Exhibit 10.1

 

Execution Version

 

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of November 25, 2014

 

Among

 

TRIANGLE USA PETROLEUM CORPORATION
as Borrower,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Administrative Agent and Issuing Lender,

 

and

 

THE LENDERS NAMED HEREIN

as Lenders

 

$1,000,000,000

 

 

WELLS FARGO SECURITIES, LLC

AS ARRANGER AND SOLE BOOKRUNNER

 

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ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS

1

 

 

 

Section 1.1

Certain Defined Terms

1

 

 

 

Section 1.2

Computation of Time Periods

22

 

 

 

Section 1.3

Accounting Terms; Changes in GAAP

23

 

 

 

Section 1.4

Types of Advances

23

 

 

 

Section 1.5

Miscellaneous

23

 

 

 

ARTICLE 2

CREDIT FACILITIES

23

 

 

 

Section 2.1

Commitment for Advances

23

 

 

 

Section 2.2

Borrowing Base

24

 

 

 

Section 2.3

Letters of Credit

27

 

 

 

Section 2.4

Advances

32

 

 

 

Section 2.5

Prepayments

34

 

 

 

Section 2.6

Repayment

37

 

 

 

Section 2.7

Fees

37

 

 

 

Section 2.8

Interest

37

 

 

 

Section 2.9

Illegality

38

 

 

 

Section 2.10

Breakage Costs

38

 

 

 

Section 2.11

Increased Costs

39

 

 

 

Section 2.12

Payments and Computations

40

 

 

 

Section 2.13

Taxes

41

 

 

 

Section 2.14

Mitigation Obligations; Replacement of Lenders

45

 

 

 

Section 2.15

Cash Collateral

46

 

 

 

Section 2.16

Defaulting Lenders

47

 

 

 

ARTICLE 3

CONDITIONS OF LENDING

49

 

 

 

Section 3.1

Conditions Precedent to Initial Borrowing

49

 

 

 

Section 3.2

Conditions Precedent to Each Borrowing and to Each Issuance, Extension or
Renewal of a Letter of Credit

52

 

 

 

Section 3.3

Determinations Under Sections 3

53

 

 

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

53

 

 

 

Section 4.1

Organization

53

 

 

 

Section 4.2

Authorization

53

 

 

 

Section 4.3

Enforceability

53

 

 

 

Section 4.4

Financial Condition

54

 

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Section 4.5

Title; Ownership and Liens; Real Property

54

 

 

 

Section 4.6

True and Complete Disclosure

54

 

 

 

Section 4.7

Litigation

54

 

 

 

Section 4.8

Compliance with Agreements

54

 

 

 

Section 4.9

Pension Plans

55

 

 

 

Section 4.10

Environmental Condition

55

 

 

 

Section 4.11

Subsidiaries

56

 

 

 

Section 4.12

Investment Company Act

56

 

 

 

Section 4.13

Taxes

56

 

 

 

Section 4.14

Permits, Licenses, Etc.

56

 

 

 

Section 4.15

Use of Proceeds

57

 

 

 

Section 4.16

Condition of Property; Casualties

57

 

 

 

Section 4.17

Insurance

57

 

 

 

Section 4.18

Security Interest

57

 

 

 

Section 4.19

OFAC; Anti-Terrorism

57

 

 

 

Section 4.20

Solvency

57

 

 

 

Section 4.21

Gas Contracts

57

 

 

 

Section 4.22

Liens, Leases, Etc.

58

 

 

 

Section 4.23

Hedging Agreements

58

 

 

 

Section 4.24

Material Agreements

58

 

 

 

ARTICLE 5

AFFIRMATIVE COVENANTS

58

 

 

 

Section 5.1

Organization

59

 

 

 

Section 5.2

Reporting

59

 

 

 

Section 5.3

Insurance

62

 

 

 

Section 5.4

Compliance with Laws

63

 

 

 

Section 5.5

Taxes

63

 

 

 

Section 5.6

New Subsidiaries

64

 

 

 

Section 5.7

Agreement to Pledge; Security

64

 

 

 

Section 5.8

Deposit Accounts

64

 

 

 

Section 5.9

Records; Inspection

64

 

 

 

Section 5.10

Maintenance of Property

64

 

 

 

Section 5.11

Title Evidence and Opinions

64

 

 

 

Section 5.12

Further Assurances; Cure of Title Defects

65

 

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Section 5.13

Leases; Development and Maintenance

65

 

 

 

ARTICLE 6

NEGATIVE COVENANTS

66

 

 

 

Section 6.1

Debt

66

 

 

 

Section 6.2

Liens

67

 

 

 

Section 6.3

Investments

68

 

 

 

Section 6.4

Acquisitions

69

 

 

 

Section 6.5

Agreements Restricting Liens

69

 

 

 

Section 6.6

Use of Proceeds; Use of Letters of Credit

69

 

 

 

Section 6.7

Corporate Actions; Accounting Changes

69

 

 

 

Section 6.8

Sale of Assets

69

 

 

 

Section 6.9

Restricted Payments

70

 

 

 

Section 6.10

Affiliate Transactions

71

 

 

 

Section 6.11

Line of Business

71

 

 

 

Section 6.12

Hazardous Materials

71

 

 

 

Section 6.13

Compliance with ERISA

71

 

 

 

Section 6.14

Sale and Leaseback Transactions

72

 

 

 

Section 6.15

Limitation on Hedging

72

 

 

 

Section 6.16

Leverage Ratio

74

 

 

 

Section 6.17

Current Ratio

74

 

 

 

Section 6.18

Operating Leases

74

 

 

 

Section 6.19

Prepayment of Certain Debt and Other Obligations

74

 

 

 

Section 6.20

Gas Imbalances, Take-or-Pay or Other Prepayments

75

 

 

 

ARTICLE 7

DEFAULT AND REMEDIES

75

 

 

 

Section 7.1

Events of Default

75

 

 

 

Section 7.2

Optional Acceleration of Maturity

77

 

 

 

Section 7.3

Automatic Acceleration of Maturity

77

 

 

 

Section 7.4

Set-off

78

 

 

 

Section 7.5

Remedies Cumulative, No Waiver

78

 

 

 

Section 7.6

Application of Payments

78

 

 

 

ARTICLE 8

THE ADMINISTRATIVE AGENT

79

 

 

 

Section 8.1

Appointment, Powers, and Immunities

79

 

 

 

Section 8.2

Rights as a Lender

80

 

 

 

Section 8.3

Exculpatory Provisions

80

 

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Section 8.4

Reliance by Administrative Agent

81

 

 

 

Section 8.5

Delegation of Duties

81

 

 

 

Section 8.6

Resignation of Administrative Agent

81

 

 

 

Section 8.7

Non-Reliance on Administrative Agent and Other Lenders

82

 

 

 

Section 8.8

No Other Duties, etc.

82

 

 

 

Section 8.9

Administrative Agent May File Proofs of Claim

82

 

 

 

Section 8.10

Collateral and Guaranty Matters

83

 

 

 

ARTICLE 9

MISCELLANEOUS

84

 

 

 

Section 9.1

Costs and Expenses

84

 

 

 

Section 9.2

Indemnification; Waiver of Damages

84

 

 

 

Section 9.3

Waivers and Amendments

86

 

 

 

Section 9.4

Severability

86

 

 

 

Section 9.5

Survival of Representations and Obligations

86

 

 

 

Section 9.6

Binding Effect

87

 

 

 

Section 9.7

Successors and Assigns

87

 

 

 

Section 9.8

Confidentiality

90

 

 

 

Section 9.9

Notices, Etc.

91

 

 

 

Section 9.10

Usury Not Intended

91

 

 

 

Section 9.11

Usury Recapture

92

 

 

 

Section 9.12

Governing Law; Service of Process

92

 

 

 

Section 9.13

Submission to Jurisdiction

93

 

 

 

Section 9.14

Execution in Counterparts; Effectiveness; Electronic Execution

93

 

 

 

Section 9.15

Waiver of Jury Trial

93

 

 

 

Section 9.16

USA Patriot Act

94

 

 

 

Section 9.17

Enduring Security

94

 

 

 

Section 9.18

Keepwell

94

 

 

 

Section 9.19

No Advisory or Fiduciary Responsibility

94

 

 

 

Section 9.20

Amendment and Restatement

95

 

 

 

Section 9.21

Confirmation of Flood Policies and Procedures

95

 

 

 

Section 9.22

Cashless Settlement

95

 

 

 

Section 9.23

Integration

95

 

iv

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EXHIBITS:

 

Exhibit A

— Form of Assignment and Assumption

Exhibit B

— Reserved

Exhibit C

— Form of Compliance Certificate

Exhibit D

— Form of Guaranty

Exhibit E

— Form of Notice of Borrowing

Exhibit F

— Form of Notice of Continuation or Conversion

Exhibit G

— Form of Pledge and Security Agreement

Exhibit H

— Form of Note

Exhibit I

— Form of Transfer Letter

Exhibit J

— Form of Pledge Agreement

 

SCHEDULES:

 

Schedule I

— Commitments, Contact Information

Schedule II

— Pricing Grid

Schedule II

— Additional Conditions and Requirements for New Subsidiaries

Schedule 4.1

— Organizational Information

Schedule 4.11

— Subsidiaries

Schedule 4.16

— Material Real Property

Schedule 4.23

— Hedging Agreements

Schedule 4.24

— Material Agreements

 

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SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

This SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 25, 2014
(the “Agreement”) is among Triangle USA Petroleum Corporation, a Colorado
corporation (the “Borrower”), the Lenders (as defined below) and Wells Fargo
Bank, National Association as Administrative Agent (as defined below) for the
Lenders and as Issuing Lender (as defined below).

 

RECITALS:

 

A.                                    Reference is made to the Amended and
Restated Credit Agreement dated as of April 11, 2013 among the Borrower, Wells
Fargo Bank, National Association, as administrative agent and issuing lender,
and the lenders party thereto, as amended by the Consent Agreement dated as of
June 28, 2013, the Amendment No. 1 to Amended and Restated Credit Agreement and
Master Assignment dated as of July 30, 2013, the Amendment No. 2 to Amended and
Restated Credit Agreement and Master Assignment dated as of October 16, 2013,
the Amendment No. 3 to Amended and Restated Credit Agreement dated as of
January 13, 2014, the Amendment No. 4 to Amended and Restated Credit Agreement
and Joinder Agreement dated as of May 9, 2014, the Amendment No. 5 to Amended
and Restated Credit Agreement and Joinder Agreement dated as of May 14, 2014,
and the Amendment No. 6 to Amended and Restated Credit Agreement dated as of
June 6, 2014 (as so amended, the “Existing Credit Agreement”).

 

B.                                    It is the intention of the parties hereto
that this Agreement is an amendment and restatement of the Existing Credit
Agreement and not a new or substitute credit agreement.

 

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

 

ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.1                                    Certain Defined Terms.  The
following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):

 

“Acceptable Letter of Credit Maturity Date” has the meaning assigned to it in
Section 2.3(a)(ii) of this Agreement.

 

“Acceptable Security Interest” means a security interest which (a) exists in
favor of the Administrative Agent for its benefit and the ratable benefit of the
Secured Parties, (b) is superior to all other security interests (other than the
Permitted Liens), (c) secures the Secured Obligations, (d) is enforceable
against the Credit Party which created such security interest and (e) is
perfected.

 

“Account Control Agreement” shall mean, as to any deposit account of any Credit
Party held with a bank, an agreement or agreements in form and substance
reasonably acceptable to the Administrative Agent, among the Credit Party owning
such deposit account, the Administrative Agent and such other bank governing
such deposit account.

 

“Acquisition” means the purchase by any Credit Party of any business, division
or enterprise, including the purchase of associated assets or operations or the
Equity Interests of a Person; provided that a merger or consolidation solely
among Credit Parties shall not constitute an Acquisition.

 

1

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“Adjusted Base Rate” means, for any day, the fluctuating rate per annum of
interest equal to the greatest of (a) the Prime Rate in effect on such day,
(b) the Federal Funds Rate in effect on such day plus one half of 1.00%, and
(c) a rate determined by the Administrative Agent to be the Daily One-Month
LIBOR plus 1.00%.  Any change in the Adjusted Base Rate due to a change in the
Prime Rate, Daily One-Month LIBOR or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate, Daily One-Month LIBOR or
the Federal Funds Rate.

 

“Administrative Agent” means Wells Fargo in its capacity as agent for the
Lenders pursuant to Article 8 and any successor agent pursuant to Section 8.7.

 

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

 

“Advance” means any advance by a Lender to the Borrower as a part of a
Borrowing.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person.  The
term “control” (including the terms “controlled by” or “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership, by contract, or otherwise.

 

“Agreement” means this Second Amended and Restated Credit Agreement among the
Borrower, the Lenders, the Issuing Lenders and the Administrative Agent.

 

“Applicable Margin” means, with respect to each Type of Advance and the Letters
of Credit, the percentage rate per annum set forth in the Pricing Grid based on
the relevant Utilization Level applicable from time to time.  The Applicable
Margin for any Advance or Letter of Credit shall change when and as the relevant
Utilization Level changes.

 

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

 

“Approved Transportation Agreement” means any transportation services agreement
as may be approved by the Required Lenders and designated as an Approved
Transportation Agreement in writing, together with such changes thereto as may
be approved by the Administrative Agent.

 

“Arranger” means Wells Fargo Securities, LLC.

