of the applicable Loan Party so designated by any of the foregoing
officers in a notice to the Administrative Agent or any other officer of
employee of the applicable Loan Party designated in or pursuant to an agreement
between the applicable Loan Party and the Administrative Agent.  Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.

 

“Restricted Debt” has the meaning set forth in Section 7.15.

 

“Restricted Debt Documentation” means any documentation governing any Restricted
Debt (including, in the case of Junior Lien Debt, Junior Lien Financing
Documentation).

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any capital stock or other Equity
Interest of the Borrower or any Restricted Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other Equity Interest,
or on account of any return of capital to the Borrower’s stockholders, partners
or members (or the equivalent Person thereof).  For the avoidance of doubt, any
payment of interest (including payment-in-kind interest) made in respect of any
Indebtedness convertible into Equity Interests of the Borrower permitted
hereunder shall not constitute a Restricted Payment.

 

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

 

“Royalty Trust” means a statutory or business trust, the trustee of which is a
financial institution not affiliated with the Borrower, to which the Borrower or
one or more of its Restricted Subsidiaries conveys, or intends to convey,
royalty interests, net profits interests, or other similar mineral interests in
the production of hydrocarbons from properties to which no value was attributed
in the then most recent determination of the Borrowing Base, in exchange for
units of beneficial interests in the trust and all or part of the cash proceeds
of an underwritten public offering or a similar offering under Rule 144A of the
trust’s units.  For the avoidance of doubt, SandRidge Mississippian Trust I,
SandRidge Mississippian Trust II and SandRidge Permian Trust shall each
constitute a Royalty Trust.

 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 

“Sanctions” means any sanction administered or enforced by the United States
Government (including without limitation, OFAC), the United Nations Security
Council, the European Union, Her Majesty’s Treasury or other relevant sanctions
authority.

 

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“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

 

“Scheduled Determination” has the meaning specified in Section 2.05(b)(i).

 

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

 

“Secured Parties” means, collectively, the Administrative Agent, the Lenders,
the L/C Issuers, the Lender Counterparties, each co-agent or sub-agent appointed
by the Administrative Agent from time to time pursuant to Section 9.05, and the
other Persons the Obligations owing to which are or are purported to be secured
by the Collateral under the terms of the Collateral Documents.

 

“Securities Laws” means the Securities Act of 1933 and regulations thereunder,
the Securities Exchange Act of 1934 and regulations thereunder, Sarbanes-Oxley
and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the PCAOB.

 

“Security Agreement” means, collectively, the pledge and security agreements
heretofore delivered pursuant to the Existing Credit Agreement and assigned to
the Administrative Agent for the benefit of the Secured Parties or hereafter
delivered pursuant to Section 6.12 or Section 6.14 hereof.

 

“Security Agreement Supplement” has the meaning specified in the Security
Agreement.

 

“Senior Secured Indenture” means the Indenture, dated as of June 10, 2015, among
the Borrower, the Guarantors (as defined therein) and the Trustee (as defined
therein), pursuant to which the Senior Secured Notes are issued.

 

“Senior Secured Notes” means the 8.75% Senior Secured Notes due 2020 issued
pursuant to the Senior Secured Indenture.

 

“Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person’s ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person’s property would constitute an unreasonably small capital and
(e) such Person is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business.  The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“SPC” has the meaning specified in Section 10.06(h).

 

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

 

“Subsidiary” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially

 

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owned, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or both, by such Person. 
Notwithstanding the foregoing, neither (i) any Royalty Trust nor (ii) any future
venture contemplated by Section 7.02(h) shall be considered to be a “Subsidiary”
of the Borrower or any of its Restricted Subsidiaries for purposes of any Loan
Document, except that any of the foregoing entities may be consolidated with the
Borrower or any Subsidiary for purposes of such Person’s financial statements. 
Unless otherwise specified, all references herein to a “Subsidiary” or to
“Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“Swap Contract” means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement.

 

“Swap Obligation” means, with respect to any Person, any obligation to pay or
perform under any Swap Contract.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date
such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).

 

“Swing Line” means the revolving credit facility made available by the Swing
Line Lenders pursuant to Section 2.04.

 

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to
Section 2.04.

 

“Swing Line Commitment” means, as to any Lender, the amount set forth opposite
such Lender’s name on Schedule 2.01S or in the Assignment and Assumption
pursuant to which such Lender becomes a party hereto, as applicable, as such
amount may be adjusted from time to time in accordance with this Agreement.

 

“Swing Line Lender” means (a) Royal Bank of Canada, in its capacity as provider
of Swing Line Loans, and (b) any other Lender satisfactory to the Borrower and
the Administrative Agent that may agree to make Swing Line Loans hereunder, or
any successor swing line lender hereunder.

 

“Swing Line Loan” has the meaning specified in Section 2.04(a).

 

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“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to
Section 2.04(b), which shall be substantially in the form of Exhibit B or such
other form as approved by the Swing Line Lenders (including any form on an
electronic platform or electronic transmission system as shall be approved by
the Swing Line Lenders), appropriately completed and signed by a Responsible
Officer of the Borrower.

 

“Swing Line Sublimit” means an amount equal to the lesser of (a) $50,000,000 and
(b) the Aggregate Commitments.  The Swing Line Sublimit is part of, and not in
addition to, the Aggregate Commitments.

 

“Synthetic Lease Obligation” means the monetary obligation of a Person under
(a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an
agreement for the use or possession of property creating obligations that do not
appear on the balance sheet of such Person but which, upon the insolvency or
bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).

 

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

 

“Threshold Amount” means $25,000,000.

 

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all
L/C Obligations.

 

“Transaction” means, collectively, the entering into and funding of the senior
credit facility under this Agreement, and all related transactions and the
payment of the fees and expenses incurred in connection with the consummation of
the foregoing.

 

“Treasury Management Services Agreement” means any agreement to provide cash
management services, including treasury, depository, overdraft, credit, debit or
purchasing card, electronic funds transfer and other cash management
arrangements to the Borrower or any Subsidiary; provided that the term “Treasury
Management Services Agreement” shall not, with respect to any Guarantor, include
any Excluded Swap Obligation with respect to such Guarantor.

 

“Type” means, with respect to a Committed Loan, its character as a Base Rate
Loan or a Eurodollar Rate Loan.

 

“UCC” means the Uniform Commercial Code as in effect in the State of New York;
provided that, if perfection or the effect of perfection or non-perfection or
the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, “UCC” means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.

 

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

 

“United States” and “U.S.” mean the United States of America.

 

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“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

 

“Unrestricted Subsidiary” means (1) any Subsidiary of the Borrower designated by
the Borrower as an Unrestricted Subsidiary hereunder by written notice to the
Administrative Agent; provided, that the Borrower shall only be permitted to so
designate a Subsidiary as an Unrestricted Subsidiary so long as (a) no Default
or Borrowing Base Deficiency has occurred and is continuing or would result
therefrom, (b) immediately after giving effect to such designation, the Borrower
shall be in compliance on a pro forma basis with the financial covenants set
forth in Section 7.11, (c) such Unrestricted Subsidiary shall be capitalized (to
the extent capitalized by the Borrower or any of its Restricted Subsidiaries)
through Investments as permitted by, and in compliance with, Section 7.02,
(d) for purposes of clause (c) such designation shall be deemed an Investment in
an amount equal to the net book value of the total investment of the Borrower
and its Restricted Subsidiaries in such Unrestricted Subsidiary, and (e) the
Borrower shall have delivered to the Administrative Agent an officer’s
certificate executed by a Responsible Officer of the Borrower, certifying
compliance with the requirements of preceding clauses (a) through (d), and
containing the calculations and information required by the preceding clause
(b), and (2) any Subsidiary of an Unrestricted Subsidiary.  The Borrower may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary for purposes
of this Agreement (each, a “Subsidiary Redesignation”); provided, that (i) no
Default has occurred and is continuing or would result therefrom,
(ii) immediately after giving effect to such Subsidiary Redesignation, the
Borrower shall be in compliance on a pro forma basis with the financial
covenants set forth in Section 7.11 and (iii) the Borrower shall have delivered
to the Administrative Agent an officer’s certificate executed by a Responsible
Officer of the Borrower, certifying compliance with the requirements of
preceding clauses (i) and (ii), and containing the calculations and information
required by the preceding clause (ii).

 

Section 1.02                             Other Interpretive Provisions.  With
reference to this Agreement and each other Loan Document, unless otherwise
specified herein or in such other Loan Document:

 

(a)                                 The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include,” “includes” and “including”
shall be deemed to be followed by the phrase “without limitation.”  The word
“will” shall be construed to have the same meaning and effect as the word
“shall.”  Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and
words of similar import when used in any Loan Document, shall be construed to
refer to such Loan Document in its entirety and not to any particular provision
thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, the Loan Document in which such references appear,
(v) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time,
and (vi) the words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

(b)                                 In the computation of periods of time from a
specified date to a later specified date, the word “from” means “from and
including;” the words “to” and “until” each mean “to but excluding;” and the
word “through” means “to and including.”

 

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(c)                                  Section headings herein and in the other
Loan Documents are included for convenience of reference only and shall not
affect the interpretation of this Agreement or any other Loan Document.

 

Section 1.03                             Accounting Terms.

 

(a)                                 Generally.  All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein.

 

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

 

Section 1.04                             Petroleum Terms.  As used herein, the
terms “proved reserves,” “proved developed reserves,” “proved developed
producing reserves,” “proved developed nonproducing reserves,” and “proved
undeveloped reserves” have the meaning given such terms from time to time and at
the time in question by the Society of Petroleum Engineers of the American
Institute of Mining Engineers.

 

Section 1.05                             Rounding.  Any financial ratios
required to be maintained by the 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).

 

Section 1.06                             Times of Day.  Unless otherwise
specified, all references herein to times of day shall be references to Eastern
time (daylight or standard, as applicable).

 

Section 1.07                             Letter of Credit Amounts.  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, however, that with respect to any Letter of Credit that, by its
terms or the terms of any Issuer Document related thereto, 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.

 

Section 1.08                             Available Amount Transactions.  If more
than one action occurs on any given date the permissibility of the taking of
which is determined hereunder by reference to the amount of the Available Amount
immediately prior to the taking of such action, the permissibility of the taking
of each such action shall be determined independently and in no event may any
two or more such actions be

 

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treated as occurring simultaneously, i.e., each transaction must be permitted
under the Available Amount as so calculated.

 

ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

 

Section 2.01                             Committed Loans.  Subject to the terms
and conditions set forth herein, each Lender severally agrees to make loans
denominated in Dollars (each such loan, a “Committed Loan”) to the Borrower from
time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender’s Commitment; provided, however, that after giving effect to any
Committed Borrowing and the application by the Administrative Agent of the
proceeds thereof, (i) the Total Outstandings shall not exceed the Facility
Limit, (ii) the aggregate Outstanding Amount of the Committed Loans of any
Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of
all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed the lesser of such Lender’s
(A) Commitment and (B) Applicable Percentage of the Facility Limit and (iii) at
any time a Junior Lien Intercreditor Agreement is in place, the amount of the
requested Committed Borrowing shall not cause the Total Outstandings to exceed
the greatest of (A) $950,000,000, (B) the then-effective Borrowing Base Cap and
(C) 30% of Modified ACNTA as of the date of incurrence of such Borrowing. 
Within the limits of each Lender’s Commitment, and subject to the other terms
and conditions hereof, the Borrower may borrow under this Section 2.01, prepay
under Section 2.06, and reborrow under this Section 2.01.  Committed Loans may
be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

 

Section 2.02                             Borrowings, Conversions and
Continuations of Committed Loans.

 

(a)                                 Each Committed Borrowing, each conversion of
Committed Loans from one Type to the other, and each continuation of Eurodollar
Rate Loans shall be made upon the Borrower’s irrevocable notice to the
Administrative Agent, which may be given by (A) telephone or (B) a Committed
Loan Notice; provided that any telephonic notice must be confirmed promptly by
delivery to the Administrative Agent of a Committed Loan Notice.  Each such
Committed Loan Notice must be received by the Administrative Agent not later
than 11:00 a.m. (i) three Business Days prior to the requested date of any
Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Committed Loans and (ii) on the
Business Day prior to any Borrowing of Base Rate Committed Loans.  Each
Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in
a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof.  Except as provided in Section 2.03(c), each Borrowing of or conversion
to Base Rate Committed Loans shall be in a principal amount of $1,000,000 or a
whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice
(whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Committed Borrowing, a conversion of Committed Loans from one Type
to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested
date of the Borrowing, conversion or continuation, as the case may be (which
shall be a Business Day), (iii) the principal amount of Committed Loans to be
borrowed, converted or continued, (iv) the Type of Committed Loans to be
borrowed or to which existing Committed Loans are to be converted and (v) if
applicable, the duration of the Interest Period with respect thereto.  If the
Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or
if the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Committed Loans shall be made as, or converted
to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be
effective as of the last day of the Interest Period then in effect with respect
to the applicable Eurodollar Rate Loans.  If the Borrower requests a Borrowing
of, conversion to, or continuation of Eurodollar Rate Loans in any such
Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month.

 

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(b)                                 Following receipt of a Committed Loan
Notice, the Administrative Agent shall promptly notify each Lender of the amount
of its Applicable Percentage of the applicable Committed Loans, and if no timely
notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender of the details of any automatic
conversion to Base Rate Loans described in the preceding subsection.  In the
case of a Committed Borrowing, each Lender shall make the amount of its
Committed Loan available to the Administrative Agent in immediately available
funds at the Administrative Agent’s Office not later than 1:00 p.m. on the
Business Day specified in the applicable Committed Loan Notice.  Upon
satisfaction of the applicable conditions set forth in Section 4.02, the
Administrative Agent shall make all funds so received available to the Borrower
in like funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of the Administrative Agent with the
amount of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower.

 

(c)                                  Except as otherwise provided herein, a
Eurodollar Rate Loan may be continued or converted only on the last day of an
Interest Period for such Eurodollar Rate Loan.  During the existence of an Event
of Default, no Loans may be requested as, converted to or continued as
Eurodollar Rate Loans without the consent of the Majority Lenders.

 

(d)                                 The Administrative Agent shall promptly
notify the Borrower and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such interest
rate.  At any time that Base Rate Loans are outstanding, the Administrative
Agent shall notify the Borrower and the Lenders of any change in the
Administrative Agent’s prime rate used in determining the Base Rate promptly
following the public announcement of such change.

 

(e)                                  After giving effect to all Committed
Borrowings, all conversions of Committed Loans from one Type to the other, and
all continuations of Committed Loans as the same Type, there shall not be more
than ten Interest Periods in effect with respect to Committed Loans.

 

Section 2.03                             Letters of Credit.

 

(a)                                 The Letter of Credit Commitment.

 

(i)                                     Subject to the terms and conditions set
forth herein, (A) each L/C Issuer agrees, in reliance upon the agreements of the
Lenders set forth in this Section 2.03, (1) from time to time on any Business
Day during the period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of the Borrower, and
to amend or extend Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drawings under the Letters of Credit; and
(B) the Lenders severally agree to participate in Letters of Credit issued for
the account of the Borrower and any drawings thereunder; provided that after
giving effect to any L/C Credit Extension with respect to any Letter of Credit,
(x) the Total Outstandings shall not exceed the Facility Limit, (y) the
aggregate Outstanding Amount of the Committed Loans of any Lender, plus such
Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations,
plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing
Line Loans shall not exceed such Lender’s Commitment and (z) the Outstanding
Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. 
Each request by the Borrower for the issuance or amendment of a Letter of Credit
shall be deemed to be a representation by the Borrower that the L/C Credit
Extension so requested complies with the conditions set forth in the proviso to
the preceding sentence.  Within the foregoing limits, and subject to the terms
and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall
be fully revolving, and accordingly the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed.

 

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(ii)                                  The L/C Issuers shall not issue any Letter
of Credit, if:

 

(A)                               subject to Section 2.03(b)(iii), the expiry
date of such requested Letter of Credit would occur more than twenty-four months
after the date of issuance or last extension, unless the Majority Lenders have
approved such expiry date; or

 

(B)                               the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date.

 

(iii)                               An L/C Issuer shall not be under any
obligation to issue any Letter of Credit if:

 

(A)                               any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the applicable L/C Issuer from issuing such Letter of Credit, or any
Law applicable to the applicable L/C Issuer or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over the applicable L/C Issuer shall prohibit, or request that the
applicable L/C Issuer refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the applicable L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the applicable L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the
applicable L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the applicable L/C Issuer in good faith
deems material to it;

 

(B)                               the issuance of such Letter of Credit would
violate one or more policies of the applicable L/C Issuer applicable to letters
of credit generally;

 

(C)                               except as otherwise agreed by the
Administrative Agent and the applicable L/C Issuer, such Letter of Credit is in
an initial stated amount less than $50,000;

 

(D)                               such Letter of Credit is to be denominated in
a currency other than Dollars; or

 

(E)                                a default of any Lender’s obligations to fund
under Section 2.01 exists or any Lender is at such time a Defaulting Lender
hereunder, unless the applicable L/C Issuer has entered into arrangements,
including delivery of Cash Collateral, satisfactory to the applicable L/C Issuer
(in its sole discretion) either with the Borrower or such Lender to eliminate
the applicable L/C Issuer’s risk with respect to such Lender’s Applicable
Percentage of the Letter of Credit then requested to be issued.

 

(iv)                              Each L/C Issuer shall not amend any Letter of
Credit if such L/C Issuer would not be permitted at such time to issue such
Letter of Credit in its amended form under the terms hereof.

 

(v)                                 The L/C Issuers shall be under no obligation
to amend any Letter of Credit if (A) the applicable L/C Issuer would have no
obligation at such time to issue such Letter of Credit in its amended form under
the terms hereof or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.

 

(vi)                              Each L/C Issuer shall act on behalf of the
Lenders with respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuers shall have all of

 

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the benefits and immunities (A) provided to the Administrative Agent in
Article 9 with respect to any acts taken or omissions suffered by the applicable
L/C Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and Issuer Documents pertaining to such Letters of Credit as fully
as if the term “Administrative Agent” as used in Article 9 included the
applicable L/C Issuer with respect to such acts or omissions and (B) as
additionally provided herein with respect to the applicable L/C Issuer.

 

(b)                                 Procedures for Issuance and Amendment of
Letters of Credit; Auto-Extension and Auto-Reinstatement Letters of Credit.

 

(i)                                     Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower delivered to the
applicable L/C Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower.  Such Letter of Credit Application must be
received by the applicable L/C Issuer and the Administrative Agent not later
than 11:00 a.m. at least three (3) Business Days (or such later date and time as
the Administrative Agent and the applicable L/C Issuer may agree in a particular
instance in their sole discretion) prior to the proposed issuance date or date
of amendment, as the case may be.  In the case of a request for an initial
issuance of a Letter of Credit, such Letter of Credit Application shall specify
in form and detail satisfactory to the applicable L/C Issuer: (A) the proposed
issuance date of the requested Letter of Credit (which shall be a Business Day);
(B) the amount thereof; (C) the expiry date thereof; (D) the name and address of
the beneficiary thereof; (E) the documents to be presented by such beneficiary
in case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the applicable L/C Issuer may require.  In the case of a
request for an amendment of any outstanding Letter of Credit, such Letter of
Credit Application shall specify in form and detail satisfactory to the
applicable L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed
date of amendment thereof (which shall be a Business Day); (C) the nature of the
proposed amendment; and (D) such other matters as the applicable L/C Issuer may
require.  Additionally, the Borrower shall furnish to the applicable L/C Issuer
and the Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the applicable L/C Issuer or the Administrative Agent may require.

 

(ii)                                  Promptly after receipt of any Letter of
Credit Application, the applicable L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the Administrative Agent
has received a copy of such Letter of Credit Application from the Borrower and,
if not, the applicable L/C Issuer will provide the Administrative Agent with a
copy thereof.  Unless the applicable L/C Issuer has received written notice from
any Lender, the Administrative Agent or any Loan Party, at least one Business
Day prior to the requested date of issuance or amendment of the applicable
Letter of Credit, that one or more applicable conditions contained in
Section 4.02 shall not then be satisfied, then, subject to the terms and
conditions hereof, the applicable L/C Issuer shall, on the requested date, issue
a Letter of Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the applicable
L/C Issuer’s usual and customary business practices.  Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the applicable L/C
Issuer a risk participation in such Letter of Credit in an amount equal to the
product of such Lender’s Applicable Percentage times the amount of such Letter
of Credit.

 

(iii)                               If the Borrower so requests in any
applicable Letter of Credit Application, the applicable L/C Issuer may, in its
sole and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit the
applicable L/C Issuer to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter

 

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of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”) in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued.  Unless otherwise
directed by the applicable L/C Issuer, the Borrower shall not be required to
make a specific request to the applicable L/C Issuer for any such extension. 
Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be
deemed to have authorized (but may not require) the applicable L/C Issuer to
permit the extension of such Letter of Credit at any time to an expiry date not
later than the Letter of Credit Expiration Date; provided, however, that the
applicable L/C Issuer shall not permit any such extension if (A) the applicable
L/C Issuer has determined that it would not be permitted, or would have no
obligation, at such time to issue such Letter of Credit in its revised form (as
extended) under the terms hereof (by reason of the provisions of clause (ii) or
(iii) of Section 2.03(a) or otherwise) or (B) it has received notice (which may
be by telephone or in writing) on or before the day that is seven Business Days
before the Non-Extension Notice Date (1) from the Administrative Agent that the
Majority Lenders have elected not to permit such extension or (2) from the
Administrative Agent, any Lender or the Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then satisfied, and in
each such case directing the applicable L/C Issuer not to permit such extension.

 

(iv)                              If the Borrower so requests in any applicable
Letter of Credit Application, the applicable L/C Issuer may, in its sole and
absolute discretion, agree to issue a Letter of Credit that permits the
automatic reinstatement of all or a portion of the stated amount thereof after
any drawing thereunder (each, an “Auto-Reinstatement Letter of Credit”).  Unless
otherwise directed by the applicable L/C Issuer, the Borrower shall not be
required to make a specific request to the applicable L/C Issuer to permit such
reinstatement.  Once an Auto-Reinstatement Letter of Credit has been issued,
except as provided in the following sentence, the Lenders shall be deemed to
have authorized (but may not require) the applicable L/C Issuer to reinstate all
or a portion of the stated amount thereof in accordance with the provisions of
such Letter of Credit.  Notwithstanding the foregoing, if such
Auto-Reinstatement Letter of Credit permits the applicable L/C Issuer to decline
to reinstate all or any portion of the stated amount thereof after a drawing
thereunder by giving notice of such non-reinstatement within a specified number
of days after such drawing (the “Non-Reinstatement Deadline”), the applicable
L/C Issuer shall not permit such reinstatement if it has received a notice
(which may be by telephone or in writing) on or before the day that is five
Business Days before the Non-Reinstatement Deadline (A) from the Administrative
Agent that the Majority Lenders have elected not to permit such reinstatement or
(B) from the Administrative Agent, any Lender or the Borrower that one or more
of the applicable conditions specified in Section 4.02 is not then satisfied
(treating such reinstatement as an L/C Credit Extension for purposes of this
clause) and, in each case, directing the applicable L/C Issuer not to permit
such reinstatement.

 

(v)                                 Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the applicable L/C Issuer will also
deliver to the Borrower and the Administrative Agent a true and complete copy of
such Letter of Credit or amendment.  On a monthly basis, each L/C Issuer shall
deliver to the Administrative Agent (with a copy to the Borrower) a complete
list of all outstanding Letters of Credit issued by such L/C Issuer.

 

(c)                                  Drawings and Reimbursements; Funding of
Participations.

 

(i)                                     Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter of Credit, the
applicable L/C Issuer shall notify the Borrower and the Administrative Agent
thereof.  Not later than 11:00 a.m. on the date of any payment by the applicable
L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the
Borrower shall reimburse the applicable L/C Issuer through the Administrative
Agent in an amount equal to the amount of such drawing.  If the Borrower fails
to so reimburse the applicable L/C Issuer by such time, the Administrative

 

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Agent shall promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such
Lender’s Applicable Percentage thereof.  In such event, the Borrower shall be
deemed to have requested a Committed Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to (A) the minimum and multiples specified in Section 2.02 for
the principal amount of Base Rate Loans and (B) the conditions set forth in
Section 4.02, but subject to the amount of the unutilized portion (calculated
after giving effect to the application by the Administrative Agent of the
proceeds of such Committed Borrowing) of the Aggregate Commitments.  Any notice
given by the applicable L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

 

(ii)                                  Each Lender shall upon any notice pursuant
to Section 2.03(c)(i) make funds available to the Administrative Agent for the
account of the applicable L/C Issuer at the Administrative Agent’s Office in an
amount equal to its Applicable Percentage of the Unreimbursed Amount not later
than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of
Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Committed Loan to the Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the applicable L/C
Issuer.

 

(iii)                               With respect to any Unreimbursed Amount that
is not fully refinanced by a Committed Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the applicable L/C
Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together
with interest) and shall bear interest at the Default Rate.  In such event, each
Lender’s payment to the Administrative Agent for the account of the applicable
L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of
its participation in such L/C Borrowing and shall constitute an L/C Advance from
such Lender in satisfaction of its participation obligation under this
Section 2.03.

 

(iv)                              Until each Lender funds its Committed Loan or
L/C Advance pursuant to this Section 2.03(c) to reimburse the applicable L/C
Issuer for any amount drawn under any Letter of Credit, interest in respect of
such Lender’s Applicable Percentage of such amount shall be solely for the
account of the applicable L/C Issuer.

 

(v)                                 Each Lender’s obligation to make Committed
Loans or L/C Advances to reimburse the L/C Issuers for amounts drawn under
Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute
and unconditional and shall not be affected by any circumstance, including
(A) any setoff, counterclaim, recoupment, defense or other right which such
Lender may have against the applicable L/C Issuer, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of a
Default; or (C) any other occurrence, event or condition, whether or not similar
to any of the foregoing,  Each Lender’s obligation to make Committed Loans
pursuant to this Section 2.03(c) shall not be subject to the conditions set
forth in Section 4.02.  No such making of an L/C Advance shall relieve or
otherwise impair the obligation of the Borrower to reimburse the applicable L/C
Issuer for the amount of any payment made by such L/C Issuer under any Letter of
Credit, together with interest as provided herein.

 

(vi)                              If any Lender fails to make available to the
Administrative Agent for the account of the applicable L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
Section 2.03(c) by the time specified in Section 2.03(c)(ii), the applicable L/C
Issuer shall be entitled to recover from such Lender (acting through the
Administrative Agent), on

 

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demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the applicable L/C Issuer at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the applicable L/C Issuer in
accordance with banking industry rules on interbank compensation.  If such
Lender pays such amount (with interest and fees as aforesaid), the amount so
paid shall constitute such Lender’s Committed Loan included in the relevant
Committed Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as
the case may be.  A certificate of the applicable L/C Issuer submitted to any
Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.

 

(vii)                           In the event the Borrower or any Lender shall
have entered into the arrangements contemplated pursuant to
Section 2.03(a)(iii)(E) with respect to the applicable L/C Issuer’s risk with
respect to another Lender’s Applicable Percentage of any Letter of Credit, the
applicable L/C Issuer shall be entitled immediately to exercise its rights under
any such arrangement and apply any funds received by it as a result thereof to
such Lender’s Applicable Percentage of any Unreimbursed Amount with respect to
such Letter of Credit.

 

(d)                                 Repayment of Participations.

 

(i)                                     At any time after an L/C Issuer has made
a payment under any Letter of Credit and has received from any Lender such
Lender’s L/C Advance in respect of such payment in accordance with
Section 2.03(c), if the Administrative Agent receives for the account of such
L/C Issuer any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Applicable Percentage thereof in the
same funds as those received by the Administrative Agent.

 

(ii)                                  If any payment received by the
Administrative Agent for the account of an L/C Issuer pursuant to
Section 2.03(c)(i) is required to be returned under any of the circumstances
described in Section 10.05 (including pursuant to any settlement entered into by
such L/C Issuer in its discretion), each Lender shall pay to the Administrative
Agent for the account of such L/C Issuer its Applicable Percentage thereof on
demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The obligations of
the Lenders under this clause shall survive the payment in full of the
Obligations and the termination of this Agreement.

 

(e)                                  Obligations Absolute.  The obligation of
the Borrower to reimburse the L/C Issuers for each drawing under each Letter of
Credit and to repay each L/C Borrowing shall be absolute, unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:

 

(i)                                     any lack of validity or enforceability
of such Letter of Credit, this Agreement, or any other Loan Document;

 

(ii)                                  the existence of any claim, counterclaim,
setoff, defense or other right that the Borrower or any Subsidiary may have at
any time against any beneficiary or any transferee of such Letter of Credit (or
any Person for whom any such beneficiary or any such transferee may be acting),
the applicable L/C Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter of Credit or
any agreement or instrument relating thereto, or any unrelated transaction;

 

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(iii)                               any draft, demand, certificate or other
document presented under such 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; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;

 

(iv)                              any payment by an L/C Issuer under such Letter
of Credit against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by an L/C
Issuer under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law; or

 

(v)                                 any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or any Subsidiary.

