Exhibit 10.1

 

 

 

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF

APRIL 13, 2018

AMONG

RANGE RESOURCES CORPORATION,

AS THE BORROWER,

THE SEVERAL LENDERS

FROM TIME TO TIME PARTIES HERETO,

JPMORGAN CHASE BANK, N.A.,

AS ADMINISTRATIVE AGENT

AND A LETTER OF CREDIT ISSUER,

BANK OF AMERICA, N.A.

AND

ROYAL BANK OF CANADA,

AS CO-SYNDICATION AGENTS AND LETTER OF CREDIT ISSUERS

AND

BANK OF MONTREAL,

CAPITAL ONE, NATIONAL ASSOCIATION,

CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH,

CITIBANK, N.A.,

CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK,

MUFG UNION BANK, N.A.,

U.S. BANK NATIONAL ASSOCIATION

AND

WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS CO-DOCUMENTATION AGENTS

 

 

 

JPMORGAN CHASE BANK, N.A.,

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

AND

RBC CAPITAL MARKETS,

AS JOINT LEAD ARRANGERS

AND

JPMORGAN CHASE BANK, N.A.,

AS BOOKRUNNER

 

 

 

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Section 1.

    

Definitions

     1  

1.1

    

Defined Terms

     1  

1.2

    

Other Interpretive Provisions

     37  

1.3

    

Accounting Terms

     38  

1.4

    

Rounding

     38  

1.5

    

References to Agreements, Laws, Etc

     38  

1.6

    

Times of Day

     39  

1.7

    

Timing of Payment or Performance

     39  

1.8

    

Currency Equivalents Generally

     39  

1.9

    

Classification of Loans and Borrowings

     39  

1.10

    

Interest Rates

     39  

Section 2.

    

Amount and Terms of Credit

     40  

2.1

    

Commitments

     40  

2.2

    

Minimum Amount of Each Borrowing; Maximum Number of Borrowings

     40  

2.3

    

Notice of Borrowing

     40  

2.4

    

Disbursement of Funds

     41  

2.5

    

Repayment of Loans; Evidence of Debt

     41  

2.6

    

Conversions and Continuations

     42  

2.7

    

Pro Rata Borrowings

     43  

2.8

    

Interest

     43  

2.9

    

Interest Periods

     44  

2.10

    

Increased Costs, Etc

     45  

2.11

    

Break Funding Payments

     46  

2.12

    

Change of Lending Office

     46  

2.13

    

Notice of Certain Costs

     46  

2.14

    

Borrowing Base

     46  

2.15

    

Defaulting Lenders

     49  

2.16

    

Increase of Total Commitment

     52  

2.17

    

Alternate Rate of Interest

     53  

Section 3.

    

Letters of Credit

     54  

3.1

    

Letters of Credit

     54  

3.2

    

Letter of Credit Requests

     55  

3.3

    

Letter of Credit Participations

     56  

3.4

    

Agreement to Repay Letter of Credit Drawings

     58  

3.5

    

[Reserved]

     59  

3.6

    

New or Successor Letter of Credit Issuer

     59  

3.7

    

Role of Letter of Credit Issuer

     60  

3.8

    

Cash Collateral

     60  

3.9

    

Applicability of ISP and UCP

     61  

3.10

    

Conflict with Issuer Documents

     61  

3.11

    

Letters of Credit Issued for Restricted Subsidiaries

     61  

Section 4.

    

Fees; Commitments

     61  

4.1

    

Fees

     61  

4.2

    

Voluntary Reduction of Commitments

     62  

4.3

    

Mandatory Termination or Reduction of Commitments

     62  

 

ii

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TABLE OF CONTENTS

(Cont’d)

 

            Page  

Section 5.

    

Payments

     63  

5.1

    

Voluntary Prepayments

     63  

5.2

    

Mandatory Prepayments

     63  

5.3

    

Method and Place of Payment

     65  

5.4

    

Net Payments

     65  

5.5

    

Computations of Interest and Fees

     69  

5.6

    

Limit on Rate of Interest

     69  

Section 6.

    

Conditions Precedent to Initial Borrowing

     70  

6.1

    

Credit Documents

     70  

6.2

    

Collateral

     70  

6.3

    

Legal Opinions

     70  

6.4

    

Closing Certificates

     70  

6.5

    

Authorization of Proceedings of Each Credit Party; Organizational Documents

     71  

6.6

    

Fees

     71  

6.7

    

Representations

     71  

6.8

    

Patriot Act

     71  

6.9

    

Historical Financial Statements

     71  

6.10

    

Projections

     71  

6.11

    

Insurance Certificate

     71  

6.12

    

Departing Lenders

     71  

Section 7.

    

Conditions Precedent to All Credit Events

     71  

7.1

    

No Default; Representations and Warranties

     72  

7.2

    

Notice of Borrowing

     72  

Section 8.

    

Representations, Warranties and Agreements

     72  

8.1

    

Corporate Status

     72  

8.2

    

Corporate Power and Authority; Enforceability

     72  

8.3

    

No Violation

     73  

8.4

    

Litigation

     73  

8.5

    

Margin Regulations

     73  

8.6

    

Governmental Approvals

     73  

8.7

    

Investment Company Act

     73  

8.8

    

True and Complete Disclosure

     73  

8.9

    

Financial Condition; Financial Statements

     74  

8.10

    

Tax Matters

     74  

8.11

    

Employee Benefits

     74  

8.12

    

Subsidiaries

     75  

8.13

    

Intellectual Property

     75  

8.14

    

Environmental Laws

     75  

8.15

    

Properties

     75  

8.16

    

Solvency

     76  

8.17

    

Insurance

     76  

8.18

    

Patriot Act

     76  

8.19

    

Liens Under the Security Documents; Collateral Coverage Minimum

     76  

8.20

    

No Default

     76  

8.21

    

Direct Benefit

     77  

8.22

    

Anti-Corruption Laws and Sanctions

     77  

 

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TABLE OF CONTENTS

(Cont’d)

 

            Page  

8.23

    

EEA Financial Institutions

     77  

8.24

    

Plan Assets

     77  

Section 9.

    

Affirmative Covenants

     77  

9.1

    

Information Covenants

     77  

9.2

    

Books, Records and Inspections

     80  

9.3

    

Maintenance of Insurance

     80  

9.4

    

Payment of Taxes

     81  

9.5

    

Consolidated Corporate Franchises

     81  

9.6

    

Compliance with Statutes; Regulations, Etc

     81  

9.7

    

ERISA

     81  

9.8

    

Maintenance of Properties

     81  

9.9

    

End of Fiscal Years; Fiscal Quarters

     82  

9.10

    

Additional Guarantors, Grantors and Collateral

     82  

9.11

    

Use of Proceeds

     83  

9.12

    

Further Assurances

     83  

9.13

    

Reserve Reports and Interim PV-9 Reports

     83  

9.14

    

Title Information

     84  

9.15

    

Commodity Exchange Act Keepwell Provisions

     84  

9.16

    

Post-Closing Covenant

     85  

Section 10.

    

Negative Covenants

     85  

10.1

    

Limitation on Indebtedness

     85  

10.2

    

Limitation on Liens

     88  

10.3

    

Limitation on Fundamental Changes

     91  

10.4

    

Limitation on Sale of Assets

     93  

10.5

    

Limitation on Investments

     95  

10.6

    

Limitation on Restricted Payments

     97  

10.7

    

Limitations on Debt Payments and Amendments

     99  

10.8

    

Negative Pledge Agreements

     99  

10.9

    

Limitation on Subsidiary Distributions

     100  

10.10

    

Hedge Agreements

     102  

10.11

    

Financial Performance Covenants

     103  

10.12

    

Transactions with Affiliates

     103  

10.13

    

Change in Business

     105  

10.14

    

Use of Proceeds

     105  

Section 11.

    

Events of Default

     105  

11.1

    

Payments

     105  

11.2

    

Representations, Etc

     105  

11.3

    

Covenants

     105  

11.4

    

Default Under Other Agreements

     105  

11.5

    

Bankruptcy, Etc

     106  

11.6

    

ERISA

     106  

11.7

    

Guarantee

     106  

11.8

    

Security Documents

     107  

11.9

    

Judgments

     107  

11.10

    

Change of Control

     107  

 

iv

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TABLE OF CONTENTS

(Cont’d)

 

            Page  

Section 12.

    

The Administrative Agent

     109  

12.1

    

Authorization and Action

     109  

12.2

    

Administrative Agent’s Reliance, Indemnification, Etc

     111  

12.3

    

Posting of Communications

     112  

12.4

    

The Administrative Agent Individually

     113  

12.5

    

Successor Administrative Agent

     113  

12.6

    

Acknowledgements of Lenders and Letter of Credit Issuers

     114  

12.7

    

Collateral Matters

     115  

12.8

    

Credit Bidding

     115  

12.9

    

Certain ERISA Matters

     116  

Section 13.

    

Miscellaneous

     118  

13.1

    

Amendments, Waivers and Releases

     118  

13.2

    

Notices

     120  

13.3

    

No Waiver; Cumulative Remedies

     120  

13.4

    

Survival of Representations and Warranties

     120  

13.5

    

Payment of Expenses; Indemnification

     120  

13.6

    

Successors and Assigns; Participations and Assignments

     122  

13.7

    

Replacements of Lenders under Certain Circumstances

     125  

13.8

    

Adjustments; Set-off

     126  

13.9

    

Counterparts

     126  

13.10

    

Severability

     127  

13.11

    

Integration

     127  

13.12

    

GOVERNING LAW

     127  

13.13

    

Submission to Jurisdiction; Waivers

     127  

13.14

    

Acknowledgments

     128  

13.15

    

WAIVERS OF JURY TRIAL

     128  

13.16

    

Confidentiality

     128  

13.17

    

Release of Collateral and Guarantee Obligations

     129  

13.18

    

USA PATRIOT Act

     130  

13.19

    

Payments Set Aside

     130  

13.20

    

Reinstatement

     131  

13.21

    

Disposition of Proceeds

     131  

13.22

    

Collateral Matters; Hedge Agreements

     131  

13.23

    

Investment Grade Election

     131  

13.24

    

Existing Credit Agreement

     132  

13.25

    

Reaffirmation and Grant of Security Interest

     132  

13.26

    

Reallocation of Commitments and Loans

     132  

13.27

    

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     133  

 

v

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TABLE OF CONTENTS

(Cont’d)

 

   Page

SCHEDULES

  

Schedule 1.1(a)    

  

Commitments

Schedule 1.1(b)

  

Excluded Stock

Schedule 1.1(c)

  

Excluded Subsidiaries

Schedule 1.1(d)

  

Closing Date Subsidiary Guarantors

Schedule 1.1(e)

  

Closing Date Hedge Banks

Schedule 1.1(f)

  

Existing Letters of Credit

Schedule 8.4

  

Litigation

Schedule 8.12

  

Subsidiaries

Schedule 10.1

  

Closing Date Indebtedness

Schedule 10.2

  

Closing Date Liens

Schedule 10.5

  

Closing Date Investments

Schedule 10.8

  

Closing Date Negative Pledge Agreements

Schedule 10.12

  

Closing Date Affiliate Transactions

Schedule 13.2

  

Notice Addresses

EXHIBITS

  

Exhibit A

  

Form of Notice of Borrowing

Exhibit B

  

Form of Letter of Credit Request

Exhibit C

  

Form of Guarantee

Exhibit D

  

Form of Pledge Agreement

Exhibit E

  

Form of Security Agreement

Exhibit F

  

Form of Credit Party Closing Certificate

Exhibit G

  

Form of Assignment and Assumption

Exhibit H

  

Form of Promissory Note

Exhibit I

  

Form of U.S. Tax Compliance Certificate

 

vi

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SIXTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 13, 2018, among
RANGE RESOURCES CORPORATION, a Delaware corporation (the “Borrower”), the banks,
financial institutions and other lending institutions from time to time parties
as lenders hereto (each a “Lender” and, collectively, the “Lenders”), JPMORGAN
CHASE BANK, N.A., as Administrative Agent and a Letter of Credit Issuer, and
each other Letter of Credit Issuer from time to time party hereto (capitalized
terms used but not defined in this preamble having the meaning provided in
Section 1).

WHEREAS, the Borrower has heretofore entered into that certain Fifth Amended and
Restated Credit Agreement dated as of October 16, 2014, by and among Borrower,
certain Subsidiaries of Borrower, as guarantors, various financial institutions
and JPMorgan Chase Bank, N.A., as administrative agent (as amended, supplemented
or otherwise modified prior to the Closing Date, the “Existing Credit
Agreement”);

WHEREAS, (i) the Borrower has requested that the Existing Credit Agreement be
amended and restated in its entirety, (ii) the Borrower has requested that the
Lenders extend credit in the form of Loans made available to the Borrower and at
any time and from time to time after the Closing Date subject to the Available
Commitment and (iii) the Borrower has requested that the Letter of Credit
Issuers issue Letters of Credit (subject to the Available Commitment) at any
time and from time to time prior to the L/C Maturity Date, in an aggregate
Stated Amount at any time outstanding not in excess of $500,000,000; and

WHEREAS, the Lenders and the Letter of Credit Issuers are willing to make
available to the Borrower such revolving credit and letter of credit facilities
upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

SECTION 1. Definitions

1.1 Defined Terms.

(a) As used herein, the following terms shall have the meanings specified in
this Section 1.1 unless the context otherwise requires (it being understood that
defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular):

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

“Additional Lender” shall have the meaning provided in Section 2.16(a).

“Adjusted LIBO Rate” shall mean, with respect to any LIBOR Loans for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBOR Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.

“Adjusted Total Commitment” shall mean, at any time, the Total Commitment less
the aggregate amount of Commitments of all Defaulting Lenders.

 

1

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“Administrative Agent” shall mean JPMorgan Chase Bank, N.A., as the
administrative agent for the Lenders under this Agreement and the other Credit
Documents, or any successor administrative agent appointed in accordance with
the provisions of Section 12.5.

“Administrative Agent’s Office” shall mean the Administrative Agent’s address
and, as appropriate, account as set forth on Schedule 13.2, or such other
address or account as the Administrative Agent may from time to time notify in
writing to the Borrower and the Lenders.

“Administrative Questionnaire” shall mean, for each Lender, an administrative
questionnaire in a form approved by the Administrative Agent.

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise. “Controlling”
(“controlling”) and “controlled” shall have meanings correlative thereto.

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in
effect on such day plus  1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one
month Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that for the purpose of
this definition, the Adjusted LIBO Rate for any day shall be based on the LIBO
Screen Rate (or if the LIBO Screen Rate is not available for such one month
Interest Period, the Interpolated Rate) at approximately 11:00 a.m. London time
on such day. Any change in the Alternate Base Rate due to a change in the Prime
Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the NYFRB Rate or
the Adjusted LIBO Rate, respectively. If the Alternate Base Rate is being used
as an alternate rate of interest pursuant to Section 2.17 hereof, then the
Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall
be determined without reference to clause (c) above. For the avoidance of doubt,
if the Alternate Base Rate as so determined would be less than zero, such rate
shall be deemed to be zero for purposes of this Agreement.

“Agreement” shall mean this Sixth Amended and Restated Credit Agreement, as
amended, restated, supplemented or otherwise modified from time to time.

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

“Applicable Margin” shall mean, for any day, with respect to any ABR Loan or
LIBOR Loan or Commitment Fees, as the case may be,

 

2

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(a) at any time other than during an Investment Grade Period, the rate per annum
set forth in the grid below based upon the Borrowing Base Utilization Percentage
in effect on such day:

 

Borrowing Base

Utilization Percentage

   LIBOR
Loans     ABR
Loans     Commitment
Fee Rate  

> 90%

     2.25 %      1.25 %      0.375 % 

> 75% and < 90%

     2.00 %      1.00 %      0.375 % 

> 50% and < 75%

     1.75 %      0.75 %      0.350 % 

> 25% and < 50%

     1.50 %      0.50 %      0.300 % 

< 25%

     1.25 %      0.25 %      0.300 % 

and (b) at any time during an Investment Grade Period, the rate per annum set
forth in the grid below based upon the higher of the Ratings assigned to the
Borrower by Moody’s or S&P in effect on such day:

 

Rating

   LIBOR
Loans     ABR
Loans     Commitment
Fee Rate  

< Ba1/BB+

     1.75 %      0.75 %      0.30 % 

Baa3/BBB-

     1.50 %      0.50 %      0.25 % 

Baa2/BBB

     1.25 %      0.25 %      0.20 % 

> Baa1/BBB+

     1.125 %      0.125 %      0.15 % 

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

“Applicable Party” has the meaning assigned to it in Section 12.3(c).

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment; provided that, in the
case of Section 2.15 when a Defaulting Lender shall exist, “Applicable
Percentage” shall mean the percentage of the total Commitments (disregarding any
Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments and to any Lender’s status as a Defaulting Lender at the time of
determination

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

“Approved Electronic Platform” shall have the meaning assigned to it in
Section 12.3(a).

“Approved Fund” shall mean 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.

“Approved Petroleum Engineers” shall mean (a) DeGolyer and MacNaughton, (b) H.J.
Gruy and Associates, Inc., (c) Wright and Company, Inc., (d) Netherland,
Sewell & Associates, Inc., (e) Cawley, Gillespie & Associates, Inc., (f) W. D.
Van Gonten & Co. Petroleum Engineering, (g) Ryder Scott Company, L.P., and
(h) at the Borrower’s option, any other independent petroleum engineers selected
by the Borrower and reasonably acceptable to the Administrative Agent.

 

3

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“Assignment and Assumption” shall mean an assignment and assumption entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 13.6), and accepted by the Administrative Agent in the form
of Exhibit G or any other form approved by the Administrative Agent.

“Authorized Officer” shall mean as to any Person, the President, the Chief
Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the
Vice President – Finance, the General Counsel, the Treasurer, the Assistant or
Vice Treasurer, any Senior Vice President, any Executive Vice President, and any
manager, managing member or general partner, in each case, of such Person, and
any other senior officer designated as such in writing to the Administrative
Agent by such Person. Any document delivered hereunder that is signed by an
Authorized Officer shall be conclusively presumed to have been authorized by all
necessary corporate, limited liability company, partnership and/or other action
on the part of the Borrower or any other Credit Party and such Authorized
Officer shall be conclusively presumed to have acted on behalf of such Person.

“Auto-Extension Letter of Credit” shall have the meaning provided in
Section 3.2(b).

“Available Commitment” shall mean, at any time, (a) the Loan Limit at such time
minus (b) the aggregate Total Exposures of all Lenders at such time.

“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers
by the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

“Bail-In Legislation” shall mean, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule.

“Bank Price Deck” shall mean the Administrative Agent’s forward curve for each
of oil, natural gas and other Hydrocarbons, as applicable, furnished to the
Borrower by the Administrative Agent from time to time in accordance with the
terms of this Agreement and consistent with the bank price deck used by the
Administrative Agent with respect to similar oil and gas credits for borrowers
with similar credit profiles.

“Bankruptcy Code” shall have the meaning provided in Section 11.5.

“Benefit Plan” shall mean any of (a) an “employee benefit plan” (as defined in
Section 3 of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined
in Section 4975 of the Code to which Section 4975 of the Code applies, and
(c) any Person whose assets include (for purposes of the Plan Asset Regulations
or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the
assets of any such “employee benefit plan” or “plan”.

“benefited Lender” shall have the meaning provided in Section 13.8.

“Board of Directors” shall mean, as to any Person, the board of directors or
other governing body of such Person, or if such Person is owned or managed by a
single entity, the board of directors or other governing body of such entity.

 

4

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“Bookrunner” shall mean J.P. Morgan Chase Bank, N.A. in its capacity as
bookrunner in respect of the Facility.

“Borrower” shall have the meaning provided in the introductory paragraph hereto.

“Borrowing” shall mean the incurrence of one Type of Loan on a given date (or
resulting from conversions on a given date) having, in the case of LIBOR Loans,
the same Interest Period (provided that ABR Loans incurred pursuant to
Section 2.17 shall be considered part of any related Borrowing of LIBOR Loans).

“Borrowing Base” shall mean, at any time, the amount determined in accordance
with Section 2.14, as the same may be adjusted from time to time pursuant to the
provisions thereof.

“Borrowing Base Deficiency” occurs if, at any time, the aggregate Total
Exposures of all Lenders exceeds the Borrowing Base then in effect. The amount
of the Borrowing Base Deficiency is the amount by which Total Exposures of all
Lenders exceeds the Borrowing Base then in effect.

“Borrowing Base Properties” shall mean the Oil and Gas Properties of the Credit
Parties included in the Initial Reserve Report and thereafter in the Reserve
Report most recently delivered pursuant to Section 9.13 and evaluated for
inclusion in the Borrowing Base.

“Borrowing Base Required Lenders” shall mean, at any date, (a) Non-Defaulting
Lenders having or holding at least 95% of the Adjusted Total Commitment at such
date or (b) if the Total Commitment has been terminated, Lenders having or
holding at least 95% of the outstanding principal amount of the Loans and Letter
of Credit Exposure (excluding the Loans and Letter of Credit Exposure of
Defaulting Lenders) in the aggregate at such date.

“Borrowing Base Utilization Percentage” shall mean, as of any day, the fraction
expressed as a percentage, the numerator of which is the sum of the aggregate
Total Exposures of all Lenders on such day, and the denominator of which is the
Borrowing Base in effect on such day.

“Business Day” shall mean any day excluding Saturday, Sunday and any other day
on which banking institutions in New York City are authorized or required by law
to remain closed; provided that, when used in connection with (a) any interest
rate settings as to a LIBOR Loan, (b) any fundings, disbursements, settlements
and payments in respect of any such LIBOR Loan, or (c) any other dealings
pursuant to this Agreement in respect of any such LIBOR Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London interbank market.

“Capital Expenditures” shall mean, for any period, the aggregate amount of all
expenditures (whether paid in cash or accrued as liabilities and including in
all events all amounts expended or capitalized under Capital Leases) by the
Borrower and the Restricted Subsidiaries during such period that, in conformity
with GAAP, are or are required to be included as capital expenditures on a
consolidated statement of cash flows of the Borrower and its Restricted
Subsidiaries.

“Capital Lease” shall mean, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is, or is required to be, accounted for as a capital lease on the
balance sheet of that Person.

 

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“Capitalized Lease Obligations” shall mean, as applied to any Person, all
obligations under Capital Leases of such Person or any of its Subsidiaries, in
each case taken at the amount thereof accounted for as liabilities in accordance
with GAAP.

“Cash Collateralize” shall have the meaning provided in Section 3.8(c).

“Cash Management Agreement” shall mean any agreement entered into from time to
time by the Borrower or any of the Borrower’s Restricted Subsidiaries in
connection with cash management services for collections, other Cash Management
Services and for operating, payroll and trust accounts of such Person, including
automatic clearing house services, controlled disbursement services, electronic
funds transfer services, lockbox services, stop payment services and wire
transfer services.

“Cash Management Bank” shall mean any Person that either (a) at the time it
provides Cash Management Services, (b) on the Closing Date or (c) at any time
after it has provided any Cash Management Services, is a Lender, the
Administrative Agent or an Affiliate of a Lender or the Administrative Agent.

“Cash Management Obligations” shall mean obligations owed by the Borrower or any
Restricted Subsidiary to any Cash Management Bank in connection with, or in
respect of, any Cash Management Services.

“Cash Management Services” shall mean (a) commercial credit cards, merchant card
services, purchase or debit cards, including non-card e-payables services,
(b) treasury management services (including controlled disbursement, overdraft,
automated clearing house fund transfer services, return items and interstate
depository network services) and (c) any other demand deposit or operating
account relationships or other cash management services, including any such
relationship or services under any Cash Management Agreement.

“Casualty Event” shall mean, with respect to any Collateral, (a) any damage to,
destruction of, or other casualty or loss involving, any property or asset or
(b) any seizure, condemnation, confiscation or taking under the power of eminent
domain of, or any requisition of title or use of, or relating to, or any similar
event in respect of, any property or asset.

“CFC” shall mean a “controlled foreign corporation” within the meaning of
Section 957 of the Code.

“Change in Law” shall mean the occurrence after the date of this Agreement or,
with respect to any Lender, such later date on which such Lender becomes a party
to this Agreement) of (a) the adoption of 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, implementation or application thereof by
any Governmental Authority or (c) compliance by any Lender or Letter of Credit
Issuer (or, for purposes of Section 2.15(b), by any lending office of such
Lender or by such Lender’s or Letter of Credit Issuer’s holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement; 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 or in the implementation thereof 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, issued or implemented.

 

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“Change of Control” shall mean and be deemed to have occurred if:

(a) any Person, entity or “group” (within the meaning of Section 13(d) or 14(d)
of the Exchange Act, but excluding any employee benefit plan of such Person,
entity or “group” and their respective Subsidiaries and any Person or entity
acting in its capacity as trustee, agent or other fiduciary or administrator of
any such plan), shall at any time have acquired direct or indirect beneficial
ownership (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) of
voting power of the outstanding Voting Stock of the Borrower having more than
40% of the ordinary voting power for the election of directors of the Borrower;
or

(b) occupation of a majority of the seats (other than vacant seats) on the Board
of Directors of the Borrower by persons who were not (1) directors of the
Borrower on the Closing Date, (2) nominated or appointed by the Board of
Directors of the Borrower or (3) approved by the Board of Directors of the
Borrower as director candidates prior to their election; or

(c) the occurrence of any “Change of Control,” “Change in Control” or
substantially similar definition under and as defined in the Indentures.

“Closing Date” shall mean April 13, 2018.

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

“Co-Documentation Agents” shall mean Bank of Montreal, Capital One, National
Association, Canadian Imperial Bank of Commerce, New York Branch, Citibank,
N.A., Credit Agricole Corporate and Investment Bank, MUFG Union Bank, N.A., U.S.
Bank National Association and Wells Fargo Bank, National Association, as
co-documentation agents for the Lenders under this Agreement and the other
Credit Documents.

“Collateral” shall have the meaning provided for such term in each of the
Security Documents; provided that with respect to any Mortgages, “Collateral”,
as defined herein, shall include “Mortgaged Properties” as defined therein.

“Collateral Coverage Minimum” shall mean a Collateral Coverage Ratio of at least
1.80 to 1.00; provided that during any Investment Grade Period, the Collateral
Coverage Minimum shall mean a Collateral Coverage Ratio of 0.00 to 1.00.

“Collateral Coverage Ratio” shall mean, at any time, the ratio of (a) the
Mortgaged Present Value at such time to (b) the Loan Limit at such time.

“Commitment” shall mean, (a) with respect to each Lender that is a Lender on the
Closing Date, the amount set forth opposite such Lender’s name on Schedule
1.1(a) as such Lender’s “Commitment” and (b) in the case of any Lender that
becomes a Lender after the Closing Date, (i) the amount specified as such
Lender’s “Commitment” in the Assignment and Assumption pursuant to which such
Lender assumed a portion of the Total Commitment, or (ii) the amount specified
in Schedule 1.1(a) as amended by any Incremental Agreement, in each case as the
same may be changed from time to time pursuant to terms of this Agreement. The
aggregate amount of the Commitments as of the Closing Date is $2,000,000,000.

“Commitment Fee” shall have the meaning provided in Section 4.1(a).

 

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“Commitment Fee Rate” shall mean, for any day, with respect to the Available
Commitment on any day, the applicable rate per annum set forth under the column
heading “Commitment Fee Rate” in the definition of “Applicable Margin” and based
upon the Borrowing Base Utilization Percentage or the higher of the Ratings
assigned to the Borrower by Moody’s or S&P, as applicable, in effect on such
day.

“Commitment Percentage” shall mean, at any time, for each Lender, the percentage
obtained by dividing (a) such Lender’s Commitment at such time by (b) the amount
of the Total Commitment at such time; provided that at any time when the Total
Commitment shall have been terminated, each Lender’s Commitment Percentage shall
be the percentage obtained by dividing (i) such Lender’s Total Exposure at such
time by (ii) the aggregate Total Exposures of all Lenders at such time.

“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, and any
regulations promulgated thereunder.

“Communications” has the meaning assigned to it in Section 12.3(c).

“Confidential Information” shall have the meaning provided in Section 13.16.

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

“Consolidated Current Assets” means, as of any date of determination, the
current assets of the Borrower and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP, plus, (a) to the extent not already
included therein, the amount by which the Borrowing Base exceeds the Total
Exposure as of such date and (b) unless an Event of Default has occurred and is
continuing, the aggregate amount of cash on deposit with the Administrative
Agent as of such date pursuant to Section 2.15(c) as a result of the existence
of any Defaulting Lender; provided that for purposes of this definition, current
assets shall exclude non-cash assets required to be included in consolidated
current assets of the Borrower and its Restricted Subsidiaries as a result of
the application of FASB Accounting Standards Codifications 815 or 410.

“Consolidated Current Liabilities” means, as of any date of determination, the
current liabilities of the Borrower and its Restricted Subsidiaries determined
on a consolidated basis in accordance with GAAP, minus, to the extent included
therein, the current portion of long-term Indebtedness outstanding under this
Agreement or under the Senior Notes; provided that for purposes of this
definition, current liabilities shall exclude non-cash liabilities required to
be included in consolidated current liabilities of the Borrower and its
Restricted Subsidiaries as a result of the application of FASB Accounting
Standards Codifications 815 or 410, but shall expressly include any unpaid
liabilities for cash charges or payments that have been incurred as a result of
the termination of any Hedge Agreement.

“Consolidated EBITDAX” means, for any period, for the Borrower and its
Restricted Subsidiaries on a consolidated basis, an amount equal to Consolidated
Net Income for such period plus (a) the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Interest Charges for
such period, (ii) the provision for federal, state, and local income and
franchise taxes payable by the Borrower and its Restricted Subsidiaries for such
period, (iii) depletion, depreciation, amortization and exploration expense for
such period, (iv) all other non-cash items reducing such Consolidated Net Income
for such period, and (v) extraordinary or non-recurring losses and charges for
such period, and minus (b) the following to the extent included in calculating
such Consolidated Net Income: (i) federal, state and local income tax credits
claimed by the Borrower and its Restricted Subsidiaries for such period but only
to the extent not taken into account in clause (a)(ii) above, (ii) all other
non-cash items increasing Consolidated Net Income for such period, and
(iii) extraordinary or non-

 

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recurring gains for such period; provided that, with respect to the
determination of the Borrower’s compliance with the covenant set forth in
Section 10.11(a) for any period, Consolidated EBITDAX shall be adjusted to give
effect, on a pro forma basis, to any Qualified Acquisition or Qualified
Disposition made during such period, as if such acquisition or Disposition had
occurred on the first day of such period.

“Consolidated Funded Debt” means, as of any date and without duplication,
Indebtedness of the Borrower and the Restricted Subsidiaries of the type
described in clauses (a) and (b) (other than intercompany Indebtedness owing
among the Borrower and the Restricted Subsidiaries), (c), (d) (with respect to
unreimbursed amounts drawn under letters of credit), (f) and (i) (to the extent
any such Guarantee Obligations constitute guarantees of Indebtedness that is
otherwise Consolidated Funded Debt) of the definition thereof, minus (i) the
aggregate cash and Permitted Investments (in each case, free and clear of all
Liens, other than Permitted Liens and other nonconsensual Liens permitted by
Section 10.2 and Liens permitted by Sections 10.2(a), (h), (i) and (l) and
clauses (i) and (ii) of Section 10.2(n) included in the cash and cash
equivalents accounts listed on the consolidated balance sheet of the Borrower
and the Restricted Subsidiaries at such date, and (ii) unless an Event of
Default has occurred and is continuing, the aggregate amount of cash on deposit
with the Administrative Agent as of such date pursuant to Section 2.15(c) as a
result of the existence of any Defaulting Lender.

“Consolidated Funded Debt to Consolidated EBITDAX Ratio” shall mean, as of any
date of determination, the ratio of (a) Consolidated Funded Debt as of the last
day of the most recent Test Period ended on or prior to such date of
determination to (b) Consolidated EBITDAX for such Test Period.

“Consolidated Interest Charges” means, for any period, for the Borrower and its
Restricted Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, debt discount, fees, charges and related expenses of the
Borrower and its Restricted Subsidiaries for such period in connection with
borrowed money (including capitalized interest) or in connection with the
deferred purchase price of assets, in each case to the extent treated as
interest in accordance with GAAP, and (b) the portion of rent expense of the
Borrower and its Restricted Subsidiaries with respect to such period under
Capital Leases that is treated as interest in accordance with GAAP.

“Consolidated Net Income” means, for any period, for the Borrower and its
Restricted Subsidiaries on a consolidated basis, the net income of the Borrower
and its Restricted Subsidiaries (excluding extraordinary gains and extraordinary
losses and the net income of any Person (other than the Borrower or a Restricted
Subsidiary) for that period, except to the extent of the amount of dividends and
distributions actually received by the Borrower or a Restricted Subsidiary),
provided that the calculation of Consolidated Net Income shall exclude any
non-cash charges or losses and any non-cash income or gains, in each case,
required to be included in net income of the Borrower and its Restricted
Subsidiaries as a result of the application of FASB Accounting Standards
Codifications 718, 815, 410 and 360, but shall expressly include any cash
charges or payments that have been incurred as a result of any Hedge
Termination.

“Consolidated Total Assets” shall mean, as of any date of determination, the
amount that would, in conformity with GAAP, be set forth opposite the caption
“total assets” (or any like caption) on a consolidated balance sheet of the
Borrower and the Restricted Subsidiaries at such date.

“Contractual Requirement” shall have the meaning provided in Section 8.3.

“Co-Syndication Agents” shall mean Bank of America, N.A. and Royal Bank of
Canada, as co-syndication agents for the Lenders under this Agreement and the
other Credit Documents.

 

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“Credit Documents” shall mean this Agreement, the Fee Letter, the Guarantee, the
Security Documents, each Letter of Credit, any promissory notes issued by the
Borrower under this Agreement and any other agreements executed in connection
with this Agreement (other than Hedge Agreements).

“Credit Event” shall mean and include the making (but not the conversion or
continuation) of a Loan, the issuance of a Letter of Credit or the amendment or
extension of a Letter of Credit resulting in an increase in the face amount
thereof.

“Credit Party” shall mean each of the Borrower and the Guarantors.

“Default” shall mean any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

“Default Rate” shall have the meaning provided in Section 2.8(c).

“Defaulting Lender” shall mean any Lender whose acts or failure to act, whether
directly or indirectly, cause it to meet any part of the definition of “Lender
Default”.

“Departing Lender” shall mean each of Frost Bank and Santander Bank N.A.

“Deposit Account Control Agreement” shall mean each agreement executed and
delivered to the Administrative Agent pursuant to Section 4.13(b) of the
Security Agreement.

“Disposition” shall have the meaning provided in Section 10.4. “Dispose” shall
have a correlative meaning.

“Disqualified Stock” shall mean, with respect to any Person, any Stock or Stock
Equivalents of such Person which, by its terms, or by the terms of any security
into which it is convertible or for which it is putable or exchangeable, or upon
the happening of any event, matures or is mandatorily redeemable (other than
solely for Stock or Stock Equivalents that is not Disqualified Stock), other
than as a result of a change of control or asset sale, pursuant to a sinking
fund obligation or otherwise, or is redeemable at the option of the holder
thereof (other than as a result of a change of control or asset sale to the
extent the terms of such Stock or Stock Equivalents provide that such Stock or
Stock Equivalents shall not be required to be repurchased or redeemed until the
Maturity Date has occurred or the indebtedness of the Person is satisfied or
such repurchase or redemption is otherwise permitted by this Agreement
(including as a result of a waiver hereunder)), in whole or in part, in each
case prior to the date that is 91 days after the Maturity Date hereunder;
provided that, if such Stock or Stock Equivalents are issued to any plan for the
benefit of employees of the Borrower or its Subsidiaries or by any such plan to
such employees, such Stock or Stock Equivalents shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the
Borrower or its Subsidiaries in order to satisfy applicable statutory or
regulatory obligations; provided, further, that any Stock or Stock Equivalents
held by any future, present or former employee, director, manager or consultant
of the Borrower, any of its Subsidiaries or any of its direct or indirect parent
companies or any other entity in which the Borrower or a Restricted Subsidiary
has an Investment and is designated in good faith as an “affiliate” by the board
of directors or managers of the Borrower, in each case pursuant to any equity
holders’ agreement, management equity plan or stock incentive plan or any other
management or employee benefit plan or agreement shall not constitute
Disqualified Stock solely because it may be required to be repurchased by the
Borrower or its Subsidiaries.

“Disregarded Entity” shall mean any Domestic Subsidiary that is disregarded for
U.S. federal income tax purposes.

 

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“Dollars” and “$” shall mean dollars in lawful currency of the United States of
America.

“Domestic Subsidiary” shall mean each Subsidiary of the Borrower that is
organized under the laws of the United States or any state thereof, or the
District of Columbia.

“Drawing” shall have the meaning provided in Section 3.4(b).

“EEA Financial Institution” shall mean (a) any institution established in any
EEA Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent
of an institution described in clause (a) of this definition, or (c) any
institution established in an EEA Member Country which is a subsidiary of an
institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent;

“EEA Member Country” shall mean any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” shall mean any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Electronic Signature” means an electronic sound, symbol, or process attached
to, or associated with, a contract or other record and adopted by a person with
the intent to sign, authenticate or accept such contract or record.

“Engineering Reports” shall have the meaning provided in Section 2.14(c).

“Environmental Claims” shall mean any and all actions, suits, orders, decrees,
written demands, claims, liens, or notices of noncompliance, violation,
potential responsibility or required investigation (other than internal reports
prepared by or on behalf of the Borrower or any of the Subsidiaries (a) in the
ordinary course of such Person’s business or (b) as required in connection with
a financing transaction or an acquisition or disposition of real estate) or
proceedings arising under or based upon any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law (hereinafter,
“Claims”), including, without limitation, (i) any and all Claims by governmental
or regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law and
(ii) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief relating to
the presence, release or threatened release of Hazardous Materials or arising
from alleged injury or threat of injury to health or safety (to the extent
relating to human exposure to Hazardous Materials), or the environment
including, without limitation, ambient air, surface water, groundwater, land
surface and subsurface strata and natural resources such as wetlands.

“Environmental Law” shall mean any laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the protection of the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters (to the extent relating to human
exposure to Hazardous Materials).

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA as in effect
on the Closing Date and any subsequent provisions of ERISA amendatory thereof,
supplemental thereto or substituted therefor.

 

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“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under
Section 414(b) or (c) of the Code or Section 4001(a)(14) of ERISA or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a
single employer under Section 414 of the Code.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Pension Plan
subject to Title IV of ERISA (other than an event for which the 30 day notice
period is waived); (b) the failure to satisfy the “minimum funding standard” (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived, with respect to any Pension Plan; (c) the filing pursuant to
Section 412(c) of the Code or Section 302(c) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Pension Plan; (d) the
incurrence by the Borrower or any ERISA Affiliate of any liability under
Title IV of ERISA with respect to the termination of any Pension Plan; (e) the
receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Pension
Plan or to appoint a trustee to administer any Pension Plan; (f) the occurrence
of a non-exempt “prohibited transaction” (as defined in Section 4975 of the Code
or Section 406 of ERISA) with respect to a Pension Plan that could give rise to
the imposition on the Borrower of fines, penalties, taxes or related charges;
(g) the incurrence by the Borrower or any ERISA Affiliate of any liability with
respect to the withdrawal or partial withdrawal of the Borrower or any ERISA
Affiliate from any Multiemployer Plan; (h) the receipt by the Borrower or any
ERISA Affiliate of a notice concerning the imposition upon the Borrower or any
ERISA Affiliate of withdrawal liability; or (i) a determination that any
Multiemployer Plan is, or is expected to be, “insolvent” (within the meaning of
Section 4245 of ERISA) or in endangered or critical status (within the meaning
of Section 432 of the Code or Section 305 of ERISA).

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor Person), as in effect
from time to time.

“Event of Default” shall have the meaning provided in Section 11.

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

“Exchange Rate” shall mean on any day with respect to any currency (other than
Dollars), the rate at which such currency may be exchanged into any other
currency (including Dollars), as set forth at approximately 11:00 a.m. (London
time) on such day on the Reuters World Currency Page for such currency. In the
event that such rate does not appear on any Reuters World Currency Page, the
Exchange Rate shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed by the Administrative
Agent and the Borrower, or, in the absence of such agreement, such Exchange Rate
shall instead be the arithmetic average of the spot rates of exchange of the
Administrative Agent in the market where its foreign currency exchange
operations in respect of such currency are then being conducted, at or about
11:00 a.m., local time, on such date for the purchase of the relevant currency
for delivery two Business Days later.

“Excluded Hedge Obligation” means, with respect to any Credit Party, any Swap
Obligation if, and to the extent that, all or a portion of the liability of such
Credit Party with respect to, or the grant by such Credit Party of a security
interest to secure, such Swap Obligation (or any Guarantee thereof or other
agreement or undertaking agreeing to guaranty, repay, indemnify or otherwise be
liable therefor) 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) (a) by virtue of such
Credit Party’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the guaranty obligation or other

 

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liability of such Credit Party or the grant of such security interest becomes or
would become effective with respect to such Swap Obligation or (b) in the case
of a Swap Obligation subject to a clearing requirement pursuant to section 2(h)
of the Commodity Exchange Act (or any successor provision thereto), because such
Credit Party is a “financial entity,” as defined in section 2(h)(7)(C)(i) of the
Commodity Exchange Act (or any successor provision thereto), at the time the
guaranty obligation or other liability of such Credit Party becomes or would
become effective with respect to such related Swap Obligation. If a Swap
Obligation arises under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such guaranty obligation or other liability or
security interest is or becomes illegal.

“Excluded Hedges” means Hedge Agreements that (i) are basis differential only
swaps for volumes of crude oil, natural gas and natural gas liquids included
under other Hedge Agreements permitted by Section 10.10(a) or (ii) are a hedge
of volumes of crude oil, natural gas or natural gas liquids by means of a put or
a price “floor” for which there exists no deferred obligation to pay the related
premium or other purchase price or the only deferred obligation is to pay the
financing for such premium or other purchase price.

“Excluded Stock” shall mean (a) any Stock or Stock Equivalents with respect to
which, in the reasonable judgment of the Administrative Agent (confirmed in
writing by notice to the Borrower), the cost or other consequences of pledging
such Stock or Stock Equivalents in favor of the Secured Parties under the
Security Documents shall be excessive in view of the benefits to be obtained by
the Secured Parties therefrom, (b) (i) solely in the case of any pledge of Stock
or Stock Equivalents of any Foreign Corporate Subsidiary or FSHCO to secure the
Obligations, any Stock or Stock Equivalents that is Voting Stock of such Foreign
Corporate Subsidiary or FSHCO in excess of 65% of the outstanding Voting Stock
of such class and (ii) solely in the case of a pledge of Stock or Stock
Equivalents of any Disregarded Entity substantially all of whose assets consist
of Stock and Stock Equivalents of Foreign Corporate Subsidiaries to secure the
Obligations, any Voting Stock of such Disregarded Entity in excess of 65% of the
outstanding Voting Stock of such entity (such percentages to be adjusted upon
any change of law as may be required to avoid adverse U.S. federal income tax
consequences to the Borrower or any Subsidiary), (c) any Stock or Stock
Equivalents to the extent the pledge thereof would be prohibited by any
Requirement of Law, (d) in the case of (i) any Stock or Stock Equivalents of any
Subsidiary to the extent the pledge of such Stock or Stock Equivalents is
prohibited by Contractual Requirements or (ii) any Stock or Stock Equivalents of
any Subsidiary that is not wholly owned by the Borrower and its Restricted
Subsidiaries at the time such Subsidiary becomes a Subsidiary, any Stock or
Stock Equivalents of each such Subsidiary described in clause (i) or (ii) to the
extent (A) that a pledge thereof to secure the Obligations is prohibited by any
applicable Contractual Requirement (other than customary non-assignment
provisions which are ineffective under the Uniform Commercial Code or other
applicable Requirements of Law) or organizational document, (B) any Contractual
Requirement or organizational document prohibits such a pledge without the
consent of any other party; provided that this clause (B) shall not apply if
(1) such other party is a Credit Party or a wholly owned Restricted Subsidiary
or (2) consent has been obtained to consummate such pledge (it being understood
that the foregoing shall not be deemed to obligate the Borrower or any
Subsidiary to obtain any such consent)) and for so long as such Contractual
Requirement or organizational document or replacement or renewal thereof is in
effect, or (C) a pledge thereof to secure the Obligations would give any other
party (other than a Credit Party or a wholly owned Restricted Subsidiary) to any
Contractual Requirement governing such Stock or Stock Equivalents the right to
terminate its obligations thereunder (other than customary non-assignment
provisions that are ineffective under the Uniform Commercial Code or other
applicable Requirement of Law), (e) the Stock or Stock Equivalents of any
Immaterial Subsidiary and any Unrestricted Subsidiary, (f) the Stock or Stock
Equivalents of any Subsidiary of a Foreign Corporate Subsidiary, (g) any Stock
or Stock Equivalents of any Subsidiary to the extent that the pledge of such
Stock or Stock Equivalents would result in material adverse tax consequences to
the Borrower or any Subsidiary as reasonably

 

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determined by the Borrower and (h) any Stock or Stock Equivalents set forth on
Schedule 1.1(b) which have been identified on or prior to the Closing Date in
writing to the Administrative Agent by an Authorized Officer of the Borrower and
agreed to by the Administrative Agent.

“Excluded Subsidiary” shall mean (a) each Domestic Subsidiary listed on
Schedule 1.1(c) and each future Domestic Subsidiary, in each case, for so long
as any such Subsidiary does not constitute a Material Subsidiary, (b) each
Domestic Subsidiary that is not a wholly owned Subsidiary on any date such
Subsidiary would otherwise be required to become a Guarantor pursuant to the
requirements of Section 9.10 (for so long as such Subsidiary remains a
non-wholly owned Restricted Subsidiary), (c) any FSHCO or Disregarded Entity
substantially all the assets of which consist of Stock and Stock Equivalents of
Foreign Corporate Subsidiaries, (d) each Domestic Subsidiary that is prohibited
by any applicable Contractual Requirement or Requirement of Law from
guaranteeing or granting Liens to secure the Obligations at the time such
Subsidiary becomes a Restricted Subsidiary (and for so long as such restriction
or any replacement or renewal thereof is in effect) or that would require
consent, approval, license or authorization of a Governmental Authority to
guarantee or grant Liens to secure the Obligations at the time such Subsidiary
becomes a Restricted Subsidiary (unless such consent, approval, license or
authorization has been received), (e) each Domestic Subsidiary that is a direct
or indirect Subsidiary of a Foreign Corporate Subsidiary, (f) each other
Domestic Subsidiary acquired pursuant to a Permitted Acquisition financed with
secured Indebtedness incurred pursuant to Section 10.1(i) and permitted by the
proviso to subclause (C) of Section 10.1(i) and each Restricted Subsidiary
thereof that guarantees such Indebtedness to the extent and so long as the
financing documentation relating to such Permitted Acquisition to which such
Restricted Subsidiary is a party prohibits such Restricted Subsidiary from
guaranteeing or granting a Lien on any of its assets to secure the Obligations,
(g) any other Domestic Subsidiary with respect to which, (x) in the reasonable
judgment of the Administrative Agent and the Borrower, the cost or other
consequences of providing a Guarantee of the Obligations shall be excessive in
view of the benefits to be obtained by the Lenders therefrom or (y) providing
such a Guarantee would result in material adverse tax consequences as reasonably
determined by the Borrower, and (h) each Unrestricted Subsidiary.

“Excluded Taxes” shall mean, with respect to the Administrative Agent, any
Lender, any Letter of Credit Issuer or any other recipient of any payment to be
made by or on account of any obligation of any Credit Party hereunder or under
any other Credit Document, (a) Taxes imposed on or measured by net income
(however denominated), branch profits Taxes and franchise Taxes, in each case,
(i) imposed as a result of such recipient being organized in, or having its
principal office in, or, in the case of any Lender, having its applicable
lending office in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of
a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for
the account of such Lender with respect to an applicable interest in a Loan or
Commitment pursuant to a law in effect on the date on which (i) such Lender
acquires such interest in the Loan or Commitment (other than pursuant to an
assignment request by the Borrower under Section 13.7) or (ii) such Lender
changes its lending office, except in each case to the extent that, pursuant to
Section 5.4, amounts with respect to such Taxes were payable either to such
Lender’s assignor immediately before such Lender became a party hereto or to
such Lender immediately before it changed its lending office, (c) Taxes
attributable to such recipient’s failure to comply with Section 5.4(e), (h) or
(i) and (d) any withholding Taxes imposed under FATCA.

“Existing Credit Agreement” shall have the meaning provided in the introductory
paragraph hereto.

“Existing Letters of Credit” shall mean the letters of credit described on
Schedule 1.1(f) hereto and issued and outstanding under the Existing Credit
Agreement on the Closing Date. The Existing Letters of Credit shall be continued
on the Closing Date as Letters of Credit hereunder.

 

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“Facility” shall mean this Agreement and the Commitments and the extensions of
credit made hereunder.

“Fair Market Value” shall mean, with respect to any asset or group of assets on
any date of determination, the value of the consideration obtainable in a
Disposition of such asset at such date of determination assuming a Disposition
by a willing seller to a willing purchaser dealing at arm’s length and arranged
in an orderly manner over a reasonable period of time having regard to the
nature and characteristics of such asset, as reasonably determined by the
Borrower.