 

“Asset Sale” means (a) any sale, lease, transfer, unwind, novation or other
disposition of any Property (including any working interest, overriding royalty
interest, production payments, net profits interest, royalty interest, mineral
fee interest, or Hedging Arrangement), by any Credit Party and (b) any issuance
or sale of any Equity Interests of any Subsidiary of the Borrower, in each case,
to any Person other than a Credit Party.

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 9.7), and accepted by the Administrative Agent, in
substantially the form of Exhibit A or any other form approved by the
Administrative Agent.

 

2

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“Availability” means, as of any date of determination, an amount equal to
(a) the lesser of the then effective Borrowing Base and the aggregate
Commitments minus (b) (i) the outstanding principal amount of all Advances plus
(ii) the Letter of Credit Exposure.

 

“Availability Period” means the period from the Closing Date until the Maturity
Date.

 

“Banking Services” means each and any of the following bank services provided to
any Credit Party by any Lender (other than a Defaulting Lender) or by any
Affiliate of a Lender (other than a Defaulting Lender): (a) commercial credit
cards, (b) purchase cards, (c) stored value cards and (d) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).

 

“Banking Services Obligations” means any and all obligations of the Borrower or
any other Credit Party, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.

 

“Banking Services Provider” means any Lender (other than a Defaulting Lender) or
Affiliate of a Lender (other than a Defaulting Lender) that provides Banking
Services to any Credit Party.

 

“Base Rate Advance” means an Advance which bears interest based upon the
Adjusted Base Rate.

 

“BB Deduction Amount” has the meaning set forth in Section 2.2(e).

 

“BB Value” means, (a) as to any Oil and Gas Property, the value, if any,
attributed to such Oil and Gas Property under the then effective Borrowing Base,
as determined by the Administrative Agent subject to the standards set forth in
Section 2.2(d), and (b) as to Hedging Arrangements, the net effect of such
Hedging Arrangements on the amount of the Borrowing Base, as determined by the
Administrative Agent.

 

“Borrower” means Triangle USA Petroleum Corporation, a Colorado corporation.

 

“Borrowing” means a borrowing consisting of simultaneous Advances of the same
Type made by the Lenders pursuant to Section 2.1(a) or Converted by each Lender
to Advances of a different Type pursuant to Section 2.4(b).

 

“Borrowing Base” means at any particular time, the Dollar amount determined in
accordance with Section 2.2 on account of Proven Reserves attributable to Oil
and Gas Properties of the Credit Parties described in the most recent
Independent Engineering Report or Internal Engineering Report, as applicable,
delivered to the Administrative Agent and the Lenders pursuant to Section 2.2.

 

“Borrowing Base Deficiency” means the excess, if any, of (a) the sum of the
outstanding principal amount of all Advances plus the Letter of Credit Exposure
over (b) the lesser of (i) aggregate amount of Commitments, and (ii) the
Borrowing Base then in effect.

 

“Business Day” means a day (a) other than a Saturday, Sunday, or other day on
which the Administrative Agent is authorized to close under the laws of, or is
in fact closed in, Denver, Colorado, and (b) if the applicable Business Day
relates to any Eurodollar Advances, on which dealings are carried on by
commercial banks in the London interbank market.

 

3

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“Caliber Agreements” means (a) the Amended and Restated Midstream Services
Agreement (Crude Oil) dated as of September 12, 2013 among Caliber North Dakota
LLC, a Delaware limited liability company and Borrower, (b) the Amended and
Restated Midstream Services Agreement dated as of September 12, 2013 among
Caliber North Dakota LLC, a Delaware limited liability company and Borrower and
(c) the Revenue Commitment Agreement dated as of September 12, 2013 among
Caliber North Dakota LLC, a Delaware limited liability company and Borrower, in
each case of clauses (a), (b) and (c) above, as in effect on the Closing Date or
as amended, restated or otherwise modified from time to time; provided that any
such amendment, restatement or modification that would increase the obligations
of the Credit Party subject to such agreement in any material respect must be
approved by the Required Lenders in writing.

 

“Capital Leases” means, for any Person, any lease of any Property by such Person
as lessee which would, in accordance with GAAP, be required to be classified and
accounted for as a capital lease on the balance sheet of such Person.

 

“Cash Collateral Account” means a cash collateral account pledged to the
Administrative Agent containing cash deposited pursuant to the terms hereof to
be maintained with the Administrative Agent in accordance with Section 2.3(h).

 

“Cash Collateralize” means, to deposit in a Cash Collateral Account or to pledge
and deposit with or deliver to the Administrative Agent, for the benefit of the
Issuing Lender or Lenders, as collateral for Letter of Credit Obligations or
obligations of Lenders to fund participations in respect of Letter of Credit
Obligations, cash or deposit account balances or, if the Administrative Agent
and the Issuing Lender shall agree in their sole discretion, other credit
support, in each case pursuant to documentation in form and substance
satisfactory to the Administrative Agent and the Issuing Lender.  “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include
the proceeds of such cash collateral and other credit support.

 

“Casualty Event” means the damage, destruction or condemnation, including by
process of eminent domain or any transfer or disposition of property in lieu of
condemnation, as the case may be, of property of any Person or any of its
Subsidiaries, including by process of eminent domain or any transfer or
disposition of property in lieu of condemnation.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.

 

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

 

“Change in Control” means the occurrence of any of the following events:

 

(a)                                 the Borrower ceases to directly or
indirectly own 100% of the Equity Interest in any Subsidiary other than as a
result of transaction permitted under Section 6.7;

 

(b)                                 the Parent ceases to directly or indirectly
own 100% of the Equity Interest in the Borrower free and clear of any Lien; or

 

(c)                                  any Person or group of related Persons
(other than NGP) shall have acquired beneficial ownership of more than 35% of
the outstanding voting shares of the Parent (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and
the applicable rules and regulations thereunder).

 

4

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

 

“Closing Date” means November 25, 2014.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereof.

 

“Collateral” means all property of the Credit Parties which is “Collateral” or
“Mortgaged Property” (as defined in each of the Mortgages or the Security
Agreement, as applicable) or similar terms used in the Security Documents.

 

“Commitment” means, for each Lender, the obligation of each Lender to advance to
Borrower the amount set opposite such Lender’s name on Schedule I as its
Commitment, or if such Lender has entered into any Assignment and Assumption,
set forth for such Lender as its Commitment in the Register, as such amount may
be reduced pursuant to Section 2.1(c)(i); provided that, after the Maturity
Date, the Commitment for each Lender shall be zero.  The initial aggregate
Commitment on the date hereof is $1,000,000,000.

 

“Commitment Fee Rate” means the per annum commitment fee rate set forth on the
Pricing Grid applicable from time to time.  The Commitment Fee Rate shall change
when and as the relevant Utilization Level changes.

 

“Commitment Fees” means the fees required under Section 2.7(a).

 

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

 

“Compliance Certificate” means a compliance certificate executed by a
Responsible Officer of the Borrower or such other Person as required by this
Agreement in substantially the same form as Exhibit C.

 

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

 

“Controlled Group” means all members of a controlled group of corporations and
all businesses (whether or not incorporated) under common control which,
together with the Borrower or any Subsidiary, are treated as a single employer
under Section 414 of the Code.

 

“Convert,” “Conversion,” and “Converted” each refers to a conversion of Advances
of one Type into Advances of another Type pursuant to Section 2.4(b).

 

5

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“Credit Documents” means this Agreement, the Notes, the Letters of Credit, the
Letter of Credit Applications, the Guaranties, the Notices of Borrowing, the
Notices of Conversion, the Security Documents, the Fee Letter and each other
agreement, instrument, or document executed at any time in connection with this
Agreement.

 

“Credit Parties” means the Borrower and the Guarantors.

 

“Daily One-Month LIBOR” means, for any day, the rate of interest equal to the
Eurodollar Rate then in effect for delivery for a one (1) month period.

 

“Debt” means, for any Person, without duplication:  (a) indebtedness of such
Person for borrowed money, including the face amount of any letters of credit
supporting the repayment of indebtedness for borrowed money issued for the
account of such Person; (b) to the extent not covered under clause (a) above,
obligations under letters of credit and agreements relating to the issuance of
letters of credit or acceptance financing, including Letters of Credit;
(c) obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, or upon which interest payments are customarily made;
(d) obligations of such Person under conditional sale or other title retention
agreements relating to any Properties purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business); (e) obligations of such Person
to pay the deferred purchase price of property or services (including, without
limitation, any contingent obligations or other similar obligations associated
with such purchase, and including obligations that are non-recourse to the
credit of such Person but are secured by the assets of such Person);
(f) obligations of such Person as lessee under Capital Leases and obligations of
such Person in respect of synthetic leases; (g) obligations of such Person under
any Hedging Arrangement; (h) all obligations of such Person to mandatorily
purchase, redeem, retire, defease or otherwise make any payment in respect of
any Equity Interest in such Person or any other Person on a date certain or upon
the occurrence of certain events or conditions; (i) the Debt of any partnership
or unincorporated joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such Person
for the payment of such Debt; (j) any obligations of such Person owing in
connection with any volumetric or production prepayments or 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; (k) obligations of such Person under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) of
such Person to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (j) above; (l) indebtedness or obligations of
others of the kinds referred to in clauses (a) through (k) secured by any Lien
on or in respect of any Property of such Person, and (m) all liabilities of such
Person in respect of unfunded vested benefits under any Plan.

 

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

 

“Default” means (a) an Event of Default or (b) any event or condition which with
notice or lapse of time or both would, unless cured or waived, become an Event
of Default.

 

“Default Rate” means a per annum rate equal to (a) in the case of principal of
any Advance, 2.00% plus the rate otherwise applicable to such Advance as
provided in Sections 2.8(a) or (b), and (b) in the case of any other Obligation,
2.00% plus the non-default rate applicable to Base Rate Advances as provided in
Section 2.8(a).

 

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“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has
failed to (i) fund all or any portion of its Advances within two Business Days
of the date such Advances were required to be funded hereunder unless such
Lender notifies the Administrative Agent and the Borrower in writing that such
failure is the result of such Lender’s determination that one or more conditions
precedent to funding (each of which conditions precedent, together with any
applicable default, shall be specifically identified in such writing) has not
been satisfied, or (ii) pay to the Administrative Agent, the Issuing Lender, or
any other Lender any other amount required to be paid by it hereunder (including
in respect of its participation in Letters of Credit) within two Business Days
of the date when due, (b) has notified the Borrower, the Administrative Agent or
the Issuing Lender in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless
such writing or public statement relates to such Lender’s obligation to fund an
Advance hereunder and states that such position is based on such Lender’s
determination that a condition precedent to funding (which condition precedent,
together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three
Business Days after written request by the Administrative Agent or the Borrower,
to confirm in writing to the Administrative Agent and the Borrower that it will
comply with its prospective funding obligations hereunder (provided that such
Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and the
Borrower), or (d) has, or has a direct or indirect parent company that has,
(i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had
appointed for it a receiver, custodian, conservator, trustee, administrator,
assignee for the benefit of creditors or similar Person charged with
reorganization or liquidation of its business or assets, including the Federal
Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity; provided that a Lender shall not be a Defaulting
Lender solely by virtue of the ownership or acquisition of any equity interest
in that Lender or any direct or indirect parent company thereof by a
Governmental Authority so long as such ownership interest does not result in or
provide such Lender with immunity from the jurisdiction of courts within the
United States or from the enforcement of judgments or writs of attachment on its
assets or permit such Lender (or such Governmental Authority) to reject,
repudiate, disavow or disaffirm any contracts or agreements made with such
Lender.  Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above shall
be conclusive and binding absent manifest error, and such Lender shall be deemed
to be a Defaulting Lender (subject to Section 2.16(b)) upon delivery of written
notice of such determination to the Borrower, the Issuing Lender and each
Lender.

 

“Dollars” and “$” means lawful money of the United States of America.

 

“Domestic Subsidiary” means a Subsidiary other than a FSHCO that is formed under
the laws of the United States, any State thereof or the District of Columbia.

 

“EBITDAX” means for the Borrower, on a consolidated basis for any period, the
sum of (a) Net Income for such period, plus (b) without duplication and to the
extent deducted in determining such Net Income (i) Interest Expense for such
period, plus (ii) Income Tax Expense for such period, plus (iii) depreciation,
amortization, depletion and exploration expenses for such period, plus
(iv) non-cash charges resulting from extraordinary, non-recurring events or
circumstances for such period (including any provision for the reduction in the
carrying value of assets recorded in accordance with GAAP and including non-cash
charges resulting from the requirements of ASC 410, 718 and 815), plus
(v) restructuring charges, accruals or reserves or related charges (including
restructuring costs related to acquisitions after the Closing Date); provided
that the amounts described in this clause (v), when combined with the amounts
under clause (vi) below, shall not exceed 5% of EBITDAX, plus (vi) one-time
costs associated with commencing public company compliance; provided that the
amounts described in this clause (vi), when combined with the amounts under
clause (v) above, shall not exceed 5% of EBITDAX, plus (vii) one-time
transaction costs associated with an Acquisition or an acquisition of Oil

 

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and Gas Properties; provided that the amounts described in this clause
(vii) shall not exceed 5% of EBITDAX, plus (viii) losses on asset dispositions,
disposals or abandonments, minus (c) without duplication and to the extent
included in determining Net Income, (i) gains on asset dispositions, disposals
or abandonments, and (ii) non-cash income resulting from extraordinary,
non-recurring events or circumstances for such period and all other non-cash
items of income which were included in determining such Net Income (including
non-cash income resulting from the requirements of ASC 410, 718 and 815);
provided that such EBITDAX shall be subject to pro forma adjustments for
permitted acquisitions and non-ordinary course asset sales assuming that such
transactions had occurred on the first day of the determination period, which
adjustments shall be made in a manner, and subject to supporting documentation,
set forth by the SEC or otherwise acceptable to the Administrative Agent.