 

The Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the applicable L/C Issuer.  The Borrower shall
be conclusively deemed to have waived any such claim against the applicable L/C
Issuer and its correspondents unless such notice is given as aforesaid.

 

(f)                                   Role of L/C Issuer.  Each Lender and the
Borrower agree that, in paying any drawing under a Letter of Credit, the
applicable L/C Issuer shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly required by
the Letter of Credit) or to ascertain or inquire as to the validity or accuracy
of any such document or the authority of the Person executing or delivering any
such document.  None of the L/C Issuers, the Administrative Agent, any of their
respective Related Parties nor any correspondent, participant or assignee of the
L/C Issuers shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Majority Lenders, as applicable; (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct, each as determined in a final,
non-appealable judgment by a court of competent jurisdiction; or (iii) the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit or Issuer Document.  The Borrower
hereby assumes all risks of the acts or omissions of any beneficiary or
transferee with respect to its use of any Letter of Credit; provided, however,
that this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement.  None of the L/C Issuers, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the applicable L/C Issuer shall be
liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the applicable
L/C Issuer, and the applicable L/C Issuer may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the applicable L/C Issuer’s willful misconduct or gross negligence or
such L/C Issuer’s willful failure, in each case as determined in a final,
non-appealable judgment by a court of competent jurisdiction, to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit.  In furtherance and not in limitation of the foregoing, the
L/C Issuers may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and the L/C Issuers shall not be responsible for
the validity or sufficiency of any instrument transferring or assigning or
purporting to

 

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transfer or assign a 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.

 

(g)                                  Cash Collateral.  Upon the request of the
Administrative Agent, (i) if an L/C Issuer has honored any full or partial
drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing or (ii) if, as of the Letter of Credit Expiration Date, any L/C
Obligation for any reason remains outstanding, the Borrower shall, in each case,
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations.  Sections 2.06 and 8.02(c) set forth certain additional
requirements to deliver Cash Collateral hereunder.  For purposes of this
Section 2.03, Section 2.06 and Section 8.02(c), “Cash Collateralize” means to
pledge and deposit with or deliver to the Administrative Agent, for the benefit
of the applicable L/C Issuer and the Lenders, as collateral for the L/C
Obligations, cash or deposit account balances pursuant to documentation in form
and substance satisfactory to the Administrative Agent and the applicable L/C
Issuer (which documents are hereby consented to by the Lenders).  Such cash and
deposit account balances are referred to herein, collectively, as the “Cash
Collateral”.  Derivatives of such term have corresponding meanings.  The
Borrower hereby grants to the Administrative Agent, for the benefit of the
applicable L/C Issuer and the Lenders, a security interest in all such cash,
deposit accounts and all balances therein and all proceeds of the foregoing. 
Cash Collateral shall be maintained in blocked, non-interest bearing deposit
accounts at the Administrative Agent.

 

(h)                                 Applicability of ISP and UCP.  Unless
otherwise expressly agreed by the applicable L/C Issuer and the Borrower when a
Letter of Credit is issued, the rules of the ISP shall apply to each Letter of
Credit.

 

(i)                                     Letter of Credit Fees.  The Borrower
shall pay to the Administrative Agent for the account of each Lender in
accordance with its Applicable Percentage a Letter of Credit fee (the “Letter of
Credit Fee”) for each Letter of Credit equal to the Applicable Rate times the
daily amount available to be drawn under such Letter of Credit; provided, in the
event the Borrower has entered into an arrangement with the applicable L/C
Issuer with respect to the applicable L/C Issuer’s risk with respect to any
Lender’s obligation to fund its Applicable Percentage of the Unreimbursed Amount
with respect to such Letter of Credit as contemplated in
Section 2.03(a)(iii)(E) hereof, no such Letter of Credit Fee shall accrue or be
deemed to have accrued, or be owing or payable by the Borrower to the
Administrative Agent for the account of such Lender with respect to such
Lender’s Applicable Percentage of such Letter of Credit Fee until such time as
the applicable L/C Issuer determines in its reasonable discretion that such
Lender is no longer a Defaulting Lender.  For purposes of computing the daily
amount available to be drawn under any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.07.  Letter of
Credit Fees shall be (i) due and payable on the fifth Business Day after the end
of each March, June, September and December, commencing with the first such date
to occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand and (ii) computed on a quarterly basis
in arrears.  If there is any change in the Applicable Rate during any quarter,
the daily amount available to be drawn under each Letter of Credit shall be
computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect.  Notwithstanding anything
to the contrary contained herein, (A) upon the request of the Majority Lenders,
while any Event of Default exists and (B) automatically, upon any Event of
Default under Section 8.01(f), all Letter of Credit Fees shall accrue at the
Default Rate.

 

(j)                                    Fronting Fee and Documentary and
Processing Charges Payable to L/C Issuers.  The Borrower shall pay directly to
the applicable L/C Issuer for its own account a fronting fee with respect to
each Letter of Credit, at the rate of 0.125% per annum (but in no event less
than $500.00 per annum or $125.00 per quarter) with respect to each Letter of
Credit, computed on the daily amount available to be drawn under such Letter of
Credit on a quarterly basis in arrears, and due and payable on the fifth
Business Day after the end of each March, June, September and December in
respect of the most

 

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recently-ended quarterly period (or portion thereof, in the case of the first
payment), commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand.  For purposes of computing the daily amount available to be drawn under
any Letter of Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.07.  In addition, the Borrower shall pay directly to
the applicable L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of such L/C Issuer relating to letters of credit as from time to time
in effect.  Such customary fees and standard costs and charges are due and
payable on demand and are nonrefundable.

 

(k)                                 Conflict with Issuer Documents.  In the
event of any conflict between the terms hereof and the terms of any Issuer
Document, the terms hereof shall control.

 

Section 2.04                             Swing Line Loans.

 

(a)                                 The Swing Line.  Subject to the terms and
conditions set forth herein, each Swing Line Lender agrees, in reliance upon the
agreements of the other Lenders set forth in this Section 2.04, to make loans
(each such loan, a “Swing Line Loan”) to the Borrower from time to time on any
Business Day during the Availability Period in an aggregate amount not to exceed
at any time outstanding the amount of its Swing Line Commitment, notwithstanding
the fact that any Swing Line Loan for any such Swing Line Lender, when
aggregated with the Applicable Percentage of the Outstanding Amount of Committed
Loans and L/C Obligations of such Swing Line Lender, may exceed the amount of
such Swing Line Lender’s Commitment; provided, however, that after giving effect
to any Swing Line Loan, (i) the Total Outstandings shall not exceed the Facility
Limit and (ii) the aggregate Outstanding Amount of the Committed Loans of any
Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of
all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding
Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and
provided, further, that the Borrower shall not use the proceeds of any Swing
Line Loan to refinance any outstanding Swing Line Loan.  Within the foregoing
limits, and subject to the other terms and conditions hereof, the Borrower may
borrow under this Section 2.04, prepay under Section 2.06, and reborrow under
this Section 2.04.  Each Swing Line Loan shall be a Base Rate Loan.  Immediately
upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from each Swing Line Lender
a risk participation in each Swing Line Lender’s portion of such Swing Line Loan
in an amount equal to the product of such Lender’s Applicable Percentage times
the amount of such Swing Line Loan.  The failure of any Swing Line Lender to
make its ratable portion of a Swing Line Loan shall not relieve any other Swing
Line Lender of its obligation hereunder to make its ratable portion of such
Swing Line Loan on the date of such Swing Line Loan, but no Swing Line Lender
shall be responsible for the failure of any other Swing Line Lender to make the
ratable portion of a Swing Line Loan to be made by such other Swing Line Lender
on the date of any Swing Line Loan.

 

(b)                                 Borrowing Procedures.  Each Swing Line
Borrowing shall be made upon the Borrower’s irrevocable notice to the Swing Line
Lenders, which may be given by (A) telephone or (B) by a Swing Line Loan Notice;
provided that telephonic notice must be confirmed promptly by delivery to the
Swing Line Lenders of a Swing Line Loan Notice. Each such Swing Line Loan Notice
must be received by the Swing Line Lenders not later than 1:00 p.m. on the
requested borrowing date, and shall specify (i) the amount to be borrowed, which
shall be a minimum of $100,000, and (ii) the requested borrowing date, which
shall be a Business Day.  Unless each Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the request
of any Lender) prior to 2:00 p.m. on the date of the proposed Swing Line
Borrowing (A) directing such Swing Line Lender not to make such Swing Line Loan
as a result of the limitations set forth in the proviso to the first sentence of
Section 2.04(a), or (B) that one or more of the applicable conditions specified
in Section 4.02 is not then satisfied, then, subject to the terms and conditions
hereof, each Swing Line Lender will, not later than 3:00 p.m. on

 

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the borrowing date specified in such Swing Line Loan Notice, make the ratable
portion of the amount of the requested Swing Line Loan (such ratable portion to
be calculated based on such Swing Line Lender’s Swing Line Commitment to the
total Swing Line Commitments of all Swing Line Lenders) available to the
Borrower at its office by crediting the account of the Borrower on the books of
the applicable Swing Line Lender in immediately available funds.

 

(c)                                  Refinancing of Swing Line Loans.

 

(i)                                     Any Swing Line Lender at any time in its
sole and absolute discretion may request, on behalf of the Borrower (which
hereby irrevocably authorizes each Swing Line Lender to so request on its
behalf), that each Lender make a Base Rate Committed Loan in an amount equal to
such Lender’s Applicable Percentage of the amount of such Swing Line Lender’s
Swing Line Loans then outstanding.  Such request shall be made in writing to the
Administrative Agent (which written request shall be deemed to be a Committed
Loan Notice for purposes hereof) and in accordance with the requirements of
Section 2.02(a), without regard to the minimum and multiples specified therein
for the principal amount of Base Rate Loans, but subject to the unutilized
portion (calculated after giving effect to the application by the Administrative
Agent of the proceeds of such Base Rate Committed Loans) of the Aggregate
Commitments and the conditions set forth in Section 4.02.  The applicable Swing
Line Lender shall furnish the Borrower with a copy of the applicable Committed
Loan Notice promptly after delivering such notice to the Administrative Agent. 
Each Lender shall make an amount equal to its Applicable Percentage of the
amount specified in such Committed Loan Notice available to the Administrative
Agent in immediately available funds for the account of the applicable Swing
Line Lender at the Administrative Agent’s Office not later than 1:00 p.m. on the
day specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Committed Loan to the Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the applicable Swing
Line Lender.

 

(ii)                                  If for any reason any Swing Line Loan
cannot be refinanced by such a Committed Borrowing in accordance with
Section 2.04(c)(i), the request for Base Rate Committed Loans submitted by the
applicable Swing Line Lender as set forth herein shall be deemed to be a request
by the applicable Swing Line Lender that each of the Lenders fund its risk
participation in the relevant Swing Line Loan and each Lender’s payment to the
Administrative Agent for the account of the applicable Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such
participation.

 

(iii)                               If any Lender fails to make available to the
Administrative Agent for the account of the applicable Swing Line Lender any
amount required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.04(c) by the time specified in Section 2.04(c)(i), such Swing
Line Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to such Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by such Swing Line
Lender in accordance with banking industry rules on interbank compensation.  If
such Lender pays such amount (with interest and fees as aforesaid), the amount
so paid shall constitute such Lender’s Committed Loan included in the relevant
Committed Borrowing or funded participation in the relevant Swing Line Loan, as
the case may be.  A certificate of the applicable Swing Line Lender submitted to
any Lender (through the Administrative Agent) with respect to any amounts owing
under this clause (iii) shall be conclusive absent manifest error.

 

(iv)                              Each Lender’s obligation to make Committed
Loans or to purchase and fund risk participations in Swing Line Loans pursuant
to this Section 2.04(c) shall be absolute and

 

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unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Borrower or any other Person for any
reason whatsoever, (B) the occurrence or continuance of a Default or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Lender’s obligation to make Committed
Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in
Section 4.02.  No such funding of risk participations shall relieve or otherwise
impair the obligation of the Borrower to repay Swing Line Loans, together with
interest as provided herein.

 

(d)                                 Repayment of Participations.

 

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

 

(ii)                                  If any payment received by a Swing Line
Lender in respect of principal or interest on any Swing Line Loan is required to
be returned by such Swing Line Lender under any of the circumstances described
in Section 10.05 (including pursuant to any settlement entered into by such
Swing Line Lender in its discretion), each Lender shall pay to the applicable
Swing Line Lender its Applicable Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned, at a rate per annum equal to the Federal Funds
Rate.  The Administrative Agent will make such demand upon the request of a
Swing Line Lender.  The obligations of the Lenders under this clause shall
survive the payment in full of the Obligations and the termination of this
Agreement.

 

(e)                                  Interest for Account of Swing Line Lender. 
Each Swing Line Lender shall be responsible for invoicing the Borrower for
interest on its applicable portion of the Swing Line Loans.  Until each Lender
funds its Base Rate Committed Loan or risk participation pursuant to this
Section 2.04 to refinance such Lender’s Applicable Percentage of any Swing Line
Loan, interest in respect of such Applicable Percentage shall be solely for the
account of the applicable Swing Line Lender.

 

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

 

Section 2.05                             Borrowing Base.

 

(a)                                 Initial Borrowing Base.  During the period
from the Closing Date until the next Determination Date the Borrowing Base shall
be $500,000,000, subject to adjustment or reduction, as applicable, as set forth
in Section 2.05(b)(iv).

 

(b)                                 Subsequent Determinations of the Borrowing
Base.  Upon each designation of a new Borrowing Base on a Scheduled
Determination or a Special Determination, the Administrative Agent shall notify
the Borrower of the new Borrowing Base which designation shall take effect
immediately on the date such notice is sent (each such date (including the
Closing Date), a “Determination Date”) and shall remain in effect until, but not
including, the next Determination Date.  The Borrowing Base shall be determined
in accordance with the following methodology:

 

(i)                                     By April 1 and October 1 of each year
beginning October 1, 2015, the Borrower shall furnish to the Administrative
Agent (with sufficient copies for each Lender of any

 

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information provided on paper, computer disks, or other tangible media) the
Engineering Report then required under Section 6.01(e) or
Section 6.01(f) together with all information, reports and data that the
Administrative Agent requests concerning the businesses and properties of the
Borrower and its Restricted Subsidiaries (including their Oil and Gas Properties
and the reserves and production relating thereto).  As promptly as reasonably
practicable after receiving such Engineering Report, information, reports and
data, the Administrative Agent shall propose a Borrowing Base following the
procedures set forth in Section 2.05(b)(iii) below.  Each such determination of
the Borrowing Base is herein called a “Scheduled Determination”.  If the
Borrower does not furnish all such information, reports and data by the date
specified in the first sentence of this Section, the Administrative Agent may
nonetheless designate the Borrowing Base at any amount that Required Lenders
determine (or, in the case of an increase, that all the Lenders determine) and
the Borrowing Base may similarly be designated from time to time thereafter
until each Lender receives all such information, reports and data, whereupon the
Lenders shall designate a new Borrowing Base as described above.

 

(ii)                                  In addition to Scheduled Determinations,
the Borrower may request the Lenders to make additional determinations of the
Borrowing Base twice during any twelve month interval between Scheduled
Determinations, and the Administrative Agent also may (and at the request of the
Required Lenders must) request the Lenders to make an additional determination
of the Borrowing Base once during each twelve month interval between Scheduled
Determinations.  The Administrative Agent shall give notice to the Borrower of
any such request made by the Administrative Agent to the Lenders.  The Borrower
shall submit any such request made by Borrower to Administrative Agent and each
Lender and, at the time of such request, the Borrower shall (A) deliver to the
Administrative Agent and each Lender an updated Engineering Report prepared
either by the Borrower or by independent petroleum engineers and (B) notify the
Administrative Agent and each Lender of the Borrowing Base requested by the
Borrower.  Any determination of the Borrowing Base made pursuant to a request
under this clause (ii) is herein called a “Special Determination”.  Any Special
Determination shall be made by Lenders in accordance with the procedures set
forth in Section 2.05(b)(iii), provided, however, that the Borrower shall not be
required to deliver an updated Engineering Report to the Administrative Agent
and Lenders in connection with any Special Determination requested by the
Administrative Agent.

 

(iii)                               The Administrative Agent shall (within 30
days after receiving the information, if any, required for a Scheduled
Determination or a Special Determination) propose to the Lenders a specific
Borrowing Base amount for the Lenders to approve or disapprove.  Within 15 days
thereafter each Lender shall respond to the Administrative Agent in writing,
either approving such proposed amount or setting out a reasonable alternative
amount (based on the criteria described in clause (v) below), and any Lender’s
failure to respond to such proposal within such time will be deemed a
disapproval of the proposed amount.  After receiving such responses or deemed
responses from all Lenders, the Administrative Agent will designate the new
Borrowing Base at the highest amount approved (i) by all Lenders, in the case of
an increase to the then current Borrowing Base, or (ii) at the highest amount
approved by the Required Lenders, in the case of a reduction to or continuation
of the then current Borrowing Base.

 

(iv)                              In addition to the foregoing, (A) unless
clause (B) below applies, the Administrative Agent and Lenders shall also have
the right to adjust the Borrowing Base (which shall not count as a Special
Determination but which shall otherwise be done in accordance with the
procedures set forth in Section 2.05(b)(iii)) if the Borrower or any Restricted
Subsidiaries sell or otherwise transfer (excluding transfers to the Borrower or
a Restricted Subsidiary of the Borrower that is a Guarantor (other than Lariat))
Oil and Gas Properties that, on a cumulative basis since the then most recent
Determination Date, represent more than five percent of the net present value of
all of their proved reserves, as determined in the most recently delivered
Engineering Report and (B) the Borrowing Base shall be automatically reduced
pursuant to (1) Section 2.06(b)(ii) or (2) Section 7.03(l), as applicable.

 

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(v)                                 Each redetermination of the Borrowing Base
pursuant to this Section 2.05 shall be made in good faith by all of the Lenders
and the Administrative Agent, in the exercise of their reasonable discretion and
in accordance with their respective customary and prudent standards for oil and
gas lending and credit transactions as they exist at such time.  Without
limiting such discretion, Borrower acknowledges and agrees that the
Administrative Agent and the Lenders (i) may make such assumptions regarding
appropriate existing and projected pricing for Hydrocarbons as they deem
appropriate in their discretion, (ii) may make such assumptions regarding
projected rates and quantities of future production of Hydrocarbons from the Oil
and Gas Properties owned by Borrower and its Restricted Subsidiaries as they
deem appropriate in their discretion, (iii) may consider the projected cash
requirements of Borrower and its Restricted Subsidiaries, (iv) are not required
to consider any asset other than Proved Reserves owned by Borrower and its
Restricted Subsidiaries and (v) may make such other assumptions, considerations
and exclusions as they deem appropriate in the exercise of their discretion. It
is further acknowledged and agreed that the Administrative Agent and the Lenders
may consider such other credit factors as they deem appropriate in the exercise
of their discretion.

 

(c)                                  Borrowing Base Deficiency.  If a Borrowing
Base Deficiency exists at any time, the Borrower shall, within ten (10) days
after being notified of such Borrowing Base Deficiency, provide written notice
(the “Election Notice”) to Lender stating the action which Borrower proposes to
take to remedy such Borrowing Base Deficiency, and the Borrower shall
thereafter, at its option, do one or a combination of the following in an
aggregate amount sufficient to eliminate such Borrowing Base Deficiency:

 

(i)                                     within ten (10) days following the
delivery of such Election Notice, make a prepayment of the Loans,

 

(ii)                                  pay monthly installments of the
Outstanding Amount of the Loans over a term and in an amount satisfactory to the
Administrative Agent, but in any event not to exceed six months, by immediately
dedicating a sufficient amount of monthly cash flow from the Oil and Gas
Properties of the Borrower and its Restricted Subsidiaries,

 

(iii)                               within thirty (30) days following the
delivery of the Election Notice, submit additional Oil and Gas Properties to the
Administrative Agent for evaluation as Borrowing Base properties which the
Administrative Agent, in its sole discretion, determines have a value sufficient
to increase the Borrowing Base by at least the amount of the Borrowing Base
Deficiency (after giving effect to other actions taken pursuant to this
Section 2.05(c) that have the effect of reducing such Borrowing Base Deficiency)
and/or

 

(iv)                              within thirty (30) days following the delivery
of such Election Notice, apply the Net Cash Proceeds from a Disposition
permitted by Section 7.05(g) to reduce the Borrowing Base Deficiency after
giving effect to any reduction of the Borrowing Base as determined by the
Required Lenders as a result of such sale.

 

Section 2.06                             Prepayments.

 

(a)                                 Optional.

 

(i)                                     The Borrower may, upon written notice to
the Administrative Agent, at any time or from time to time voluntarily prepay
Committed Loans in whole or in part without premium or penalty; provided that
(i) such notice must be received by the Administrative Agent not later than
11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar
Rate Loans and (B) on the date of prepayment of Base Rate Committed Loans;
(ii) any prepayment of Eurodollar Rate Loans

 

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shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; and (iii) any prepayment of Base Rate Committed Loans shall
be in a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof or, in each case, if less, the entire principal amount thereof then
outstanding; provided further that any such notice may state that such notice is
conditioned upon effectiveness of other financing or the occurrence of other
events, in which case such notice may be revoked by the Borrower, by notice to
the Administrative Agent on or prior to the date specified therein if such
condition is not satisfied.  Each such notice shall be substantially in the form
of Exhibit C hereto and specify the date and amount of such prepayment and the
Type(s) of Committed Loans to be prepaid and, if Eurodollar Rate Loans are to be
prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will
promptly notify each Lender of its receipt of each such notice, and of the
amount of such Lender’s Applicable Percentage of such prepayment.  If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein.  Any prepayment of a Eurodollar Rate Loan shall be
accompanied by all accrued interest on the amount prepaid, together with any
additional amounts required pursuant to Section 3.05.  Each such prepayment
shall be applied to the Committed Loans of the Lenders in accordance with their
respective Applicable Percentages.

 

(ii)                                  The Borrower may, upon notice to the Swing
Line Lenders (with a copy to the Administrative Agent), at any time or from time
to time, voluntarily prepay Swing Line Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the Swing Line
Lenders and the Administrative Agent not later than 1:00 p.m. on the date of the
prepayment and (ii) any such prepayment shall be in a minimum principal amount
of $100,000.  Each such notice shall specify the date and amount of such
prepayment.  If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein.

 

(b)                                 Mandatory.

 

(i)                                     If for any reason the Total Outstandings
at any time exceed the Aggregate Commitments then in effect, the Borrower shall
immediately prepay Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess; provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.06(b) unless after the prepayment in full of the Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.

 

(ii)                                  Upon completion of (i) any early
termination of any Hedge Transaction used in determining the Borrowing Base on
the immediately preceding Determination Date or (ii) the Disposition of any
assets included in the Borrowing Base on the immediately preceding Determination
Date, the effect of which termination or Disposition would be a reduction in the
Borrowing Base then in effect of 10.0% or more on a pro forma basis, the
Borrowing Base shall immediately and automatically upon consummation of such
transaction be reduced by the Borrowing Base contribution of such Hedge
Transaction or assets, and all Net Cash Proceeds from the termination of such
Hedge Transaction or the Disposition of such assets shall be applied to reduce
or eliminate any Borrowing Base Deficiency resulting from such reduction.

 

(iii)                               To the extent not covered by (ii), if the
Borrower or any of its Restricted Subsidiaries Disposes of any property under
Section 7.05(g) or suffers a Casualty Event which results in the realization by
such Person of Net Cash Proceeds, the Borrower shall use the Net Cash Proceeds
to eliminate any Borrowing Base Deficiency resulting from such sale; provided
that, the proceeds of any Disposition permitted by Section 7.05(g) shall not
constitute Net Cash Proceeds to the extent that (A) such proceeds are reinvested
in replacement properties or assets, or other productive properties or assets,

 

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acquired by the  Borrower or a Restricted Subsidiary of a kind then used or
usable in the business of the applicable Person (with equal or greater aggregate
Attributed Value) within 180 days from the date of receipt thereof or (B) if the
applicable Borrower or Restricted Subsidiary intends to acquire replacement
properties or assets, or other productive properties or assets, with such
proceeds as part of a like-kind exchange under Section 1031 of the Code, the
potential replacement properties or assets are identified by such Borrower or
Restricted Subsidiary within 180 days from the date the ownership to the sold
assets is transferred to the buyer of such property and the proceeds from such
property are reinvested to acquire such replacement properties or assets (with
equal or greater aggregate Attributed Value) within 180 days from the date the
ownership to the sold assets is transferred to the buyer of such property;
provided further that, the proceeds of any Casualty Event shall not constitute
Net Cash Proceeds to the extent that such proceeds are reinvested in replacement
properties or assets, or other productive properties or assets, acquired by the
Borrower or a Guarantor (other than Lariat, except that any proceeds of any
Casualty Event suffered by Lariat shall not constitute Net Cash Proceeds to the
extent that such proceeds are reinvested in replacement properties or assets, or
other productive properties or assets, acquired by Lariat, the Borrower or a
Guarantor) of a kind then used or usable in the business of the applicable
Person (with equal or greater aggregate Attributed Value) within 180 days from
the date of receipt thereof.

 

(iv)                              Upon the incurrence or issuance by the
Borrower or any of its Restricted Subsidiaries of any Indebtedness (other than
Indebtedness expressly permitted to be incurred or issued pursuant to
Section 7.03), the Borrower shall prepay an aggregate principal amount of Loans
equal to 100% of all Net Cash Proceeds received therefrom immediately upon
receipt thereof by the Borrower or such Restricted Subsidiary (such prepayments
to be applied as set forth in clause (v) below).

 

(v)                                 Prepayments of the Total Outstandings made
pursuant to this Section 2.06(b), first, shall be applied ratably to the L/C
Borrowings, second, shall be applied ratably to the outstanding Loans, and,
third, shall be used to Cash Collateralize the remaining L/C Obligations.  Upon
the drawing of any Letter of Credit that has been Cash Collateralized, the funds
held as Cash Collateral shall be applied (without any further action by or
notice to or from the Borrower or any other Loan Party) to reimburse the
applicable L/C Issuer or the Lenders, as applicable.

 

Section 2.07                             Termination or Reduction of
Commitments.  The Borrower may, upon notice to the Administrative Agent,
terminate the Aggregate Commitments, or from time to time permanently reduce the
Aggregate Commitments; provided that (i) any such notice shall be received by
the Administrative Agent not later than 11:00 a.m. three Business Days prior to
the date of termination or reduction, (ii) any such partial reduction shall be
in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in
excess thereof, (iii) the Borrower shall not terminate or reduce the Aggregate
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Total Outstandings would exceed the Aggregate Commitments and
(iv) if, after giving effect to any reduction of the Aggregate Commitments, the
Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the
Aggregate Commitments, such Sublimit shall be automatically reduced by the
amount of such excess; provided further that any such notice may state that such
notice is conditioned upon effectiveness of other financing or the occurrence of
other events, in which case such notice may be revoked by the Borrower by notice
to the Administrative Agent on or prior to the date specified therein if such
condition is not satisfied.  The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Aggregate
Commitments.  Any reduction of the Aggregate Commitments shall be applied to the
Commitment of each Lender according to its Applicable Percentage.  All fees
accrued until the effective date of any termination of the Aggregate Commitments
shall be paid on the effective date of such termination.

 

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Section 2.08                             Repayment of Loans.

 

(a)                                 The Borrower shall repay to the Lenders on
the Maturity Date the aggregate principal amount of Committed Loans outstanding
on such date.

 

(b)                                 The Borrower shall repay each Swing Line
Lender’s applicable portion of each Swing Line Loan on the earlier to occur of
(i) demand by such Swing Line Lender and (ii) the Maturity Date.

 

Section 2.09                             Interest.

 

(a)                                 Subject to the provisions of subsection
(b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each
Base Rate Committed Loan shall bear interest on the outstanding principal amount
thereof from the applicable borrowing date at a rate per annum equal to the Base
Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate.

 

(b)                                 (i)  If any amount of principal of any Loan
is not paid when due (without regard to any applicable grace periods), whether
at stated maturity, by acceleration or otherwise, such amount shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.

 

(ii)                                  If any amount (other than principal of any
Loan) payable by the Borrower under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, then upon the request of the Majority Lenders, such
amount shall thereafter bear interest at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.