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the date of
this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or
future regulations or official interpretations thereof, any agreement entered
into pursuant to Section 1471(b)(1) of the Code, any applicable
intergovernmental agreement, treaty or convention among Governmental Authorities
entered into in connection with the implementation of such Sections of the Code
and any applicable fiscal or regulatory legislation, rules or practices adopted
pursuant to such intergovernmental agreement, treaty or convention.

“Federal Funds Effective Rate” shall mean, for any day, the rate calculated by
the NYFRB based on such day’s federal funds transactions by depositary
institutions, as determined in such manner as the NYFRB shall set forth on its
public website from time to time, and published on the next succeeding Business
Day by the NYFRB as the effective federal funds rate, provided that if the
Federal Funds Effective Rate as so determined would be less than zero, such rate
shall be deemed to be zero for the purposes of this Agreement.

“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve
System of the United States (or any successor).

“Fee Letter” shall have the meaning provided in Section 6.6.

“Financial Performance Covenants” shall mean, with respect to any Test Period,
the covenants of the Borrower set forth in Section 10.11, applicable for such
Test Period.

“Foreign Corporate Subsidiary” shall mean a Foreign Subsidiary that is treated
as a corporation for U.S. federal income tax purposes.

“Foreign Plan” shall mean any employee benefit plan, program, policy,
arrangement or agreement maintained or contributed to by the Borrower or any of
its Subsidiaries with respect to employees employed outside the United States.

“Foreign Subsidiary” shall mean each Subsidiary of the Borrower that is not a
Domestic Subsidiary.

“Fronting Fee” shall have the meaning provided in Section 4.1(c).

“FSHCO” shall mean any direct or indirect Subsidiary that has no material assets
other than the Stock of one or more direct or indirect Foreign Corporate
Subsidiaries.

“Fund” shall mean 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.

 

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“GAAP” shall mean generally accepted accounting principles in the United States
of America, as in effect from time to time.

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

“Guarantee” shall mean the Guarantee made by any Guarantor in favor of the
Administrative Agent for the benefit of the Secured Parties, substantially in
the form of Exhibit C.

“Guarantee Obligations” shall mean, as to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such Indebtedness or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
Indebtedness of the ability of the primary obligor to make payment of such
Indebtedness or (d) otherwise to assure or hold harmless the owner of such
Indebtedness against loss in respect thereof; provided, however, that the term
“Guarantee Obligations” shall not include endorsements of instruments for
deposit or collection in the ordinary course of business or customary and
reasonable indemnity obligations in effect on the Closing Date or entered into
in connection with any acquisition or Disposition of assets permitted under this
Agreement (other than such obligations with respect to Indebtedness). The amount
of any Guarantee Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the Indebtedness in respect of which such Guarantee
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.

“Guarantors” shall mean each Domestic Subsidiary listed on Schedule 1.1(d) and
each other Domestic Subsidiary (other than an Excluded Subsidiary) that becomes
a party to the Guarantee after the Closing Date pursuant to Section 9.10 or
otherwise.

“Hazardous Materials” shall mean (a) any petroleum or petroleum products,
radioactive materials, friable asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, and radon gas, (b) any chemicals, materials or
substances defined as or included in the definition of “hazardous substances”,
“hazardous waste”, “hazardous materials”, “extremely hazardous waste”,
“restricted hazardous waste”, “toxic substances”, “toxic pollutants”,
“contaminants”, or “pollutants”, or words of similar import, under any
applicable Environmental Law and (c) any other chemical, material or substance,
which is prohibited, limited or regulated by any Environmental Law.

“Hedge Agreements” shall mean (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, fixed-price physical
delivery contracts, whether or not exchange traded, 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

 

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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. Notwithstanding the foregoing, agreements or obligations to
physically sell any commodity at any index-based price shall not be considered
Hedge Agreements.

“Hedge Bank” shall mean (a) any Person (other than the Borrower or any of its
Subsidiaries) that (x) at the time it enters into a Hedge Agreement is a Lender,
the Administrative Agent or an Affiliate of a Lender or the Administrative
Agent, or (y) at any time after it enters into a Hedge Agreement it becomes a
Lender, the Administrative Agent or an Affiliate of a Lender or the
Administrative Agent or (b) with respect to any Hedge Agreement that is in
effect on the Closing Date, any Person (other than the Borrower or any of its
Subsidiaries) that (x) is a Lender, the Administrative Agent or an Affiliate of
a Lender or the Administrative Agent on the Closing Date or (y) is listed on
Schedule 1.1(e) (and in the case of this clause (y), any Affiliate of such
Person).

“Hedge PV” shall mean, with respect to any commodity Hedge Agreement, the
present value, discounted at 9% per annum, of the future receipts expected to be
paid to the Borrower or the Restricted Subsidiaries under such Hedge Agreement
netted against the most recent Bank Price Deck provided to the Borrower by the
Administrative Agent pursuant to Section 2.14(g); provided, however, that the
“Hedge PV” shall never be less than $0.00.

“Hedging Obligations” shall mean, with respect to any Person, the obligations of
such Person under Hedge Agreements.

“Hedge Termination” shall have the meaning provided in Section 10.4(l).

“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Loans under laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws
allow as of the date hereof.

“Historical Financial Statements” shall mean the audited consolidated balance
sheets of the Borrower and its consolidated Subsidiaries as of December 31, 2016
and December 31, 2017, and the related audited statements of income, statements
of changes in shareholders’ equity and statements of cash flows for each of the
fiscal years in the two-year period ended December 31, 2017.

“Hydrocarbon Interests” shall mean all rights, titles, interests and estates now
or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases,
or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever nature.

“Hydrocarbons” shall mean oil, gas, casinghead gas, drip gasoline, natural
gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and
all products refined or separated therefrom.

“Immaterial Subsidiary” shall mean any Subsidiary that is not a Material
Subsidiary.

“Impacted Interest Period” has the meaning assigned to it in the definition of
“LIBOR Rate.”

 

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“Increasing Lender” shall have the meaning provided in Section 2.16(a).

“Incremental Agreement” shall have the meaning provided in Section 2.16(c).

“Incremental Increase” shall have the meaning provided in Section 2.16(a).

“Indebtedness” of any Person shall mean (a) all indebtedness of such Person for
borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes, loan agreements or other similar instruments, (c) the
deferred purchase price of assets or services that in accordance with GAAP would
be included as a liability on the balance sheet of such Person (other than
(i) any earn-out obligation until such obligation becomes a liability on the
balance sheet of such Person in accordance with GAAP and (ii) obligations
resulting under firm transportation contracts or take or pay contracts entered
into in the ordinary course of business), (d) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder, (e) all Indebtedness (excluding prepaid interest
thereon) of any other Person secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person (but if
such Indebtedness has not been assumed, limited to the lesser of the amount of
such Indebtedness or the fair market value of the property securing or to be
secured by such Indebtedness), (f) the principal component of all Capitalized
Lease Obligations of such Person, (g) obligations to deliver commodities, goods
or services, including Hydrocarbons, in consideration of one or more advance
payments, other than obligations relating to net oil, natural gas liquids or
natural gas balancing arrangements arising in the ordinary course of business,
(h) the undischarged balance of any production payment created by such Person or
for the creation of which such Person directly or indirectly received payment,
and (i) without duplication, all Guarantee Obligations of such Person; provided
that Indebtedness shall not include (i) trade and other ordinary course payables
and accrued expenses arising in the ordinary course of business, (ii) deferred
or prepaid revenue, (iii) purchase price holdbacks in respect of a portion of
the purchase price of an asset to satisfy warranty or other unperformed
obligations of the respective seller, (iv) in the case of the Borrower and its
Restricted Subsidiaries, all intercompany Indebtedness having a term not
exceeding 364 days (inclusive of any roll-over or extensions of terms) and made
in the ordinary course of business, (v) any obligation in respect of a farm-in
agreement, joint development agreement, joint operating agreement or similar
arrangement whereby such Person agrees to pay all or a share of the drilling,
completion or other expenses of an exploratory or development well (which
agreement may be subject to a maximum payment obligation, after which expenses
are shared in accordance with the working or participation interest therein or
in accordance with the agreement of the parties) or perform the drilling,
completion or other operation on such well in exchange for an ownership interest
in an oil or gas property, (vi) any obligations in respect of any Hedge
Agreement that is permitted under this Agreement, (vii) prepayments for gas or
crude oil production or net gas imbalances not in excess of $50,000,000 in the
aggregate at any time outstanding and (viii) obligations to deliver commodities
or pay royalties or other payments in connection with obligations arising from
the sale of net profits interests, working interests, overriding royalty
interests or similar real property interests.

“Indemnified Liabilities” shall have the meaning provided in Section 13.5.

“Indemnified Taxes” shall mean (a) all Taxes imposed on or with respect to or
measured by, any payment by or on account of any obligation of any Credit Party
hereunder or under any other Credit Document other than Excluded Taxes and
(b) to the extent not otherwise described in (a), Other Taxes.

“Indentures” shall mean, collectively, as each is amended or supplemented from
time to time as permitted under the terms hereof, (i) that certain Indenture
dated May 25, 2011, among the Borrower, as issuer, certain of its Subsidiaries,
as guarantors, and The Bank of New York Mellon Trust Company, N.A., (ii) that
certain Indenture dated March 9, 2012, among the Borrower, as issuer, certain of
its

 

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Subsidiaries, as guarantors, and The Bank of New York Mellon Trust Company,
N.A., (iii) that certain Indenture dated March 18, 2013, among the Borrower, as
issuer, certain of its Subsidiaries, as guarantors, and U.S. Bank National
Association, (iv) that certain Indenture dated May 14, 2015, among the Borrower,
as issuer, certain of its Subsidiaries, as guarantors, and U.S. Bank National
Association, and (v) each of those certain Indentures dated September 16, 2016,
among the Borrower, as issuer, certain of its Subsidiaries, as guarantors, and
U.S. Bank National Association.

“Industry Investment” shall mean Investments and expenditures made in the
ordinary course of, and of a nature that is or shall have become customary in,
the Oil and Gas business as a means of actively engaging therein through
agreements, transactions, interests or arrangements that permit one to share
risks or costs, comply with regulatory requirements regarding local ownership or
satisfy other objectives customarily achieved through the conduct of Oil and Gas
business jointly with third parties, including: (1) ownership interests in oil
and gas properties or gathering, transportation, processing, or related systems;
and (2) Investments and expenditures in the form of or pursuant to operating
agreements, processing agreements, farm-in agreements, farm-out agreements,
development agreements, area of mutual interest agreements, unitization
agreements, pooling arrangements, joint bidding agreements, service contracts,
joint venture agreements, partnership agreements (whether general or limited),
and other similar agreements (including for limited liability companies) with
third parties.

“Initial Reserve Report” shall mean the reserve engineers’ report as of
December 31, 2017 prepared by the Borrower’s internal engineers with respect to
the Oil and Gas Properties of the Credit Parties.

“Interest Period” shall mean, with respect to any Loan, the interest period
applicable thereto, as determined pursuant to Section 2.9.

“Interim PV-9 Report” shall mean a report prepared by or under the supervision
of the Borrower’s chief engineer, in form and substance reasonably satisfactory
to the Administrative Agent, setting forth the PV-9 for the Proved Reserves
attributable to the Borrowing Base Properties of the Borrower and the Credit
Parties, as of the immediately preceding June 30.

“Interim Redetermination” shall have the meaning provided in Section 2.14.

“Interim Redetermination Date” shall mean the date on which a Borrowing Base
that has been redetermined pursuant to an Interim Redetermination becomes
effective as provided in Section 2.14.

“Interpolated Rate” shall mean, at any time, for any Interest Period, the rate
per annum (rounded to the same number of decimal places as the LIBO Screen Rate)
determined by the Administrative Agent (which determination shall be conclusive
and binding absent manifest error) to be equal to the rate that results from
interpolating on a linear basis between: (a) the LIBO Screen Rate for the
longest period for which the LIBO Screen Rate is available) that is shorter than
the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest
period (for which that LIBO Screen Rate is available) that exceeds the Impacted
Interest Period, in each case, at such time.

“Investment” shall mean, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of Stock, Stock Equivalents,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person (including any “short sale” or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale), (b) the making of any deposit with, or advance, loan or other
extension of credit to, assumption of Indebtedness of, or capital contribution
to, or purchase or other acquisition of an equity participation in, any other
Person (including the purchase of property from another Person subject to an
understanding or agreement,

 

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contingent or otherwise, to resell such property to such Person) (including any
partnership or joint venture), (c) the entering into of any guarantee of, or
other contingent obligation with respect to, Indebtedness of any other Person or
(d) the purchase or other acquisition (in one transaction or a series of
transactions) of (x) all or substantially all of the property and assets or
business of another Person or (y) assets constituting a business unit, line of
business or division of such Person; provided that, in the event that any
Investment is made by the Borrower or any Restricted Subsidiary in any Person
through substantially concurrent interim transfers of any amount through one or
more other Restricted Subsidiaries, then such other substantially concurrent
interim transfers shall be disregarded for purposes of Section 10.5.

“Investment Grade Period” shall mean any period commencing with the date the
Borrower elects to enter into an Investment Grade Period pursuant to the
provisions of Section 13.23(a) and ending with the earlier to occur of (i) the
date the Borrower elects to exit such Investment Grade Period pursuant to the
provisions of Section 13.23(b) and (ii) the first date following the beginning
of such Investment Grade Period on which the Borrower receives both (i) a Rating
from Moody’s that is lower than Ba1 and (ii) a Rating from S&P that is lower
than BB+.

“ISP” shall mean, 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” shall mean, with respect to any Letter of Credit, the Letter
of Credit Request, and any other document, agreement and instrument entered into
by the applicable Letter of Credit Issuer and the Borrower (or any Restricted
Subsidiary) or in favor of such Letter of Credit Issuer and relating to such
Letter of Credit.

“Joint Lead Arrangers” shall mean JPMorgan Chase Bank, N.A., Merrill Lynch,
Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer
wholly-owned by Bank of America Corporation to which all or substantially all of
Bank of America Corporation’s or any of its subsidiaries’ investment banking,
commercial lending services or related businesses may be transferred following
the date of this Agreement) and RBC Capital Markets, each in its capacity as
joint lead arranger in respect of the Facility.

“L/C Borrowing” shall mean 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 Borrowing. All L/C Borrowings shall be denominated in Dollars.

“L/C Maturity Date” shall mean the date that is five Business Days prior to the
Maturity Date.

“L/C Obligations” shall mean, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unpaid Drawings, including all L/C Borrowings. 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.

“L/C Participant” shall have the meaning provided in Section 3.3(a).

“L/C Participation” shall have the meaning provided in Section 3.3(a).

“Lender” shall have the meaning provided in the preamble to this Agreement.

 

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“Lender Default” shall mean (i) the refusal or failure of any Lender to make
available its portion of any incurrence of Loans or participations in Letters of
Credit, which refusal or failure is not cured within one Business Day after the
date of such refusal or failure; (ii) the failure of any Lender to pay over to
the Administrative Agent, any Letter of Credit Issuer or any other Lender any
other amount required to be paid by it hereunder within one Business Day of the
date when due, unless the subject of a good faith dispute; (iii) a Lender has
notified the Borrower or the Administrative Agent that it does not intend or
expect to comply with any of its funding obligations or has made a public
statement to that effect with respect to its funding obligations under the
Facility, (iv) the failure by a Lender to confirm in a manner reasonably
satisfactory to the Administrative Agent that it will comply with its
obligations under the Facility or (v) a Distressed Person has admitted in
writing that it is insolvent or such Distressed Person becomes subject to a
Lender-Related Distress Event or a Bail-In Action.

“Lender-Related Distress Event” shall mean, with respect to any Lender, that
such Lender or any Person that directly or indirectly controls such Lender
(each, a “Distressed Person”), as the case may be, is or becomes subject to a
voluntary or involuntary case with respect to such Distressed Person under any
debt relief law, or a custodian, conservator, receiver or similar official is
appointed for such Distressed Person or any substantial part of such Distressed
Person’s assets, or such Distressed Person or any Person that directly or
indirectly controls such Distressed Person is subject to a forced liquidation,
or such Distressed Person makes a general assignment for the benefit of
creditors or is otherwise adjudicated as, or determined by any Governmental
Authority having regulatory authority over such Distressed Person or its assets
to be, insolvent or bankrupt; provided that a Lender-Related Distress Event
shall not be deemed to have occurred solely by virtue of the ownership or
acquisition of any equity interests in any Lender or any Person that directly or
indirectly controls such Lender by a Governmental Authority or an
instrumentality thereof 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 of America 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 agreements made by such Lender.

“Letter of Credit” shall have the meaning provided in Section 3.1.

“Letter of Credit Commitment” shall mean, with respect to each Letter of Credit
Issuer, the commitment of such Letter of Credit Issuer to issue Letters of
Credit hereunder, in an aggregate amount at any one time outstanding not to
exceed the amount set forth therefor opposite such Letter of Credit Issuer’s
name on Schedule 1.1(a) at such time, as such schedule and amount may be amended
or supplemented from time to time by the Administrative Agent, the Borrower and
the relevant Letter of Credit Issuer.

“Letter of Credit Exposure” shall mean, with respect to any Lender, at any time,
the sum of (a) the principal amount of any Unpaid Drawings in respect of which
such Lender has made (or is required to have made) payments to the applicable
Letter of Credit Issuer pursuant to Section 3.4(a) at such time and (b) such
Lender’s Commitment Percentage of the Letters of Credit Outstanding at such time
(excluding the portion thereof consisting of Unpaid Drawings in respect of which
the Lenders have made (or are required to have made) payments to the applicable
Letter of Credit Issuer pursuant to Section 3.4(a)) minus the amount of cash or
deposit account balances held by the Administrative Agent to Cash Collateralize
outstanding Letters of Credit and Unpaid Drawings under Section 3.8.

“Letter of Credit Fee” shall have the meaning provided in Section 4.1(b).

“Letter of Credit Issuer” shall mean (a) JPMorgan Chase Bank, N.A., (b) Bank of
America, N.A., and (c) Royal Bank of Canada, or, in each case, any of their
respective Affiliates or any new Letter of Credit Issuer or any replacement or
successor appointed pursuant to Section 3.6.

 

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References herein and in the other Credit Documents to the Letter of Credit
Issuer shall be deemed to refer to the Letter of Credit Issuer in respect of the
applicable Letter of Credit or to all Letter of Credit Issuers, as the context
requires.

“Letter of Credit Request” shall have the meaning provided in Section 3.2.

“Letter of Credit Sublimit” shall mean $500,000,000, as the same may be reduced
from time to time pursuant to Section 3.1.

“Letters of Credit Outstanding” shall mean, at any time, the sum of, without
duplication, (a) the aggregate Stated Amount of all outstanding Letters of
Credit and (b) the aggregate principal amount of all Unpaid Drawings in respect
of all Letters of Credit.

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

“LIBOR Rate” shall mean, with respect to any LIBOR Loan for any Interest Period,
the LIBO Screen Rate at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period; provided that if the LIBO
Screen Rate shall not be available at such time for such Interest Period (an
“Impacted Interest Period”) then the LIBOR Rate shall be the Interpolated Rate.

“LIBO Screen Rate” shall mean, for any day and time, with respect to any LIBOR
Loan for any Interest Period, the London interbank offered rate as administered
by ICE Benchmark Administration (or any other Person that takes over the
administration of such rate for U.S. Dollars for a period equal in length to
such Interest Period as displayed on such day and time on pages LIBOR01 or
LIBOR02 of the Reuters screen that displays such rate (or, in the event such
rate does not appear on a Reuters page or screen, on any successor or substitute
page on such screen that displays such rate, or on the appropriate page of such
other information service that publishes such rate from time to time as selected
by the Administrative Agent in its reasonable discretion); provided that if the
LIBO Screen Rate as so determined would be less than zero, such rate shall be
deemed to be zero for the purposes of this Agreement.

“Lien” shall mean any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the property, whether such interest
is based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including (a) the lien or security interest
arising from a mortgage, encumbrance, pledge, security agreement or a financing
lease, consignment or bailment for security purposes or (b) Production Payments
and the like payable out of Oil and Gas Properties; provided that in no event
shall an operating lease be deemed to be a Lien.

“Liquidity” shall mean, as of any date of determination, the sum of (a) the
Available Commitment on such date and (b) the aggregate amount of cash and cash
equivalents (in each case, free and clear of all Liens, other than Permitted
Liens and nonconsensual Liens permitted by Section 10.2 and Liens permitted by
Sections 10.2(a), (h), (i) and (l) and clauses (i) and (ii) of Section 10.2(n))
included in the cash and cash equivalents accounts listed on the consolidated
balance sheet of the Borrower and the Restricted Subsidiaries at such date, less
the amount, if any, of the Borrowing Base Deficiency existing on such date of
determination.

“Loan” shall mean any extension of credit by a Lender to the Borrower hereunder.

 

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“Loan Limit” shall mean (a) at any time during an Investment Grade Period, the
lesser of (i) the Maximum Aggregate Amount and (ii) the Total Commitments at
such time and (b) at any time that is not an Investment Grade Period, the least
of (i) the Maximum Aggregate Amount, (ii) the Total Commitments at such time and
(iii) the Borrowing Base at such time (including as it may be reduced pursuant
to Section 2.14(f)).

“Majority Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or
holding a majority of the Adjusted Total Commitment at such date, or (b) if the
Total Commitment has been terminated or for the purposes of acceleration
pursuant to Section 11, Non-Defaulting Lenders having or holding a majority of
the outstanding principal amount of the Loans and Letter of Credit Exposure
(excluding the Loans and Letter of Credit Exposure of Defaulting Lenders) in the
aggregate at such date.

“Margin Stock” means margin stock within the meaning of Regulations T, U and X,
as applicable.

“Material Adverse Effect” shall mean a material adverse effect on (a) the assets
or properties, financial condition, businesses or operations of the Credit
Parties taken as a whole (it being understood that changes in commodity prices
for Hydrocarbons affecting the oil and gas industry as a whole shall not
constitute a material adverse effect), (b) the ability of the Credit Parties
taken as a whole to carry out their business as of the date of this Agreement or
as proposed at the date of this Agreement to be conducted, (c) the ability of
the Credit Parties taken as a whole to perform fully and on a timely basis their
respective obligations under any of the Credit Documents to which they are a
party, or (d) the validity or enforceability of any of the Credit Documents or
the rights and remedies of the Administrative Agent or the Lenders under this
Agreement and the other Credit Documents.

“Material Subsidiary” shall mean, at any date of determination, each Domestic
Subsidiary of the Borrower that is a Restricted Subsidiary of the Borrower whose
Total Assets (when combined with the assets of such Subsidiary’s Subsidiaries,
after eliminating intercompany obligations) at the last day of the Test Period
for which Section 9.1 Financials have been delivered were equal to or greater
than 5% of the Consolidated Total Assets of the Borrower and the Restricted
Subsidiaries at such date, determined in accordance with GAAP.

“Maturity Date” shall mean April 13, 2023.

“Maximum Aggregate Amount” shall mean $4,000,000,000.

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger
or consolidation to its business.

“Mortgage” shall mean a mortgage or a deed of trust, deed to secure debt, trust
deed, assignment of as-extracted collateral, fixture filing or other security
document entered into by the owner of a Mortgaged Property and the
Administrative Agent for the benefit of the Secured Parties in respect of that
Mortgaged Property, in such form as agreed between the Borrower and the
Administrative Agent.

“Mortgaged Present Value” shall mean, as of any date of determination, the PV-9
attributable to Mortgaged Properties.

“Mortgaged Property” shall mean, initially, each parcel of real estate and
improvements thereto owned by a Credit Party with respect to which a Mortgage is
required to be granted pursuant to Section 9.10; provided that, notwithstanding
any provision in any Mortgage to the contrary, in no event shall any Building
(as defined in the applicable Flood Insurance Regulation) or Manufactured
(Mobile)

 

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Home (as defined in the applicable Flood Insurance Regulation) located on the
Mortgaged Properties (as defined in the applicable Mortgage) within an area
having special flood hazards and in which flood insurance is available under the
National Flood Insurance Act of 1968 be included in the definition of “Mortgaged
Property” or “Mortgaged Properties” and no such Building or Manufactured
(Mobile) Home shall be encumbered by any 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.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA and subject to Title IV of ERISA that the Borrower
or an ERISA Affiliate is or was obligated to contribute to.

“New Borrowing Base Notice” shall have the meaning provided in Section 2.14(d).

“Non-Consenting Lender” shall have the meaning provided in Section 13.7(b).

“Non-Defaulting Lender” shall mean and include each Lender other than a
Defaulting Lender.

“Non-Extension Notice Date” shall have the meaning provided in Section 3.2(b).

“Non-U.S. Lender” shall mean any Lender that is not a “United States person” as
defined by Section 7701(a)(30) of the Code.

“Notice of Borrowing” shall mean a request of the Borrower in accordance with
the terms of Section 2.3(a) and substantially in the form of Exhibit A or such
other form as shall be approved by the Administrative Agent (acting reasonably).

“Notice of Conversion or Continuation” shall have the meaning provided in
Section 2.6(a).

“NYFRB” shall mean the Federal Reserve Bank of New York.

“NYFRB Rate” shall mean, for any day, the greater of (a) the Federal Funds
Effective Rate in effect on such day and (b) the Overnight Rate in effect on
such day (or for any day that is not a Business Day, for the immediately
preceding Business Day); provided that if none of such rates are published for
any day that is a Business Day, the term “NYFRB Rate” means the rate for a
federal funds transaction quoted at 11:00 a.m. on such day received by the
Administrative Agent from a federal funds broker of recognized standing selected
by it; provided, further, that if any of the aforesaid rates as so determined
would be less than zero, such rate shall be deemed to be zero for purposes of
this Agreement.

“Obligations” shall mean all advances to, and debts, liabilities and obligations
of, any Credit Party arising under any Credit Document or otherwise with respect
to any Loan or Letter of Credit or under any Secured Cash Management Agreement
or Secured Hedge Agreement, in each case, entered into with the Borrower or any
of its Restricted Subsidiaries, 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 Credit Party or any Affiliate thereof in any
proceeding under any bankruptcy or insolvency law naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Credit Parties under

 

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the Credit Documents (and any of their Restricted Subsidiaries to the extent
they have obligations under the Credit Documents) include the obligation
(including Guarantee Obligations) to pay principal, interest, charges, expenses,
fees, attorney costs, indemnities and other amounts payable by any Credit Party
under any Credit Document. Notwithstanding the foregoing, (a) the obligations of
the Borrower or any Restricted Subsidiary under any Secured Hedge Agreement and
under any Secured Cash Management Agreement shall be secured and guaranteed
pursuant to the Security Documents and the Guarantee only to the extent that,
and for so long as, the other Obligations are so secured and guaranteed, (b) any
release of Collateral or Guarantors effected in the manner permitted by this
Agreement and the other Credit Documents shall not require the consent of the
holders of Hedging Obligations under Secured Hedge Agreements or of the holders
of Cash Management Obligations under Secured Cash Management Agreements and
(c) solely with respect to any Credit Party that is not an “eligible contract
participant” under the Commodity Exchange Act, Excluded Hedge Obligations of
such Credit Party shall in any event be excluded from “Obligations” owing by
such Credit Party.

“Oil and Gas Properties” shall mean (a) Hydrocarbon Interests, (b) the
properties now or hereafter pooled or unitized with Hydrocarbon Interests,
(c) all presently existing or future unitization, pooling agreements and
declarations of pooled units and the units created thereby (including all units
created under orders, regulations and rules of any Governmental Authority) which
may affect all or any portion of the Hydrocarbon Interests, (d) all operating
agreements, contracts and other agreements, including production sharing
contracts and agreements, which relate to any of the Hydrocarbon Interests or
the production, sale, purchase, exchange or processing of Hydrocarbons from or
attributable to such Hydrocarbon Interests, (e) all Hydrocarbons in and under
and which may be produced and saved or attributable to the Hydrocarbon
Interests, including all oil in tanks, and all rents, issues, profits, proceeds,
products, revenues and other incomes from or attributable to the Hydrocarbon
Interests, (f) all tenements, hereditaments, appurtenances and properties in any
manner appertaining, belonging, affixed or incidental to the Hydrocarbon
Interests and (g) all properties, rights, titles, interests and estates
described or referred to above, including any and all property, real or
personal, now owned or hereafter acquired and situated upon, used, held for use
or useful in connection with the operating, working or development of any of
such Hydrocarbon Interests or property (excluding drilling rigs, automotive
equipment, rental equipment or other personal property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all oil wells, gas wells, injection wells or other wells,
buildings, structures, fuel separators, liquid extraction plants, plant
compressors, pumps, pumping units, field gathering systems, gas processing
plants and pipeline systems and any related infrastructure to any thereof, tanks
and tank batteries, fixtures, valves, fittings, machinery and parts, engines,
boilers, meters, apparatus, equipment, appliances, tools, implements, cables,
wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements
and servitudes together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing.

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

“Other Taxes” shall mean any and all present or future stamp, registration,
documentary, intangible, recording, filing or similar taxes (including interest,
fines, penalties, additions to tax and related, reasonable, out-of-pocket
expenses with regard thereto) arising from any payment made hereunder or made
under any other Credit Document or from the execution or delivery of,
registration or enforcement of, consummation or administration of, from the
receipt or perfection of a security interest under, or otherwise with respect
to, this Agreement or any other Credit Document; provided that such term shall
not include Other Connection Taxes imposed with respect to an assignment (except
to the extent that any such assignment is requested or required by the Borrower)
or Excluded Taxes.

 

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“Overnight Rate” shall mean, for any day, the rate comprised of both overnight
federal funds and overnight LIBOR loans by U.S.-managed banking offices of
depository institutions, as such composite rate shall be determined by the NYFRB
as set forth on its public website from time to time, and published on the next
succeeding Business Day by the NYFRB as an overnight bank funding rate.

“Participant” shall have the meaning provided in Section 13.6(c).

“Participant Register” shall have the meaning provided in Section 13.6(c).

“Patriot Act” shall have the meaning provided in Section 13.18.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, and any successor entity performing similar functions.

“Pension Plan” shall mean an “employee pension benefit plan” (as defined in
Section 3(2) of ERISA) (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Sections 412 and 430 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would, under Section 4062 or
Section 4069 of ERISA, be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

“Permitted Acquisition” shall mean the acquisition, by merger or otherwise, by
the Borrower or any of the Restricted Subsidiaries of assets (including any
assets constituting a business unit, line of business or division) or Stock or
Stock Equivalents, so long as (a) such acquisition and all transactions related
thereto shall be consummated in all material respects in accordance with
Requirements of Law; (b) if such acquisition involves the acquisition of Stock
or Stock Equivalents of a Person that upon such acquisition would become a
Subsidiary, such acquisition shall result in the issuer of such Stock becoming a
Restricted Subsidiary and, to the extent required by Section 9.10, a Guarantor
(subject to the time periods set forth therein); (c) such acquisition shall
result in the Administrative Agent, for the benefit of the Secured Parties,
being granted a security interest in any Stock or any assets so acquired to the
extent required by Section 9.10 (and subject to the time periods set forth
therein); (d) after giving effect to such acquisition, no Default or Event of
Default shall have occurred and be continuing; (e) after giving effect to such
acquisition, the Borrower and its Restricted Subsidiaries shall be in compliance
with Section 10.13; and (f) the Borrower shall be in compliance, on a pro forma
basis after giving effect to such acquisition (including any Indebtedness
assumed or permitted to exist pursuant to Section 10.1(i), and any related pro
forma adjustment), with the Financial Performance Covenants, as such covenants
are recomputed as at the last day of the most recently ended Test Period as if
such acquisition had occurred on the first day of such Test Period.

“Permitted Additional Debt” shall mean unsecured senior, senior subordinated or
subordinated Indebtedness issued by the Borrower or a Guarantor, (a) the terms
of which do not provide for any scheduled repayment, mandatory redemption or
sinking fund obligation prior to the 91st day after the Maturity Date (other
than customary offers to purchase upon a change of control, asset sale or
casualty or condemnation event and customary acceleration rights after an event
of default), (b) the covenants, events of default, guarantees and other terms of
which (other than interest rate, fees, funding discounts and redemption or
prepayment premiums determined by the Borrower to be “market” rates, fees,
discounts and premiums at the time of issuance or incurrence of any such
Indebtedness), taken as a whole, are determined by the Borrower to be “market”
terms on the date of issuance or incurrence and in any event are not, in the
aggregate, materially more restrictive on the Borrower and its Restricted
Subsidiaries than

 

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the terms of this Agreement (as in effect at the time of such issuance or
incurrence) and do not require the maintenance or achievement of any financial
performance standards other than as a condition to taking specified actions;
provided that a certificate of an Authorized Officer of the Borrower delivered
to the Administrative Agent at least five Business Days prior to the incurrence
or issuance of such Indebtedness, together with a reasonably detailed
description of the material terms and conditions of such Indebtedness or drafts
of the documentation relating thereto, stating that the Borrower has determined
in good faith that such terms and conditions satisfy the foregoing requirements
shall be conclusive evidence that such terms and conditions satisfy the
foregoing requirements, (c) if such Indebtedness is senior subordinated or
subordinated Indebtedness, the terms of such Indebtedness provide for customary
subordination of such Indebtedness to the Obligations and (d) no Subsidiary of
the Borrower (other than a Guarantor) is an obligor under such Indebtedness.

“Permitted Investments” shall mean:

(a) securities issued or unconditionally guaranteed by the United States
government or any agency or instrumentality thereof, in each case having
maturities and/or reset dates of not more than 24 months from the date of
acquisition thereof;

(b) securities issued by any state, territory or commonwealth of the United
States of America or any political subdivision of any such state, territory or
commonwealth or any public instrumentality thereof or any political subdivision
of any such state, territory or commonwealth or any public instrumentality
thereof having maturities of not more than 24 months from the date of
acquisition thereof and, at the time of acquisition, having an investment grade
rating generally obtainable from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, then from another
nationally recognized rating service);

(c) commercial paper maturing no more than 12 months after the date of creation
thereof and, at the time of acquisition, having a rating of at least A-2 or P-2
from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be
rating such obligations, an equivalent rating from another nationally recognized
rating service);

(d) time deposits with, or domestic and LIBOR certificates of deposit or
bankers’ acceptances maturing no more than two years after the date of
acquisition thereof issued by any Lender or any other bank having combined
capital and surplus of not less than $500,000,000 in the case of domestic banks
and $100,000,000 (or the Dollar equivalent thereof) in the case of foreign
banks;

(e) repurchase agreements with a term of not more than 90 days for underlying
securities of the type described in clauses (a), (b) and (d) above entered into
with any bank meeting the qualifications specified in clause (d) above or
securities dealers of recognized national standing;

(f) marketable short-term money market and similar funds (i) either having
assets in excess of $500,000,000 or (ii) having a rating of at least A-2 or P-2
from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be
rating such obligations, an equivalent rating from another nationally recognized
rating service);

(g) shares of investment companies that are registered under the Investment
Company Act of 1940 and substantially all the investments of which are one or
more of the types of securities described in clauses (a) through (f) above; and

 

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(h) in the case of Investments by any Restricted Foreign Subsidiary or
Investments made in a country outside the United States of America, other
customarily utilized high-quality Investments in the country where such
Restricted Foreign Subsidiary is located or in which such Investment is made.

“Permitted Liens” shall mean:

(a) Liens for taxes, assessments or governmental charges or claims not yet
overdue for a period of more than 30 days or that are being contested in good
faith and by appropriate proceedings for which appropriate reserves have been
established to the extent required by and in accordance with GAAP, or for
property taxes on property that the Borrower or one of its Subsidiaries has
determined to abandon if the sole recourse for such tax, assessment, charge or
claim is to such property;

(b) Liens in respect of property or assets of the Borrower or any of the
Restricted Subsidiaries imposed by law, such as landlords’, vendors’,
suppliers’, carriers’, warehousemen’s, repairmens’, construction contractors’,
workers’ and mechanics’ Liens and other similar Liens arising in the ordinary
course of business or incident to the exploration, development, operation or
maintenance of Oil and Gas Properties, in each case so long as such Liens arise
in the ordinary course of business and do not individually or in the aggregate
have a Material Adverse Effect;

(c) Liens arising from judgments or decrees in circumstances not constituting an
Event of Default under Section 11.9;

(d) Liens incurred or pledges or deposits made in connection with workers’
compensation, unemployment insurance and other types of social security, old age
pension, public liability obligations or similar legislation and deposits
securing liabilities to insurance carriers under insurance or self-insurance
arrangements in respect of such obligations, or to secure the performance of
tenders, statutory obligations, plugging and abandonment obligations, surety,
stay, customs and appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other similar obligations
(including letters of credit issued in lieu of such bonds or to support the
issuance thereof) incurred in the ordinary course of business or otherwise
constituting Investments permitted by Section 10.5;

(e) ground leases, subleases, licenses or sublicenses in respect of real
property on which facilities owned or leased by the Borrower or any of its
Restricted Subsidiaries are located;

(f) easements, rights-of-way, licenses, surface leases, restrictions (including
zoning restrictions), title defects, exceptions, deficiencies or irregularities
in title, encroachments, protrusions, servitudes, permits, conditions and
covenants and other similar charges or encumbrances (including in any rights of
way or other property of the Borrower or its Restricted Subsidiaries for the
purpose of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil or other minerals or timber, and
other like purposes, or for joint or common use of real estate, rights of way,
facilities and equipment) not interfering in any material respect with the
business of the Borrower and its Restricted Subsidiaries, taken as a whole and,
to the extent reasonably agreed by the Administrative Agent, any exception on
the title reports issued in connection with any Borrowing Base Property;

(g) any interest or title of a lessor, sublessor, licensor or sublicensor or
secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under
any lease, sublease, license or sublicense permitted by this Agreement;

(h) Liens in favor of customs and revenue authorities arising as a matter of law
to secure payment of customs duties in connection with the importation of goods;

 

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(i) Liens on goods or inventory the purchase, shipment or storage price of which
is financed by a documentary letter of credit or bankers’ acceptance issued for
the account of the Borrower or any of its Restricted Subsidiaries; provided that
such Lien secures only the obligations of the Borrower or such Restricted
Subsidiaries in respect of such letter of credit or bankers’ acceptance to the
extent permitted under Section 10.1;

(j) leases, licenses, subleases or sublicenses granted to others not interfering
in any material respect with the business of the Borrower and its Restricted
Subsidiaries, taken as a whole;

(k) Liens arising from precautionary Uniform Commercial Code financing statement
or similar filings made in respect of operating leases entered into by the
Borrower or any of its Restricted Subsidiaries;

(l) Liens created in the ordinary course of business in favor of banks and other
financial institutions over credit balances of any bank accounts of the Borrower
and the Restricted Subsidiaries held at such banks or financial institutions, as
the case may be;

(m) Liens which arise in the ordinary course of business under operating
agreements, joint venture agreements, oil and gas partnership agreements, oil
and gas leases, farm-out agreements, 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 that are usual and
customary in the oil and gas business and are for claims which are not
delinquent or that are being contested in good faith and by appropriate
proceedings for which appropriate reserves have been established to the extent
required by and in accordance with GAAP; provided that any such Lien referred to
in this clause does not in the aggregate have a Material Adverse Effect;

(n) any zoning or similar law or right reserved to or vested in any Governmental
Authority to control or regulate the use of any real property that does not
materially interfere with the ordinary conduct of the business of the Borrower
and its Restricted Subsidiaries, taken as a whole; and

(o) Liens arising pursuant to Article 9.343 of the Texas Uniform Commercial Code
or other similar statutory provisions of other states with respect to production
purchased from others.

The parties acknowledge and agree that no intention to subordinate the priority
afforded the Liens granted in favor of the Administrative Agent, for the benefit
of the Secured Parties, under the Security Documents is to be hereby implied or
expressed by the permitted existence of such Permitted Liens.

“Permitted Refinancing Indebtedness” shall mean, with respect to any
Indebtedness (the “Refinanced Indebtedness”), any Indebtedness issued or
incurred in exchange for, or the net proceeds of which are used to modify,
extend, refinance, renew, replace or refund (collectively to “Refinance” or a
“Refinancing” or “Refinanced”), such Refinanced Indebtedness (or previous
refinancing thereof constituting Permitted Refinancing Indebtedness); provided
that (a) the principal amount (or accreted value, if applicable) of any such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Refinanced Indebtedness outstanding
immediately prior to such Refinancing except by an amount equal to the unpaid
accrued interest and premium thereon plus other amounts paid and fees and
expenses incurred in connection with such Refinancing (including original issue
discount) plus an amount equal to any existing commitment unutilized and letters
of credit

 

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undrawn thereunder, (b) if the Indebtedness being Refinanced is Indebtedness
permitted by Section 10.1(h) or 10.1(i), the direct and contingent obligors with
respect to such Permitted Refinancing Indebtedness are not changed (except that
a Credit Party may be added as an additional obligor), (c) other than with
respect to a Refinancing in respect of Indebtedness permitted pursuant to
Section 10.1(g), such Permitted Refinancing Indebtedness shall have a final
maturity date equal to or later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Refinanced Indebtedness, (d) if the Indebtedness being
Refinanced is Indebtedness permitted by Section 10.1(h) or 10.1(i), terms and
conditions of any such Permitted Refinancing Indebtedness, taken as a whole, are
not materially less favorable to the Lenders than the terms and conditions of
the Refinanced Indebtedness being Refinanced (including, if applicable, as to
collateral priority and subordination, but excluding as to interest rates, fees,
floors, funding discounts and redemption or prepayment premiums); provided that,
a certificate of an Authorized Officer of the Borrower delivered to the
Administrative Agent at least five Business Days prior to the incurrence or
issuance of such Indebtedness, together with a reasonably detailed description
of the material terms and conditions of such Indebtedness or drafts of the
documentation relating thereto, stating that the Borrower has determined in good
faith that such terms and conditions satisfy the foregoing requirement shall be
conclusive evidence that such terms and conditions satisfy the foregoing
requirement, and (e) if the Indebtedness being Refinanced is Indebtedness
permitted by Section 10.1(b), such Permitted Refinancing Indebtedness is
unsecured.

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

“Petroleum Industry Standards” shall mean the Definitions for Oil and Gas
Reserves promulgated by the Society of Petroleum Engineers (or any generally
recognized successor) as in effect at the time in question.

“Plan” shall mean an “employee benefit plan” (as defined in Section 3(3) of
ERISA) (other than a Multiemployer Plan) in respect of which the Borrower or any
ERISA Affiliate is (or, if such Plan were terminated, would, under Section 4062
or Section 4069 of ERISA, be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

“Plan Asset Regulations” shall mean 29 CFR § 2510.3-101 et seq., as modified by
Section 3(42) of ERISA, as amended from time to time.

“Pledge Agreement” shall mean the Fourth Amended and Restated Pledge and
Security Agreement, dated as of the date hereof, between the Borrower and the
Administrative Agent, for the benefit of the Secured Parties, substantially in
the form of Exhibit D.

“Prime Rate” shall mean the rate of interest last quoted by The Wall Street
Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to
quote such rate, the highest per annum interest rate published by the Federal
Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected
Interest Rates) as the “bank prime loan” rate or, if such rate is no longer
quoted therein, any similar rate quoted therein (as determined by the
Administrative Agent) or any similar release by the Federal Reserve Board (as
determined by the Administrative Agent). Each change in the Prime Rate shall be
effective from and including the date such change is publicly announced or
quoted as being effective.

“Production Payment” means a production payment obligation (whether volumetric
or dollar denominated) of the Borrower or any of its Restricted Subsidiaries
which are payable from a specified share of proceeds received from production
from specified Oil and Gas Properties, together with all undertakings and
obligations in connection therewith.

 

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“Projected Volume” means the forecasted production of oil and natural gas
reserves of the Borrower and its Restricted Subsidiaries, as determined as of
the last day of each fiscal quarter, by the Borrower based on the Borrower’s
internal engineering reports

“Proposed Borrowing Base” shall have the meaning provided in Section 2.14(c)(i).

“Proposed Borrowing Base Notice” shall have the meaning provided in
Section 2.14(c)(ii).

“Proved Developed Producing Reserves” shall mean oil and gas reserves that, in
accordance with Petroleum Industry Standards, are classified as both “Proved
Reserves” and “Developed Producing Reserves.”

“Proved Developed Reserves” shall mean oil and gas reserves that, in accordance
with Petroleum Industry Standards, are classified as both “Proved Reserves” and
one of the following: (a) “Developed Producing Reserves” or (b) “Developed
Non-Producing Reserves.”

“Proved Reserves” shall mean oil and gas reserves that, in accordance with
Petroleum Industry Standards, are classified as both “Proved Reserves” and one
of the following: (a) “Developed Producing Reserves”, (b) “Developed
Non-Producing Reserves” or (c) “Undeveloped Reserves”.

“PTE” shall mean a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“PV-9” shall mean, with respect to any Proved Reserves expected to be produced
from any Oil and Gas Properties, the net present value, discounted at 9% per
annum, of the future net revenues expected to accrue to the Borrower’s and the
Restricted Subsidiaries’ collective interests in such reserves during the
remaining expected economic lives of such reserves, calculated in accordance
with the most recent Bank Price Deck provided to the Borrower by the
Administrative Agent pursuant to Section 2.14(g).

“Qualified Acquisition” means an acquisition or a series of related acquisitions
in which the consideration paid by the Credit Parties is equal to or greater
than $50,000,000.

“Qualified Disposition” means a Disposition or a series of related Dispositions
in which the consideration received by the Credit Parties is equal to or greater
than $50,000,000.

“Rating” shall mean (a) with respect to a Person’s rating by Moody’s, such
Person’s (i) long-term corporate family rating if such Person is not considered
investment grade by Moody’s or (ii) long-term, senior unsecured debt rating if
such Person is considered investment grade by Moody’s, and (b) with respect to a
Person’s rating by S&P, such Person’s long-term issuer rating.

“Redetermination Date” shall mean, with respect to any Scheduled Redetermination
or any Interim Redetermination, the date that the redetermined Borrowing Base
related thereto becomes effective pursuant to Section 2.14(d).

“Refinance” shall have the meaning provided in the definition of “Permitted
Refinancing Indebtedness.”

“Register” shall have the meaning provided in Section 13.6(b)(iv).

 

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“Regulation D” shall mean Regulation D of the Federal Reserve Board, as in
effect from time to time and all official rulings and interpretations thereunder
or thereof.

“Regulation T” shall mean Regulation T of the Federal Reserve Board, as in
effect from time to time and all official rulings and interpretations thereunder
or thereof.

“Regulation U” shall mean Regulation U of the Federal Reserve Board, as in
effect from time to time and all official rulings and interpretations thereunder
or thereof.

“Regulation X” shall mean Regulation X of the Federal Reserve Board, as in
effect from time to time and all official rulings and interpretations thereunder
or thereof.

“Reimbursement Date” shall have the meaning provided in Section 3.4(a).

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the directors, officers, employees, agents and members
of such Person or such Person’s Affiliates and any Person that possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of such Person, whether through the ability to exercise
voting power, by contract or otherwise.

“Required Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or
holding at least 66- 2⁄3% of the Adjusted Total Commitment at such date or
(b) if the Total Commitment has been terminated, Non-Defaulting Lenders having
or holding at least 66- 2⁄3% of the outstanding principal amount of the Loans
and Letter of Credit Exposure (excluding the Loans and Letter of Credit Exposure
of Defaulting Lenders) in the aggregate at such date.

“Requirement of Law” shall mean, as to any Person, any law, treaty, rule,
regulation statute, order, ordinance, decree, judgment, consent decree, writ,
injunction, settlement agreement or governmental requirement enacted,
promulgated or imposed or entered into or agreed by any Governmental Authority,
in each case applicable to or binding upon such Person or any of its property or
assets or to which such Person or any of its property or assets is subject.

“Reserve Report” shall mean the Initial Reserve Report and any other subsequent
report, in form and substance reasonably satisfactory to the Administrative
Agent, setting forth, as of each December 31st (or such other date in the event
of certain Interim Redeterminations) the Proved Reserves and the Proved
Developed Reserves attributable to the Borrowing Base Properties of the Borrower
and the Credit Parties, together with a projection of the rate of production and
future net income, taxes, operating expenses and Capital Expenditures with
respect thereto as of such date, based upon the most recent Bank Price Deck
provided to the Borrower by the Administrative Agent pursuant to
Section 2.14(g); provided that in connection with any Interim Redeterminations
of the Borrowing Base pursuant to the last sentence of Section 2.14(b) (i.e., as
a result of the Borrower having acquired Oil and Gas Properties with Proved
Reserves that are to be Borrowing Base Properties having a PV-9 (calculated at
the time of acquisition) in excess of 10% of the Borrowing Base in effect
immediately prior to such acquisition), the Borrower shall be required, for
purposes of updating the Reserve Report, to set forth only such additional
Proved Reserves and related information as are the subject of such acquisition.

“Restricted Foreign Subsidiary” shall mean a Foreign Subsidiary that is a
Restricted Subsidiary.

“Restricted Payments” shall have the meaning provided in Section 10.6.

 

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“Restricted Subsidiary” shall mean any Subsidiary of the Borrower other than an
Unrestricted Subsidiary.

“S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger
or consolidation to its business.