 

“Effective Date” means the date of this Agreement.

 

“Eligible Assignee” means any Person that meets the requirements to be an
assignee under Section 9.7(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 9.7(b)(iii)).

 

“Engineering Report” means either an Independent Engineering Report or an
Internal Engineering Report.

 

“Environment” or “Environmental” shall have the meanings set forth in 42 U.S.C.
9601(8) (1988).

 

“Environmental Claim” means any third party (including governmental agencies and
employees) action, lawsuit, claim, demand, regulatory action or proceeding,
order, decree, consent agreement or notice of potential or actual responsibility
or violation (including claims or proceedings under the Occupational Safety and
Health Acts or similar laws or requirements relating to health or safety of
employees) which seeks to impose liability under any Environmental Law.

 

“Environmental Law” means all federal, state, and local laws, rules,
regulations, ordinances, orders, decisions, agreements, and other requirements,
including common law theories, now or hereafter in effect and relating to, or in
connection with the Environment, health, or safety, including without limitation
CERCLA, relating to (a) pollution, contamination, injury, destruction, loss,
protection, cleanup, reclamation or restoration of the air, surface water,
groundwater, land surface or subsurface strata, or other natural resources;
(b) solid, gaseous or liquid waste generation, treatment, processing, recycling,
reclamation, cleanup, storage, disposal or transportation; (c) exposure to
pollutants, contaminants, hazardous, or toxic substances, materials or wastes;
(d) the safety or health of employees; or (e) the manufacture, processing,
handling, transportation, distribution in commerce, use, storage or disposal of
hazardous, or toxic substances, materials or wastes.

 

“Environmental Permit” means any permit, license, order, approval, registration
or other authorization under Environmental Law.

 

“Equity Interest” means with respect to any Person, any shares, interests,
participation, or other equivalents (however designated) of corporate stock,
membership interests or partnership interests (or any other ownership interests)
of such Person.

 

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

 

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“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D
of the Federal Reserve Board as in effect from time to time.

 

“Eurodollar Advance” means an Advance that bears interest based upon the
Eurodollar Rate.

 

“Eurodollar Base Rate” means the rate per annum (rounded upward to the nearest
whole multiple of 1/100th of 1%) equal to the interest rate per annum set forth
on the Reuters Reference LIBOR1 page as the London Interbank Offered Rate, for
deposits in Dollars at 11:00 a.m.  (London, England time) two Business Days
before the first day of the applicable Interest Period and for a period equal to
such Interest Period; provided that, if such quotation is not available for any
reason, then the Eurodollar Base Rate shall then be the rate determined by the
Administrative Agent to be the rate at which deposits in Dollars for delivery on
the first day of such Interest Period in immediately available funds in the
approximate amount of the Advances being made, continued or Converted by the
Lenders and with a term equivalent to such Interest Period would be offered by
the Administrative Agent’s London Branch (or other branch or Affiliate of the
Administrative Agent, or in the event that the Administrative Agent does not
have a London branch, the London branch of a Lender chosen by the Administrative
Agent) to major banks in the London or other offshore inter-bank market for
Dollars at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period); provided further that
if such rate is less than zero, such rate shall be deemed to be zero.

 

“Eurodollar Rate” means a rate per annum determined by the Administrative Agent
pursuant to the following formula:

 

Eurodollar Rate  =

 

Eurodollar Base Rate

 

 

1.00 – Eurodollar Reserve Percentage

 

 

Where,

 

“Eurodollar Reserve Percentage” means, as of any day, the reserve percentage
(expressed as a decimal, carried out to five decimal places) in effect on such
day, whether or not applicable to any Lender, under regulations issued from time
to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities.  The Eurodollar Rate for each outstanding Advance
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.

 

“Event of Default” has the meaning specified in Section 7.1.

 

“Excluded Swap Obligations” means, with respect to any Credit Party other than
the Borrower, any Swap Obligation if, and to the extent that, all or a portion
of the guarantee of such Credit Party of, or the grant by such Credit Party of a
security interest to secure, such Swap Obligation (or any guarantee thereof) is
or becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of such 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
guarantee of such Credit Party or the grant of such security interest becomes
effective with respect to such 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 guarantee or security interest is or becomes illegal.

 

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“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located 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 an Advance or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such
interest in the Advance or Commitment (other than pursuant to an assignment
request by the Borrower under Section 2.14) or (ii) such Lender changes its
lending office, except in each case to the extent that, pursuant to
Section 2.13, 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 2.13(g) and
(d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Extraordinary Receipts” means (a) with respect to any Asset Sale, all cash and
Liquid Investments received by a Credit Party from such Asset Sale after payment
of, or provision for, all estimated cash taxes attributable to such Asset Sale
and payable by such Credit Party, and other reasonable out of pocket fees and
expenses actually incurred by such Credit Party directly in connection with such
Asset Sale, (b) with respect to any settlement or litigation proceeding, the
proceeds of such settlement or litigation proceeding after payment of all out of
pocket fees and expenses actually incurred in connection with such settlement or
proceeding, (c) with respect to any Casualty Event, the insurance proceeds or
award or other compensation as a result of a Casualty Event after payment of all
out of pocket fees and expenses actually incurred by the applicable Credit Party
to receive such proceeds, and (d) with respect to any novation, assignment,
unwinding, termination, or amendment of any hedge position or any other Hedging
Arrangement, the sum of the cash and Liquid Investments received by any Credit
Party in connection with such transaction after giving effect to any netting
agreements.

 

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

 

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

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any of its successors.

 

“Fee Letter” means the Fee Letter dated as of November 25, 2014 among the
Borrower, Wells Fargo and Wells Fargo Securities, LLC.

 

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

 

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

 

“Funded Debt” means, as of any date of determination, (x) the outstanding Debt
of the Borrower and its Subsidiaries on a consolidated basis, excluding:
(i) contingent obligations in respect of Debt described in clause (b) of the
definition of “Debt”, (ii) Debt described in clauses (d), (e), (g), and (i) of
the definition of “Debt” and (iii) Debt described in clauses (k) and (l) of the
definition of “Debt” in respect of Debt of others described in clauses (i) or
(ii) of this definition, minus (y), the excess, if any of (1) the aggregate
amount of cash included in the cash accounts listed on the consolidated balance
sheet of the Borrower and its Subsidiaries at such date over (2) $20,000,000;
provided that the deduction under this clause (y) shall not exceed $30,000,000.

 

“Fronting Exposure” means, at any time there is a Defaulting Lender, such
Defaulting Lender’s Pro Rata Share of the outstanding Letter of Credit
Obligations with respect to Letters of Credit issued by the Issuing Lender other
than Letter of Credit Obligations as to which such Defaulting Lender’s
participation obligation has been reallocated to other Lenders or Cash
Collateralized in accordance with the terms hereof.

 

“FSHCO” means any Subsidiary (including a disregarded entity for U.S. federal
income tax purposes) substantially all of whose assets (held directly or through
Subsidiaries) consist of Equity Interests of one or more CFCs and Indebtedness
of such CFCs.

 

“GAAP” means United States of America generally accepted accounting principles
as in effect from time to time, applied on a basis consistent with the
requirements of Section 1.3.

 

“Governmental Authority” means, with respect to any Person, any foreign
governmental authority, the United States of America, any state of the United
States of America, the District of Columbia, and any subdivision of any of the
foregoing, and any agency, department, commission, board, authority or
instrumentality, bureau or court having jurisdiction over such Person.

 

“Guarantors” means (a) the Subsidiaries of the Borrower listed on Schedule 4.11,
(b) each other Subsidiary of the Borrower that is a U.S. Person from time to
time, and (c) any other Person that becomes a guarantor of all or a portion of
the Obligations and which has entered into either a joinder agreement
substantially in the form attached to the Guaranty or a new Guaranty.

 

“Guaranty” means the Second Amended and Restated Guaranty Agreement executed in
substantially the same form as Exhibit D.

 

“Hazardous Substance” means any substance or material identified as such
pursuant to CERCLA and those regulated under any other Environmental Law,
including without limitation pollutants, contaminants, petroleum, petroleum
products, radionuclides, and radioactive materials.

 

“Hazardous Waste” means any substance or material regulated or designated as
such pursuant to any Environmental Law, including without limitation,
pollutants, contaminants, flammable substances and materials, explosives,
radioactive materials, oil, petroleum and petroleum products, chemical liquids
and solids, polychlorinated biphenyls, asbestos, toxic substances, and similar
substances and materials.

 

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“Hedging Arrangement” means a hedge, call, put, swap, collar, floor, cap,
option, forward sale or purchase or other contract or similar arrangement
(including any obligations to purchase or sell any commodity or security at a
future date for a specific price).

 

“Hydrocarbon Hedge Agreement” means a Hedging Arrangement related to the price
of Hydrocarbons.

 

“Hydrocarbons” means oil, gas, coal seam gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, and all other liquid and gaseous
hydrocarbons produced or to be produced in conjunction therewith from a well
bore and all products, by-products, and other substances derived therefrom or
the processing thereof, and all other minerals and substances produced in
conjunction with such substances, including, but not limited to, sulfur,
geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores,
or substances of value and the products and proceeds therefrom.

 

“Income Tax Expense” means for Borrower and its Subsidiaries, on a consolidated
basis for any period, all state and federal income taxes paid or due to be paid
during such period.

 

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

 

“Independent Engineer” means Cawley, Gillespie and Associates, Inc. or any other
engineering firm acceptable to the Administrative Agent.

 

“Independent Engineering Report” means a report, in form and substance
satisfactory to the Administrative Agent, prepared, at the sole discretion of
the Borrower, (x) by an Independent Engineer or (y) by or under the supervision
of the engineers of the Borrower; provided that Independent Engineering Reports
that are prepared by or under the supervision of the engineers of the Borrower
shall be accompanied by an audit letter issued by the Independent Engineer that
it has audited at least 90% by value of the Proven Reserves attributable to the
Oil and Gas Properties owned (or to be acquired) by the Credit Parties which are
or are to be included in the Borrowing Base, and addressed to the Administrative
Agent and the Lenders with respect to the Oil and Gas Properties owned by the
Credit Parties (or to be acquired by a Credit Party) which are or are to be
included in the Borrowing Base, which report shall (a) specify the location,
quantity, and type of the estimated Proven Reserves attributable to such Oil and
Gas Properties, (b) contain a projection of the rate of production of such Oil
and Gas Properties, (c) contain an estimate of the net operating revenues to be
derived from the production and sale of Hydrocarbons from such Proven Reserves
based on product price and cost escalation assumptions specified by the
Administrative Agent and the Lenders, and (d) contain such other information as
is customarily obtained from and provided in such reports or is otherwise
reasonably requested by the Administrative Agent or any Lender.

 

“Interest Expense” means, for the Borrower and its Subsidiaries, on a
consolidated basis for any period, total cash interest expense, letter of credit
fees and other fees and expenses incurred by such Person in connection with any
Debt (including but not limited to Debt under this Agreement) for such period,
whether paid or accrued (including that attributable to obligations which have
been or should be, in accordance with GAAP, recorded as Capital Leases),
including, without limitation, all commissions, discounts, and other fees and
charges owed with respect to letters of credit and bankers’ acceptance
financing, fees owed with respect to the Secured Obligations, and net costs
under Hedging Arrangements entered into addressing interest rates, all as
determined in conformity with GAAP.

 

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“Interest Hedge Agreement” means a Hedging Arrangement between the Borrower or
another Credit Party and one or more financial institutions providing for the
exchange of nominal interest obligations between the Borrower or such other
Credit Party and such financial institution or the cap of the interest rate on
any Debt of the Borrower.

 

“Interest Period” means for each Eurodollar Advance comprising part of the same
Borrowing, the period commencing on the date of such Eurodollar Advance is made
or deemed made and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and Section 2.4, and thereafter, each
subsequent period commencing on the day following the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and Section 2.4.  The
duration of each such Interest Period shall be one, two, three, or six months,
in each case as the Borrower may select, provided that:

 

(a)                                 Interest Periods commencing on the same date
for Advances comprising part of the same Borrowing shall be of the same
duration;

 

(b)                                 whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided that if such extension would cause the last day of such Interest Period
to occur in the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day;

 

(c)                                  any Interest Period which begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month in which it
would have ended if there were a numerically corresponding day in such calendar
month; and

 

(d)                                 the Borrower may not select any Interest
Period for any Advance which ends after the Maturity Date.

 

“Internal Engineering Report” means a report, in form and substance satisfactory
to the Administrative Agent, prepared by the Borrower and certified by a
Responsible Officer of the Borrower, addressed to the Administrative Agent and
the Lenders with respect to the Oil and Gas Properties owned by any Credit Party
(or to be acquired by a Credit Party) which are or are to be included in the
Borrowing Base, which report shall (a) specify the location, quantity, and type
of the estimated Proven Reserves attributable to such Oil and Gas Properties,
(b) contain a projection of the rate of production of such Oil and Gas
Properties, (c) contain an estimate of the net operating revenues to be derived
from the production and sale of Hydrocarbons from such Proven Reserves based on
product prices and cost escalation assumptions specified by the Administrative
Agent, and (d) contain such other information as is customarily obtained from
and provided in such reports or is otherwise reasonably requested by the
Administrative Agent or any Lender.