 

(iii)                               (A) Upon the request of the Majority
Lenders, while any Event of Default exists or (B) automatically, while any Event
of Default under Section 8.01(f) exists, the Borrower shall pay interest on the
principal amount of all outstanding Loans hereunder at a fluctuating interest
rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.

 

(iv)                              Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

 

(c)                                  Interest on each Loan shall be due and
payable in arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein.  Interest hereunder shall be due and
payable in accordance with the terms hereof before and after judgment, and
before and after the commencement of any proceeding under any Debtor Relief Law.

 

Section 2.10                             Fees.  In addition to certain fees
described in subsections (i) and (j) of Section 2.03:

 

(a)                                 Commitment Fee.  The Borrower shall pay to
the Administrative Agent for the account of each Lender in accordance with its
Applicable Percentage, a commitment fee equal to the Applicable Rate times the
daily amount of the Available Borrowing Base.  The commitment fee shall accrue
at all times during the Availability Period, including at any time during which
one or more of the conditions in Section 4.02 is not met, and shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur after the
Closing Date, and on the last day of the Availability Period.  The commitment
fee shall be

 

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calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.  For the purposes of computation of the
commitment fee, Swing Line Loans shall not be counted as usage of the Aggregate
Commitments.

 

(b)                                 Other Fees.  (i)  The Borrower shall pay to
the Arranger and the Administrative Agent for their own respective accounts fees
in the amounts and at the times specified in the Administrative Agent Fee
Letter.  Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.

 

(ii)                                  The Borrower shall pay to the Lenders such
fees as shall have been separately agreed upon in writing in the amounts and at
the times so specified.  Such fees shall be fully earned when paid and shall not
be refundable for any reason whatsoever.

 

Section 2.11                             Computation of Interest and Fees.  All
computations of interest for Base Rate Loans (if the Base Rate is determined in
reliance on clause (ii) of the definition thereof) shall be made on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed.  All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year). 
Interest shall accrue on each Loan for the day on which the Loan is made, and
shall not accrue on a Loan, or any portion thereof, for the day on which the
Loan or such portion is paid, provided that any Loan that is repaid on the same
day on which it is made shall, subject to Section 2.13(a), bear interest for one
day.  Each determination by the Administrative Agent of an interest rate or fee
hereunder shall be conclusive and binding for all purposes, absent manifest
error.

 

Section 2.12                             Evidence of Debt.

 

(a)                                 The Credit Extensions made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business.  The
accounts or records maintained by the Administrative Agent and each Lender shall
be conclusive absent manifest error of the amount of the Credit Extensions made
by the Lenders to the Borrower and the interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount
owing with respect to the Obligations.  In the event of any conflict between the
accounts and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and records of
the Administrative Agent shall control in the absence of manifest error.  Upon
the request of any Lender made through the Administrative Agent, the Borrower
shall execute and deliver to such Lender (through the Administrative Agent) a
Note, which shall evidence such Lender’s Loans in addition to such accounts or
records.  Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

(b)                                 In addition to the accounts and records
referred to in subsection (a), each Lender and the Administrative Agent shall
maintain in accordance with its usual practice accounts or records evidencing
the purchases and sales by such Lender of participations in Letters of Credit
and Swing Line Loans.  In the event of any conflict between the accounts and
records maintained by the Administrative Agent and the accounts and records of
any Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.

 

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Section 2.13                             Payments Generally; Administrative
Agent’s Clawback.

 

(a)                                 General.  All payments to be made by the
Borrower shall be made without condition or deduction for any counterclaim,
defense, recoupment or setoff.  Except as otherwise expressly provided herein,
all payments by the Borrower hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is owed,
at the Administrative Agent’s Office in Dollars and in immediately available
funds not later than 2:00 p.m. on the date specified herein.  The Administrative
Agent will promptly distribute to each Lender its Applicable Percentage (or
other applicable share as provided herein) of such payment in like funds as
received by wire transfer to such Lender’s Lending Office.  All payments
received by the Administrative Agent after 2:00 p.m. shall be deemed received on
the next succeeding Business Day and any applicable interest or fee shall
continue to accrue.  If any payment to be made by the Borrower shall come due on
a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing
interest or fees, as the case may be.

 

(b)                                 (i)  Funding by Lenders; Presumption by
Administrative Agent.  Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Committed Borrowing of
Eurodollar Rate Loans (or, in the case of any Committed Borrowing of Base Rate
Loans, prior to 12:00 noon on the date of such Committed Borrowing) that such
Lender will not make available to the Administrative Agent such Lender’s share
of such Committed Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
Section 2.02 (or, in the case of a Committed Borrowing of Base Rate Loans, that
such Lender has made such share available in accordance with and at the time
required by Section 2.02) and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount.  In such event, if a Lender
has not in fact made its share of the applicable Committed Borrowing available
to the Administrative Agent, then the applicable Lender and the Borrower
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount in immediately available funds with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(A) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, and (B) in the
case of a payment to be made by the Borrower, the interest rate applicable to
Base Rate Loans.  If the Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrower the amount of such interest paid by
the Borrower for such period.  If such Lender pays its share of the applicable
Committed Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Committed Loan included in such Committed Borrowing. 
Any payment by the Borrower shall be without prejudice to any claim the Borrower
may have against a Lender that shall have failed to make such payment to the
Administrative Agent.

 

(ii)                                  Payments by Borrower; Presumptions by
Administrative Agent.  Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the L/C Issuers hereunder
that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption, distribute to the Lenders or
the L/C Issuers, as the case may be, the amount due.  In such event, if the
Borrower has not in fact made such payment, then each of the Lenders or the L/C
Issuers, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or L/C
Issuer, in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.

 

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A notice of the Administrative Agent to any Lender or the Borrower with respect
to any amount owing under this subsection (b) shall be conclusive, absent
manifest error.

 

(c)                                  Failure to Satisfy Conditions Precedent. 
If any Lender makes available to the Administrative Agent funds for any Loan to
be made by such Lender as provided in the foregoing provisions of this
Article 2, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Section 4.02 are not satisfied or waived in accordance with the
terms hereof, the Administrative Agent shall promptly return such funds (in like
funds as received from such Lender) to such Lender, without interest.

 

(d)                                 Obligations of Lenders Several.  The
obligations of the Lenders hereunder to make Committed Loans, to fund
participations in Letters of Credit and Swing Line Loans and to make payments
pursuant to Section 10.04(c) are several and not joint.  The failure of any
Lender to make any Committed Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and no
Lender shall be responsible for the failure of any other Lender to so make its
Committed Loan, to purchase its participation or to make its payment under
Section 10.04(c).

 

(e)                                  Funding Source.  Nothing herein shall be
deemed to obligate any Lender to obtain the funds for any Loan in any particular
place or manner or to constitute a representation by any Lender that it has
obtained or will obtain the funds for any Loan in any particular place or
manner.

 

Section 2.14                             Sharing of Payments by Lenders.  If any
Lender shall, by exercising any right of setoff or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of the
Committed Loans made by it, or the participations in L/C Obligations or in Swing
Line Loans held by it resulting in such Lender’s receiving payment of a
proportion of the aggregate amount of such Committed Loans or participations and
accrued interest thereon greater than its pro rata share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact and (b) purchase (for cash at face value)
participations in the Committed Loans and subparticipations in L/C Obligations
and in Swing Line Loans of the other Lenders, or make such other adjustments as
shall be equitable, so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Committed Loans and other amounts owing
them, provided that:

 

(i)                                     if any such participations or
subparticipations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations or subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(ii)                                  the provisions of this Section shall not
be construed to apply to (x) any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or (y) any payment obtained
by a Lender as consideration for the assignment of or sale of a participation in
any of its Committed Loans or subparticipations in L/C Obligations or Swing Line
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary thereof (as to which the provisions of this Section shall apply).

 

The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.

 

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Section 2.15                             Defaulting Lenders.  Notwithstanding
anything to the contrary contained in this Agreement, if any Lender becomes a
Defaulting Lender, then, until such time as such Lender is no longer a
Defaulting Lender, to the extent permitted by applicable law:

 

(a)                                 Defaulting Lender Waterfall. Any payment of
principal, interest, fees or other amounts received by the Administrative Agent
for the account of such Defaulting Lender (whether voluntary or mandatory, at
maturity, pursuant to Article VIII or otherwise) or received by the
Administrative Agent from a Defaulting Lender pursuant to Section 10.08 shall be
applied at such time or times as may be determined by the Administrative Agent
as follows: first, to the payment of any amounts owing by such Defaulting Lender
to the Administrative Agent hereunder; second, to the payment on a pro rata
basis of any amounts owing by such Defaulting Lender to any L/C Issuer or Swing
Line Lender hereunder; third, to Cash Collateralize the L/C Issuers’ Fronting
Exposure with respect to such Defaulting Lender; fourth, as the Borrower may
request (so long as no Default or Event of Default exists), to the funding of
any Committed Loans in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; fifth, if so determined by the Administrative Agent and
the Borrower, to be held in a deposit account and released pro rata in order to
(x) satisfy such Defaulting Lender’s potential future funding obligations with
respect to Committed Borrowings under this Agreement and (y) Cash Collateralize
the L/C Issuers’ future Fronting Exposure with respect to such Defaulting Lender
with respect to future Letters of Credit issued under this Agreement; sixth, to
the payment of any amounts owing to the Lenders, the L/C Issuers or Swing Line
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Lender, the L/C Issuers or Swing Line Lenders against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Committed Loan or
L/C Advance in respect of which such Defaulting Lender has not fully funded its
appropriate share, and (y) such Committed Loans were made or the related Letters
of Credit were issued at a time when the conditions set forth in Section 4.02
were satisfied or waived, such payment shall be applied solely to pay the Loans
of, and L/C Advance owed to, all Non-Defaulting Lenders on a pro rata basis
prior to being applied to the payment of any Loans of, or L/C Advances owed to,
such Defaulting Lender until such time as all Loans and funded and unfunded
participations in L/C Obligations and Swing Line Loans are held by the Lenders
pro rata in accordance with the Commitments under the facility without giving
effect to Section 2.15(d). Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.15(a) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

(b)                                 Certain Fees.

 

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

 

(ii)                                  Each Defaulting Lender shall be entitled
to receive Letter of Credit Fees for any period during which that Lender is a
Defaulting Lender only to the extent allocable to its Applicable Percentage of
the stated amount of Letters of Credit for which it has provided Cash Collateral
pursuant to Section 2.15(e).

 

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(iii)                               With respect to any fee not required to be
paid to any Defaulting Lender pursuant to clause (i) or (ii) above, the Borrower
shall (x) pay to each Non-Defaulting Lender that portion of any such fee
otherwise payable to such Defaulting Lender with respect to such Defaulting
Lender’s participation in L/C Obligations or Swing Line Loans that has been
reallocated to such Non-Defaulting Lender pursuant to clause (c) below, (y) pay
to each L/C Issuer and Swing Line Lender, as applicable, the amount of any such
fee otherwise payable to such Defaulting Lender to the extent allocable to such
L/C Issuer’s Fronting Exposure or Swing Line Lender’s Fronting Exposure to such
Defaulting Lender, and (z) not be required to pay the remaining amount of any
such fee.

 

(c)                                  Reallocation of Participations to Reduce
Fronting Exposure.  All or any part of such Defaulting Lender’s participation in
L/C Obligations and Swing Line Loans shall be reallocated among the
Non-Defaulting Lenders in accordance with their respective Applicable
Percentages (calculated without regard to such Defaulting Lender’s Commitment)
but only to the extent that such reallocation does not cause (i) the aggregate
Outstanding Amount of the Loans of any Non-Defaulting Lender, plus such
Non-Defaulting Lender’s Applicable Percentage of the Outstanding Amount of all
L/C Obligations to exceed (ii) the lesser of such Non-Defaulting Lender’s
(A) Commitment or (B) Applicable Percentage of the Facility Limit.  No
reallocation hereunder shall constitute a waiver or release of any claim of any
party hereunder against a Defaulting Lender arising from that Lender having
become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a
result of such Non-Defaulting Lender’s increased exposure following such
reallocation.

 

(d)                                 Cash Collateral, Repayment of Swing Line
Loans.  If the reallocation described in clause (c) above cannot, or can only
partially, be effected, the Borrower shall, without prejudice to any right or
remedy available to it hereunder or under law, (x) first, prepay Swing Line
Loans in an amount equal to the Swing Line Lenders’ Fronting Exposure and
(y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance
with the procedures set forth in Section 2.03(g).

 

(e)                                  Defaulting Lender Cure.  If the Borrower,
the Administrative Agent and each Swing Line Lender and L/C Issuer agree in
writing that a Lender is no longer a Defaulting Lender, the Administrative Agent
will so notify the parties hereto, whereupon as of the effective date specified
in such notice and subject to any conditions set forth therein (which may
include arrangements with respect to any Cash Collateral), that Lender will, to
the extent applicable, purchase at par that portion of outstanding Loans of the
other Lenders or take such other actions as the Administrative Agent may
determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit and Swing Line Loans to be held pro rata by
the Lenders in accordance with the Commitments under the applicable facility
(without giving effect to Section 2.15(c)), whereupon such Lender will cease to
be a Defaulting Lender; provided that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Borrower
while that Lender was a Defaulting Lender; and provided, further, that except to
the extent otherwise expressly agreed by the affected parties, no change
hereunder from Defaulting Lender to Lender will constitute a waiver or release
of any claim of any party hereunder arising from that Lender’s having been a
Defaulting Lender.

 

(f)                                   New Swing Line Loans/Letters of Credit. 
So long as any Lender is a Defaulting Lender, (i) no Swing Line Lender shall be
required to fund any Swing Line Loans unless it is satisfied that it will have
no Fronting Exposure after giving effect to such Swing Line Loan and (ii) no L/C
Issuer shall be required to issue, extend, renew or increase any Letter of
Credit unless it is satisfied that it will have no Fronting Exposure after
giving effect thereto.

 

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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY

 

Section 3.01                             Taxes.

 

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

 

(b)                                 Payment of Other Taxes by the Borrower. 
Without limiting the provisions of subsection (a) above, the Borrower shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.

 

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

 

(d)                                 Evidence of Payments.  As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

 

(e)                                  Status of Lenders.  Any Foreign Lender that
is entitled to an exemption from or reduction of withholding tax under the law
of the jurisdiction in which the Borrower is resident for tax purposes, or any
treaty to which such jurisdiction is a party, with respect to payments hereunder
or under any other Loan Document shall deliver to the Borrower (with a copy to
the Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if requested by the Borrower or the
Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower or the Administrative
Agent as will enable the Borrower or the Administrative Agent to determine
whether or not such Lender is subject to backup withholding or information
reporting requirements.

 

Without limiting the generality of the foregoing, in the event that the Borrower
is resident for tax purposes in the United States, any Foreign Lender shall
deliver to the Borrower and the Administrative

 

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

 

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

 

(ii)                                  duly completed copies of Internal Revenue
Service Form W-8ECI;

 

(iii)                               in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under section 881(c) of the
Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10 percent
shareholder” of the Borrower within the meaning of section 881(c)(3)(B) of the
Code or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of  Internal Revenue
Service Forms W-8BEN, W-8BEN-E or applicable W-8; or

 

(iv)                              any other form prescribed by applicable law as
a basis for claiming exemption from or a reduction in United States Federal
withholding tax duly completed together with such supplementary documentation as
may be prescribed by applicable law to permit the Borrower to determine the
withholding or deduction required to be made.

 

Without limiting the generality of the foregoing, in the event that the Borrower
is resident for tax purposes in the United States, if a payment made to a Lender
under any Loan Document would be subject to U.S. federal withholding Tax imposed
by FATCA if such Lender were to fail to comply with the applicable reporting
requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower
and the Administrative Agent at the time or times prescribed by law and at such
time or times reasonably requested by the Borrower or the Administrative Agent
such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment.  For purposes of determining withholding Taxes
imposed under FATCA, from and after the Closing Date, the Borrower and the
Administrative Agent shall treat (and the Lenders hereby authorize the
Administrative Agent to treat) this Agreement as not qualifying as a
“grandfathered obligation” within the meaning of Treasury Regulation
Section 1.1471-2(b)(2)(i).

 

(f)                                   Treatment of Certain Refunds.  If the
Administrative Agent, any Lender or an L/C Issuer determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent, such Lender or
such L/C Issuer, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the Administrative
Agent, such Lender or such L/C Issuer, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or
such L/C Issuer in the event the Administrative Agent, such Lender or such L/C
Issuer is required to repay such

 

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refund to such Governmental Authority.  This subsection shall not be construed
to require the Administrative Agent, any Lender or any L/C Issuer to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to the Borrower or any other Person.  Notwithstanding
anything to the contrary in this paragraph (f), in no event will the
Administrative Agent or any Lender be required to pay any amount to the Borrower
pursuant to this paragraph (f), the payment of which would place the
Administrative Agent or such Lender in a less favorable net after-Tax position
than the Administrative Agent or such Lender would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid.

 

Section 3.02                             Illegality.  If any Lender determines
that any Law has made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for any Lender or its applicable Lending Office to
make, maintain or fund Eurodollar Rate Loans, or to determine or charge interest
rates based upon the Eurodollar Rate, or any Governmental Authority has imposed
material restrictions on the authority of such Lender to purchase or sell, or to
take deposits of, Dollars in the London interbank market, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Committed Loans to Eurodollar Rate Loans shall be suspended
until such Lender notifies the Administrative Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.  Upon receipt
of such notice, the Borrower shall, upon demand from such Lender (with a copy to
the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted.

 

Section 3.03                             Inability to Determine Rates.  If the
Majority Lenders determine that for any reason in connection with any request
for a Eurodollar Rate 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
Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan or (c) the Eurodollar Rate for any requested
Interest Period with respect to a proposed Eurodollar Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrower and each Lender. 
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended until the Administrative Agent (upon the instruction of
the Majority Lenders) revokes such notice.  Upon receipt of such notice, the
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or, failing that, will be deemed to have
converted such request into a request for a Committed Borrowing of Base Rate
Loans in the amount specified therein.

 

Section 3.04                             Increased Costs; Reserves on Eurodollar
Rate Loans.

 

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

 

(i)                                     impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 3.04(e)) or any L/C Issuer;

 

(ii)                                  subject any Lender or any L/C Issuer to
any tax of any kind whatsoever with respect to its loans, loan principal,
letters of credit, commitments or other obligations, or its deposits, reserves
or other liabilities attributable thereto (except for Indemnified Taxes or Other
Taxes covered by

 

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Section 3.01 and the imposition of, or any change in the rate of, any Excluded
Tax payable by such Lender or L/C Issuer); or

 

(iii)                               impose on any Lender or any L/C Issuer or
the London interbank market any other condition, cost or expense affecting this
Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit
or participation therein;

 

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

 

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

 

(c)                                  Certificates for Reimbursement.  A
certificate of a Lender or an L/C Issuer  setting forth the amount or amounts
necessary to compensate such Lender or such L/C Issuer or its holding company,
as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Borrower shall be conclusive absent manifest error.  The
Borrower shall pay such Lender or such L/C Issuer, as the case may be, the
amount shown as due on any such certificate within 10 Business Days after
receipt thereof.

 

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

 

(e)                                  Reserves on Eurodollar Rate Loans.  The
Borrower shall pay to each Lender, as long as such Lender shall be required to
maintain reserves with respect to liabilities or assets consisting of

 

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or including Eurocurrency funds or deposits, additional interest on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive absent manifest error),
which shall be due and payable on each date on which interest is payable on such
Loan, provided the Borrower shall have received at least 10 Business Days’ prior
notice (with a copy to the Administrative Agent) of such additional interest
from such Lender.  If a Lender fails to give notice 10 Business Days prior to
the relevant Interest Payment Date, such additional interest shall be due and
payable 10 Business Days from receipt of such notice.

 

Section 3.05                             Compensation for Losses.  Upon demand
of any Lender (with a copy to the Administrative Agent) from time to time, the
Borrower shall promptly compensate such Lender for and hold such Lender harmless
from any loss, cost or expense incurred by it as a result of:

 

(a)                                 any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise) (including, for avoidance of
doubt, any payments pursuant to clauses (2) and (4) of Section 4.01);

 

(b)                                 any failure by the Borrower (for a reason
other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower (including by reason of a revocation of notice
of prepayment pursuant to the further proviso in the first sentence of
Section 2.06(a)(i)); or

 

(c)                                  any assignment of a Eurodollar Rate Loan on
a day other than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 10.13; including any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained.  The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.

 

Section 3.06                             Mitigation Obligations; Replacement of
Lenders.

 

(a)                                 Designation of a Different Lending Office. 
If any Lender requests compensation under Section 3.04, or the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01, or if any
Lender gives a notice pursuant to Section 3.02, then such Lender shall use
reasonable efforts to designate a different Lending Office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 3.01 or Section 3.04, as the case may be, in the
future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable and (ii) in each case, would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

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(b)                                 Replacement of Lenders.  If any Lender
requests compensation under Section 3.04, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, the Borrower may replace such
Lender in accordance with Section 10.13.

 

Section 3.07                             Survival.  All of the Borrower’s
obligations, and any corresponding Lenders’ obligations, under this Article 3
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.

 

ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

Section 4.01                             Effectiveness.  The Existing Credit
Agreement shall be amended and restated and this Agreement shall become
effective on the date that each of the following conditions shall have been
satisfied (or waived in accordance with Section 10.01):

 

(a)                                 The Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the signing Loan Party, each dated the Closing Date (or, in the case
of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance satisfactory to the Administrative Agent
and each of the Lenders:

 

(i)                                     executed counterparts of this Agreement,
the Guaranty, the Security Agreement, and each other document pursuant to which
the Loan Parties grant Liens to secure the Obligations (other than the
Mortgages) executed by the relevant parties, sufficient in number for
distribution to the Administrative Agent, each Lender and the Borrower;
provided, that Lariat shall not be required to execute the Security Agreement or
any other document granting Liens to secure the Obligations on the Closing Date;

 

(ii)                                  a Note executed by the Borrower in favor
of each Lender requesting a Note;

 

(iii)                               such certificates of resolutions or other
action, incumbency certificates and/or other certificates of the Responsible
Officers, secretary or assistant secretary of each Loan Party as the
Administrative Agent may reasonably require evidencing the identity, authority
and capacity of each Responsible Officer, secretary or assistant secretary
thereof authorized to act in such capacity in connection with this Agreement and
the other Loan Documents to which such Loan Party is a party or is to be a
party;

 

(iv)                              such documents and certifications as the
Administrative Agent may reasonably require to evidence that the each Loan Party
is duly organized or formed, and is validly existing, in good standing and
qualified to engage in business in each jurisdiction where its ownership, lease
or operation of properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could not reasonably
be expected to have a Material Adverse Effect;

 

(v)                                 favorable opinion of counsel to the Loan
Parties, addressed to the Administrative Agent and each Lender, as to the
matters set forth in Exhibit G and such other matters concerning the Loan
Parties and the Loan Documents as the Majority Lenders may reasonably request;

 

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(vi)                              a favorable opinion of the General Counsel of
the Borrower, addressed to the Administrative Agent and each Lender, as to
matters set forth in Exhibit H and such other matters concerning the Loan
Parties and the Loan Documents as the Majority Lenders may reasonably request;

 

(vii)                           a certificate of a Responsible Officer of the
Borrower either (A) attaching copies, or an exhibit, of all consents, licenses
and approvals required in connection with the execution, delivery and
performance by the Borrower and the validity against the Borrower of the Loan
Documents to which it is a party, and such consents, licenses and approvals
shall be in full force and effect, or (B) stating that no such consents,
licenses or approvals are so required;

 

(viii)                        a certificate signed by a Responsible Officer of
the Borrower certifying (A) that the conditions specified in Sections
4.02(b) and (c) have been satisfied and (B) that there has been no event or
circumstance since the date of the Audited Financial Statements that has had or
could be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect;

 

(ix)                              certificate from the chief financial officer
of the Borrower attesting Loan Parties are, together with their Subsidiaries on
a Consolidated basis, Solvent;

 

(x)                                 evidence that all insurance required to be
maintained pursuant to the Loan Documents has been obtained and is in effect,
together with the certificates of insurance, naming the Administrative Agent, on
behalf of the Lenders, as an additional insured or loss payee, as the case may
be, under all insurance policies maintained with respect to the assets and
properties of the Loan Parties that constitutes Collateral;

 

(xi)                              documentation related to assignment of notes
and liens under the Existing Credit Agreement;

 

(xii)                           receipt by the Administrative Agent of lien
searches, including UCC lien searches with respect to each Loan Party;

 

(xiii)                        (A) the contemporaneous issuance of not less than
$1,000,000,000 of Senior Secured Notes and (B) the execution and delivery by all
parties thereto of a Junior Lien Intercreditor Agreement with respect to the
Senior Secured Notes;

 

(xiv)                       receipt by the Administrative Agent of a schedule
setting forth the names, commitments, loans outstanding and pro rata percentage
of the aggregate commitments of each lender under the Existing Credit Agreement
as of the Closing Date; and

 

(xv)                          such other certificates, documents, or opinions as
the Administrative Agent, the L/C Issuers or the Swing Line Lenders reasonably
may require.

 

(b)                                 Any fees required to be paid on or before
the Closing Date shall have been paid.

 

(c)                                  Unless waived by the Administrative Agent,
the Borrower shall have paid all fees, charges and disbursements of counsel to
the Administrative Agent (directly to such counsel if requested by the
Administrative Agent) to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of such fees, charges and disbursements as shall
constitute its reasonable estimate of such fees, charges and disbursements
incurred or to be incurred by it through the closing proceedings (provided that
such estimate shall not thereafter preclude a final settling of accounts between
the Borrower and the Administrative Agent).

 

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(d)                                 The Closing Date shall have occurred on or
before July 2, 2015.

 

(e)                                  There shall have been no change, occurrence
or development since December 31, 2014, including any action, suit,
investigation or proceeding pending or, to the knowledge of the Borrower,
threatened against the Borrower or any of its Restricted Subsidiaries in any
court or before any arbitrator or governmental authority, that could reasonably
be expected to have a Material Adverse Effect.

 

Without limiting the generality of the provisions of Section 9.04, for purposes
of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

 

On the Closing Date, the following transactions shall occur:

 

(1)                                 The Existing Credit Agreement will be
automatically amended and restated in its entirety to read as set forth herein. 
On and after the Closing Date the rights and obligations of the parties hereto
shall be governed by this Agreement; provided that, with respect to the period
prior to Closing Date, the rights and obligations of the parties hereto that
were also party to the Existing Credit Agreement shall continue to be governed
by the provisions of the Existing Credit Agreement.

 

(2)                                 The Commitment of each Lender shall be the
amount set forth in Schedule 2.01 to this Agreement. Any Lender under the
Existing Credit Agreement not appearing on Schedule 2.01 shall cease to be
Lender party to this Agreement; provided that the provisions of Sections 3.01,
3.04 and 10.04 of the Existing Credit Agreement shall continue to inure to the
benefit of, and be binding upon, each such Lender with respect to facts and
circumstances occurring prior to the Closing Date.

 

(3)                                 The Administrative Agent shall promptly
notify the Borrower and the Lenders of the Closing Date, and such notice shall
be conclusive and binding on all parties hereto.

 

Section 4.02                             Conditions to All Credit Extensions. 
The obligation of each Lender to honor any Request for Credit Extension (other
than a Committed Loan Notice requesting only a conversion of Committed Loans to
the other Type, or a continuation of Eurodollar Rate Loans) is subject to the
following conditions precedent:

 

(a)                                 After giving effect to such Credit Extension
and the application by the Administrative Agent of the proceeds thereof, (x) the
Total Outstandings shall not exceed the Facility Limit, (y) the aggregate
Outstanding Amount of the Loans of any Lender, plus such Lender’s Applicable
Percentage of the Outstanding Amount of all L/C Obligations shall not exceed
such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations
shall not exceed the Letter of Credit Sublimit.

 

(b)                                 The representations and warranties of the
Borrower and each other Loan Party contained in Article 5 or any other Loan
Document, or which are contained in any document furnished at any time under or
in connection herewith or therewith, shall be true and correct in all material
respects (or if such representation or warranty is qualified by materiality or
reference to Material Adverse Effect, such representation or warranty shall be
true and correct in all respects) on and as of the date of such Credit
Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct, in all material respects(or if such representation or warranty is
qualified by materiality or reference to Material Adverse Effect, such
representation or

 

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warranty shall be true and correct in all respects), as of such earlier date,
and except that for purposes of this Section 4.02, the representations and
warranties contained in subsection (a) of Section 5.05 shall be deemed to refer
to the most recent statements furnished pursuant to clause (a) of Section 6.01.

 

(c)                                  No Default shall exist, or would result
from such proposed Credit Extension or from the application of the proceeds
thereof.