“Sanctioned Country” shall mean, at any time, a country or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
Crimea, Cuba, Iran, North Korea, Sudan and Syria).

“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury or the U.S. Department of
State, (b) any Person operating, organized or resident in a Sanctioned Country,
(c) any Person owned or controlled by any such Person or Persons described in
the foregoing clauses (a) or (b) or (d) any Person otherwise the subject of any
Sanctions.

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

“Scheduled Redetermination” shall have the meaning provided in Section 2.14(b).

“Scheduled Redetermination Date” shall mean the date on which a Borrowing Base
that has been redetermined pursuant to a Scheduled Redetermination becomes
effective as provided in Section 2.14.

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

“Section 9.1 Financials” shall mean the financial statements delivered, or
required to be delivered, pursuant to Section 9.1(a) or (b), together with the
accompanying Authorized Officer’s certificate delivered, or required to be
delivered, pursuant to Section 9.1(c).

“Secured Cash Management Agreement” shall mean any Cash Management Agreement by
and between the Borrower or any of its Restricted Subsidiaries and any Cash
Management Bank.

“Secured Hedge Agreement” shall mean any Hedge Agreement by and between the
Borrower or any of its Restricted Subsidiaries and any Hedge Bank.

“Secured Parties” shall mean, collectively, the Administrative Agent, the Letter
of Credit Issuers, each Lender, each Hedge Bank that is party to any Secured
Hedge Agreement, each Cash Management Bank that is a party to any Secured Cash
Management Agreement and each sub-agent pursuant to Section 12 appointed by the
Administrative Agent with respect to matters relating to the Credit Documents.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

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“Security Agreement” shall mean the Security Agreement, dated as of the date
hereof, between the Borrower and the Administrative Agent, for the benefit of
the Secured Parties, substantially in the form of Exhibit E.

“Security Documents” shall mean, collectively, (a) the Pledge Agreement, (b) the
Security Agreement, (c) the Mortgages, (d) the Deposit Account Control
Agreements and (e) each other security agreement or other instrument or document
executed and delivered pursuant to Section 9.10 or 9.12 or pursuant to any other
such Security Documents or otherwise to secure or perfect the security interest
in any or all of the Obligations.

“Senior Notes” shall mean (i) the 5.75% Senior Subordinated Notes due 2021, (ii)
the 5.0% Senior Subordinated Notes due 2022, (iii) the 5.0% Senior Subordinated
Notes due 2023, (iv) the 5.75% Senior Notes due 2021, (v) the 5.0% Senior Notes
due 2022, (vi) the 5.875% Senior Notes due 2022, (vii) the 5.0% Senior Notes due
2023, and (viii) the 4.875% Senior Notes due 2025, in each case issued pursuant
to the relevant Indenture.

“Solvent” shall mean as to any Person as of 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 saleable value of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its debts,
including contingent 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, including contingent debts and liabilities, beyond such Person’s
ability to pay such debts and liabilities as they mature and (d) such Person is
not engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person’s property would constitute an
unreasonably small capital. The amount of any contingent liability at any time
shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

“Specified Subsidiary” shall mean, at any date of determination any Restricted
Subsidiary (i) whose Total Assets at the last day of the Test Period were equal
to or greater than 15% of the Consolidated Total Assets of the Borrower and the
Restricted Subsidiaries at such date, or (ii) whose revenues during such Test
Period were equal to or greater than 15% of the consolidated revenues of the
Borrower and the Restricted Subsidiaries for such period, in each case
determined in accordance with GAAP.

“Stated Amount” of any Letter of Credit shall mean the maximum amount from time
to time available to be drawn thereunder, determined without regard to whether
any conditions to drawing could then be met.

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

 

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“Stock” shall mean any and all shares of capital stock or shares in the capital,
as the case may be (whether denominated as common stock or preferred stock or
ordinary shares or preferred shares, as the case may be), beneficial,
partnership or membership interests, participations or other equivalents
(regardless of how designated) of or in a corporation, partnership, limited
liability company or equivalent entity, whether voting or non-voting.

“Stock Equivalents” shall mean all securities convertible into or exchangeable
for Stock and all warrants, options or other rights to purchase or subscribe for
any Stock, whether or not presently convertible, exchangeable or exercisable.

“Subsidiary” of any Person shall mean and include (a) any corporation more than
50% of whose Stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time Stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (b) any limited liability company,
partnership, association, joint venture or other entity of which such Person
directly or indirectly through Subsidiaries has more than a 50% equity interest
at the time. Unless otherwise expressly provided, all references herein to a
“Subsidiary” shall mean a Subsidiary of the Borrower.

“Subsidiary Guarantor” shall mean each Subsidiary that is a Guarantor.

“Successor Borrower” shall have the meaning provided in Section 10.3(a).

“Super-Majority Lenders” shall mean, at any date, (a) Non-Defaulting Lenders
having or holding at least 80% of the Adjusted Total Commitment at such date or
(b) if the Total Commitment has been terminated, Non-Defaulting Lenders having
or holding at least 80% of the outstanding principal amount of the Loans and
Letter of Credit Exposure (excluding the Loans and Letter of Credit Exposure of
Defaulting Lenders) in the aggregate at such date.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Taxes” shall mean any and all present or future taxes, duties, levies, imposts,
assessments, deductions, withholdings or other similar charges (in each case,
however denominated) imposed by any Governmental Authority whether computed on a
separate, consolidated, unitary, combined or other basis and any interest,
fines, penalties or additions to tax with respect to the foregoing.

“Termination Date” shall mean the earlier to occur of (a) the Maturity Date and
(b) the date on which the Total Commitment shall have terminated.

“Test Period” shall mean, for any determination under this Agreement, the four
consecutive fiscal quarters of the Borrower then last ended and for which
Section 9.1 Financials have been delivered to the Administrative Agent.

“Total Assets” shall mean, as of any date of determination with respect to any
Person, the amount that would, in conformity with GAAP, be set forth opposite
the caption “total assets” (or any like caption) on a balance sheet of such
Person at such date.

“Total Commitment” shall mean the sum of the Commitments of the Lenders.

 

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“Total Exposure” shall mean, with respect to any Lender at any time, the sum of
(a) the aggregate principal amount of the Loans of such Lender then outstanding
and (b) such Lender’s Letter of Credit Exposure at such time.

“Transaction Expenses” shall mean any fees or expenses incurred or paid by the
Borrower or any of its Subsidiaries or any of their Affiliates in connection
with the Transactions, this Agreement and the other Credit Documents and the
transactions contemplated hereby and thereby.

“Transactions” shall mean, collectively, the execution, delivery and performance
of this Agreement and the other Credit Documents, the borrowing of Loans, the
use of the proceeds thereof, the issuance of Letters of Credit hereunder and the
payment of Transaction Expenses on the Closing Date.

“Transferee” shall have the meaning provided in Section 13.6(e).

“Type” shall mean, as to any Loan, its nature as an ABR Loan or a LIBOR Loan.

“UCC” shall mean the Uniform Commercial Code of the State of New York or of any
other state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.

“Unfunded Pension Liability” of any Pension Plan shall mean the excess, if any,
of such Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA
over the fair market value of such Pension Plan’s assets, determined in each
case in accordance with the assumptions used for funding the Pension Plan
pursuant to Section 412 of the Code for the most recently completed plan year.

“Unpaid Drawing” shall have the meaning provided in Section 3.4(a).

“Unrestricted Subsidiary” shall mean (a) any Subsidiary of the Borrower that is
formed or acquired after the Closing Date; provided that at such time (or
promptly thereafter) the Borrower designates such Subsidiary an Unrestricted
Subsidiary in a written notice to the Administrative Agent, (b) any Restricted
Subsidiary subsequently designated as an Unrestricted Subsidiary by the Borrower
in a written notice to the Administrative Agent; provided that in the case of
(a) and (b), (i) such designation shall be deemed to be an Investment on the
date of such designation in the amount of the fair market value of the
Borrower’s and Restricted Subsidiaries’ outstanding investments therein, (ii) in
the case of clause (b), such designation shall be deemed to be a Disposition of
the assets owned by such Restricted Subsidiary on the date of such designation
for the purposes of Section 10.4(b) and (iii) no Default or Event of Default
would result from such designation after giving pro forma effect thereto and
(c) each Subsidiary of an Unrestricted Subsidiary. No Subsidiary may be
designated as an Unrestricted Subsidiary if, after such designation, it would be
a “Restricted Subsidiary” for the purpose of any Permitted Additional Debt or
any Permitted Refinancing Indebtedness in respect of any of the foregoing. The
Borrower may, by written notice to the Administrative Agent, re-designate any
Unrestricted Subsidiary as a Restricted Subsidiary, and thereafter, such
Subsidiary shall no longer constitute an Unrestricted Subsidiary, but only if
(A) to the extent such Subsidiary has outstanding Indebtedness on the date of
such designation, immediately after giving effect to such designation, the
Borrower shall be in compliance, on a pro forma basis after giving effect to the
incurrence of such Indebtedness, with the Financial Performance Covenants, as
such covenants are recomputed as at the last day of the most recently ended Test
Period as if such re-designation had occurred on the first day of such Test
Period (and, as a condition precedent to the effectiveness of any such
designation, the Borrower shall deliver to the Administrative Agent a
certificate setting forth in reasonable detail the calculations demonstrating
satisfaction of such test) and (B) no Default or Event of Default would result
from such re-designation.

 

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“U.S. Lender” shall have the meaning provided in Section 5.4(h).

“Voting Stock” shall mean, with respect to any Person, such Person’s Stock or
Stock Equivalents having the right to vote for the election of directors of such
Person under ordinary circumstances.

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness
at any date, the number of years obtained by dividing: (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (b) the then outstanding principal
amount of such Indebtedness.

“Write-Down and Conversion Powers” shall mean, with respect to any EEA
Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the
applicable EEA Member Country, which write-down and conversion powers are
described in the EU Bail-In Legislation Schedule.

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

(a) The meanings of defined terms are equally applicable to the singular and
plural forms of the defined terms.

(b) The words “herein”, “hereto”, “hereof” and “hereunder” and words of similar
import when used in any Credit Document shall refer to such Credit Document as a
whole and not to any particular provision thereof.

(c) Article, Section, Exhibit and Schedule references are to the Credit Document
in which such reference appears.

(d) The term “including” is by way of example and not limitation.

(e) The term “documents” includes any and all instruments, documents,
agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.

(f) 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”.

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

(h) Any reference to any Person shall be constructed to include such Person’s
successors or assigns (subject to any restrictions on assignment set forth
herein) and, in the case of any Governmental Authority, any other Governmental
Authority that shall have succeeded to any or all of the functions thereof.

(i) Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.

 

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(j) The word “will” shall be construed to have the same meaning as the word
“shall”.

(k) 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.

1.3 Accounting Terms.

(a) Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agent notifies the Borrower that the Majority Lenders request an amendment to
any provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith. Notwithstanding any other provision contained herein, all terms of an
accounting or financial nature used herein shall be construed, and all
computations of amounts and ratios referred to herein shall be made, without
giving effect to (i) any election under Financial Accounting Standards Board
Accounting Standards Codification 825 (or any other Financial Accounting
Standard having a similar result or effect) to value any Indebtedness or other
liabilities of the Borrower or any Subsidiary at “fair value”, as defined
therein and (ii) any treatment of Indebtedness in respect of convertible debt
instruments under Accounting Standards Codification 470-20 (or any other
Accounting Standards Codification or Financial Accounting Standard having a
similar result or effect) to value any such Indebtedness in a reduced or
bifurcated manner as described therein, and such Indebtedness shall at all times
be valued at the full stated principal amount thereof.

(b) Notwithstanding anything to the contrary contained in Section 1.3(a) or in
the definition of “Capital Lease” or “Capitalized Lease Obligations,” in the
event of an accounting change requiring certain operating leases to be
capitalized, only those leases (assuming for purposes hereof that such leases
were in existence on the date hereof) that would constitute capital leases in
conformity with GAAP on the date hereof shall be considered capital leases, and
all calculations and deliverables under this Agreement or any other Credit
Document shall be made or delivered, as applicable, in accordance therewith. For
this purpose, FASB ASC 842 shall constitute an accounting change regardless of
when implemented and shall not be given effect.

1.4 Rounding. Any financial ratios required to be maintained or complied with by
the Borrower pursuant to this Agreement (or required to be satisfied in order
for a specific action to be permitted under 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).

1.5 References to Agreements, Laws, Etc. Unless otherwise expressly provided
herein, (a) references to organizational documents, agreements (including the
Credit Documents) and other Contractual Requirements shall be deemed to include
all subsequent amendments, restatements, amendment and restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, amendment and restatements, extensions, supplements
and other modifications are permitted by any Credit Document and (b) references
to any Requirement of Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such
Requirement of Law.

 

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

1.7 Timing of Payment or Performance. When the payment of any obligation or the
performance of any covenant, duty or obligation is stated to be due or
performance required on a day which is not a Business Day, the date of such
payment (other than as described in Section 2.9) or performance shall extend to
the immediately succeeding Business Day.

1.8 Currency Equivalents Generally.

(a) For purposes of any determination under Section 9, Section 10 (other than
Section 10.11) or Section 11 or any determination under any other provision of
this Agreement requiring the use of a current exchange rate, all amounts
incurred, outstanding or proposed to be incurred or outstanding in currencies
other than Dollars shall be translated into Dollars at the Exchange Rate then in
effect on the date of such determination; provided, however, that (x) for
purposes of determining compliance with Section 10 with respect to the amount of
any Indebtedness, Investment, Disposition, Restricted Payment or payment under
Section 10.7 in a currency other than Dollars, no Default or Event of Default
shall be deemed to have occurred solely as a result of changes in rates of
exchange occurring after the time such Indebtedness or Investment is incurred or
Disposition, Restricted Payment or payment under Section 10.7 is made, (y) for
purposes of determining compliance with any Dollar-denominated restriction on
the incurrence of Indebtedness, if such Indebtedness is incurred to Refinance
other Indebtedness denominated in a foreign currency, and such Refinancing would
cause the applicable Dollar-denominated restriction to be exceeded if calculated
at the relevant currency exchange rate in effect on the date of such
Refinancing, such Dollar-denominated restriction shall be deemed not to have
been exceeded so long as the principal amount of such Refinanced Indebtedness
does not exceed the principal amount of such Indebtedness being Refinanced and
(z) for the avoidance of doubt, the foregoing provisions of this Section 1.8
shall otherwise apply to such Sections, including with respect to determining
whether any Indebtedness or Investment may be incurred or Disposition,
Restricted Payment or payment under Section 10.7 may be made at any time under
such Sections. For purposes of Section 10.11, amounts in currencies other than
Dollars shall be translated into Dollars at the applicable exchange rates used
in preparing the most recently delivered financial statements pursuant to
Section 9.1(a) or (b).

(b) Each provision of this Agreement shall be subject to such reasonable changes
of construction as the Administrative Agent may from time to time specify with
the Borrower’s consent (such consent not to be unreasonably withheld) to
appropriately reflect a change in currency of any country and any relevant
market conventions or practices relating to such change in currency.

1.9 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Type (e.g., a “LIBOR Loan”).

1.10 Interest Rates. The Administrative Agent does not warrant or accept
responsibility for, and shall not have any liability with respect to, the
administration, submission or any other matter related to the rates in the
definition of “LIBOR Rate” or with respect to any comparable or successor rate
thereto, or replacement rate therefor.

 

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SECTION 2. Amount and Terms of Credit

2.1 Commitments.

(a) Subject to and upon the terms and conditions herein set forth, each Lender
severally, but not jointly, agrees to make Loans denominated in Dollars to the
Borrower, which Loans (i) shall be made at any time and from time to time on and
after the Closing Date and prior to the Termination Date, (ii) may, at the
option of the Borrower, be incurred and maintained as, and/or converted into,
ABR Loans or LIBOR Loans; provided that all Loans made by each of the Lenders
pursuant to the same Borrowing shall, unless otherwise specifically provided
herein, consist entirely of Loans of the same Type, (iii) may be repaid and
reborrowed in accordance with the provisions hereof, (iv) shall not, for any
Lender at any time, after giving effect thereto and to the application of the
proceeds thereof, result in such Lender’s Total Exposure at such time exceeding
such Lender’s Commitment Percentage at such time of the Loan Limit and (v) shall
not, after giving effect thereto and to the application of the proceeds thereof,
result in the aggregate amount of all Lenders’ Total Exposures at such time
exceeding the Loan Limit.

(b) Each Lender may at its option make any LIBOR Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan, provided that
(i) any exercise of such option shall not affect the obligation of the Borrower
to repay such Loan and (ii) in exercising such option, such Lender shall use its
reasonable efforts to minimize any increased costs to the Borrower resulting
therefrom (which obligation of the Lender shall not require it to take, or
refrain from taking, actions that it determines would result in increased costs
for which it will not be compensated hereunder or that it determines would be
otherwise disadvantageous to it and in the event of such request for costs for
which compensation is provided under this Agreement, the provisions of
Section 2.10 shall apply).

2.2 Minimum Amount of Each Borrowing; Maximum Number of Borrowings. The
aggregate principal amount of each Borrowing shall be in a minimum amount of at
least $1,000,000 and in a multiple of $100,000 in excess thereof (except for any
Borrowing in an aggregate amount that is equal to the entire unused balance of
aggregate Commitments and Loans to reimburse the Letter of Credit Issuers with
respect to any Unpaid Drawing shall be made in the amounts required by
Sections 3.3 or 3.4, as applicable). More than one Borrowing may be incurred on
any date; provided, that at no time shall there be outstanding more than ten
Borrowings of LIBOR Loans under this Agreement.

2.3 Notice of Borrowing.

(a) Whenever the Borrower desires to incur Loans (other than borrowings to repay
Unpaid Drawings), the Borrower shall give the Administrative Agent at the
Administrative Agent’s Office, (i) prior to 1:00 p.m. (Central time) at least
three Business Days’ prior written notice (or telephonic notice promptly
confirmed in writing by hand delivery, telecopy or electronic mail) of each
Borrowing of Loans if such Loans are to be initially LIBOR Loans (or prior to
9:00 a.m. (Central time) two Business Days’ prior written notice in the case of
a Borrowing of Loans to be made on the Closing Date initially as LIBOR Loans)
and (ii) written notice (or telephonic notice promptly confirmed in writing)
prior to 12:00 noon (Central time) on the date of each Borrowing of Loans that
are to be ABR Loans. Such notice (a “Notice of Borrowing”) shall specify (A) the
aggregate principal amount of the Loans to be made pursuant to such Borrowing,
(B) the date of the Borrowing (which shall be a Business Day), (C) whether the
respective Borrowing shall consist of ABR Loans and/or LIBOR Loans and, if LIBOR
Loans, the Interest Period to be initially applicable thereto (if no Interest
Period is selected, the Borrower shall be deemed to have selected an Interest
Period of one month’s duration) and (D) the amount of the then effective
Borrowing Base, the current aggregate Total Exposures (without regard to the
requested Borrowing) of all Lenders and the pro forma aggregate Total Exposures
(giving effect to the requested Borrowing) of all Lenders. The Administrative
Agent shall promptly give each Lender written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing of Loans, of such
Lender’s Commitment Percentage thereof and of the other matters covered by the
related Notice of Borrowing.

 

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(b) Borrowings to reimburse Unpaid Drawings shall be made upon the notice
specified in Section 3.4(a).

(c) Without in any way limiting the obligation of the Borrower to confirm in
writing any notice it may give hereunder by telephone, the Administrative Agent
may act prior to receipt of written confirmation without liability upon the
basis of such telephonic notice believed by the Administrative Agent in good
faith to be from an Authorized Officer of the Borrower.

2.4 Disbursement of Funds.

(a) No later than 1:00 p.m. (Central time) on the date specified in each Notice
of Borrowing, each Lender will make available its pro rata portion of each
Borrowing requested to be made on such date in the manner provided below;
provided that on the Closing Date, such funds shall be made available by
10:00 a.m. (Central time) or such earlier time as may be agreed among the
Lenders, the Borrower and the Administrative Agent for the purpose of
consummating the Transactions.

(b) Each Lender shall make available all amounts it is to fund to the Borrower
under any Borrowing in immediately available funds to the Administrative Agent
at the Administrative Agent’s Office in Dollars, and the Administrative Agent
will (except in the case of Borrowings to repay Unpaid Drawings) make available
to the Borrower, by depositing or wiring to an account as designated by the
Borrower in the Borrowing Notice to the Administrative Agent the aggregate of
the amounts so made available in Dollars. Unless the Administrative Agent shall
have been notified by any Lender prior to the date of any such Borrowing that
such Lender does not intend to make available to the Administrative Agent its
portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and without
any obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative
Agent by such Lender and the Administrative Agent has made available such amount
to the Borrower, the Administrative Agent shall be entitled to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor
the Administrative Agent shall promptly notify the Borrower and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent in
Dollars. The Administrative Agent shall also be entitled to recover from such
Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (i) if paid by such Lender, the Overnight Rate or (ii) if paid by
the Borrower, the then-applicable rate of interest or fees, calculated in
accordance with Section 2.8, for the respective Loans.

(c) Nothing in this Section 2.4 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
the Borrower may have against any Lender as a result of any default by such
Lender hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to fulfill its commitments
hereunder).

2.5 Repayment of Loans; Evidence of Debt.

(a) The Borrower hereby promises to pay to the Administrative Agent, for the
benefit of the applicable Lenders, on the Maturity Date, the then outstanding
principal amount of all Loans.

 

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(b) Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the indebtedness of the Borrower to the appropriate
lending office of such Lender resulting from each Loan made by such lending
office from time to time, including the amounts of principal and interest
payable and paid to such lending office from time to time under this Agreement.

(c) The Administrative Agent, on behalf of the Borrower, shall maintain the
Register pursuant to Section 13.6(b), and a subaccount for each Lender, in which
Register and subaccounts (taken together) shall be recorded (i) the amount of
each Loan made hereunder, the Type of each Loan made and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) the amount of any sum received by the Administrative Agent hereunder from
the Borrower and each Lender’s share thereof.

(d) The entries made in the Register and accounts and subaccounts maintained
pursuant to clauses (b) and (c) of this Section 2.5 shall, to the extent
permitted by applicable Requirements of Law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain such account, such Register or such subaccount, as applicable, or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Loans made to the Borrower by such Lender
in accordance with the terms of this Agreement.

(e) Any Lender may request that Loans made by it be evidenced by a promissory
note substantially in the form of Exhibit H hereto. In such event, the Borrower
shall prepare, execute and deliver to such Lender a promissory note payable to
such Lender and its registered assigns. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 13.6) be represented by one or more promissory
notes in such form payable to the payee named therein and its registered
assigns.

2.6 Conversions and Continuations.

(a) Subject to the penultimate sentence of this clause (a), (i) the Borrower
shall have the option on any Business Day to convert all or a portion equal to
at least $1,000,000 (and in multiples of $100,000 in excess thereof) of the
outstanding principal amount of Loans of one Type into a Borrowing or Borrowings
of another Type and (ii) the Borrower shall have the option on any Business Day
to continue the outstanding principal amount of any LIBOR Loans as LIBOR Loans
for an additional Interest Period; provided that (A) no partial conversion of
LIBOR Loans shall reduce the outstanding principal amount of LIBOR Loans made
pursuant to a single Borrowing to less than $1,000,000, (B) ABR Loans may not be
converted into LIBOR Loans if an Event of Default is in existence on the date of
the conversion and the Administrative Agent has or the Majority Lenders have
determined in its or their sole discretion not to permit such conversion,
(C) LIBOR Loans may not be continued as LIBOR Loans for an additional Interest
Period if an Event of Default is in existence on the date of the proposed
continuation and the Administrative Agent has or the Majority Lenders have
determined in its or their sole discretion not to permit such continuation, and
(D) Borrowings resulting from conversions pursuant to this Section 2.6 shall be
limited in number as provided in Section 2.2. Each such conversion or
continuation shall be effected by the Borrower by giving the Administrative
Agent at the Administrative Agent’s Office prior to 1:00 p.m. (Central time) at
least (1) three Business Days’, in the case of a continuation of or conversion
to LIBOR Loans or (2) the date of conversion, in the case of a conversion into
ABR Loans, prior written notice (or telephonic notice promptly confirmed in
writing) (each, a “Notice of Conversion or Continuation”) specifying the Loans
to be so converted or continued, the Type of Loans to be converted

 

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into or continued and, if such Loans are to be converted into or continued as
LIBOR Loans, the Interest Period to be initially applicable thereto (if no
Interest Period is selected, the Borrower shall be deemed to have selected an
Interest Period of one month’s duration). The Administrative Agent shall give
each applicable Lender notice as promptly as practicable of any such proposed
conversion or continuation affecting any of its Loans.

(b) If any Event of Default is in existence at the time of any proposed
continuation of any LIBOR Loans and the Administrative Agent has or the Majority
Lenders have determined in its or their sole discretion not to permit such
continuation, such LIBOR Loans shall be automatically converted on the last day
of the current Interest Period into ABR Loans. If upon the expiration of any
Interest Period in respect of LIBOR Loans, the Borrower has failed to elect a
new Interest Period to be applicable thereto as provided in clause (a) above,
the Borrower shall be deemed to have elected to convert such Borrowing of LIBOR
Loans into a Borrowing of ABR Loans, effective as of the expiration date of such
current Interest Period.

(c) Notwithstanding anything to the contrary herein, the Borrower may deliver a
Notice of Conversion or Continuation pursuant to which the Borrower elects to
irrevocably continue the outstanding principal amount of any Loans subject to an
interest rate Hedge Agreement as LIBOR Loans for each Interest Period until the
expiration of the term of such applicable Hedge Agreement; provided that any
Notice of Conversion or Continuation delivered pursuant to this Section 2.6(c)
shall include a schedule attaching the relevant interest rate Hedge Agreement or
related trade confirmation.

2.7 Pro Rata Borrowings. Each Borrowing of Loans under this Agreement shall be
made by the Lenders pro rata on the basis of their then applicable Commitment
Percentages. It is understood that (a) no Lender shall be responsible for any
default by any other Lender in its obligation to make Loans hereunder and that
each Lender severally but not jointly shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other
Lender to fulfill its commitments hereunder and (b) failure by a Lender to
perform any of its obligations under any of the Credit Documents shall not
release any Person from performance of its obligation under any Credit Document.

2.8 Interest.

(a) The unpaid principal amount of each ABR Loan shall bear interest from the
date of the Borrowing thereof until maturity (whether by acceleration or
otherwise) or repayment or prepayment in full thereof at a rate per annum that
shall at all times be the Applicable Margin plus the Alternate Base Rate, in
each case, in effect from time to time.

(b) The unpaid principal amount of each LIBOR Loan shall bear interest from the
date of the Borrowing thereof until maturity thereof (whether by acceleration or
otherwise) or repayment or prepayment in full thereof at a rate per annum that
shall at all times be the Applicable Margin plus the relevant Adjusted LIBO
Rate, in each case, in effect from time to time.

(c) If all or a portion of (i) the principal amount of any Loan or (ii) any
interest payable thereon shall not be paid when due (whether at stated maturity,
by acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum that is (the “Default Rate”) (A) in the case of overdue principal, the
rate that would otherwise be applicable thereto plus 2% or (B) in the case of
any overdue interest, to the extent permitted by applicable Requirements of Law,
the rate described in Section 2.8(a) plus 2% from the date of such non-payment
to the date on which such amount is paid in full (after as well as before
judgment).

 

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(d) Interest on each Loan shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable in Dollars; provided that any Loan that is repaid on the same date on
which it is made shall bear interest for one day. Except as provided below, the
Borrower hereby promises to pay to the Administrative Agent for the benefit of
the Lenders interest, (i) in respect of each ABR Loan, quarterly in arrears on
the last Business Day of each March, June, September and December, (ii) in
respect of each LIBOR Loan, on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three-month intervals after the first day of such
Interest Period, (iii) in respect of each Loan, (A) on any prepayment (on the
amount prepaid), (B) at maturity (whether by acceleration or otherwise) and
(C) after such maturity, on demand.

(e) All computations of interest hereunder shall be made in accordance with
Section 5.5.

(f) The Administrative Agent, upon determining the interest rate for any
Borrowing of LIBOR Loans, shall promptly notify the Borrower and the relevant
Lenders thereof. Each such determination shall, absent manifest error, be final
and conclusive and binding on all parties hereto.

2.9 Interest Periods. At the time the Borrower gives a Notice of Borrowing or
Notice of Conversion or Continuation in respect of the making of, or conversion
into or continuation as, a Borrowing of LIBOR Loans in accordance with
Section 2.6(a), the Borrower shall give the Administrative Agent written notice
(or telephonic notice promptly confirmed in writing) of the Interest Period
applicable to such Borrowing, which Interest Period shall, at the option of the
Borrower be a one, two, three or six or (if available to all the Lenders making
such LIBOR Loans as determined by such Lenders in good faith based on prevailing
market conditions) a 12-month period or any shorter period requested by the
Borrower; provided that, notwithstanding the foregoing, the initial Interest
Period beginning on the Closing Date may be for a period less than one month if
agreed upon by the Borrower, the Administrative Agent and each of the Lenders.

Notwithstanding anything to the contrary contained above:

(a) the initial Interest Period for any Borrowing of LIBOR Loans shall commence
on the date of such Borrowing (including the date of any conversion from a
Borrowing of ABR Loans) and each Interest Period occurring thereafter in respect
of such Borrowing shall commence on the day on which the next preceding Interest
Period expires;

(b) if any Interest Period relating to a Borrowing of LIBOR Loans begins on the
last Business Day of a calendar month or begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of the calendar
month at the end of such Interest Period;

(c) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided that, if any Interest Period in respect of a LIBOR Loan would
otherwise expire on a day that is not a Business Day, but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day; and

(d) the Borrower shall not be entitled to elect any Interest Period in respect
of any LIBOR Loan if such Interest Period would extend beyond the Maturity Date.

 

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2.10 Increased Costs, Etc.

(a) If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, liquidity or
similar requirement (including any compulsory loan requirement, insurance charge
or other assessment) against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate) or Letter of Credit Issuer;

(ii) impose on any Lender or any Letter of Credit Issuer or the London interbank
market any other condition, cost or expense (in each case, other than Taxes)
affecting this Agreement or Loans made by such Lender or any Letters of Credit
issued by such Letter of Credit Issuer, or any participation therein; or

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

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

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

(c) A certificate of a Lender or Letter of Credit Issuer setting forth the
amount or amounts necessary to compensate such Lender or Letter of Credit Issuer
or its holding company, as the case may be, as specified in paragraph (a) or
(b) of this Section shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or Letter of Credit
Issuer, as the case may be, the amount shown as due on any such certificate
within 15 days after receipt thereof.

 

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(d) Failure or delay on the part of any Lender or Letter of Credit Issuer to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender’s or Letter of Credit Issuer’s right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or
Letter of Credit Issuer pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or
Letter of Credit 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
Letter of Credit Issuer’s intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180-day period referred to above shall be
extended to include the period of retroactive effect thereof.

2.11 Break Funding Payments. If (a) any payment of principal of any LIBOR Loan
is made by the Borrower to or for the account of a Lender other than on the last
day of the Interest Period for such LIBOR Loan as a result of a payment or
conversion pursuant to Sections 2.5, 2.6, 2.10, 5.1, 5.2 or 13.7, as a result of
acceleration of the maturity of the Loans pursuant to Section 11 or for any
other reason, (b) any Borrowing of LIBOR Loans is not made on the date specified
in a Notice of Borrowing, (c) any ABR Loan is not converted into a LIBOR Loan on
the date specified in a Notice of Conversion or Continuation, (d) any LIBOR Loan
is not continued as a LIBOR Loan on the date specified in a Notice of Conversion
or Continuation or (e) any prepayment of principal of any LIBOR Loan is not made
as a result of a withdrawn notice of prepayment pursuant to Section 5.1 or 5.2,
the Borrower shall after the Borrower’s receipt of a written request by such
Lender (which request shall set forth in reasonable detail the basis for
requesting such amount), pay to the Administrative Agent (within fifteen days
after such request) for the account of such Lender any amounts required to
compensate such Lender for any additional losses, costs or expenses that such
Lender may reasonably incur as a result of such payment, failure to convert,
failure to continue or failure to prepay, including any loss, cost or expense
(excluding, in each case, loss of anticipated profits or applicable margin)
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such LIBOR Loan.

2.12 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.10(a), 2.10(b), or 5.4 with
respect to such Lender, it will, if requested by the Borrower use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event; provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of any such Section.
Nothing in this Section 2.12 shall affect or postpone any of the obligations of
the Borrower or the right of any Lender provided in Section 2.10, or 5.4.

2.13 Notice of Certain Costs. Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 2.10, 2.11 or 5.4 is
given by any Lender more than 180 days after such Lender has knowledge (or
should have had knowledge) of the occurrence of the event giving rise to the
additional cost, reduction in amounts, loss, tax or other additional amounts
described in such Sections, such Lender shall not be entitled to compensation
under Section 2.10, 2.11 or 5.4, as the case may be, for any such amounts
incurred or accruing prior to the 181st day prior to the giving of such notice
to the Borrower; provided that if the circumstance giving rise to such claim is
retroactive, then such 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

2.14 Borrowing Base.

(a) Initial Borrowing Base. For the period from and including the Closing Date
to but excluding the first Redetermination Date, the amount of the Borrowing
Base shall be $3,000,000,000. Notwithstanding the foregoing, the Borrowing Base
may be subject to further adjustments from time to time pursuant to
Section 2.14(e).

 

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(b) Scheduled and Interim Redeterminations. The Borrowing Base shall be
redetermined annually in accordance with this Section 2.14 (a “Scheduled
Redetermination”), and, subject to Section 2.14(d), such redetermined Borrowing
Base shall become effective and applicable to the Borrower, the Administrative
Agent, the Letter of Credit Issuers and the Lenders on May 1st of each year,
commencing May 1, 2019. In addition, the Borrower may at any time (including
prior to the first Scheduled Redetermination date of May 1, 2019), by notifying
the Administrative Agent thereof, not more than once between Scheduled
Redeterminations, and the Administrative Agent, following the first Scheduled
Redetermination date of May 1, 2019, may, at the direction of the Required
Lenders, by notifying the Borrower thereof, not more than once between Scheduled
Redeterminations, in each case elect to cause the Borrowing Base to be
redetermined between Scheduled Redeterminations (an “Interim Redetermination”)
in accordance with this Section 2.14. In addition to, and not including and/or
limited by the Interim Redeterminations allowed above, the Borrower may, by
notifying the Administrative Agent thereof, at any time between Scheduled
Redeterminations, request additional Interim Redeterminations of the Borrowing
Base in the event it or another Credit Party acquires Oil and Gas Properties
with Proved Reserves which are to be Borrowing Base Properties having a PV-9
(calculated at the time of acquisition) in excess of 10% of the Borrowing Base
in effect immediately prior to such acquisition.

(c) Scheduled and Interim Redetermination Procedure.

(i) Each Scheduled Redetermination and each Interim Redetermination shall be
effectuated as follows: Upon receipt by the Administrative Agent of (A) the
Reserve Report, and (B) such other reports, data and supplemental information as
may, from time to time, be reasonably requested by the Required Lenders (the
Reserve Report and such other reports, data and supplemental information being
the “Engineering Reports”), the Administrative Agent shall evaluate the
information contained in the Engineering Reports and shall in good faith propose
a new Borrowing Base (the “Proposed Borrowing Base”) based upon such information
and such other information (including the status of title information with
respect to the Borrowing Base Properties as described in the Engineering Reports
and the existence of any Hedge Agreements or any other Indebtedness) as the
Administrative Agent deems appropriate in good faith in accordance with its
usual and customary oil and gas lending criteria as it exists at the particular
time and that is of the type used for such purpose with respect to similar oil
and gas credits for borrowers with similar credit profiles.

(ii) The Administrative Agent shall notify the Borrower and the Lenders of the
Proposed Borrowing Base (the “Proposed Borrowing Base Notice”):

(A) in the case of a Scheduled Redetermination (1) if the Administrative Agent
shall have received the Engineering Reports required to be delivered by the
Borrower pursuant to Sections 9.13(a) and (b) in a timely manner, then on or
before April 15th of such year following the date of delivery or (2) if the
Administrative Agent shall not have received the Engineering Reports required to
be delivered by the Borrower pursuant to Sections 9.13(a) and (b) in a timely
manner, then promptly after the Administrative Agent has received complete
Engineering Reports from the Borrower and has had a reasonable opportunity to
determine the Proposed Borrowing Base in accordance with Section 2.14(c)(i); and

(B) in the case of an Interim Redetermination, promptly, and in any event,
within 15 days after the Administrative Agent has received the required
Engineering Reports.

(iii) Any Proposed Borrowing Base that would increase the Borrowing Base then in
effect must be approved or deemed to have been approved by the Borrowing Base
Required Lenders in each such Lender’s sole discretion and consistent with each
such Lender’s normal and customary oil and

 

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gas lending criteria as it exists at the particular time as provided in this
Section 2.14(c)(iii) and any Proposed Borrowing Base that would decrease or
maintain the Borrowing Base then in effect must be approved or be deemed to have
been approved by Lenders constituting at least the Required Lenders in each such
Lender’s sole discretion and consistent with each such Lender’s normal and
customary oil and gas lending criteria as it exists at the particular time as
provided in this Section 2.14(c)(iii). Upon receipt of the Proposed Borrowing
Base Notice, each Lender shall have 15 days to agree with the Proposed Borrowing
Base or disagree with the Proposed Borrowing Base by proposing an alternate
Borrowing Base. If at the end of such 15-day period, any Lender has not
communicated its approval or disapproval in writing to the Administrative Agent,
such silence shall be deemed to be an approval of the Proposed Borrowing Base.
If, at the end of such 15-day period, the Borrowing Base Required Lenders, in
the case of a Proposed Borrowing Base that would increase the Borrowing Base
then in effect, or the Required Lenders, in the case of a Proposed Borrowing
Base that would decrease or maintain the Borrowing Base then in effect, have
approved or deemed to have approved, as aforesaid, then the Proposed Borrowing
Base shall become the new Borrowing Base, effective on the date specified in
Section 2.14(d). If, however, at the end of such 15-day period, the Borrowing
Base Required Lenders or the Required Lenders, as applicable, have not approved
or deemed to have approved, as aforesaid, then the Administrative Agent shall
promptly thereafter poll the Lenders to ascertain the highest Borrowing Base
then acceptable to the Borrowing Base Required Lenders (in the case of any
increase to the Borrowing Base) or a number of Lenders sufficient to constitute
the Required Lenders (in any other case) and such amount shall become the new
Borrowing Base, effective on the date specified in Section 2.14(d). It is
expressly understood that the Administrative Agent and Lenders have no
obligation to designate the Borrowing Base at any particular amount, except in
the exercise of their discretion, whether in relation to the Total Commitment,
the Maximum Aggregate Amount or otherwise.

(d) Effectiveness of a Redetermined Borrowing Base. Subject to Section 2.14(f),
after a redetermined Borrowing Base is approved or is deemed to have been
approved by the Borrowing Base Required Lenders or the Required Lenders, as
applicable, pursuant to Section 2.14(c)(iii), the Administrative Agent shall
promptly thereafter notify the Borrower and the Lenders of the amount of the
redetermined Borrowing Base (the “New Borrowing Base Notice”), and such amount
shall become the new Borrowing Base, effective and applicable to the Borrower,
the Administrative Agent, the Letter of Credit Issuers and the Lenders:

(i) in the case of a Scheduled Redetermination, (A) if the Administrative Agent
shall have received the Engineering Reports required to be delivered by the
Borrower pursuant to Sections 9.13(a) and (b) in a timely and complete manner,
on the May 1st following such notice, or (B) if the Administrative Agent shall
not have received the Engineering Reports required to be delivered by the
Borrower pursuant to Sections 9.13(a) and (b) in a timely and complete manner,
then on the Business Day next succeeding delivery of such New Borrowing Base
Notice; and

(ii) in the case of an Interim Redetermination, on the Business Day next
succeeding delivery of such New Borrowing Base Notice.

Subject to Section 2.14(f), such amount shall then become the Borrowing Base
until the next Scheduled Redetermination Date, the next Interim Redetermination
Date or the next adjustment to the Borrowing Base under Section 2.14(e).
Notwithstanding the foregoing, no Scheduled Redetermination or Interim
Redetermination shall become effective until the New Borrowing Base Notice
related thereto is received by the Borrower.

(e) Reduction of Borrowing Base Upon Asset Dispositions or Termination of Hedge
Positions. If (i) (1) the Borrower or one of the other Credit Parties Disposes
of Oil and Gas Properties or Disposes of the Stock or Stock Equivalents of any
Credit Party owning Oil and Gas Properties, and such

 

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Disposition involves Borrowing Base Properties included in the most recently
delivered Reserve Report, or (2) the Borrower or any Credit Party shall unwind,
terminate or create any off-setting positions in respect of any commodity hedge
positions (whether evidenced by a floor, put or Hedge Agreement) upon which the
Lenders relied in determining the Borrowing Base pursuant to Section 10.4(b) or
(k), as applicable, and (ii) the sum of (1) in the case of clause (i)(1) the
aggregate PV-9 (calculated at the time of such Disposition) of all such
Borrowing Base Properties Disposed of since the later of (A) the last
Redetermination Date and (B) the last adjustment of the Borrowing Base made
pursuant to this Section 2.14(e), and (2) in the case of clause (i)(2), the
Hedge PV (as calculated at the time of any such unwind, termination or creation
of off-setting positions) of such unwound, terminated and/or offsetting
positions (after taking into account any other Hedge Agreement executed
subsequent to the last Redetermination Date or adjustment of the Borrowing Base)
during such period, collectively, exceeds 10% of the then-effective Borrowing
Base, then, after the Administrative Agent has received the notice required to
be delivered by the Borrower pursuant to Section 10.4(b) or (k), no later than
one Business Day after the date of consummation of any such Disposition, unwind,
termination or off-set, as the case may be, the Required Lenders shall have the
right to adjust the Borrowing Base in an amount equal to the sum of the
Borrowing Base value, if any, attributable to such Disposed of Borrowing Base
Properties plus the Borrowing Base value, if any, attributable to such unwound,
terminated or off-setting hedge positions in the calculation of the
then-effective Borrowing Base and, if the Required Lenders in fact make any such
adjustment, the Administrative Agent shall promptly notify the Borrower in
writing of the Borrowing Base value, if any, attributable to such Disposed of
Borrowing Base Properties in the calculation of the then-effective Borrowing
Base and upon receipt of such notice, the Borrowing Base shall be simultaneously
reduced by such amount.

(f) Borrower’s Right to Elect Reduced Borrowing Base. Within three Business Days
of its receipt of a New Borrowing Base Notice, the Borrower may provide written
notice to the Administrative Agent and the Lenders that specifies for the period
from the effective date of the New Borrowing Base Notice until the next
succeeding Scheduled Redetermination Date, the Borrowing Base will be a lesser
amount than the amount set forth in such New Borrowing Base Notice, whereupon
such specified lesser amount will become the new Borrowing Base. The Borrower’s
notice under this Section 2.14(f) shall be irrevocable, but without prejudice to
its rights to initiate Interim Redeterminations.

(g) Administrative Agent Data. The Administrative Agent hereby agrees to
provide, promptly, and in any event within 3 Business Days, following its
receipt of a request by the Borrower, an updated Bank Price Deck. In addition,
the Administrative Agent and the Lenders agree, upon request, to meet with the
Borrower to discuss their evaluation of the reservoir engineering of the Oil and
Gas Properties included in the Reserve Report and their respective methodologies
for valuing such properties and the other factors considered in calculating the
Borrowing Base.

(h) Investment Grade Period. Notwithstanding anything in this Agreement to the
contrary, during any Investment Grade Period, the provisions of clauses
(a) through (f) of Section 2.14 and Section 4.3(b) will be deemed to be
inapplicable and shall be disregarded for all purposes. Upon the end of any
Investment Grade Period, the Borrowing Base will be determined based on the most
recently delivered Reserve Report and will remain in effect until the next
Redetermination Date, subject to further adjustments from time to time pursuant
to Section 2.14(e).

2.15 Defaulting Lenders. Notwithstanding any provision of this Agreement to the
contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) Commitment Fees shall cease to accrue on the unfunded portion of the
Commitment of such Defaulting Lender pursuant to Section 4.1(a);

 

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(b) The Commitment and Total Exposure of such Defaulting Lender shall not be
included in determining whether all Lenders, the Majority Lenders, the Required
Lenders or Borrowing Base Required Lenders have taken or may take any action
hereunder (including any consent to any amendment or waiver pursuant to
Section 13.1); provided that (i) any waiver, amendment or modification requiring
the consent of all Lenders pursuant to Section 13.1 or requiring the consent of
each affected Lender pursuant to Section 13.1(i) shall require the consent of
such Defaulting Lender (which for the avoidance of doubt would include any
change to the Maturity Date applicable to such Defaulting Lender, decreasing or
forgiving any principal or interest due to such Defaulting Lender, any decrease
of any interest rate applicable to Loans made by such Defaulting Lender (other
than the waiving of post-default interest rates) and any increase in such
Defaulting Lender’s Commitment) and (ii) any redetermination, whether an
increase, decrease or affirmation, of the Borrowing Base shall occur without the
participation of a Defaulting Lender;

(c) If any Letter of Credit Exposure exists at the time a Lender becomes a
Defaulting Lender, then (i) all or any part of such Letter of Credit Exposure of
such Defaulting Lender will, subject to the limitation in the first proviso
below, automatically be reallocated (effective on the day such Lender becomes a
Defaulting Lender) among the Non-Defaulting Lenders pro rata in accordance with
their respective Commitment Percentages; provided that (A) each Non-Defaulting
Lender’s Total Exposure may not in any event exceed the Commitment Percentage of
the Loan Limit of such Non-Defaulting Lender as in effect at the time of such
reallocation and (B) neither such reallocation nor any payment by a
Non-Defaulting Lender pursuant thereto will constitute a waiver or release of
any claim the Borrower, the Administrative Agent, the Letter of Credit Issuers
or any other Lender may have against such Defaulting Lender or cause such
Defaulting Lender to be a Non-Defaulting Lender, (ii) to the extent that all or
any portion (the “unreallocated portion”) of the Defaulting Lender’s Letter of
Credit Exposure cannot, or can only partially, be so reallocated to
Non-Defaulting Lenders, whether by reason of the first proviso in
Section 2.15(c)(i) or otherwise, the Borrower shall within two Business Days
following notice by the Administrative Agent or the applicable Letter of Credit
Issuer, Cash Collateralize for the benefit of the applicable Letter of Credit
Issuer only the Borrower’s obligations corresponding to such Defaulting Lender’s
Letter of Credit Exposure (after giving effect to any partial reallocation
pursuant to clause (i) above), in accordance with the procedures set forth in
Section 3.8 for so long as such Letter of Credit Exposure is outstanding,
(iii) if the Borrower Cash Collateralizes any portion of such Defaulting
Lender’s Letter of Credit Exposure pursuant to this Section 2.15(c), the
Borrower shall not be required to pay any fees to such Defaulting Lender
pursuant to Section 4.1(b) with respect to such Defaulting Lender’s Letter of
Credit Exposure during the period such Defaulting Lender’s Letter of Credit
Exposure is Cash Collateralized, (iv) if the Letter of Credit Exposure of the
Non-Defaulting Lenders is reallocated pursuant to this Section 2.15(c), then the
Letter of Credit Fees payable for the account of the Lenders pursuant to
Section 4.1(b) shall be adjusted in accordance with such Non-Defaulting Lenders’
Commitment Percentages and the Borrower shall not be required to pay any Letter
of Credit Fees to the Defaulting Lender pursuant to Section 4.1(b) with respect
to such Defaulting Lender’s Letter of Credit Exposure during the period that
such Defaulting Lender’s Letter of Credit Exposure is reallocated, or (v) if any
Defaulting Lender’s Letter of Credit Exposure is neither Cash Collateralized nor
reallocated pursuant to this Section 2.15(c), then, without prejudice to any
rights or remedies of any Letter of Credit Issuer or any Lender hereunder, all
Letter of Credit Fees payable under Section 4.1(b) with respect to such
Defaulting Lender’s Letter of Credit Exposure shall be payable to the applicable
Letter of Credit Issuer until such Letter of Credit Exposure is Cash
Collateralized and/or reallocated;

(d) So long as any Lender is a Defaulting Lender, no Letter of Credit Issuer
will be required to issue any new Letter of Credit or amend any outstanding
Letter of Credit to increase the Stated Amount thereof, alter the drawing terms
thereunder or extend the expiry date thereof, unless the Letter of Credit Issuer
is reasonably satisfied that any exposure that would result from the exposure to
such Defaulting Lender is eliminated or fully covered by the Commitments of the
Non-Defaulting Lenders or by Cash

 

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Collateralization or a combination thereof in accordance with clause (c) above
or otherwise in a manner reasonably satisfactory to the Letter of Credit Issuer,
and participating interests in any such newly issued or increased Letter of
Credit shall be allocated among Non-Defaulting Lenders in a manner consistent
with Section 2.15(c)(i) (and Defaulting Lenders shall not participate therein);
and

(e) If the Borrower, the Administrative Agent and each Letter of Credit Issuer
agree in writing in their discretion that a Lender that is a Defaulting Lender
should no longer be deemed to be 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, such Lender will
cease to be a Defaulting Lender and will be a Non-Defaulting Lender and the
Letter of Credit Exposure of the Lenders shall be readjusted to reflect the
inclusion of such Lender’s Commitment and on such date such Lender shall
purchase at par such of the Loans of the other Lenders as the Administrative
Agent shall determine may be necessary in order for such Lender to hold such
Loans in accordance with its Applicable Percentage and any applicable Cash
Collateral shall be promptly returned to the Borrower; provided that, except to
the extent otherwise expressly agreed by the affected parties, no change
hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from such Lender’s
having been a Defaulting Lender.