 

“Issuing Lender” means Wells Fargo in its capacity as a Lender that issues
Letters of Credit for the account of any Credit Party pursuant to the terms of
this Agreement.

 

“Leases” means all oil and gas leases, oil, gas and mineral leases, oil, gas and
casinghead gas leases or any other instruments, agreements, or conveyances under
and pursuant to which the owner thereof has or obtains the right to enter upon
lands and explore for, drill, and develop such lands for the production of
Hydrocarbons.

 

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“Legal Requirement” means any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or official interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, including, but not limited to, Regulations T, U and X.

 

“Lenders” means the Persons listed on the signature pages hereto as Lenders, any
other Person that shall have become a Lender hereto pursuant to Section 2.14,
and any other Person that shall have become a Lender hereto pursuant to an
Assignment and Assumption, but in any event, excluding any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption.

 

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

 

“Letter of Credit” means any standby letter of credit issued by an Issuing
Lender for the account of a Credit Party pursuant to the terms of this
Agreement, in such form as may be agreed by the Borrower and the Issuing Lender.

 

“Letter of Credit Application” means the Issuing Lender’s standard form letter
of credit application for standby letters of credit which has been executed by
the Borrower and accepted by such Issuing Lender in connection with the issuance
of a Letter of Credit.

 

“Letter of Credit Documents” means all Letters of Credit, Letter of Credit
Applications and amendments thereof, and agreements, documents, and instruments
entered into in connection therewith or relating thereto.

 

“Letter of Credit Exposure” means, at the date of its determination by the
Administrative Agent, the aggregate outstanding undrawn amount of Letters of
Credit plus the aggregate unpaid amount of all of the Borrower’s payment
obligations under drawn Letters of Credit.

 

“Letter of Credit Fees” means fees payable pursuant to Section 2.7(b)(i).

 

“Letter of Credit Maximum Amount” means $15,000,000; provided that, on and after
the Maturity Date, the Letter of Credit Maximum Amount shall be zero.

 

“Letter of Credit Obligations” means any obligations of the Borrower under this
Agreement in connection with the Letters of Credit.

 

“Leverage Ratio” means, as of the end of each fiscal quarter, the ratio of
(a) the consolidated Funded Debt of the Borrower (other than obligations under
permitted Hedging Arrangements) as of the last day of such fiscal quarter to
(b) the consolidated EBITDAX of the Borrower for the four-fiscal quarter period
then ended.

 

“Lien” means any mortgage, lien, pledge, charge, deed of trust, security
interest, or encumbrance to secure or provide for the payment of any obligation
of any Person, whether arising by contract, operation of law, or otherwise
(including the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease, or other title retention agreement).

 

“Liquid Investments” means (a) readily marketable direct full faith and credit
obligations of the United States of America or obligations unconditionally
guaranteed by the full faith and credit of the United States of America;
(b) commercial paper issued by (i) any Lender or any Affiliate of any Lender or
(ii) any commercial banking institutions or corporations rated at least P-1 by
Moody’s or A-1 by S&P;

 

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(c) certificates of deposit, time deposits, and bankers’ acceptances issued by
(i) any of the Lenders or (ii) any other commercial banking institution which is
a member of the Federal Reserve System and has a combined capital and surplus
and undivided profits of not less than $250,000,000 and rated Aa by Moody’s or
AA by S&P; (d) repurchase agreements which are entered into with any of the
Lenders or any major money center banks included in the commercial banking
institutions described in clause (c) and which are secured by readily marketable
direct full faith and credit obligations of the government of the United States
of America or any agency thereof; (e) investments in any money market fund which
holds investments substantially of the type described in the foregoing clauses
(a) through (d); (f) readily and immediately available cash held in any money
market account maintained with any Lender; provided that, such money market
accounts and the funds therein shall be unencumbered and free and clear of all
Liens and other third party rights other than a Lien in favor of the
Administrative Agent pursuant to the Security Documents; and (g) other
investments made through the Administrative Agent or its Affiliates and approved
by the Administrative Agent.  All the Liquid Investments described in clauses
(a) through (d) above shall have maturities of not more than 365 days from the
date of issue.

 

“Management Agreement” means the Management Agreement dated as of April 11, 2013
by and among the Borrower and Parent, as amended or otherwise modified from time
to time in accordance with Section 6.9.

 

“Material Adverse Change” means a material adverse change (a) in the business,
assets (including Oil and Gas Properties), condition (financial or otherwise),
or operations of the Borrower individually or Credit Parties, taken as a whole;
(b) on the Borrower’s ability, as a whole, to perform its obligations under this
Agreement or any other Credit Document; (c) on the Credit Parties’ ability, as a
whole, to perform their obligations under this Agreement or any other Credit
Document; (d) in any material right or remedy of any Secured Party under any
Credit Document; (e) on the validity or enforceability of this Agreement or any
of the other Credit Documents; or (f) on the Acceptable Security Interest in
favor of the Agent with respect to any material portion of the Collateral.

 

“Maturity Date” means the earlier of (a) October 16, 2018 and (b) the earlier
termination in whole of the Commitments pursuant to Section 2.1(c)(i) or
Article 7.

 

“Maximum Exposure Amount” means, at any time for each Lender, the sum of (a) the
unfunded Commitment held by such Lender at such time; plus (b) the aggregate
unpaid principal amount of the Note held by such Lender at such time, (with the
aggregate amount of such Lender’s risk participation and funded participation in
the Letter of Credit Exposure (including any such Letter of Credit Exposure that
has been reallocated pursuant to Section 2.15) being deemed as unpaid principal
under such Lender’s Note).

 

“Maximum Rate” means the maximum nonusurious interest rate under applicable law.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash
Collateral consisting of cash or deposit account balances, an amount equal to
102% of the Fronting Exposure of the Issuing Lender with respect to Letters of
Credit issued and outstanding at such time and (ii) otherwise, an amount
determined by the Administrative Agent and the Issuing Lender in its sole
discretion.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto which
is a nationally recognized statistical rating organization.

 

“Mortgage” means each mortgage or deed of trust in form acceptable to the
Administrative Agent executed by any Credit Party to secure all or a portion of
the Secured Obligations.

 

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“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any member of the
Controlled Group is making or accruing an obligation to make contributions.

 

“Net Income” means, for any period and with respect to any Person, the net
income for such period for such Person after taxes as determined in accordance
with GAAP, including any cash net gain but excluding, however, (a) extraordinary
items, including (i) any net non-cash gain or loss during such period arising
from the sale, exchange, retirement or other disposition of capital assets (such
term to include all fixed assets and all securities) other than in the ordinary
course of business, and (ii) any write-up or write-down of assets and (b) the
cumulative effect of any change in GAAP.

 

“NGP” means, collectively, NGP Triangle Holdings, LLC, NGP Natural Resources X,
L.P., NGP Natural Resources X Parallel Fund, L.P., and any assignee of the
foregoing reasonably acceptable to the Administrative Agent.

 

“NGP Group” means, collectively, NGP and any group of related Persons (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations thereunder).

 

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all affected Lenders in
accordance with the terms of Section 9.3 and (ii) has been approved by the
Required Lenders.

 

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

 

“Non-Increasing Lender” means any Lender that does not approve any increase to
the Borrowing Base in accordance with the terms of Section 2.2 that has been
approved by the Required Lenders.

 

“Note” means a promissory note of the Borrower payable to a Lender or its
registered assigns in the amount of such Lender’s Commitment, in substantially
the same form as Exhibit H, evidencing indebtedness of the Borrower to such
Lender resulting from Advances owing to such Lender.

 

“Notes Reduction Amount” has the meaning set forth in Section 2.2(e)(ii).

 

“Notice of Borrowing” means a means a Notice of Borrowing signed by the Borrower
in substantially the same form as Exhibit E.

 

“Notice of Continuation or Conversion” means a notice of continuation or
conversion signed by the Borrower in substantially the same form as Exhibit F.

 

“Obligations” means all principal, interest (including post-petition interest),
fees, reimbursements, indemnifications, and other amounts now or hereafter owed
by any of the Credit Parties to the Lenders, the Issuing Lender, or the
Administrative Agent under this Agreement and the Credit Documents, including,
the Letter of Credit Obligations, and any increases, extensions, and
rearrangements of those obligations under any amendments, supplements, and other
modifications of the documents and agreements creating those obligations.

 

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

 

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“Oil and Gas Properties” means fee mineral interests, term mineral interests,
Leases, subleases, farm-outs, royalties, overriding royalties, net profit
interests, carried interests, production payments and similar mineral interests,
and all unsevered and unextracted Hydrocarbons in, under, or attributable to
such oil and gas Properties and interests.

 

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

 

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Credit Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 2.14(b)).

 

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

 

“Parent” means Triangle Petroleum Corporation, a Nevada corporation.

 

“Participant” has the meaning set forth in Section 9.7(d).

 

“Participant Register” has the meaning set forth in Section 9.7(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

 

“PDP Reserves” means the Proven Reserves which are categorized as both
“developed” and “producing” under the definitions for oil and gas reserves
promulgated by the Society of Petroleum Evaluation Engineers (or any generally
recognized successor) as in effect at the time in question and reasonably
acceptable to the Administrative Agent.

 

“Permit” means any approval, certificate of occupancy, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license
of or from any Governmental Authority, including without limitation, an
Environmental Permit.

 

“Permitted Asset Sale” means any Asset Sale that is permitted under Section 6.8.

 

“Permitted Debt” has the meaning set forth in Section 6.1.

 

“Permitted Investments” has the meaning set forth in Section 6.3.

 

“Permitted Liens” has the meaning set forth in Section 6.2.

 

“Permitted Notes” has the meaning set forth in Section 6.1(i).

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, limited liability company, limited liability
partnership, unincorporated association, joint

 

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venture, or other entity, or a government or any political subdivision or agency
thereof, or any trustee, receiver, custodian, or similar official.

 

“Plan” means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.

 

“Pledge Agreement” means the Second Amended and Restated Pledge Agreement
executed in substantially the same form as Exhibit J.

 

“Pricing Grid” means the pricing information set forth in Schedule II.

 

“Prime Rate” means the per annum rate of interest established from time to time
by the Administrative Agent at its principal office in San Francisco as its
prime rate, which rate may not be the lowest rate of interest charged by such
Lender to its customers.

 

“Property” of any Person means any property or assets (whether real, personal,
or mixed, tangible or intangible) of such Person.

 

“Pro Rata Share” means, at any time with respect to any Lender, (i) the ratio
(expressed as a percentage) of such Lender’s Commitment at such time to the
aggregate Commitments at such time, or (ii) if all of the Commitments have been
terminated, the ratio (expressed as a percentage) of such Lender’s aggregate
outstanding Advances at such time to the total aggregate outstanding Advances at
such time.

 

“Proven Reserves” means, at any particular time, the estimated quantities of
Hydrocarbons which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs attributable
to Oil and Gas Properties included or to be included in the Borrowing Base under
then existing economic and operating conditions (i.e., prices and costs as of
the date the estimate is made).

 

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

 

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

 

“Register” has the meaning set forth in Section 9.7(b).

 

“Regulations T, U, and X” means Regulations T, U, and X of the Federal Reserve
Board, as each is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.  Each of Regulations T, U, or X may be
referred to individually as Regulation T, Regulation U, or Regulation X herein.

 

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

 

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“Release” shall have the meaning set forth in CERCLA or under any other
Environmental Law.

 

“Response” shall have the meaning set forth in CERCLA or under any other
Environmental Law.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
(other than any such event not subject to the provision for 30-day notice to the
PBGC under the regulations issued under such section).

 

“Required Lenders” means (a) other than as provided in clause (b) below, two or
more Lenders holding greater than 66 2/3% of the aggregate Maximum Exposure
Amount, and (b) at any time when there is only one Lender, such Lender; provided
that, if there are two or more Lenders, the Commitment of, and the portion of
the Advances and Letter of Credit Exposure held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders unless all Lenders are Defaulting Lenders.

 

“Responsible Officer” means (a) with respect to any Person that is a
corporation, such Person’s Chief Executive Officer, President, Chief Financial
Officer, or Vice President, (b) with respect to any Person that is a limited
liability company, if such Person has officers, then such Person’s Chief
Executive Officer, President, Chief Financial Officer, Vice President, and if
such Person is managed by members, then a Responsible Officer of such Person’s
managing member, and if such Person is managed by managers, then a manager (if
such manager is an individual) or a Responsible Officer of such manager (if such
manager is an entity), and (c) with respect to any Person that is a general
partnership, limited partnership or a limited liability partnership, the
Responsible Officer of such Person’s general partner or partners.

 

“Restricted Payment” means, with respect to any Person, (a) any direct or
indirect dividend or distribution (whether in cash, securities or other
Property), return of capital or any direct or indirect payment of any kind or
character (whether in cash, securities or other Property) made in connection
with the Equity Interest of such Person, including those dividends,
distributions, returns of capital and payments made in consideration for or
otherwise in connection with any retirement, purchase, redemption or other
acquisition of any Equity Interest of such Person, or any options, warrants or
rights to purchase or acquire any such Equity Interest of such Person or
(b) principal or interest payments (in cash, Property or otherwise) on, or
redemptions of, Subordinated Debt of such Person; provided that (i) the term
“Restricted Payment” shall not include any dividend or distribution payable
solely in common Equity Interests of such Person or warrants, options or other
rights to purchase such Equity Interests and (ii) if the Restricted Payment is
made in a form of Property other than cash, the amount of such Restricted
Payment shall be deemed to be the fair market value of such Property.