 

(d)                                 The Administrative Agent and, if applicable,
the L/C Issuers or the Swing Line Lenders shall have received a Request for
Credit Extension in accordance with the requirements hereof.

 

Each Request for Credit Extension (other than a Committed Loan Notice requesting
only a conversion of Committed Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the conditions specified in Section 4.02(a),
Section 4.02(b) and Section 4.02(c) have been satisfied on and as of the date of
the applicable Credit Extension.

 

Section 4.03                             Agreement to Deliver Mortgages .As soon
as reasonably possible and in no case later than 30 days after the Closing Date,
as such period may be extended in the sole discretion of the Administrative
Agent, the Borrower shall provide information satisfactory to the Administrative
Agent to support that at least 80% of the total PV9 Pricing of the Proved
Reserves attributable to the Engineered Oil and Gas Properties (without taking
into account any adjustments for hedging) are secured by existing Mortgages, or
shall execute and deliver to the Administrative Agent, Mortgages or assignments
of mortgages, in each case in form and substance reasonably acceptable to the
Administrative Agent together with such other assignments, conveyances,
amendments, agreements and other writings (each duly authorized and executed)
and together with such certificates and opinions of counsel with respect
thereto, in each case as the Administrative Agent shall deem necessary or
appropriate to grant, evidence and perfect first priority Liens on at least 80%
of the PV9 Pricing of the Proved Reserves attributable to the Engineered Oil and
Gas Properties  (without taking into account any adjustments for hedging).

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Administrative Agent and the Lenders
that:

 

Section 5.01                             Existence, Qualification and Power. 
Each Loan Party and each of its Restricted Subsidiaries (a) is duly organized or
formed, validly existing and, as applicable, in good standing under the Laws of
the jurisdiction of its incorporation or organization, (b) has all requisite
power and authority and all requisite governmental licenses, authorizations,
consents and approvals to (i) own or lease its assets and carry on its business
and (ii) execute, deliver and perform its obligations under the Loan Documents
to which it is a party and consummate the Transaction, and (c) is duly qualified
and is licensed and, as applicable, in good standing under the Laws of each
jurisdiction where its ownership, lease or operation of properties or the
conduct of its business requires such qualification or license; except in each
case referred to in clause (b)(i) or (c), to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.

 

Section 5.02                             Authorization; No Contravention.  The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is or is to be a party have been duly authorized by all
necessary corporate or other organizational action, and do not and will not
(a) contravene the terms of any of such Person’s Organization Documents;
(b) conflict with or result in any breach or contravention of, or the creation
of any Lien under, or require any payment to be made under (i) any Contractual
Obligation that is material to the Loan Parties to which such Person is a party
or (ii) any

 

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order, injunction, writ or decree of any Governmental Authority or any arbitral
award to which such Person or its property is subject; or (c) violate any Law.

 

Section 5.03                             Governmental Authorization; Other
Consents.  No approval, consent, exemption, authorization, or other action by,
or notice to, or filing with, any Governmental Authority or any other Person is
necessary or required in connection with (a) the execution, delivery or
performance by, or enforcement against, any Loan Party of this Agreement or any
other Loan Document, or for the consummation of the Transaction, (b) the grant
by any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (c) the perfection or maintenance of the Liens created under the
Collateral Documents (including the first priority nature thereof) or (d) the
exercise by the Administrative Agent or the Lenders of their rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for (i) the authorizations, approvals, actions,
notices and filings listed on Schedule 5.03, all of which have been duly
obtained, taken, given or made and are in full force and effect,
(ii) authorizations, approvals, actions, notices and filings in connection with
the enforcement of pledges of, and the sale of, the Pledged Equity in connection
therewith, (iii) authorizations, approvals, actions, notices and filings
required in connection with the additional mortgage and security interests
required to be granted under this Agreement; (iv) routine authorizations,
approvals, actions, notices and filings in the ordinary course of business (e.g.
tax filings, annual reports, environmental filings, etc.); (v) authorizations,
approvals and consents necessary in connection with the Borrower’s mineral class
leases with the general land office of the State of Texas; and (vi) the periodic
filing of continuation statements under the UCC, and (vii) authorizations,
approvals, actions, notices and filings the failure of which to obtain, take or
make could not reasonably be expected to have a Material Adverse Effect.

 

Section 5.04                             Binding Effect.  This Agreement has
been, and each other Loan Document, when delivered hereunder, will have been,
duly executed and delivered by each Loan Party that is party thereto.  This
Agreement constitutes, and each other Loan Document when so delivered will
constitute, a legal, valid and binding obligation of such Loan Party,
enforceable against each Loan Party that is party thereto in accordance with its
terms.

 

Section 5.05                             Financial Statements; No Material
Adverse Effect.  (a)  The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; (ii) fairly present in all material
respects the financial condition of the Borrower and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show, in accordance with
and as required by GAAP, all material indebtedness and other material
liabilities, direct or contingent, of the Borrower and its Subsidiaries as of
the date thereof, including material liabilities for taxes, material commitments
and material Indebtedness.

 

(b)                                 Since the date of the Audited Financial
Statements, there has been no event or circumstance, either individually or in
the aggregate, that has had or could reasonably be expected to have a Material
Adverse Effect.

 

Section 5.06                             Litigation.  There are no actions,
suits, proceedings, claims or disputes pending or, to the knowledge of the
Borrower after due and diligent investigation, threatened, at law, in equity, in
arbitration or before any Governmental Authority, by or against the Borrower or
any of its Subsidiaries or against any of their properties or revenues that
(a) purport to affect or pertain to this Agreement, any other Loan Document or
the consummation of the Transaction or (b) except as specifically disclosed in
Schedule 5.06, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, and there has been no change in the
status, or financial effect on any Loan Party or any

 

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Subsidiary thereof, of the matters described in Schedule 5.06 that could
reasonably be expected to have a Material Adverse Effect.

 

Section 5.07                             No Default.  Neither any Loan Party nor
any Restricted Subsidiary thereof is in default under or with respect to, or a
party to, any Contractual Obligation that could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.  No Default
has occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.

 

Section 5.08                             Ownership of Property; Liens.  (a) 
Each Loan Party and each of its Restricted Subsidiaries has good record and
marketable title in fee simple to, or valid leasehold interests in, all real
property necessary or used in the ordinary conduct of its business, except for
such defects in title as could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

(b)                                 The property of each Loan Party and each of
its Restricted Subsidiaries is subject to no Liens, other than Liens permitted
by Section 7.01.

 

Section 5.09                             Environmental Compliance.  (a)  The
Loan Parties and their respective Subsidiaries conduct in the ordinary course of
business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any
Environmental Law on their respective businesses, operations and properties, and
as a result thereof the Borrower has reasonably concluded that, except as
specifically disclosed in Schedule 5.09, such Environmental Laws and claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

(b)                                 As of the Closing Date and except (i) as
otherwise set forth in Schedule 5.09 or (ii) to the extent the same could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect: none of the properties currently or formerly owned or operated
by any Loan Party or any of its Subsidiaries is listed or proposed for listing
on the National Priorities List under 42 USC § 9605(a)(8)(B) or on the CERCLIS
or any analogous foreign, state or local list or is adjacent to any such
property; there is no asbestos or asbestos-containing material on any property
currently owned or operated by any Loan Party or any of its Subsidiaries; and
Hazardous Materials have not been released, discharged or disposed of on any
property currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries in quantities or in a manner as to create Environmental Liability.

 

(c)                                  As of the Closing Date and except (i) as
otherwise set forth in Schedule 5.09 or (ii) to the extent the same could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect: neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or remedial or
response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any Governmental Authority or the
requirements of any Environmental Law that is reasonably expected to result in
material Environmental Liability to any Loan Party or any of its Subsidiaries;
and all Hazardous Materials generated, used, treated, handled or stored at, or
transported to or from, any property currently or formerly owned or operated by
any Loan Party or any of its Subsidiaries have been disposed of in a manner not
reasonably expected to result in material Environmental Liability to any Loan
Party or any of its Subsidiaries.

 

Section 5.10                             Insurance.  The properties of the
Borrower and its Restricted Subsidiaries are insured (a) with financially sound
and reputable insurance companies in such amounts, with such limitations or
deductibles, against such risks, and in such form as are customarily maintained
by companies of established repute engaged in the same or similar businesses
operating in the same or

 

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similar locations and/or (b) through a system or systems of self-insurance which
are in accord with sound practices of similarly situated corporations of
established reputation maintaining such systems and with respect to which the
Borrower or such Restricted Subsidiary maintain adequate insurance reserves in
accordance with GAAP and in accordance with sound actuarial and insurance
principles.

 

Section 5.11                             Taxes.  The Borrower and its
Subsidiaries have filed all Federal, state and other material tax returns and
reports required to be filed, and have paid all Federal, state and other
material taxes, assessments, fees and other governmental charges levied or
imposed upon them or their properties, income or assets otherwise due and
payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP.  Neither the Borrower nor any Subsidiary has
received written notice of any proposed tax assessment against it that could
reasonably be expected to have a Material Adverse Effect.

 

Section 5.12                             ERISA Compliance.  (a)  Each Plan is in
compliance in all material respects with the applicable provisions of ERISA, the
Code and other Federal or state Laws except for such events of noncompliance
which could not, in the aggregate, reasonably be expected to result in a
Material Adverse Effect.

 

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

 

(c)                                  Except to the extent the same could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect:  (i) no ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA);
(iv) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) neither the Borrower nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.

 

Section 5.13                             Subsidiaries; Equity Interests; Loan
Parties.  As of the Closing Date, no Loan Party has any Subsidiaries other than
those specifically disclosed in Part (a) of Schedule 5.13, and all of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are
(in the case of corporate securities) fully paid and non-assessable and are
owned by a Loan Party in the amounts specified on Part (a) of Schedule 5.13 free
and clear of all Liens except those created under the Collateral Documents or
permitted by Section 7.01.  As of the Closing Date, no Loan Party has any equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of Schedule 5.13.  Set forth on Part (c) of Schedule 5.13
is a complete and accurate list of all Loan Parties as of the Closing Date,
showing as of the Closing Date (as to each Loan Party) the jurisdiction of its
incorporation, the address of its principal place of business and its U.S.
taxpayer identification number or, in the case of any non-U.S. Loan Party that
does not have a U.S. taxpayer identification number, its unique identification
number issued to it by the jurisdiction of its incorporation.

 

Section 5.14                             Margin Regulations; Investment Company
Act.  (a)  No part of the proceeds of any Credit Extension, will be used in
violation of Regulation U or X as now and from time to time hereafter in effect.

 

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(b)                                 No Loan Party is an “investment company”
within the meaning of the Investment Company Act of 1940.

 

Section 5.15                             Disclosure.  No report, financial
statement, certificate or other information furnished in writing by or on behalf
of any Loan Party to the Administrative Agent or any Lender in connection with
the transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case as modified
or supplemented by other information so furnished), when taken together with all
other information previously furnished or that is publicly available, contains
as of the date so furnished any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not materially misleading; provided
that, with respect to projected financial information, the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed by it to be reasonable at the time.  There are no statements or
conclusions in any Engineering Report which are based upon or include, as of the
date of such Engineering Report, misleading information or fail to take into
account, as of the date of such Engineering Report, material information
regarding the matters reported therein, it being understood that projections
concerning volumes attributable to the Oil and Gas Properties and production and
cost estimates contained in each Engineering Report are necessarily based upon
professional opinions, estimates and projections and that the Borrower does not
warrant that such opinions, estimates and projections will ultimately prove to
have been accurate.

 

Section 5.16                             Compliance with Laws.  Each Loan Party
and each Subsidiary thereof is in compliance in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its properties, except in such instances in which
(a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted or
(b) the failure to comply therewith, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

Section 5.17                             Solvency.  The Loan Parties are,
together with their Subsidiaries on a Consolidated basis, Solvent.

 

Section 5.18                             Casualty, Etc.  Neither the businesses
nor the properties of any Loan Party or any of its Restricted Subsidiaries are
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance) that, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

Section 5.19                             Labor Matters.  There are no collective
bargaining agreements or Multiemployer Plans covering the employees of the
Borrower or any of its Restricted Subsidiaries as of the Closing Date and
neither the Borrower nor any Restricted Subsidiary has suffered any strikes,
walkouts, work stoppages or other material labor difficulty within the last five
years that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

Section 5.20                             Collateral Documents.  The provisions
of the Collateral Documents are effective to create in favor of the
Administrative Agent for the benefit of the Secured Parties a legal, valid and
enforceable first priority Lien (subject to Liens permitted by Section 7.01) on
all right, title and interest of the respective Loan Parties (other than Lariat)
in the Collateral described therein.  Except as expressly contemplated hereby
and by the Collateral Documents, no filing or other action will be necessary to
perfect or protect such Liens.

 

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Section 5.21                             Engineered Oil and Gas Properties.

 

(a)                                 The Borrower or another Loan Party has good
and defensible title to all Engineered Oil and Gas Properties, free and clear of
all Liens except as permitted pursuant to Section 7.01 and Immaterial Title
Deficiencies.  With the exception of Immaterial Title Deficiencies, all such Oil
and Gas Properties are valid, subsisting, and in full force and effect, and all
material 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 of the Loan Parties’
Proved Reserves, and with the exception of Immaterial Title Deficiencies, the
Loan Parties’ share of (a) the costs for each Engineered Oil and Gas Property is
not greater than the decimal fraction set forth in the most recent Engineering
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 Engineered Oil and Gas Property is not less than the decimal fraction set
forth in the most recent Engineering Report, before and after payout, as the
case may be, and described therein by the designations “net revenue interest,”
“NRI,” or similar terms.  Except to the extent constituting an Immaterial Title
Deficiency, each well drilled in respect of each Engineered Oil and Gas Property
described in the Engineering Report (y) is capable of, and is presently,
producing Hydrocarbons in commercial quantities, and the applicable Loan Party
is currently receiving payments for its share of production, with no material
funds in respect of any thereof being presently held in suspense, other than any
such funds being held in suspense pending delivery of appropriate division
orders and other usual and customary suspense accounts, and (z) has been
drilled, bottomed, completed, and operated in compliance in all material
respects with all applicable Laws and no such well which is currently producing
hydrocarbons is subject to any penalty in production by reason of such well
having produced in excess of its allowable production.  To the Borrower’s
knowledge, there are no unrecorded assignments or conveyances affecting the
Engineered Oil and Gas Properties or any Loan Party’s interest therein that
would result in the Borrower or its Restricted Subsidiaries having a WI or NRI
that is less than the WI/NRI set forth in the Engineering Report, except the
interests of Sierra Madera CO2 Pipeline LP and Symbol Energy Inc., which
constitute Immaterial Title Deficiencies.

 

(b)                                 The Engineered Oil and Gas Properties (and
all properties unitized therewith) are, in all material respects, being (and, to
the extent the same could materially and adversely affect the ownership or
operation of the Engineered Oil and Gas Properties after the date hereof, to the
applicable Loan Party’s knowledge, have in the past been) maintained, operated
and developed in a good and workmanlike manner, in accordance with prudent
industry standards and in conformity with all applicable Laws and in conformity
with all oil, gas or other mineral leases and other contracts and agreements
forming a part of the Engineered Oil and Gas Property and in conformity with the
Permitted Encumbrances.  No Engineered Oil and Gas Property is subject to having
allowable production after the date hereof reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) prior to
the date hereof and none of the wells located on the Engineered Oil and Gas
Properties (or properties unitized therewith) are or will be deviated from the
vertical more than the maximum permitted by applicable laws, regulations,
rules and orders, and such wells are bottomed under and producing from, with the
well bores wholly within, the Engineered Oil and Gas Properties (or, in the case
of wells located on properties unitized therewith, such unitized properties). 
There are no dry holes, or otherwise inactive wells, located on the Engineered
Oil and Gas Properties or on lands pooled or unitized therewith, except for
wells that have been properly plugged and abandoned or for which appropriate
plugging and abandonment has been scheduled.  Each Loan Party has all material
governmental licenses and permits reasonably necessary or appropriate to own and
operate its Engineered Oil and Gas Properties, and no Loan Party has received
notice in writing of any material violations in respect of any such licenses or
permits.

 

Section 5.22                             Sale of Production.  Except (x) as of
the Closing Date, as set forth in Schedule 5.22, or (y) thereafter, as disclosed
in writing to the Administrative Agent and the Lenders and reflected

 

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in the most recent determination of the Borrowing Base, or (z) for matters that
constitute Immaterial Title Deficiencies:

 

(a)                                 No Engineered Oil and Gas Property is
subject to any material contractual or other arrangement (i) whereby payment for
production is or can be deferred for a substantial period after the month in
which such production is delivered (in the case of oil, not in excess of 60
days, and in the case of gas, not in excess of 90 days) or (ii) whereby payments
are made to a Loan Party other than by checks, drafts, wire transfer advises or
other similar writings, instruments or communications for the immediate payment
of money;

 

(b)                                 (i) No Engineered Oil and Gas Property is
subject to any material contractual or other arrangement for the sale,
processing or transportation of production (or otherwise related to the
marketing of production) which cannot be canceled on 120 days’ (or less) notice
and (ii) all material contractual or other arrangements for the sale, processing
or transportation of production (or otherwise related to the marketing of
production) are bona fide arm’s length transactions made with third parties not
affiliated with Loan Parties;

 

(c)                                  Each Loan Party is presently receiving a
price for all production (other than gas used for operations at a field
location) from (or attributable to) each Engineered Oil and Gas Property covered
by a production sales contract or marketing contract that is computed in
accordance with the terms of such contract, and no Loan Party is having
deliveries of production from such Engineered Oil and Gas Property curtailed
substantially below such property’s delivery capacity, except for curtailments
caused (i) by an act or event of force majeure, or (ii) by routine maintenance
requirements in the ordinary course of business;

 

(d)                                 No Loan Party, nor, to such Loan Party’s
knowledge, any Loan Party’s predecessors in title, has received prepayments
(including payments for gas not taken pursuant to “take or pay” or other similar
arrangements) for any oil, gas or other hydrocarbons produced or to be produced
from any Engineered Oil and Gas Properties after the date hereof;

 

(e)                                  No Engineered Oil and Gas Property is
subject to any “take or pay” or other similar arrangement (i) which can be
satisfied in whole or in part by the production or transportation of gas from
other properties or (ii) as a result of which production from any Engineered Oil
and Gas Property may be required to be delivered to one or more third parties
without payment (or without full payment) therefor as a result of payments made,
or other actions taken, with respect to other properties;

 

(f)                                   There is no Engineered Oil and Gas
Property with respect to which any Loan Party, or, to such Loan Party’s
knowledge, any Loan Party’s predecessors in title, has, prior to the date
hereof, taken more (“overproduced”), or less (“underproduced”), in any material
respect, gas from the lands covered thereby (or pooled or unitized therewith)
than its ownership interest in such Engineered Oil and Gas Property would
entitle it to take; and as of the Closing Date, Schedule 5.22 accurately
reflects, in all material respects, for each well or unit with respect to which
such an imbalance is shown thereon to exist, (i) whether such Loan Party is
overproduced or underproduced and (ii) the volumes (in cubic feet or British
thermal units) of such overproduction or underproduction and the effective date
of such information;

 

(g)                                  No Engineered Oil and Gas Property is
subject to a gas balancing arrangement under which one or more third parties may
take a portion of the production attributable to such Engineered Oil and Gas
Property without payment (or without full payment) therefor as a result of
production having been taken from, or as a result of other actions or inactions
with respect to, other properties; and

 

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(h)                                 No Engineered Oil and Gas Property is
subject at the present time to any regulatory refund obligation and, to such
Loan Party’s knowledge, no facts exist which might cause the same to be imposed.

 

Section 5.23                             OFAC.

 

(a)                                 Neither the Borrower, nor any of its
Subsidiaries, nor, to its knowledge, any director, officer, employee, agent,
affiliate or representative thereof, is an individual or entity that is, or is
owned or controlled by any individual or entity that is (i) currently the
subject or target of any Sanctions or (ii) located, organized or resident in a
Designated Jurisdiction.

 

(b)                                 The Borrower and its Subsidiaries have
conducted their businesses in compliance in all material respects with Sanctions
and have instituted and maintained policies and procedures designed to promote
and achieve compliance with such Sanctions or any Laws related thereto.

 

Section 5.24                             Anti-Corruption Laws.  The Borrower and
its Subsidiaries have conducted their businesses in compliance in all material
respects with applicable anti-corruption laws (including FCPA) and have
instituted and maintained policies and procedures designed to promote and
achieve compliance with such laws.

 

Section 5.25                             Patriot Act.  The Borrower and its
Subsidiaries are in compliance in all material respects with all applicable
anti-money laundering laws and regulations, including without limitation the
Bank Secrecy Act, as amended by Title III of the USA PATRIOT Act (the “Patriot
Act”).

 

ARTICLE VI
AFFIRMATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation owing to any Lender or to the Administrative Agent hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
and not fully Cash Collateralized, the Borrower shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each
Restricted Subsidiary to:

 

Section 6.01                             Financial Statements.  Deliver to the
Administrative Agent and the Lenders as contemplated by the last paragraph of
Section 6.02:

 

(a)                                 as soon as available, but in any event
within 90 days after the end of each fiscal year of the Borrower, a consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year, and the related consolidated and consolidating statements of income or
operations, shareholders’ equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail and prepared in accordance with GAAP, such consolidated
statements to be audited and accompanied by a report and opinion of a Registered
Public Accounting Firm of nationally recognized standing, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and applicable Securities Laws and shall not be subject to any “going
concern” or like qualification or exception or any qualification or exception as
to the scope of such audit or with respect to the absence of any material
misstatement, and such consolidating statements to be certified by the chief
executive officer, chief financial officer, treasurer or controller of the
Borrower to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements of
the Borrower and its Subsidiaries;

 

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(b)                                 as soon as available, but in any event
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal quarter, and the related
consolidated statements of income or operations, shareholders’ equity and cash
flows for such fiscal quarter and for the portion of the Borrower’s fiscal year
then ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, certified by the
chief executive officer, chief financial officer, treasurer or controller of the
Borrower as fairly presenting in all material respects the financial condition,
results of operations, shareholders’ equity and cash flows of the Borrower and
its Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes;

 

(c)                                  if there shall be any Unrestricted
Subsidiaries at the end of any fiscal period in respect of which any
consolidated financial statements referred to in Sections 6.01(a) and (b) above
is delivered, concurrently with such delivery, the related consolidating
financial statements reflecting the adjustments necessary to eliminate the
accounts of such Unrestricted Subsidiaries from such consolidated financial
statements;

 

(d)                                 as soon as available, but in any event
within 90 days after the end of each fiscal year of the Borrower, an annual
business plan and budget of the Borrower and its Subsidiaries on a Consolidated
basis, including forecasts prepared by management of the Borrower, in form
satisfactory to the Administrative Agent and the Majority Lenders, of
consolidated balance sheets and statements of income or operations of the
Borrower and its Subsidiaries on a monthly basis for the immediately following
fiscal year;

 

(e)                                  by April 1 of each year commencing April 1,
2016, an Engineering Report prepared as of the preceding January 1 by one or
more of Netherland, Sewell & Associates, DeGolyer & MacNaughton, or other
independent petroleum engineers chosen by Borrower and reasonably acceptable to
Administrative Agent, concerning all Oil and Gas Properties owned by any Loan
Party which are located in or offshore of the United States and which have
attributable to them proved oil or gas reserves.  This report shall be
reasonably satisfactory to Administrative Agent, shall be prepared using PV9
Pricing, shall take into account any “over-produced” status under gas balancing
arrangements, and shall contain information and analysis consistent in form and
scope in all material respects to that contained in the Initial Engineering
Report.  This report shall distinguish (or shall be delivered together with a
certificate from an appropriate officer of Borrower which distinguishes) (i) the
Oil and Gas Properties owned by each Loan Party and (ii) those properties
treated in the report which are Collateral from those properties treated in the
report which are not Collateral.  At any time the Total Outstandings exceed
$950,000,000, concurrently with the delivery of each Engineering Report pursuant
to this Section 6.01(e), the Borrower shall provide a certificate of an
appropriate officer of the Borrower to the Administrative Agent certifying as to
the Modified ACNTA, as of the date of delivery of the Engineering Report, and
containing a copy of the calculation for such and certifying that the Borrower
has not granted Liens to secure Indebtedness in excess of the amount permitted
under the Senior Secured Indenture or in excess of the greatest of
(A) $950,000,000, (B) the then-effective Borrowing Base Cap and (C) 30% of
Modified ACNTA; and

 

(f)                                   by October 1 of each year, commencing
October 1, 2015, an Engineering Report prepared as of the preceding July 1 (or
the last day of the preceding calendar month in the case of a Special
Determination) by petroleum engineers who are employees of Borrower (or, at the
option of Borrower, by the independent engineers named above or selected in
accordance with (e) above), together with an accompanying report on property
sales, property purchases and changes in categories that have occurred since the
date of the prior Engineering Report, both in the same form and scope as the
reports in (e) above.  At any time the Total Outstandings exceed $950,000,000,
concurrently with the delivery of each Engineering Report pursuant to this
Section 6.01(f), the Borrower shall provide a certificate of an

 

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appropriate officer of the Borrower to the Administrative Agent certifying as to
the Modified ACNTA, as of the date of delivery of the Engineering Report, and
containing a copy of the calculation for such and certifying that the Borrower
has not granted Liens to secure Indebtedness in excess of the amount permitted
under the Senior Secured Indenture or in excess of the greatest of
(A) $950,000,000, (B) the then-effective Borrowing Base Cap and (C) 30% of
Modified ACNTA.

 

As to any information contained in materials furnished pursuant to
Section 6.02(c), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.

 

Section 6.02                             Certificates; Other Information. 
Deliver to the Administrative Agent and the Lenders as contemplated by the last
paragraph of this Section 6.02:

 

(a)                                 concurrently with the delivery of the
financial statements referred to in Sections 6.01(a) and (b), (i) a duly
completed Compliance Certificate signed by the chief executive officer, chief
financial officer, treasurer or controller of the Borrower and (ii) a
calculation of the Borrowing Base Utilization Ratio as of the end of the most
recent fiscal quarter;

 

(b)                                 promptly after any request by the
Administrative Agent or any Lender, copies of any detailed audit reports,
management letters or recommendations submitted to the board of directors (or
the audit committee of the board of directors) of the Borrower by independent
accountants in connection with the accounts or books of the Borrower or any
Restricted Subsidiary, or any audit of any of them;

 

(c)                                  promptly after the same are available,
copies of all annual, regular, periodic and special reports, registration
statements and proxy statements which the Borrower may file or be required to
file with the SEC under Sections 13, 14 or 15(d) of the Securities Exchange Act
of 1934, or with any national securities exchange, and in any case not otherwise
required to be delivered to the Administrative Agent pursuant hereto;

 

(d)                                 promptly after the furnishing thereof,
copies of any statement or report furnished to any holder of debt securities of
any Loan Party or any Restricted Subsidiary thereof pursuant to the terms of any
indenture, loan or credit or similar agreement relating to Indebtedness with a
principal amount in excess of the Threshold Amount and not otherwise required to
be furnished to the Lenders pursuant to Section 6.01 or any other clause of this
Section 6.02;

 

(e)                                  promptly, and in any event within five
(5) Business Days after receipt thereof by any Loan Party or any Subsidiary
thereof, copies of each notice or other correspondence received from the SEC (or
comparable agency in any applicable non-U.S. jurisdiction) concerning any
investigation or possible investigation by such agency regarding financial or
other operational results of any Loan Party or any Subsidiary thereof;

 

(f)                                   not later than five (5) Business Days
after receipt thereof by any Loan Party or any Restricted Subsidiary thereof,
copies of all notices, requests and other documents (including amendments,
waivers and other modifications) so received under or pursuant to any
instrument, indenture, loan or credit or similar agreement relating to
Indebtedness with a principal amount in excess of the Threshold Amount and
regarding or related to any breach or default by any party thereto or any other
event that could reasonably be expected to materially impair the value of the
interests or the rights of any Loan Party or otherwise have a Material Adverse
Effect and, from time to time upon request by the Administrative Agent, such
information and reports regarding such instruments, indentures and loan and
credit and similar agreements as the Administrative Agent may reasonably
request;

 

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(g)                                  promptly after the assertion or occurrence
thereof, notice of any action or proceeding against or of any noncompliance by
any Loan Party or any of its Subsidiaries with any Environmental Law or
Environmental Permit that could (i) reasonably be expected to have a Material
Adverse Effect or (ii) cause any property described in the Mortgages to be
subject to any materially adverse restrictions on ownership, occupancy, use or
transferability under any Environmental Law;

 

(h)                                 promptly, such additional information
regarding the business, financial or corporate affairs of the Borrower or any
Restricted Subsidiary, or compliance with the terms of the Loan Documents, as
the Administrative Agent or any Lender may from time to time reasonably request.