(f) 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 Section 11 or otherwise, and
including any amounts made available to the Administrative Agent by that
Defaulting Lender pursuant to Section 13.8), 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 each Letter of Credit Issuer hereunder; third, to
Cash Collateralize each Letter of Credit Issuer’s Letter of Credit Exposure with
respect to such Defaulting Lender in accordance with this Section; fourth, as
the Borrower may request (so long as no Default or Event of Default exists), to
the funding of any Loan in respect of which that Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Administrative Agent; 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 Loans under this Agreement and (y) Cash Collateralize each Letter of
Credit Issuer’s future Letter of Credit Exposure with respect to such Defaulting
Lender with respect to future Letters of Credit issued under this Agreement, in
accordance with this Section; sixth, to the payment of any amounts owing to the
Lenders or the Letter of Credit Issuers as a result of any judgment of a court
of competent jurisdiction obtained by any Lender or such Letter of Credit Issuer
against that Defaulting Lender as a result of that 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
such payment is a payment of the principal amount of any Loans or Unpaid
Drawings, such payment shall be applied solely to pay the relevant Loans of, and
Unpaid Drawings owed to, the relevant non-Defaulting Lenders on a pro rata basis
prior to being applied in the manner set forth in this Section 2.15(f). 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 Section 3.8 shall be deemed paid to and redirected
by that Defaulting Lender, and each Lender irrevocably consents hereto.

 

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2.16 Increase of Total Commitment.

(a) Subject to the conditions set forth in Section 2.16(b), the Borrower may,
from time to time (including in connection with any redetermination of the
Borrowing Base), increase the Total Commitment then in effect (any such increase
an “Incremental Increase”) by increasing the Commitment of a Lender (an
“Increasing Lender”) or by causing a Person that at such time is not a Lender to
become a Lender (an “Additional Lender”).

(b) Any increase in the Total Commitment shall be subject to the following
additional conditions:

(i) such increase shall not be less than $100,000,000 (and increments of
$10,000,000 above that minimum) unless the Administrative Agent otherwise
consents, and no such increase shall be permitted if after giving effect thereto
the Total Commitment would exceed (A) at any time during an Investment Grade
Period, the Maximum Aggregate Amount or (B) at any time other than during an
Investment Grade Period, the lesser of the Borrowing Base then in effect and the
Maximum Aggregate Amount;

(ii) no Default or Event of Default shall have occurred and be continuing after
giving effect to such increase;

(iii) no Lender’s Commitment may be increased without the consent of such
Lender;

(iv) the Administrative Agent shall have been given notice of the increase in
Commitments;

(v) the maturity date of such increase shall be the same as the Maturity Date;

(vi) the Borrower shall have paid to the Administrative Agent, for payment to
any Increasing Lender or Additional Lender, as applicable, any fees payable in
the amounts and at the times separately agreed upon among the Borrower, the
Administrative Agent and such Lender or Lenders; and

(vii) the increase shall be on the exact same terms and pursuant to the exact
same documentation applicable to this Agreement (other than with respect to any
arrangement, structuring, upfront or other fees or discounts payable in
connection with such Incremental Increase) (provided that the Applicable Margin
of the Facility may be increased to be consistent with that for such Incremental
Increases).

(c) Each Increasing Lender or Additional Lender shall execute and deliver to the
Borrower and the Administrative Agent customary documentation (any such
documentation, an “Incremental Agreement”) implementing any Incremental
Increase. Upon receipt by the Administrative Agent of one or more executed
Incremental Agreements increasing the Commitments of Lenders and/or adding
Commitments from Additional Lenders as provided in this Section 2.16, (i) the
Total Commitment shall be increased automatically on the effective date set
forth in such Incremental Agreements by the aggregate amount indicated in such
Incremental Agreements without further action by the Borrower, the
Administrative Agent and the Letter of Credit Issuers or any Lender,
(ii) Schedule 1.1(a) and the Register shall each be amended to add such
Additional Lender’s Commitment or to reflect the increase in the Commitment of
an Increasing Lender, and the Commitment Percentages of the Lenders shall be
adjusted accordingly to reflect the Incremental Increase of each Additional
Lender and/or each Increasing Lender, (iii) the Administrative Agent shall
distribute to the Borrower, the Administrative Agent, each Letter of Credit
Issuer and each Lender the revised Schedule 1.1(a), (iv) any such Additional
Lender shall be deemed to be a party in all respects to this Agreement and any
other Credit Documents to which the Lenders are a party, and (v) upon the
effective date set forth in such Incremental Agreement, any such

 

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Lender party to the Incremental Agreement shall purchase a pro rata portion of
the outstanding Loans (including participations in L/C Obligations) of each of
the current Lenders such that each Lender (including any Additional Lender, if
applicable) shall hold its respective Commitment Percentage of the outstanding
Loans (and participation interests in participations in L/C Obligations) as
reflected in the revised Schedule 1.1(a) required by this Section 2.16.

2.17 Alternate Rate of Interest.

(a) If prior to the commencement of any Interest Period for a LIBOR Loan:

(i) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBOR Rate, as applicable (including
because the LIBO Screen Rate is not available or published on a current basis),
for such Interest Period; or

(ii) the Administrative Agent is advised by the Majority Lenders that the
Adjusted LIBO Rate or the LIBOR Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans (or its Loan) included in such Borrowing for
such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone, telecopy or electronic mail as promptly as practicable
thereafter and, until the Administrative Agent notifies the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist,
(A) any request by the Borrower for the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBOR Loan shall be ineffective and (B) if
any Notice of Borrowing requests a LIBOR Loan, such Borrowing shall be made as
an ABR Loan; provided that if the circumstances giving rise to such notice
affect only one Type of Loans, then the other Type of Loans shall be permitted.

(b) If any Lender determines that any Requirement of Law has made it unlawful,
or if any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable lending office to make, maintain, fund or continue any
LIBOR Loan, 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 obligations of such Lender
to make, maintain, fund or continue LIBOR Loans or to convert ABR Loans to LIBOR
Loans will 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 will upon demand from such
Lender (with a copy to the Administrative Agent), either convert all LIBOR Loans
of such Lender to ABR Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such LIBOR Loans to
such day, or immediately, if such Lender may not lawfully continue to maintain
such Loans. Upon any such prepayment or conversion, the Borrower will also pay
accrued interest on the amount so prepaid or converted.

(c) If at any time the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that (i) the circumstances set forth
in clause (a)(i) have arisen and such circumstances are unlikely to be temporary
or (ii) the circumstances set forth in clause (a)(i) have not arisen but the
supervisor for the administrator of the LIBO Screen Rate or a Governmental
Authority having jurisdiction over the Administrative Agent has made a public
statement identifying a specific date after which the LIBO Screen Rate shall no
longer be used for determining interest rates for loans, then the Administrative
Agent and the Borrower shall endeavor to establish an alternate rate of interest
to the LIBOR Rate that gives due consideration to the then prevailing market
convention for determining a rate

 

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of interest for syndicated loans in the United States at such time, and shall
enter into an amendment to this Agreement to reflect such alternate rate of
interest and such other related changes to this Agreement as may be applicable
(but for the avoidance of doubt, such related changes shall not include a
reduction of the Applicable Margin); provided that, if such alternate rate of
interest as so determined would be less than zero, such rate shall be deemed to
be zero for the purposes of this Agreement. Notwithstanding anything to the
contrary in Section 13.1, such amendment shall become effective without any
further action or consent of any other party to this Agreement so long as the
Administrative Agent shall not have received, within five Business Days of the
date notice of such alternate rate of interest is provided to the Lenders, a
written notice from the Majority Lenders stating that such Majority Lenders
object to such amendment. Until an alternate rate of interest shall be
determined in accordance with this clause (c) (but, in the case of the
circumstances described in clause (ii) of the first sentence of this
Section 2.17(c), only to the extent the LIBO Screen Rate for such Interest
Period is not available or published at such time on a current basis), (x) any
requests by the Borrower for the conversion of any Borrowing to, or continuation
of any Borrowing as, a LIBOR Loan shall be ineffective and (y) if any Notice of
Borrowing requests a LIBOR Loan, such Loan shall be made as an ABR Loan.

SECTION 3. Letters of Credit

3.1 Letters of Credit.

(a) Subject to and upon the terms and conditions herein set forth, at any time
and from time to time on and after the Closing Date and prior to the L/C
Maturity Date, each Letter of Credit Issuer agrees, in reliance upon the
agreements of the Lenders set forth in this Section 3, to issue upon the request
of the Borrower and for the direct or indirect benefit of the Borrower and the
Restricted Subsidiaries, a letter of credit or letters of credit (together with
the Existing Letters of Credit, the “Letters of Credit” and each, a “Letter of
Credit”) in such form and with such Issuer Documents as may be approved by the
Letter of Credit Issuer in its reasonable discretion; provided that the Borrower
shall be a co-applicant of, and jointly and severally liable with respect to,
each Letter of Credit issued for the account of a Restricted Subsidiary.

(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the
Stated Amount of which, when added to the Letters of Credit Outstanding at such
time, would exceed the Letter of Credit Sublimit then in effect, (ii) no Letter
of Credit shall be issued the Stated Amount of which would cause the aggregate
amount of all Lenders’ Total Exposures at such time to exceed the Loan Limit
then in effect, (iii) no Letter of Credit is required to be issued by a given
Letter of Credit Issuer if, as a result of the issuance of such Letter of
Credit, (x) the aggregate undrawn Stated Amount of all outstanding Letters of
Credit issued by such Letter of Credit Issuer at such time plus (y) the
aggregate amount of all outstanding Unpaid Drawings made by such Letter of
Credit Issuer would exceed such Letter of Credit Issuer’s Letter of Credit
Commitment, (iv) each Letter of Credit shall have an expiration date occurring
no later than one year after the date of issuance or such longer period of time
as may be agreed by the applicable Letter of Credit Issuer, unless otherwise
agreed upon by the Administrative Agent and the Letter of Credit Issuer or as
provided under Section 3.2(b); provided that any Letter of Credit may provide
for automatic renewal thereof for additional periods of up to 12 months or such
longer period of time as may be agreed by the applicable Letter of Credit
Issuer, subject to the provisions of Section 3.2(b); provided, further, that in
no event shall such expiration date occur later than the L/C Maturity Date
unless arrangements which are satisfactory to the applicable Letter of Credit
Issuer to Cash Collateralize (or backstop) such Letter of Credit have been made
(provided, however, that no Lenders shall be obligated to fund participations in
respect of any Letter of Credit after the Maturity Date), (v) each Letter of
Credit shall be denominated in Dollars, (vi) no Letter of Credit shall be issued
if it would be illegal under any applicable Requirement of Law for the
beneficiary of the Letter of Credit to have a Letter of Credit issued in its
favor and (vii) no Letter of Credit shall be issued by a Letter of Credit Issuer
after it has received a

 

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written notice from any Credit Party or the Administrative Agent or the Majority
Lenders stating that a Default or Event of Default has occurred and is
continuing until such time as the Letter of Credit Issuer shall have received a
written notice (A) of rescission of such notice from the party or parties
originally delivering such notice, (B) of the waiver of such Default or Event of
Default in accordance with the provisions of Section 13.1 or (C) that such
Default or Event of Default is no longer continuing.

(c) Upon at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent and the Letter of
Credit Issuer (which notice the Administrative Agent shall promptly transmit to
each of the applicable Lenders), the Borrower shall have the right, on any day,
permanently to terminate or reduce the Letter of Credit Sublimit in whole or in
part; provided that, after giving effect to such termination or reduction, the
Letters of Credit Outstanding shall not exceed the Letter of Credit Sublimit

(d) Notwithstanding anything herein to the contrary, no Letter of Credit Issuer
shall have any obligation hereunder to issue, and none shall issue, any Letter
of Credit the proceeds of which would be made available to any Person (i) to
fund any activity or business of or with any Sanctioned Person, or in any
country or territory that, at the time of such funding, is the subject of any
Sanctions, (ii) in any manner that would result in a violation of any Sanctions
by any party to this Agreement or (iii) in any manner that would result in a
violation of one or more policies of such Letter of Credit Issuer applicable to
letters of credit generally.

3.2 Letter of Credit Requests.

(a) Whenever the Borrower desires that a Letter of Credit be issued for its
account, the Borrower shall give the Administrative Agent and the Letter of
Credit Issuer a Letter of Credit Request by no later than 1:00 p.m. (Central
time) at least two (or such lesser number as may be agreed upon by the
Administrative Agent and the Letter of Credit Issuer) Business Days prior to the
proposed date of issuance. Each notice shall be executed by the Borrower and
shall be in the form of Exhibit B or such other form (including by electronic
mail or fax transmission) as reasonably agreed between the Borrower, the
Administrative Agent and the Letter of Credit Issuer (each a “Letter of Credit
Request”). No Letter of Credit Issuer shall issue any Letters of Credit unless
such Letter of Credit Issuer shall have received notice from the Administrative
Agent that the conditions to such issuance have been met, which notice shall be
deemed given (i) if the Letter of Credit Issuer has not received notice from the
Administrative Agent that the conditions to such issuance have been met within
two Business Days after the date of the applicable Letter of Credit Request or
(ii) if the aggregate amount of Letters of Credit Outstanding issued by such
Letter of Credit Issuer then outstanding does not exceed the amount theretofore
agreed to by the Borrower, the Administrative Agent and such Letter of Credit
Issuer, and the Administrative Agent has not otherwise notified such Letter of
Credit Issuer that it may no longer rely on this clause (i).

(b) If the Borrower so requests in any applicable Letter of Credit Request, the
Letter of Credit 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 Letter of Credit Issuer to prevent any such extension
at least once in each 12-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not
later than a day (the “Non-Extension Notice Date”) in each such 12-month period
to be agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by the Letter of Credit Issuer, the Borrower shall not be required to
make a specific request to the Letter of Credit 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 Letter of Credit Issuer to
permit the extension of such Letter of Credit at any time to an expiry date not
later than the L/C Maturity Date unless arrangements which are satisfactory to
the applicable Letter of Credit Issuer to Cash Collateralize

 

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(or backstop) such Letter of Credit have been made (but no Lenders shall be
obligated to fund participations in respect of any Letter of Credit after the
Maturity Date); provided, however, that the Letter of Credit Issuer shall not
permit any such extension if (i) the Letter of Credit 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 (b) of Section 3.1 or otherwise), or
(ii) it has received notice (which may be by telephone or in writing) on or
before the day that is five Business Days before the Non-Extension Notice Date
(A) from the Administrative Agent that the Majority Lenders have elected not to
permit such extension or (B) from the Administrative Agent, any Lender or the
Borrower that one or more of the applicable conditions specified in Section 7
are not then satisfied, and in each such case directing the Letter of Credit
Issuer not to permit such extension.

(c) Each Letter of Credit Issuer (other than the Administrative Agent or any of
its Affiliates) shall, at least once each week, provide the Administrative Agent
with a list of all Letters of Credit issued by it that are outstanding at such
time; provided that, upon written request from the Administrative Agent, such
Letter of Credit Issuer shall thereafter notify the Administrative Agent in
writing on each Business Day of all Letters of Credit issued on the prior
Business Day by such Letter of Credit Issuer.

(d) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that the Letter of Credit may be
issued in accordance with, and will not violate the requirements of,
Section 3.1(b).

3.3 Letter of Credit Participations.

(a) Immediately upon the issuance by the Letter of Credit Issuer of any Letter
of Credit, the Letter of Credit Issuer shall be deemed to have sold and
transferred to each Lender (each such Lender, in its capacity under this
Section 3.3, an “L/C Participant”), and each such L/C Participant shall be
deemed irrevocably and unconditionally to have purchased and received from the
Letter of Credit Issuer, without recourse or warranty, an undivided interest and
participation (each an “L/C Participation”), to the extent of such L/C
Participant’s Commitment Percentage, in each Letter of Credit, each substitute
therefor, each drawing made thereunder and the obligations of the Borrower under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto.

(b) In determining whether to pay under any Letter of Credit, the relevant
Letter of Credit Issuer shall have no obligation relative to the L/C
Participants other than to confirm that (i) any documents required to be
delivered under such Letter of Credit have been delivered, (ii) the Letter of
Credit Issuer has examined the documents with reasonable care and (iii) the
documents appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the relevant Letter of Credit
Issuer under or in connection with any Letter of Credit issued by it, if taken
or omitted in the absence of gross negligence or willful misconduct, shall not
create for the Letter of Credit Issuer any resulting liability.

(c) In the event that the Letter of Credit Issuer makes any payment under any
Letter of Credit issued by it and the Borrower shall not have repaid such amount
in full to the respective Letter of Credit Issuer pursuant to Section 3.4(a), or
if any reimbursement payment is required to be refunded to the Borrower, the
Letter of Credit Issuer shall promptly notify the Administrative Agent and each
L/C Participant of such failure, and each such L/C Participant shall promptly
and unconditionally pay to the Administrative Agent for the account of the
Letter of Credit Issuer, the amount of such L/C Participant’s Commitment
Percentage of such unreimbursed payment in Dollars and in immediately available
funds; provided, however, that no L/C Participant shall be obligated to pay to
the Administrative Agent for the account of the Letter of Credit Issuer its
Commitment Percentage of such unreimbursed amount arising from any wrongful
payment made by the Letter of Credit Issuer under any such Letter of Credit as a
result

 

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of acts or omissions constituting willful misconduct or gross negligence on the
part of the Letter of Credit Issuer (as determined in a final and non-appealable
judgment by a court of competent jurisdiction). Each L/C Participant shall make
available to the Administrative Agent for the account of the Letter of Credit
Issuer such L/C Participant’s Commitment Percentage of the amount of such
payment no later than 1:00 p.m. (Central time) on the first Business Day after
the date notified by the Letter of Credit Issuer in immediately available funds.
If and to the extent such L/C Participant shall not have so made its Commitment
Percentage of the amount of such payment available to the Administrative Agent
for the account of the Letter of Credit Issuer, such L/C Participant agrees to
pay to the Administrative Agent for the account of the Letter of Credit Issuer,
forthwith on demand, such amount, together with interest thereon for each day
from such date until the date such amount is paid to the Administrative Agent
for the account of the Letter of Credit Issuer at a rate per annum equal to the
Overnight Rate from time to time then in effect, plus any administrative,
processing or similar fees customarily charged by the Letter of Credit Issuer in
connection with the foregoing. The failure of any L/C Participant to make
available to the Administrative Agent for the account of the Letter of Credit
Issuer its Commitment Percentage of any payment under any Letter of Credit shall
not relieve any other L/C Participant of its obligation hereunder to make
available to the Administrative Agent for the account of the Letter of Credit
Issuer its Commitment Percentage of any payment under such Letter of Credit on
the date required, as specified above, but no L/C Participant shall be
responsible for the failure of any other L/C Participant to make available to
the Administrative Agent such other L/C Participant’s Commitment Percentage of
any such payment.

(d) Whenever the Letter of Credit Issuer receives a payment in respect of an
unpaid reimbursement obligation as to which the Administrative Agent has
received for the account of the Letter of Credit Issuer any payments from the
L/C Participants pursuant to clause (c) above, the Letter of Credit Issuer shall
pay to the Administrative Agent and the Administrative Agent shall promptly pay
to each L/C Participant that has paid its Commitment Percentage of such
reimbursement obligation, in Dollars and in immediately available funds, an
amount equal to such L/C Participant’s share (based upon the proportionate
aggregate amount originally funded by such L/C Participant to the aggregate
amount funded by all L/C Participants) of the principal amount so paid in
respect of such reimbursement obligation and interest thereon accruing after the
purchase of the respective L/C Participations at the Overnight Rate.

(e) The obligations of the L/C Participants to make payments to the
Administrative Agent for the account of a Letter of Credit Issuer with respect
to Letters of Credit shall be irrevocable and not subject to counterclaim,
set-off or other defense or any other qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including under any of the following circumstances:

(i) any lack of validity or enforceability of this Agreement or any of the other
Credit Documents;

(ii) the existence of any claim, set-off, defense or other right that the
Borrower may have at any time against a beneficiary named in a Letter of Credit,
any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Letter of Credit
Issuer, any Lender or other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);

(iii) any draft, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

 

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(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or

(v) the occurrence of any Default or Event of Default;

provided, however, that no L/C Participant shall be obligated to pay to the
Administrative Agent for the account of the Letter of Credit Issuer its
Commitment Percentage of any unreimbursed amount arising from any wrongful
payment made by the Letter of Credit Issuer under a Letter of Credit as a result
of acts or omissions constituting willful misconduct, bad faith or gross
negligence on the part of the Letter of Credit Issuer (as determined in a final
and non-appealable judgment by a court of competent jurisdiction).

3.4 Agreement to Repay Letter of Credit Drawings.

(a) The Borrower hereby agrees to reimburse the Letter of Credit Issuer by
making payment in Dollars to the Administrative Agent for the account of the
Letter of Credit Issuer in immediately available funds, for any payment or
disbursement made by the Letter of Credit Issuer under any Letter of Credit
issued by it (each such amount so paid until reimbursed, an “Unpaid Drawing”)
(i) within one Business Day of the date of such payment or disbursement if the
Letter of Credit Issuer provides notice to the Borrower of such payment or
disbursement prior to 11:00 a.m. (Central time) on such next succeeding Business
Day (from the date of such payment or disbursement) or (ii) if such notice is
received after such time, on the next Business Day following the date of receipt
of such notice (such required date for reimbursement under clause (i) or (ii),
as applicable, on such Business Day (the “Reimbursement Date”)), with interest
on the amount so paid or disbursed by such Letter of Credit Issuer, from and
including the date of such payment or disbursement to but excluding the
Reimbursement Date, at the per annum rate for each day equal to the rate
described in Section 2.8(a); provided that, notwithstanding anything contained
in this Agreement to the contrary, with respect to any Letter of Credit,
(i) unless the Borrower shall have notified the Administrative Agent and the
Letter of Credit Issuer prior to 11:00 a.m. (Central time) on the Reimbursement
Date that the Borrower intends to reimburse the Letter of Credit Issuer for the
amount of such drawing with funds other than the proceeds of Loans, the Borrower
shall be deemed to have given a Notice of Borrowing requesting that the Lenders
make Loans (which shall be ABR Loans) on the Reimbursement Date in an amount
equal to the amount at such drawing, and (ii) the Administrative Agent shall
promptly notify each L/C Participant of such drawing and the amount of its Loan
to be made in respect thereof, and each L/C Participant shall be irrevocably
obligated to make a Loan to the Borrower in the manner deemed to have been
requested in the amount of its Commitment Percentage of the applicable Unpaid
Drawing by 12:00 noon (Central time) on such Reimbursement Date by making the
amount of such Loan available to the Administrative Agent. Such Loans made in
respect of such Unpaid Drawing on such Reimbursement Date shall be made without
regard to the limits of Section 2.2 and without regard to the satisfaction of
the conditions set forth in Section 7. The Administrative Agent shall use the
proceeds of such Loans solely for purpose of reimbursing the Letter of Credit
Issuer for the related Unpaid Drawing. In the event that the Borrower fails to
Cash Collateralize any Letter of Credit that is outstanding on the Maturity
Date, the full amount of the Letters of Credit Outstanding in respect of such
Letter of Credit shall be deemed to be an Unpaid Drawing subject to the
provisions of this Section 3.4 except that the Letter of Credit Issuer shall
hold the proceeds received from the Lenders as contemplated above as cash
collateral for such Letter of Credit to reimburse any Drawing under such Letter
of Credit and shall use such proceeds first, to reimburse itself for any
Drawings made in respect of such Letter of Credit following the L/C Maturity
Date, second, to the extent such Letter of Credit expires or is returned undrawn
while any such cash collateral remains, to the repayment of obligations in
respect of any Loans that have not paid at such time and third, to the Borrower
or as otherwise directed by a court of competent jurisdiction. Nothing in this
Section 3.4(a) shall affect the Borrower’s obligation to repay all outstanding
Loans when due in accordance with the terms of this Agreement.

 

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(b) The obligations of the Borrower under this Section 3.4 to reimburse the
Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment that the Borrower or any other Person may have or have had against the
Letter of Credit Issuer, the Administrative Agent or any Lender (including in
its capacity as an L/C Participant), including any defense based upon the
failure of any drawing under a Letter of Credit (each a “Drawing”) to conform to
the terms of the Letter of Credit or any non-application or misapplication by
the beneficiary of the proceeds of such Drawing; provided that the Borrower
shall not be obligated to reimburse the Letter of Credit Issuer for any wrongful
payment made by the Letter of Credit Issuer under the Letter of Credit issued by
it as a result of acts or omissions constituting willful misconduct, bad faith
or gross negligence on the part of the Letter of Credit Issuer (as determined in
a final and non-appealable judgment by a court of competent jurisdiction).

3.5 [Reserved].

3.6 New or Successor Letter of Credit Issuer.

(a) A Letter of Credit Issuer (other than any Letter of Credit Issuer that is
also the Administrative Agent at such time) may resign as a Letter of Credit
Issuer upon 30 days’ prior written notice to the Administrative Agent, the
Lenders and the Borrower. The Borrower may replace the Letter of Credit Issuer
for any reason upon written notice to the Letter of Credit Issuer and the
Administrative Agent and may add Letter of Credit Issuers at any time upon
notice to the Administrative Agent. If a Letter of Credit Issuer shall resign or
be replaced, or if the Borrower shall decide to add a new Letter of Credit
Issuer under this Agreement, then the Borrower may appoint from among the
Lenders a successor issuer of Letters of Credit or a new Letter of Credit
Issuer, as the case may be, or, with the consent of the Administrative Agent
(such consent not to be unreasonably withheld) and such new Letter of Credit
Issuer, another successor or new issuer of Letters of Credit, whereupon such
successor issuer shall succeed to the rights, powers and duties of the replaced
or resigning Letter of Credit Issuer under this Agreement and the other Credit
Documents, or such new issuer of Letters of Credit shall be granted the rights,
powers and duties of a Letter of Credit Issuer hereunder, and the term “Letter
of Credit Issuer” shall mean such successor or such new issuer of Letters of
Credit effective upon such appointment. The acceptance of any appointment as a
Letter of Credit Issuer hereunder whether as a successor issuer or new issuer of
Letters of Credit in accordance with this Agreement, shall be evidenced by an
agreement entered into by such new or successor issuer of Letters of Credit, in
a form reasonably satisfactory to the Borrower and the Administrative Agent and,
from and after the effective date of such agreement, such new or successor
issuer of Letters of Credit shall become a “Letter of Credit Issuer” hereunder.
After the resignation or replacement of a Letter of Credit Issuer hereunder, the
resigning or replaced Letter of Credit Issuer shall remain a party hereto and
shall continue to have all the rights and obligations of a Letter of Credit
Issuer under this Agreement and the other Credit Documents with respect to
Letters of Credit issued by it prior to such resignation or replacement, but
shall not be required to issue additional Letters of Credit. In connection with
any resignation or replacement pursuant to this clause (a) (but, in case of any
such resignation, only to the extent that a successor issuer of Letters of
Credit shall have been appointed), either (i) the Borrower, the resigning or
replaced Letter of Credit Issuer and the successor issuer of Letters of Credit
shall arrange to have any outstanding Letters of Credit issued by the resigning
or replaced Letter of Credit Issuer replaced with Letters of Credit issued by
the successor issuer of Letters of Credit or (ii) the Borrower shall cause the
successor issuer of Letters of Credit, if such successor issuer is reasonably
satisfactory to the replaced or resigning Letter of Credit Issuer, to issue
“back-stop” Letters of Credit naming the resigning or replaced Letter of Credit
Issuer as beneficiary for each outstanding Letter of Credit issued by the
resigning or replaced Letter of Credit Issuer, which new Letters of Credit shall
have a Stated Amount equal to the Letters of Credit being back-stopped and the
sole requirement for drawing on such new Letters of Credit shall be a drawing on
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Credit. After any resigning or replaced Letter of Credit Issuer’s resignation or
replacement as Letter of Credit Issuer, the provisions of this Agreement
relating to a Letter of Credit Issuer shall inure to its benefit as to any
actions taken or omitted to be taken by it (A) while it was a Letter of Credit
Issuer under this Agreement or (B) at any time with respect to Letters of Credit
issued by such Letter of Credit Issuer.

(b) To the extent that there are, at the time of any resignation or replacement
as set forth in clause (a) above, any outstanding Letters of Credit, nothing
herein shall be deemed to impact or impair any rights and obligations of any of
the parties hereto with respect to such outstanding Letters of Credit (including
any obligations related to the payment of fees or the reimbursement or funding
of amounts drawn), except that the Borrower, the resigning or replaced Letter of
Credit Issuer and the successor issuer of Letters of Credit shall have the
obligations regarding outstanding Letters of Credit described in clause (a)
above.

3.7 Role of Letter of Credit Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the Letter of Credit 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
Letter of Credit Issuer, the Administrative Agent, any of their respective
affiliates nor any correspondent, participant or assignee of the Letter of
Credit Issuer shall be liable to any Lender for (a) any action taken or omitted
in connection herewith at the request or with the approval of the Majority
Lenders, (b) any action taken or omitted in the absence of gross negligence,
willful misconduct or bad faith or (c) 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 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 Letter of Credit Issuer, the Administrative Agent, any of their
respective affiliates nor any correspondent, participant or assignee of the
Letter of Credit Issuer shall be liable or responsible for any of the matters
described in Section 3.3(e); provided that anything in such Section to the
contrary notwithstanding, the Borrower may have a claim against the Letter of
Credit Issuer, and the Letter of Credit Issuer may be liable to the Borrower, to
the extent, but only to the extent, of any direct, as opposed to special,
indirect, consequential, exemplary or punitive, damages suffered by the Borrower
which the Borrower proves were caused by the Letter of Credit Issuer’s willful
misconduct, gross negligence or bad faith (as determined in a final and
non-appealable judgment by a court of competent jurisdiction) or the Letter of
Credit Issuer’s willful failure 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 Letter of Credit Issuer
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 Letter of Credit Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to 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.

3.8 Cash Collateral.

(a) Upon the request of the Majority Lenders if, as of the L/C Maturity Date,
there are any Letters of Credit Outstanding, the Borrower shall immediately Cash
Collateralize the then Letters of Credit Outstanding.

 

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(b) If any Event of Default shall occur and be continuing, the Required Lenders
may require that the L/C Obligations be Cash Collateralized; provided that, upon
the occurrence of an Event of Default referred to in Section 11.5 with respect
to the Borrower, the Borrower shall immediately Cash Collateralize the Letters
of Credit then outstanding and no notice or request by or consent from the
Required Lenders shall be required.

(c) For purposes of this Agreement, “Cash Collateralize” shall mean to pledge
and deposit with or deliver to the Administrative Agent, for the benefit of the
Letter of Credit Issuer and the Lenders, as collateral for the L/C Obligations,
cash or deposit account balances in an amount equal to the amount of the Letters
of Credit Outstanding required to be Cash Collateralized pursuant to
documentation in form and substance reasonably satisfactory to the
Administrative Agent and the Letter of Credit Issuer (which documents are hereby
consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Borrower hereby grants to the Administrative Agent, for the
benefit of the Letter of Credit Issuer and the L/C Participants, a security
interest in all such cash, deposit accounts and all balances therein and all
proceeds of the foregoing. Such cash Collateral shall be maintained in blocked,
interest bearing deposit accounts established by and in the name of the
Borrower, but under the “control” (as defined in Section 9-104 of the UCC) of
the Administrative Agent.

3.9 Applicability of ISP and UCP. Unless otherwise expressly agreed by the
Letter of Credit Issuer and the Borrower when a Letter of Credit is issued,
(a) the rules of the ISP shall apply to each standby Letter of Credit and
(b) the rules of the Uniform Customs and Practice for Documentary Credits, as
most recently published by the International Chamber of Commerce at the time of
issuance, shall apply to each commercial Letter of Credit.

3.10 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.

3.11 Letters of Credit Issued for Restricted Subsidiaries. Notwithstanding that
a Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Restricted Subsidiary, the Borrower
shall be obligated to reimburse the Letter of Credit Issuer hereunder for any
and all drawings under such Letter of Credit. The Borrower hereby acknowledges
that the issuance of Letters of Credit for the account of Restricted
Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s
business derives substantial benefits from the businesses of such Restricted
Subsidiaries.

SECTION 4. Fees; Commitments

4.1 Fees.

(a) The Borrower agrees to pay to the Administrative Agent in Dollars, for the
account of each Lender (in each case pro rata according to the respective
Commitment Percentages of the Lenders), a commitment fee (the “Commitment Fee”)
for each day from the Closing Date until but excluding the Termination Date.
Each Commitment Fee shall be payable by the Borrower (i) quarterly in arrears on
the last Business Day of each March, June, September and December (for the
three-month period (or portion thereof) ended on such day for which no payment
has been received) and (ii) on the Termination Date (for the period ended on
such date for which no payment has been received pursuant to clause (i) above),
and shall be computed for each day during such period at a rate per annum equal
to the Commitment Fee Rate in effect on such day on the Available Commitment in
effect on such day.

 

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(b) The Borrower agrees to pay to the Administrative Agent in Dollars for the
account of the Lenders pro rata on the basis of their respective Letter of
Credit Exposure, a fee in respect of each Letter of Credit (the “Letter of
Credit Fee”), for the period from the date of issuance of such Letter of Credit
until the termination or expiration date of such Letter of Credit computed at
the per annum rate for each day equal to the Applicable Margin for LIBOR Loans
on the average daily Stated Amount of such Letter of Credit. Such Letter of
Credit Fees shall be due and payable (i) quarterly in arrears on the last
Business Day of each March, June, September and December and (ii) on the
Termination Date (for the period for which no payment has been received pursuant
to clause (i) above).

(c) The Borrower agrees to pay to each Letter of Credit Issuer a fee in respect
of each Letter of Credit issued by it (the “Fronting Fee”), for the period from
the date of issuance of such Letter of Credit to the termination or expiration
date of such Letter of Credit, computed at the rate for each day equal to 0.125%
per annum (or such other amount a may be agreed in a separate writing between
the Borrower and any Letter of Credit Issuer) on the average daily Stated Amount
of such Letter of Credit (or at such other rate per annum as agreed in writing
between the Borrower and the Letter of Credit Issuer). Such Fronting Fees shall
be due and payable by the Borrower (i) quarterly in arrears on the last Business
Day of each March, June, September and December and (ii) on the Termination Date
(for the period for which no payment has been received pursuant to clause
(i) above).

(d) The Borrower agrees to pay directly to the Letter of Credit Issuer upon each
issuance of, drawing under, and/or amendment of, a Letter of Credit issued by it
such amount as the Letter of Credit Issuer and the Borrower shall have agreed
upon for issuances of, drawings under or amendments of, letters of credit issued
by it.

(e) The Borrower agrees to pay to the Administrative Agent the administrative
agent fees in the amounts and on the dates as set forth in writing from time to
time between the Administrative Agent and the Borrower.

4.2 Voluntary Reduction of Commitments.

(a) Upon at least three Business Days’ prior written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent at the
Administrative Agent’s Office (which notice the Administrative Agent shall
promptly transmit to each of the Lenders), the Borrower shall have the right,
without premium or penalty, on any day, to permanently terminate or reduce the
Commitments, as determined by the Borrower, in whole or in part; provided that
(i) any such termination or reduction shall apply ratably to reduce each
Lender’s Commitment, (b) any partial reduction pursuant to this Section 4.2
shall be in the amount of at least $10,000,000 and in an integral multiple of
$1,000,000 in excess thereof and (c) after giving effect to such termination or
reduction and to any prepayments of Loans or cancellation or Cash
Collateralization of Letters of Credit made on the date thereof in accordance
with this Agreement, the aggregate amount of all Lenders’ Total Exposures shall
not exceed the Loan Limit.

(b) The Borrower may terminate the unused amount of the Commitment of a
Defaulting Lender upon not less than two (2) Business Days’ prior notice to the
Administrative Agent (which will promptly notify the Lenders thereof), and in
such event the provisions of Section 2.15(f) will apply to all amounts
thereafter paid by the Borrower for the account of such Defaulting Lender under
this Agreement (whether on account of principal, interest, fees, indemnity or
other amounts), provided that such termination will not be deemed to be a waiver
or release of any claim the Borrower, the Administrative Agent, any Letter of
Credit Issuer or any Lender may have against such Defaulting Lender.

4.3 Mandatory Termination or Reduction of Commitments.

(a) The Total Commitment shall terminate at 5:00 p.m. (Central time) on the
Termination Date.

 

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(b) If any reduction in the Borrowing Base would result in the Borrowing Base
being less than the Total Commitments, the Total Commitments shall be
automatically and permanently (but subject to Section 2.16) reduced, without
premium or penalty, contemporaneously with such reduction in the Borrowing Base
so that the Total Commitment equals the Borrowing Base as reduced; provided that
any such reduction shall apply ratably to reduce each Lender’s Commitment.
Concurrently with, and effective on, the Redetermination Date applicable to such
Borrowing Base reduction, (i) Schedule 1.1(a) and the Register shall each be
amended to reflect the decrease in the Total Commitment and the Commitment of
each Lender and (ii) the Administrative Agent shall promptly distribute to the
Borrower, the Administrative Agent, each Letter of Credit Issuer and each Lender
the revised Schedule 1.1(a).

SECTION 5. Payments

5.1 Voluntary Prepayments. The Borrower shall have the right to prepay Loans
without premium or penalty, in whole or in part from time to time on the
following terms and conditions:

(a) the Borrower shall give the Administrative Agent at the Administrative
Agent’s Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to make such prepayment, the amount of such prepayment
and (in the case of LIBOR Loans) the specific Borrowing(s) being prepaid, which
notice shall be given by the Borrower no later than 1:00 p.m. (Central time) (i)
in the case of LIBOR Loans, three Business Days prior to and (ii) in the case of
ABR Loans on the date of such prepayment and shall promptly be transmitted by
the Administrative Agent to each of the Lenders;

(b) each partial prepayment of (i) LIBOR Loans shall be in a minimum amount of
$1,000,000 and in multiples of $1,000,000 in excess thereof, and (ii) any ABR
Loans shall be in a minimum amount of $1,000,000 and in multiples of $1,000,000
in excess thereof; provided that no partial prepayment of LIBOR Loans made
pursuant to a single Borrowing shall reduce the outstanding LIBOR Loans made
pursuant to such Borrowing to an amount less than $1,000,000 for such LIBOR
Loans; and

(c) any prepayment of LIBOR Loans pursuant to this Section 5.1 on any day other
than the last day of an Interest Period applicable thereto shall be subject to
compliance by the Borrower with the applicable provisions of Section 2.11.

Each such notice shall specify the date and amount of such prepayment and the
Type of Loans to be prepaid. At the Borrower’s election in connection with any
prepayment pursuant to this Section 5.1, such prepayment shall not be applied to
any Loans of a Defaulting Lender.

5.2 Mandatory Prepayments.

(a) Repayment following Optional Reduction of Commitments. If, after giving
effect to any termination or reduction of the Commitments pursuant to
Section 4.2(a), the aggregate Total Exposures of all Lenders exceeds the Loan
Limit (as reduced), then the Borrower shall on the same Business Day (i) prepay
the Loans in an aggregate principal amount equal to such excess and (ii) if any
excess remains after prepaying all of the Loans as a result of any Letter of
Credit Exposure, pay to the Administrative Agent on behalf of the applicable
Letter of Credit Issuer and the L/C Participants an amount in cash equal to such
excess to be held as cash collateral as provided in Section 3.8.

(b) Repayment of Loans Following Redetermination or Adjustment of Borrowing
Base.

(i) Upon any redetermination of the Borrowing Base in accordance with
Section 2.14(b), if the aggregate Total Exposures of all Lenders exceeds the
redetermined Borrowing Base, then the Borrower shall, within 10 Business Days
after its receipt of a New Borrowing Base Notice

 

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indicating such Borrowing Base Deficiency, inform the Administrative Agent of
the Borrower’s election to: (A) within 30 days following such election prepay
the Loans in an aggregate principal amount equal to such excess, (B) prepay the
Loans in six equal monthly installments, commencing on the 30th day following
its receipt of such New Borrowing Base Notice with each payment being equal to
1/6th of the aggregate principal amount of such excess, (C) within 30 days
following such election, provide additional Collateral in the form of additional
Oil and Gas Properties not evaluated in the most recently delivered Reserve
Report or other Collateral reasonably acceptable to the Administrative Agent
having a Borrowing Base value (as proposed by the Administrative Agent and
approved by the Required Lenders) sufficient, after giving effect to any other
actions taken pursuant to this Section 5.2(b)(i) to eliminate any such excess or
(D) undertake a combination of clauses (A), (B) and (C); provided that if,
because of Letter of Credit Exposure, a Borrowing Base Deficiency remains after
prepaying all of the Loans, the Borrower shall Cash Collateralize such remaining
Borrowing Base Deficiency as provided in Section 3.8; provided further, that all
payments required to be made pursuant to this Section 5.2(b)(i) must be made on
or prior to the Termination Date.

(ii) Upon any adjustment to the Borrowing Base pursuant to Section 2.14(e), if
the aggregate Total Exposures of all Lenders exceeds the Borrowing Base, as
adjusted, then the Borrower shall (A) prepay the Loans in an aggregate principal
amount equal to such excess and (B) if any excess remains after prepaying all of
the Loans as a result of any Letter of Credit Exposure, Cash Collateralize such
excess as provided in Section 3.8. The Borrower shall be obligated to make such
prepayment and/or deposit of cash collateral no later than two Business Days
following the date it receives written notice from the Administrative Agent of
the adjustment of the Borrowing Base and the resulting Borrowing Base
Deficiency; provided that all payments required to be made pursuant to this
clause must be made on or prior to the Termination Date.

(iii) If the Borrower issues any Indebtedness permitted under Section 10.1(m) or
(n) at any time a Borrowing Base Deficiency exists, the Borrower shall prepay
the Loans on the date the Borrower receives the net cash proceeds from the
issuance of such Senior Notes in an amount sufficient to eliminate such
Borrowing Base Deficiency (or, if less, such net cash proceeds). For the
avoidance of doubt, Borrower shall be required to continue to comply with
Section 5.2(b)(ii) with respect to any Borrowing Base Deficiency existing at the
time of such issuance of Senior Notes for any reason other than any Disposition
of Borrowing Base Properties.

(iv) For the avoidance of doubt and notwithstanding the foregoing, clauses
(b)(i) through (iii) above shall not apply during an Investment Grade Period.

(c) Application to Loans. With respect to each prepayment of Loans elected under
Section 5.1 or required by Section 5.2, the Borrower may designate (i) the Types
of Loans that are to be prepaid and the specific Borrowing(s) being repaid and
(ii) the Loans to be prepaid; provided that (A) each prepayment of any Loans
made pursuant to a Borrowing shall be applied pro rata among such Loans and
(B) notwithstanding the provisions of the preceding clause (A), no prepayment of
Loans shall be applied to the Loans of any Defaulting Lender unless otherwise
agreed in writing by the Borrower. In the absence of a designation by the
Borrower as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its reasonable discretion with a
view, but no obligation, to minimize breakage costs owing under Section 2.11.

(d) LIBOR Interest Periods. In lieu of making any payment pursuant to this
Section 5.2 in respect of any LIBOR Loan, other than on the last day of the
Interest Period therefor so long as no Event of Default shall have occurred and
be continuing, the Borrower at its option may deposit, on behalf of the
Borrower, with the Administrative Agent an amount equal to the amount of the
LIBOR Loan to be prepaid and such LIBOR Loan shall be repaid on the last day of
the Interest Period therefor in the

 

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required amount. Such deposit shall be held by the Administrative Agent in a
corporate time deposit account established on terms reasonably satisfactory to
the Administrative Agent, earning interest at the then customary rate for
accounts of such type. Such deposit shall constitute cash collateral for the
LIBOR Loans to be so prepaid; provided that the Borrower may at any time direct
that such deposit be applied to make the applicable payment required pursuant to
this Section 5.2.

5.3 Method and Place of Payment.

(a) Except as otherwise specifically provided herein, all payments under this
Agreement shall be made by the Borrower without set-off, counterclaim or
deduction of any kind, to the Administrative Agent for the ratable account of
the Lenders entitled thereto or the Letter of Credit Issuer entitled thereto, as
the case may be, not later than 2:00 p.m. (Central time), in each case, on the
date when due and shall be made in immediately available funds at the
Administrative Agent’s Office or at such other office as the Administrative
Agent shall specify for such purpose by notice to the Borrower; it being
understood that written or facsimile notice by the Borrower to the
Administrative Agent to make a payment from the funds in the Borrower’s account
at the Administrative Agent’s Office shall constitute the making of such payment
to the extent of such funds held in such account. All repayments or prepayments
of any Loans (whether of principal, interest or otherwise) hereunder and all
other payments under each Credit Document shall be made in Dollars. The
Administrative Agent will thereafter cause to be distributed on the same day (if
payment was actually received by the Administrative Agent prior to 2:00 p.m.
(Central time) or, otherwise, on the next Business Day in the sole discretion of
the Administrative Agent) like funds relating to the payment of principal or
interest or fees ratably to the Lenders or the Letter of Credit Issuer, as
applicable, entitled thereto.

(b) For purposes of computing interest or fees, any payments under this
Agreement that are made later than 2:00 p.m. (Central time) shall be deemed to
have been made on the next succeeding Business Day in the sole discretion of the
Administrative Agent. Whenever any payment to be made hereunder shall be stated
to be due on a day that is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable during such extension at the applicable
rate in effect immediately prior to such extension.

5.4 Net Payments.

(a) Any and all payments made by or on behalf of the Borrower or any Guarantor
under this Agreement or any other Credit Document shall be made free and clear
of, and without deduction or withholding for or on account of, any Taxes;
provided that if the Borrower or any Guarantor or the Administrative Agent shall
be required by applicable Requirements of Law to deduct or withhold any Taxes
from such payments, then (i) the Borrower or such Guarantor or the
Administrative Agent shall make such deductions or withholdings as are
reasonably determined in good faith by the Borrower, such Guarantor or the
Administrative Agent to be required by any applicable Requirement of Law,
(ii) the Borrower, such Guarantor or the Administrative Agent, as applicable,
shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority within the time allowed and in accordance with applicable
Requirements of Law, and (iii) to the extent withholding or deduction is
required to be made on account of Indemnified Taxes, the sum payable by the
Borrower or such Guarantor shall be increased as necessary so that after making
all required deductions and withholdings (including deductions or withholdings
of Indemnified Taxes applicable to additional sums payable under this
Section 5.4) the Administrative Agent, any Letter of Credit Issuer or any
Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made. As soon as practical
after any payment of Taxes by any Credit Party to a Governmental Authority as
provided in this Section 5.4, the Borrower shall deliver to the Administrative
Agent a copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of any return required by laws to report such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

 

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(b) The Borrower shall timely pay and shall indemnify and hold harmless the
Administrative Agent and each Lender with regard to any Other Taxes (whether or
not such Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority).

(c) The Borrower shall indemnify and hold harmless the Administrative Agent and
each Lender within 15 Business Days after written demand therefor, for the full
amount of any Indemnified Taxes imposed on the Administrative Agent or such
Lender, as the case may be (including Indemnified Taxes imposed or asserted on
or attributable to amounts payable under this Section 5.4), and any reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority; provided, that the right to indemnification shall be
subject to the notice requirements of Section 2.13. A certificate setting forth
in reasonable detail the basis and calculation of the amount of such payment or
liability delivered to the Borrower by a Lender or the Administrative Agent (as
applicable) on its own behalf or on behalf of a Lender shall be conclusive
absent manifest error.