 

“RockPile” means RockPile Energy Services, LLC, a Delaware limited liability
company.

 

“RockPile Agreement” means the Amended and Restated Master Service Agreement by
and between RockPile Energy Services, LLC a Delaware limited liability company
and Borrower, effective as of September 15, 2013, as in effect on the Closing
Date or as amended, restated or otherwise modified from time to time; provided
that any such amendment, restatement or modification that would increase the
obligations of the Credit Party subject to such agreement in any material
respect must be approved by the Required Lenders in writing.

 

“S&P” means Standard & Poor’s Rating Agency Group, a division of McGraw-Hill
Companies, Inc., or any successor thereof which is a national credit rating
organization.

 

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“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in a
country, in each case, that is subject to a country sanctions program
administered and enforced by OFAC.

 

“Sanctioned Person” means a person named on the list of Specially Designated
Nationals maintained by OFAC.

 

“SEC” means the Securities and Exchange Commission.

 

“Secured Obligations” means (a) the Obligations, (b) the Banking Services
Obligations, and (b) all obligations of any of the Credit Parties owing to Swap
Counterparties under any Hedging Arrangements; provided, however that “Secured
Obligations” of any Guarantor shall not include the Excluded Swap Obligations of
such Guarantor.

 

“Secured Parties” means the Administrative Agent, the Issuing Lender, the
Lenders, the Swap Counterparties and Banking Service Providers.

 

“Security Agreement” means the Second Amended and Restated Security Agreement
among the Credit Parties and the Administrative Agent in substantially the same
form as Exhibit G.

 

“Security Documents” means, collectively, the Mortgages, Security Agreement, the
Pledge Agreement, the Transfer Letters and any and all other instruments,
documents or agreements, including Account Control Agreements, now or hereafter
executed by any Credit Party or any other Person to secure the Secured
Obligations.

 

“Solvent” means, as to any Person, on the date of any determination (a) the fair
value of the Property of such Person is greater than the total amount of debts
and other liabilities (including without limitation, contingent liabilities) of
such Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts and other liabilities (including, without limitation,
contingent liabilities) as they become absolute and matured, (c) such Person is
able to realize upon its assets and pay its debts and other liabilities
(including, without limitation, contingent liabilities) as they mature in the
normal course of business, (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities (including, without limitation,
contingent liabilities) beyond such Person’s ability to pay as such debts and
liabilities mature, (e) such Person is not engaged in, and is not about to
engage in, business or a transaction for which such Person’s Property would
constitute unreasonably small capital, and (f) such Person has not transferred,
concealed or removed any Property with intent to hinder, delay or defraud any
creditor of such Person.

 

“Subject Lender” has the meaning set forth in Section 2.14.

 

“Subordinated Debt” means any Debt of a Borrower and its Subsidiaries which is
subordinated in right of payment to the Obligations pursuant to agreements,
documents and instruments in form and substance, and containing terms and
provisions, satisfactory to the Administrative Agent. For the avoidance of doubt
“Subordinated Debt” shall not include Debt incurred in accordance with clauses
(a), (c), (d), (e), (f) and (k) of Section 6.1 unless such Debt is expressly
subordinated to the Obligations in writing.

 

“Subsidiary” means, with respect to any Person (the “holder”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be

 

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consolidated with those of the holder in the holder’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, as well as any other corporation, limited liability company,
partnership, association or other entity, a majority of whose outstanding Voting
Securities shall at any time be owned by the holder or one more Subsidiaries of
the holder.  Unless expressly provided otherwise, all references herein and in
any other Credit Document to any “Subsidiary” or “Subsidiaries” means a
Subsidiary or Subsidiaries of the Borrower.

 

“Swap Counterparty” means a Person who (a) is a Lender or Affiliate of a Lender
on the Effective Date and is a counter party to a Hedging Arrangement with a
Credit Party, which Hedging Arrangement was in effect on the Effective Date, or
(b) was a Lender or an Affiliate of a Lender at the time it entered into a
Hedging Arrangement with a Credit Party as permitted by the terms of this
Agreement; provided that (i) when any Swap Counterparty assigns or otherwise
transfers any interest held by it under any Hedging Arrangement to any other
Person pursuant to the terms of such agreement, the obligations thereunder shall
be secured by Liens under the Credit Documents only if such assignee or
transferee is also then a Lender or an Affiliate of a Lender and (ii) if a Swap
Counterparty ceases to be a Lender hereunder or an Affiliate of a Lender
hereunder, obligations owing to such Swap Counterparty shall be secured by Liens
under the Credit Documents only to the extent such obligations arise from
transactions under such individual Hedging Arrangements (and not the Master
Agreement between such parties) entered into prior to the Effective Date or at
the time such Swap Counterparty was a Lender hereunder or an Affiliate of a
Lender hereunder, without giving effect to any extension, increases, or
modifications thereof which are made after such Swap Counterparty ceases to be a
Lender hereunder or an Affiliate of a Lender hereunder.

 

“Swap Obligation” means, with respect to any Credit Party other than the
Borrower, 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.

 

“Tax Group” has the meaning assigned to it in Section 4.13 of this Agreement.

 

“Tax Group Payment” shall mean Restricted Payments in the form of cash equal to
an amount not to exceed the aggregate amount of federal, state and local income
or franchise Taxes that would be imposed on the Borrower and its Subsidiaries if
such Persons were not members of the federal consolidated income Tax group of
Parent and instead filed federal income and similar Tax Returns on a stand-alone
basis and paid Taxes on such basis.

 

“Tax Return” means any return, report, information return, declaration,
estimate, or other document, together with all schedules, attachments,
amendments and supplements thereto (including all related or supporting
information), supplied to or required to be supplied to any Governmental
Authority in respect of Taxes.

 

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

 

“Termination Event” means (a) a Reportable Event with respect to a Plan, (b) the
withdrawal of the Borrower or any member of the Controlled Group from a Plan
during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under
Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan
by the PBGC, or (e) any other event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.

 

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“Test Date” means each date that the production and hedging reports required
pursuant to Section 5.2(d) are delivered, commencing with the reports delivered
for the fiscal quarter ending October 31, 2014.

 

“Transactions” means, collectively, (a) the initial borrowings and other
extensions of credit under this Agreement and (b) the payment of fees,
commissions and expenses in connection with each of the foregoing.

 

“Transfer Letters” means, collectively, the letters in lieu of transfer orders
in substantially the form of the attached Exhibit I and executed by the
Borrower, any Guarantor or any of their respective Subsidiaries executing a
Mortgage.

 

“Type” has the meaning set forth in Section 1.4.

 

“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
paragraph (f) of Section 2.13(g).

 

“Unused Commitment Amount” means, with respect to a Lender at any time, the
lesser of (a) such Lender’s Commitment at such time and (b) such Lender’s Pro
Rata Share of the Borrowing Base then in effect at such time minus, in each
case the sum of (i) the aggregate outstanding principal amount of all Advances
owed to such Lender at such time plus (ii) such Lender’s Pro Rata Share of the
aggregate Letter of Credit Exposure at such time.

 

“Utilization Level” means the applicable category (being Level I, Level II,
Level III, Level IV or Level V) of pricing criteria contained in Schedule II,
which is at any time of its determination based on the percentage obtained by
dividing (a) the outstanding principal amount of the Advances and the Letter of
Credit Exposure at such time by (b) the lesser of the Commitments and the
Borrowing Base at such time.

 

“Voting Securities” means (a) with respect to any corporation, capital stock of
the corporation having general voting power under ordinary circumstances to
elect directors of such corporation (irrespective of whether at the time stock
of any other class or classes shall have or might have special voting power or
rights by reason of the happening of any contingency), (b) with respect to any
partnership, any partnership interest or other ownership interest having general
voting power to elect the general partner or other management of the partnership
or other Person, and (c) with respect to any limited liability company,
membership certificates or interests having general voting power under ordinary
circumstances to elect managers of such limited liability company.

 

“Wells Fargo” means Wells Fargo Bank, National Association.

 

Section 1.2                                    Computation of Time Periods.  In
this Agreement in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding”.

 

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Section 1.3                                    Accounting Terms; Changes in
GAAP.

 

(a)                                 All accounting terms not specifically
defined in this Agreement shall be construed in accordance with GAAP applied on
a consistent basis with those applied in the preparation of the financial
statements of the Parent delivered to the Administrative Agent for the fiscal
year ended January 31, 2014.

 

(b)                                 Unless otherwise indicated, all financial
statements of the Borrower, all calculations for compliance with covenants in
this Agreement, all determinations of the Applicable Margin, and all
calculations of any amounts to be calculated under the definitions in
Section 1.1 shall be based upon the consolidated accounts of the Borrower and
its Subsidiaries in accordance with GAAP and consistent with the principles of
consolidation applied in preparing the financial statements referred to in
Section 4.4.

 

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

 

Section 1.4                                    Types of Advances.  Advances are
distinguished by “Type”.  The “Type” of an Advance refers to the determination
of whether such Advance is a Base Rate Advance or a Eurodollar Advance.

 

Section 1.5                                    Miscellaneous.  Article, Section,
Schedule, and Exhibit references are to this Agreement, unless otherwise
specified.  All references to instruments, documents, contracts, and agreements
(including this Agreement) are references to such instruments, documents,
contracts, and agreements as the same may be amended, supplemented, and
otherwise modified from time to time, unless otherwise specified, and shall
include all schedules and exhibits thereto unless otherwise specified.  Any
reference herein to any law shall be construed as referring to such law as
amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time.  Any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions
contained herein).  The words “hereof”, “herein”, and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.  The term
“including” means “including, without limitation,”.  Paragraph headings have
been inserted in this Agreement as a matter of convenience for reference only
and it is agreed that such paragraph headings are not a part of this Agreement
and shall not be used in the interpretation of any provision of this Agreement.

 

ARTICLE 2
CREDIT FACILITIES

 

Section 2.1                                    Commitment for Advances.

 

(a)                                 Advances.  Each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Advances to the
Borrower from time to time on any Business Day during the Availability Period;
provided that after giving effect to such Advances, the sum of the aggregate
outstanding amount of all Advances and plus the Letter of Credit Exposure, shall
not exceed the lesser of

 

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(i) the Borrowing Base in effect at such time and (ii) the aggregate Commitments
in effect at such time.  Each Borrowing shall, (A) if comprised of Base Rate
Advances, be in an aggregate amount not less than $250,000 and in integral
multiples of $100,000 in excess thereof, (B) if comprised of Eurodollar
Advances, be in an aggregate amount not less than $500,000 and in integral
multiples of $100,000 in excess thereof, and (C) in each case shall consist of
Advances of the same Type made on the same day by the Lenders ratably according
to their respective Commitments.  Within the limits of each Lender’s Commitment,
and subject to the terms of this Agreement, the Borrower may from time to time
borrow, prepay pursuant to Section 2.5, and reborrow under this Section 2.1.

 

(b)                                 Notes.  The indebtedness of the Borrower to
each Lender resulting from Advances owing to such Lender shall be evidenced by a
Note payable to such Lender or its registered assigns.

 

(c)                                  Reduction of the Commitments. The Borrower
shall have the right, upon at least three Business Days’ irrevocable notice to
the Administrative Agent, to terminate in whole or reduce in part the unused
portion of the Commitments; provided that each partial reduction shall be in a
minimum amount of $500,000 and in integral multiples of $100,000 in excess
thereof.  Any reduction or termination of the Commitments pursuant to this
Section 2.1(c) shall be applied ratably to each Lender’s Commitment and shall be
permanent, with no obligation of the Lenders to reinstate such Commitments, and
the applicable Commitment Fees shall thereafter be computed on the basis of the
Commitments, as so reduced.

 

Section 2.2                                    Borrowing Base.

 

(a)                                 Borrowing Base.  The initial Borrowing Base
in effect as of the Effective Date has been set by the Administrative Agent and
the Lenders and acknowledged by the Borrower as $435,000,000.  Such initial
Borrowing Base shall remain in effect until the next redetermination or
reduction made pursuant to this Section 2.2.  The Borrowing Base shall be
determined in accordance with the standards set forth in Section 2.2(d) and is
subject to periodic redetermination pursuant to Sections 2.2(b), and 2.2(c) and
reductions pursuant to Section 2.2(e).

 

(b)                                 Calculation of Borrowing Base.

 

(i)                                     For the November 1 Borrowing Base
redetermination, the Borrower shall deliver to the Administrative Agent, on or
before each October 1, beginning October 1, 2015, an Internal Engineering Report
dated effective as of the immediately preceding September 1st and such other
information as may be reasonably requested by the Administrative Agent or any
Lender with respect to the Oil and Gas Properties included or to be included in
the Borrowing Base.  Within 30 days after the Administrative Agent’s receipt of
such Internal Engineering Report and other information, (A) the Administrative
Agent shall deliver to each Lender the Administrative Agent’s recommendation for
the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders
shall redetermine the Borrowing Base in accordance with Section 2.2(d), and
(C) the Administrative Agent shall promptly notify the Borrower in writing of
the amount of the Borrowing Base as so redetermined.