 

Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address listed on Schedule 10.02 or
(ii) on which such documents are posted on the Borrower’s behalf on an Internet
or intranet website, if any, to which each Lender and the Administrative Agent
have access (whether a commercial, third-party website or whether sponsored by
the Administrative Agent); provided that: (A) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender that requests
the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(B) the Borrower shall notify the Administrative Agent and each Lender (by
telecopier, facsimile or electronic mail) of the posting of any such documents
and provide to the Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents.  Notwithstanding anything contained
herein, in every instance the Borrower shall be required to provide paper copies
of the Compliance Certificates required by Section 6.02(a) to the Administrative
Agent.  Except for such Compliance Certificates, the Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

 

The Borrower hereby acknowledges that the Administrative Agent and/or the
Arranger will make available to the Lenders and the L/C Issuers materials and/or
information provided by or on behalf of the Borrower hereunder (collectively,
the “Borrower Materials”) by posting the Borrower Materials on SyndTrak or
another similar electronic system (the “Platform”).

 

Section 6.03                             Notices.  Promptly notify the
Administrative Agent and each Lender:

 

(a)                                 of the occurrence of any Default or Event of
Default known to any Responsible Officer (if such Default or Event of Default is
then continuing);

 

(b)                                 of any matter (other than matters of a
general economic or industry-specific nature) that has resulted or could
reasonably be expected to result in a Material Adverse Effect, including
(i) breach or non-performance of, or any default under, a Contractual Obligation
of the Borrower or any Subsidiary; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws;

 

(c)                                  of the occurrence of any ERISA Event;

 

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(d)                                 of any material change in accounting
policies or financial reporting practices by the Borrower or any Restricted
Subsidiary; and

 

(e)                                  of the (i) occurrence of any Disposition of
property or assets for which the Borrower is required to make a mandatory
prepayment pursuant to Section 2.06(b)(ii), and (ii) incurrence or issuance of
any Indebtedness for which the Borrower is required to make a mandatory
prepayment pursuant to Section 2.06(b)(iv).

 

Each notice pursuant to this Section 6.03 (other than Section 6.03(e)) shall be
accompanied by a statement of a Responsible Officer of the Borrower setting
forth details of the occurrence referred to therein and stating what action the
Borrower has taken and proposes to take with respect thereto.  Each notice
pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Loan Document that have been
breached.

 

Section 6.04                             Payment of Obligations.  Pay and
discharge as the same shall become due and payable, (a) all tax liabilities,
assessments and governmental charges or levies upon it or its properties or
assets, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Restricted Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property,
except, in the case of (a) or (b), for such amounts that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

Section 6.05                             Preservation of Existence, Etc. 
(a) Preserve, renew and maintain in full force and effect its legal existence
and good standing under the Laws of the jurisdiction of its organization except
in a transaction permitted by Section 7.04 or Section 7.05; (b) take all
reasonable action to maintain all rights, privileges, permits, licenses and
franchises necessary or desirable in the normal conduct of its business, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect; and (c) preserve or renew all of its registered
patents, trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.

 

Section 6.06                             Maintenance of Properties. 
(a) Maintain, preserve and protect all of its material properties and equipment
necessary in the operation of its business in good working order and condition,
ordinary wear and tear excepted; (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) use the
standard of care typical in the industry in the operation and maintenance of its
facilities.

 

Section 6.07                             Maintenance of Insurance. (a)  Maintain
(at its own expense) insurance for its property with financially sound and
reputable insurance companies in such amounts, with such limitations or
deductibles, against such risks, and in such form as are customarily maintained
by companies of established repute engaged in the same or similar businesses
operating in the same or similar locations; provided, however, that in lieu of
any such insurance, the Borrower or any of its Restricted Subsidiaries may
maintain a system or systems of self-insurance which are in accord with sound
practices of similarly situated corporations of established reputation
maintaining such systems and with respect to which the Borrower or such
Restricted Subsidiary shall maintain adequate insurance reserves in accordance
with GAAP and in accordance with sound actuarial and insurance principles.  All
insurance policies covering Collateral shall be endorsed (i) to provide for
payment of losses to the Administrative Agent as its interests may appear,
(ii) to provide that such policies may not be canceled or reduced or affected in
any material manner for any reason without ten (10) days prior notice to the
Administrative Agent, and (iii) to provide for any other matters specified in
any applicable Collateral Document.  Each Loan Party shall at

 

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all times maintain insurance against its liability for injury to persons or
property with financially sound and reputable insurers in such amounts, with
such limitations or deductibles, against such risks, and in such form as are
customarily maintained by companies of established repute engaged in the same or
similar businesses operating in the same or similar locations.

 

(b)                                 Reimbursement under any liability insurance
maintained by Loan Parties pursuant to this Section 6.07 may be paid directly to
the Person who has incurred the liability covered by such insurance.  With
respect to any loss involving damage to Collateral, each Loan Party will make or
cause to be made the necessary repairs to or replacements of such Collateral,
and any proceeds of insurance maintained by each Loan Party pursuant to this
Section 6.07 shall be paid to such Loan Party by the Administrative Agent as
reimbursement for the costs of such repairs or replacements as such repairs or
replacements are made or acquired; provided that Administrative Agent shall be
entitled (but not obligated) to retain and apply such proceeds as Collateral
during the continuance of any Event of Default.

 

Section 6.08                             Compliance with Laws.  Comply in all
material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property, except
in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith could not reasonably
be expected to have a Material Adverse Effect.

 

Section 6.09                             Books and Records.  (a) 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 the Borrower or
such Restricted Subsidiary, as the case may be and (b) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over the Borrower or
such Restricted Subsidiary, as the case may be.

 

Section 6.10                             Inspection Rights.  Permit
representatives and independent contractors of the Administrative Agent and each
Lender to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom,
and to discuss its affairs, finances and accounts with its directors, officers,
and independent public accountants, all at the expense of the Borrower and at
such reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrower; provided,
however, that when an Event of Default exists the Administrative Agent or any
Lender (or any of their respective representatives or independent contractors)
may do any of the foregoing at the expense of the Borrower at any time during
normal business hours and without advance notice.

 

Section 6.11                             Use of Proceeds.  The Borrower shall
apply the proceeds of the Credit Extensions for general corporate purposes,
including to provide working capital for the Borrower and its Subsidiaries, the
issuance of letters of credit, capital expenditures and acquisitions by the
Borrower and its Subsidiaries of oil and gas properties and other assets related
to the exploration, production and development of oil and gas properties.

 

Section 6.12                             Covenant to Guarantee Obligations and
Give Security.  (a)  Upon the formation or acquisition of any new direct or
indirect wholly-owned Subsidiary (excluding (x) any CFC or any Subsidiary that
is held directly or indirectly by a CFC, (y) any Unrestricted Subsidiary and
(z) any Immaterial Subsidiary (except that up to 66% of the Equity Interest in a
CFC held directly by the Borrower or any Subsidiary, other than a Subsidiary
described in clause (x), (y) or (z) above, is subject to pledge as contemplated
by clause (ii) below)) by any Loan Party, then the Borrower shall, at the
Borrower’s expense:

 

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(i)                                     within 20 days after such formation or
acquisition (or such longer period as the Administrative Agent may in its
discretion approve), cause such Subsidiary, and cause each direct and indirect
parent (except, if applicable, Cholla Pipeline, L.P. or Sagebrush Pipeline, LLC)
of such Subsidiary (if it has not already done so), to duly execute and deliver
to the Administrative Agent a guaranty or guaranty supplement, in form and
substance reasonably satisfactory to the Administrative Agent, guaranteeing the
other Loan Parties’ obligations under the Loan Documents;

 

(ii)                                  subject in the case of Oil and Gas
Properties to Section 6.12(b), within 30 days after such formation or
acquisition (or such longer period as the Administrative Agent may in its
discretion approve), cause such Subsidiary and each direct and indirect parent
(except, if applicable, Lariat, Cholla Pipeline, L.P. or Sagebrush Pipeline,
LLC) of such Subsidiary (if it has not already done so) to duly execute and
deliver to the Administrative Agent deeds of trust, trust deeds, deeds to secure
debt, mortgages, leasehold mortgages, leasehold deeds of trust, Security
Agreement Supplements and other security and pledge agreements, as specified by
and in form and substance reasonably satisfactory to the Administrative Agent
(including delivery of all Pledged Equity in and of such Subsidiary, and other
instruments required under the Security Agreement) securing payment of all the
Obligations of such Subsidiary or such parent, as the case may be, under the
Loan Documents and constituting Liens on all such real and personal properties;
provided however, that notwithstanding the foregoing, neither the Borrower nor
any Subsidiary will be required to grant a security interest in the Equity
Interest of any (i) CFC in excess of 66% of the Equity Interest of such CFC,
(ii) Immaterial Subsidiary or (iii) Unrestricted Subsidiary;

 

(iii)                               subject in the case of Oil and Gas
Properties to Section 6.12(b), within 30 days after such formation or
acquisition (or such longer period as the Administrative Agent may in its
discretion approve), cause such Subsidiary and each direct and indirect parent
(except, if applicable, Lariat, Cholla Pipeline, L.P. or Sagebrush Pipeline,
LLC) of such Subsidiary (if it has not already done so) to take whatever action
(including the recording of mortgages, the filing of Uniform Commercial Code
financing statements, the giving of notices and the endorsement of notices on
title documents) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the deeds of
trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages,
leasehold deeds of trust, Security Agreement Supplements and security and pledge
agreements delivered pursuant to this Section 6.12, enforceable against all
third parties in accordance with their terms; and

 

(iv)                              within 60 days after such formation or
acquisition (or such longer period as the Administrative Agent may in its
discretion approve), deliver to the Administrative Agent, upon the request of
the Administrative Agent in its sole discretion, a signed copy of a favorable
opinion, addressed to the Administrative Agent and the other Secured Parties, of
counsel for the Loan Parties reasonably acceptable to the Administrative Agent
as to the matters contained in clauses (i), (ii) and (iii) above, and as to such
other matters as the Administrative Agent may reasonably request.

 

(b)                                 If the report or certificate delivered under
Section 6.01(e) or Section 6.01(f) does not confirm that the Obligations are
secured by Liens covering and encumbering at least 80% of the PV9 Pricing of the
Proved Reserves attributable to the Engineered Oil and Gas Properties (without
taking into account any adjustments for hedging), then (i) within 30 days of the
delivery of such report or certificate (or such longer period as may be
appropriate in the sole discretion of the Administrative Agent), the Loan
Parties that own Engineered Oil and Gas Properties shall execute and deliver
mortgages and deeds of trust in form and substance reasonably acceptable to the
Administrative Agent, together with such other assignments, conveyances,
amendments, agreements and other writings (each duly authorized and executed)
and together with such certificates and opinions of counsel with respect
thereto, in each case as

 

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the Administrative Agent shall deem necessary to grant, evidence and perfect the
Liens on such additional properties required by this Section 6.12(b) and
(ii) upon the request of the Administrative Agent, which request shall not be
made more than once per calendar year so long as no Default, Event of Default or
Borrowing Base Deficiency is then continuing, evidence of title reasonably
satisfactory to the Administrative Agent with respect to such additional
properties, but only to the extent necessary such that the Borrower shall have
delivered evidence of title covering Engineered Oil and Gas Properties subject
to the Mortgages comprising at least 75% of the total PV9 Pricing of the Proved
Reserves attributable to the Engineered Oil and Gas Properties required by this
Section 6.12(b) to be subject to the Mortgages; provided, however, that the
requirements of this Section 6.12(b) shall not apply to any Oil and Gas
Properties as to which the Administrative Agent shall determine in its
reasonable discretion, after consultation with the Borrower, that the costs and
burden of obtaining such evidence of title are excessive in relation to the
value of the benefits afforded thereby.

 

Section 6.13                             Compliance with Environmental Laws. 
Comply, and cause all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew all material
Environmental Permits necessary for its current operations and properties; and
conduct any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance in all material
respects with the requirements of all applicable Environmental Laws; provided,
however, that neither the Borrower nor any of its Restricted Subsidiaries shall
be required to undertake any such cleanup, removal, remedial or other action to
the extent that its obligation to do so is not required by applicable
Environmental Laws or being contested in good faith and by proper proceedings
and appropriate reserves are being maintained with respect to such circumstances
in accordance with GAAP.

 

Section 6.14                             Further Assurances.  Promptly upon
request by the Administrative Agent, or any Lender through the Administrative
Agent, (a) correct any material defect or error that may be discovered in any
Loan Document or in the execution, acknowledgment, filing or recordation
thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file,
re-file, register and re-register any and all such further acts, deeds,
certificates, assurances and other instruments as the Administrative Agent, or
any Lender through the Administrative Agent, may reasonably require from time to
time in order to (i) to the fullest extent permitted by applicable law, subject
any Loan Party’s or any of its Restricted Subsidiaries’ properties, assets,
rights or interests to the Liens now or hereafter intended to be covered by any
of the Collateral Documents, (ii) perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and any of the
Liens intended to be created thereunder and (iii) assure, convey, grant, assign,
transfer, preserve, protect and confirm more effectively unto the Secured
Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument executed
in connection with any Loan Document to which any Loan Party or any of its
Restricted Subsidiaries is or is to be a party, and cause each of its Restricted
Subsidiaries to do so.

 

Section 6.15                             Production Proceeds.  Notwithstanding
that, by the terms of the various Mortgages, certain Guarantors and Borrower are
and will be assigning to Administrative Agent and Lenders all of the “Production
Proceeds” (as defined therein) accruing to the property covered thereby, so long
as no Event of Default has occurred such Loan Parties may continue to receive
from the purchasers of production all such Production Proceeds, subject,
however, to the Liens created under the Mortgages, which Liens are hereby
affirmed and ratified.  Upon the occurrence of an Event of Default,
Administrative Agent and Lenders may exercise all rights and remedies granted
under the Mortgages, including the right to obtain possession of all Production
Proceeds then held by Loan Parties or to receive directly from the purchasers of
production all other Production Proceeds.  In no case shall any failure, whether
purposed or inadvertent, by Administrative Agent or Lenders to collect directly
any such

 

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Production Proceeds constitute in any way a waiver, remission or release of any
of their rights under the Mortgages, nor shall any release of any Production
Proceeds by Administrative Agent or Lenders to Loan Parties constitute a waiver,
remission, or release of any other Production Proceeds or of any rights of
Administrative Agent or Lenders to collect other Production Proceeds thereafter.

 

Section 6.16                             Anti-Corruption, Anti-Terrorism and
Anti-Money Laundering Laws.  Conduct its businesses in compliance in all
material respects with all applicable anti-corruption laws, applicable
anti-terrorism laws and applicable anti-money laundering laws and maintain
policies and procedures designed to promote and achieve compliance with such
laws.

 

ARTICLE VII
NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment hereunder, any Loan or other
Obligation owing to any Lender or to the Administrative Agent hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
and not fully Cash Collateralized, the Borrower shall not, nor shall it permit
any Restricted Subsidiary to, directly or indirectly:

 

Section 7.01                             Liens.  Create, incur, assume or suffer
to exist any Lien upon any of its property, assets or revenues, whether now
owned or hereafter acquired, other than the following:

 

(a)                                 Liens pursuant to any Loan Document;

 

(b)                                 Liens existing on the date hereof and listed
on Schedule 7.01 and any renewals or extensions thereof, provided that (i) the
property covered thereby is not changed, (ii) the amount secured or benefited
thereby is not increased except as contemplated by Section 7.03(c), (iii) the
direct or any contingent obligor with respect thereto is not changed, and
(iv) any renewal or extension of the obligations secured or benefited thereby is
permitted by Section 7.03(c);

 

(c)                                  Liens for taxes and other governmental
charges not yet due or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;

 

(d)                                 operators’, carriers’, landlords’,
suppliers’, workers’, construction, warehousemen’s, mechanics’, materialmen’s,
repairmen’s or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 90 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;

 

(e)                                  pledges or deposits in the ordinary course
of business in connection with workers’ compensation, unemployment insurance and
other social security legislation or other liabilities of a like nature, other
than any Lien imposed by ERISA;

 

(f)                                   Liens to secure the performance of bids,
trade contracts and leases (other than Indebtedness), licenses, statutory
obligations, surety and appeal bonds, performance bonds, regulatory obligations
and other obligations of a like nature incurred in the ordinary course of
business;

 

(g)                                  (i) easements, rights-of-way, restrictions
and other similar encumbrances affecting real property which, in the aggregate,
are not substantial in amount, and which do not in any case materially detract
from the value of the property subject thereto or materially interfere with the
ordinary conduct of the business of the applicable Person and (ii) Immaterial
Title Deficiencies;

 

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(h)                                 Liens securing judgments for the payment of
money not constituting an Event of Default under Section 8.01(h);

 

(i)                                     Liens on pipelines and pipeline
facilities that arise by operation of law or other like Liens arising by
operation of law in the ordinary course of business and incident to the
exploration, development, operation and maintenance of Oil and Gas Properties
each of which is in respect of obligations that do not constitute Indebtedness
and that are not delinquent or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP;

 

(j)                                    customary contractual Liens under
operating lease agreements or which arise in the ordinary course of business
under operating agreements, joint venture agreements, oil and gas partnership
agreements, oil and gas leases, farm-out and farm-in agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the Oil and Gas Business and are for obligations that do not
constitute Indebtedness and that are not delinquent or that are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; provided that any such Lien referred to in
this clause does not materially impair the use of the property covered by such
Lien for the purposes for which such property is held by the Borrower or any
Restricted Subsidiary or materially impair the value of such property subject
thereto;

 

(k)                                 Permitted Encumbrances;

 

(l)                                     Liens existing on assets at the time of
acquisition thereof, or Liens existing on assets of any Person at the time such
Person became a Subsidiary, which in each case (i) were not created in
contemplation thereof and (ii) do not encumber Oil and Gas Properties to be
included in the Borrowing Base;

 

(m)                             UCC financing statements filed in connection
with an operating lease under which the Borrower or a Restricted Subsidiary is
the lessee;

 

(n)                                 Liens on assets of Lariat securing
obligations of Lariat;

 

(o)                                 Liens on Oklahoma Properties or Electrical
Assets securing Indebtedness permitted by Section 7.03(b) or Section 7.03(c);

 

(p)                                 Liens on Piñon Field Interests securing
Indebtedness permitted by Section 7.03(i);

 

(q)                                 Liens securing Indebtedness permitted under
Section 7.03(f); provided that (i) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (ii) the
Indebtedness secured thereby does not exceed the cost or fair market value,
whichever is lower, of the property being acquired on the date of acquisition;

 

(r)                                    Liens in favor of banking and other
financial institutions arising by operation of law or otherwise encumbering
deposits held by such banking institution or securities and other financial
assets held by such financial institution (in each case including the right of
set-off) and which are within

 

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the general parameters customary in the banking industry or the securities
brokerage industry, as applicable;

 

(s)                                   Liens not otherwise permitted by this
Section 7.01; provided that the aggregate outstanding principal amount of the
obligations secured thereby does not exceed (as to the Borrower and its
Restricted Subsidiaries) $50,000,000 at any one time; and

 

(t)                                    Liens to secure Junior Lien Debt;
provided that any such Lien granted on any property is only permitted to the
extent that it is junior to a valid and enforceable first priority Lien granted
on such property to secure the Obligations (subject to the applicable Junior
Lien Intercreditor Agreement).

 

Section 7.02                             Investments.  Make any Investments,
except:

 

(a)                                 Investments held by the Borrower or such
Restricted Subsidiary in the form of Cash Equivalents;

 

(b)                                 advances to officers, directors and
employees of the Borrower and Restricted Subsidiaries in an aggregate amount not
to exceed $500,000 at any time outstanding, for travel, entertainment,
relocation and analogous ordinary business purposes;

 

(c)                                  Investments of the Borrower in any now
existing or hereafter acquired wholly-owned Restricted Subsidiary and
Investments of any Restricted Subsidiary in the Borrower or in another now
existing or hereafter acquired wholly-owned Restricted Subsidiary; provided,
however, that (i) in the case of any Investments in Lariat, the aggregate amount
of such Investment shall  not exceed (x) $1,000,000 less (y) the aggregate
amount of Restricted Payments made to Lariat pursuant to Section 7.06(a) and
(ii) in the case of an Investment constituting the acquisition from a third
party of a Person which thereby becomes a wholly-owned Restricted Subsidiary,
such Investment is permitted pursuant to another clause of this Section 7.02;

 

(d)                                 Investments consisting of extensions of
credit in the nature of accounts receivable or notes receivable arising from the
grant of trade credit in the ordinary course of business, and Investments
received in satisfaction or partial satisfaction thereof from financially
troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;

 

(e)                                  Investments in Oil and Gas Properties (or
in Persons at least 60% of whose assets consist of Oil and Gas Properties and
which become wholly-owned Restricted Subsidiaries pursuant to such Investment);

 

(f)                                   Guarantees permitted by Section 7.03;

 

(g)                                  Investments received in connection with
bankruptcy or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary course of
business;

 

(h)                                 Investments (including, without limitation,
capital contributions) in general or limited partnerships or other types of
entities (each a “venture”) entered into by the Borrower or a Restricted
Subsidiary with others in the ordinary course of business; provided that (i) any
such venture is engaged exclusively 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) the aggregate net amount of such
Investments does not

 

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exceed $25,000,000 in any fiscal year of the Borrower (exclusive of the value of
Oil and Gas Properties contributed as contemplated by Section 7.05(l));

 

(i)                                     Investments under clause (a) or (c) of
the definition thereof in Persons (which become wholly-owned Restricted
Subsidiaries pursuant to such Investment) or business units, respectively, in
each case whose assets consist solely of oil and gas service business assets,
including drilling rigs, workover rigs, drilling fluids and other assets
involved in providing services to the oil and gas upstream and midstream
segments, which Investments shall not exceed $50,000,000 in the aggregate in any
fiscal year of the Borrower;

 

(j)                                    other Investments not exceeding
$50,000,000 in the aggregate in any fiscal year of the Borrower;

 

(k)                                 Investments for consideration consisting of
common stock of the Borrower;

 

(l)                                     capital stock, promissory notes, and
other similar non-cash consideration received by the Borrower or any of its
Restricted Subsidiaries in connection with any transaction permitted by
Section 7.05;

 

(m)                             Investments expressly permitted by Section 7.06;

 

(n)                                 Investments in existence on the Closing Date
and, in the case of any Investment in excess of $5,000,000, listed on Schedule
7.02(n), and extensions, renewals, modifications, or restatements or
replacements thereof, provided that no such extension, renewal, modification,
restatement or replacement shall (i) increase the amount of the original
Investment or (ii) adversely affect the interest of the Lenders with respect to
such original Investment or the interests of the Lenders under this Agreement
and the other Loan Documents in any material respect;

 

(o)                                 Investments in Royalty Trusts;

 

(p)                                 Investments in Unrestricted Subsidiaries to
the extent resulting from Dispositions permitted by Section 7.05(o); and

 

(q)                                 subject to satisfaction of the Available
Amount Conditions, other Investments not permitted by the foregoing provisions
of this Section 7.02 in an amount not to exceed the Available Amount at such
time.

 

Section 7.03     Indebtedness.  Create, incur, assume or suffer to exist any
Indebtedness, except:

 

(a)                                 Indebtedness under the Loan Documents;

 

(b)                                 Attributable Indebtedness and Synthetic
Lease Obligations created in connection with the sale-leaseback of the Oklahoma
Properties or the Electrical Assets;

 

(c)                                  Indebtedness outstanding on the date hereof
and listed on Schedule 7.03, including the Existing Notes, and any Permitted
Refinancing thereof;

 

(d)                                 Guarantees of the Borrower or any Guarantor
in respect of Indebtedness otherwise permitted hereunder of the Borrower or any
Guarantor;

 

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(e)                                  obligations (contingent or otherwise) of
the Borrower or any Restricted Subsidiary existing or arising under any Swap
Contract; provided that (i) such obligations are (or were) entered into by such
Person in the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments, investments, assets, or property
held or reasonably anticipated by such Person, or changes in the value of
securities issued by such Person, and not for purposes of speculation or taking
a “market view” and (ii) such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party (other than customary netting
arrangements);

 

(f)                                   Indebtedness in respect of capital leases,
Synthetic Lease Obligations and purchase money obligations for fixed or capital
assets within the limitations set forth in Section 7.01(q); provided, however,
that the aggregate principal amount of all such Indebtedness (other than
Indebtedness permitted pursuant to clause (b) above) at any one time outstanding
shall not exceed $25,000,000;

 

(g)                                  Indebtedness of the Borrower or a
Restricted Subsidiary owing to the Borrower or a wholly-owned Restricted
Subsidiary (other than Lariat);

 

(h)                                 Indebtedness incurred by Lariat, and
Guarantees of the Borrower in respect of such Indebtedness; provided that the
principal amount of Indebtedness of Lariat guaranteed by the Borrower pursuant
to this subsection (h) or otherwise shall at no time exceed $125,000,000;

 

(i)                                     Indebtedness incurred to finance
investments in the Piñon Field Interest in an aggregate principal amount not
exceeding $50,000,000;

 

(j)                                    other Indebtedness in an aggregate
principal amount not to exceed $75,000,000 at any time outstanding;

 

(k)                                 Indebtedness in respect of surety bonds
obtained by the Borrower or a Restricted Subsidiary in the ordinary course of
business and supporting other obligations undertaken by the Borrower or a
Restricted Subsidiary in the ordinary course of business which other obligations
do not constitute Indebtedness;

 

(l)                                     Indebtedness that constitutes Junior
Lien Debt and unsecured Indebtedness not otherwise permitted by this
Section 7.03 in an aggregate principal amount for all Indebtedness under this
clause (l) not to exceed $1,750,000,000 at any time outstanding; provided that
(1) at the time of incurring such Indebtedness (x) no Default has occurred and
is then continuing and (y) no Default would result from the incurrence of such
Indebtedness after giving effect to the incurrence of such Indebtedness (and any
concurrent repayment of Indebtedness with the proceeds of such incurrence),
(2) such Indebtedness does not mature and requires no scheduled amortization
prior to the 91st day following the Maturity Date, (3) the terms of such
Indebtedness are not materially more onerous, taken as a whole, than the terms
of this Agreement and the other Loan Documents, (4) if any Person Guarantees
such Indebtedness, such Person shall also Guarantee the Obligations by providing
a guaranty or guaranty supplement, in form and substance reasonably satisfactory
to the Administrative Agent and (5) such Indebtedness and any guarantees thereof
are otherwise on market terms and conditions for similarly situated companies;
and provided further that during any period that any Indebtedness is issued and
outstanding in reliance on this subsection (l) in excess of $1,500,000,000, the
Borrowing Base shall automatically be reduced by 25% of the principal amount of
such Indebtedness;

 

(m)                             Junior Lien Debt issued as a Permitted
Refinancing of the Existing Notes;

 

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(n)                                 Indebtedness of any Person at the time such
Person becomes a Restricted Subsidiary of the Borrower, or is merged or
consolidated with or into the Borrower or any of its Restricted Subsidiaries, in
a transaction permitted by this Agreement, and extensions, renewals,
refinancings, refundings and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof (other than any increase not
exceeding the amount of any fees, premium, if any, and financing costs relating
to such refinancing); provided that (i) such Indebtedness (other than any such
extension, renewal, refinancing, refunding or replacement) exists at the time
such Person becomes a Restricted Subsidiary and is not created in contemplation
of such event, (ii) other than Guarantee obligations permitted by clause (d) of
this Section 7.03, neither the Borrower nor any of its other Restricted
Subsidiaries shall be liable for such Indebtedness and (iii) the Borrower is in
compliance, on a pro forma basis after giving effect to the incurrence of such
Indebtedness and the use of proceeds thereof, with the covenants contained in
Section 7.11;

 

(o)                                 Indebtedness of the Borrower or any
Restricted Subsidiary to the seller representing all or part of the purchase
price of an Investment or acquisition permitted hereunder, or assumed by the
Borrower or any of its Restricted Subsidiaries in connection therewith, and
extensions, renewals, refinancings, refundings and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof
(other than any increase not exceeding the amount of any fees, premium, if any,
and financing costs relating to such refinancing), provided that as to any such
assumed Indebtedness, such Indebtedness (other than any extension, renewal,
refinancing, refunding or replacement thereof) exists at the time of such
acquisition and is not created in contemplation of such event;

 

(p)                                 Indebtedness arising from judgments or
orders in circumstances not constituting an Event of Default under
Section 8.01(h);

 

(q)                                 Indebtedness arising from or representing
deferred compensation to employees of the Borrower or its Restricted
Subsidiaries that constitute or are deemed to be Indebtedness under GAAP and
that are incurred in the ordinary course of business;

 

(r)                                    Indebtedness arising pursuant to clause
(e) of the definition thereof as a result of Liens permitted under Sections
7.01(c), (d), (e), (f) and (k); and

 

(s)                                   obligations of the Borrower or any
Restricted Subsidiary existing or arising under any Treasury Management Services
Agreement.