(d) Each Lender shall deliver to the Borrower and the Administrative Agent, at
such time or times reasonably requested by the Borrower or the Administrative
Agent, such properly completed and executed documentation prescribed by
applicable law and such other reasonably requested information and documentation
as will permit the Borrower or the Administrative Agent, as the case may be, to
determine (i) whether or not any payments made hereunder or under any other
Credit Document are subject to Taxes, (ii) if applicable, the required rate of
withholding or deduction, and (iii) such Lender’s entitlement to any available
exemption from, or reduction of, applicable Taxes in respect of any payments to
be made to such Lender by any Credit Party pursuant to any Credit Document or
otherwise to establish such Lender’s status for withholding tax purposes in the
applicable jurisdiction. 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. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 5.4(e)(i)(A),
(e)(i)(B), (e)(i)(C), (h) and (i) below) shall not be required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

(e) Without limiting the generality of Section 5.4(d), each Non-U.S. Lender with
respect to any Loan made to the Borrower shall, to the extent it is legally
entitled to do so:

(i) deliver to the Borrower and the Administrative Agent, on or prior to the
date on which the Non-U.S. Lender becomes a party to this Agreement, two copies
of (A) in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, Internal Revenue Service Form W-8BEN or
W-8BEN-E (or any applicable successor form) (together with a certificate in the
form attached hereto as Exhibit I representing that such Non-U.S. Lender is not
a bank for purposes of Section 881(c) of the Code, is not a 10% shareholder
(within the meaning of Section 871(h)(3)(B) of the Code) of the Borrower, is not
a CFC related to the Borrower (within the meaning of Section 864(d)(4) of the
Code) and the interest payments in question are not effectively connected with
the United States trade or business conducted by such Lender), (B) Internal
Revenue Service Form W-8BEN, Form W-8BEN-E or Form W-8ECI (or any applicable
successor form), in each case properly completed and duly executed by

 

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such Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrower under this Agreement,
(C) Internal Revenue Service Form W-8IMY (or any applicable successor form) and
all necessary attachments (including the forms described in clauses (A) and (B)
above, as required) required by applicable law or reasonably requested by the
Administrative Agent or the Borrower, or (D) 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 or
the Administrative Agent to determine the withholding or deduction required to
be made; and

(ii) deliver to the Borrower and the Administrative Agent two further copies of
any such form or certification (or any applicable successor form) on or before
the date that any such form or certification expires or becomes obsolete or
invalid, after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Borrower, and from time to time
thereafter if reasonably requested by the Borrower or the Administrative Agent;

unless in any such case any Change in Law has occurred prior to the date on
which any such delivery would otherwise be required that renders any such form
inapplicable or would prevent such Non-U.S. Lender from duly completing and
delivering any such form with respect to it and such Non-U.S. Lender promptly so
notifies the Borrower and the Administrative Agent. Each Person that shall
become a Participant pursuant to Section 13.6 or a Lender pursuant to
Section 13.6 shall, upon the effectiveness of the related transfer, be required
to provide all the forms and statements required pursuant to this
Section 5.4(e); provided that in the case of a Participant such Participant
shall furnish all such required forms and statements to the Lender from which
the related participation shall have been purchased.

(f) If any Lender or the Administrative Agent, as applicable, determines, in its
sole discretion, that it has received and retained a refund of an Indemnified
Tax for which a payment has been made by the Borrower or any Guarantor pursuant
to this Agreement or any other Credit Document, which refund in the good faith
judgment of such Lender or the Administrative Agent, as the case may be, is
attributable to such payment made by the Borrower or any Guarantor, then such
Lender or the Administrative Agent, as the case may be, shall reimburse the
Borrower or such Guarantor for such amount (net of all out-of-pocket expenses
(including Taxes) of such Lender or the Administrative Agent, as the case may
be, and without interest other than any interest received thereon from the
relevant Governmental Authority with respect to such refund) as such Lender or
the Administrative Agent, as the case may be, determines in its sole discretion
to be the proportion of the refund as will leave it, after such reimbursement,
in no better or worse position (taking into account expenses or any Taxes
imposed on the refund) than it would have been in if the payment had not been
required; provided that the Borrower or such Guarantor, upon the request of such
Lender or the Administrative Agent, agrees to repay the amount paid over to the
Borrower or such Guarantor (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to such Lender or the
Administrative Agent in the event such Lender or the Administrative Agent is
required to repay such refund to such Governmental Authority. No Lender nor the
Administrative Agent shall be obliged to make available its tax returns (or any
other information relating to its Taxes that it deems confidential) to any
Credit Party in connection with this clause (f) or any other provision of this
Section 5.4.

(g) If the Borrower determines that a reasonable basis exists for contesting a
Tax, each Lender or the Administrative Agent, as the case may be, shall use
reasonable efforts to cooperate with the Borrower as the Borrower may reasonably
request in challenging such Tax. The Borrower shall indemnify and hold each
Lender and the Administrative Agent harmless against any out-of-pocket expenses
incurred by such Person in connection with any request made by the Borrower
pursuant to this Section 5.4(g). Nothing in this Section 5.4(g) shall obligate
any Lender or the Administrative Agent to take any action that such Person, in
its sole judgment, determines (i) may result in a material detriment to such
Person, (ii) may subject such Person to any material unreimbursed cost or
expense, (iii) may materially prejudice the legal or commercial position of such
Person, or (iv) that such Person is not legally entitled to take.

 

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(h) The Administrative Agent and each Lender that is a United States person
under Section 7701(a)(30) of the Code (each, a “U.S. Lender”) shall deliver to
the Borrower and the Administrative Agent two Internal Revenue Service Forms W-9
(or substitute or successor form), properly completed and duly executed,
certifying that such Person is exempt from United States federal backup
withholding (i) on or prior to the date it becomes a party to this Agreement,
(ii) on or before the date that such form expires or becomes obsolete or
invalid, (iii) after the occurrence of a change in Person’s circumstances
requiring a change in the most recent form previously delivered by it to the
Borrower and the Administrative Agent, and (iv) from time to time thereafter if
reasonably requested by the Borrower or the Administrative Agent.

(i) If a payment made to any Lender or the Administrative Agent under this
Agreement or any other Credit Document would be subject to U.S. federal
withholding tax imposed by FATCA if such Person 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 Person 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, to determine that such
Person has or has not complied with such Person’s obligations under FATCA or to
determine the amount, if any, to deduct and withhold from such payment. Solely
for purposes of this Section 5.4(i), “FATCA” shall include any amendments made
to FATCA after the date of this Agreement. The Lenders and the Administrative
Agent shall, to the extent they are legally entitled to do so, deliver to the
Borrower (and the Lenders shall deliver to the Administrative Agent) additional
documentation on or before the date that any such previously delivered
documentation under this Section 5.4(i) expires or becomes obsolete or invalid
and after the occurrence of any event requiring a change in the most recent
documentation previously delivered by it to the Borrower and the Administrative
Agent, and from time to time thereafter if reasonably requested by the Borrower
or the Administrative Agent, as applicable.

(j) For purposes of determining withholding Taxes imposed under FATCA, from and
after the date of this Agreement, the Borrower and the Administrative Agent
shall treat (and the Lenders hereby authorize the Administrative Agent to treat)
this Agreement and the Loans as not qualifying as “grandfathered obligations”
within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

(k) For the avoidance of doubt, for purposes of this Section 5.4, the term
“Lender” includes any Letter of Credit Issuer and the terms “applicable
Requirements of Law” and “applicable law” include FATCA.

(l) Each Lender shall severally indemnify the Administrative Agent, within ten
(10) days after demand therefor, for (i) any Indemnified Taxes attributable to
such Lender (but only to the extent that any Credit Party has not already
indemnified the Administrative Agent for such Indemnified Taxes and without
limiting the obligation of the Borrower and each Guarantor to do so), (ii) any
Taxes attributable to such Lender’s failure to comply with the provisions of
Section 13.6(c) relating to the maintenance of a Participant Register, and
(iii) any Excluded Taxes attributable to such Lender, in each case, that are
payable or paid by the Administrative Agent in connection with any Credit
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were

 

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correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to any
Lender by the Administrative Agent shall be conclusive absent manifest error.
Each Lender hereby authorizes the Administrative Agent to set off and apply any
and all amounts at any time owing to such Lender under any Credit Document or
otherwise payable by the Administrative Agent to the Lender from any other
source against any amount due to the Administrative Agent under this paragraph
(l).

(m) The agreements in this Section 5.4 shall survive the termination of this
Agreement, the payment, satisfaction or discharge of the Loans and all other
amounts payable hereunder, any assignment of rights by, or the replacement of, a
Lender, and the termination of the Commitments.

5.5 Computations of Interest and Fees.

(a) Except as provided in the next succeeding sentence, Interest on LIBOR Loans
and ABR Loans shall be calculated on the basis of a 360-day year for the actual
days elapsed. Interest on ABR Loans in respect of which the rate of interest is
calculated on the basis of the Prime Rate and interest on overdue interest shall
be calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed.

(b) Fees and the average daily Stated Amount of Letters of Credit shall be
calculated on the basis of a 360-day year for the actual days elapsed.

5.6 Limit on Rate of Interest.

(a) No Payment Shall Exceed Lawful Rate. Notwithstanding any other term of this
Agreement, the Borrower shall not be obligated to pay any interest or other
amounts under or in connection with this Agreement or otherwise in respect to
any of the Obligations in excess of the amount or rate permitted under or
consistent with any applicable law, rule or regulation.

(b) Payment at Highest Lawful Rate. If the Borrower is not obliged to make a
payment that it would otherwise be required to make, as a result of
Section 5.6(a), the Borrower shall make such payment to the maximum extent
permitted by or consistent with applicable laws, rules and regulations.

(c) Adjustment if Any Payment Exceeds Lawful Rate. If any provision of this
Agreement or any of the other Credit Documents would obligate the Borrower or
any other Credit Party to make any payment of interest or other amount payable
to any Lender in an amount or calculated at a rate that would be prohibited by
any applicable Requirement of Law, then notwithstanding such provision, such
amount or rate shall be deemed to have been adjusted with retroactive effect to
the maximum amount or rate of interest, as the case may be, as would not be so
prohibited by applicable Requirements of Law, such adjustment to be effected, to
the extent necessary, by reducing the amount or rate of interest required to be
paid by the Borrower to the affected Lender under Section 2.8.

(d) Rebate of Excess Interest. Notwithstanding the foregoing, and after giving
effect to all adjustments contemplated thereby, if any Lender shall have
received from the Borrower an amount in excess of the maximum permitted by any
applicable Requirement of Law, then the Borrower shall be entitled, by notice in
writing to the Administrative Agent to obtain reimbursement from that Lender in
an amount equal to such excess, and pending such reimbursement, such amount
shall be deemed to be an amount payable by that Lender to the Borrower.

 

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SECTION 6. Conditions Precedent to Initial Borrowing.

The amendment and restatement of the Existing Credit Agreement and the initial
Borrowing under this Agreement is subject to the satisfaction of the following
conditions precedent, except as otherwise agreed or waived pursuant to
Section 13.1.

6.1 Credit Documents. The Administrative Agent shall have received:

(a) this Agreement, executed and delivered by a duly Authorized Officer of each
of the Borrower, the Administrative Agent, each Lender and each Letter of Credit
Issuer;

(b) the Guarantee, executed and delivered by a duly Authorized Officer of each
Person that is a Guarantor as of the Closing Date;

(c) the Pledge Agreement, executed and delivered by a duly Authorized Officer of
the Borrower, the Administrative Agent and each other pledgor party thereto as
of the Closing Date;

(d) the Security Agreement, executed and delivered by a duly Authorized Officer
of the Borrower, the Administrative Agent and each other grantor party thereto
as of the Closing Date; and

(e) a Note executed by the Borrower in favor of each Lender that has requested a
Note not less than two (2) Business Days prior to the Closing Date.

6.2 Collateral.

(a) All documents, amendments and other instruments, including Uniform
Commercial Code or other applicable personal property and financing statements,
reasonably requested by the Administrative Agent to be filed, registered or
recorded to create or continue, as applicable, the Liens intended to be created
by any Security Document and perfect such Liens to the extent required by, and
with the priority required by, such Security Document shall have been delivered
to the Administrative Agent for filing, registration or recording and none of
the Collateral shall be subject to any other pledges, security interests or
mortgages, except for Liens permitted under Section 10.2.

(b) All Stock of each Restricted Subsidiary of the Borrower directly or
indirectly owned by the Borrower or any Subsidiary Guarantor, in each case as of
the Closing Date, shall have been pledged pursuant to the Pledge Agreement
(except that such Credit Parties shall not be required to pledge any Excluded
Stock) and the Administrative Agent shall have received all certificates, if
any, representing such securities pledged under the Pledge Agreement,
accompanied by instruments of transfer and/or undated powers endorsed in blank.

(c) The Guarantee shall be in full force and effect.

6.3 Legal Opinions. The Administrative Agent shall have received the executed
legal opinions of Vinson & Elkins LLP, counsel to the Borrower, in form and
substance reasonably satisfactory to the Administrative Agent. The Borrower, the
other Credit Parties and the Administrative Agent hereby instruct such counsel
to deliver such legal opinions.

6.4 Closing Certificates. The Administrative Agent shall have received a
certificate of the Credit Parties, dated the Closing Date, substantially in the
form of Exhibit F, with appropriate insertions, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of each Credit
Party, and attaching the documents referred to in Section 6.5 and such other
closing certificates as it may reasonably request.

 

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6.5 Authorization of Proceedings of Each Credit Party; Organizational Documents.
The Administrative Agent shall have received (a) a copy of the resolutions, in
form and substance reasonably satisfactory to the Administrative Agent, of the
board of directors or managers of each Credit Party (or a duly authorized
committee thereof) authorizing (i) the execution, delivery and performance of
the Credit Documents (and any agreements relating thereto) to which it is a
party and (ii) in the case of the Borrower, the extensions of credit
contemplated hereunder and (b) true and complete copies of each of the
organizational documents of each Person that is a Credit Party as of the Closing
Date.

6.6 Fees. All fees required to be paid on the Closing Date pursuant to the fee
letter (the “Fee Letter”) previously agreed in writing between the
Administrative Agent, J.P. Morgan Chase Bank, N.A., and the Borrower and
reasonable out-of-pocket expenses required to be paid on the Closing Date, to
the extent invoiced at least three business days prior to the Closing Date
(except as otherwise reasonably agreed by the Borrower), shall, upon the initial
Borrowings hereunder, have been, or will be substantially simultaneously, paid.

6.7 Representations. On the Closing Date, all representations and warranties
made by any Credit Party contained herein or in the other Credit Documents shall
be true and correct in all material respects unless such representations and
warranties are already qualified by materiality, Material Adverse Effect or a
similar qualification, in which case such representations and warranties shall
be true and correct in all respects.

6.8 Patriot Act. The Administrative Agent and the Bookrunner shall have received
all documentation and other information about the Borrower and the Guarantors as
shall have been reasonably requested in writing by the Administrative Agent or
the Bookrunner at least seven calendar days prior to the Closing Date and as is
mutually agreed to be required by U.S. regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including
without limitation the PATRIOT Act.

6.9 Historical Financial Statements. The Joint Lead Arrangers shall have
received true, correct and complete copies of the Historical Financial
Statements.

6.10 Projections. The Administrative Agent shall have received satisfactory
projections for the Borrower through December 31, 2019.

6.11 Insurance Certificate. The Administrative Agent shall have received copies
of insurance certificates evidencing the insurance required to be maintained by
the Borrower and the Subsidiaries pursuant to Section 9.3.

6.12 Departing Lenders. Each Departing Lender shall have received payment in
full of all its outstanding principal and accrued interest and fees owing under
the Existing Credit Agreement (other than obligations to pay contingent
indemnity obligations and other contingent obligations owing to it under the
“Credit Documents,” as defined in the Existing Credit Agreement).

SECTION 7. Conditions Precedent to All Credit Events

The agreement of each Lender to make any Loan requested to be made by it on any
date (excluding Loans required to be made by the Lenders in respect of Unpaid
Drawings pursuant to Sections 3.3 and 3.4), and the obligation of the Letter of
Credit Issuer to issue Letters of Credit on any date, is subject to the
satisfaction of the following conditions precedent:

 

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7.1 No Default; Representations and Warranties. At the time of each Credit Event
and also after giving effect thereto (other than the initial Credit Event to
occur on the Closing Date) (a) no Default or Event of Default shall have
occurred and be continuing and (b) all representations and warranties made by
any Credit Party contained herein or in the other Credit Documents shall be true
and correct in all material respects (unless such representations and warranties
are already qualified by materiality, Material Adverse Effect or a similar
qualification, in which case such representations and warranties shall be true
and correct in all respects) with the same effect as though such representations
and warranties had been made on and as of the date of such Credit Event (except
where such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall have been true and
correct in all material respects as of such earlier date).

7.2 Notice of Borrowing.

(a) Prior to the making of each Loan (other than any Loan made pursuant to
Section 3.4(a)), the Administrative Agent shall have received a Notice of
Borrowing (whether in writing or by telephone) meeting the requirements of
Section 2.3(a).

(b) Prior to the issuance of each Letter of Credit, the Administrative Agent and
the Letter of Credit Issuer shall have received a Letter of Credit Request
meeting the requirements of Section 3.2(a).

The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that all
the applicable conditions specified in Section 7 above have been satisfied as of
that time.

SECTION 8. Representations, Warranties and Agreements

In order to induce the Lenders to enter into this Agreement, to make the Loans
and issue or participate in Letters of Credit as provided for herein, the
Borrower makes, on the Closing Date and on each other date as required or
otherwise set forth in this Agreement, the following representations and
warranties to, and agreements with, the Lenders, all of which shall survive the
execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit:

8.1 Corporate Status. Each of the Borrower and each Restricted Subsidiary (a) is
a duly organized and validly existing corporation or other entity in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate or other organizational power and authority to own its property and
assets and to transact the business in which it is engaged and (c) has duly
qualified and is authorized to do business and is in good standing (if
applicable, or has “active” status in the case of the State of Texas) in all
jurisdictions where it is required to be so qualified, except in each case
referred to in clauses (b) and (c), where the failure to do so would not
reasonably be expected to result in a Material Adverse Effect.

8.2 Corporate Power and Authority; Enforceability. Each Credit Party has the
corporate or other organizational power and authority to execute, deliver and
carry out the terms and provisions of the Credit Documents to which it is a
party and has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Credit Documents to
which it is a party. Each Credit Party has duly executed and delivered each
Credit Document to which it is a party and each such Credit Document constitutes
the legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization and other similar laws relating to or
affecting creditors’ rights generally and general principles of equity (whether
considered in a proceeding in equity or law).

 

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8.3 No Violation. None of the execution, delivery or performance by any Credit
Party of the Credit Documents to which it is a party or the compliance with the
terms and provisions thereof will (a) contravene any material applicable
provision of any material Requirement of Law, (b) result in any breach of any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of such Credit Party or
any of the Restricted Subsidiaries (other than Liens created under the Credit
Documents and other Liens permitted under Section 10.2) pursuant to the terms of
any indenture, loan agreement, lease agreement, mortgage, deed of trust,
agreement or other instrument to which such Credit Party or any of the
Restricted Subsidiaries is a party or by which it or any of its property or
assets is bound (any such term, covenant, condition or provision, a “Contractual
Requirement”) except to the extent such breach, default or Lien would not
reasonably be expected to result in a Material Adverse Effect or (c) violate any
provision of the certificate of incorporation, by-laws or other organizational
documents of such Credit Party or any of the Restricted Subsidiaries.

8.4 Litigation. Except as set forth on Schedule 8.4, there are no actions, suits
or proceedings (including Environmental Claims) pending or, to the knowledge of
the Borrower, threatened with respect to the Borrower or any of its Restricted
Subsidiaries that would reasonably be expected to result in a Material Adverse
Effect.

8.5 Margin Regulations. The Borrower is not engaged and will not engage,
principally or as one of its important activities, in the business of purchasing
or carrying Margin Stock, or extending credit for the purpose of purchasing or
carrying Margin Stock, and no part of the proceeds of any Borrowing or Letter of
Credit extension hereunder will be used to buy or carry any Margin Stock.
Following the application of the proceeds of each Borrowing or drawing under
each Letter of Credit, not more than 25% of the value of the assets (either of
the Borrower only or of the Borrower and its Subsidiaries on a consolidated
basis) will be Margin Stock.

8.6 Governmental Approvals. The execution, delivery and performance of each
Credit Document do not require any consent or approval of, registration or
filing with, or other action by, any Governmental Authority, except for (a) such
as have been obtained or made and are in full force and effect, (b) filings and
recordings in respect of the Liens created pursuant to the Security Documents
and (c) such consents, approvals, registrations, filings or actions the failure
of which to obtain or make would not reasonably be expected to have a Material
Adverse Effect.

8.7 Investment Company Act. No Credit Party is an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

8.8 True and Complete Disclosure.

(a) None of the written factual information and written data (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of the Borrower, any
of the Subsidiaries or any of their respective authorized representatives to the
Administrative Agent, any Joint Lead Arranger, the Bookrunner and/or any Lender
on or before the Closing Date (including all such information and data contained
in the Credit Documents) for purposes of or in connection with this Agreement or
any transaction contemplated herein contained any untrue statement of any
material fact or omitted to state any material fact necessary to make such
information and data (taken as a whole) not materially misleading at such time
(after giving effect to all supplements so furnished prior to such time) in
light of the circumstances under which such information or data was furnished;
it being understood and agreed

 

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that for purposes of this Section 8.8(a), such factual information and data
shall not include pro forma financial information, projections or estimates
(including financial estimates, forecasts and other forward-looking information)
and information of a general economic or general industry nature.

(b) The projections (including financial estimates, forecasts and other
forward-looking information) contained in the information and data referred to
in Section 8.8(a) were based on good faith estimates and assumptions believed by
the Borrower to be reasonable at the time made; it being recognized by the
Administrative Agent and the Lenders that such projections are as to future
events and are not to be viewed as facts, the projections are subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Borrower and the Subsidiaries, that no assurance can be given
that any particular projections will be realized and that actual results during
the period or periods covered by any such projections may differ from the
projected results and such differences may be material.

8.9 Financial Condition; Financial Statements.

(a) The Historical Financial Statements present fairly in all material respects
the consolidated financial position of the Borrower and its consolidated
Subsidiaries at the date of such information and for the period covered thereby
and have been prepared in accordance with GAAP consistently applied except to
the extent provided in the notes thereto, if any. Since December 31, 2017, there
has been no Material Adverse Effect.

(b) As of the Closing Date, neither the Borrower nor any Restricted Subsidiary
has any material Indebtedness (including Disqualified Stock), any material
guarantee obligations, contingent liabilities, off balance sheet liabilities or
unusual forward or long-term commitments that, in each case, are not reflected
or provided for in the Historical Financial Statements, except as would not
reasonably be expected to result in a Material Adverse Effect.

8.10 Tax Matters. Except where the failure of which would not be reasonably
expected to have a Material Adverse Effect, (a) each of the Borrower and the
Subsidiaries has filed all federal income tax returns and all other tax returns,
domestic and foreign, required to be filed by it and has paid all material Taxes
payable by it that have become due, other than those (i) not yet delinquent or
(ii) being contested in good faith by appropriate proceedings and as to which
adequate reserves have been provided to the extent required by and in accordance
with GAAP and (b) to the extent then due and payable, the Borrower and each of
the Subsidiaries have paid, or have provided adequate reserves (in the good
faith judgment of management of the Borrower or such Subsidiary) in accordance
with GAAP for the payment of, all federal, state, provincial and foreign Taxes
applicable for the current fiscal year to the Closing Date.

8.11 Employee Benefits.

(a) Except as would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect: (i) each Plan is in compliance with,
and has been established, administered and operated in accordance with, its
terms, ERISA, the Code and any applicable Requirement of Law; (ii) each Plan
that is intended to qualify under Section 401(a) of the Code is so qualified;
(iii) no ERISA Event has occurred or is reasonably expected to occur; (iv) no
Pension Plan has an Unfunded Pension Liability; and (v) all amounts required
with respect to or by the terms of any material retiree welfare benefit plan or
arrangement maintained by the Borrower or any Subsidiary or to which the
Borrower or any Subsidiary has an obligation to contribute have been accrued in
accordance with Accounting Standards Codification No 715.

 

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(b) Except as would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect, (i) all Foreign Plans are in
compliance with, and have been established, administered and operated in
accordance with, the terms of such Foreign Plans and any applicable Requirement
of Law; and (ii) all contributions or other payments which are due with respect
to each Foreign Plan have been made in full and there are no funding
deficiencies thereunder.

8.12 Subsidiaries. Schedule 8.12 lists each Subsidiary of the Borrower (and the
direct and indirect ownership interest of the Borrower therein), in each case
existing on the Closing Date (after giving effect to the Transactions). Each
Guarantor, Material Subsidiary and Unrestricted Subsidiary as of the Closing
Date has been so designated on Schedule 8.12.

8.13 Intellectual Property. The Borrower and each of the Restricted Subsidiaries
have obtained all intellectual property, free from burdensome restrictions, that
is necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, except where the failure to obtain
any such rights would not reasonably be expected to have a Material Adverse
Effect.

8.14 Environmental Laws.

(a) Except as would not reasonably be expected to have a Material Adverse
Effect: (i) the Borrower and each of the Subsidiaries and their Oil and Gas
Properties are in compliance with all Environmental Laws; (ii) neither the
Borrower nor any Subsidiary has received written notice of any Environmental
Claim or any other liability under any Environmental Law that has not been fully
resolved; (iii) neither the Borrower nor any Subsidiary is conducting any
investigation, removal, remedial or other corrective action pursuant to any
Environmental Law at any location; and (iv) no underground storage tank or
related piping, or any impoundment or disposal area containing Hazardous
Materials has been used by the Borrower or any of its Subsidiaries or, to the
knowledge of the Borrower, is located at, on or under any Oil and Gas Properties
thereof currently owned or leased by the Borrower or any of its Subsidiaries in
violation of any Environmental Law.

(b) Except as would not reasonably be expected to have a Material Adverse
Effect, neither the Borrower nor any of the Subsidiaries has treated, stored,
transported, released or disposed or arranged for disposal or transport for
disposal of Hazardous Materials at, on, under or from any of its currently or
formerly owned or leased Oil and Gas Properties or facilities in a manner that
would reasonably be expected to give rise to liability of the Borrower or any
Subsidiary under Environmental Law.

8.15 Properties.

(a) Each Credit Party has good and defensible title to the Borrowing Base
Properties evaluated in the most recently delivered Reserve Report (other than
those (i) disposed of in compliance with Section 10.4 since delivery of such
Reserve Report, (ii) leases that have expired in accordance with their terms and
(iii) with title defects which are either immaterial or have been disclosed in
writing to the Administrative Agent), and good title to all its material
personal properties, in each case, free and clear of all Liens other than Liens
permitted by Section 10.2. After giving full effect to the Liens permitted by
Section 10.2, the Borrower or the Restricted Subsidiary specified as the owner
owns the working interests and net revenue interests attributable to the
Hydrocarbon Interests as reflected in the most recently delivered Reserve
Report, and, without regard to any consent or non-consent provisions in any
joint operating agreement, the ownership of such properties shall not in any
material respect obligate the Borrower or such Restricted Subsidiary to bear the
costs and expenses relating to the maintenance, development and operations of
each such property in an amount in excess of the working interest of each
property set forth in the most recently delivered Reserve Report that is not
offset by a corresponding proportionate increase in the Borrower’s or such
Restricted Subsidiary’s net revenue interest in such property.

 

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(b) All material leases and agreements necessary for the conduct of the business
of the Borrower and the Restricted Subsidiaries are valid and subsisting, in
full force and effect, except to the extent that any such failure to be valid or
subsisting would not reasonably be expected to have a Material Adverse Effect.

(c) The rights and properties presently owned, leased or licensed by the Credit
Parties including all easements and rights of way, include all rights and
properties necessary to permit the Credit Parties to conduct their respective
businesses as currently conducted, except to the extent any failure to have any
such rights or properties would not reasonably be expected to have a Material
Adverse Effect.

(d) All of the properties of the Borrower and the Restricted Subsidiaries that
are reasonably necessary for the operation of their businesses are in good
working condition and are maintained in accordance with prudent business
standards, except to the extent any failure to satisfy the foregoing would not
reasonably be expected to have a Material Adverse Effect.

8.16 Solvency. On the Closing Date (after giving effect to the consummation of
the Transactions), the Borrower, on a consolidated basis with its Restricted
Subsidiaries, is Solvent.

8.17 Insurance. The properties of the Borrower and the Restricted Subsidiaries
are insured in the manner contemplated by Section 9.3.

8.18 Patriot Act. On the Closing Date, each Credit Party is in compliance in all
material respects with the material provisions of the Patriot Act, and the
Borrower has provided to the Administrative Agent and the Lenders all
information related to the Credit Parties (including but not limited to names,
addresses and tax identification numbers (if applicable)) reasonably requested
in writing by the Administrative Agent and the Lenders and mutually agreed to be
required by the Patriot Act to be obtained by the Administrative Agent or any
Lender.

8.19 Liens Under the Security Documents; Collateral Coverage Minimum. Subject to
Section 9.16, upon the execution and delivery of the Security Documents
(including any amendments or supplements to the existing Mortgages securing the
obligations under the Existing Credit Agreement) in accordance herewith, and
where appropriate the filing and recordation thereof with the appropriate filing
or recording officers in each of the necessary jurisdictions, delivery to the
Administrative Agent of Pledged Stock and the filing of Uniform Commercial Code
financing statements, the Liens granted by any Credit Party to the
Administrative Agent, constitute validly created, perfected and first priority
Liens, subject only to Liens permitted under Section 10.2. The Collateral
Coverage Ratio equals or exceed the Collateral Coverage Minimum.

8.20 No Default. On the Closing Date, no Credit Party is in default under or
with respect to any Contractual Requirement that would, 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. Each of the Borrower and each Restricted Subsidiary is in
compliance in all material respects with the Requirements of Law applicable to
it or to its properties, except in such instances in which (a) such Requirement
of Law is being contested in good faith by appropriate proceedings diligently
conducted or (b) the failure to comply therewith, either individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.

 

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8.21 Direct Benefit. The initial Borrowing hereunder and all additional
Borrowings are for the direct benefit of the Borrower and its Restricted
Subsidiaries. The Borrower and its Restricted Subsidiaries shall engage as an
integrated group in the business of oil and gas exploration and related
activities and certain other legal business purposes, and any benefits to the
Borrower and its Restricted Subsidiaries is a benefit to all of them, both
directly or indirectly, inasmuch as the successful operation and condition of
the Borrower and its Restricted Subsidiaries is dependent upon the continued
successful performance of the functions of the integrated group as a whole.

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

8.23 EEA Financial Institutions. No Credit Party is an EEA Financial
Institution.

8.24 Plan Assets. None of the Borrower or any of its Subsidiaries is an entity
deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations).

SECTION 9. Affirmative Covenants

The Borrower hereby covenants and agrees that on the Closing Date and
thereafter, until the Total Commitment and each Letter of Credit have terminated
(unless such Letters of Credit have been collateralized on terms and conditions
reasonably satisfactory to the Letter of Credit Issuer following the termination
of the Total Commitment) and the Loans and Unpaid Drawings, together with
interest, fees and all other Obligations incurred hereunder (other than Hedging
Obligations under Secured Hedge Agreements, Cash Management Obligations under
Secured Cash Management Agreements or contingent indemnification obligations not
then due and payable), are paid in full:

9.1 Information Covenants. The Borrower will furnish to the Administrative Agent
(which shall promptly make such information available to the Lenders in
accordance with its customary practice):

(a) Annual Financial Statements. As soon as available and in any event within
five days after the date on which such financial statements are required to be
filed with the SEC (after giving effect to any permitted extensions) (or, if
such financial statements are not required to be filed with the SEC, on or
before the date that is 90 days after the end of each such fiscal year), the
audited consolidated balance sheets of the Borrower and the Subsidiaries and, if
different, the Borrower and the Restricted Subsidiaries, in each case as at the
end of such fiscal year, and the related consolidated statements of operations,
shareholders’ equity and cash flows for such fiscal year, setting forth
comparative consolidated figures for the preceding fiscal years (or, in lieu of
such audited financial statements of the Borrower and the Restricted
Subsidiaries, a detailed reconciliation, reflecting such financial information
for the Borrower and the Restricted Subsidiaries, on the one hand, and the
Borrower and the Subsidiaries, on the other hand), all in reasonable detail and
prepared in accordance with GAAP, and, except with respect to such
reconciliation, certified by independent certified public accountants of
recognized national standing whose opinion shall not be materially qualified
with a “going concern” or like qualification or exception

 

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(other than with respect to, or resulting from, (x) the occurrence of the
Maturity Date within one year from the date such opinion is delivered or (y) any
potential inability to satisfy the Financial Performance Covenants on a future
date or in a future period), together in any event with a certificate of such
accounting firm stating that in the course of either (i) its regular audit of
the business of the Borrower and its consolidated Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards or
(ii) performing certain other procedures permitted by professional standards,
such accounting firm has obtained no knowledge of any Event of Default relating
to the Financial Performance Covenants that has occurred and is continuing or,
if in the opinion of such accounting firm such an Event of Default has occurred
and is continuing, a statement as to the nature thereof.

(b) Quarterly Financial Statements. As soon as available and in any event within
five days after the date on which such financial statements are required to be
filed with the SEC (after giving effect to any permitted extensions) with
respect to each of the first three quarterly accounting periods in each fiscal
year of the Borrower (or, if such financial statements are not required to be
filed with the SEC, on or before the date that is 60 days after the end of each
such quarterly accounting period), the consolidated balance sheets of the
Borrower and the Subsidiaries and, if different, the Borrower and the Restricted
Subsidiaries, in each case as at the end of such quarterly period and the
related consolidated statements of operations, shareholders’ equity and cash
flows for such quarterly accounting period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period, and setting forth
comparative consolidated figures for the related periods in the prior fiscal
year or, in the case of such consolidated balance sheet, for the last day of the
prior fiscal year (or, in lieu of such unaudited financial statements of the
Borrower and the Restricted Subsidiaries, a detailed reconciliation reflecting
such financial information for the Borrower and the Restricted Subsidiaries, on
the one hand, and the Borrower and the Subsidiaries, on the other hand), all of
which shall be certified by an Authorized Officer 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
consolidated Subsidiaries in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments and the absence of footnotes.

(c) Officer’s Certificates. At the time of the delivery of the financial
statements provided for in Section 9.1(a) and (b), a certificate of an
Authorized Officer of the Borrower to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying the
nature and extent thereof, which certificate shall set forth (i) the
calculations required to establish whether the Borrower and its Restricted
Subsidiaries were in compliance with the Financial Performance Covenants as at
the end of such fiscal year or period, as the case may be and (ii) a
specification of any change in the identity of the Restricted Subsidiaries,
Material Subsidiaries, Guarantors and Unrestricted Subsidiaries as at the end of
such fiscal year or period, as the case may be, from the Restricted
Subsidiaries, Material Subsidiaries, Guarantors and Unrestricted Subsidiaries,
respectively, provided to the Lenders on the Closing Date or the most recent
fiscal year or period, as the case may be.

(d) Notice of Default; Litigation. Promptly after an Authorized Officer of the
Borrower or any of the Restricted Subsidiaries obtains actual knowledge thereof,
notice of (i) the occurrence of any event that constitutes a Default or Event of
Default, which notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower proposes to take with respect thereto and
(ii) any litigation or governmental proceeding pending against the Borrower or
any of the Subsidiaries that would reasonably be expected to be determined
adversely and, if so determined, to result in a Material Adverse Effect.

(e) Environmental Matters. Promptly after obtaining actual knowledge of any one
or more of the following environmental matters, unless such environmental
matters would not, individually, or when aggregated with all other such matters,
be reasonably expected to result in a Material Adverse Effect, notice of:

 

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(i) any pending or threatened Environmental Claim against any Credit Party or
any of their Oil and Gas Properties not otherwise disclosed on Schedule 8.4;

(ii) any condition or occurrence on any Oil and Gas Properties that (A) would
reasonably be expected to result in noncompliance by any Credit Party with any
applicable Environmental Law or (B) would reasonably be anticipated to form the
basis of an Environmental Claim against any Credit Party or any of the Credit
Parties’ Oil and Gas Properties;

(iii) any condition or occurrence on any of the Credit Parties’ Oil and Gas
Properties not previously disclosed to the Administrative Agent in writing that
would reasonably be anticipated to cause such Oil and Gas Properties to be
subject to any restrictions on the ownership, occupancy, use or transferability
of such Oil and Gas Properties under any Environmental Law; and

(iv) the conduct of any investigation, or any removal, remedial or other
corrective action in response to the actual or alleged presence, release or
threatened release of any Hazardous Material on, at, under or from any of the
Credit Parties’ Oil and Gas Properties.

All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
response thereto.

(f) Other Information. (i) Promptly upon filing thereof, copies of any filings
(including on Form 10-K, 10-Q or 8-K) or registration statements with, and
reports to, the SEC or any analogous Governmental Authority in any relevant
jurisdiction by the Borrower or any of the Subsidiaries (other than amendments
to any registration statement (to the extent such registration statement, in the
form it becomes effective, is delivered to the Administrative Agent), exhibits
to any registration statement and, if applicable, any registration statements on
Form S-8), (ii) copies of all financial statements, proxy statements, notices
and reports that the Borrower or any of the Restricted Subsidiaries shall send
to the holders of any publicly issued debt of the Borrower and/or any of the
Restricted Subsidiaries, in each case in their capacity as such holders, lenders
or agents (in each case to the extent not theretofore delivered to the
Administrative Agent pursuant to this Agreement), and, (iii) with reasonable
promptness, but subject to the limitations set forth in the last sentences of
Section 9.2(a) and Section 13.6, such other information (financial or otherwise)
as the Administrative Agent on its own behalf or on behalf of any Lender (acting
through the Administrative Agent) may reasonably request in writing from time to
time.

Documents required to be delivered pursuant to Sections 9.1(a) and (b) and
Section 9.1(f) 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 13.2, (ii) on which such documents are
transmitted by electronic mail to the Administrative Agent or (iii) on which
such documents are filed of record with the SEC; provided that: (i) upon written
request by the Administrative Agent, the Borrower shall deliver paper copies of
such documents to the Administrative Agent for further distribution to each
Lender until a written request to cease delivering paper copies is given by the
Administrative Agent and (ii) the Borrower shall notify (which may be by
facsimile or electronic mail) the Administrative Agent of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents (except that no such
notice shall be required to the extent such documents are filed on record with
the SEC). Notwithstanding anything contained herein, in every instance the
Borrower shall be required to provide paper copies of the certificates required
by Section 9.1(c) to the Administrative Agent. Each Lender shall be solely
responsible for timely accessing posted documents or requesting delivery of
paper copies of such documents from the Administrative Agent and maintaining its
copies of such documents.

 

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9.2 Books, Records and Inspections.

(a) The Borrower will, and will cause each Restricted Subsidiary to, permit
officers and designated representatives of the Administrative Agent or the
Majority Lenders (as accompanied by the Administrative Agent) to visit and
inspect any of the properties or assets of the Borrower or such Subsidiary in
whomsoever’s possession to the extent that it is within such party’s control to
permit such inspection (and shall use commercially reasonable efforts to cause
such inspection to be permitted to the extent that it is not within such party’s
control to permit such inspection), and to examine the books and records of the
Borrower and any such Subsidiary and discuss the affairs, finances and accounts
of the Borrower and of any such Subsidiary with, and be advised as to the same
by, its and their officers and independent accountants, upon reasonable advance
notice to the Borrower, all at such reasonable times and intervals during normal
business hours and to such reasonable extent as the Administrative Agent or the
Majority Lenders may desire (and subject, in the case of any such meetings or
advice from such independent accountants, to such accountants’ customary
policies and procedures); provided that, excluding any such visits and
inspections during the continuation of an Event of Default (i) only the
Administrative Agent on behalf of the Majority Lenders may exercise rights of
the Administrative Agent and the Lenders under this Section 9.2, and (ii) only
one such visit shall be at the Borrower’s expense; provided, further, that when
an Event of Default exists, the Administrative Agent (or any of its
representatives or independent contractors) or any representative of the
Majority Lenders may do any of the foregoing at the expense of the Borrower at
any time during normal business hours and upon reasonable advance notice. The
Administrative Agent and the Majority Lenders shall give the Borrower the
opportunity to participate in any discussions with the Borrower’s independent
public accountants. Notwithstanding anything to the contrary in
Section 9.1(f)(iii) or this Section 9.2, neither the Borrower nor any Restricted
Subsidiary will be required to disclose, permit the inspection, examination or
making copies or abstracts of, or discussion of, any document, information or
other matter (i) that constitutes non-financial trade secrets or non-financial
proprietary information, (ii) in respect of which disclosure to the
Administrative Agent or any Lender (or their respective representatives or
contractors) is prohibited by any Requirement of Law or any binding agreement or
(iii) that is subject to attorney-client or similar privilege or constitutes
attorney work product.

(b) The Borrower will, and will cause each of the Restricted Subsidiaries to,
maintain proper books of record and account, in which entries that are full,
true and correct in all material respects and are in conformity with GAAP
consistently applied shall be made of all material financial transactions and
matters involving the assets and business of the Borrower or such Restricted
Subsidiary, as the case may be.

9.3 Maintenance of Insurance. The Borrower will, and will cause each Restricted
Subsidiary to, at all times maintain in full force and effect, pursuant to
self-insurance arrangements or with insurance companies that the Borrower
believes (in the good faith judgment of the management of the Borrower) are
financially sound and responsible at the time the relevant coverage is placed or
renewed, insurance in at least such amounts (after giving effect to any
self-insurance which the Borrower believes (in the good faith judgment of
management of the Borrower) is reasonable and prudent in light of the size and
nature of its business) and against at least such risks (and with such risk
retentions) as the Borrower believes (in the good faith judgment of management
of the Borrower) is reasonable and prudent in light of the size and nature of
its business; and will furnish to the Administrative Agent, upon written request
from the Administrative Agent, information presented in reasonable detail as to
the insurance so carried. The Administrative Agent shall be an additional
insured on any such liability insurance as its interests may appear. All
policies of insurance required by the terms of this Agreement or any Security
Document shall provide that each insurer shall endeavor to give at least 30
days’ prior written notice to the Administrative Agent of any cancellation of
such insurance (or at least 10 days’ prior written notice in the case of
cancellation of such insurance due to non-payment of premiums).

 

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9.4 Payment of Taxes. The Borrower will pay and discharge, and will cause each
of the Subsidiaries to pay and discharge, all Taxes imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which material penalties attach thereto, and all lawful material claims in
respect of any Taxes imposed, assessed or levied that, if unpaid, would
reasonably be expected to become a material Lien upon any properties of the
Borrower or any of the Restricted Subsidiaries; provided that neither the
Borrower nor any of the Subsidiaries shall be required to pay or discharge any
such Tax that is being contested in good faith and by proper proceedings if it
has maintained adequate reserves (in the good faith judgment of management of
the Borrower) with respect thereto to the extent required by, and in accordance
with, GAAP or the failure to pay or discharge would not reasonably be expected
to result in a Material Adverse Effect.

9.5 Consolidated Corporate Franchises. The Borrower will do, and will cause each
Restricted Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its existence, corporate rights and
authority, except to the extent that the failure to do so would not reasonably
be expected to have a Material Adverse Effect; provided, however, that the
Borrower and its Restricted Subsidiaries may consummate any transaction
permitted under Section 10.3, 10.4 or 10.5.

9.6 Compliance with Statutes; Regulations, Etc.

(a) The Borrower will, and will cause each Restricted Subsidiary to, comply with
all Requirements of Law applicable to it or its property, including all
governmental approvals or authorizations required to conduct its business, and
to maintain all such governmental approvals or authorizations in full force and
effect, in each case except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect.

(b) The Borrower will maintain in effect and enforce policies and/or procedures
designed to ensure compliance by the Borrower, its Subsidiaries and their
respective directors, officers, employees and agents with Anti-Corruption Laws
and applicable Sanctions.

9.7 ERISA. The Borrower will furnish to the Administrative Agent and each Lender
prompt written notice of the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding $50,000,000.

9.8 Maintenance of Properties. The Borrower will, and will cause each of the
Restricted Subsidiaries to, except in each case, where the failure to so comply
would not reasonably be expected to result in a Material Adverse Effect:

(a) operate its Oil and Gas Properties and other material properties or cause
such Oil and Gas Properties and other material properties to be operated in a
careful and efficient manner in accordance with the practices of the industry
and in compliance with all applicable Contractual Requirements and all
applicable Requirements of Law, including applicable proration requirements and
Environmental Laws, and all applicable Requirements of Law of every other
Governmental Authority from time to time constituted to regulate the development
and operation of its Oil and Gas Properties and the production and sale of
Hydrocarbons and other minerals therefrom;

 

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(b) keep and maintain all property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted, and preserve,
maintain and keep in good repair, working order and efficiency (ordinary wear
and tear excepted) all of its material Oil and Gas Properties and other material
properties, including all equipment, machinery and facilities; and

(c) to the extent a Credit Party is not the operator of any property, the
Borrower shall use reasonable efforts to cause the operator to comply with this
Section 9.8.

9.9 End of Fiscal Years; Fiscal Quarters. The Borrower will, for financial
reporting purposes, cause each of its, and each of its Restricted Subsidiaries’,
fiscal years and fiscal quarters to end on dates consistent with past practice;
provided, however, that the Borrower may, upon written notice to the
Administrative Agent change the financial reporting convention specified above
to any other financial reporting convention reasonably acceptable to the
Administrative Agent, in which case the Borrower and the Administrative Agent
will, and are hereby authorized by the Lenders to, make any adjustments to this
Agreement that are necessary in order to reflect such change in financial
reporting.

9.10 Additional Guarantors, Grantors and Collateral.

(a) On any date that is not during an Investment Grade Period, subject to any
applicable limitations set forth in the Guarantee or the Security Documents, the
Borrower will cause (i) any direct or indirect Domestic Subsidiary (other than
any Excluded Subsidiary) formed or otherwise purchased or acquired after the
Closing Date (including pursuant to a Permitted Acquisition) and (ii) any
Domestic Subsidiary of the Borrower that ceases to be an Excluded Subsidiary, in
each case within 30 days from the date of such formation, acquisition or
cessation, as applicable (or such longer period as the Administrative Agent may
agree in its reasonable discretion) to execute a supplement to each of the
Guarantee, the Pledge Agreement and the Security Agreement, in form and
substance acceptable to the Administrative Agent, in order to become a Guarantor
under the Guarantee and a grantor under each of the Pledge Agreement and the
Security Agreement.

(b) On any date that is not during an Investment Grade Period, subject to any
applicable limitations set forth in the Pledge Agreement, the Borrower will
pledge, and, if applicable, will cause each other Subsidiary Guarantor (or
Person required to become a Subsidiary Guarantor pursuant to Section 9.10(a)) to
pledge, to the Administrative Agent, for the benefit of the Secured Parties all
of the Stock (other than any Excluded Stock) of each Subsidiary owned by the
Borrower or any Subsidiary Guarantor (or Person required to become a Guarantor
pursuant to Section 9.10(a)), in each case, formed or otherwise purchased or
acquired after the Closing Date, pursuant to a supplement to the Pledge
Agreement substantially in the form of Annex A thereto and within 30 days of
such event (or such longer period as the Administrative Agent may agree in its
reasonable discretion).

(c) In connection with each redetermination (but not any adjustment) of the
Borrowing Base, the Borrower shall review the applicable Reserve Report, if any,
and the list of current Mortgaged Properties, to ascertain whether the PV-9 of
the Mortgaged Properties (calculated at the time of redetermination) meets the
Collateral Coverage Minimum after giving effect to exploration and production
activities, acquisitions, Dispositions and production. In the event that the
Collateral Coverage Ratio (calculated at the time of redetermination) does not
meet the Collateral Coverage Minimum, then the Borrower shall, and shall cause
its Credit Parties to, grant, within 60 days of delivery of notice from the
Administrative Agent thereof (or such longer period as the Administrative Agent
may agree in its reasonable discretion), to the Administrative Agent as security
for the Obligations a first-priority Lien (subject to Liens permitted by
Section 10.2) on additional Oil and Gas Properties not already subject to a Lien
of the Security Documents such that, after giving effect thereto, the Collateral
Coverage Ratio (calculated at the time of redetermination) meets the Collateral
Coverage Minimum. All such Liens will

 

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be created and perfected by and in accordance with the provisions of the
Security Documents, including, if applicable, any additional Mortgages. In order
to comply with the foregoing, if any Restricted Subsidiary places a Lien on its
property and such Subsidiary is not a Guarantor, then it shall become a
Guarantor and comply with the provisions of Sections 9.10(a) and (b).

(d) Subject to any applicable limitations set forth in the Security Documents or
the Pledge Agreement, the Borrower will, within forty-five (45) days of the end
of any Investment Grade Period (or such longer period as the Administrative
Agent may agree), execute and cause its Restricted Subsidiaries to execute
Security Documents and a Guarantee such that the Borrower and its Restricted
Subsidiaries are in compliance with the foregoing provisions of this
Section 9.10.

9.11 Use of Proceeds.

(a) The Borrower will use the proceeds of the Loans (i) to pay Transaction
Expenses, (ii) to make Restricted Payments and Investments permitted to be made
hereunder, (iii) to finance the acquisition, development and exploration of Oil
and Gas Properties, (iv) to redeem, defease, prepay or repay Indebtedness
permitted to be incurred hereunder, including any fees, premiums and expenses
associated therewith, (v) for working capital, capital expenditures and other
general corporate purposes of the Borrower and its Subsidiaries and (vi) to
renew and extend outstanding Indebtedness under the Existing Credit Agreement
and the Existing Letters of Credit.

(b) The Borrower will use Letters of Credit for general corporate purposes,
including to support deposits required under purchase agreements pursuant to
which the Borrower or its Subsidiaries may acquire Oil and Gas Properties and
other assets, obligations to pipelines and plugging and abandonment obligations.

9.12 Further Assurances.

(a) Subject to the applicable limitations set forth in the Security Documents,
the Borrower will, and will cause each other Credit Party to, execute any and
all further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements, fixture filings, assignments of as-extracted collateral, mortgages,
deeds of trust and other documents) that may be required under any applicable
Requirements of Law, or that the Administrative Agent or the Majority Lenders
may reasonably request, in order to grant, preserve, protect and perfect the
validity and priority of the security interests created or intended to be
created by the applicable Security Documents, all at the expense of the Borrower
and the Restricted Subsidiaries.