 

(ii)                                  For the May 1 Borrowing Base
redetermination, the Borrower shall deliver to the Administrative Agent, on or
before each April 1st, beginning April 1, 2015, an Independent Engineering
Report dated effective as of the immediately preceding March 1st and such other
information as may be reasonably requested by the Administrative Agent or any
Lender with respect to the Oil and Gas Properties included or to be included in
the Borrowing Base.  Within 30 days after the Administrative Agent’s receipt of
such Independent Engineering Report and other information, (A) the
Administrative Agent shall deliver to each Lender the Administrative Agent’s
recommendation for the redetermined Borrowing Base, (B) the Administrative Agent
and

 

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the Lenders shall redetermine the Borrowing Base in accordance with
Section 2.2(d), and (C) the Administrative Agent shall promptly notify the
Borrower in writing of the amount of the Borrowing Base as so redetermined.

 

(iii)                               In the event that the Borrower does not
furnish to the Administrative Agent and the Lenders the Independent Engineering
Report, Internal Engineering Report or other information specified in clauses
(i) and (ii) above by the date specified therein, the Administrative Agent and
the Lenders may nonetheless redetermine the Borrowing Base and redesignate the
Borrowing Base from time-to-time thereafter in their sole discretion, with
notice of such redetermination promptly provided to the Borrower in writing. 
Upon receipt by the Administrative Agent of the relevant Independent Engineering
Report, Internal Engineering Report, or other information, as applicable, the
Administrative Agent and the Lenders shall redetermine the Borrowing Base as
otherwise specified in this Section 2.2.

 

(iv)                              Each delivery of an Engineering Report by the
Borrower to the Administrative Agent and the Lenders shall constitute a
representation and warranty by the Borrower to the Administrative Agent and the
Lenders that (A) the Credit Parties, own the Oil and Gas Properties specified
therein with at least 80% (by value) of the Proven Reserves covered therein
subject to an Acceptable Security Interest and free and clear of any Liens
(except Permitted Liens), (B) on and as of the date of such Engineering Report
each Oil and Gas Property identified as PDP Reserves therein was developed for
oil and gas, and the wells pertaining to such Oil and Gas Properties that are
described therein as producing wells (“Wells”), were each producing oil and/or
gas in paying quantities, except for Wells that were utilized as water or gas
injection wells, carbon dioxide wells or as water disposal wells (each as noted
in such Engineering Report), (C) the descriptions of quantum and nature of the
record title interests of the Credit Parties, set forth in such Engineering
Report include the entire record title interests of the Credit Parties in such
Oil and Gas Properties, are complete and accurate in all respects, and take into
account all Permitted Liens, (D) there are no “back-in” or “reversionary”
interests held by third parties which could reduce the interests of the Credit
Parties in such Oil and Gas Properties except as set forth in Engineering
Report, (E) no operating or other agreement to which any Credit Party is a party
or by which any Credit Party is bound affecting any part of such Oil and Gas
Properties requires any Credit Party to bear any of the costs relating to such
Oil and Gas Properties greater than the record title interest of any Credit
Party in such portion of such Oil and Gas Properties as set forth in such
Engineering Report, except in the event any Credit Party is obligated under an
operating agreement to assume a portion of a defaulting party’s share of costs,
and (F) the Credit Parties’ ownership of the Hydrocarbons and the undivided
interests in the Oil and Gas Properties as specified in such Engineering Report
(i) will, after giving full effect to all Permitted Liens, afford the Credit
Parties not less than those net interests (expressed as a fraction, percentage
or decimal) in the production from or which is allocated to such Hydrocarbons
specified as net revenue interest in such Engineering Report and (ii) will cause
the Credit Parties to bear not more than that portion (expressed as a fraction,
percentage or decimal), specified as working interest in such Engineering
Report, of the costs of drilling, developing and operating the wells identified
in such Engineering Report or identified in the exhibits to the Mortgages
encumbering such Oil and Gas Properties (except for any increases in working
interest with a corresponding increase in the net revenue interest in such Oil
and Gas Property).

 

(c)                                  Interim Redetermination.  In addition to
the Borrowing Base redeterminations provided for in Section 2.2(b), (i) based on
such information as the Administrative Agent and the Lenders deem relevant (but
in accordance with Section 2.2(d)), the Administrative Agent may, and shall at
the request of the Required Lenders, make up to two additional redeterminations
of the Borrowing Base during any year; and (ii) based on such information as the
Administrative Agent and the Lenders deem relevant (but

 

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in accordance with Section 2.2(d)), the Administrative Agent shall at the
request of the Borrower, make up to two additional redeterminations of the
Borrowing Base during any year.  For the avoidance of doubt, such additional
redeterminations of the Borrowing Base shall not constitute nor be construed as
a consent to any transaction or proposed transaction that would not be permitted
under the terms of this Agreement.  The party requesting the redetermination
under this paragraph (c) shall give the other party at least 10 days’ prior
written notice that a redetermination of the Borrowing Base pursuant to this
paragraph (c) is to be performed; provided that, no such prior written notice
shall be required for any redetermination made by the Lenders during the
existence of a Default.  In connection with any redetermination of the Borrowing
Base under this Section 2.2(c), the Borrower shall provide the Administrative
Agent and the Lenders with an Internal Engineering Report dated effective as of
a date no more than 30 days prior to the redetermination and such other
information as may be reasonably requested by the Administrative Agent or any
Lender with respect to the Oil and Gas Properties included or to be included in
the Borrowing Base.  The Administrative Agent shall promptly notify the Borrower
in writing of each redetermination of the Borrowing Base pursuant to this
Section 2.2(c) and the amount of the Borrowing Base as so redetermined.

 

(d)                                 Standards for Redetermination.  Each
redetermination of the Borrowing Base by the Administrative Agent and the
Lenders pursuant to this Section 2.2 shall be made (i) in the sole discretion of
the Administrative Agent and the Lenders (but in accordance with the other
provisions of this Section 2.2(d)), (ii) in accordance with the Administrative
Agent’s and the Lenders’ customary internal standards and practices for valuing
and redetermining the value of Oil and Gas Properties in connection with reserve
based oil and gas loan transactions, (iii) in conjunction with the most recent
Independent Engineering Report or Internal Engineering Report, as applicable, or
other information received by the Administrative Agent and the Lenders relating
to the Proven Reserves of the Credit Parties, and (iv) based upon the estimated
value of the Proven Reserves owned by the Credit Parties as determined by the
Administrative Agent and the Lenders.  In valuing and redetermining the
Borrowing Base, the Administrative Agent and the Lenders may also consider the
business, financial condition, and Debt obligations of the Credit Parties and
such other factors as the Administrative Agent and the Lenders customarily deem
appropriate, including without limitation, commodity price assumptions,
projections of production, operating expenses, general and administrative
expenses, capital costs, working capital requirements, liquidity evaluations,
dividend payments, environmental costs, and legal costs.  In that regard, the
Borrower acknowledges that the determination of the Borrowing Base contains an
equity cushion (market value in excess of loan value), which is essential for
the adequate protection of the Administrative Agent and the Lenders.  No Proven
Reserves shall be included or considered for inclusion in the Borrowing Base
unless the Administrative Agent shall have received, at the Borrower’s expense,
(A) evidence of title reasonably satisfactory in form and substance to the
Administrative Agent covering at least 80% (by value) of the Proven Reserves and
the Oil and Gas Properties relating thereto, and (B) Mortgages and such other
Security Documents requested by the Administrative Agent to the extent necessary
to cause the Administrative Agent to have an Acceptable Security Interest in at
least 80% (by value) of the Proven Reserves and the Oil and Gas Properties
relating thereto.  At all times after the Administrative Agent has given the
Borrower notification of a redetermination of the Borrowing Base under this
Section 2.2, the Borrowing Base shall be equal to the redetermined amount or
such lesser amount designated by the Borrower and disclosed in writing to the
Administrative Agent and the Lenders until the Borrowing Base is subsequently
redetermined or reduced in accordance with this Section 2.2; provided that the
Borrower shall not request that the Borrowing Base be reduced to a level that
would result in a Borrowing Base Deficiency.  Notwithstanding anything herein to
the contrary, (x) to the extent the redetermined Borrowing Base is less than or
equal to the Borrowing Base in effect prior to such redetermination, such
redetermined Borrowing Base must be approved by the Administrative Agent and the
Required Lenders, and (y) to the extent the redetermined Borrowing Base is
greater than the Borrowing Base in effect prior to such redetermination, such
redetermined Borrowing Base must be approved by the Administrative Agent and all
of the Lenders.

 

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(e)                                  Reductions to Borrowing Base.

 

(i)                                     If the aggregate BB Value of (A) Oil and
Gas Properties subject to Asset Sales consummated since the immediately
preceding redetermination of the Borrowing Base plus (B) Hedging Arrangements
subject to Asset Sales consummated since the immediately preceding
redetermination of the Borrowing Base (the sum of clauses (A) and (B) being the
“BB Deduction Amount”) exceeds 7% of the most recently redetermined Borrowing
Base, then, upon the consummation of any such Asset Sale after which the BB
Deduction Amount exceeds 7% of the most recently redetermined Borrowing Base,
the Borrowing Base shall be automatically reduced to an amount equal to the
Borrowing Base in effect as of the previous redetermination, minus the BB
Deduction Amount, minus any Notes Reduction Amount determined under clause
(ii) hereof if Debt in the form of Permitted Notes has been issued since the
most recent redetermination of the Borrowing Base.

 

(ii)                                  Upon the issuance of Debt in the form of
Permitted Notes, the Borrowing Base shall be automatically reduced by an amount
equal to 25% of the excess, if any, (the “Notes Reduction Amount”) of (A) the
principal amount of such Permitted Notes over (B) the amount of the proceeds of
such Permitted Notes applied by the Borrower to repay the principal amount of
Permitted Notes that were outstanding at the time of such issuance.

 

Section 2.3                                    Letters of Credit.

 

(a)                                 Commitment for Letters of Credit.  Subject
to the terms and conditions set forth in this Agreement, the Issuing Lender
agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.3, from time to time on any Business Day during the period from the
Closing Date until the Maturity Date, to issue, increase or extend the
expiration date of, Letters of Credit for the account of any Credit Party,
provided that no Letter of Credit will be issued, increased, or extended:

 

(i)                                     if such issuance, increase, or extension
would cause the Letter of Credit Exposure to exceed the lesser of (A) the Letter
of Credit Maximum Amount and (B) an amount equal to (1) the lesser of the
Borrowing Base and the aggregate Commitments, in either case, in effect at such
time minus (2) the sum of the aggregate outstanding amount of all Advances;

 

(ii)                                  unless such Letter of Credit has an
expiration date not later than the earlier of (A) one year after its issuance or
extension and (B) five Business Days prior to the Maturity Date (an “Acceptable
Letter of Credit Maturity Date”); provided that, (1) if the Commitments are
terminated in whole pursuant to Section 2.1(c)(i), the Borrower shall either
(A) deposit into the Cash Collateral Account cash in an amount equal to 102% of
the Letter of Credit Exposure for the Letters of Credit which have an expiry
date beyond the date the Commitments are terminated or (B) provide a replacement
letter of credit (or other security) reasonably acceptable to the Administrative
Agent and the Issuing Lender in an amount equal to 102% of the Letter of Credit
Exposure, and (2) any such Letter of Credit with a one-year tenor may expressly
provide for an automatic extension of one additional year so long as such Letter
of Credit expressly allows the Issuing Lender, at its sole discretion, to elect
not to provide such extension; provided that, in any event, such automatic
extension may not result in an expiration date that occurs after the fifth
Business Day prior to the Maturity Date;

 

(iii)                               unless such Letter of Credit is a standby
letter of credit not supporting the repayment of indebtedness for borrowed money
of any Person;

 

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(iv)                              unless such Letter of Credit is in form and
substance acceptable to the Issuing Lender in its sole discretion;

 

(v)                                 unless the Borrower has delivered to the
Issuing Lender a completed and executed Letter of Credit Application; provided
that, if the terms of any Letter of Credit Application conflicts with the terms
of this Agreement, the terms of this Agreement shall control;

 

(vi)                              unless such Letter of Credit is governed by
(A) the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, or (B) the
International Standby Practices (ISP98), International Chamber of Commerce
Publication No. 590, in either case, including any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce and adhered to
by the Issuing Lender;

 

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

 

(viii)                        if the issuance, increase or extension of such
Letter of Credit would violate one or more policies of the Issuing Lender
applicable to letters of credit generally;

 

(ix)                              if Letter of Credit is to be denominated in a
currency other than Dollars;

 

(x)                                 if any Lender is at such time a Defaulting
Lender hereunder, unless the Issuing Lender has entered into satisfactory
arrangements including the delivery of Cash Collateral, satisfactory to the
Issuing Lender (in its sole discretion) with the Borrower or such Lender to
eliminate the Issuing Lender’s actual or potential Fronting Exposure (after
giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender
arising from either the Letter of Credit then proposed to be issued or that
Letter of Credit and all other Letter of Credit Obligations as to which the
Issuing Lender has actual or potential Fronting Exposure, as it may elect in its
sole discretion; or

 

(xi)                              if such Letter of Credit supports the
obligations of any Person in respect of (x) a lease of real property, or (y) an
employment contract if the Issuing Lender reasonably determines that the
Borrower’s obligation to reimburse any draws under such Letter of Credit may be
limited.