 

Section 7.04                             Fundamental Changes.  Merge, dissolve,
liquidate, amalgamate, consolidate with or into another Person, or Dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to or in favor of
any Person, except that, so long as no Default exists or would result therefrom:

 

(a)                                 any Restricted Subsidiary may merge with
(i) the Borrower, provided that the Borrower shall be the continuing or
surviving Person or (ii) any one or more other Restricted Subsidiaries, provided
that when any wholly-owned Restricted Subsidiary is merging with another
Restricted Subsidiary, the continuing or surviving Person shall be a
wholly-owned Restricted Subsidiary and provided further that when any Guarantor
is merging with another Restricted Subsidiary, the continuing or surviving
Person shall be a Guarantor (other than Lariat);

 

(b)                                 any Restricted Subsidiary may Dispose of all
or substantially all of its assets (upon voluntary liquidation or otherwise) to
the Borrower or to another Restricted Subsidiary (and thereafter dissolve,
liquidate or wind-up its affairs); provided that if the transferor in such a
transaction is

 

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a wholly-owned Restricted Subsidiary, then the transferee must either be the
Borrower or a wholly-owned Restricted Subsidiary; and provided further that if
the transferor in such a transaction is a Guarantor, then the transferee must
either be the Borrower or a Guarantor (other than Lariat);

 

(c)                                  any Disposition of a Restricted Subsidiary
expressly permitted by Section 7.05 may be structured as a merger, consolidation
or amalgamation to which such Restricted Subsidiary is a party and as a result
of which such Restricted Subsidiary ceases to be a Restricted Subsidiary; and

 

(d)                                 any Investment expressly permitted by
Section 7.02 may be structured as a merger, consolidation or amalgamation;
provided that if the Borrower is a party thereto, the Borrower shall be the
continuing or surviving Person; and provided further that the continuing or
surviving Person shall be the Borrower or a Guarantor (other than Lariat) to the
extent required by Section 6.12.

 

Section 7.05                             Dispositions.  Make any Disposition
except:

 

(a)                                 Dispositions of (i) obsolete or worn out
property or assets, whether now owned or hereafter acquired, in the ordinary
course of business or (ii) equipment that is no longer useful in the conduct of
the business of the Borrower and its Restricted Subsidiaries in the ordinary
course of business;

 

(b)                                 Dispositions of inventory (including
Hydrocarbons sold after severance) in the ordinary course of business;

 

(c)                                  Dispositions of equipment or real property
or other assets (other than (x) Oil and Gas Properties or (y) Investments in
Restricted Subsidiaries) to the extent that (i) such equipment, property or
other asset is exchanged for credit against the purchase price of similar
replacement equipment, property or other asset or (ii) the proceeds of such
Disposition are reasonably promptly applied to the purchase price of such
replacement equipment, property, or other assets;

 

(d)                                 Dispositions of property or assets by any
Restricted Subsidiary to the Borrower or to a wholly-owned Restricted Subsidiary
or by the Borrower to any wholly-owned Restricted Subsidiary; provided that if
the transferor of such property or assets is a Guarantor, the transferee thereof
must either be the Borrower or a Guarantor (other than Lariat);

 

(e)                                  Dispositions permitted by
Section 7.04(a) or Section 7.04(b);

 

(f)                                   Dispositions of Electrical Assets;

 

(g)                                  (1) Dispositions of Oil and Gas Properties
which are sold or otherwise transferred for fair consideration to Persons who
are not Affiliates of Borrower, (2) farmouts of undeveloped acreage and
assignments in connection with such farmouts or the abandonment, farm-out,
exchange or Disposition of Oil and Gas Properties not containing Proved Reserves
and (3) Dispositions of Oil and Gas Properties to which no value has been
attributed by the Administrative Agent in the most recent determination of the
Borrowing Base in the ordinary course of business, provided that (i) no Event of
Default exists at the time of and after giving effect to any such sale or other
transfer of Collateral (other than Defaults that will be cured upon the
application of the proceeds of such sale or other transfer), (ii) the Borrower
must first give notice to the Administrative Agent of any such sale, (iii) if
the Oil and Gas Properties so sold or transferred, or all equity of the
Restricted Subsidiary owning the Oil and Gas Properties so sold or transferred,
on a cumulative basis since the then most recent Determination Date, represent
more than five percent of the then effective Borrowing Base, the sale or other
transfer may not be made until Administrative Agent and the Lenders have made a
Special Determination to the extent contemplated by Section 2.05(b)(iv)(A);
provided that this clause (iii) shall not apply to (x) Dispositions

 

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of any assets of SandRidge Midstream Inc. or the equity interests of SandRidge
Midstream Inc. (or any other Person that is, or becomes, the owner solely of the
assets of SandRidge Midstream Inc.) and (y) Dispositions otherwise permitted by
this Section 7.05(g) if the Administrative Agent and the Lenders have not
elected to make a Special Determination as contemplated by
Section 2.05(b)(iv)(A) within five Business Days following delivery of the
applicable notice referred to in clause (ii) above, (iv) concurrently with such
sale or other transfer the Borrower must pay in full any Borrowing Base
Deficiency that results from such Special Determination, and (v) for the
avoidance of doubt, any Disposition of Oil and Gas Properties pursuant to this
Section 7.05(g) may be structured as a Disposition of Equity Interests in a
Person, substantially all of whose assets consist of Oil and Gas Properties;

 

(h)                                 Dispositions of the Equity Interests of
SandRidge Midstream Inc. (or any other Person that is, or becomes, the owner
solely of the assets of SandRidge Midstream Inc.);

 

(i)                                     Dispositions of interest in Oil and Gas
Properties in respect of Immaterial Title Deficiencies in order to discharge
such Immaterial Title Deficiencies or an obligation giving rise thereto;

 

(j)                                    Dispositions of overdue accounts
receivable arising in the ordinary course of business, but only in connection
with the compromise or collection thereof;

 

(k)                                 Dispositions of Investments made pursuant to
Sections 7.02(a), (d) (g) and (m);

 

(l)                                     Dispositions of Oil and Gas Properties
to ventures pursuant to Section 7.02(h); provided that no value was attributed
to such Oil and Gas Properties in the then most recent determination of the
Borrowing Base;

 

(m)                             Dispositions of assets to Royalty Trusts, and of
Equity Interests in Royalty Trusts;

 

(n)                                 any Disposition that constitutes an
Investment that is permitted pursuant to Section, 7.02(h), Section 7.02(j) or
Section 7.02(q); provided that such Dispositions may not consist of any Oil and
Gas Properties included in the Borrowing Base;

 

(o)                                 Dispositions of assets comprising the Loan
Parties’ salt water gathering and disposal business, or of equity interests
owned by the Borrower or its Restricted Subsidiaries in persons that solely own
assets of, and conduct the business of, the Loan Parties’ salt water gathering
and disposal business;

 

(p)                                 Dispositions directly related to any
sale-leaseback transaction with respect to the Oklahoma Properties; and

 

(q)                                 other Dispositions not exceeding $10,000,000
in the aggregate in any fiscal year of the Borrower; provided that such
Dispositions may not consist of any Oil and Gas Properties included in the
Borrowing Base.

 

Section 7.06                             Restricted Payments.  Declare or make,
directly or indirectly, any Restricted Payment except that, so long as no
Default shall have occurred and be continuing at the time of any action
described below or would result therefrom:

 

(a)                                 each Restricted Subsidiary may make
Restricted Payments to the Borrower, the Guarantors and any other Person that
owns an Equity Interest in such Restricted Subsidiary, ratably according to
their respective holdings of the type of Equity Interest in respect of which
such Restricted

 

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Payment is being made; provided, however, that in the case of any Restricted
Payments to Lariat Services, Inc., the aggregate amount of such Restricted
Payments shall not exceed (i) $1,000,000 less (ii) the aggregate amount of
Investment in Lariat made pursuant to Section 7.02(c);

 

(b)                                 the Borrower and each Restricted Subsidiary
may declare and make dividend payments or other distributions payable solely in
the Qualified Stock of such Person;

 

(c)                                  the Borrower and each Restricted Subsidiary
may purchase, redeem or otherwise acquire Equity Interests issued by it with the
proceeds received from the substantially concurrent issue of new shares of its
Qualified Stock;

 

(d)                                 so long as in each case no Default or
Borrowing Base Deficiency exists at the time of such payment or would result
therefrom, (i) the Borrower may pay regular semi-annual cash dividends on shares
of its 8.5% Convertible Preferred Stock issued prior to October 1, 2009 in an
amount not exceeding $8.50 per share per annum; (ii) the Borrower may pay
regular semi-annual cash dividends on shares of its 6% Convertible Preferred
Stock in an amount not exceeding $6.00 per share per annum; (iii) the Borrower
may pay regular semi-annual cash dividends on shares of its 7% Convertible
Preferred Stock in an amount not exceeding $7.00 per share per annum; and
(iv) so long as after giving effect thereto, Available Borrowing Base is equal
to or greater than 15% of the lesser of the Facility Limit or the Aggregate
Commitments, the Borrower may pay regular periodic cash dividends on shares of
other issues of its preferred stock at the applicable rate specified therefor;

 

(e)                                  the Borrower and each Restricted Subsidiary
may repurchase Equity Interests held by an employee, officer or director (or
their estates, trusts, family members or former spouses) upon the death,
disability, retirement or termination of employment of the applicable employee,
officer or director or pursuant to any benefit or employee plan; provided that
the aggregate amount of payments under this clause (e) in any fiscal year of the
Borrower shall not exceed $5,000,000; and provided further that any Restricted
Payments permitted (but not made) pursuant to this clause (e) in any prior
fiscal year may be carried forward to any subsequent fiscal year (subject to an
annual cap of no greater than $10,000,000);

 

(f)                                   in the ordinary course of its business,
the Borrower may make Restricted Payments pursuant to and in connection with
stock option plans or other benefit plans or arrangements for directors,
management, employees or consultants of the Borrower and its Restricted
Subsidiaries;

 

(g)                                  the Borrower and its Restricted
Subsidiaries may make Restricted Payments constituting purchases by the Borrower
or any of its Restricted Subsidiaries of any other Subsidiary’s capital stock
pursuant to a transaction expressly permitted by Section 7.02; and

 

(h)                                 subject to satisfaction of the Available
Amount Conditions, the Borrower and each Restricted Subsidiary may make
Restricted Payments not otherwise permitted by this Section 7.06 in an amount
not to exceed the Available Amount at such time.

 

Section 7.07                             Change in Nature of Business.  Engage
in any material line of business substantially different from those lines of
business conducted by the Borrower and its Restricted Subsidiaries on the date
hereof or any business substantially related or incidental thereto.

 

Section 7.08                             Transactions with Affiliates.  Enter
into any transaction of any kind with any Affiliate of the Borrower, whether or
not in the ordinary course of business, other than on fair and reasonable terms
substantially as favorable to the Borrower or such Restricted Subsidiary as
would be obtainable by the Borrower or such Restricted Subsidiary at the time in
a comparable arm’s length

 

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transaction with a Person other than an Affiliate; provided that the foregoing
restriction shall not apply to (i) transactions between or among the Borrower
and any of its wholly-owned Restricted Subsidiaries or between and among any
wholly-owned Restricted Subsidiaries or (ii) payment of customary cash and
non-cash compensation, including stock option and similar employee benefit
plans, to directors and officers on an arm’s length basis.

 

Section 7.09                             Burdensome Agreements.  After the date
of this Agreement, enter into any Contractual Obligation (other than (x) this
Agreement or any other Loan Document and (y) Permitted Debt Restrictions) that
(a) limits the ability (i) of any Restricted Subsidiary to make Restricted
Payments to the Borrower or any Guarantor or to otherwise transfer property to
the Borrower or any Guarantor, (ii) of any Restricted Subsidiary to Guarantee
the Indebtedness of the Borrower or (iii) of the Borrower or any Restricted
Subsidiary to create, incur, assume or suffer to exist Liens on property of such
Person to secure any of the Loan Documents or (b) requires the grant of a Lien
to secure an obligation of such Person if a Lien is granted to secure another
obligation of such Person, or amend any Contractual Obligation existing on the
date of this Agreement so as to impose or make more restrictive such a
limitation, in each case other than the following: (A) any negative pledge
incurred or provided in favor of any holder of Indebtedness permitted under
Section 7.03(b) and Section 7.03(f) solely to the extent any such negative
pledge relates to the property financed by or the subject of such Indebtedness
or property subject to a Lien permitted hereunder which secures such
Indebtedness, (B) Swap Contracts and any Guarantee in respect of such Swap
Contracts, (C) any encumbrances or restrictions imposed by reason of customary
provisions contained in leases, licenses, joint ventures agreements and similar
agreements entered into in the ordinary course of business; (D) any encumbrances
or restrictions that are or were created by virtue of any transfer of, agreement
to transfer or option or right with respect to any property, assets or capital
stock not otherwise prohibited by this Agreement; (E) any restrictions regarding
licenses or sublicenses by the Borrower and its Restricted Subsidiaries of
intellectual property in the ordinary course of business; (F) any restrictions
in a Contractual Obligation incurred in the ordinary course of business and on
customary terms which prohibit transfer of assets subject of the applicable
Contractual Obligation; (G) restrictions on cash or other deposits or net worth
imposed by customers, suppliers or, in the ordinary course of business, other
third parties; (H) any restrictions contained in agreements related to
Indebtedness permitted by Section 7.03(e), (n) or (o); and (I) any restriction
contained in a Contractual Obligation relating to property, an interest in which
has been Disposed of to a Royalty Trust, in accordance with Section 7.05.

 

Section 7.10                             Use of Proceeds.  Use the proceeds of
any Credit Extension, in violation of Regulation U or X as now and from time to
time hereafter in effect.

 

Section 7.11                             Financial Covenants.

 

(a)                                 Consolidated First Lien Leverage Ratio. 
Permit the Consolidated First Lien Leverage Ratio as of the end of any fiscal
quarter of the Borrower exceed 2.00:1.00.

 

(b)                                 Consolidated Current Ratio.  Permit the
Consolidated Current Ratio as of the end of any fiscal quarter of the Borrower
to be less than 1.0:1.0.

 

Section 7.12                             Hedge Transactions  Enter into any Oil
and Gas Hedge Transactions which would cause the notional volume of Hydrocarbons
for each of crude oil and natural gas, calculated separately, with respect to
which a settlement payment is calculated under such Oil and Gas Hedge
Transactions (other than basis swaps, floors and puts on volumes hedged pursuant
to Swap Contracts) to exceed eighty five percent (85%) of Borrower’s or such
Restricted Subsidiary’s production that may reasonably be anticipated to be
produced from Proved Reserves during the period from the immediately preceding
settlement date (or the commencement of such Hedge Transaction if there is no
prior settlement

 

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date) to such settlement date.  Notwithstanding the foregoing, the Loan Parties
may purchase commodity puts and floors not to exceed one hundred percent (100%)
of the reasonably anticipated volume of the oil and gas production of the Loan
Parties over the term of such puts and floors. Calculations in respect of the
foregoing shall cover production for the immediately following 66 month period
and be based on the most recently delivered Engineering Report (subject to
certain adjustments as may be required by acquisitions or dispositions made
subsequent to the date of such Engineering Report) and any additional
information reasonably satisfactory to the Administrative Agent delivered by the
Loan Parties to the Administrative Agent subsequent to the publication of the
most recently delivered Engineering Report.

 

Section 7.13                             Sanctions.  Directly or, to the
Borrower’s knowledge, indirectly use the proceeds of any Credit Extension, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
joint venture partner or other individual or entity, to fund any activities of
or business with any individual or entity that, at the time of such funding, is
the subject of Sanctions, or with or in any country that, at the time of such
funding, is a Designated Jurisdiction, or in any other manner that will result
in a violation by any individual or entity (including any individual or entity
participating in the transaction, whether as Lender, Arranger, Administrative
Agent, L/C Issuers, Swing Line Lenders, or otherwise) of Sanctions.

 

Section 7.14                             Anti-Corruption Laws.  Directly or, to
the Borrower’s knowledge, indirectly use the proceeds of any Credit Extension
for any purpose which would breach the United States Foreign Corrupt Practices
Act of 1977, the UK Bribery Act 2010,  or other similar legislation in other
jurisdictions.

 

Section 7.15                             Prepayment of Restricted Debt.

 

(a)                                 Optionally prepay, redeem, purchase, defease
or otherwise satisfy prior to the scheduled maturity thereof in any manner (it
being understood that mandatory payments of principal and interest shall be
permitted to the extent permitted by the applicable provisions of the
intercreditor agreement applicable thereto; provided that no such mandatory
payments shall be made using any funds or proceeds that may otherwise be
reinvested by the Borrower), any Principal Debt Obligations or any other
Indebtedness permitted under Section 7.03(c) or Section 7.03(l) (collectively,
“Restricted Debt”) or make any payment in violation of any terms of any
Restricted Debt Documentation, except (i) with the proceeds of any Refinancing
Indebtedness in respect thereof, (ii) the conversion of any Restricted Debt to
Equity Interests (other than Disqualified Stock) of the Borrower, (iii) the
redemption of any Restricted Debt with the Net Cash Proceeds of any offering of
Equity Interests (other than Disqualified Stock) of the Borrower and
(iv) subject to the satisfaction of the Available Amount Conditions, other
prepayments, redemptions, purchases, defeasances and other payments in respect
of Restricted Debt in an amount not to exceed the Available Amount at such time.

 

(b)                                 Amend, modify or change in any manner
materially adverse to the interests of the Lenders any term or condition of any
Restricted Debt Documentation without the consent of the Majority Lenders.

 

ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES

 

Section 8.01                             Events of Default.  Any of the
following shall constitute an Event of Default:

 

(a)                                 Non-Payment.  The Borrower or any other Loan
Party fails to pay (i) when and as required to be paid herein, any amount of
principal of any Loan or any L/C Obligation; (ii) within three Business Days
after the same becomes due, any interest on any Loan or on any L/C Obligation,
or any fee

 

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due hereunder; or (iii) within five Business Days that the same has come due,
any other amount payable hereunder or under any other Loan Document; or

 

(b)                                 Specific Covenants.  The Borrower fails to
perform or observe any term, covenant or agreement contained in any of
Section 6.03(a), Section 6.05(a) (with respect to the Borrower only),
Section 6.11 or Section 6.12 or Article 7; or

 

(c)                                  Other Defaults.  Any Loan Party fails to
perform or observe any other covenant or agreement (not specified in subsection
(a) or (b) above) contained in any Loan Document on its part to be performed or
observed and such failure continues for 30 days after receipt of written notice
from the Administrative Agent of the occurrence of such failure; or

 

(d)                                 Representations and Warranties.  Any
representation, warranty, or certification made or deemed made by or on behalf
of the Borrower or any other Loan Party herein, in any other Loan Document, or
in any document delivered in connection herewith or therewith shall be incorrect
or misleading in any material respect when made or deemed made; or

 

(e)                                  Cross-Default.  (i) The Borrower or any
Restricted Subsidiary (excluding Immaterial Subsidiaries) (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, such
Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from any event of
default under such Swap Contract as to which the Borrower or any Restricted
Subsidiary (excluding Immaterial Subsidiaries) is the Defaulting Party (as
defined in such Swap Contract) and the Swap Termination Value owed by the
Borrower or such Restricted Subsidiary as a result thereof is greater than the
Threshold Amount; or

 

(f)                                   Insolvency Proceedings, Etc.  Any Loan
Party or any of its Restricted Subsidiaries (excluding Immaterial Subsidiaries)
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes a general assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or

 

(g)                                  Inability to Pay Debts; Attachment. 
(i) The Borrower or any Restricted Subsidiary (excluding Immaterial
Subsidiaries) becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due or (ii) any writ or warrant of
attachment or execution or

 

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similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or

 

(h)                                 Judgments.  There is entered against the
Borrower or any Restricted Subsidiary (excluding Immaterial Subsidiaries)
(i) one or more final judgments or orders for the payment of money in an
aggregate amount (as to all such judgments or orders) exceeding the Threshold
Amount (to the extent not covered by independent third-party insurance as to
which the insurer does not dispute coverage) or (ii) any one or more
non-monetary final judgments that have, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and, in either case,
(A) enforcement proceedings are commenced by any creditor upon such judgment or
order or (B) there is a period of 30 consecutive days during which a stay of
enforcement of such judgment, by reason of a pending appeal or otherwise, is not
in effect; or

 

(i)                                     ERISA.  (i) An ERISA Event occurs with
respect to a Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of the Borrower under Title IV of
ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount
in excess of the Threshold Amount or (ii) the Borrower or any ERISA Affiliate
fails to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount; or

 

(j)                                    Invalidity of Loan Documents.  Any
material provision of the Loan Documents, at any time after its execution and
delivery and for any reason other than as expressly permitted hereunder or
thereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any material provision of the Loan Documents;
or any Loan Party denies that it has any material or further liability or
obligation under any material provision of the Loan Documents, or purports to
revoke, terminate or rescind any material provision of the Loan Documents; or

 

(k)                                 Change of Control.  There occurs any Change
of Control;

 

(l)                                     Collateral Documents.  Any Collateral
Document after delivery thereof pursuant to Section 4.01 or Section 6.12 shall
for any reason (other than pursuant to the terms thereof) cease to create a
valid and perfected first priority Lien (subject to Liens permitted by
Section 7.01) on any material portion of  the Collateral purported to be covered
by the Collateral Documents; or

 

(m)                             Junior Lien Financing Documentation.  (i) Any of
the Obligations of the Loan Parties under the Loan Documents for any reason
shall cease to be “First Lien Obligations” (or any comparable term) under, and
as defined in, the Junior Lien Intercreditor Agreement under, and as defined in
any Junior Lien Financing Documentation or (ii) the lien subordination
provisions set forth in any Junior Lien Financing Documentation shall, in whole
or in part, cease to be effective or cease to be legally valid, binding and
enforceable against the holders of any Junior Lien Debt, if applicable.

 

Section 8.02                             Remedies Upon Event of Default.  If any
Event of Default occurs and is continuing, the Administrative Agent shall, at
the request of Majority Lenders, take any or all of the following actions:

 

(a)                                 declare the commitment of each Lender to
make Loans and any obligation of the L/C Issuers to make L/C Credit Extensions
to be terminated, whereupon such commitments and obligation shall be terminated;

 

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(b)                                 declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrower;

 

(c)                                  require that the Borrower Cash
Collateralize the L/C Obligations (in an amount equal to the then Outstanding
Amount thereof); and

 

(d)                                 exercise on behalf of itself, the Lenders
and the L/C Issuers all rights and remedies available to it, the Lenders and the
L/C Issuers under the Loan Documents;

 

provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
each L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.

 

Section 8.03                             Application of Funds.  After the
exercise of remedies provided for in Section 8.02 (or after the Loans have
automatically become immediately due and payable and the L/C Obligations have
automatically been required to be Cash Collateralized as set forth in the
proviso to Section 8.02), any amounts received on account of the Obligations
shall be applied by the Administrative Agent in the following order:

 

(a)                                 First, to payment of that portion of the
Obligations constituting fees, indemnities, expenses and other amounts
(including fees, charges and disbursements of counsel to the Administrative
Agent and amounts payable under Article 3) payable to the Administrative Agent
in its capacity as such;

 

(b)                                 Second, to payment of that portion of the
Obligations constituting fees, indemnities and other amounts (other than
principal, interest and Letter of Credit Fees) payable to the Lenders and the
L/C Issuers (including fees, charges and disbursements of counsel to the
respective Lenders and the L/C Issuers (including fees and time charges for
attorneys who may be employees of any Lender or any L/C Issuer) and amounts
payable under Article 3), ratably among them in proportion to the respective
amounts described in this clause Second payable to them;

 

(c)                                  Third, to payment of that portion of the
Obligations constituting accrued and unpaid Letter of Credit Fees and interest
on the Loans, L/C Borrowings and other Obligations, ratably among the Lenders
and the L/C Issuers in proportion to the respective amounts described in this
clause Third payable to them;

 

(d)                                 Fourth, to payment of that portion of the
Obligations constituting unpaid principal of the Loans and L/C Borrowings,
amounts payable under Swap Contracts, amounts payable under Treasury Management
Services Agreements, and to the Administrative Agent for the account of each L/C
Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the
aggregate undrawn amount of Letters of Credit, ratably among the Lenders, the
L/C Issuers and the Lender Counterparties, in proportion to the respective
amounts described in this clause Fourth held by them; and

 

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

 

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Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they occur.  If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

ARTICLE IX
ADMINISTRATIVE AGENT

 

Section 9.01                             Appointment and Authority.

 

(a)                                 Each of the Lenders and each L/C Issuer
hereby irrevocably appoints Royal Bank of Canada to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.  Except to the extent Sections 9.01(b) and 9.06 expressly contemplate
rights of others, the provisions of this Article are solely for the benefit of
the Administrative Agent, the Lenders and the L/C Issuers, and the Borrower
shall not have rights as a third party beneficiary of any of such provisions.

 

(b)                                 The Administrative Agent shall also act as
the “collateral agent” under the Loan Documents, and each of the Lenders (in its
capacities as a Lender and potential Lender Counterparty) and each L/C Issuer
hereby irrevocably appoints and authorizes the Administrative Agent to act as
the agent of such Lender and such L/C Issuer for purposes of acquiring, holding
and enforcing any and all Liens on Collateral granted by any of the Loan Parties
to secure any of the Obligations, together with such powers and discretion as
are reasonably incidental thereto.  In this connection, the Administrative
Agent, as “collateral agent” and any co-agents, sub-agents and attorneys-in-fact
appointed by the Administrative Agent pursuant to Section 9.05 for purposes of
holding or enforcing any Lien on the Collateral (or any portion thereof) granted
under the Collateral Documents, or for exercising any rights and remedies
thereunder at the direction of the Administrative Agent), shall be entitled to
the benefits of all provisions of this Article 9 and Article 10 (including
Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact
were the “collateral agent” under the Loan Documents) as if set forth in full
herein with respect thereto.

 

Section 9.02                             Rights as a Lender.  The Person serving
as the Administrative Agent hereunder shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as though
it were not the Administrative Agent and the term “Lender” or “Lenders” shall,
unless otherwise expressly indicated or unless the context otherwise requires,
include the Person serving as the Administrative Agent hereunder in its
individual capacity.  Such Person and its Affiliates may accept deposits from,
lend money to, act as the financial advisor or in any other advisory capacity
for and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

 

Section 9.03                             Exculpatory Provisions.  The
Administrative Agent shall not have any duties or obligations except those
expressly set forth herein and in the other Loan Documents.  Without limiting
the generality of the foregoing, the Administrative Agent:

 

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

 

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

 

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

 

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Majority Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct, in each case as determined in a
final, non-appealable judgment by a court of competent jurisdiction.  The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until notice describing such Default is given to the Administrative Agent by
the Borrower, a Lender or an L/C Issuer .

 

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or the creation,
perfection or priority of any Lien purported to be created by the Collateral
Documents, (v) the value or the sufficiency of any Collateral, or (vi) the
satisfaction of any condition set forth in Article 4 or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

Section 9.04                             Reliance by Administrative Agent.

 

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

 

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Section 9.05                             Delegation of Duties.  The
Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other Loan Document by or through any
one or more sub agents appointed by the Administrative Agent.  The
Administrative Agent and any such sub agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties.  The exculpatory provisions of this Article shall apply to any such sub
agent and to the Related Parties of the Administrative Agent and any such sub
agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.

 

Section 9.06                             Resignation of Administrative Agent. 
The Administrative Agent may at any time give notice of its resignation to the
Lenders, the L/C Issuers and the Borrower.  Upon receipt of any such notice of
resignation, the Majority Lenders shall have the right, in consultation with the
Borrower, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the United
States.  If no such successor shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may (in consultation with the Borrower) on behalf of the
Lenders and the L/C Issuers, appoint a successor Administrative Agent meeting
the qualifications set forth above; provided that if the Administrative Agent
shall notify the Borrower and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of the Lenders or the L/C Issuers under any of
the Loan Documents, the retiring Administrative Agent shall continue to hold
such collateral security until such time as a successor Administrative Agent is
appointed) and (2) all payments, communications and determinations provided to
be made by, to or through the Administrative Agent shall instead be made by or
to each Lender and each L/C Issuer directly, until such time as the Majority
Lenders appoint a successor Administrative Agent as provided for above in this
Section.  Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
Section).  The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor.  After the retiring Administrative
Agent’s resignation hereunder and under the other Loan Documents, the provisions
of this Article and Section 10.04 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

 

Any resignation by Royal Bank of Canada as Administrative Agent pursuant to this
Section shall also constitute its resignation as an L/C Issuer and Swing Line
Lender.  Upon the acceptance of a successor’s appointment as Administrative
Agent hereunder, (a) such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring L/C Issuer and
Swing Line Lender, (b) the retiring L/C Issuer and Swing Line Lender shall be
discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (c) the successor L/C Issuer shall issue
letters of credit in substitution for the Letters of Credit, if any, outstanding
at the time of such succession or make other arrangements satisfactory to the
retiring L/C Issuer to effectively assume the obligations of the retiring L/C
Issuer with respect to such Letters of Credit.