(b) Notwithstanding anything herein to the contrary, (i) if the Administrative
Agent and the Borrower reasonably determine in writing that the cost of creating
or perfecting any Lien on any property is excessive in relation to the benefits
afforded to the Lenders thereby, then such property may be excluded from the
Collateral for all purposes of the Credit Documents and (ii) no additional
Security Documents or Collateral shall be required during an Investment Grade
Period.

9.13 Reserve Reports and Interim PV-9 Reports.

(a) On or before April 1st of each year, commencing April 1, 2019, the Borrower
shall furnish to the Administrative Agent a Reserve Report evaluating, as of the
immediately preceding December 31st, the Proved Reserves of the Borrower and the
Credit Parties located within the geographic boundaries of the United States of
America (or the Outer Continental Shelf adjacent to the United States of
America) that the Borrower desires to have included in any calculation of the
Borrowing Base. Each Reserve Report as of December 31 shall be prepared, at the
Borrower’s election, (i) by or under the

 

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supervision of the chief engineer of the Borrower and audited by one or more
Approved Petroleum Engineers; provided, that so long as such audit covers at
least 85% of the total value of Proved Reserves set forth in such Reserve
Report, the remaining value may be covered by a report prepared by or under the
supervision of the chief engineer of the Borrower or (ii) by one or more
Approved Petroleum Engineers; provided, so long as such report covers at least
85% of the total value of Proved Reserves set forth in such Reserve Report, the
remaining value may be covered by a report prepared by or under the supervision
of the chief engineer of the Borrower.

(b) In the event of an Interim Redetermination, the Borrower shall furnish to
the Administrative Agent a Reserve Report prepared by one or more Approved
Petroleum Engineers or by or under the supervision of the chief engineer of the
Borrower or by the Borrower. For any Interim Redetermination pursuant to
Section 2.14(b), the Borrower shall provide such Reserve Report with an “as of”
date as required by the Administrative Agent, as soon as possible, but in any
event no later than 30 days, in the case of any Interim Redetermination
requested by the Borrower or 45 days, in the case of any Interim Redetermination
requested by the Administrative Agent or the Lenders, following the receipt of
such request.

(c) On or before October 1st of each year, commencing October 1, 2018, the
Borrower shall furnish to the Administrative Agent an Interim PV-9 Report
evaluating, as of the immediately preceding June 30th, the Proved Reserves of
the Borrower and the Credit Parties located within the geographic boundaries of
the United States of America (or the Outer Continental Shelf adjacent to the
United States of America).

(d) Notwithstanding anything in this Agreement to the contrary, during any
Investment Grade Period, the Borrower will not be required to comply with
clauses (a), (b) and (c) of this Section 9.13 so long as the Borrower has both
(i) a Rating from Moody’s of Baa3 or better and (ii) a Rating from S&P of BBB-
or better.

9.14 Title Information. Upon the Administrative Agent’s request at any time a
Default shall have occurred and is continuing, the Borrower will, and will cause
each Restricted Subsidiary to, deliver to the Administrative Agent such evidence
of title as the Administrative Agent shall deem reasonably necessary or
appropriate to verify (a) the ownership of 80% of the Mortgaged Present Value
and (b) the validity, perfection and priority of the Liens created by the
Mortgages and such other matters regarding such Mortgages as the Administrative
Agent shall reasonably request; provided that the Borrower will not be required
to comply with this Section 9.14 during any Investment Grade Period.

9.15 Commodity Exchange Act Keepwell Provisions. The Borrower hereby guarantees
the payment and performance of all Obligations of each Credit Party (other than
Borrower) and absolutely, unconditionally and irrevocably undertakes to provide
such funds or other support as may be needed from time to time by each Credit
Party (other than the Borrower) in order for such Credit Party to honor its
obligations under its respective Guaranty Agreement including obligations with
respect to Hedge Agreements (provided, however, that the Borrower shall only be
liable under this Section 9.15 for the maximum amount of such liability that can
be hereby incurred without rendering its obligations under this Section 9.15, or
otherwise under this Agreement or any Credit Document, as it relates to such
other Credit Parties, 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 9.15 shall remain in full force
and effect until all Obligations are paid in full to the Lenders, the
Administrative Agent and all other Secured Parties, and all of the Commitments
are terminated. The Borrower intends that this Section 9.15 constitute, and this
Section 9.15 shall be deemed to constitute, a “keepwell, support, or other
agreement” for the benefit of each other Credit Party for all purposes of
Section 1a(18)(A)(v)(II) of the Commodity Exchange Act..

 

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9.16 Post-Closing Covenant.

(a) On or prior to the date that is forty-five (45) days following delivery of
drafts thereof to the Borrower (or such later date as agreed to by the
Administrative Agent), the Borrower shall have executed and delivered to the
Administrative Agent amendments to existing Mortgages as necessary to reflect
the amendment and restatement of the Existing Credit Agreement.

(b) On or prior to the date that is forty-five (45) days following the Closing
Date (or such later date as agreed to by the Administrative Agent), the
Administrative Agent shall have received each Deposit Account Control Agreement
required to be provided pursuant to Section 4.13(b) of the Security Agreement.

SECTION 10. Negative Covenants.

The Borrower hereby covenants and agrees that on the Closing Date and
thereafter, until the Total Commitment and each Letter of Credit have terminated
(unless such Letters of Credit have been collateralized on terms and conditions
reasonably satisfactory to the Letter of Credit Issuer following the termination
of the Total Commitment) and the Loans and Unpaid Drawings, together with
interest, fees and all other Obligations incurred hereunder (other than Hedging
Obligations under Secured Hedge Agreements, Cash Management Obligations under
Secured Cash Management Agreements or contingent indemnification obligations not
then due and payable), are paid in full:

10.1 Limitation on Indebtedness. The Borrower will not, and will not permit any
of the Restricted Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than the following:

(a) Indebtedness arising under the Credit Documents;

(b) Indebtedness (including Guarantee Obligations thereunder) in respect of the
Senior Notes and any fees, underwriting discounts, premiums and other costs and
expenses incurred in connection with the foregoing and any Permitted Refinancing
Indebtedness issued or incurred to Refinance such Indebtedness;

(c) Indebtedness of (i) the Borrower or any Guarantor owing to the Borrower or
any Subsidiary; provided that any such Indebtedness owing by a Credit Party to a
Subsidiary that is not a Guarantor shall be permitted so long as such
Indebtedness is evidenced by an intercompany note and subject to subordination
terms acceptable to the Administrative Agent, to the extent permitted by
Requirements of Law and not giving rise to material adverse Tax consequences,
(ii) any Subsidiary that is not a Guarantor owing to any other Subsidiary that
is not a Guarantor and (iii) to the extent permitted by Section 10.5, any
Subsidiary that is not a Guarantor owing to the Borrower or any Guarantor;

(d) Indebtedness in respect of any bankers’ acceptance, bank guarantees, letter
of credit, warehouse receipt or similar facilities entered into in the ordinary
course of business (including in respect of workers compensation claims, health,
disability or other employee benefits or property, casualty or liability
insurance or self-insurance or other Indebtedness with respect to
reimbursement-type obligations regarding workers compensation claims);

(e) subject to compliance with Section 10.5, Guarantee Obligations incurred by
(i) Restricted Subsidiaries in respect of Indebtedness of the Borrower or other
Restricted Subsidiaries that is permitted to be incurred under this Agreement
(except that a Restricted Subsidiary that is not a Credit Party may not, by
virtue of this Section 10.1(e) guarantee Indebtedness that such Restricted
Subsidiary could not

 

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otherwise incur under this Section 10.1) and (ii) the Borrower in respect of
Indebtedness of Restricted Subsidiaries that is permitted to be incurred under
this Agreement; provided that (A) if the Indebtedness being guaranteed under
this Section 10.1(e) is subordinated to the Obligations, such Guarantee
Obligations shall be subordinated to the Guarantee of the Obligations on terms
at least as favorable to the Lenders as those contained in the subordination of
such Indebtedness and (B) no guarantee by any Restricted Subsidiary of any
Permitted Additional Debt (or Indebtedness under clause (b) above) shall be
permitted unless such Restricted Subsidiary shall have also provided a guarantee
of the Obligations substantially on the terms set forth in the Guarantee;

(f) Guarantee Obligations (i) incurred in the ordinary course of business in
respect of obligations of (or to) suppliers, customers, franchisees, lessors,
licensees or sublicensees or (ii) otherwise constituting Investments permitted
by Sections 10.5(d), (h), (o), (p) and (q);

(g) (i) Indebtedness (including Indebtedness arising under Capital Leases)
incurred within 270 days of the acquisition, construction, lease, repair,
replacement, expansion or improvement of fixed or capital assets to finance the
acquisition, construction, lease, repair, replacement expansion, or improvement
of such fixed or capital assets; (ii) Indebtedness arising under Capital Leases,
other than (A) Capital Leases in effect on the Closing Date and (B) Capital
Leases entered into pursuant to subclause (i) above (provided that, in the case
of each of the foregoing subclauses (i) and (ii), the Borrower shall be in
compliance on a pro forma basis after giving effect to the incurrence of such
Indebtedness with the Financial Performance Covenants, as such covenants are
recomputed as at the last day of the most recently ended Test Period as if such
incurrence had occurred on the first day of such Test Period); and (iii) any
Permitted Refinancing Indebtedness issued or incurred to Refinance any such
Indebtedness;

(h) Indebtedness outstanding on the date hereof listed on Schedule 10.1 and any
Permitted Refinancing Indebtedness issued or incurred to Refinance such
Indebtedness;

(i) (i) Indebtedness of a Person or Indebtedness attaching to the assets of a
Person that, in either case, becomes a Restricted Subsidiary (or is a Restricted
Subsidiary that survives a merger with such Person or any of its Subsidiaries)
or Indebtedness attaching to the assets that are acquired by the Borrower or any
Restricted Subsidiary, in each case after the Closing Date as the result of a
Permitted Acquisition; provided that:

(A) such Indebtedness existed at the time such Person became a Restricted
Subsidiary or at the time such assets were acquired and, in each case, was not
created in anticipation thereof,

(B) such Indebtedness is not guaranteed in any respect by the Borrower or any
Restricted Subsidiary (other than any such Person that so becomes a Restricted
Subsidiary or is the survivor of a merger with such Person or any of its
Subsidiaries),

(C) (1) the Stock of such Person is pledged to the Administrative Agent to the
extent required under Section 9.10(b) and (2) such Person executes a supplement
to each of the Guarantee and the Pledge Agreement, in each case to the extent
required under Section 9.10; provided that the assets covered by such pledges
and security interests may, to the extent permitted by Section 10.2, equally and
ratably secure such Indebtedness assumed with the Secured Parties subject to
intercreditor arrangements in form and substance reasonably satisfactory to the
Administrative Agent; provided, further, that the requirements of this clause
(C) shall not apply to any Indebtedness of the type that could have been
incurred under Section 10.1(g), and

 

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(D) after giving effect to the assumption of any such Indebtedness, to such
acquisition and to any related pro forma adjustment, the Borrower shall be in
compliance on a pro forma basis with the Financial Performance Covenants, as
such covenants are recomputed as at the last day of the most recently ended Test
Period as if such assumption and acquisition had occurred on the first day of
such Test Period; and

(ii) any Permitted Refinancing Indebtedness incurred to Refinance such
Indebtedness;

(j) (i) Indebtedness incurred to finance a Permitted Acquisition; provided that:

(A) (1) the Stock of the Person acquired is pledged to the Administrative Agent
to the extent required under Section 9.10(b) and (2) such Person executes a
supplement to each of the Guarantee and the Pledge Agreement and delivers any
other Security Documents, in each case, to the extent required under
Section 9.10;

(B) after giving effect to the incurrence of any such Indebtedness, to such
acquisition and to any related pro forma adjustment, the Borrower shall be in
compliance on a pro forma basis with the Financial Performance Covenants, as
such covenant are recomputed as at the last day of the most recently ended Test
Period as if such incurrence and acquisition had occurred on the first day of
such Test Period;

(C) the maturity of such Indebtedness is not earlier than, and no mandatory
repayment or redemption (other than customary change of control or asset sale
offers or upon any event of default) is required prior to, 91 days after the
Maturity Date (determined at the time of issuance or incurrence); and

(D) such Indebtedness is not guaranteed in any respect by the Borrower or any
Subsidiary Guarantor except to the extent permitted under Section 10.5; and

(ii) any Permitted Refinancing Indebtedness incurred to Refinance such
Indebtedness;

(k) Indebtedness consisting of secured financings by a Foreign Subsidiary in
which no Credit Party’s assets are used to secure such Indebtedness;

(l) Indebtedness in respect of performance bonds, bid bonds, appeal bonds,
surety bonds and completion guarantees and similar obligations not in connection
with money borrowed, in each case provided in the ordinary course of business or
consistent with past practice, including those incurred to secure health, safety
and environmental obligations in the ordinary course of business or consistent
with past practice;

(m) (i) other additional Indebtedness and (ii) any Permitted Refinancing
Indebtedness issued as incurred to Refinance such Indebtedness; provided that
the aggregate principal amount of Indebtedness outstanding at any time pursuant
to this clause (m) shall not at the time of incurrence thereof and after giving
pro forma effect thereto and the use of proceeds thereof, exceed the greater of
$500,000,000 and 4.5% of Consolidated Total Assets (measured as of the date such
Indebtedness is incurred based upon the financial statements most recently
available prior to such date);

 

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(n) Indebtedness in respect of Permitted Additional Debt and any Permitted
Refinancing Indebtedness issued or incurred to Refinance such Indebtedness;
provided that after giving effect to the incurrence or issuance thereof, the
Borrower shall be in compliance on a pro forma basis with the Financial
Performance Covenants as such covenant are recomputed as of the last day of the
most recently ended Test Period as if such incurrence or issuance had occurred
on the first day of such Test Period;

(o) Cash Management Obligations, Cash Management Services and other Indebtedness
in respect of netting services, automatic clearing house arrangements,
employees’ credit or purchase cards, overdraft protections and similar
arrangements in each case incurred in the ordinary course of business;

(p) Indebtedness incurred in the ordinary course of business in respect of
obligations of the Borrower or any Restricted Subsidiary to pay the deferred
purchase price of goods or services or progress payments in connection with such
goods and services;

(q) Indebtedness arising from agreements of the Borrower or any Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations (including earn-outs), in each case entered into in
connection with Permitted Acquisitions, other Investments and the Disposition of
any business, assets or Stock permitted hereunder;

(r) Indebtedness of the Borrower or any Restricted Subsidiary consisting of
(i) obligations to pay insurance premiums or insurance premium financing or
(ii) obligations contained in firm transportation or supply agreements or other
take or pay contracts, in each case arising in the ordinary course of business;

(s) Indebtedness representing deferred compensation to employees, consultants or
independent contractors of the Borrower (or, to the extent such work is done for
the Borrower or its Subsidiaries, any direct or indirect parent thereof) and the
Restricted Subsidiaries incurred in the ordinary course of business;

(t) Indebtedness consisting of promissory notes issued by the Borrower or any
Guarantor to current or former officers, managers, consultants, directors and
employees (or their respective spouses, former spouses, successors, executors,
administrators, heirs, legatees or distributees) to finance the purchase or
redemption of Stock or Stock Equivalents of the Borrower (or any direct or
indirect parent thereof) permitted by Section 10.6;

(u) Indebtedness consisting of obligations of the Borrower and the Restricted
Subsidiaries under deferred compensation or other similar arrangements incurred
by such Person in connection with the Transactions, Permitted Acquisitions or
any other Investment permitted hereunder;

(v) Indebtedness associated with bonds or surety obligations required by
Requirements of Law or by Governmental Authorities in connection with the
operation of Oil and Gas Properties in the ordinary course of business;

(w) Indebtedness consisting of the undischarged balance of any Production
Payment, subject to adjustment of the Borrowing Base as set forth in
Section 2.14(e) to the extent required under Section 10.4(b); and

(x) all premiums (if any), interest (including post-petition interest), fees,
expenses, charges, and additional or contingent interest on obligations
described in clauses (a) through (w) above.

10.2 Limitation on Liens. The Borrower will not, and will not permit any of the
Restricted Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any Restricted Subsidiary, whether now owned or
hereafter acquired, except:

 

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(a) Liens arising under the Credit Documents to secure the Obligations
(including Liens contemplated by Section 3.8) or permitted in respect of any
Mortgaged Property by the terms of the applicable Mortgage;

(b) Permitted Liens;

(c) (x) Liens (including liens arising under Capital Leases to secure
Capitalized Lease Obligations) securing Indebtedness permitted pursuant to
Section 10.1(g); provided that (i) such Liens attach concurrently with or within
270 days after the acquisition, lease, repair, replacement, construction,
expansion or improvement (as applicable) being financed with such Indebtedness,
(ii) other than the property financed by such Indebtedness, such Liens do not at
any time encumber any property, except for replacements thereof and accessions
and additions to such property and the proceeds and the products thereof and
customary security deposits and (iii) with respect to Capital Leases, such Liens
do not at any time extend to or cover any assets (except for accessions and
additions to such assets, replacements and products thereof and customary
security deposits) other than the assets subject to such Capital Leases;
provided that individual financings of equipment provided by one lender may be
cross collateralized to other financings of equipment provided by such lender,
and (y) on any date that is not during an Investment Grade Period, Liens on the
assets of a Restricted Subsidiary that is not a Credit Party securing
Indebtedness permitted pursuant to Section 10.1(m);

(d) Liens existing on the date hereof; provided that any Lien securing
Indebtedness in excess of (i) $5,000,000 individually or (ii) $10,000,000 in the
aggregate (when taken together with all other Liens securing obligations
outstanding in reliance on this clause (d) that are not listed on Schedule 10.2)
shall only be permitted to the extent such Lien is listed on Schedule 10.2;

(e) (i) the modification, replacement, extension or renewal of any Lien
permitted by clauses (a), (b), (c), (d), (f), (g), (s), (t), (u) and (x) of this
Section 10.2 upon or in the same assets theretofore subject to such Lien or upon
or in after-acquired property that is (A) affixed or incorporated into the
property covered by such Lien, (B) in the case of Liens permitted by clauses
(f) and (s), included or required to be included by the Indebtedness secured by
such Lien (it being understood that such Lien may not extend to property that
would not have been encumbered thereby but for such acquisition) and (C) the
proceeds and products thereof or (ii) on any date that is not during an
Investment Grade Period, Liens securing Indebtedness incurred in replacement,
extension or renewal (without increase in the amount or change in any direct or
contingent obligor except to the extent otherwise permitted hereunder) of
secured Indebtedness, to the extent the replacement, extension or renewal of the
Indebtedness secured thereby is permitted by Section 10.1;

(f) On any date that is not during an Investment Grade Period, Liens existing on
the assets of any Person that becomes a Subsidiary, or existing on assets
acquired, pursuant to a Permitted Acquisition to the extent the Liens on such
assets secure Indebtedness permitted by Section 10.1(i); provided that such
Liens attach at all times only to the same assets that such Liens (or upon or in
after-acquired property that is (i) affixed or incorporated into the property
covered by such Lien, (ii) after-acquired property subject to a Lien securing
Indebtedness permitted under Section 10.1(i), the terms of which Indebtedness
require or include a pledge of after-acquired property (it being understood that
such requirement shall not be permitted to apply to any property to which such
requirement would not have applied but for such acquisition) and (iii) the
proceeds and products thereof) attached to, and secure only, the same
Indebtedness or obligations (or any Permitted Refinancing Indebtedness incurred
to Refinance such Indebtedness permitted by Section 10.1) that such Liens
secured, immediately prior to such Permitted Acquisition;

 

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(g) On any date that is not during an Investment Grade Period, Liens placed upon
the Stock and Stock Equivalents of any Person that becomes a Restricted
Subsidiary pursuant to a Permitted Acquisition, or the assets of such a
Restricted Subsidiary, in each case, to secure Indebtedness incurred pursuant to
Section 10.1(j); provided that such Liens attach at all times only to the Stock
and Stock Equivalents or assets so acquired;

(h) Liens securing Indebtedness or other obligations (i) of the Borrower or a
Restricted Subsidiary in favor of a Credit Party and (ii) of any Restricted
Subsidiary that is not a Credit Party in favor of any Restricted Subsidiary that
is not a Credit Party;

(i) Liens (i) of a collecting bank arising under Section 4-210 of the Uniform
Commercial Code on items in the course of collection, (ii) attaching to
commodity trading accounts or other commodity brokerage accounts incurred in the
ordinary course of business and (iii) in favor of a banking institution arising
as a matter of law encumbering deposits (including the right of set-off);

(j) Liens (i) on cash advances in favor of the seller of any property to be
acquired in an Investment permitted pursuant to Section 10.5 to be applied
against the purchase price for such Investment, and (ii) consisting of an
agreement to Dispose of any property in a transaction permitted under
Section 10.4, in each case, solely to the extent such Investment or Disposition,
as the case may be, would have been permitted on the date of the creation of
such Lien;

(k) Liens arising out of conditional sale, title retention, consignment or
similar arrangements for sale or purchase of goods entered into by the Borrower
or any of the Restricted Subsidiaries in the ordinary course of business
permitted by this Agreement;

(l) Liens deemed to exist in connection with Investments in repurchase
agreements permitted under Section 10.5;

(m) Liens encumbering reasonable customary initial deposits and margin deposits
and similar Liens attaching to brokerage and securities accounts (and the assets
therein) incurred in the ordinary course of business and not for speculative
purposes;

(n) Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance or incurrence of Indebtedness, (ii) relating to pooled deposit or
sweep accounts of the Borrower or any Restricted Subsidiary to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of the Borrower and the Restricted Subsidiaries or (iii) relating to
purchase orders and other agreements entered into with customers of the Borrower
or any Restricted Subsidiary in the ordinary course of business;

(o) Liens solely on any cash earnest money deposits made by the Borrower or any
of the Restricted Subsidiaries in connection with any letter of intent or
purchase agreement permitted hereunder;

(p) Liens on insurance policies and the proceeds thereof securing the financing
of the premiums with respect thereto;

(q) Liens in respect of Production Payments, subject to adjustment of the
Borrowing Base as set forth in Section 2.14(e) to the extent required under
Section 10.4(b);

 

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(r) the prior right of consignees and their lenders under consignment
arrangements entered into in the ordinary course of business;

(s) agreements to subordinate any interest of the Borrower or any Restricted
Subsidiary in any accounts receivable or other proceeds arising from inventory
consigned by the Borrower or any Restricted Subsidiary pursuant to an agreement
entered into in the ordinary course of business;

(t) Liens on Stock in a joint venture that (i) does not constitute a Restricted
Subsidiary securing obligations of such joint venture so long as the assets of
such joint venture do not constitute Collateral or (ii) constitute customary
buy/sell arrangements between the joint venture parties or are restrictions
under the organizational documents of such joint venture;

(u) Liens securing any Indebtedness permitted by Section 10.1(k);

(v) Liens arising pursuant to Section 107(l) of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9607(l), or other
Environmental Law, unless such Lien (i) by action of the lienholder, or by
operation of law, takes priority over any Liens arising under the Credit
Documents on the property upon which it is a Lien, and (ii) relates to a
liability of the Borrower or any Restricted Subsidiary that is reasonably likely
to exceed $5,000,000;

(w) on any date that is not during an Investment Grade Period, Liens on any
property of the Borrower or any Restricted Subsidiary, other than property or
assets securing the Obligations or any Borrowing Base Properties, to secure
Indebtedness and obligations of the Borrower or such Restricted Subsidiary under
Hedge Agreements permitted under Section 10.10 with counterparties other than a
Hedge Bank; and

(x) additional Liens on property not constituting Borrowing Base Properties so
long as the aggregate principal amount of the obligations secured thereby at the
time of the incurrence thereof and after giving pro forma effect thereto and the
use of proceeds thereof, does not exceed the greater of $150,000,000 and 1.50%
of Consolidated Total Assets (measured as of the date such Lien or the
obligations secured is incurred based upon the financial statements most
recently available prior to such date).

10.3 Limitation on Fundamental Changes. Except as permitted by Sections 10.4 or
10.5, the Borrower will not, and will not permit any of the Restricted
Subsidiaries to, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or Dispose of, all or substantially all its business units, assets
or other properties, except that:

(a) any Subsidiary of the Borrower or any other Person may be merged,
amalgamated or consolidated with or into the Borrower; provided that (i) the
Borrower shall be the continuing or surviving Person or, in the case of a
merger, amalgamation or consolidation with or into the Borrower, the Person
formed by or surviving any such merger, amalgamation or consolidation (if other
than the Borrower) shall be an entity organized or existing under the laws of
the United States, any state thereof, the District of Columbia or any territory
thereof (the Borrower or such Person, as the case may be, being herein referred
to as the “Successor Borrower”), (ii) the Successor Borrower (if other than the
Borrower) shall expressly assume all the obligations of the Borrower under this
Agreement and the other Credit Documents pursuant to a supplement hereto or
thereto in form reasonably satisfactory to the Administrative Agent, (iii) no
Borrowing Base Deficiency, Default or Event of Default has occurred and is
continuing at the date of such merger, amalgamation or consolidation or would
result from such consummation of such merger, amalgamation or consolidation, and
(iv) if such merger, amalgamation or consolidation involves the Borrower and a
Person that, prior to the consummation of such merger,

 

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amalgamation or consolidation, is not a Subsidiary of the Borrower (A) the
Successor Borrower shall be in compliance, on a pro forma basis after giving
effect to such merger, amalgamation or consolidation, with the Financial
Performance Covenants, as such covenants are recomputed as at the last day of
the most recently ended Test Period under such Section as if such merger,
amalgamation or consolidation had occurred on the first day of such Test Period,
(B) each Guarantor, unless it is the other party to such merger, amalgamation or
consolidation or unless the Successor Borrower is the Borrower, shall have by a
supplement to the Guarantee confirmed that its Guarantee shall apply to the
Successor Borrower’s obligations under this Agreement, (C) each Subsidiary
pledgor, unless it is the other party to such merger, amalgamation or
consolidation or unless the Successor Borrower is the Borrower, shall have by a
supplement to the Credit Documents confirmed that its obligations thereunder
shall apply to the Successor Borrower’s obligations under this Agreement,
(D) each mortgagor of a Mortgaged Property, unless it is the other party to such
merger or consolidation or unless the Successor Borrower is the Borrower, shall
have by an amendment to or restatement of the applicable Mortgage confirmed that
its obligations thereunder shall apply to the Successor Borrower’s obligations
under this Agreement, (E) the Borrower shall have delivered to the
Administrative Agent an officer’s certificate stating that such merger,
amalgamation or consolidation and any supplements to the Credit Documents
preserve the enforceability of the Guarantee and the perfection and priority of
the Liens under the Security Documents, (F) if reasonably requested by the
Administrative Agent, an opinion of counsel shall be required to be provided to
the effect that such merger, amalgamation or consolidation does not violate this
Agreement or any other Credit Document and that the Credit Documents are
enforceable against the Successor Borrower; and (G) such merger, amalgamation or
consolidation shall comply with all the conditions set forth in the definition
of the term “Permitted Acquisition” or is otherwise permitted under
Section 10.5; provided, further, that if the foregoing are satisfied, the
Successor Borrower (if other than the Borrower) will succeed to, and be
substituted for, the Borrower under this Agreement;

(b) any Subsidiary of the Borrower or any other Person (other than the Borrower)
may be merged, amalgamated or consolidated with or into any one or more
Subsidiaries of the Borrower; provided that (i) in the case of any merger,
amalgamation or consolidation involving one or more Restricted Subsidiaries,
(A) a Restricted Subsidiary shall be the continuing or surviving Person or
(B) the Borrower shall take all steps necessary to cause the Person formed by or
surviving any such merger, amalgamation or consolidation (if other than a
Restricted Subsidiary) to become a Restricted Subsidiary, (ii) in the case of
any merger, amalgamation or consolidation involving one or more Guarantors, a
Guarantor shall be the continuing or surviving Person or the Person formed by or
surviving any such merger, amalgamation or consolidation (if other than a
Guarantor) shall execute a supplement to the Guarantee, the Pledge Agreement,
the Security Agreement and any applicable Mortgage, each in form and substance
reasonably satisfactory to the Administrative Agent in order for the surviving
Person to become a Guarantor and pledgor, mortgagor and grantor of Collateral
for the benefit of the Secured Parties, (iii) no Borrowing Base Deficiency,
Default or Event of Default has occurred and is continuing on the date of such
merger, amalgamation or consolidation or would result from the consummation of
such merger, amalgamation or consolidation and (iv) if such merger, amalgamation
or consolidation involves a Subsidiary and a Person that, prior to the
consummation of such merger, amalgamation or consolidation, is not a Restricted
Subsidiary of the Borrower, (A) the Borrower shall be in compliance, on a pro
forma basis after giving effect to such merger, amalgamation or consolidation,
with the Financial Performance Covenants, as such covenants are recomputed as at
the last day of the most recently ended Test Period under such Section as if
such merger, amalgamation or consolidation had occurred on the first day of such
Test Period, (B) the Borrower shall have delivered to the Administrative Agent
an officer’s certificate stating that such merger, amalgamation or consolidation
and such supplements to any Credit Document preserve the enforceability of the
Guarantee and the perfection and priority of the Liens under the Security
Documents (if involving a Guarantor) and (C) such merger, amalgamation or
consolidation shall comply with all the conditions set forth in the definition
of the term “Permitted Acquisition” or is otherwise permitted under
Section 10.5;

 

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(c) any Restricted Subsidiary that is not a Guarantor may (i) merge, amalgamate
or consolidate with or into any other Restricted Subsidiary and (ii) Dispose of
any or all of its assets (upon voluntary liquidation or otherwise) to the
Borrower, a Guarantor or any other Restricted Subsidiary of the Borrower;

(d) any Subsidiary Guarantor may (i) merge, amalgamate or consolidate with or
into any other Subsidiary Guarantor, (ii) merge, amalgamate or consolidate with
or into any other Subsidiary which is not a Guarantor or Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to any other Subsidiary
that is not a Guarantor; provided that if such Subsidiary Guarantor is not the
surviving entity, such merger, amalgamation or consolidation shall be deemed to
be, and any such Disposition shall be, an “Investment” and subject to the
limitations set forth in Section 10.5 and (iii) Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any other
Guarantor;

(e) any Restricted Subsidiary may liquidate or dissolve if (i) the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders
and (ii) to the extent such Restricted Subsidiary is a Credit Party, any assets
or business of such Restricted Subsidiary not otherwise Disposed of or
transferred in accordance with Section 10.4 or 10.5 or, in the case of any such
business, discontinued, shall be transferred to, or otherwise owned or conducted
by, a Credit Party after giving effect to such liquidation or dissolution; and

(f) to the extent that no Borrowing Base Deficiency, Default or Event of Default
would result from the consummation of such Disposition, the Borrower and the
Restricted Subsidiaries may consummate a merger, dissolution, liquidation,
consolidation or Disposition, the purpose of which is to effect a Disposition
permitted pursuant to Section 10.4.

10.4 Limitation on Sale of Assets. The Borrower will not, and will not permit
any of the Restricted Subsidiaries to, (x) convey, sell, lease, sell and
leaseback, assign, farm-out, transfer or otherwise dispose (each of the
foregoing a “Disposition”) of any of its property, business or assets (including
receivables and leasehold interests), whether now owned or hereafter acquired or
(y) sell to any Person (other than the Borrower or a Guarantor) any shares owned
by it of any Restricted Subsidiary’s Stock and Stock Equivalents, except that:

(a) the Borrower and the Restricted Subsidiaries may Dispose of (i) inventory
and other goods held for sale, including Hydrocarbons, obsolete, worn out, used
or surplus equipment, vehicles and other assets (other than accounts receivable)
in the ordinary course of business (including equipment that is no longer
necessary for the business of the Borrower or its Restricted Subsidiaries or is
replaced by equipment of at least comparable value and use), (ii) Permitted
Investments, and (iii) assets for the purposes of charitable contributions or
similar gifts to the extent such assets are not material to the ability of the
Borrower and its Restricted Subsidiaries, taken as a whole, to conduct its
business in the ordinary course;

(b) the Borrower and the Restricted Subsidiaries may Dispose of any Oil and Gas
Properties or any interest therein or the Stock or Stock Equivalents of any
Restricted Subsidiary owning Oil and Gas Properties (and including, but without
limitation, Dispositions in respect of Production Payments and in connection
with net profits interests, operating agreements, farm-ins, joint exploration
and development agreements and other agreements customary in the oil and gas
industry for the purpose of developing such Oil and Gas Properties); provided
that such Disposition is for Fair Market Value; provided, further, that if such
Disposition of Oil and Gas Properties or of any Stock or Stock Equivalents of
any Restricted Subsidiary owning Oil and Gas Properties involves Borrowing Base
Properties included in the most recently delivered Reserve Report and the
aggregate PV-9 (calculated at the time of such Disposition) of

 

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all such Borrowing Base Properties Disposed pursuant to this clause (b), when
aggregated with the Hedge PV (as calculated at the time of any such termination
or creation of off-setting positions) of terminated and/or offsetting positions
that were relied upon by the Lenders in determining the Borrowing Base (as
calculated at the time of any such termination or creation of offsetting
positions and after taking into account any other Hedge Agreement entered into
since the later of clause (i) or (ii) below, as applicable), since the later of
(i) the last Redetermination Date and (ii) the last adjustment of the Borrowing
Base made pursuant to Section 2.14(e) exceeds 10% of the then-effective
Borrowing Base, then such Disposition may be consummated so long as the Borrower
shall have provided notice to the Administrative Agent of such Disposition and
the Borrowing Base Properties so Disposed no later than five Business Days prior
to the date of consummation of any such Disposition, and the Borrowing Base
shall be adjusted in accordance with the provisions of Section 2.14(e);
provided, further, that to the extent that the Borrower is notified by the
Administrative Agent that a Borrowing Base Deficiency could result from an
adjustment to the Borrowing Base resulting from such Disposition, after the
consummation of such Disposition(s), the Borrower shall have received net cash
proceeds, or shall have cash on hand, sufficient to eliminate any such potential
Borrowing Base Deficiency;

(c) the Borrower and the Restricted Subsidiaries may Dispose of property or
assets to the Borrower or to a Restricted Subsidiary; provided that if the
transferor of such property is a Credit Party (i) the transferee thereof must
either be a Credit Party or (ii) such transaction is permitted under
Section 10.5;

(d) the Borrower and any Restricted Subsidiary may effect any transaction
permitted by Section 10.3, 10.5 or 10.6;

(e) the Borrower and the Restricted Subsidiaries may lease, sublease, license or
sublicense (on a non-exclusive basis with respect to any intellectual property)
real, personal or intellectual property in the ordinary course of business;

(f) Dispositions constituting like-kind exchanges of Borrowing Base Properties
to the extent that (i) such property is exchanged for credit against the
purchase price of similar replacement property or the proceeds of such
Disposition are applied to the purchase price of such replacement property, in
each case under Section 1031 of the Code or otherwise, and (ii) after giving
effect to such Disposition, the difference between (x) the Borrowing Base in
effect immediately prior to such Disposition minus (y) the PV-9 (calculated at
the time of such Disposition) of the Borrowing Base Properties Disposed of since
the later of (A) the last Redetermination Date and (B) the last adjustment of
the Borrowing Base made pursuant to Section 2.14(e), exceeds the Loan Limit in
effect immediately prior to such Disposition;

(g) Dispositions of Hydrocarbon Interests to which no Proved Reserves are
attributable and farm-outs of undeveloped acreage to which no Proved Reserves
are attributable and assignments in connection with such farm-outs;

(h) Dispositions of Investments in joint ventures (regardless of the form of
legal entity) to the extent required by, or made pursuant to, customary buy/sell
arrangements between the joint venture parties set forth in joint venture
arrangements and similar binding arrangements to the extent the same would be
permitted under Section 10.5(h);

(i) transfers of property subject to (i) a Casualty Event or in connection with
any condemnation proceeding with respect to Collateral upon receipt of the net
cash proceeds of such Casualty Event or condemnation proceeding or (ii) in
connection with any Casualty Event or any condemnation proceeding, in each case
with respect to property that does not constitute Collateral;

 

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(j) Dispositions of accounts receivable (i) in connection with the collection or
compromise thereof, (ii) in connection with a Disposition of a Restricted
Subsidiary permitted hereunder or (iii) otherwise if no Default exists;

(k) the unwinding, terminating and/or offsetting of any Hedge Agreement (a
“Hedge Termination”) (subject to the terms of Section 2.14(e)); provided, that
if the Hedge PV of the unwound, terminated and/or offsetting positions that were
relied upon by the Lenders in determining the Borrowing Base (as calculated at
the time of any such Hedge Termination and after taking into account any other
Hedge Agreement entered into since the later of clause (i) or (ii) below, as
applicable) when aggregated with the aggregate PV-9 of all Borrowing Base
Properties Disposed pursuant to clause (b) above (calculated at the time of such
Disposition) included in the most recently delivered Reserve Report, since the
later of (i) the last Redetermination Date and (ii) the last adjustment of the
Borrowing Base made pursuant to Section 2.14(e), exceeds 10% of the
then-effective Borrowing Base, then such Hedge Termination may be consummated so
long as the Borrower shall have provided notice to the Administrative Agent of
such Hedge Termination no later than five Business Days prior to the date of
consummation of any such Hedge Termination, and the Borrowing Base shall be
adjusted in accordance with the provisions of Section 2.14(e); provided,
further, that to the extent that the Borrower is notified by the Administrative
Agent that a Borrowing Base Deficiency could result from an adjustment to the
Borrowing Base resulting from such Hedge Termination, after the consummation of
such Hedge Termination, the Borrower shall have received net cash proceeds, or
shall have cash on hand, sufficient to eliminate any such potential Borrowing
Base Deficiency;

(l) Dispositions of Oil and Gas Properties and other assets not included in the
Borrowing Base;

(m) Disposition of any asset between or among the Borrower and/or its Restricted
Subsidiaries as a substantially concurrent interim Disposition in connection
with a Disposition otherwise permitted pursuant to clauses (a) through
(l) above; and

(n) on any date during an Investment Grade Period, any Disposition provided that
after giving pro forma effect to such Disposition no Default or Event of Default
would result therefrom (including that the Borrower shall be in compliance with
Section 10.11(a) and Section 10.11(b), in each case, on a pro forma basis after
giving effect to such Disposition, as such covenants are recomputed as at the
last day of the most recently ended Test Period as if such Disposition had
occurred on the first day of such Test Period).

10.5 Limitation on Investments. The Borrower will not, and will not permit any
of the Restricted Subsidiaries, to make any Investment except:

(a) extensions of trade credit and purchases of assets and services (including
purchases of inventory, supplies and materials) in the ordinary course of
business;

(b) Investments in assets that constituted Permitted Investments at the time
such Investments were made;

(c) loans and advances to officers, directors, employees and consultants of the
Borrower (or any direct or indirect parent thereof) or any of its Restricted
Subsidiaries (i) for reasonable and customary business-related travel,
entertainment, relocation and analogous ordinary business purposes (including
employee payroll advances), (ii) in connection with such Person’s purchase of
Stock or Stock Equivalents of the Borrower (or any direct or indirect parent
thereof; provided that, to the extent such loans and advances are made in cash,
the amount of such loans and advances used to acquire such Stock or Stock
Equivalents shall be contributed to the Borrower in cash) and (iii) for purposes
not described in the foregoing subclauses (i) and (ii); provided that the
aggregate principal amount outstanding pursuant to subclause (iii) shall not
exceed $20,000,000;

 

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(d) (i) Investments existing on, or made pursuant to legally binding written
commitments in existence on, the Closing Date as set forth on Schedule 10.5,
(ii) Investments existing on the Closing Date of the Borrower or any Subsidiary
in any other Subsidiary and (iii) any extensions, renewals or reinvestments
thereof, so long as the amount of any Investment made pursuant to clause (d)(i)
is not increased at any time above the amount of such Investment set forth on
Schedule 10.5;

(e) Investments received in connection with the bankruptcy or reorganization of
suppliers or customers and in settlement of delinquent obligations of, and other
disputes with, customers arising in the ordinary course of business or upon
foreclosure with respect to any secured Investment or other transfer of title
with respect to any secured Investment;

(f) Investments to the extent that payment for such Investments is made with
Stock or Stock Equivalents (other than Disqualified Stock not otherwise
permitted by Section 10.1) of the Borrower (or any direct or indirect parent
thereof);

(g) Investments in Unrestricted Subsidiaries (provided that no Event of Default
shall then exist and, the Borrower shall be in compliance with the Financial
Performance Covenants on a pro forma basis after giving effect to such
Investment, as such covenants are recomputed as at the last day of the most
recently ended Test Period as if such Investment had occurred on the first day
of such Test Period);

(h) Investments (including but not limited to (i) Permitted Acquisitions and
(ii) Investments in respect of royalty trusts and master limited partnerships),
in each case valued at the Fair Market Value (determined by the Borrower acting
in good faith) of such Investment at the time each such Investment is made, in
an aggregate amount pursuant to this Section 10.5(h) that, at the time each such
Investment is made, would not exceed the sum of (A) the greater of (1)
$125,000,000 and (2) 1.25% of Consolidated Total Assets (measured as of the date
such Investment is made based upon the financial statements most recently
available prior to such date) plus (B) an amount equal to any repayments,
interest, returns, profits, distributions, income and similar amounts actually
received in cash in respect of any such Investment (which amount shall not
exceed the amount of such Investment valued at the Fair Market Value of such
Investment at the time such Investment was made); provided that the foregoing
limits shall not apply during the period in which, and Investments may be made
pursuant to this Section 10.5(h) without limit at any such time during which,
after giving pro forma effect to the making of any such Investment, (1) no Event
of Default shall have occurred and be continuing and (2) Liquidity is not less
than 10% of the then effective Loan Limit (on a pro forma basis after giving
effect to such Investment); provided, further, that intercompany current
liabilities incurred in the ordinary course of business and consistent with past
practices, in connection with the cash management operations of the Borrower and
the Subsidiaries shall not be included in calculating any limitations in this
paragraph at any time;

(i) Investments constituting non-cash proceeds of Dispositions of assets to the
extent such Disposition is permitted by Section 10.4;

(j) Investments made to repurchase or retire Stock or Stock Equivalents of the
Borrower or any direct or indirect parent thereof owned by any employee or any
stock ownership plan or key employee stock ownership plan of the Borrower (or
any direct or indirect parent thereof);

 

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(k) loans and advances to any direct or indirect parent of the Borrower in lieu
of, and not in excess of the amount of, Restricted Payments to the extent
permitted to be made to such parent in accordance with Section 10.6;

(l) 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 and other credits
to suppliers in the ordinary course of business;

(m) Investments in the ordinary course of business consisting of endorsements
for collection or deposit and customary trade arrangements with customers
consistent with past practices;

(n) advances of payroll payments to employees, consultants or independent
contractors or other advances of salaries or compensation to employees,
consultants or independent contractors, in each case in the ordinary course of
business;

(o) guarantee obligations of the Borrower or any Restricted Subsidiary of leases
(other than Capital Leases) or of other obligations that do not constitute
Indebtedness, in each case entered into in the ordinary course of business;

(p) Investments held by a Person acquired (including by way of merger or
consolidation) after the Closing Date otherwise in accordance with this
Section 10.5 to the extent that such Investments were not made in contemplation
of or in connection with such acquisition, merger or consolidation and were in
existence on the date of such acquisition, merger or consolidation;

(q) Investments in Industry Investments and in interests in additional Oil and
Gas Properties and gas gathering systems related thereto or Investments related
to farm-out, farm-in, joint operating, joint venture, joint development or other
area of mutual interest agreements, other similar industry investments,
gathering systems, pipelines or other similar oil and gas exploration and
production business arrangements whether through direct ownership or ownership
through a joint venture or similar arrangement;

(r) Investments in Hedge Agreements permitted by Section 10.1 and Section 10.10;

(s) Investments consisting of Indebtedness, fundamental changes, Dispositions
and Restricted Payments permitted under Sections 10.1, 10.3, 10.4 and 10.6
(other than 10.6(c)); and

(t) Investments consisting of licensing of intellectual property pursuant to
joint marketing arrangements with other Persons in the ordinary course of
business.

10.6 Limitation on Restricted Payments. The Borrower will not pay any dividends
(other than Restricted Payments payable solely in its Stock that is not
Disqualified Stock) or return any capital to its equity holders or make any
other distribution, payment or delivery of property or cash to its equity
holders as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for consideration, any shares of any class of its Stock or Stock
Equivalents or the Stock or Stock Equivalents of any direct or indirect parent
now or hereafter outstanding, or set aside any funds for any of the foregoing
purposes, or permit any of the Restricted Subsidiaries to purchase or otherwise
acquire for consideration (other than in connection with an Investment permitted
by Section 10.5) any Stock or Stock Equivalents of the Borrower (or any direct
or indirect parent thereof), now or hereafter outstanding (all of the foregoing,
“Restricted Payments”); except that:

 

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(a) the Borrower may redeem in whole or in part any of its Stock or Stock
Equivalents in exchange for another class of its Stock or Stock Equivalents or
with proceeds from substantially concurrent equity contributions or issuances of
new Stock or Stock Equivalents; provided that such new Stock or Stock
Equivalents contain terms and provisions at least as advantageous to the Lenders
in all material respects to their interests as those contained in the Stock or
Stock Equivalents redeemed thereby, and the Borrower may pay Restricted Payments
payable solely in the Stock and Stock Equivalents (other than Disqualified Stock
not otherwise permitted by Section 10.1) of the Borrower;

(b) the Borrower may (i) redeem, acquire, retire or repurchase shares of its
Stock or Stock Equivalents held by any present or former officer, manager,
consultant, director or employee (or their respective Affiliates, estates,
spouses, former spouses, successors, executors, administrators, heirs, legatees,
distributees or immediate family members) of the Borrower and its Subsidiaries,
upon the death, disability, retirement or termination of employment of any such
Person or otherwise in accordance with any equity option or equity appreciation
rights plan, any management, director and/or employee equity ownership, benefit
or incentive plan or agreement, equity subscription plan, employment termination
agreement or any other employment agreements or equity holders’ agreement;
provided that, with respect to non-discretionary repurchases, acquisitions,
retirements or redemptions pursuant to the terms of any equity option or equity
appreciation rights plan, any management, director and/or employee equity
ownership, benefit or incentive plan or agreement, equity subscription plan,
employment termination agreement or any other employment agreements or equity
holders’ agreement, the aggregate amount of all cash paid in respect of all such
shares of Stock or Stock Equivalents so redeemed, acquired, retired or
repurchased in any calendar year does not exceed the $50,000,000; and (ii) pay
Restricted Payments in an amount equal to withholding or similar Taxes payable
or expected to be payable by any present or former employee, director, manager
or consultant (or their respective Affiliates, estates or immediate family
members) and any repurchases of Stock or Stock Equivalents in consideration of
such payments including deemed repurchases in connection with the exercise of
stock options so long as the amount of such payments made during any calendar
year does not exceed $50,000,000 in the aggregate; provided that the amount of
Restricted Payments permitted to be made pursuant to this clause (ii) in respect
of any calendar year shall be increased by the unused amount of Restricted
Payments that were permitted to be made pursuant to this clause (ii) during the
immediately preceding calendar year without giving effect to any carryover
amount from prior calendar years (with such Restricted Payments being deemed to
use first, the $50,000,000 permitted for such for such calendar year and,
second, any amount carried forward to such calendar year);

(c) to the extent constituting Restricted Payments, the Borrower may make
Investments permitted by Section 10.5;

(d) to the extent constituting Restricted Payments, the Borrower may enter into
and consummate transactions expressly permitted by any provision of
Section 10.3;

(e) the Borrower may (i) issue additional shares of its Stock or Stock
Equivalents or (ii) repurchase Stock or Stock Equivalents of the Borrower (or
any direct or indirect parent thereof) upon exercise of stock options or
warrants if such Stock or Stock Equivalents represents all or a portion of the
exercise price of such options or warrants;

(f) the Borrower or any of the Restricted Subsidiaries may (i) pay cash in lieu
of fractional shares in connection with any dividend, split or combination
thereof or any Permitted Acquisition and (ii) so long as, after giving pro forma
effect thereto, (A) no Default or Event of Default shall have occurred and be
continuing and (B) no Borrowing Base Deficiency exists, honor any conversion
request by a holder of convertible Indebtedness and make cash payments in lieu
of fractional shares in connection with any such conversion and may make
payments on convertible Indebtedness in accordance with its terms;

 

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(g) the Borrower may pay any Restricted Payment within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Agreement;

(h) so long as, after giving pro forma effect thereto, together with any
concurrent Restricted Payments being paid under this Section 10.6(h) and
Section 10.6(i), (i) no Event of Default shall have occurred and be continuing,
and (ii) the Available Commitment is not less than 15% of the then effective
Loan Limit (on a pro forma basis after giving effect to such Restricted
Payment), the Borrower may make, declare and pay additional Restricted Payments
in cash without limit to the holders of its Stock and Stock Equivalents;

(i) in addition to the foregoing Restricted Payments and so long as no Event of
Default shall have occurred and be continuing or would result therefrom and
after giving effect to the making of any such Restricted Payment, together with
any concurrent Restricted Payments being paid under Section 10.6(h) and this
Section 10.6(i), the Borrower shall be in compliance on a pro forma basis with
the Financial Performance Covenants as such covenants are re-computed as of the
last day of the most recently ended Test Period as if such Restricted Payment
had been paid on the first day of such Test Period, the Borrower may declare and
pay Restricted Payments in an aggregate amount not to exceed $25,000,000 in any
given calendar year; and

(j) the Borrower may make payments described in Sections 10.12(a), (c), (d),
(e), (g) and (h) (subject to the conditions set out therein).