 

(b)                                 Requesting Letters of Credit.  Each Letter
of Credit shall be issued pursuant to a Letter of Credit Application given by
the Borrower to the Administrative Agent and the Issuing Lender by facsimile or
other writing not later than 10:00 a.m. (Denver, Colorado time) on the third
Business Day before the proposed date of issuance for the Letter of Credit. 
Each Letter of Credit Application shall be fully completed and shall specify the
information required therein.  Each Letter of Credit Application shall be
irrevocable and binding on the Borrower.  Subject to the terms and conditions
hereof, the Issuing

 

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Lender shall before 1:00 p.m. (Denver, Colorado time) on the requested issuance
date set forth in the Letter of Credit Application issue such Letter of Credit
to the beneficiary of such Letter of Credit.

 

(c)                                  Reimbursements for Letters of Credit;
Funding of Participations.

 

(i)                                     With respect to any Letter of Credit, in
accordance with the related Letter of Credit Application, the Borrower agrees to
pay on demand to the Administrative Agent on behalf of the Issuing Lender an
amount equal to any amount paid by the Issuing Lender under such Letter of
Credit.  Upon the Issuing Lender’s demand for payment under the terms of a
Letter of Credit Application, the Borrower may, with a written notice, request
that the Borrower’s obligations to the Issuing Lender thereunder be satisfied
with the proceeds of an Advance in the same amount (notwithstanding any minimum
size or increment limitations on individual Advances).  If the Borrower does not
make such request and does not otherwise make the payments demanded by the
Issuing Lender as required under this Agreement or the Letter of Credit
Application, then the Borrower shall be deemed for all purposes of this
Agreement to have requested such an Advance in the same amount and the transfer
of the proceeds thereof to satisfy the Borrower’s obligations to the Issuing
Lender, and the Borrower hereby unconditionally and irrevocably authorizes,
empowers, and directs the Lenders to make such Advance, to transfer the proceeds
thereof to the Issuing Lender in satisfaction of such obligations, and to record
and otherwise treat such payments as an Advance to the Borrower.  The
Administrative Agent and each Lender may record and otherwise treat the making
of such Borrowings as the making of a Borrowing to the Borrower under this
Agreement as if requested by the Borrower.  Nothing herein is intended to
release any of the Borrower’s obligations under any Letter of Credit
Application, but only to provide an additional method of payment therefor.  The
making of any Borrowing under this Section 2.3(c) shall not constitute a cure or
waiver of any Default, other than the payment Default which is satisfied by the
application of the amounts deemed advanced hereunder, caused by the Borrower’s
failure to comply with the provisions of this Agreement or the Letter of Credit
Application.

 

(ii)                                  Each Lender (including the Lender acting
as Issuing Lender) shall, upon notice from the Administrative Agent that the
Borrower has requested or is deemed to have requested an Advance pursuant to
Section 2.4 and regardless of whether (A) the conditions in Section 3.2 have
been met, (B) such notice complies with Section 2.4, or (C) a Default exists,
make funds available to the Administrative Agent for the account of the Issuing
Lender in an amount equal to such Lender’s Pro Rata Share of the amount of such
Advance not later than 1:00 p.m. on the Business Day specified in such notice by
the Administrative Agent, whereupon each Lender that so makes funds available
shall be deemed to have made an Advance to the Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the Issuing Lender.

 

(iii)                               If any such Lender shall not have so made
its Advance available to the Administrative Agent pursuant to this Section 2.3,
such Lender agrees to pay interest thereon for each day from such date until the
date such amount is paid at the lesser of (A) the Federal Funds Rate for such
day for the first three days and thereafter the interest rate applicable to the
Advance and (B) the Maximum Rate.  Whenever, at any time after the
Administrative Agent has received from any Lender such Lender’s Advance, the
Administrative Agent receives any payment on account thereof, the Administrative
Agent will pay to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s Advance was outstanding and funded), which
payment shall be subject to repayment by such Lender if such payment received by
the Administrative Agent is required to be returned.  Each Lender’s obligation
to make the Advance pursuant to this Section 2.3 shall be absolute and
unconditional and shall not be affected by any circumstance, including

 

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(1) any set-off, counterclaim, recoupment, defense or other right which such
Lender or any other Person may have against the Issuing Lender, the
Administrative Agent or any other Person for any reason whatsoever; (2) the
occurrence or continuance of a Default or the termination of the Commitments;
(3) any breach of this Agreement by any Credit Party or any other Lender; or
(4) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.

 

(d)                                 Participations.  Upon the date of the
issuance or increase of a Letter of Credit, the Issuing Lender shall be deemed
to have sold to each other Lender and each other Lender shall have been deemed
to have purchased from the Issuing Lender a participation in the related Letter
of Credit Obligations equal to such Lender’s Pro Rata Share at such date and
such sale and purchase shall otherwise be in accordance with the terms of this
Agreement.  The Issuing Lender shall promptly notify each such participant
Lender by facsimile, telephone, or electronic mail (PDF) of each Letter of
Credit issued or increased and the actual dollar amount of such Lender’s
participation in such Letter of Credit.

 

(e)                                  Obligations Unconditional.  The obligations
of the Borrower under this Agreement in respect of each Letter of Credit shall
be unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, notwithstanding the
following circumstances:

 

(i)                                     any lack of validity or enforceability
of any Letter of Credit Documents;

 

(ii)                                  any amendment or waiver of or any consent
to departure from any Letter of Credit Documents;

 

(iii)                               the existence of any claim, set-off, defense
or other right which any Credit Party may have at any time against any
beneficiary or transferee of such Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing Lender, any
Lender or any other person or entity, whether in connection with this Agreement,
the transactions contemplated in this Agreement or in any Letter of Credit
Documents or any unrelated transaction;

 

(iv)                              any statement or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect to the extent the Issuing Lender would not be liable therefor
pursuant to the following paragraph (g);

 

(v)                                 payment by the Issuing Lender under such
Letter of Credit against presentation of a draft or certificate which does not
comply with the terms of such Letter of Credit; or

 

(vi)                              any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing;

 

provided, however, that nothing contained in this paragraph (e) shall be deemed
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit.

 

(f)                                   Prepayments of Letters of Credit.  In the
event that any Letter of Credit shall be outstanding or shall be drawn and not
reimbursed on or prior to the Acceptable Letter of Credit Maturity Date, the
Borrower shall pay to the Administrative Agent an amount equal to 102% of the
Letter of Credit Exposure allocable to such Letter of Credit, such amount to be
due and payable on the Acceptable Letter

 

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of Credit Maturity Date, and to be held in the Cash Collateral Account and
applied in accordance with paragraph (h) below.

 

(g)                                  Liability of Issuing Lender.  The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit.  Neither
the Issuing Lender nor any of its officers or directors shall be liable or
responsible for:

 

(i)                                     the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith;

 

(ii)                                  the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged;

 

(iii)                               payment by the Issuing Lender against
presentation of documents which do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the relevant Letter of Credit; or

 

(iv)                              any other circumstances whatsoever in making
or failing to make payment under any Letter of Credit (INCLUDING THE ISSUING
LENDER’S OWN NEGLIGENCE),

 

except that the provisions set forth in paragraph (e) or in this paragraph
(g) shall not be construed to excuse the Issuing Lender from liability to the
Borrower, to the extent of any direct, as opposed to consequential, damages
suffered by the Borrower which were caused by the Issuing Lender’s willful
misconduct or gross negligence, as determined by a court of competent
jurisdiction by final and nonappealable judgment, in determining whether
documents presented under a Letter of Credit comply with the terms of such
Letter of Credit.  In furtherance and not in limitation of the foregoing, the
Issuing Lender 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 or may refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.

 

(h)                                 Cash Collateral Account.

 

(i)                                     If the Borrower is required to deposit
funds in the Cash Collateral Account pursuant to Sections 2.5(c), 2.16,
7.2(b) or 7.3(b) or any other provision under this Agreement, then the Borrower
and the Administrative Agent shall establish the Cash Collateral Account and the
Borrower shall execute any documents and agreements, including the
Administrative Agent’s standard form assignment of deposit accounts, that the
Administrative Agent requests in connection therewith to establish the Cash
Collateral Account and grant the Administrative Agent an Acceptable Security
Interest in such account and the funds therein.  The Borrower hereby pledges to
the Administrative Agent and grants the Administrative Agent a security interest
in the Cash Collateral Account, whenever established, all funds held in the Cash
Collateral Account from time to time, and all proceeds thereof as security for
the payment of the Secured Obligations.

 

(ii)                                  Funds held in the Cash Collateral Account
shall be held as cash collateral for obligations with respect to Letters of
Credit and promptly applied by the Administrative Agent at the request of the
Issuing Lender to any reimbursement or other obligations under Letters of Credit
that exist or occur.  To the extent that any surplus funds are held in the Cash
Collateral Account above the Letter of Credit Exposure during the existence of
an Event of Default the

 

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Administrative Agent may (A) hold such surplus funds in the Cash Collateral
Account as cash collateral for the Secured Obligations or (B) apply such surplus
funds to any Secured Obligations in any manner directed by the Required
Lenders.  If no Default exists, the Administrative Agent shall release any
surplus funds held in the Cash Collateral Account above the Letter of Credit
Exposure to the Borrower at the Borrower’s written request.

 

(iii)                               Funds held in the Cash Collateral Account
may be invested in Liquid Investments maintained with, and under the sole
dominion and control of, the Administrative Agent or in another investment if
mutually agreed upon by the Borrower and the Administrative Agent, but the
Administrative Agent shall have no obligation to make any investment of the
funds therein.  The Administrative Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.

 

(i)                                     Letters of Credit Issued for Guarantors
or any Subsidiary.  Notwithstanding that a Letter of Credit issued or
outstanding hereunder is in support of any obligations of, or is for the account
of, a Guarantor or any Subsidiary, the Borrower shall be obligated to reimburse
the Issuing Lender hereunder for any and all drawings under such Letter of
Credit issued hereunder by the Issuing Lender.  The Borrower hereby acknowledges
that the issuance of Letters of Credit for the account of any Guarantor, the
Borrower or any Subsidiary inures to the benefit of the Borrower, and that the
Borrower’s business (indirectly or directly) derives substantial benefits from
the businesses of such other Persons.

 

Section 2.4                                    Advances.

 

(a)                                 Notice.  Each Borrowing (other than the
Borrowings to be made on the Closing Date), shall be made pursuant to the
applicable Notice of Borrowing given by Borrower to Administrative Agent not
later than (i) 10:00 a.m. (Denver, Colorado time) on the third Business Day
before the date of the proposed Borrowing, in the case of a Eurodollar Advance
or (ii) 10:00 a.m. (Denver, Colorado time) one Business Day before the date of
the proposed Borrowing in the case of a Base Rate Advance, by the Borrower to
the Administrative Agent, which shall give to each Lender prompt notice of such
proposed Borrowing, by facsimile or telex.  The Borrowings to be made on the
Closing Date shall be made pursuant to the applicable Notices of Borrowing given
not later than 10:00 a.m. (Denver, Colorado time) on the Closing Date by the
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice of such proposed Borrowing, by facsimile or telex.  Each Notice of
Borrowing shall be by facsimile or telex, confirmed promptly by the Borrower
with a hard copy (other than with respect to notice sent by facsimile),
specifying (i) the requested date of such Borrowing, (ii) the requested Type of
Advances comprising such Borrowing, (iii) the aggregate amount of such
Borrowing, and (iv) if such Borrowing is to be comprised of Eurodollar Advances,
the requested Interest Period for each such Advance; provided that, and all
Borrowings to be made on the Closing Date shall consist only of Base Rate
Advance which may, subject to the terms of this Agreement, be thereafter
Converted into Eurodollar Advances.  In the case of a proposed Borrowing
comprised of Eurodollar Advances, the Administrative Agent shall promptly notify
each Lender of the applicable interest rate under Section 2.8(b).  Each Lender
shall, before 11:00 a.m. (Denver, Colorado time) on the date of such Borrowing,
make available for the account of its applicable Lending Office to the
Administrative Agent at its address referred to in Section 9.9, or such other
location as the Administrative Agent may specify by notice to the Lenders, in
same day funds, such Lender’s pro rata share of such Borrowing.  After the
Administrative Agent’s receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article 3, the Administrative

 

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Agent will make such funds available to the Borrower at its account with the
Administrative Agent or as otherwise directed by the Borrower with written
notice to the Administrative Agent.

 

(b)                                 Conversions and Continuations.  In order to
elect to Convert or continue an Advance under this paragraph, the Borrower shall
deliver an irrevocable Notice of Continuation or Conversion to the
Administrative Agent at the Administrative Agent’s office no later than
10:00 a.m. (Denver, Colorado time) (i) on the Business Day before the date of
the proposed conversion date in the case of a Conversion to a Base Rate Advance
and (ii) at least three Business Days in advance of the proposed Conversion or
continuation date in the case of a Conversion to, or a continuation of, a
Eurodollar Advance.  Each such Notice of Conversion or Continuation shall be in
writing or by telex or facsimile confirmed promptly by the Borrower with a hard
copy (other than with respect to notice sent by facsimile), specifying (i) the
requested Conversion or continuation date (which shall be a Business Day),
(ii) the amount and Type of the Advance to be Converted or continued,
(iii) whether a Conversion or continuation is requested and, if a Conversion,
into what Type of Advance, and (iv) in the case of a Conversion to, or a
continuation of, a Eurodollar Advance, the requested Interest Period.  Promptly
after receipt of a Notice of Continuation or Conversion under this paragraph,
the Administrative Agent shall provide each Lender with a copy thereof and, in
the case of a Conversion to or a Continuation of a Eurodollar Advance, notify
each Lender of the applicable interest rate under Section 2.8(b).  The portion
of Advances comprising part of the same Borrowing that are Converted to Advances
of another Type shall constitute a new Borrowing.