 

Section 9.07                             Non-Reliance on Administrative Agent
and Other Lenders.  Each Lender and each L/C Issuer acknowledges that it has,
independently and without reliance upon the Administrative

 

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

 

Section 9.08                             No Other Duties, Etc.  Anything herein
to the contrary notwithstanding, none of the Arranger or Co-Syndication Agents
shall have any powers, duties or responsibilities under this Agreement, except
in its capacity, as applicable, as the Administrative Agent, a Lender or an L/C
Issuer  hereunder.

 

Section 9.09                             Administrative Agent May File Proofs of
Claim.  In case of the pendency of any proceeding under any Debtor Relief Law or
any other judicial proceeding relative to any Loan Party, the Administrative
Agent (irrespective of whether the principal of any Loan or L/C Obligation shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

 

(a)                                 to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the Loans,
L/C Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders, the L/C Issuers and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders, the L/C Issuers and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders, the L/C
Issuers and the Administrative Agent under Sections 2.03(i) and (j), 2.09 and
10.04) allowed in such judicial proceeding; and

 

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

 

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and each L/C 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 Lenders and the L/C 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 Sections
2.09 and 10.04.

 

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

 

Section 9.10                             Collateral and Guaranty Matters.  The
Lenders and the L/C Issuers irrevocably authorize:

 

(a)                                 and instruct the Administrative Agent to
release (and the following shall automatically be released without any further
action on the part of any Person):  any Lien on any property

 

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granted to or held by the Administrative Agent under any Loan Document (i) upon
termination of the Aggregate Commitments and payment in full of all Obligations
(other than contingent indemnification obligations, obligations with respect to
Swap Contracts and obligations with respect to Treasury Management Services
Agreements) and the expiration, termination or Cash Collateralization in full of
all Letters of Credit, (ii) which property is Disposed of or to be Disposed of
as part of or in connection with any Disposition permitted hereunder or under
any other Loan Document, (iii) which property is owned by a Subsidiary at the
time it is designated an Unrestricted Subsidiary, or (iv) subject to
Section 10.01, if approved, authorized or ratified in writing by the Majority
Lenders;

 

(b)                                 and instruct the Administrative Agent to
release (and the following Guarantors shall automatically be released without
any further action on the part of any Person): (i) any Guarantor from its
obligations under the Guaranty if such Person ceases to be a Restricted
Subsidiary as a result of a transaction permitted hereunder and (ii) any
Restricted Subsidiary from its obligations under any Collateral Document upon
its designation as an Unrestricted Subsidiary;

 

(c)                                  the Administrative Agent, at its option and
in its discretion to subordinate or release any Lien on any property granted to
or held by the Administrative Agent under any Loan Document to the holder of any
Lien on such property that is permitted by Section 7.01(i) or Section 7.01(j);

 

(d)                                 and instruct the Administrative Agent to
release (and the following shall automatically be released without any further
action on the part of any Person):  any Lien on any property (an interest in
which has been Disposed of to a Royalty Trust) granted to or held by the
Administrative Agent under any Loan Document if, and when, a Lien on such
property is granted in favor of such Royalty Trust; and

 

(e)                                  the Administrative Agent to, without any
further consent of any Lender (other than the consent as to the form of Junior
Lien Intercreditor Agreement contemplated by the definition of Junior Lien
Intercreditor Agreement), enter into a Junior Lien Intercreditor Agreement with
the collateral agent or other representatives of the holders of Indebtedness
permitted under Section 7.03 that is intended to be secured on a junior basis to
the Liens securing the Obligations, in each case, where such Indebtedness is
secured by Liens permitted under Section 7.01. The Administrative Agent may rely
exclusively on a certificate of a Responsible Officer of the Borrower as to
whether any such other Liens are permitted.  Any Junior Lien Intercreditor
Agreement entered into by the Administrative Agent in accordance with the terms
of this Agreement shall be binding on the Secured Parties.

 

Upon request by the Administrative Agent at any time, the Majority Lenders will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 9.10.  In each case as specified in this Section 9.10, the
Administrative Agent will, at the Borrower’s expense, execute and deliver to the
applicable Loan Party such documents as such Loan Party may reasonably request
to evidence the release of such item of Collateral from the assignment and
security interest granted under the Collateral Documents or to subordinate its
interest in such item, or to release such Guarantor from its obligations under
the Guaranty, in each case in accordance with the terms of the Loan Documents
and this Section 9.10.

 

Section 9.11                             Flood Insurance.  The Administrative
Agent has adopted internal policies and procedures that address requirements
placed on federally regulated lenders under the Flood Insurance Regulations. The
Administrative Agent will post on the applicable electronic platform (or
otherwise distribute to each lender in the syndicate) documents that it
receives, if any, in connection with the Flood Insurance Regulations. However,
the Administrative Agent reminds each Lender and Participant in the

 

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facility that, pursuant to the Flood Insurance Regulations, each federally
regulated lender (whether acting as a Lender or a Participant in the facility)
is responsible for assuring its own compliance with the Flood Insurance
Regulations.

 

ARTICLE X
MISCELLANEOUS

 

Section 10.01                      Amendments, Etc.  No amendment or waiver of
any provision of this Agreement or any other Loan Document, and no consent to
any departure by the Borrower or any other Loan Party therefrom, shall be
effective unless in writing signed by the Majority Lenders and the Borrower or
the applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, and each such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:

 

(a)                                 extend or increase the Commitment of any
Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without
the written consent of such Lender;

 

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

 

(c)                                  reduce the principal of, or the rate of
interest specified herein on, any Loan or L/C Borrowing, or (subject to clause
(iv) of the second proviso to this Section 10.01) any fees or other amounts
payable hereunder or under any other Loan Document without the written consent
of each Lender directly affected thereby; provided, however, that only the
consent of the Majority Lenders shall be necessary to amend the definition of
“Default Rate” or to waive any obligation of the Borrower to pay interest or
Letter of Credit Fees at the Default Rate;

 

(d)                                 change Section 2.14 or Section 8.03 in a
manner that would alter the pro rata sharing of payments required thereby
without the written consent of each Lender adversely affected thereby;

 

(e)                                  change any provision of this Section or the
definition of “Majority Lenders”, “Required Lenders”, “Applicable Percentage” or
any other provision hereof specifying the number or percentage of Lenders
required to amend, waive or otherwise modify any rights hereunder or make any
determination or grant any consent hereunder without the written consent of each
Lender;

 

(f)                                   amend, modify or waive this Agreement or
the Security Agreement so as to alter the ratable treatment of Obligations
arising under the Loan Documents and Obligations arising under Hedge
Transactions or the definition of “Lender Counterparty”, “Hedge Transactions”,
“Obligations” or “Secured Obligations” in a manner adverse to any Lender
Counterparty except with the written consent of each affected Lender
Counterparty;

 

(g)                                  release all or substantially all of the
value of the Guaranty without the written consent of each Lender;

 

(h)                                 amend any provision of Section 2.05(b)(iv),
Section 7.03(l) relating to the automatic reduction of the Borrowing Base upon
the issuance of Indebtedness or of Section 7.05(g) relating to the sale of Oil
and Gas Properties in each case without the written consent of the Required
Lenders; or

 

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(i)                                     release all or substantially all of the
Collateral in any transaction or series of related transactions, without the
written consent of each Lender;

 

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by each L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuers under this Agreement or any
Issuer Document relating to any Letter of Credit issued or to be issued by it;
(ii) no amendment, waiver or consent shall, unless in writing and signed by the
Swing Line Lenders in addition to the Lenders required above, affect the rights
or duties of the Swing Line Lenders under this Agreement; (iii) no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent in addition to the Lenders required above, affect the rights or duties of
the Administrative Agent under this Agreement or any other Loan Document; and
(iv) Section 10.06(h) may not be amended, waived or otherwise modified without
the consent of each Granting Lender all or any part of whose Loans are being
funded by an SPC at the time of such amendment, waiver or other modification. 
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except as provided in (a), (b), (c) and (to the extent such Defaulting Lender’s
rights are directly and adversely affected thereby) (e) above.

 

Notwithstanding the foregoing, no Lender consent is required to effect any
amendment or supplement to any Junior Lien Intercreditor Agreement or other
intercreditor agreement or arrangement permitted under this Agreement that is
for the purpose of adding any holders of Junior Lien Debt, as expressly
contemplated by the terms of such Junior Lien Intercreditor Agreement or such
other intercreditor agreement or arrangement permitted under this Agreement, as
applicable (it being understood that any such amendment or supplement may  make
such other changes to the applicable intercreditor agreement as, in the good
faith determination of the Administrative Agent, are required to effectuate the
foregoing and provided that such other changes are not adverse, in any material
respect, to the interests of the Lenders); provided, further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder or under any other Loan Document without the
prior written consent of the Administrative Agent.

 

Section 10.02                      Notices; Effectiveness; Electronic
Communication.

 

(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 the Borrower, the Administrative
Agent or an L/C Issuer or an Swing Line Lender, to the address, telecopier
number, electronic mail address or telephone number specified for such Person on
Schedule 10.02; and

 

(ii)                                  if to any other Lender, to the address,
telecopier number, electronic mail address or telephone number specified in its
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).

 

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(b)                                 Electronic Communications.  Notices and
other communications to the Lenders and the L/C Issuers hereunder may be
delivered or furnished by electronic communication (including e mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender or any L/C Issuer pursuant to Article 2 if such Lender or such L/C
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 the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.

 

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 Related Parties (collectively, the “Agent Parties”) have any liability to
the Borrower, any Lender, any L/C Issuer or any other Person for losses, claims,
damages, liabilities or expenses of any kind (whether in tort, contract or
otherwise) arising out of the 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 are determined by a
court of competent jurisdiction by a final and non-appealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent Party;
provided, however, that in no event shall any Agent Party have any liability to
the Borrower, any Lender, any L/C 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 the
Borrower, the Administrative Agent, the L/C Issuers and the Swing Line Lenders
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto.  Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Borrower, the Administrative
Agent, each L/C Issuer and each Swing Line Lender.  In addition, each Lender
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 Lender.

 

(e)                                  Reliance by Administrative Agent, L/C
Issuer and Lenders.  The Administrative Agent, the L/C Issuers and the Lenders
shall be entitled to rely and act upon any notices (including

 

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telephonic Committed Loan Notices and Swing Line Loan Notices) purportedly given
by or on behalf of the 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.  The Borrower shall
indemnify the Administrative Agent, each L/C Issuer, each Lender and the Related
Parties 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 the 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 10.03                      No Waiver; Cumulative Remedies.  No failure
by any Person to exercise, and no delay by any such Person in exercising, any
right, remedy, power or privilege hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.  The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

Section 10.04                      Expenses; Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses.  The Borrower shall pay
(i) all reasonable out of pocket expenses incurred by the Administrative Agent
and its Affiliates (including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent), in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out of pocket expenses incurred by each L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all out of
pocket expenses incurred by the Administrative Agent, any Lender or any L/C
Issuer (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or any L/C Issuer), and shall pay all fees and
time charges for attorneys who may be employees of the Administrative Agent, any
Lender or any L/C Issuer, in connection with the enforcement of its rights
(A) in connection with this Agreement and the other Loan Documents, including
its rights under this Section, or (B) in connection with the Loans made or
Letters of Credit issued hereunder, including all such out of pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

 

(b)                                 Indemnification by the Borrower.  The
Borrower shall indemnify the Administrative Agent (and any sub-agent thereof),
each Lender and each L/C Issuer, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from
all fees and time charges and disbursements for attorneys who may be employees
of any Indemnitee, incurred by any Indemnitee or asserted against any Indemnitee
by any third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder, the consummation of the transactions
contemplated hereby or thereby, or, in the case of the Administrative Agent (and
any sub-agent thereof) and its Related Parties only, the administration of this
Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the
use or proposed use of the proceeds therefrom (including any refusal by any L/C
Issuer to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such

 

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demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any property owned or operated by the Borrower or any of its Subsidiaries,
or any Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory, whether brought by a third party or by the Borrower or any
other Loan Party, and regardless of whether any Indemnitee is a party
thereto, IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART,
OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE INDEMNITEE;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
(x) are determined by a court of competent jurisdiction by final and
non-appealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by the Borrower
or any other Loan Party against an Indemnitee for breach in bad faith of such
Indemnitee’s obligations hereunder or under any other Loan Document, if the
Borrower or such Loan Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.  No
Loan Party will, without the prior written consent of the relevant Indemnitee
(which consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened claim, litigation, investigation or proceeding (any of the
foregoing, a “Proceeding”) against an Indemnitee in respect of which indemnity
could have been sought hereunder by such Indemnitee unless (i) such settlement
includes an unconditional release of such Indemnitee from all liability or
claims that are the subject matter of such Proceeding and (ii) does not include
any statement as to any admission.  Notwithstanding the foregoing, no Loan Party
shall be liable for any settlement of any pending or threatened Proceeding
effected without the Borrower’s prior written consent (which consent shall not
be unreasonably withheld).

 

(c)                                  Reimbursement by Lenders.  To the extent
that the Borrower for any reason fails to indefeasibly pay any amount required
under subsection (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the applicable L/C Issuer or
any Related Party of any of the foregoing, each Lender severally agrees to pay
to the Administrative Agent (or any such sub-agent), the applicable L/C Issuer
or such Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent (or any
such sub-agent) or the applicable L/C Issuer in its capacity as such, or against
any Related Party of any of the foregoing acting for the Administrative Agent
(or any such sub-agent) or applicable L/C Issuer in connection with such
capacity.  The obligations of the Lenders under this subsection (c) are subject
to the provisions of Section 2.13(d).

 

(d)                                 Waiver of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof.  No Indemnitee referred to in
subsection (b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed to such
unintended recipients by such Indemnitee through telecommunications, electronic
or other information transmission systems in connection with this Agreement or
the other Loan Documents or the transactions contemplated hereby or thereby
other than for direct or actual damages resulting from the gross negligence or
willful misconduct of such Indemnitee as determined by a final and
non-appealable judgment of a court of competent jurisdiction.

 

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

 

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

 

Section 10.05                      Payments Set Aside.  To the extent that any
payment by or on behalf of the Borrower is made to the Administrative Agent, the
applicable L/C Issuer or any Lender, or the Administrative Agent, any L/C Issuer
or any Lender exercises its right of setoff, and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent, such L/C Issuer or such
Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred and (b) each Lender and each L/C Issuer severally agrees to pay to
the Administrative Agent upon demand its applicable share (without duplication)
of any amount so recovered from or repaid by the Administrative Agent, plus
interest thereon from the date of such demand to the date such payment is made
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.  The obligations of the Lenders and the L/C Issuers under clause (b) of
the preceding sentence shall survive the payment in full of the Obligations and
the termination of this Agreement.

 

Section 10.06                      Successors and Assigns.

 

(a)                                 Successors and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower may not assign or otherwise transfer any of its rights
or obligations hereunder without the prior written consent of the Administrative
Agent and each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of participation in
accordance with the provisions of subsection (d) of this Section, (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
subsection (f) of this Section, or (iv) to an SPC in accordance with the
provisions of subsection (h) of this Section (and any other attempted assignment
or transfer by any party hereto shall be null and void).  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d) of this
Section and, to the extent expressly contemplated hereby, the Related Parties of
each of the Administrative Agent, the L/C Issuers and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders.  Any Lender may at
any time assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans (including for purposes of this subsection (b), participations in
L/C Obligations and in Swing Line Loans) at the time owing to it); provided that
any such assignment shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               in the case of an assignment of the entire
remaining amount of the assigning Lender’s Commitment and the Loans at the time
owing to it or in the case of an

 

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assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum
amount need be assigned; and

 

(B)                               in any case not described in subsection
(b)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each
of the Administrative Agent and, so long as no Event of Default has occurred and
is continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single assignee (or to an assignee and members
of its Assignee Group) will be treated as a single assignment for purposes of
determining whether such minimum amount has been met.

 

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

 

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

 

(A)                               the consent of the Borrower (such consent not
to be unreasonably withheld or delayed) shall be required unless (1) an Event of
Default has occurred and is continuing at the time of such assignment or
(2) such assignment is to a Lender, an Affiliate of a Lender or an Approved
Fund; provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof;

 

(B)                               the consent of the Administrative Agent (such
consent not to be unreasonably withheld or delayed) shall be required if such
assignment is to a Person that is not a Lender, an Affiliate of such Lender or
an Approved Fund with respect to such Lender; and the consent of the L/C Issuers
and the Swing Line Lenders (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment.

 

(iv)                              Assignment and Assumption.  The parties to
each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee per
assignment payable by the assignor (subject to Section 10.13(a)) directly to the
Administrative Agent in the amount of $3,500; provided, however, that the
Administrative Agent may, in its sole discretion, elect to waive such processing
and recordation fee in the case of any assignment.  The assignee, if it is not a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

(v)                                 No Assignment to Borrower.  No such
assignment shall be made to the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

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

 

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(vii)                           No Assignment to Defaulting Lenders. No such
assignment shall be made to a Defaulting Lender.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment.  Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.

 

(c)                                  Register.  The Administrative Agent, acting
solely for this purpose as an agent of the Borrower, shall maintain at the
Administrative Agent’s Office a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitments of, and principal amounts of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”).  The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(d)                                 Participations.  Any Lender may at any time,
without the consent of, or notice to, the Borrower or the Administrative Agent,
sell participations to any Person (other than a natural person or the Borrower
or any of the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent, the Lenders and the L/C Issuers shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement.

 

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any  provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that affects such Participant.  Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04, and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section.  To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.14 as though it were a
Lender.

 

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

 

(e)                                  Limitations upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under
Section 3.01 or Section 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower’s
prior written consent.  A Participant that would be a Foreign Lender if it were
a Lender shall not be entitled to the benefits of Section 3.01 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 3.01(e) as though it were a Lender.

 

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

 

(g)                                  [reserved].

 

(h)                                 Special Purpose Funding Vehicles. 
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may grant to a special purpose funding vehicle identified as
such in writing from time to time by the Granting Lender to the Administrative
Agent and the Borrower (an “SPC”) the option to provide all or any part of any
Committed Loan that such Granting Lender would otherwise be obligated to make
pursuant to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Committed Loan and (ii) if an SPC elects not
to exercise such option or otherwise fails to make all or any part of such
Committed Loan, the Granting Lender shall be obligated to make such Committed
Loan pursuant to the terms hereof or, if it fails to do so, to make such payment
to the Administrative Agent as is required under Section 2.13(b)(ii).  Each
party hereto hereby agrees that (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrower under this
Agreement (including its obligations under Section 3.04), (ii) no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement for
which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder. 
The making of a Committed Loan by an SPC hereunder shall utilize the Commitment
of the Granting Lender to the same extent, and as if, such Committed Loan were
made by such Granting Lender.  In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior debt of any
SPC, it will not institute against, or join

 

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any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceeding under the
laws of the United States or any State thereof.  Notwithstanding anything to the
contrary contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Administrative Agent and with the payment of a
processing fee in the amount of $2,500, assign all or any portion of its right
to receive payment with respect to any Committed Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to its
funding of Committed Loans to any rating agency, commercial paper dealer or
provider of any surety or Guarantee or credit or liquidity enhancement to such
SPC.

 

(i)                                     Resignation as an L/C Issuer or a Swing
Line Lender after Assignment.  Notwithstanding anything to the contrary
contained herein, if at any time an L/C Issuer or Swing Line Lender assigns all
of its Commitment and Loans pursuant to subsection (b) above, such L/C Issuer or
Swing Line Lender may, (i) upon 30 days’ notice to the Borrower and the Lenders,
resign as an L/C Issuer and/or (ii) upon 30 days’ notice to the Borrower, resign
as a Swing Line Lender.  In the event of any such resignation as L/C Issuer or
Swing Line Lender, the Borrower shall be entitled to appoint from among the
Lenders a successor L/C Issuer or Swing Line Lender hereunder (and any such
appointment shall be subject to the acceptance of such appointed Lender);
provided, however, that no failure by the Borrower to appoint any such successor
shall affect the resignation of the exiting L/C Issuer or Swing Line Lender as
L/C Issuer or Swing Line Lender, as the case may be.  If such L/C Issuer resigns
as L/C Issuer, it shall retain all the rights, powers, privileges and duties of
the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of
the effective date of its resignation as L/C Issuer and all L/C Obligations with
respect thereto (including the right to require the Lenders to make Base Rate
Committed Loans or fund risk participations in Unreimbursed Amounts pursuant to
Section 2.03(c)).  If such Swing Line Lender resigns as Swing Line Lender, it
shall retain all the rights of a Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the effective date
of such resignation, including the right to require the Lenders to make Base
Rate Committed Loans or fund risk participations in outstanding Swing Line Loans
pursuant to Section 2.04(c).  Upon the appointment of a successor L/C Issuer
and/or Swing Line Lender, (i) such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring L/C Issuer
or Swing Line Lender, as the case may be, and (ii) the successor L/C Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the exiting L/C Issuer to effectively assume the obligations of
exiting L/C Issuer with respect to such Letters of Credit.

 

Section 10.07                      Treatment of Certain Information;
Confidentiality.  Each of the Administrative Agent, the Lenders and each L/C
Issuer agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) to credit rating agencies, the CUSIP
Service Bureau and credit insurers, (h) with the consent of the Borrower or
(i) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this

 

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Section or (y) becomes available to the Administrative Agent, any Lender, any
L/C Issuer or any of their respective Affiliates on a nonconfidential basis from
a source other than the Borrower.

 

For purposes of this Section, “Information” means all information received from
the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or any
of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or any L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary;
provided that, in the case of information received from the Borrower or any
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as nonpublic and confidential.  Any Person required to maintain
the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to confidential information of a similar
nature.

 

Each of the Administrative Agent, the Lenders and the L/C Issuers acknowledges
that (a) the Information may include material non-public information concerning
the Borrower or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and
(c) it will handle such material non-public information in accordance with
applicable Law, including Federal and state securities Laws.

 

In addition, the Administrative Agent and the Lenders may disclose the existence
of this Agreement and the substantive terms of this Agreement to market data
collectors, similar service providers to the lending industry and service
providers to the Agents and the Lenders in connection with the administration of
this Agreement, the other Loan Documents and the Commitments.

 

Section 10.08                      Right of Setoff.  If an Event of Default
shall have occurred and be continuing, each Lender, each L/C Issuer and each of
their respective Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by applicable law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, such L/C Issuer or any such
Affiliate to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender or such L/C Issuer,
irrespective of whether or not such Lender or such L/C Issuer shall have made
any demand under this Agreement or any other Loan Document and although such
obligations of the Borrower may be contingent or unmatured or are owed to a
branch or office of such Lender or such L/C Issuer different from the branch or
office holding such deposit or obligated on such indebtedness.  The rights of
each Lender, each L/C Issuer and their respective Affiliates under this
Section are in addition to other rights and remedies (including other rights of
setoff) that such Lender, such L/C Issuer or their respective Affiliates may
have.  Each Lender and each L/C Issuer agrees to notify the Borrower and the
Administrative Agent promptly after any such setoff and application, provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

 

Section 10.09                      Interest Rate Limitation.  Notwithstanding
anything to the contrary contained in any Loan Document, the interest paid or
agreed to be paid under the Loan Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the
Administrative Agent or any Lender shall receive interest in an amount that
exceeds the Maximum Rate, the excess interest shall be applied to the principal
of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower. 
In determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to
the extent permitted by applicable Law, (a) characterize any payment that is not
principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,

 

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allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.

 

Section 10.10                      Counterparts; Integration; Effectiveness. 
This Agreement may be executed in counterparts (and by different parties hereto
in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract.  This Agreement
and the other Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof, supersede any and all previous agreements
and understandings, oral or written, relating to the subject matter hereof. 
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.   Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by telecopy facsimile, photocopy or by sending
a scanned copy by electronic mail shall be effective as delivery of a manually
executed counterpart of this Agreement.  To the extent any inconsistency exists
between this Agreement and any other Loan Document, the terms of this Agreement
shall be deemed controlling.

 

Section 10.11                      Survival of Representations and Warranties. 
All representations and warranties made hereunder and in any other Loan Document
or other document delivered pursuant hereto or thereto or in connection herewith
or therewith shall survive the execution and delivery hereof and thereof.  Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

 

Section 10.12                      Severability.  If any provision of this
Agreement or the other Loan Documents is held to be illegal, invalid or
unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be affected
or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the illegal, invalid or unenforceable provisions.  The invalidity of a
provision in a particular jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

Section 10.13                      Replacement of Lenders.  If (i) any Lender
requests compensation under Section 3.04, (ii) the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 3.01, (iii) any Lender is a Defaulting
Lender, or (iv) any Lender is unwilling to approve an increase in the Borrowing
Base or other amendment hereto which has been approved by the Required Lenders
but requires approval of such Lender to be effective, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in, and consents
required by, Section 10.06), all of its interests, rights and obligations under
this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that:

 

(a)                                 the Borrower shall have paid to the
Administrative Agent the assignment fee specified in Section 10.06(b);

 

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(b)                                 such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans and L/C Advances,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents (including any amounts under
Section 3.05) from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts);

 

(c)                                  in the case of any such assignment
resulting from a claim for compensation under Section 3.04 or payments required
to be made pursuant to Section 3.01, such assignment will result in a reduction
in such compensation or payments thereafter;

 

(d)                                 in the case of an assignment resulting from
clause (iv) above, such assignment will result in effectiveness of such increase
or amendment; and

 

(e)                                  such assignment does not conflict with
applicable Laws.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

 

Each Lender hereby grants to the Administrative Agent an irrevocable power of
attorney (which power is coupled with an interest) to execute and deliver, on
behalf of such Lender as assignor, any Assignment and Assumption necessary to
effectuate any assignment of such Lender’s interests hereunder in the
circumstances contemplated by this Section 10.13.

 

Section 10.14                      Governing Law; Jurisdiction; Etc.

 

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

 

(b)                                 SUBMISSION TO JURISDICTION.  EACH PARTY
HERETO  IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. 
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT A PARTY
HERETO MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANOTHER PARTY HERETO OR ITS
PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER OF VENUE.  EACH PARTY HERETO
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE

 

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LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(d)                                 SERVICE OF PROCESS.  EACH PARTY HERETO
IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN
SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY
HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

Section 10.15                      Waiver of Jury Trial.  EACH PARTY HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

Section 10.16                      No Advisory or Fiduciary Responsibility.

 

In connection with all aspects of each transaction contemplated hereby, the
Borrower acknowledges and agrees that: (i) the credit facility provided for
hereunder and any related arranging or other services in connection therewith
(including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document) are an arm’s-length commercial transaction
between the Borrower and its Affiliates, on the one hand, and the Administrative
Agent, the Arranger and the Lenders, on the other hand, and the Borrower is
capable of evaluating and understanding and understands and accepts the terms,
risks and conditions of the transactions contemplated hereby and by the other
Loan Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, the
Administrative Agent, the Arranger and each Lender is and has been acting solely
as a principal and is not the financial advisor, agent or fiduciary, for the
Borrower or any of its Affiliates, stockholders, creditors or employees or any
other Person; (iii) neither the Administrative Agent nor the Arranger nor any
Lender has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Borrower with respect to any of the transactions
contemplated hereby or the process leading thereto, including with respect to
any amendment, waiver or other modification hereof or of any other Loan Document
(irrespective of whether the Administrative Agent, the Arranger or any Lender
has advised or is currently advising the Borrower or any of its Affiliates on
other matters) and neither the Administrative Agent nor the Arranger nor any
Lender has any obligation to the 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 Documents; (iv) the Administrative Agent, the
Arranger, each Lender and their respective Affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Borrower and its Affiliates, and neither the Administrative Agent nor the
Arranger nor any Lender has any obligation to disclose any of such interests by
virtue of any advisory, agency or fiduciary relationship; and (v) the
Administrative

 

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Agent, the Arranger and the Lenders have not provided and will not provide any
legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Loan Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate.  The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent, the Arranger and each Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with the Transaction.