10.7 Limitations on Debt Payments and Amendments.

(a) The Borrower will not, and will not permit any Restricted Subsidiary to,
prepay, repurchase or redeem or otherwise defease the Senior Notes or any
Permitted Additional Debt comprised of senior subordinated or subordinated
Indebtedness (it being understood that payments of regularly scheduled cash
interest in respect of the Senior Notes or such Permitted Additional Debt shall
be permitted); provided, however, that the Borrower or any Subsidiary may
prepay, repurchase, redeem or defease the Senior Notes or any such Permitted
Additional Debt (A) with the proceeds of any Permitted Refinancing Indebtedness,
(B) by converting or exchanging the Senior Notes or any such Permitted
Additional Debt to Stock (other than Disqualified Stock) of the Borrower or any
of its direct or indirect parent or (C) so long as, after giving pro forma
effect thereto, (1) no Event of Default has occurred and is continuing and
(2) Available Commitment is not less than 10% of the then effective Loan Limit
(on a pro forma basis after giving effect to such prepayment, repurchase,
redemption or defeasance); and

(b) The Borrower will not amend or modify the Indentures or the documentation
governing any senior subordinated or subordinated Permitted Additional Debt or
the terms applicable thereto to the extent that (i) any such amendment or
modification, taken as a whole, would be adverse to the Lenders in any material
respect or (ii) the provisions of the Indentures or the documentation governing
any senior subordinated or subordinated Permitted Additional Debt, as so amended
or modified, would not be permitted to be included in the documentation
governing any senior subordinated or subordinated Permitted Additional Debt that
was issued at such time.

10.8 Negative Pledge Agreements. The Borrower will not, and will not permit any
of the Restricted Subsidiaries to, enter into or permit to exist any Contractual
Requirement (other than this Agreement or any other Credit Document or any
documentation in respect of secured Indebtedness

 

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otherwise permitted hereunder) that limits the ability of the Borrower or any
Guarantor to create, incur, assume or suffer to exist Liens on property of such
Person for the benefit of the Secured Parties with respect to the Obligations or
under the Credit Documents; provided that the foregoing shall not apply to
Contractual Requirements that (i)(x) exist on the Closing Date and (to the
extent not otherwise permitted by this Section 10.8) are listed on Schedule 10.8
and (y) to the extent Contractual Requirements permitted by clause (x) are set
forth in an agreement evidencing Indebtedness or other obligations, are set
forth in any agreement evidencing any Permitted Refinancing Indebtedness
incurred to Refinance such Indebtedness or obligation so long as such Permitted
Refinancing Indebtedness does not expand the scope of such Contractual
Requirement, (ii) are binding on a Restricted Subsidiary at the time such
Restricted Subsidiary first becomes a Restricted Subsidiary of the Borrower, so
long as such Contractual Requirements were not entered into solely in
contemplation of such Person becoming a Restricted Subsidiary of the Borrower,
(iii) represent Indebtedness of a Restricted Subsidiary of the Borrower that is
not a Guarantor to the extent such Indebtedness is permitted by Section 10.1 so
long as such Contractual Requirement applies only to such Subsidiary, (iv) arise
pursuant to agreements entered into with respect to any sale, transfer, lease or
other Disposition permitted by Section 10.4 and applicable solely to assets
under such sale, transfer, lease or other Disposition, (v) are customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures permitted by Section 10.5 (including organizational documents
for a joint venture) and applicable solely to such joint venture or otherwise
arise in agreements which restrict the Disposition or distribution of assets or
property in oil and gas leases, joint operating agreements, joint exploration
and/or development agreements, participation agreements and other similar
agreements entered into in the ordinary course of the oil and gas exploration
and development business, (vi) are negative pledges and restrictions on Liens in
favor of any holder of Indebtedness permitted under Section 10.1, but solely to
the extent any negative pledge relates to the property financed by or the
subject of such Indebtedness, (vii) are customary restrictions on leases,
subleases, licenses or asset sale agreements otherwise permitted hereby so long
as such restrictions relate to the assets subject thereto, (viii) comprise
restrictions imposed by any agreement relating to secured Indebtedness permitted
pursuant to Section 10.1 to the extent that such restrictions apply only to the
property or assets securing such Indebtedness, (ix) are customary provisions
restricting subletting or assignment of any lease governing a leasehold interest
of the Borrower or any Subsidiary, (x) are customary provisions restricting
assignment of any agreement entered into in the ordinary course of business,
(xi) restrict the use of cash or other deposits imposed by customers under
contracts entered into in the ordinary course of business, (xii) are imposed by
applicable law, (xiii) exist under any documentation governing any Permitted
Refinancing Indebtedness incurred to Refinance any Indebtedness but only to the
extent such Contractual Requirement was contained in the document evidencing the
Indebtedness being refinanced, (xiv) customary net worth provisions contained in
real property leases entered into by Subsidiaries of the Borrower, so long as
the Borrower has determined in good faith that such net worth provisions would
not reasonably be expected to impair the ability of the Borrower and its
Subsidiaries to meet their ongoing obligation and (xv) any restrictions
regarding licenses or sublicenses by the Borrower and its Restricted
Subsidiaries of Intellectual Property in the ordinary course of business (in
which case such restriction shall relate only to such Intellectual Property).

10.9 Limitation on Subsidiary Distributions. The Borrower will not, and will not
permit any of its Restricted Subsidiaries that are not Guarantors to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any such
Restricted Subsidiary that is not a Guarantor to pay dividends or make any other
distributions to the Borrower or any Restricted Subsidiary on its Stock or with
respect to any other interest or participation in, or measured by, its profits
or transfer any property to the Borrower or any Restricted Subsidiary except (in
each case) for such encumbrances or restrictions existing under or by reason of:

(a) contractual encumbrances or restrictions in effect on the Closing Date that
are described on Schedule 10.9 or pursuant to the Credit Documents;

 

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(b) the Senior Notes, the Indentures and related guarantees;

(c) purchase money obligations for property acquired in the ordinary course of
business and Capitalized Lease Obligations that impose restrictions on
transferring the property so acquired;

(d) Requirement of Law or any applicable rule, regulation or order;

(e) any agreement or other instrument of a Person acquired by or merged or
consolidated with or into the Borrower or any Restricted Subsidiary, or of an
Unrestricted Subsidiary that is designated a Restricted Subsidiary, or that is
assumed in connection with the acquisition of assets from such Person, in each
case that is in existence at the time of such transaction (but not created in
contemplation thereof), which encumbrance or restriction is not applicable to
any Person, or the properties or assets of any Person, other than the Person and
its Subsidiaries, or the property or assets of the Person and its Subsidiaries,
so acquired or designated;

(f) contracts for the sale of assets, including customary restrictions with
respect to a Subsidiary of the Borrower pursuant to an agreement that has been
entered into for the sale or disposition of all or substantially all of the
Stock or assets of such Subsidiary;

(g) secured Indebtedness otherwise permitted to be incurred pursuant to Sections
10.1 and 10.2 that limit the right of the debtor to dispose of the assets
securing such Indebtedness;

(h) restrictions on cash or other deposits or net worth imposed by customers
under contracts entered into in the ordinary course of business;

(i) other Indebtedness, Disqualified Stock or preferred stock of Restricted
Subsidiaries permitted to be incurred subsequent to the Closing Date pursuant to
Section 10.1 and either (A) the provisions relating to such encumbrance or
restriction contained in such Indebtedness are no less favorable to the
Borrower, taken as a whole, as determined by the board of directors of the
Borrower in good faith, than the provisions contained in this Agreement as in
effect on the Closing Date or (B) any such encumbrance or restriction contained
in such Indebtedness does not prohibit (except upon a default or an event of
default thereunder) the payment of dividends in an amount sufficient, as
determined by the board of directors of the Borrower in good faith, to make
scheduled payments of cash interest on the Obligations when due;

(j) customary provisions in joint venture agreements (including organizational
documents for a joint venture) or agreements governing property held with a
common owner and other similar agreements or arrangements relating solely to
such joint venture or property;

(k) customary provisions contained in leases, sub-leases, licenses, sub-licenses
or similar agreements, in each case, entered into in the ordinary course of
business; and

(l) any encumbrances or restrictions imposed by any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of the contracts, instruments or obligations referred to in clauses
(a) through (k) above; provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are, in the good faith judgment of the Borrower’s board of
directors, no more restrictive in any material respect with respect to such
encumbrance and other restrictions taken as a whole than those prior to such
amendment, modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.

 

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10.10 Hedge Agreements. The Borrower will not, and will not permit any
Restricted Subsidiary to, enter into any Hedge Agreements with any Person other
than:

(a) Hedge Agreements entered into with an Approved Counterparty that are
non-speculative (including Hedge Agreements entered into to unwind or offset
other permitted Hedge Agreements); provided that, at any time other than when,
during any Investment Grade Period, the Borrower has both a Rating from Moody’s
of Baa3 or better and a Rating from S&P of BBB- or better:

(i) any such Hedge Agreement does not have a term greater than sixty (60) months
from the date such Hedge Agreement is entered into;

(ii) at all times, on a net basis, the aggregate notional volume for each of
natural gas, natural gas liquids and crude oil, calculated separately, covered
by market sensitive Hedge Agreements (other than Excluded Hedges) shall not
exceed 90% of the Projected Volume of natural gas, natural gas liquids and crude
oil production, calculated separately, for each month in the forthcoming five
year period;

(iii) notwithstanding the limitations set forth in clause (ii) of this
Section 10.10(a) in contemplation of a Permitted Acquisition, the Borrower and
its Restricted Subsidiaries may enter into additional market sensitive Hedge
Agreements such that the aggregate notional volumes for each of natural gas,
natural gas liquids and crude oil, calculated separately, for each month in the
forthcoming five year period covered by such additional market sensitive Hedge
Agreements do not exceed 70% of the Projected Volume of natural gas, natural gas
liquids and crude oil production, calculated separately, from the estimated
reserves to be acquired in such Permitted Acquisition for each month in such
forthcoming period; provided such additional Hedge Agreements are entered into
(A) on or after the date of execution of a definitive agreement with respect to
a proposed Permitted Acquisition, but in any event no earlier than 90 days prior
to the proposed closing date of such Permitted Acquisition and (B) in the event
such agreement is terminated or such Permitted Acquisition is otherwise not
consummated within 90 days after such initial additional market sensitive Hedge
Agreements have been entered into (or such longer period as may be reasonably
acceptable to the Administrative Agent in the event the proposed closing of such
Permitted Acquisition has been delayed beyond what the Borrower originally
expected), then within 15 days (or such longer period as the Administrative
Agent may agree in its reasonable discretion) after such termination or the end
of such 90 day (or longer) period, as applicable, the Borrower shall and shall
cause the Restricted Subsidiaries to novate, unwind or otherwise dispose of
market sensitive Hedge Agreements to the extent necessary to be in compliance
with the limitations set forth in clause (ii) of this Section 10.10(a); and

(iv) notwithstanding the separate calculation requirements for natural gas,
natural gas liquids and crude oil in clauses (ii) and (iii) above, so long as
the Borrower and the Restricted Subsidiaries properly identify and consistently
report such hedges, the Borrower and the Restricted Subsidiaries may utilize
crude oil hedges as a substitute for hedging natural gas liquids.

(b) Hedge Agreements entered into with the purpose and effect of (i) fixing or
limiting interest rates on a principal amount of indebtedness of any Credit
Party that is accruing interest at a variable rate or (ii) obtaining variable
interest rates on a principal amount of indebtedness of any Credit Party that is
accruing interest at a fixed rate (in each case including Hedge Agreements
entered into to unwind or offset other permitted Hedge Agreements), provided
that, at any time other than when, during any Investment Grade Period, the
Borrower has both a Rating from Moody’s of Baa3 or better and a Rating from S&P
of BBB- or better, the aggregate notional amount of such Hedge Agreements does
not (on a net basis) exceed 80% of the principal balance of the variable or
fixed rate, as the case may be, Indebtedness of the Credit Parties projected to
be outstanding at the time such Hedge Agreement is entered into.

 

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(c) It is understood that for purposes of this Section 10.10, the following
Hedge Agreements shall not be deemed speculative or entered into for speculative
purposes: (i) any commodity Hedging Agreement intended, at inception of
execution, to hedge or manage any of the risks related to existing and or
forecasted Hydrocarbon production of the Borrower or its Restricted Subsidiaries
(whether or not contracted) and (ii) any Hedge Agreement intended, at inception
of execution, (A) to hedge or manage the interest rate exposure associated with
any debt securities, debt facilities or leases (existing or forecasted) of the
Borrower or its Restricted Subsidiaries, (B) for foreign exchange or currency
exchange management, (C) to manage commodity portfolio exposure associated with
changes in interest rates or (D) to hedge any exposure that the Borrower or its
Restricted Subsidiaries may have to counterparties under other Hedge Agreements
such that the combination of such Hedge Agreements is not speculative taken as a
whole.

(d) Notwithstanding any of the foregoing, the Borrower shall have thirty
(30) days following the end of any Investment Grade Period (or such longer
period as the Administrative Agent may agree) to enter into Hedge Terminations
or otherwise take any other actions necessary to comply with the hedging
covenants in this Section 10.10.

10.11 Financial Performance Covenants.

(a) Consolidated Funded Debt to Consolidated EBITDAX Ratio. If as of the last
day of any Test Period ending during any Investment Grade Period the Borrower
has both (i) a Rating from Moody’s of Baa3 or better and (ii) a Rating from S&P
of BBB- or better, the Borrower will not permit the Consolidated Funded Debt to
Consolidated EBITDAX Ratio as of such date to be greater than 4.25 to 1.00.

(b) Current Ratio. The Borrower will not permit the ratio of Consolidated
Current Assets to Consolidated Current Liabilities as of the last day of any
Test Period to be less than 1.00 to 1.00.

(c) Asset Coverage Test. If as of the last day of any Test Period either (i) an
Investment Grade Period is not in effect or (ii) the Borrower does not have both
(A) a Rating from Moody’s of Baa3 or better and (B) a Rating from S&P of BBB- or
better, the Borrower will not permit the ratio of the PV-9 of its and its
Restricted Subsidiaries’ Oil and Gas Properties reflected in the most recently
delivered Reserve Report or Interim PV-9 Report to Consolidated Funded Debt as
of such date to be less than 1.50 to 1.00; provided that, for the purposes of
this Section 10.11(c), no more than 35% of the Borrower’s and its Restricted
Subsidiaries’ Oil and Gas Properties may be attributable to Proved Reserves that
are not then categorized as Proved Developed Producing Reserves.

(d) Interest Coverage Ratio. If as of the last day of any Test Period either
(i) an Investment Grade Period is not in effect or (ii) the Borrower does not
have both (A) a Rating from Moody’s of Baa3 or better and (B) a Rating from S&P
of BBB- or better, the Borrower will not permit the ratio of Consolidated
EBITDAX to Consolidated Interest Charges paid in cash for such period as of such
date to be less than 2.50 to 1.00.

10.12 Transactions with Affiliates. The Borrower will not, and will not permit
any of the Restricted Subsidiaries to conduct, any material transaction with any
of its Affiliates (other than the Borrower and the Restricted Subsidiaries or
any entity that becomes a Restricted Subsidiary as a result of such transaction)
on terms other than those that are substantially as favorable to the Borrower or
such Restricted Subsidiary as it would obtain at the time in a comparable
arm’s-length transaction with a Person that is not an Affiliate, as determined
by the board of directors or managers of the Borrower or such Restricted
Subsidiary in good faith; provided that the foregoing restrictions shall not
apply to:

 

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(a) the payment of Transaction Expenses;

(b) loans, advances and other transactions between or among the Borrower, any
Subsidiary or any joint venture (regardless of the form of legal entity) in
which the Borrower or any Subsidiary has invested (and which Subsidiary or joint
venture would not be an Affiliate of the Borrower or such Subsidiary, but for
the Borrower’s or such Subsidiary’s ownership of Stock or Stock Equivalents in
such joint venture or such Subsidiary) to the extent permitted under
Section 10.5;

(c) employment and severance arrangements and health, disability and similar
insurance or benefit plans between the Borrower (or any direct or indirect
parent thereof) and the Subsidiaries and their respective directors, officers,
employees or consultants (including management and employee benefit plans or
agreements, subscription agreements or similar agreements pertaining to the
repurchase of Stock or Stock Equivalents pursuant to put/call rights or similar
rights with current or former employees, officers, directors or consultants and
equity option or incentive plans and other compensation arrangements) in the
ordinary course of business or as otherwise approved by the board of directors
or managers of the Borrower (or any direct or indirect parent thereof);

(d) the payment of customary fees and reasonable out of pocket costs to, and
indemnities provided on behalf of, directors, managers, consultants, officers
and employees of the Borrower (or any direct or indirect parent thereof) and the
Subsidiaries in the ordinary course of business to the extent attributable to
the ownership or operation of, or in connection with any services provided to,
the Borrower and the Subsidiaries;

(e) transactions pursuant to agreements in existence on the Closing Date and set
forth on Schedule 10.12 or any amendment thereto to the extent such an amendment
is not adverse, taken as a whole, to the Lenders in any material respect;

(f) Restricted Payments, redemptions, repurchases and other actions permitted
under Section 10.6;

(g) any issuance of Stock or Stock Equivalents or other payments, awards or
grants in cash, securities, Stock, Stock Equivalents or otherwise pursuant to,
or the funding of, employment arrangements, equity options and equity ownership
plans approved by the board of directors or board of managers of the Borrower
(or any direct or indirect parent thereof);

(h) transactions with joint ventures for the purchase or sale of goods,
equipment and services entered into in the ordinary course of business and in a
manner consistent with prudent business practice followed by companies in the
industry of the Borrower and its Subsidiaries;

(i) payments by the Borrower (or any direct or indirect parent thereof) and the
Subsidiaries pursuant to tax sharing agreements among the Borrower (and any such
parent) and the Subsidiaries on customary terms; provided that payments by
Borrower and the Subsidiaries under any such tax sharing agreements shall not
exceed the excess (if any) of the amount they would have paid on a standalone
basis over the amount they actually pay directly to Governmental Authorities;
and

(j) customary agreements and arrangements with oil and gas royalty trusts and
master limited partnership agreements that comply with the affiliate transaction
provisions of such royalty trust or master limited partnership agreement.

 

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10.13 Change in Business. The Borrower and its Restricted Subsidiaries, taken as
a whole, will not fundamentally and substantively alter the character of their
business, taken as a whole, from the business of Industry Investments by the
Borrower and its Restricted Subsidiaries and other business activities
incidental or reasonably related to any of the foregoing.

10.14 Use of Proceeds.

(a) No part of the proceeds of any Loan or any Letter of Credit will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the regulations of the Federal Reserve Board, including Regulations T, U and
X.

(b) The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall not use, and shall procure that its Subsidiaries and its or their
respective directors, officers, employees and agents shall not use, the proceeds
of any Borrowing or Letter of Credit (i) in furtherance of an offer, payment,
promise to pay, or authorization of the payment or giving of money, or anything
else of value, to any Person in violation of any Anti-Corruption Laws, (ii) for
the purpose of funding, financing or facilitating any activities, business or
transaction of or with any Sanctioned Person, or in any Sanctioned Country, to
the extent such activities, business or transaction would be prohibited by
Sanctions or (iii) in any manner that would result in the violation of any
Sanctions applicable to any party hereto.

SECTION 11. Events of Default

Upon the occurrence of any of the following specified events (each an “Event of
Default”):

11.1 Payments. The Borrower shall (a) default in the payment when due of any
principal of the Loans or (b) default, and such default shall continue for five
or more days, in the payment when due of any interest on the Loans or any Unpaid
Drawings, fees, Cash Collateral or of any other amounts owing hereunder or under
any other Credit Document (other than any amount referred to in clause
(a) above).

11.2 Representations, Etc. Any representation, warranty or statement made or
deemed made by any Credit Party herein or in any other Credit Document or any
certificate delivered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made.

11.3 Covenants. Any Credit Party shall:

(a) default in the due performance or observance by it of any term, covenant or
agreement contained in Section 9.1(d)(i), Section 9.5 (solely with respect to
the Borrower), Section 9.16 or Section 10; or

(b) default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in Section 11.1 or 11.2 or clause (a) of
this Section 11.3) contained in this Agreement or any Security Document and such
default shall continue unremedied for a period of at least 30 days after receipt
of written notice thereof by the Borrower from the Administrative Agent.

11.4 Default Under Other Agreements.

(a) The Borrower or any of the Restricted Subsidiaries shall (i) default in any
payment with respect to any Indebtedness (other than Indebtedness described in
Section 11.1) or Hedging Obligations in excess of $125,000,000, beyond the
period of grace, if any, provided in the instrument or agreement

 

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under which such Indebtedness or Hedging Obligations was created or (ii) default
in the observance or performance of any agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist
(other than, (1) with respect to any Hedging Obligations, termination events or
equivalent events pursuant to the terms of the related Hedge Agreements,
(2) secured Indebtedness that becomes due as a result of a Disposition
(including as a result of Casualty Event) of the property or assets securing
such Indebtedness permitted under this Agreement and (3) prepayments, tender
offers or calls of Indebtedness to the extent permitted under Section 10.7), the
effect of which default or other event or condition is to cause, or to permit
the holder or holders of such Indebtedness (or a trustee or agent on behalf of
such holder or holders) to cause, any such Indebtedness 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

(b) without limiting the provisions of clause (a) above, any such Indebtedness
or Hedging Obligations shall be declared to be due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment (and, (i) with respect to any Hedging Obligations, other
than due to a termination event or equivalent event pursuant to the terms of the
related Hedge Agreements and (ii) other than secured Indebtedness that becomes
due as a result of a Disposition (including as a result of Casualty Event) of
the property or assets securing such Indebtedness permitted under this
Agreement), prior to the stated maturity thereof.

11.5 Bankruptcy, Etc. The Borrower or any Specified Subsidiary shall commence a
voluntary case, proceeding or action concerning itself under (a) Title 11 of the
United States Code entitled “Bankruptcy”; or (b) in the case of any Foreign
Subsidiary that is a Specified Subsidiary, any domestic or foreign law relating
to bankruptcy, judicial management, insolvency, reorganization, administration
or relief of debtors in effect in its jurisdiction of incorporation, in each
case as now or hereafter in effect, or any successor thereto (collectively, the
“Bankruptcy Code”); or an involuntary case, proceeding or action is commenced
against the Borrower or any Specified Subsidiary and the petition is not
dismissed within 60 days after commencement of the case, proceeding or action
or, in connection with any such involuntary proceeding or action, the Borrower
or any Specified Subsidiary commences any other proceeding or action under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to the Borrower or any Specified Subsidiary; or a
custodian (as defined in the Bankruptcy Code), receiver, receiver manager,
trustee or similar person is appointed for, or takes charge of, all or
substantially all of the property of the Borrower or any Specified Subsidiary;
or there is commenced against the Borrower or any Specified Subsidiary any such
proceeding or action that remains undismissed for a period of 60 days; or any
order of relief or other order approving any such case or proceeding or action
is entered; or the Borrower or any Specified Subsidiary suffers any appointment
of any custodian, receiver, receiver manager, trustee or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or the Borrower or any Specified Subsidiary makes a general
assignment for the benefit of creditors.

11.6 ERISA. An ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect.

11.7 Guarantee. The Guarantee or any material provision thereof shall cease to
be in full force or effect (other than pursuant to the terms hereof and thereof)
or any Guarantor or any other Credit Party shall deny or disaffirm in writing
any such Guarantor’s obligations under the Guarantee.

 

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11.8 Security Documents. At any time other than during an Investment Grade
Period, any Mortgage or any other Security Document pursuant to which the assets
of the Borrower or any Subsidiary are pledged as Collateral or any material
provision thereof shall cease to be in full force or effect (other than pursuant
to the terms hereof or thereof) or any grantor thereunder or any other Credit
Party shall deny or disaffirm in writing any grantor’s obligations under the
Mortgage or any other Security Document.

11.9 Judgments. One or more monetary judgments or decrees shall be entered
against the Borrower or any of the Restricted Subsidiaries involving a liability
of $125,000,000 or more in the aggregate for all such judgments and decrees for
the Borrower and the Restricted Subsidiaries (to the extent not paid or covered
by insurance provided by a carrier not disputing coverage) and any such
judgments or decrees shall not have been satisfied, vacated, discharged or
stayed or bonded pending appeal within 60 days after the entry thereof.

11.10 Change of Control. A Change of Control shall occur.

Then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent may and, upon the written
request of the Majority Lenders, shall, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against the Borrower or
any other Credit Party, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in Section 11.5 shall
occur with respect to the Borrower, the result that would occur upon the giving
of written notice by the Administrative Agent as specified in clauses (a), (b)
and (d) below shall occur automatically without the giving of any such notice):
(a) declare the Total Commitment terminated, whereupon the Commitment of each
Lender shall forthwith terminate immediately and any fees theretofore accrued
shall forthwith become due and payable without any other notice of any kind;
(b) declare the principal of and any accrued interest and fees in respect of any
or all Loans and any or all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; (c) terminate any Letter of Credit that may be terminated in
accordance with its terms; and/or (d) at the request of the Required Lenders,
direct the Borrower to pay (and the Borrower agrees that upon receipt of such
notice, or upon the occurrence of an Event of Default specified in Section 11.5
with respect to the Borrower, it will pay) to the Administrative Agent at the
Administrative Agent’s Office such additional amounts of cash, to be held as
security for the Borrower’s respective reimbursement obligations for Drawings
that may subsequently occur thereunder, equal to the aggregate Stated Amount of
all Letters of Credit issued and then outstanding. In addition, after the
occurrence and during the continuance of an Event of Default, the Administrative
Agent and the Lenders will have all other rights and remedies available at law
and equity.

Any amount received by the Administrative Agent from any Credit Party (or from
proceeds of any Collateral) following any acceleration of the Obligations under
this Agreement or any Event of Default with respect to the Borrower under
Section 11.5 shall be applied:

(i) first, to payment or reimbursement of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts payable to the
Administrative Agent (including fees and disbursements and other charges of
counsel to the Administrative Agent payable under Section 13.5 and amounts
pursuant to Section 4.1 payable to the Administrative Agent in its capacity as
such);

(ii) second, to payment of that portion of the Obligations constituting fees,
expenses, indemnities and other amounts (other than principal, reimbursement
obligations in respect of Unpaid Drawings, interest and Letter of Credit fees)
payable to the Lenders and the Letter of Credit Issuers

 

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(including fees and disbursements and other charges of counsel to the Lenders
and the Letter of Credit Issuers payable under Section 13.5) arising under the
Credit Documents, ratably among them in proportion to the respective amounts
described in this clause (ii) payable to them;

(iii) third, to payment of that portion of the Obligations constituting accrued
and unpaid Letter of Credit fees and charges and interest on the Loans and
unreimbursed Unpaid Drawings, ratably among the Lenders and the Letter of Credit
Issuers in proportion to the respective amounts described in this clause (iii)
payable to them;

(iv) fourth, to the Secured Parties, (A) to payment of that portion of the
Obligations constituting unpaid principal of the Loans, Unpaid Drawings, unpaid
Cash Management Obligations and unpaid Hedging Obligations owing in respect of
any Secured Hedge Agreement and (B) to cash collateralize that portion of Letter
of Credit Exposure comprising the undrawn amount of Letters of Credit to the
extent not otherwise cash collateralized by the Borrower pursuant to
Section 2.15 or Section 3, ratably among the Secured Parties in proportion to
the respective amounts described in this clause (iv) payable to them; provided
that (x) any such amounts applied pursuant to subclause (B) above shall be paid
to the Administrative Agent for the ratable account of the applicable Letter of
Credit Issuers to cash collateralize Obligations in respect of Letters of
Credit, (y) subject to Section 2.15 or Section 3, amounts used to cash
collateralize the aggregate amount of Letters of Credit pursuant to this
clause (iv) shall be used to satisfy drawings under such Letters of Credit as
they occur and (z) upon the expiration of any Letter of Credit (without any
pending drawings), the pro rata share of cash collateral shall be distributed to
the other Obligations, if any, in the order set forth in this Section 11;

(v) fifth, to the payment in full of all other Obligations, in each case ratably
among the Administrative Agent, the Lenders and the Letter of Credit Issuers
based upon the respective aggregate amounts of all such Obligations owing to
them in accordance with the respective amounts thereof then due and payable; and

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

Notwithstanding the foregoing, amounts received from the Borrower or any Credit
Party that is not an “eligible contract participant” under the Commodity
Exchange Act shall not be applied to any Excluded Hedge Obligations (it being
understood, that in the event that any amount is applied to Obligations other
than Excluded Hedge Obligations as a result of this clause, the Administrative
Agent shall make such adjustments as it determines are appropriate to
distributions pursuant to clause fourth above from amounts received from
“eligible contract participants” under the Commodity Exchange Act to ensure, as
nearly as possible, that the proportional aggregate recoveries with respect to
Obligations described in clause fourth above by the holders of any Excluded
Hedge Obligations are the same as the proportional aggregate recoveries with
respect to other Obligations pursuant to clause fourth above).

If any amount remains on deposit as cash collateral after all Letters of Credit
have either been fully drawn or expired (without any pending drawings), such
remaining amount shall be applied to the other Obligations, if any, in the order
set forth above.

 

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SECTION 12. The Administrative Agent

12.1 Authorization and Action.

(a) Each Lender and each Letter of Credit Issuer hereby irrevocably appoints the
entity named as Administrative Agent in the heading of this Agreement and its
successors and assigns to serve as the administrative agent under the Credit
Documents and each Lender and each Letter of Credit Issuer authorizes the
Administrative Agent to take such actions as agent on its behalf and to exercise
such powers under this Agreement and the other Credit Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Letter of Credit Issuer hereby authorizes the Administrative Agent to
execute and deliver, and to perform its obligations under, each of the Credit
Documents to which the Administrative Agent is a party, to exercise all rights,
powers and remedies that the Administrative Agent may have under such Credit
Documents.

(b) As to any matters not expressly provided for herein and in the other Credit
Documents (including enforcement or collection), the Administrative Agent shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the written instructions of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary, pursuant to the terms in the Credit Documents), and, unless and until
revoked in writing, such instructions shall be binding upon each Lender and each
Letter of Credit Issuer; provided, however, that the Administrative Agent shall
not be required to take any action that (i) the Administrative Agent in good
faith believes exposes it to liability unless the Administrative Agent receives
an indemnification satisfactory to it from the Lenders and the Letter of Credit
Issuers with respect to such action or (ii) is contrary to this Agreement or any
other Credit Document or applicable law, including any action that may be in
violation of the automatic stay under any requirement of law relating to
bankruptcy, insolvency or reorganization or relief of debtors or that may affect
a forfeiture, modification or termination of property of a Defaulting Lender in
violation of any requirement of law relating to bankruptcy, insolvency or
reorganization or relief of debtors; provided, further, that the Administrative
Agent may seek clarification or direction from the Required Lenders prior to the
exercise of any such instructed action and may refrain from acting until such
clarification or direction has been provided. Except as expressly set forth in
the Credit Documents, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower, any Subsidiary or any Affiliate of any of the
foregoing that is communicated to or obtained by the Person serving as
Administrative Agent or any of its Affiliates in any capacity. Nothing in this
Agreement shall require the Administrative Agent to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.

(c) In performing its functions and duties hereunder and under the other Credit
Documents, the Administrative Agent is acting solely on behalf of the Lenders
and the Letter of Credit Issuers (except in limited circumstances expressly
provided for herein relating to the maintenance of the Register), and its duties
are entirely mechanical and administrative in nature. Without limiting the
generality of the foregoing:

 

  (i) the Administrative Agent does not assume and shall not be deemed to have
assumed any obligation or duty or any other relationship as the agent, fiduciary
or trustee of or for any Lender, Letter of Credit Issuer or holder of any other
obligation other than as expressly set forth herein and in the other Credit
Documents, regardless of whether a Default or an Event of Default has occurred
and is continuing (and it is understood and agreed that the use of the term
“agent” (or any similar term) herein or in any other Credit Document with
reference to the Administrative Agent is not intended to connote any fiduciary
duty or other implied (or express) obligations arising under agency doctrine of
any applicable law, and that such term is used as a matter of market custom and
is intended to create or reflect only an administrative relationship between
contracting parties); additionally, each Lender agrees that it will not assert
any claim against the Administrative Agent based on an alleged breach of
fiduciary duty by the Administrative Agent in connection with this Agreement and
the transactions contemplated hereby;

 

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  (ii) where the Administrative Agent is required or deemed to act as a trustee
in respect of any Collateral over which a security interest has been created
pursuant to a Credit Document expressed to be governed by the laws of the United
States, the obligations and liabilities of the Administrative Agent to the
Secured Parties in its capacity as trustee shall be excluded to the fullest
extent permitted by applicable law; and

 

  (iii) nothing in this Agreement or any Credit Document shall require the
Administrative Agent to account to any Lender for any sum or the profit element
of any sum received by the Administrative Agent for its own account.

(d) The Administrative Agent may perform any of its duties and exercise its
rights and powers hereunder or under any other Credit 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 of their respective duties and
exercise their respective rights and powers 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 pursuant to this
Agreement. The Administrative Agent shall not be responsible for the negligence
or misconduct of any sub-agent except to the extent that a court of competent
jurisdiction determines in a final and nonappealable judgment that the
Administrative Agent acted with gross negligence or willful misconduct in the
selection of such sub-agent.

(e) None of any Co-Documentation Agent, any Joint Lead Arranger or any
Bookrunner shall have obligations or duties whatsoever in such capacity under
this Agreement or any other Credit Document and shall incur no liability
hereunder or thereunder in such capacity, but all such persons shall have the
benefit of the indemnities provided for hereunder.

(f) In case of the pendency of any proceeding with respect to any Credit Party
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect, the Administrative Agent (irrespective
of whether the principal of any Loan or any other 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 (but not obligated) by intervention in such
proceeding or otherwise:

 

  (i) to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, Unpaid Drawings 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 Letter of
Credit Issuers and the Administrative Agent (including any claim under Sections
2.8, 2.10, 4.1, 5.4 and 13.5) allowed in such judicial proceeding; and

 

  (ii) 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 proceeding is hereby authorized by each
Lender, each Letter of Credit Issuer and each other Secured Party 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, the
Letter of Credit Issuers or the

 

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other Secured Parties, to pay to the Administrative Agent any amount due to it,
in its capacity as the Administrative Agent, under the Credit Documents
(including under Section 13.5). 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 Letter of Credit Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or Letter of Credit Issuer or to authorize the Administrative
Agent to vote in respect of the claim of any Lender or Letter of Credit Issuer
in any such proceeding.

(g) The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the Letter of Credit Issuers, and, except
solely to the extent of the Borrower’s rights to consent pursuant to and subject
to the conditions set forth in this Article, none of the Borrower or any
Subsidiary, or any of their respective Affiliates, shall have any rights as a
third party beneficiary under any such provisions. Each Secured Party, whether
or not a party hereto, will be deemed, by its acceptance of the benefits of the
Collateral and of the Guarantees of the Obligations provided under the Credit
Documents, to have agreed to the provisions of this Article.

12.2 Administrative Agent’s Reliance, Indemnification, Etc.

(a) Neither the Administrative Agent nor any of its Related Parties shall be
(i) liable for any action taken or omitted to be taken by it under or in
connection with this Agreement or the other Credit Documents (x) with the
consent of or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith to be necessary, under the circumstances as provided
in the Credit Documents) or (y) in the absence of its own gross negligence or
willful misconduct (such absence to be presumed unless otherwise determined by a
court of competent jurisdiction by a final and nonappealable judgment) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Credit Party or any
officer thereof contained in this Agreement or any other Credit Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Credit Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Credit Document or for any failure of any Credit Party to perform its
obligations hereunder or thereunder.

(b) The Administrative Agent shall be deemed not to have knowledge of any
Default unless and until written notice thereof (stating that it is a “notice of
default” or substantially similar wording) is given to the Administrative Agent
by the Borrower, a Lender or a Letter of Credit Issuer, and the Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with any
Credit Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Credit Document or the occurrence of any Default, (iv) the
sufficiency, validity, enforceability, effectiveness or genuineness of any
Credit Document or any other agreement, instrument or document, (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any Credit
Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent or satisfaction of any condition that
expressly refers to the matters described therein being acceptable or
satisfactory to the Administrative Agent, or (vi) the creation, perfection or
priority of Liens on the Collateral.

(c) Without limiting the foregoing, the Administrative Agent (i) may treat the
payee of any promissory note as its holder until such promissory note has been
assigned in accordance with Section 13.6, (ii) may rely on the Register to the
extent set forth in Section 13.6(b), (iii) may consult with legal

 

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counsel (including counsel to the Borrower), independent public accountants and
other experts selected by it, and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts, (iv) makes no warranty or representation to any
Lender or Letter of Credit Issuer and shall not be responsible to any Lender or
Letter of Credit Issuer for any statements, warranties or representations made
by or on behalf of any Credit Party in connection with this Agreement or any
other Credit Document, (v) 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 Letter of
Credit Issuer, may presume that such condition is satisfactory to such Lender or
Letter of Credit Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or Letter of Credit Issuer sufficiently
in advance of the making of such Loan or the issuance of such Letter of Credit
and (vi) shall be entitled to rely on, and shall incur no liability under or in
respect of this Agreement or any other Credit Document by acting upon, any
notice, consent, certificate or other instrument or writing (which writing may
be a fax, any electronic message, Internet or intranet website posting or other
distribution) or any statement made to it orally or by telephone and believed by
it to be genuine and signed or sent or otherwise authenticated by the proper
party or parties (whether or not such Person in fact meets the requirements set
forth in the Credit Documents for being the maker thereof).

12.3 Posting of Communications.

(a) The Borrower agrees that the Administrative Agent may, but shall not be
obligated to, make any Communications available to the Lenders and the Letter of
Credit Issuers by posting the Communications on IntraLinks™, DebtDomain,
SyndTrak, ClearPar or any other generally well-recognized electronic platform
chosen by the Administrative Agent to be its electronic transmission system (the
“Approved Electronic Platform”).

(b) Although the Approved Electronic Platform and its primary web portal are
secured with generally-applicable security procedures and policies implemented
or modified by the Administrative Agent from time to time (including, as of the
Closing Date, a user ID/password authorization system) and the Approved
Electronic Platform is secured through a per-deal authorization method whereby
each user may access the Approved Electronic Platform only on a deal-by-deal
basis, each of the Lenders, each of the Letter of Credit Issuers and the
Borrower acknowledges and agrees that the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution. Each of the Lenders, each of
the Letter of Credit Issuers and the Borrower hereby approves distribution of
the Communications through the Approved Electronic Platform and understands and
assumes the risks of such distribution.

(c) THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED “AS IS”
AND “AS AVAILABLE”. THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE APPROVED
ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN
THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS. 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 THE APPLICABLE PARTIES IN
CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. IN NO
EVENT SHALL THE ADMINISTRATIVE AGENT ANY CO-DOCUMENTATION AGENT, ANY JOINT LEAD
ARRANGER OR ANY BOOKRUNNER OR ANY OF THEIR RESPECTIVE RELATED PARTIES
(COLLECTIVELY, “APPLICABLE PARTIES”) HAVE ANY LIABILITY TO ANY CREDIT PARTY, ANY
LENDER, ANY LETTER OF

 

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CREDIT ISSUER OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING
DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR
EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY CREDIT
PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE
INTERNET OR THE APPROVED ELECTRONIC PLATFORM.

“Communications” shall mean, collectively, any notice, demand, communication,
information, document or other material provided by or on behalf of the Borrower
or any Credit Party pursuant to any Credit Document or the transactions
contemplated therein which is distributed by the Administrative Agent, any
Lender or any Letter of Credit Issuer by means of electronic communications
pursuant to this Section, including through an Approved Electronic Platform.

(d) Each Lender and each Letter of Credit Issuer agrees that notice to it (as
provided in the next sentence) specifying that Communications have been posted
to the Approved Electronic Platform shall constitute effective delivery of the
Communications to such Lender for purposes of the Credit Documents. Each Lender
and Letter of Credit Issuer agrees (i) to notify the Administrative Agent in
writing (which could be in the form of electronic communication) from time to
time of such Lender’s or Letter of Credit Issuer’s (as applicable) email address
to which the foregoing notice may be sent by electronic transmission and
(ii) that the foregoing notice may be sent to such email address.

(e) Each of the Lenders, each of the Letter of Credit Issuers and the Borrower
agrees that the Administrative Agent may, but (except as may be required by
applicable law) shall not be obligated to, store the Communications on the
Approved Electronic Platform in accordance with the Administrative Agent’s
generally applicable document retention procedures and policies.

(f) Nothing herein shall prejudice the right of the Administrative Agent, any
Lender or any Letter of Credit Issuer to give any notice or other communication
pursuant to any Credit Document in any other manner specified in such Credit
Document.

12.4 The Administrative Agent Individually. With respect to its Commitment,
Loans, Letter of Credit Commitments and Letters of Credit, the Person serving as
the Administrative Agent shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender or Letter of Credit Issuer, as the
case may be. The terms “Letter of Credit Issuers”, “Lenders”, “Required
Lenders”, “Borrowing Base Required Lenders”, “Majority Lenders”, and any similar
terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity as a Lender, Letter of Credit
Issuer or as one of the Required Lenders, Borrowing Base Required Lenders, or
Majority Lenders, as applicable. The Person serving as the Administrative Agent
and its Affiliates may accept deposits from, lend money to, own securities of,
act as the financial advisor or in any other advisory capacity for and generally
engage in any kind of banking, trust or other business with, the Borrower, any
Subsidiary or any Affiliate of any of the foregoing as if such Person was not
acting as the Administrative Agent and without any duty to account therefor to
the Lenders or the Letter of Credit Issuers.

12.5 Successor Administrative Agent.

(a) The Administrative Agent may resign at any time by giving 30 days’ prior
written notice thereof to the Lenders, the Letter of Credit Issuers and the
Borrower, whether or not a successor Administrative Agent has been appointed.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days

 

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after the retiring Administrative Agent’s giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Letter
of Credit Issuers, appoint a successor Administrative Agent, which shall be a
bank with an office in New York, New York or an Affiliate of any such bank. In
either case, such appointment shall be subject to the prior written approval of
the Borrower (which approval may not be unreasonably withheld and shall not be
required while an Event of Default has occurred and is continuing). Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall succeed to, and
become vested with, all the rights, powers, privileges and duties of the
retiring Administrative Agent. Upon the acceptance of appointment as
Administrative Agent by a successor Administrative Agent, the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement and the other Credit Documents. Prior to any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
retiring Administrative Agent shall take such action as may be reasonably
necessary to assign to the successor Administrative Agent its rights as
Administrative Agent under the Credit Documents.

(b) Notwithstanding paragraph (a) of this Section, in the event no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its intent to resign, the retiring Administrative Agent may give notice of
the effectiveness of its resignation to the Lenders, the Letter of Credit
Issuers and the Borrower, whereupon, on the date of effectiveness of such
resignation stated in such notice, (i) the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder and under the other
Credit Documents; provided that, solely for purposes of maintaining any security
interest granted to the Administrative Agent under any Security Document for the
benefit of the Secured Parties, the retiring Administrative Agent shall continue
to be vested with such security interest as collateral agent for the benefit of
the Secured Parties, and continue to be entitled to the rights set forth in such
Security Document and Credit Document, and, in the case of any Collateral in the
possession of the Administrative Agent, shall continue to hold such Collateral,
in each case until such time as a successor Administrative Agent is appointed
and accepts such appointment in accordance with this Section (it being
understood and agreed that the retiring Administrative Agent shall have no duty
or obligation to take any further action under any Security Document, including
any action required to maintain the perfection of any such security interest),
and (ii) the Required Lenders shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent;
provided that (A) all payments required to be made hereunder or under any other
Credit Document to the Administrative Agent for the account of any Person other
than the Administrative Agent shall be made directly to such Person and (B) all
notices and other communications required or contemplated to be given or made to
the Administrative Agent shall directly be given or made to each Lender and each
Letter of Credit Issuer. Following the effectiveness of the Administrative
Agent’s resignation from its capacity as such, the provisions of this Article
and Section 13.5, as well as any exculpatory, reimbursement and indemnification
provisions set forth in any other Credit Document, 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 and in respect of the matters referred to in the proviso
under clause (i) above.

12.6 Acknowledgements of Lenders and Letter of Credit Issuers.

(a) Each Lender represents that it is engaged in making, acquiring or holding
commercial loans in the ordinary course of its business and that it has,
independently and without reliance upon the Administrative Agent, any Arranger
or any other Lender, or any of the Related Parties of any of the foregoing, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement as a Lender, and
to make, acquire or hold Loans hereunder. Each Lender also acknowledges that it
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Administrative Agent, any Arranger or any other Lender, or any of the Related
Parties of any of the foregoing, and based on such documents and information
(which may contain material, non-public information within the meaning of the
United States securities laws concerning the Borrower and its Affiliates) 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 Credit
Document or any related agreement or any document furnished hereunder or
thereunder.

(b) Each Lender, by delivering its signature page to this Agreement on the
Closing Date, or delivering its signature page to an Assignment and Assumption
or any other Credit Document pursuant to which it shall become a Lender
hereunder, shall be deemed to have acknowledged receipt of, and consented to and
approved, each Credit Document and each other document required to be delivered
to, or be approved by or satisfactory to, the Administrative Agent or the
Lenders on the Closing Date.

12.7 Collateral Matters

(a) Except with respect to the exercise of setoff rights in accordance with
Section 13.8 or with respect to a Secured Party’s right to file a proof of claim
in an insolvency proceeding, no Secured Party shall have any right individually
to realize upon any of the Collateral or to enforce any Guarantee of the
Obligations, it being understood and agreed that all powers, rights and remedies
under the Credit Documents may be exercised solely by the Administrative Agent
on behalf of the Secured Parties in accordance with the terms thereof.

(b) In furtherance of the foregoing and not in limitation thereof, no
arrangements in respect of Cash Management Services the obligations under which
constitute Cash Management Obligations and no Hedging Agreement the obligations
under which constitute Hedging Obligations, will create (or be deemed to create)
in favor of any Secured Party that is a party thereto any rights in connection
with the management or release of any Collateral or of the obligations of any
Credit Party under any Credit Document. By accepting the benefits of the
Collateral, each Secured Party that is a party to any such arrangement in
respect of Cash Management Services or Hedging Agreement, as applicable, shall
be deemed to have appointed the Administrative Agent to serve as administrative
agent and collateral agent under the Credit Documents and agreed to be bound by
the Credit Documents as a Secured Party thereunder, subject to the limitations
set forth in this paragraph.

(c) The Secured Parties irrevocably authorize the Administrative Agent, at its
option and in its discretion, to subordinate any Lien on any property granted to
or held by the Administrative Agent under any Credit Document to the holder of
any Lien on such property that is permitted by Section 10.2(b). The
Administrative Agent shall not be responsible for or have a duty to ascertain or
inquire into any representation or warranty regarding the existence, value or
collectability of the Collateral, the existence, priority or perfection of the
Administrative Agent’s Lien thereon or any certificate prepared by any Credit
Party in connection therewith, nor shall the Administrative Agent be responsible
or liable to the Lenders or any other Secured Party for any failure to monitor
or maintain any portion of the Collateral.