 

Section 10.17                      USA PATRIOT Act Notice.  Each Lender and each
L/C Issuer that is subject to the Patriot Act and the Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the Patriot Act, it is required to obtain,
verify and record information that identifies the Borrower, which information
includes the name and address of the Borrower and other information that will
allow such Lender, L/C Issuer or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the Patriot Act.  The Borrower shall
promptly provide such additional information and documentation reasonably
requested by any Lender, L/C Issuer or the Administrative Agent as may be
necessary for such Lender, L/C Issuer or the Administrative Agent to comply with
its obligations under the Patriot Act

 

Section 10.18                      Electronic Execution of Assignments and
Certain Other Documents.  The words “execute,” “execution,” “signed,”
“signature,” and words of like import in or related to any document to be signed
in connection with this Agreement and the transactions contemplated hereby
(including without limitation Assignment and Assumptions, amendments or other
modifications, Committed Loan Notices, Swing Line Loan Notices, waivers and
consents)  shall be deemed to include electronic signatures, the electronic
matching of assignment terms and contract formations on electronic platforms
approved by the Administrative Agent, or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act; provided that notwithstanding anything contained herein to the contrary the
Administrative Agent is under no obligation to agree to accept electronic
signatures in any form or in any format unless expressly agreed to by the
Administrative Agent pursuant to procedures approved by it.

 

Section 10.19                      Amendment and Restatement.  It is the
intention of each of the parties hereto that the Existing Credit Agreement be
amended and restated in its entirety pursuant hereto so as to preserve and
continue the perfection and priority of all Liens securing Indebtedness and
Obligations under the Existing Credit Agreement and that all Indebtedness and
Obligations of the Borrower and the Guarantors (other than Lariat) hereunder
shall be secured by the Liens evidenced under the Collateral Documents and that
this Agreement does not constitute a novation or termination of the Indebtedness
and Obligations existing under the Existing Credit Agreement.  In addition,
unless specifically amended hereby, each of the Loan Documents shall continue in
full force and effect and that, from and after the Closing Date, all references
to the “Credit Agreement” contained therein shall be deemed to refer to this
Agreement.  The Lenders hereby authorize the Administrative Agent to amend and
restate each of the Security Agreement  and the Guaranty, in form and substance
satisfactory to the Administrative Agent in order to, among other things,
reflect the amendment and restatement of the Existing Credit Agreement pursuant
to this Agreement.

 

Section 10.20                      Keepwell.  The Borrower absolutely,
unconditionally, and irrevocably undertakes to provide such funds or other
support as may be needed from time to time by each other Loan Party to honor all
of its obligations under this guarantee in respect of any Swap Obligation
(provided, however, that the Borrower shall only be liable under this
Section 10.20 for the maximum amount of such liability

 

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that can be hereby incurred without rendering its obligations under this
Section 10.20, or otherwise under this guarantee, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount).  The obligations of the Borrower under this Section 10.20 shall
remain in full force and effect until the payment in full of the Obligations and
the termination of this Agreement.  The Borrower intends that this Section 10.20
constitute, and this Section 10.20 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Loan Party for all
purposes of section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

[SIGNATURES BEGIN NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

SANDRIDGE ENERGY, INC.

 

 

 

 

 

 

By:

/s/ Eddie LeBlanc

 

Name:

Eddie LeBlanc

 

Title:

Executive Vice President and Chief Financial Officer

 

Signature Page to Credit Agreement

 

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ROYAL BANK OF CANADA, as Administrative Agent

 

 

 

 

 

 

By:

/s/ Susan Khokher

 

Name:

Susan Khokher

 

Title:

Manager, Agency

 

Signature Page to Credit Agreement

 

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ROYAL BANK OF CANADA, as a Lender, a Swing Line Lender and an L/C Issuer

 

 

 

 

 

 

By:

/s/ Don J. McKinnerney

 

Name:

Don J. McKinnerney

 

Title:

Authorized Signatory

 

Signature Page to Credit Agreement

 

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BARCLAYS BANK PLC, as a Lender

 

 

 

 

 

 

By:

/s/ Ann E. Sutton

 

Name:

Ann E. Sutton

 

Title:

Director

 

Signature Page to Credit Agreement

 

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

 

 

MORGAN STANLEY BANK, N.A., as a Lender

 

 

 

 

 

 

By:

/s/ Henrik Z. Sandström

 

Name:

Henrik Z. Sandström

 

Title:

Authorized Signatory

 

Signature Page to Credit Agreement

 

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

 

 

UBS AG, STAMFORD BRANCH, as a Lender

 

 

 

 

 

 

By:

/s/ Darlene Arias

 

Name:

Darlene Arias

 

Title:

Director

 

 

 

 

 

 

 

By:

/s/ Denise Bushee

 

Name:

Denise Bushee

 

Title:

Associate Director

 

Signature Page to Credit Agreement

 

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

 

 

SUNTRUST BANK, as a Lender

 

 

 

 

 

 

By:

/s/ Chulley Bogle

 

Name:

Chulley Bogle

 

Title:

Vice President

 

Signature Page to Credit Agreement

 

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

 

 

NATIXIS, NEW YORK BRANCH., as a Lender

 

 

 

 

 

 

By:

/s/ Louis P. Laville, III

 

Name:

Louis P. Laville, III

 

Title:

Managing Director

 

 

 

 

 

 

 

By:

/s/ Vikram Nath

 

Name:

Vikram Nath

 

Title:

Vice President

 

Signature Page to Credit Agreement

 

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

 

 

CITIZENS BANK, N.A., as a Lender

 

 

 

 

 

 

By:

/s/ Scott Donaldson

 

Name:

Scott Donaldson

 

Title:

Senior Vice President

 

Signature Page to Credit Agreement

 

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

 

 

CAPITAL ONE, NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

 

By:

/s/ Michael Higgins

 

Name:

Michael Higgins

 

Title:

Director

 

Signature Page to Credit Agreement

 

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

 

 

GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender

 

 

 

 

 

 

By:

/s/ Rebecca Kratz

 

Name:

Rebecca Kratz

 

Title:

Authorized Signatory

 

Signature Page to Credit Agreement

 

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

 

 

NEXTERA ENERGY POWER MARKETING, LLC, as a Lender

 

 

 

 

 

 

By:

/s/ Lawrence Silverstein

 

Name:

Lawrence Silverstein

 

Title:

Senior Vice President and Managing Director

 

Signature Page to Credit Agreement

 

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

 

 

MACQUARIE BANK LIMITED, as a Lender

 

 

 

 

 

 

By:

/s/ Andrew Gates

 

Name:

Andrew Gates

 

Title:

Division Director

 

 

 

 

 

 

 

By:

/s/ Lisa Knowles

 

Name:

Lisa Knowles

 

Title:

Division Director

 

Signature Page to Credit Agreement

 

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

 

SCHEDULE 1.01A

 

EXISTING SWAP OBLIGATIONS

 

(Continued on next page)

 

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

 

Date

 

SandRidge Entity

 

Counterparty

 

Type

 

Term

 

Volume

 

Confirm Number

9/18/2013

 

SandRidge Energy, Inc.

 

Bank of America

 

Crude Oil

 

Jan15-June15

 

180,000

 

19314801

10/8/2013

 

SandRidge Energy, Inc.

 

Bank of America

 

Crude Oil

 

Jan15-Sept15

 

244,000

 

19679600

10/14/2013

 

SandRidge Energy, Inc.

 

Bank of America

 

Crude Oil

 

Jan15-Sept15

 

366,000

 

19739055

8/29/2011

 

SandRidge Energy, Inc.

 

Barclays

 

Crude Oil

 

Cal 15

 

428,000

 

27235861

9/6/2013

 

SandRidge Energy, Inc.

 

Goldman Sachs

 

Crude Oil

 

Jan15-June15

 

60,000

 

4071757698-1-1/4071752578-1-1

8/29/2011

 

SandRidge Energy, Inc.

 

Scotia

 

Crude Oil

 

Cal 15

 

428,000

 

225860

8/20/2012

 

SandRidge Energy, Inc.

 

Citibank

 

Crude 3-Way Collar

 

Cal 15

 

214,000

 

24315834/24315835/24315836

8/22/2012

 

SandRidge Energy, Inc.

 

Citibank

 

Crude 3-Way Collar

 

Cal 15

 

214,000

 

12868594/12868595/12868596

9/6/2012

 

SandRidge Energy, Inc.

 

Citibank

 

Crude 3-Way Collar

 

Cal 15

 

214,000

 

13004727/13004728/13004729

5/23/2014

 

SandRidge Energy, Inc.

 

Citibank

 

Crude 3-Way Collar

 

Jul15-Dec15

 

184,000

 

10254789/10254790/10254792

6/25/2014

 

SandRidge Energy, Inc.

 

Citibank

 

Crude 3-Way Collar

 

Jul15-Dec15

 

368,000

 

20258359

6/13/2014

 

SandRidge Energy, Inc.

 

Goldman Sachs

 

Crude 3-Way Collar

 

Jul15-Dec15

 

184,000

 

408987955411

8/1/2013

 

SandRidge Energy, Inc.

 

JP Morgan

 

Crude 3-Way Collar

 

Cal 15

 

428,000

 

O1ZB/O1ZC/O1ZE

8/24/2012

 

SandRidge Energy, Inc.

 

JP Morgan

 

Crude 3-Way Collar

 

Cal 15

 

642,000

 

48187441/48187653

7/16/2014

 

SandRidge Energy, Inc.

 

Scotia

 

Crude 3-Way Collar

 

Jul15-Dec15

 

368,000

 

1268747/1268757/1268754

 

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

 

7/21/2014

 

SandRidge Energy, Inc.

 

Scotia

 

Crude 3-Way Collar

 

Jul15-Dec15

 

552,000

 

1272698/1272699/1272700

3/4/2011

 

SandRidge Energy, Inc.

 

Wells Fargo

 

SDT Oil

 

Cal 15

 

195,810

 

4327568

3/11/2011

 

SandRidge Energy, Inc.

 

Wells Fargo

 

SDT Oil

 

Cal 15

 

78,324

 

4327567

4/17/2014

 

SandRidge Energy, Inc.

 

Barclays

 

SDR Oil

 

Cal 15

 

160,500

 

36546606

2/6/2014

 

SandRidge Energy, Inc.

 

Morgan Stanley

 

Gas Swap

 

Cal 15

 

3,680,000

 

F14365656-1

2/2/2015

 

SandRidge Energy, Inc.

 

Barclays

 

Gas PEPL Basis

 

Mar15-Dec15

 

3,680,000

 

38930376

12/18/2014

 

SandRidge Energy, Inc.

 

Goldman Sachs

 

Gas PEPL Basis

 

Cal 15

 

3,680,000

 

3797116792-1-1

1/16/2015

 

SandRidge Energy, Inc.

 

Goldman Sachs

 

Gas PEPL Basis

 

Feb15-Dec15

 

1,840,000

 

379908310911

1/30/2015

 

SandRidge Energy, Inc.

 

Goldman Sachs

 

Gas PEPL Basis

 

Mar15-Dec15

 

3,680,000

 

379998488811

12/15/2014

 

SandRidge Energy, Inc.

 

Morgan Stanley

 

Gas PEPL Basis

 

Cal 15

 

3,680,000

 

F16301451-1

1/14/2015

 

SandRidge Energy, Inc.

 

Morgan Stanley

 

Gas PEPL Basis

 

Feb15-Dec15

 

3,680,000

 

F16358123-1/F16358664-1

2/10/2015

 

SandRidge Energy, Inc.

 

Morgan Stanley

 

Gas PEPL Basis

 

Mar15-Dec15

 

3,680,000

 

F16415284-1

12/10/2014

 

SandRidge Energy, Inc.

 

Scotia

 

Gas PEPL Basis

 

Cal 15

 

3,680,000

 

1415042

2/11/2015

 

SandRidge Energy, Inc.

 

Scotia

 

Gas PEPL Basis

 

Mar15-Dec15

 

3,680,000

 

1463275

12/22/2010

 

SandRidge Energy, Inc.

 

Wells Fargo

 

SDT Gas Collar

 

Cal 15

 

509,128

 

4327595/4327594

9/18/2014

 

SandRidge Energy, Inc.

 

Barclays

 

Crude Oil

 

Cal 16

 

1,098,000

 

37822586

9/25/2014

 

SandRidge Energy, Inc.

 

Citibank

 

Crude Oil

 

Cal 16

 

366,000

 

21668487

9/26/2014

 

SandRidge Energy, Inc.

 

Bank of America

 

Crude 3-Way Collar

 

Cal 16

 

366,000

 

22950234/22950240/22950286

9/26/2014

 

SandRidge Energy, Inc.

 

Bank of America

 

Crude 3-Way Collar

 

Cal 16

 

366,000

 

22945467/22945469/22945482

 

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

 

7/21/2014

 

SandRidge Energy, Inc.

 

Citibank

 

Crude 3-Way Collar

 

Jan16-Jun16

 

546,000

 

21766196/21766197/21766198

7/25/2014

 

SandRidge Energy, Inc.

 

Goldman Sachs

 

Crude 3-Way Collar

 

Cal 16

 

732,000

 

409185418311

7/24/2014

 

SandRidge Energy, Inc.

 

Scotia

 

Crude 3-Way Collar

 

Jan16-Jun16

 

546,000

 

1272698/1272699/1272700

3/23/2015

 

SandRidge Energy, Inc.

 

Macquarie

 

Gas PEPL Basis

 

Cal 16

 

3,660,000

 

HH 13779174

3/17/2015

 

SandRidge Energy, Inc.

 

Scotia

 

Gas PEPL Basis

 

Cal 16

 

7,320,000

 

1487797

 

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

 

SCHEDULE 1.01B

 

EXISTING TREASURY MANAGEMENT SERVICES AGREEMENTS

 

Master Agreement for Treasury Management Services between SandRidge Energy, Inc.
and Wells Fargo Bank, N.A. (“Wells Fargo”) and/or the Wells Fargo bank through
which the services are provided.

 

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

 

SCHEDULE 2.01

 

COMMITMENTS
AND APPLICABLE PERCENTAGES

 

Lender

 

Commitment

 

Applicable Percentage

 

Royal Bank of Canada

 

$

140,000,000

 

14.00

%

Barclays Bank PLC

 

$

140,000,000

 

14.00

%

Morgan Stanley Bank, N.A.

 

$

140,000,000

 

14.00

%

UBS AG, Stamford Branch

 

$

110,000,000

 

11.00

%

SunTrust Bank

 

$

110,000,000

 

11.00

%

Natixis, New York Branch

 

$

110,000,000

 

11.00

%

Citizens Bank, N.A.

 

$

110,000,000

 

11.00

%

Capital One, National Association

 

$

110,000,000

 

11.00

%

Goldman Sachs Lending Partners LLC

 

$

10,000,000

 

1.00

%

NextEra Energy Power Marketing, LLC

 

$

10,000,000

 

1.00

%

Macquarie Bank Limited

 

$

10,000,000

 

1.00

%

Total:

 

$

1,000,000,000

 

100.000000000

%

 

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

 

SCHEDULE 2.01S

 

SWING LINE COMMITMENTS

 

Lender

 

Commitment

 

Applicable Percentage

 

Royal Bank of Canada

 

$

50,000,000

 

100.00

%

Total:

 

$

50,000,000

 

100.00

%

 

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

 

SCHEDULE 5.03

 

GOVERNMENTAL AUTHORIZATIONS

 

None.

 

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

 

SCHEDULE 5.06

 

LITIGATION

 

None.

 

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

 

SCHEDULE 5.09

 

ENVIRONMENTAL MATTERS

 

None.

 

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

 

SCHEDULE 5.13

 

SUBSIDIARIES,
OTHER EQUITY INVESTMENTS
AND LOAN PARTY INFORMATION

 

(Continued on next page)

 

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

 

SCHEDULE 5.13

 

PART A AND PART B - all Subsidiaries and Equity Interests of Loan Parties

 

Company Name

 

Address

 

City/ State/ Zip

 

Jurisdiction

 

FEIN

 

SandRidge Ownership
(owner — percentage)

 

 

 

 

 

 

 

 

 

 

 

SandRidge Energy, Inc. (SD)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Delaware

 

20-8084793

 

 

 

 

 

 

 

 

 

 

 

 

 

SUBSIDIARY ENTITIES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4th Street Properties, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Oklahoma

 

n/a

 

REALTY - 100%

 

 

 

 

 

 

 

 

 

 

 

Black Bayou Exploration, L.L.C.

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Louisiana

 

20-4790561

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

Braniff Restaurant Holdings, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Oklahoma

 

61-1682453

 

REALTY - 100%

 

 

 

 

 

 

 

 

 

 

 

CEBA Midstream, LP

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Delaware

 

30-0827252

 

SDE&P - 99%
SDMMGP - 1%

 

 

 

 

 

 

 

 

 

 

 

Cornhusker Energy, L.L.C.

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Oklahoma

 

73-1474609

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

FAE Holdings 389322R, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Oklahoma

 

n/a

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

Integra Energy, L.L.C. (IEL)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

75-2887527

 

SDE&P - 100%

 

 

 

 

 

 

 

 

 

 

 

Cholla Pipeline, L.P.

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

26-0025092

 

SDMI - 62.5716%
IEL - 36.1427%

 

 

 

 

 

 

 

 

 

 

 

Lariat Services, Inc. (LSI)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

75-2500702

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

MidContinent Resources, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

20-0096928

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

Mistmada Oil Company, Inc.

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Oklahoma

 

73-1393032

 

SD - 100%

 

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

 

Company Name

 

Address

 

City/ State/ Zip

 

Jurisdiction

 

FEIN

 

SandRidge Ownership
(owner — percentage)

 

 

 

 

 

 

 

 

 

 

 

Sabino Exploration, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

20-5931929

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

SandRidge CO2, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

76-0547903

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

SandRidge Exploration and Production, LLC (SDE&P)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Delaware

 

87-0776535

 

SDHI -100%

 

 

 

 

 

 

 

 

 

 

 

SandRidge Mississippian Trust I

 

919 Congress Avenue, Suite 500

 

Austin, TX 78701

 

Delaware

 

27-6990649

 

SDE&P - 26.885939% of Common Units

 

 

 

 

 

 

 

 

 

 

 

SandRidge Permian Trust

 

919 Congress Avenue, Suite 500

 

Austin, TX 78701

 

Delaware

 

45-6276683

 

SDE&P - 0% of Common Units
SDE&P - 100% of Subordinated Units

 

 

 

 

 

 

 

 

 

 

 

SandRidge Mississippian Trust II

 

919 Congress Avenue, Suite 500

 

Austin, TX 78701

 

Delaware

 

30-0709968

 

SDE&P - 16.742081% of Common Units
SDE&P - 100% of Subordinated Units

 

 

 

 

 

 

 

 

 

 

 

SandRidge Gathering LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Delaware

 

n/a

 

SDE&P - 100%

 

 

 

 

 

 

 

 

 

 

 

SandRidge Holdings, Inc. (SDHI)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Delaware

 

20-5878401

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

SandRidge Midcon Midstream GP, LLC (SDMMGP)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Delaware

 

46-5390511

 

SDE&P - 100%

 

 

 

 

 

 

 

 

 

 

 

SandRidge Midstream, Inc. (SDMI)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

75-2541148

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

Sagebrush Pipeline, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Colorado

 

20-1550515

 

SDMI - 73.80881%

 

 

 

 

 

 

 

 

 

 

 

SandRidge Operating Company (SDOC)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

75-2541245

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

SandRidge Realty, LLC (REALTY)

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Oklahoma

 

26-0586079

 

SD - 100%

 

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

 

Company Name

 

Address

 

City/ State/ Zip

 

Jurisdiction

 

FEIN

 

SandRidge Ownership
(owner — percentage)

 

 

 

 

 

 

 

 

 

 

 

Sierra Madera CO2 Pipeline, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

47-0881558

 

SD - 100%

 

 

 

 

 

 

 

 

 

 

 

WTO Gas Gathering Company, LLC

 

123 Robert S. Kerr Avenue

 

Oklahoma City, OK 73102

 

Texas

 

n/a

 

SD - 100%

 

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

 

PART C - LOAN PARTIES INFORMATION

 

Company Name

 

Address

 

Jurisdiction of
Organization

 

FEIN

 

 

 

 

 

 

 

SandRidge Energy, Inc.

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Delaware

 

20-8084793

 

 

 

 

 

 

 

SandRidge Exploration and Production, LLC

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Delaware

 

87-0776535

 

 

 

 

 

 

 

SandRidge Gathering LLC

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Delaware

 

n/a

 

 

 

 

 

 

 

SandRidge Holdings, Inc.

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Delaware

 

20-5878401

 

 

 

 

 

 

 

SandRidge Midstream, Inc.

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Texas

 

75-2541148

 

 

 

 

 

 

 

SandRidge Operating Company

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Texas

 

75-2541245

 

 

 

 

 

 

 

Integra Energy, L.L.C

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Texas

 

75-2887527

 

 

 

 

 

 

 

Lariat Services, Inc.

 

123 Robert S. Kerr Avenue
Oklahoma City, OK 73102

 

Texas

 

75-2500702

 

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

 

SCHEDULE 5.22

 

SALE OF PRODUCTION

 

(Continued on next page)

 

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

 

SCHEDULE 5.22

 

TYPE OF AGREEMENT

 

DATE

 

SANDRIDGE
ENTITY

 

OTHER PARTY

 

TERM

 

NOTES

 

 

 

 

 

 

 

 

 

 

 

MID-CON

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude Oil Purchase Contract

 

2/3/2012

 

SandRidge Exploration and Production, LLC

 

Plains Marketing, LP

 

10 years

 

 

Gas Purchase Contract

 

10/1/2011, Amended 6/1/2014

 

SandRidge Exploration and Production, LLC

 

DCP Midstream, LP

 

15 years

 

K# NHC 0517-000

Gas Purchase Agreement

 

12/27/2012, Effective 1/1/2013

 

SandRidge Exploration and Production, LLC

 

Targa Pipeline Mid-Continent WestOK LLC (FKA Atlas Pipeline Mid-Continent
WestOK, LLC)

 

5 years

 

K# 8570

 

 

 

 

 

 

 

 

 

 

 

PERMIAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gas Purchase Contract

 

1/1/2011 Amended 1/1/2012

 

SandRidge Exploration and Production, LLC

 

DCP Midstream, LP

 

10 years

 

FUL 0600-00R

Lease Connection Agreement

 

9/3/2009

 

SandRidge Exploration and Production, LLC (FKA Arena Resources Inc.)

 

Enterprise Crude Oil LLC (FKA Teppco Crude Pipeline, LLC)

 

10 years

 

 

 

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

 

Gas Treating and CO2 Delivery Agreement

 

6/29/2008

 

SandRidge Exploration and Production, LLC

 

Oxy USA Inc.

 

12/31/2040

 

Century Plant

Interconnect & Operating Agreement

 

10/22/2009

 

SandRidge Exploration and Production, LLC

 

Enterprise Texas Pipeline LLC

 

10 years

 

Century Plant Residue

Gas Gathering Agreement

 

6/30/2009

 

SandRidge Exploration and Production, LLC

 

Pinon Gathering Company, LLC

 

20 years

 

Pinon Gathering

Gathering and Natural Gas Services Agreement

 

11/1/2007
Amended
12/1/2008

 

SandRidge Energy, Inc.

 

ETC Texas Pipeline, LTD.

 

12/31/2027

 

Sweet Gas Gathering

Intrastate Natural Gas Transportation Service Agreement

 

11/1/2007
Amended
12/1/2008

 

SandRidge Energy, Inc.

 

Oasis Pipeline, L.P.

 

12/31/2027

 

028-77610-02-101
Sweet Gas Short Haul

Interruptible Natural Gas Transportation Service Agreement 028-77610-02-204

 

8/1/2009

 

SandRidge Energy, Inc.

 

Oasis Pipeline, L.P.

 

10 Years

 

First 5 years: 77,067 MMBtu/d Second 5 years: 51,336 MMBtu/d

Firm Natural Gas Transportation Service Agreement 77610-02-200

 

8/1/2009

 

SandRidge Energy, Inc.

 

Energy Transfer Fuel, LP

 

10 Years

 

First 5 years: 76,078 MMBtu/d Second 5 years: 50,677 MMBtu/d

Interruptible Natural Gas Transportation Service Agreement 776100201

 

8/1/2009

 

SandRidge Energy, Inc.

 

Houston Pipeline Company LP

 

10 Years

 

First 5 years: 75,750 MMBtu/d Second 5 years: 50,500 MMBtu/d

FTS Transport Agreement 553498

 

8/1/2009

 

SandRidge Energy, Inc.

 

MidContinent Express Pipeline LLC

 

10 Years

 

First 5 years: 75,000 MMBtu/d Second 5 years: 50,000 MMBtu/d

 

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

 

GAS IMBALANCES

 

 

 

 

 

OPERATOR

 

SD NET MCF OVER
RESERVES

 

ESTIMATED $ LIABILITY
OVER RESERVES

 

 

 

 

 

 

 

 

 

 

 

Bertha 13-1

 

12/31/2014

 

SandRidge Exploration and Production, LLC

 

Apache Corp.

 

340,924 MCF

 

Imbalance in Excess (Over) Reserves Report $480,702.84

Bollinger 22-1

 

12/31/2014

 

SandRidge Exploration and Production, LLC

 

Blake Production

 

176,229 MCF

 

Imbalance in Excess (Over) Reserves Report $230,859.99

Koerner 1-24

 

12/31/2014

 

SandRidge Exploration and Production, LLC

 

Operated/SandRidge E & P, LLC

 

70,652 MCF

 

Imbalance in Excess (Over) Reserves Report $140,159.44

 

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

 

SCHEDULE 7.01

 

EXISTING LIENS

 

None.

 

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

 

SCHEDULE 7.02(n)

 

EXISTING INVESTMENTS

 

SandRidge Midstream, Inc. owns a 73.80881% interest in Sagebrush Pipeline, LLC.

 

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

 

SCHEDULE 7.03

 

EXISTING INDEBTEDNESS

 

 

 

Outstanding
Principal Amount
as of June 10,
2015

 

8.75% Senior Notes Due 2020 - $450MM

 

$

445.7

*

7.5% Senior Notes Due 2021 - $1,175MM

 

$

1,149.3

**

8.125% Senior Notes Due 2022 - $750MM

 

$

729.0

 

7.5% Senior Notes Due 2023 - $825MM

 

$

821.7

*

 

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

* Notes issued at discount. Outstanding balance net of discount.

** Includes a premium paid to the Borrower in connection with the issuance of
the notes.

 

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

 

SCHEDULE 10.02

 

ADMINISTRATIVE AGENT’S OFFICE;
CERTAIN ADDRESSES FOR NOTICES

 

BORROWER:

 

SandRidge Energy, Inc.

123 Robert South Kerr Avenue

Oklahoma City, OK 73102

Attention: Executive Vice President and Chief Financial Officer

Telephone: 405-429-5500

Telecopier: 405-429-5977

Electronic Mail:  eleblanc@sandridgeenergy.com

Website Address:  www.sandridgeenergy.com

U.S. Taxpayer Identification Number: 20-8084793

 

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

 

ADMINISTRATIVE AGENT:

 

Administrative Agent’s Office

(for payments and Requests for Credit Extensions):

 

20 King Street West, 4th Floor

Toronto, Ontario M5K 1C4

 

Attention:

Manager, Agency Services Group

Fax:

416-842-4023

 

 

Rec. Bank:

JP Morgan Chase Bank, New York

ABA:

021000021

Swift:

CHASUS33

Acct with:

Royal Bank of Canada New York

Acct:

9201033363

Swift:

ROYCUS3X

Benf:

RBCCM AGENCY SERVICES

Acct:

012692937464

Address:

200 VESEY STREET

 

NEW YORK, NY 10281

Ref:

SandRidge Energy, Inc.

 

Other Notices as Administrative Agent:

 

20 King Street West, 4th Floor

Toronto, Ontario M5K 1C4

 

Attention:

Manager, Agency Services

Fax:

416-842-4023

 

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

 

L/C ISSUER:

 

Royal Bank of Canada

200 Vesey Street, 5th Floor

New York, New York 10281-8098

Attention: Credit Administration

Fax: (212) 428-3015

 

SWING LINE LENDER:

 

Swing Line Lender Address:

Royal Bank of Canada, New York Branch

Global Loans Administration, NY

Three World Financial Center

200 Vesey Street

New York, NY 10281-8098

Attention:  Manager  - Global Loans Administration

Fax No:   212-428-2372

 

Pay:

JP Morgan Chase Bank

ABA#

021000021

Account #

920-1-033363

For further credit to:

RBC NY Loans Department

Account#

2185999

 

 

Ref:

SandRidge Energy, Inc.

 

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