12.8 Credit Bidding. The Secured Parties hereby irrevocably authorize the
Administrative Agent, at the direction of the Majority Lenders, to credit bid
all or any portion of the Obligations (including by accepting some or all of the
Collateral in satisfaction of some or all of the Obligations pursuant to a deed
in lieu of foreclosure or otherwise) and in such manner purchase (either
directly or through one or more acquisition vehicles) all or any portion of the
Collateral (a) at any sale thereof conducted under the provisions of the
Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy
Code, or any similar laws in any other jurisdictions to which a Credit Party is
subject, or (b) at any other sale, foreclosure or acceptance of collateral in
lieu of debt conducted by (or with the

 

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consent or at the direction of) the Administrative Agent (whether by judicial
action or otherwise) in accordance with any applicable law. In connection with
any such credit bid and purchase, the Obligations owed to the Secured Parties
shall be entitled to be, and shall be, credit bid by the Administrative Agent at
the direction of the Majority Lenders on a ratable basis (with Obligations with
respect to contingent or unliquidated claims receiving contingent interests in
the acquired assets on a ratable basis that shall vest upon the liquidation of
such claims in an amount proportional to the liquidated portion of the
contingent claim amount used in allocating the contingent interests) for the
asset or assets so purchased (or for the equity interests or debt instruments of
the acquisition vehicle or vehicles that are issued in connection with such
purchase). In connection with any such bid, (i) the Administrative Agent shall
be authorized to form one or more acquisition vehicles and to assign any
successful credit bid to such acquisition vehicle or vehicles, (ii) each of the
Secured Parties’ ratable interests in the Obligations which were credit bid
shall be deemed without any further action under this Agreement to be assigned
to such vehicle or vehicles for the purpose of closing such sale, (iii) the
Administrative Agent shall be authorized to adopt documents providing for the
governance of the acquisition vehicle or vehicles (provided that any actions by
the Administrative Agent with respect to such acquisition vehicle or vehicles,
including any disposition of the assets or equity interests thereof, shall be
governed, directly or indirectly, by, and the governing documents shall provide
for, control by the vote of the Majority Lenders or their permitted assignees
under the terms of this Agreement or the governing documents of the applicable
acquisition vehicle or vehicles, as the case may be, irrespective of the
termination of this Agreement and without giving effect to the limitations on
actions by the Majority Lenders contained in Section 13.1 of this Agreement),
(iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles
shall be authorized to issue to each of the Secured Parties, ratably on account
of the relevant Obligations which were credit bid, interests, whether as equity,
partnership, limited partnership interests or membership interests, in any such
acquisition vehicle and/or debt instruments issued by such acquisition vehicle,
all without the need for any Secured Party or acquisition vehicle to take any
further action, and (v) to the extent that Obligations that are assigned to an
acquisition vehicle are not used to acquire Collateral for any reason (as a
result of another bid being higher or better, because the amount of Obligations
assigned to the acquisition vehicle exceeds the amount of Obligations credit bid
by the acquisition vehicle or otherwise), such Obligations shall automatically
be reassigned to the Secured Parties pro rata with their original interest in
such Obligations and the equity interests and/or debt instruments issued by any
acquisition vehicle on account of such Obligations shall automatically be
cancelled, without the need for any Secured Party or any acquisition vehicle to
take any further action. Notwithstanding that the ratable portion of the
Obligations of each Secured Party are deemed assigned to the acquisition vehicle
or vehicles as set forth in clause (ii) above, each Secured Party shall execute
such documents and provide such information regarding the Secured Party (and/or
any designee of the Secured Party which will receive interests in or debt
instruments issued by such acquisition vehicle) as the Administrative Agent may
reasonably request in connection with the formation of any acquisition vehicle,
the formulation or submission of any credit bid or the consummation of the
transactions contemplated by such credit bid.

12.9 Certain ERISA Matters.

(a) Each Lender (x) represents and warrants, as of the date such Person became a
Lender party hereto, to, and (y) covenants, from the date such Person became a
Lender party hereto to the date such Person ceases being a Lender party hereto,
for the benefit of, the Administrative Agent, and each Joint Lead Arranger and
their respective Affiliates, and not, for the avoidance of doubt, to or for the
benefit of the Borrower or any other Credit Party, that at least one of the
following is and will be true:

(i) such Lender is not using “plan assets” (within the meaning of the Plan Asset
Regulations) of one or more Benefit Plans in connection with the Loans, the
Letters of Credit or the Commitments,

 

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(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14
(a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement, and the conditions for exemptive relief thereunder are and will
continue to be satisfied in connection therewith,

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Letters of
Credit, the Commitments and this Agreement, (C) the entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement satisfies the requirements of sub-sections
(b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such
Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied
with respect to such Lender’s entrance into, participation in, administration of
and performance of the Loans, the Letters of Credit, the Commitments and this
Agreement, or

(iv) such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent, in its sole discretion, and such
Lender.

(b) In addition, unless sub-clause (i) in the immediately preceding clause
(a) is true with respect to a Lender or such Lender has not provided another
representation, warranty and covenant as provided in sub-clause (iv) in the
immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and
(y) covenants, from the date such Person became a Lender party hereto to the
date such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent, and each Co-Documentation Agent, Joint Lead Arranger and
Bookrunner and their respective Affiliates, and not, for the avoidance of doubt,
to or for the benefit of the Borrower or any other Credit Party, that:

(i) none of the Administrative Agent or any Co-Documentation Agent, Joint Lead
Arranger or Bookrunner or any of their respective Affiliates is a fiduciary with
respect to the assets of such Lender (including in connection with the
reservation or exercise of any rights by the Administrative Agent under this
Agreement, any Credit Document or any documents related to hereto or thereto),

(ii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended
from time to time) and is a bank, an insurance carrier, an investment adviser, a
broker-dealer or other person that holds, or has under management or control,
total assets of at least $50 million, in each case as described in 29 CFR §
2510.3-21(c)(1)(i)(A)-(E),

(iii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is capable of evaluating investment risks independently, both in
general and with regard to particular transactions and investment strategies
(including in respect of the obligations),

 

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(iv) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is a fiduciary under ERISA or the Code, or both, with respect to the
Loans, the Letters of Credit, the Commitments and this Agreement and is
responsible for exercising independent judgment in evaluating the transactions
hereunder, and

(v) no fee or other compensation is being paid directly to the Administrative
Agent, or any Arranger or any of their respective Affiliates for investment
advice (as opposed to other services) in connection with the Loans, the Letters
of Credit, the Commitments or this Agreement.

(c) The Administrative Agent, and each Co-Documentation Agent, Joint Lead
Arranger and Bookrunner hereby informs the Lenders that each such Person is not
undertaking to provide impartial investment advice, or to give advice in a
fiduciary capacity, in connection with the transactions contemplated hereby, and
that such Person has a financial interest in the transactions contemplated
hereby in that such Person or an Affiliate thereof (i) may receive interest or
other payments with respect to the Loans, the Letters of Credit, the Commitments
and this Agreement, (ii) may recognize a gain if it extended the Loans, the
Letters of Credit or the Commitments for an amount less than the amount being
paid for an interest in the Loans, the Letters of Credit or the Commitments by
such Lender or (iii) may receive fees or other payments in connection with the
transactions contemplated hereby, the Credit Documents or otherwise, including
structuring fees, commitment fees, arrangement fees, facility fees, upfront
fees, underwriting fees, ticking fees, agency fees, administrative agent or
collateral agent fees, utilization fees, minimum usage fees, letter of credit
fees, fronting fees, deal-away or alternate transaction fees, amendment fees,
processing fees, term out premiums, banker’s acceptance fees, breakage or other
early termination fees or fees similar to the foregoing.

SECTION 13. Miscellaneous

13.1 Amendments, Waivers and Releases. Except as expressly set forth herein, but
subject to Section 2.17(c), neither this Agreement nor any terms hereof, may be
amended, supplemented or modified except in accordance with the provisions of
this Section 13.1. The Majority Lenders may, or, with the written consent of the
Majority Lenders, the Administrative Agent shall, from time to time, (a) enter
into with the relevant Credit Party or Credit Parties written amendments,
supplements or modifications hereto for the purpose of adding any provisions to
this Agreement or changing in any manner the rights of the Lenders or of the
Credit Parties hereunder or (b) waive in writing, on such terms and conditions
as the Majority Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or any
Default or Event of Default and its consequences; provided, however, that each
such waiver and each such amendment, supplement or modification shall be
effective only in the specific instance and for the specific purpose for which
given; provided, further, that no such waiver and no such amendment, supplement
or modification shall (i) forgive or reduce any portion of any Loan or reduce
the stated rate (it being understood that only the consent of the Majority
Lenders shall be necessary to waive any obligation of the Borrower to pay
interest at the Default Rate or amend Section 2.8(e)), or forgive any portion,
or extend the date for the payment, of any interest or fee payable hereunder
(other than as a result of waiving the applicability of any post-default
increase in interest rates), or extend the final expiration date of any Lender’s
Commitment (provided that any Lender, upon the request of the Borrower, may
extend the final expiration date of its Commitment without the consent of any
other Lender, including the Majority Lenders) or extend the final expiration
date of any Letter of Credit beyond the L/C Maturity Date unless arrangements
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satisfactory to the applicable Letter of Credit Issuer to Cash Collateralize (or
backstop) such Letter of Credit have been made (provided, that no Lenders shall
be obligated to fund participations in respect of any Letter of Credit after the
Maturity Date), or increase the amount of the Commitment of any Lender (provided
that, any Lender, upon the request of the Borrower, may increase the amount of
its Commitment without the consent of any other Lender, including the Majority
Lenders), or make any Loan, interest, fee or other amount payable in any
currency other than Dollars, in each case without the written consent of each
Lender directly and adversely affected thereby, (ii) amend, modify or waive any
provision of Section 6.12 without the consent of each affected Departing Lender,
or (iii) amend, modify or waive any provision of this Section 13.1, or amend or
modify any of the provisions of Section 13.8(a) to the extent it would alter the
ratable allocation of payments thereunder, or reduce the percentages specified
in the definitions of the terms “Majority Lenders”, “Required Lenders” or
“Borrowing Base Required Lenders”, consent to the assignment or transfer by the
Borrower of its rights and obligations under any Credit Document to which it is
a party (except as permitted pursuant to Section 13.3) or alter the order of the
provisions governing the application of proceeds of Collateral set forth at the
end of Section 11 or modify any definition used therein if the effect thereof
would be to alter the order of payment specified therein, in each case without
the written consent of each Lender directly and adversely affected thereby, or
(iv) amend, modify or waive any provision of Section 12 without the written
consent of the then-current Administrative Agent, as applicable, or any other
former Administrative Agent to whom Section 12 then applies in a manner that
directly and adversely affects such Person, or (v) amend, modify or waive any
provision of Section 3 with respect to any Letter of Credit without the written
consent of each Letter of Credit Issuer to whom Section 3 then applies in a
manner that directly and adversely affects such Person, or (vi) release all or
substantially all of the Guarantors under the Guarantee (except as expressly
permitted by the Guarantee or this Agreement) without the prior written consent
of each Lender, or (vii) release all or substantially all of the Collateral
under the Security Documents (except as expressly permitted by the Security
Documents or this Agreement) without the prior written consent of each Lender,
or (viii) amend Section 2.9 so as to permit Interest Period intervals greater
than six months without regard to availability to Lenders, without the written
consent of each Lender directly and adversely affected thereby, or (ix) increase
the Borrowing Base without the written consent of the Borrowing Base Required
Lenders (other than Defaulting Lenders), decrease or maintain the Borrowing Base
without the written consent of the Required Lenders or otherwise modify
Section 2.14(b), (c), (d) or (e) without the written consent of Borrowing Base
Required Lenders (other than Defaulting Lenders); provided that a Scheduled
Redetermination may be postponed by the Majority Lenders, or (ix) affect the
rights or duties of, or any fees or other amounts payable to the Administrative
Agent under this Agreement or any other Credit Document without the prior
written consent of the Administrative Agent; provided, further, that any
provision of this Agreement or any other Credit Document may be amended by an
agreement in writing entered into by the Borrower and the Administrative Agent
to cure any ambiguity, omission, defect or inconsistency so long as, in each
case, the Lenders shall have received at least five Business Days’ prior written
notice thereof and the Administrative Agent shall not have received, within five
Business Days of the date of such notice to the Lenders, a written notice from
the Majority Lenders stating that the Majority Lenders object to such amendment.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the affected Lenders and shall be binding upon the Borrower,
such Lenders, the Administrative Agent and all future holders of the affected
Loans. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former positions and rights
hereunder and under the other Credit Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; it being
understood that no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon. In connection with
the foregoing provisions, the Administrative Agent may, but shall have no
obligations to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender.

 

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13.2 Notices. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder or under any other Credit Document shall
be in writing (including by facsimile transmission). All such written notices
shall be mailed, faxed or delivered to the applicable address, facsimile number
or electronic mail address, and all notices and other communications expressly
permitted hereunder to be given by telephone shall be made to the applicable
telephone number, as follows:

(a) if to the Borrower, the Administrative Agent or any Letter of Credit Issuer,
to the address, facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 13.2 or to such other address, facsimile
number, electronic mail address or telephone number as shall be designated by
such party in a notice to the other parties; and

(b) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the Borrower, the
Administrative Agent and each Letter of Credit Issuer.

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii)(A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, three Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail, when delivered; provided that notices and other communications to the
Administrative Agent or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and
5.1 shall not be effective until received.

13.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Credit Documents 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
Requirements of Law.

13.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Credit Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.

13.5 Payment of Expenses; Indemnification. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all of its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the preparation and
execution and delivery of, and any amendment, waiver, supplement or modification
to, this Agreement and the other Credit Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable fees, disbursements and other charges of Norton Rose Fulbright,
in its capacity as counsel to the Administrative Agent, and one counsel in each
appropriate local jurisdiction (other than any allocated costs of in-house
counsel), (b) to pay or reimburse the Administrative Agent for all its
reasonable and documented out-of-pocket costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Credit Documents and any such other documents, including
the reasonable fees, disbursements and other charges of one counsel to the
Administrative Agent, (c) to pay, indemnify, and hold harmless each Lender,
Letter of Credit Issuer and the Administrative Agent from, any and all recording
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fees and (d) to pay, indemnify, and hold harmless each Lender, Letter of Credit
Issuer and the Administrative Agent and their respective Related Parties from
and against any and all other liabilities, obligations, losses, damages,
penalties, claims, demands, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, whether or not such proceedings
are brought by the Borrower, any of its Related Parties or any other third
Person, including reasonable and documented fees, disbursements and other
charges of one primary counsel for all such Persons, taken as a whole, and, if
necessary, by a single firm of local counsel in each appropriate jurisdiction
for all such Persons, taken as a whole (unless there is an actual or perceived
conflict of interest in which case each such Person may, with the consent of the
Borrower (not to be unreasonably withheld or delayed) retain its own counsel),
with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Credit Documents and any such other
documents, including, without limitation, any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law
(other than by such indemnified person or any of its Related Parties (other than
any trustee or advisor)) or to any actual or alleged presence, release or
threatened release of Hazardous Materials involving or attributable to the
operations of the Borrower, any of its Subsidiaries or any of the Oil and Gas
Properties (all the foregoing in this clause (d), collectively, the “Indemnified
Liabilities”); provided that the Borrower shall have no obligation hereunder to
the Administrative Agent or any Lender or any of their respective Related
Parties with respect to Indemnified Liabilities to the extent it has been
determined by a final non-appealable judgment of a court of competent
jurisdiction to have resulted from (i) the gross negligence, bad faith or
willful misconduct of the party to be indemnified or any of its Related Parties
(IT BEING THE INTENTION OF THE PARTIES HERETO THAT EACH LENDER, LETTER OF CREDIT
ISSUER AND THE ADMINISTRATIVE AGENT AND THEIR RESPECTIVE RELATED PARTIES SHALL,
IN ALL CASES, BE INDEMNIFIED FOR ITS ORDINARY COMPARATIVE, CONTRIBUTORY OR SOLE
NEGLIGENCE), (ii) any material breach of any Credit Document by the party to be
indemnified or (iii) disputes, claims, demands, actions, judgments or suits not
arising from any act or omission by the Borrower or its Affiliates, brought by
an indemnified Person against any other indemnified Person (other than disputes,
claims, demands, actions, judgments or suits involving claims against the
Administrative Agent in its capacity as such). NO PERSON ENTITLED TO
INDEMNIFICATION UNDER CLAUSE (D) OF THIS SECTION 13.5 SHALL BE LIABLE FOR ANY
DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR
OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR
OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE
TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS USED BY
THE ADMINISTRATIVE AGENT IS PROVIDED “AS IS” AND “AS AVAILABLE.” NONE OF THE
ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES WARRANT THE ADEQUACY OF SUCH
TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT
LIMITATION, 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 ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES IN
CONNECTION WITH ANY COMMUNICATIONS OR ANY TELECOMMUNICATIONS, ELECTRONIC OR
OTHER INFORMATION TRANSMISSION SYSTEMS. No Person entitled to indemnification
under clause (d) of this Section 13.5, nor the Borrower or any of its
Subsidiaries, shall have any liability for any special, punitive, indirect,
exemplary or consequential damages (including, without limitation, any loss of
profits, business or anticipated savings) relating to this Agreement or any
other Credit Document or arising out of its activities in connection herewith or
therewith (whether before or after the Closing Date); provided that the
foregoing shall not negate the Borrower’s obligations with respect to
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amounts payable under this Section 13.5 shall be paid within 10 Business Days of
receipt by the Borrower of an invoice relating thereto setting forth such
expense in reasonable detail. The agreements in this Section 13.5 shall survive
repayment of the Loans and all other amounts payable hereunder. This
Section 13.5 shall not apply with respect to any claims for Taxes other than any
Taxes that represent losses, claims, damages, etc., arising from any non-Tax
claim.

13.6 Successors and Assigns; Participations and Assignments.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Letter of Credit Issuer that
issues any Letter of Credit), except that (i) except as expressly permitted by
Section 13.3, the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender (and any attempted assignment or transfer
by the Borrower without such consent shall be null and void) and (ii) no Lender
may assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section 13.6. Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Letter of Credit Issuer that issues any Letter of Credit),
Participants (to the extent provided in clause (c) of this Section 13.6) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Letter of Credit Issuer and the Lenders and each other
Person entitled to indemnification under Section 13.5) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in clause (b)(ii) below, any Lender
may at any time assign to one or more assignees (other than the Borrower, its
Subsidiaries or any natural person) all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans (including participations in L/C Obligations) at the time owing to
it) with the prior written consent (such consent not be unreasonably withheld or
delayed; it being understood that the Borrower shall have the right to withhold
or delay its consent to any assignment solely if, in order for such assignment
to comply with applicable Requirements of Law, the Borrower would be required to
obtain the consent of, or make any filing or registration with, any Governmental
Authority) of:

(A) the Borrower; provided that no consent of the Borrower shall be required for
an assignment (1) if an Event of Default under Section 11.1 or Section 11.5 has
occurred and is continuing or (2) to a Lender, an Affiliate of a Lender or an
Approved Fund; and

(B) the Administrative Agent and each Letter of Credit Issuer (in each case, not
to be unreasonably withheld or delayed).

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $5,000,000 and increments of
$1,000,000 in excess thereof, unless each of the Borrower, each Letter of Credit
Issuer and the Administrative Agent otherwise consents (which consents shall not
be unreasonably withheld or delayed); provided that no such consent of the
Borrower shall be required if an Event of Default under Section 11.1 or
Section 11.5 has occurred and is continuing; provided, further, that
contemporaneous assignments to a single assignee made by Affiliates of Lenders
and related Approved Funds shall be aggregated for purposes of meeting the
minimum assignment amount requirements stated above;

 

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(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in the amount of $3,500 payable by the assignor or the
assignee; provided that the Administrative Agent may, in its sole discretion,
elect to waive such processing and recordation fee in the case of any
assignment; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

(iii) Subject to acceptance and recording thereof pursuant to clause (b)(iv) of
this Section 13.6, from and after the effective date specified in each
Assignment and Assumption, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
Sections 2.10, 2.11, 5.4 and 13.5). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 13.6 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
clause (c) of this Section 13.6.

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary 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 amount (and stated interest amounts) of the Loans and L/C
Obligations and any payment made by the Letter of Credit Issuer under any Letter
of Credit owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). Further, the Register shall contain the name and address of
the Administrative Agent and the lending office through which each such Person
acts under this Agreement. The entries in the Register shall be conclusive, and
the Borrower, the Administrative Agent, the Letter of Credit Issuer and the
Lenders shall treat each Person whose name is recorded in the Register pursuant
to the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, each Letter of Credit Issuer and, solely with
respect to itself, each other Lender, at any reasonable time and from time to
time upon reasonable prior notice.

(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in clause (b) of this Section 13.6
(unless waived) and any written consent to such assignment required by
clause (b) of this Section 13.6, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative
Agent or any Letter of Credit Issuer, sell participations to one or more banks
or other entities other than the Borrower or any Subsidiary of the Borrower
(each, a “Participant”) in all or a portion of such Lender’s

 

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rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Administrative Agent, the Letter of
Credit Issuer and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement. Any agreement or instrument pursuant to which a Lender sells
such a participation shall provide that such Lender shall retain the sole right
to enforce this Agreement and to approve any amendment, modification or waiver
of any provision of this Agreement or any other Credit Document; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in clauses (i) or (ii) of the proviso to Section 13.1 that affects
such Participant, provided that the Participant shall have no right to consent
to any modification to the percentages specified in the definitions of the terms
“Majority Lenders”, “Required Lenders” or “Borrowing Base Required Lenders”.
Subject to clause (c)(ii) of this Section 13.6, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.10, 2.11, and 5.4 to
the same extent as if it were a Lender (subject to the limitations and
requirements of those Sections as though it were a Lender and had acquired its
interest by assignment pursuant to clause (b) of this Section 13.6, including
the requirements of clause (e) of Section 5.4). To the extent permitted by
Requirements of Law, each Participant also shall be entitled to the benefits of
Section 13.8(b) as though it were a Lender; provided such Participant agrees to
be subject to Section 13.8(a) as though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under
Sections 2.10, 2.11, or 5.4 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 (which consent shall not be unreasonably withheld);
provided that the Participant shall be subject to the provisions in Section 2.12
as if it were an assignee under clauses (a) and (b) of this Section 13.6. Each
Lender that sells a participation shall, acting solely for this purpose as a
non-fiduciary agent of the Borrower, maintain a register on which it enters the
name and address of each participant and the principal amounts (and related
interest amounts) of each participant’s interest in the Loans or other
obligations under this Agreement (the “Participant Register”). 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. No Lender shall have any obligation
to disclose all or any portion of the Participant Register to any Person
(including the identity of any Participant or any information relating to a
Participant’s interest in any commitments, loans, letters of credit or its other
obligations under any Credit Document) except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations, Section 1.163-5 of the proposed United States Treasury
Regulations or any applicable temporary, final or other successor regulations.

(d) Any Lender may, without the consent of the Borrower or the Administrative
Agent, at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank or any
central bank having jurisdiction over such Lender, and this Section 13.6 shall
not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto. In order to facilitate such pledge or assignment
or for any other reason, the Borrower hereby agrees that, upon request of any
Lender at any time and from time to time after the Borrower has made its initial
borrowing hereunder, the Borrower shall provide to such Lender, at the
Borrower’s own expense, a promissory note, substantially in the form of Exhibit
H evidencing the Loans owing to such Lender.

 

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(e) Subject to Section 13.16, the Borrower authorizes each Lender to disclose to
any Participant, secured creditor of such Lender or assignee (each, a
“Transferee”) and any prospective Transferee any and all financial information
in such Lender’s possession concerning the Borrower and its Affiliates that has
been delivered to such Lender by or on behalf of the Borrower and its Affiliates
pursuant to this Agreement or that has been delivered to such Lender by or on
behalf of the Borrower and its Affiliates in connection with such Lender’s
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement.

(f) The words “execution,” “signed,” “signature,” and words of like import in
any Assignment and Assumption shall be deemed to include electronic signatures
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.

13.7 Replacements of Lenders under Certain Circumstances.

(a) The Borrower shall be permitted to replace any Lender that (i) requests
reimbursement for amounts owing pursuant to Sections 2.10, or 5.4, (ii) is
affected in the manner described in Section 2.17(b) and as a result thereof any
of the actions described in such Section is required to be taken or
(iii) becomes a Defaulting Lender, with a replacement bank, lending institution
or other financial institution; provided that (A) such replacement does not
conflict with any Requirement of Law, (B) no Event of Default under Section 11.1
or 11.5 shall have occurred and be continuing at the time of such replacement,
(C) the replacement bank or institution shall purchase, at par, all Loans and
the Borrower shall pay all other amounts (other than any disputed amounts),
pursuant to Section 2.10, or 5.4, as the case may be) owing to such replaced
Lender prior to the date of replacement, (D) the replacement bank or
institution, if not already a Lender, and the terms and conditions of such
replacement, shall be reasonably satisfactory to the Administrative Agent (and
if a Commitment is being assigned, the Letter of Credit Issuer), (E) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 13.6(b) (provided that the Borrower shall be obligated
to pay the registration and processing fee referred to therein) and (F) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.

(b) If any Lender (such Lender, a “Non-Consenting Lender”) (i) has failed to
consent to a proposed amendment, waiver, discharge or termination that pursuant
to the terms of Section 13.1 requires the consent of all of the Lenders affected
or the Required Lenders and with respect to which the Majority Lenders shall
have granted their consent, or (ii) does not consent to a proposed increase of
the Borrowing Base with respect to which the Super-Majority Lenders shall have
granted their consent, then provided no Event of Default then exists, the
Borrower shall have the right (unless such Non-Consenting Lender grants such
consent), to replace such Non-Consenting Lender by requiring such Non-Consenting
Lender to assign its Loans and its Commitments hereunder to one or more
assignees reasonably acceptable to the Administrative Agent (and if a Commitment
is being assigned, the Letter of Credit Issuer); provided that:    (i) all
Obligations of the Borrower owing to such Non-Consenting Lender being replaced
(other than principal and interest) shall be paid in full to such Non-Consenting
Lender concurrently with such assignment, and (ii) the replacement Lender shall
purchase the foregoing by paying to such Non-Consenting Lender a price equal to
the principal amount thereof plus accrued and unpaid interest thereon. In
connection with any such assignment, the Borrower, Administrative Agent, such
Non-Consenting Lender and the replacement Lender shall otherwise comply with
Section 13.6.

 

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(c) Notwithstanding anything herein to the contrary, each party hereto agrees
that any assignment pursuant to the terms of this Section 13.7 may be effected
pursuant to an Assignment and Assumption executed by the Borrower, the
Administrative Agent and the assignee and that the Lender making such assignment
need not be a party thereto.

13.8 Adjustments; Set-off.

(a) If any Lender (a “benefited Lender”) shall at any time receive any payment
in respect of any principal of or interest on all or part of the Loans made by
it, or the participations in Letter of Credit Obligations held by it, or receive
any collateral in respect thereof (whether voluntarily or involuntarily, by
set-off, pursuant to events or proceedings of the nature referred to in
Section 11.5, or otherwise), in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such other
Lender’s Loans, or interest thereon, such benefited Lender shall (i) notify the
Administrative Agent of such fact, and (ii) purchase for cash at face value from
the other Lenders a participating interest in such portion of each such other
Lender’s Loans, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably in accordance with the aggregate principal of and accrued
interest on their respective Loans and other amounts owing them; provided,
however, that, (A) if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest and (B) the provisions of this paragraph shall
not be construed to apply to (1) any payment made by the Borrower or any other
Credit Party pursuant to and in accordance with the express terms of this
Agreement and the other Credit Documents, (2) any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its
Loans, Commitments or participations in Drawings to any assignee or participant
or (3) any disproportionate payment obtained by a Lender as a result of the
extension by Lenders of the maturity date or expiration date of some but not all
Loans or Commitments or any increase in the Applicable Margin in respect of
Loans or Commitments of Lenders that have consented to any such extension. Each
Credit Party consents to the foregoing and agrees, to the extent it may
effectively do so under Requirements of Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Credit Party rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Credit
Party in the amount of such participation.

(b) After the occurrence and during the continuance of an Event of Default, in
addition to any rights and remedies of the Lenders provided by Requirements of
Law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable Requirements of Law, upon any amount becoming due and payable by the
Borrower hereunder or under any Credit Document (whether at the stated maturity,
by acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower (and the Credit Parties, if applicable)
and the Administrative Agent after any such set-off and application made by such
Lender; provided that the failure to give such notice shall not affect the
validity of such set-off and application.

13.9 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
or other electronic transmission, i.e. a “pdf” or a “tif”), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.

 

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13.10 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

13.11 INTEGRATION. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS REPRESENT THE
AGREEMENT OF THE BORROWER, THE GUARANTORS, THE ADMINISTRATIVE AGENT AND THE
LENDERS WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF, AND THERE ARE NO
PROMISES, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES BY THE BORROWER, THE
GUARANTORS, THE ADMINISTRATIVE AGENT NOR ANY LENDER RELATIVE TO SUBJECT MATTER
HEREOF NOT EXPRESSLY SET FORTH OR REFERRED TO HEREIN OR IN THE OTHER CREDIT
DOCUMENTS.

13.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

13.13 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably
and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Credit Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the non-exclusive general jurisdiction of the courts of the State of New York,
the courts of the United States of America for the Southern District of New York
and appellate courts from any thereof;

(b) consents that any such action or proceeding shall be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address set forth on Schedule 13.2 at such other address of which the
Administrative Agent shall have been notified pursuant to Section 13.2;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by Requirements of Law or shall limit the
right to sue in any other jurisdiction;

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 13.13 any special, exemplary, punitive or consequential damages; and

(f) agrees that a final judgment in any 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.

 

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13.14 Acknowledgments. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Credit Documents;

(b) (i) the credit facilities 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 Credit Document)
are an arm’s-length commercial transaction between the Borrower and the other
Credit Parties, on the one hand, and the Administrative Agent and the Lenders,
on the other hand, and the Borrower and the other Credit Parties are capable of
evaluating and understanding and understand and accept the terms, risks and
conditions of the transactions contemplated hereby and by the other Credit
Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, each
of the Administrative Agent and the Lenders is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary for any of the
Borrower, any other Credit Parties or any of their respective Affiliates, equity
holders, creditors or employees or any other Person; (iii) neither the
Administrative Agent, the Bookrunner, any Joint Lead Arranger, nor any Lender
has assumed or will assume an advisory, agency or fiduciary responsibility in
favor of the Borrower or any other Credit Party 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
Credit Document (irrespective of whether the Administrative Agent, the
Bookrunner, any Joint Lead Arranger or any Lender has advised or is currently
advising any of the Borrower, the other Credit Parties or their respective
Affiliates on other matters) and none of the Administrative Agent, the
Bookrunner, any Joint Lead Arranger or any Lender has any obligation to any of
the Borrower, the other Credit Parties or their respective Affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Credit Documents; (iv) the
Administrative Agent and its Affiliates and each Lender and its Affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of the Borrower and its respective Affiliates, and none of the
Administrative Agent or any Lender has any obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship; and
(v) neither the Administrative Agent nor any Lender has provided and none will
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 Credit 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 with respect to any breach or alleged breach of agency or
fiduciary duty; and

(c) no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower, on the one hand, and any Lender, on the other
hand.

13.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, EACH LETTER
OF CREDIT ISSUER AND EACH LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

13.16 Confidentiality. The Administrative Agent, each other Agent, each Letter
of Credit Issuer and each other Lender shall hold all non-public information
furnished by or on behalf of the Borrower or any of its Subsidiaries in
connection with such Lender’s evaluation of whether to become a Lender hereunder
or obtained by such Lender, the Administrative Agent, any Letter of Credit
Issuer or

 

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such other Agent pursuant to the requirements of this Agreement (“Confidential
Information”), confidential in accordance with its customary procedure for
handling confidential information of this nature and in any event may make
disclosure (a) as required or requested by any Governmental Authority,
self-regulatory agency or representative thereof or pursuant to legal process or
applicable Requirements of Law, (b) to such Lender’s or the Administrative
Agent’s, any Letter of Credit Issuer’s or such other Agent’s attorneys,
professional advisors, independent auditors, trustees or Affiliates, in each
case who need to know such information in connection with the administration of
the Credit Documents and are informed of the confidential nature of such
information, (c) to an investor or prospective investor in a securitization that
agrees its access to information regarding the Credit Parties, the Loans and the
Credit Documents is solely for purposes of evaluating an investment in a
securitization and who agrees to treat such information as confidential, (d) to
a trustee, collateral manager, servicer, backup servicer, noteholder or secured
party in connection with the administration, servicing and reporting on the
assets serving as collateral for a securitization and who agrees to treat such
information as confidential, (e) to a nationally recognized ratings agency that
requires access to information regarding the Credit Parties, the Loans and
Credit Documents in connection with ratings issued with respect to a
securitization and (f) with the consent of the Borrower; provided that unless
specifically prohibited by applicable Requirements of Law, each Lender, the
Administrative Agent, each Letter of Credit Issuer and each other Agent shall
endeavor to notify the Borrower (without any liability for a failure to so
notify the Borrower) of any request made to such Lender, the Administrative
Agent, any Letter of Credit Issuer or such other Agent, as applicable, by any
governmental, regulatory or self-regulatory agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information; provided further
that in no event shall any Lender, the Administrative Agent, any Letter of
Credit Issuer or any other Agent be obligated or required to return any
materials furnished by the Borrower or any Subsidiary. In addition, each Lender,
the Administrative Agent and each other Agent may provide Confidential
Information to prospective Transferees or to any pledgee referred to in
Section 13.6 or to prospective direct or indirect contractual counterparties in
Hedge Agreements to be entered into in connection with Loans made hereunder as
long as such Person is advised of and agrees to be bound by the provisions of
this Section 13.16 or confidentiality provisions at least as restrictive as
those set forth in the Section 13.16.

13.17 Release of Collateral and Guarantee Obligations.

(a) The Lenders hereby irrevocably agree that the Liens granted to the
Administrative Agent by the Credit Parties on any Collateral shall be
automatically released (i) in full, as set forth in clauses (b) or (c) below,
(ii) upon the Disposition of such Collateral (including as part of or in
connection with any other Disposition permitted hereunder) to any Person other
than another Credit Party, to the extent such Disposition is made in compliance
with the terms of this Agreement (and the Administrative Agent may rely
conclusively on a certificate to that effect provided to it by any Credit Party
upon its reasonable request without further inquiry), (iii) to the extent such
Collateral is comprised of property leased to a Credit Party, upon termination
or expiration of such lease, (iv) if the release of such Lien is approved,
authorized or ratified in writing by the Majority Lenders (or such other
percentage of the Lenders whose consent may be required in accordance with
Section 13.1), (v) to the extent the property constituting such Collateral is
owned by any Guarantor, upon the release of such Guarantor from its obligations
under the Guarantee (in accordance with the second succeeding sentence and
Section 5.14(b) of the Guarantee) and (vi) as required by the Administrative
Agent to effect any Disposition of Collateral in connection with any exercise of
remedies of the Administrative Agent pursuant to the Security Documents. Any
such release shall not in any manner discharge, affect, or impair the
Obligations or any Liens (other than those being released) upon (or obligations
(other than those being released) of the Credit Parties in respect of) all
interests retained by the Credit Parties, including the proceeds of any
Disposition, all of which shall continue to constitute part of the Collateral
except to the extent otherwise released in accordance with the

 

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provisions of the Credit Documents. Additionally, the Lenders hereby irrevocably
agree that the Guarantors shall be released from the Guarantees upon
consummation of any transaction permitted hereunder resulting in such Subsidiary
ceasing to constitute a Restricted Subsidiary or otherwise becoming an Excluded
Subsidiary. The Lenders hereby authorize the Administrative Agent to execute and
deliver any instruments, documents, and agreements necessary or desirable to
evidence and confirm the release of any Guarantor or Collateral pursuant to the
foregoing provisions of this paragraph, all without the further consent or
joinder of any Lender. Any representation, warranty or covenant contained in any
Credit Document relating to any such Collateral or Guarantor shall no longer be
deemed to be repeated.

(b) Notwithstanding anything to the contrary contained herein or in any other
Credit Document, when all Obligations (other than (i) Hedging Obligations in
respect of any Secured Hedge Agreements, (ii) Cash Management Obligations in
respect of any Secured Cash Management Agreements and (iii) any contingent or
indemnification obligations not then due) have been paid in full, all
Commitments have terminated or expired and no Letter of Credit shall be
outstanding that is not Cash Collateralized or back-stopped, upon request of the
Borrower, the Administrative Agent shall (without notice to, or vote or consent
of, any Secured Party) take such actions as shall be required to release its
security interest in all Collateral, and to release all obligations under any
Credit Document, whether or not on the date of such release there may be any
(i) Hedging Obligations in respect of any Secured Hedge Agreements, (ii) Cash
Management Obligations in respect of any Secured Cash Management Agreements and
(iii) any contingent or indemnification obligations not then due. Any such
release of Obligations shall be deemed subject to the provision that such
Obligations shall be reinstated if after such release any portion of any payment
in respect of the Obligations guaranteed thereby shall be rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payment had not been
made.

(c) Notwithstanding anything to the contrary contained herein or any other
Credit Document, upon the Borrower’s election to enter into an Investment Grade
Period pursuant to Section 13.23(a) and delivery of the written notice
contemplated therein, the Administrative Agent shall (without notice to, or vote
or consent of, any Secured Party) take such actions as shall be required to
release its security interest in all Collateral (including, without limitation,
the filing of record of mortgage releases and UCC termination statements), and
to release all obligations under any Security Document, in each case, within 60
days of the receipt by the Administrative Agent of such notice.

13.18 USA PATRIOT Act. The Administrative Agent and each Lender hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is
required to obtain, verify and record information that identifies each Credit
Party, which information includes the name and address of each Credit Party and
other information that will allow the Administrative Agent and such Lender to
identify each Credit Party in accordance with the Patriot Act.

13.19 Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent 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
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred,

 

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and (b) each Lender severally agrees to pay to the Administrative Agent upon
demand its applicable share 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 applicable Overnight
Rate from time to time in effect.

13.20 Reinstatement. This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any other Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower, or upon
or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, the Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.

13.21 Disposition of Proceeds. The Security Documents contain an assignment by
the Borrower and/or the Guarantors unto and in favor of the Administrative Agent
for the benefit of the Lenders of all of the Borrower’s or each Guarantor’s
interest in and to their as-extracted collateral in the form of production and
all proceeds attributable thereto which may be produced from or allocated to the
Mortgaged Property. The Security Documents further provide in general for the
application of such proceeds to the satisfaction of the Obligations described
therein and secured thereby. Notwithstanding the assignment contained in such
Security Documents, until the occurrence of an Event of Default, (a) the
Administrative Agent and the Lenders agree that they will neither notify the
purchaser or purchasers of such production nor take any other action to cause
such proceeds to be remitted to the Administrative Agent or the Lenders, but the
Lenders will instead permit such proceeds to be paid to the Borrower and its
Subsidiaries and (b) the Lenders hereby authorize the Administrative Agent to
take such actions as may be necessary to cause such proceeds to be paid to the
Borrower and/or such Subsidiaries.

13.22 Collateral Matters; Hedge Agreements. The benefit of the Security
Documents and of the provisions of this Agreement relating to any Collateral
securing the Obligations shall also extend to and be available on a pro rata
basis to any Person (a) under any Secured Hedge Agreement, in each case, after
giving effect to all netting arrangements relating to such Hedge Agreements or
(b) under any Secured Cash Management Agreement; provided that, with respect to
any Secured Hedge Agreement or Secured Cash Management Agreement that remains
secured after the Hedge Bank thereto or the Cash Management Bank thereunder is
no longer a Lender or an Affiliate of a Lender, the provisions of Section 12
shall also continue to apply to such Hedge Bank or Cash Management Bank in
consideration of its benefits hereunder and each such Hedge Bank or Cash
Management Bank, as applicable, shall, if requested by the Administrative Agent,
promptly execute and deliver to the Administrative Agent all such other
documents, agreements and instruments reasonably requested by the Administrative
Agent to evidence the continued applicability of the provisions of Section 12.
No Person shall have any voting rights under any Credit Document solely as a
result of the existence of obligations owed to it under any such Secured Hedge
Agreement or Secured Cash Management Agreement.

13.23 Investment Grade Election.

(a) At any time that is not an Investment Grade Period, on any date on which the
Borrower has either (i) a Rating from Moody’s of Baa3 or better or (ii) a Rating
from S&P of BBB- or better, the Borrower may provide written notice to the
Administrative Agent of its election to enter into an Investment Grade Period,
together with a certificate of an Authorized Officer of the Borrower confirming
that (A) no Event of Default exists, (B) the release of the Security Documents
securing the Obligations does not violate the terms of any Secured Hedge
Agreement or Secured Cash Management Agreement, and (C) the Hedge Agreements
(including the Secured Hedge Agreements) and the Cash Management Agreements
(including any Secured Cash Management Agreements) of the Borrower and its
Restricted Subsidiaries are not otherwise secured (except to the extent secured
by a Permitted Lien), which Investment Grade Period will commence upon the
Administrative Agent’s receipt of such notice.

 

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(b) At any time during an Investment Grade Period, the Borrower may provide
notice to the Administrative Agent of its election to exit such Investment Grade
Period, which Investment Grade Period will end upon the Administrative Agent’s
receipt of such notice.

13.24 Existing Credit Agreement. On the Closing Date, this Agreement shall
supersede and replace in its entirety the Existing Credit Agreement; provided,
however, that (a) all loans, Existing Letters of Credit, and other indebtedness,
obligations and liabilities outstanding under the Existing Credit Agreement on
such date shall continue to constitute Loans, Letters of Credit and other
indebtedness, obligations and liabilities under this Agreement, (b) the
execution and delivery of this Agreement or any of the Credit Documents
hereunder shall not constitute a novation, refinancing or any other fundamental
change in the relationship among the parties and (c) the Loans, Letters of
Credit, and other indebtedness, obligations and liabilities outstanding
hereunder, to the extent outstanding under the Existing Credit Agreement
immediately prior to the date hereof, shall constitute the same loans, letters
of credit, and other indebtedness, obligations and liabilities as were
outstanding under the Existing Credit Agreement.

13.25 Reaffirmation and Grant of Security Interest. Each Credit Party hereby
(a) confirms that each Security Document (as defined in the Existing Credit
Agreement) to which it is a party or is otherwise bound and all Collateral
encumbered thereby, will continue to guarantee or secure, as the case may be, to
the fullest extent possible in accordance with the Credit Documents, the payment
and performance of all Obligations under this Agreement and the Secured
Indebtedness (as such term is defined in the Security Documents) under the
Security Documents, as the case may be, including without limitation the payment
and performance of all such Obligations under this Agreement and the Secured
Indebtedness under the Security Documents, and (b) reaffirms its grant to the
Administrative Agent for the benefit of the Secured Parties of a continuing Lien
on and security interest in and to such Credit Party’s right, title and interest
in, to and under all Collateral as collateral security for the prompt payment
and performance in full when due of the Obligations under this Agreement and the
Secured Indebtedness under the Security Documents (whether at stated maturity,
by acceleration or otherwise) in accordance with the terms thereof.

13.26 Reallocation of Commitments and Loans. The Lenders (including the
Departing Lenders) party to the Existing Credit Agreement have agreed among
themselves to reallocate their respective Commitments (as defined in the
Existing Credit Agreement) as contemplated by this Agreement. On the Closing
Date and after giving effect to such reallocation and adjustment of the Total
Commitment, the Commitment and Applicable Percentage of each Lender shall be as
set forth on Schedule 1.1(a) and each Lender shall own its Applicable Percentage
of the outstanding Loans. The reallocation and adjustment to the Commitments of
each Lender as contemplated by this Section 13.26 shall be deemed to have been
consummated pursuant to the terms of the Assignment and Assumption attached as
Exhibit G hereto as if each of the Lenders had executed an Assignment and
Assumption with respect to such reallocation and adjustment. The Borrower and
the Administrative Agent hereby consent to such reallocation and adjustment of
the Commitments. The Administrative Agent hereby waives the $3,500 processing
and recordation fee set forth in Section 13.6(b)(ii)(C) with respect to the
assignments and reallocations of the Commitments contemplated by this
Section 13.26. To the extent requested by any Lender, and in accordance with
Section 2.11, the Borrower shall pay to such Lender, within the time period
prescribed by Section 2.11, any amounts required to be paid by the Borrower
under Section 2.11 in the event the payment of any principal of any LIBOR Loan
or the conversion of any LIBOR Loan other than on the last day of an Interest
Period applicable thereto is required in connection with the reallocation
contemplated by this Section 13.26. After giving effect to this Section 13.26,
as of the Closing Date, each Departing Lender shall cease to be a Lender under
this Agreement or have any rights or obligations hereunder (except with respect
to any indemnification obligations of the Borrower and the other Credit Parties
and any other provisions which by their terms expressly survive repayment of the
Loans and the termination of the Credit Documents).

 

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13.27 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Credit Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Credit Document may be subject to the Write-Down and Conversion Powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if
applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent entity,
or a bridge institution that may be issued to it or otherwise conferred on it,
and that such shares or other instruments of ownership will be accepted by it in
lieu of any rights with respect to any such liability under this Agreement or
any other Credit Document; or

(iii) the variation of the terms of such liability in connection with the
exercise of the Write-Down and Conversion Powers of any EEA Resolution
Authority.

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.

 

RANGE RESOURCES CORPORATION,

    as the Borrower

By:  

/s/ Mark Scucchi

 

Name: Mark Scucchi

Title: Vice President – Finance and Treasurer

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, a Letter of Credit Issuer and a Lender

 

By:  

/s/ David Morris

 

Name: David Morris

Title: Authorized Officer

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

BANK OF AMERICA, N.A.,

as a Letter of Credit Issuer and a Lender

 

By:  

/s/ Ronald E. McKaig

 

Name: Ronald E. McKaig

Title: Managing Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

ROYAL BANK OF CANADA,

    as a Letter of Credit Issuer and a Lender

 

By:  

/s/ Kristan Spivey

 

Name: Kristan Spivey

Title: Authorized Signatory

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

BANK OF MONTREAL,

    as a Lender

 

By:  

/s/ James V. Ducote

 

Name: James V. Ducote

Title: Managing Director

 

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

CAPITAL ONE, NATIONAL ASSOCIATION,

    as a Lender

 

By:  

/s/ Christopher Kuna

 

Name: Christopher Kuna

Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH,

as a Lender

 

By:  

/s/ Trudy Nelson

 

Name: Trudy Nelson

Title: Authorized Signatory

By:  

/s/ Donovan C. Broussard

 

Name: Donovan C. Broussard

Title: Authorized Signatory

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

CITIBANK, N.A.,

as a Lender

 

By:  

/s/ Phil Ballard

 

Name: Phil Ballard

Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

CREDIT AGRICOLE CORPORATE AND

INVESTMENT BANK,

as a Lender

 

By:  

/s/ Michael Willis

 

Name: Michael Willis

Title: Managing Director

By:  

/s/ Dixon Schultz

 

Name: Dixon Schultz

Title: Managing Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

MUFG UNION BANK, N.A

as a Lender

 

By:  

/s/ Traci Bankston

 

Name: Traci Bankston

Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

U.S. BANK NATIONAL ASSOCIATION,

as a Lender

 

By:  

/s/ Mark E. Thompson

 

Name: Mark E. Thompson

Title: Senior Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as a Lender

 

By:  

/s/ Brandon Kast

 

Name: Brandon Kast

Title: Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

NATIXIS, NEW YORK BRANCH,

as a Lender

 

By:  

/s/ Leila Zomorrodian

 

Name: Leila Zomorrodian

Title: Director

By:  

/s/ Timothy Polvado

 

Name: Timothy Polvado

Title: Managing Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

SOCIÉTÉ GÉNÉRALE,

as a Lender

 

By:

 

/s/ Max Sonnonstine

 

Name: Max Sonnonstine

Title: Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

ABN AMRO CAPITAL USA LLC ,

    AS A LENDER

 

By:  

/s/ David Montgomery

 

Name: David Montgomery

Title: Managing Director

By:  

/s/ Darrel Holley

 

Name: Darrel Holley

Title: Managing Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

BARCLAYS BANK PLC,

as a Lender

 

By:  

/s/ Sydney G. Dennis

 

Name: Sydney G. Dennis

Title: Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

COMPASS BANK,

as a Lender

 

By:  

/s/ Gabriela Azcarate

Name: Gabriela Azcarate

Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as a Lender

 

By:  

/s/ Nupur Kumar

 

Name: Nupur Kumar

Title: Authorized Signatory

By:  

/s/ Sophie Bulliard

 

Name: Sophie Bulliard

Title: Authorized Signatory

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as a Lender

 

By:  

/s/ Juan J. Mejia

 

Name: Juan J. Mejia

Title: Director

By:  

/s/ Robert Altman

 

Name: Robert Altman

Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

KEYBANK NATIONAL ASSOCIATION,

as a Lender

 

By:  

/s/ David M. Bornstein

 

Name: David M. Bornstein

Title: Senior Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

PNC BANK, NATIONAL ASSOCIATION,

    AS A LENDER

 

By:  

/s/ Jonathan Luchansky

Name: Jonathan Luchansky

Title: Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

SUNTRUST BANK,

    as a Lender

By:  

/s/ Yann Pirio

Name: Yann Pirio

Title: Managing Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

ZB, N.A. DBA AMEGY BANK,

as a Lender

 

By:  

/s/ Matt Lang

Name: Matt Lang

Title: Vice President – Amegy Bank Division

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

BOKF, NA DBA BANK OF TEXAS,

    as a Lender

By:  

/s/ Scott Miller

  Name: Scott Miller   Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

BRANCH BANKING AND TRUST COMPANY,

    as a Lender

By:  

/s/ Kelly Granam

  Name: Kelly Granam   Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

COMERICA BANK,

    as a Lender

By:  

/s/ Jeffrey M. LaBauve

  Name: Jeffrey M. LaBauve   Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

COMMONWEALTH BANK OF AUSTRALIA,

    as a Lender

By:  

/s/ David Pichut

  Name: David Pichut   Title: Senior Associate

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

THE BANK OF NOVA SCOTIA, HOUSTON BRANCH,

    as a Lender

By:  

/s/ Alan Dawson

  Name: Alan Dawson   Title: Director

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

FROST BANK,

    as a Departing Lender

By:  

/s/ Philip Mortimer

  Name: Philip Mortimer   Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement

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

SANTANDER BANK N.A.,

    as a Departing Lender

By:  

/s/ Mark Connelly

  Name: Mark Connelly   Title: Senior Vice President By:  

/s/ Puiki Lok

  Name: Puiki Lok   Title: Vice President

 

Signature Page

Range Resources Corporation

Sixth Amended and Restated Credit Agreement