 

(c)                                  Certain Limitations.  Notwithstanding
anything in paragraphs (a) and (b) above:

 

(i)                                     at no time shall there be more than five
Interest Periods applicable to outstanding Eurodollar Advances;

 

(ii)                                  the Borrower may not select Eurodollar
Advances for any Borrowing at any time when a Default has occurred and is
continuing;

 

(iii)                               if any Lender shall, at least one Business
Day before the date of any requested Borrowing, notify the Administrative Agent
that the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender or its applicable Lending
Office to perform its obligations under this Agreement to make Eurodollar
Advances or to fund or maintain Eurodollar Advances, (A) the obligation of such
Lender to make such Eurodollar Advance as part of the requested Borrowing or for
any subsequent Borrowing shall be suspended until such Lender shall notify the
Borrower that the circumstances causing such suspension no longer exist and such
Lender’s portion of such requested Borrowing or any subsequent Borrowing of
Eurodollar Advances shall be made in the form of a Base Rate Advance, and
(B) such Lender agrees to use commercially reasonable efforts (consistent with
its internal policies and legal and regulatory restrictions) to designate a
different Lending Office if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender;

 

(iv)                              if the Administrative Agent is unable to
determine the Eurodollar Rate for Eurodollar Advances comprising any requested
Borrowing, the right of the Borrower to select Eurodollar Advances for such
Borrowing or for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance;

 

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(v)                                 if the Required Lenders shall, at least one
Business Day before the date of any requested Borrowing, notify the
Administrative Agent that the Eurodollar Rate for Eurodollar Advances comprising
such Borrowing will not adequately reflect the cost to such Lenders of making or
funding their respective Eurodollar Advances, as the case may be, for such
Borrowing, the right of the Borrower to select Eurodollar Advances for such
Borrowing or for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance; and

 

(vi)                              if the Borrower shall fail to select the
duration or continuation of any Interest Period for any Eurodollar Advances in
accordance with the provisions contained in the definition of Interest Period in
Section 1.1 and paragraph (b) above, the Administrative Agent will forthwith so
notify the Borrower and the Lenders and such Advances will be made available to
the Borrower on the date of such Borrowing as Base Rate Advances or, if an
existing Advance, Convert into Base Rate Advances.

 

(d)                                 Notices Irrevocable.  Each Notice of
Borrowing and Notice of Continuation or Conversion delivered by the Borrower
hereunder, including its deemed request for borrowing made under Section 2.3(c),
shall be irrevocable and binding on the Borrower.

 

(e)                                  Administrative Agent Reliance.  Unless the
Administrative Agent shall have received notice from a Lender before the date of
any Borrowing that such Lender will not make available to the Administrative
Agent such Lender’s applicable Pro Rata Share of any Borrowing, the
Administrative Agent may assume that such Lender has made its applicable Pro
Rata Share of such Borrowing available to the Administrative Agent on the date
of such Borrowing in accordance with Section 2.4(a), and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount.  If and to the extent that such Lender shall
not have so made its applicable Pro Rata Share of such Borrowing available to
the Administrative Agent, such Lender and the Borrower severally agree to
immediately repay to the Administrative Agent on demand such corresponding
amount, together with interest on such amount, for each day from the date such
amount is made available to the Borrower until the date such amount is repaid to
the Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable on such day to Advances comprising such Borrowing and (ii) in the
case of such Lender, the lesser of (A) the Federal Funds Rate for such day and
(B) the Maximum Rate.  If such Lender shall repay to the Administrative Agent
such corresponding amount and interest as provided above, such corresponding
amount so repaid shall constitute such Lender’s Advance as part of such
Borrowing for purposes of this Agreement even though not made on the same day as
the other Advances comprising such Borrowing.

 

Section 2.5                                    Prepayments.

 

(a)                                 Right to Prepay; Ratable Prepayment.  The
Borrower shall have no right to prepay any principal amount of any Advance
except as provided in this Section 2.5 and all notices given pursuant to this
Section 2.5 shall be irrevocable and binding upon the Borrower.  Each payment of
any Advance pursuant to this Section 2.5 shall be made in a manner such that all
Advances comprising part of the same Borrowing are paid in whole or ratably in
part other than Advances owing to a Defaulting Lender as provided in
Section 2.16.

 

(b)                                 Optional.  The Borrower may elect to prepay
any of the Advances without penalty or premium except as set forth in
Section 2.10 and after giving by 10:00 a.m. (Denver, Colorado time) (i) in the
case of Eurodollar Advances, at least three Business Days’ or (ii) in case of
Base Rate Advances, one Business Day’s prior written notice to the
Administrative Agent stating the proposed date and aggregate

 

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principal amount of such prepayment.  If any such notice is given, the Borrower
shall prepay Advances comprising part of the same Borrowing in whole or ratably
in part in an aggregate principal amount equal to the amount specified in such
notice, together with accrued interest to the date of such prepayment on the
principal amount prepaid and amounts, if any, required to be paid pursuant to
Section 2.10 as a result of such prepayment being made on such date; provided
that (A) each optional prepayment of Eurodollar Advances shall be in a minimum
amount not less than $1,000,000 and in multiple integrals of $500,000 in excess
thereof and (B) each optional prepayment of Base Rate Advances shall be in a
minimum amount not less than $500,000 and in multiple integrals of $100,000 in
excess thereof.

 

(c)                                  Borrowing Base Deficiency.

 

(i)                                     Other than as provided in clause (ii) or
clause (iii) below, if a Borrowing Base Deficiency exists, the Borrower shall,
after receipt of written notice from the Administrative Agent regarding such
deficiency, (x) provide written notice to the Administrative Agent within ten
days of the date such deficiency notice is received by the Borrower from the
Administrative Agent, identifying which of the following actions the Borrower
shall take (and in the case of option (D), below, identifying the allocation
between options (B) and (C)), and (y) proceed to take such actions (and the
failure of the Borrower to provide such notice or take such actions to remedy
such Borrowing Base Deficiency shall constitute an Event of Default):

 

(A)                               prepay Advances or, if the Advances have been
repaid in full, make deposits into the Cash Collateral Account to provide cash
collateral for the Letter of Credit Exposure, such that the Borrowing Base
Deficiency is cured within 30 days after the date such deficiency notice is
received by the Borrower from the Administrative Agent;

 

(B)                               pledge as Collateral for the Obligations
additional Oil and Gas Properties acceptable to the Administrative Agent and
each of the Lenders such that the Borrowing Base Deficiency is cured within 30
days after the date such deficiency notice is received by the Borrower from the
Administrative Agent;

 

(C)                               repay the Advances and make deposits into the
Cash Collateral Account to provide cash collateral for the Letters of Credit,
each in three monthly installments equal to one-third of such Borrowing Base
Deficiency with the first such installment due 30 days after the date such
deficiency notice is received by the Borrower from the Administrative Agent and
each following installment due 30 days after the preceding installment;

 

(D)                               combine the options provided in clause (A) and
clause (B) above, to make such prepayment or deposit and deliver such additional
Collateral within the time required under clause (A) and clause (B) above;

 

(E)                                combine the options provided in clause
(A) and clause (C) above, to make such prepayment or deposit and deliver such
additional Collateral within the time required under clause (A) and clause (C);
or

 

(F)                                 combine the options provided in clause
(B) and clause (C) above, to make such three equal consecutive monthly
installments and deliver such additional Collateral within the time required
under clause (B) and clause (C) above.

 

(ii)                                  If, during the existence of a Borrowing
Base Deficiency, any Credit Party (or the Administrative Agent as loss payee or
assignee) receives Extraordinary Receipts, whether as one payment or a series of
payments, then the Borrower shall, within three Business Days after

 

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receipt of such proceeds, prepay the Borrowings and provide cash collateral for
the Letter of Credit Exposure, in an aggregate amount equal to the lesser of
(i) such Borrowing Base Deficiency and (ii) 100% of such proceeds.

 

(iii)                               Upon each reduction of the Borrowing Base,
if any, resulting from a Borrowing Base redetermination made under
Section 2.2(c) or a Borrowing Base reduction made under Section 2.2(e), if a
Borrowing Base Deficiency exists, then the Borrower shall immediately prepay the
Advances or, if the Advances have been repaid in full, make deposits into the
Cash Collateral Account to provide cash collateral for the Letter of Credit
Exposure, in an amount equal to (A) such portion of the Borrowing Base
Deficiency resulting from such reduction plus (B) if a Borrowing Base Deficiency
exists prior to such reduction, then an amount equal to the lesser of (i) the
net cash proceeds of the transaction that triggered such Borrowing Base
reduction and (ii) such portion of the Borrowing Base Deficiency in existence
immediately prior to such reduction.

 

(iv)                              Each prepayment pursuant to this
Section 2.5(c) shall be accompanied by accrued interest on the amount prepaid to
the date of such prepayment and amounts, if any, required to be paid pursuant to
Section 2.10 (other than prepayments made to a Defaulting Lender) as a result of
such prepayment being made on such date.  Each prepayment under this
Section 2.5(c) shall be applied to the Advances as determined by the
Administrative Agent and agreed to by the Lenders in their sole discretion.  The
failure of the Borrower to provide a notice of its election within the required
10 days as required in clause (i) above shall be deemed to be an election by the
Borrower to take the actions provided in clause (i)(A) above.

 

(d)                                 Reduction of Commitments.  On the date of
each reduction of the aggregate Commitments pursuant to Section 2.1(c), the
Borrower agrees to make a prepayment in respect of the outstanding amount of the
Advances to the extent, if any, that the aggregate unpaid principal amount of
all Advances plus the Letter of Credit Exposure exceeds the lesser of (A) the
aggregate Commitments, as so reduced and (B) the Borrowing Base.  Each
prepayment pursuant to this Section 2.5(d) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.10 as a result of such prepayment
being made on such date.  Each prepayment under this Section 2.5(d) shall be
applied to the Advances as determined by the Administrative Agent and agreed to
by the Lenders in their sole discretion

 

(e)                                  Reserved.

 

(f)                                   No Additional Right; Ratable Prepayment. 
The Borrower shall have no right to prepay any principal amount of any Advance
except as provided in this Section 2.5, and all notices given pursuant to this
Section 2.5 shall be irrevocable and binding upon the Borrower.  Except as
provided in the preceding sentence, each payment of any Advance pursuant to this
Section 2.5 shall be made in a manner such that all Advances comprising part of
the same Borrowing are paid in whole or ratably in part.

 

(g)                                  Interest; Costs.  Each prepayment pursuant
to this Section 2.5 shall be accompanied by accrued interest on the amount
prepaid to the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.10 as a result of such prepayment being made on such date.

 

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Section 2.6                                    Repayment.  The Borrower shall
pay to the Administrative Agent for the ratable benefit of each Lender the
aggregate outstanding principal amount of the Advances on the Maturity Date.

 

Section 2.7                                    Fees.

 

(a)                                 Commitment Fees.  Subject to Section 2.16,
the Borrower agrees to pay to the Administrative Agent for the account of each
Lender a commitment fee equal to the Commitment Fee Rate on the average daily
Unused Commitment Amount for such period.  Such Commitment Fee is due quarterly
in arrears on March 31, June 30, September 30, and December 31 of each year and
on the Maturity Date.

 

(b)                                 Fees for Letters of Credit.  The Borrower
agrees to pay the following:

 

(i)                                     Subject to Section 2.16, to the
Administrative Agent for the pro rata benefit of the Lenders a per annum letter
of credit fee for each Letter of Credit issued hereunder, for the period such
Letter of Credit is to be outstanding, in an amount equal to the greater of
(A) the Applicable Margin for Eurodollar Advances per annum on the face amount
of such Letter of Credit, and (B) $500 per Letter of Credit.  Such fee shall be
due and payable quarterly in arrears on March 31, June 30, September 30, and
December 31 of each year, and on the Maturity Date. Notwithstanding anything to
the contrary contained herein, (1) while any Event of Default under
Section 7.1(a) or Section 7.1(g) exists, or (2) at the Request of the Required
Lenders, while any other Event of Default exists, all Letter of Credit fees
shall accrue at the Default Rate.

 

(ii)                                  To the Issuing Lender, a fronting fee for
each Letter of Credit equal to the greater of (A) 0.125% per annum on the face
amount of such Letter of Credit and (B) $500.  Such fee shall be due and payable
quarterly in arrears on March 31, June 30, September 30, and December 31 of each
year, and on the Maturity Date.

 

(iii)                               To the Issuing Lender such other usual and
customary fees associated with any transfers, amendments, drawings, negotiations
or reissuances of any Letters of Credit.  Such fees shall be due and payable as
requested by the Issuing Lender in accordance with the Issuing Lender’s then
current fee policy.

 

The Borrower shall have no right to any refund of letter of credit fees
previously paid by the Borrower, including any refund claimed because any Letter
of Credit is canceled prior to its expiration date.

 

(c)                                  Administrative Agent Fee.  The Borrower
agrees to pay the fees to the Administrative Agent as set forth in the Fee
Letter.

 

Section 2.8                                    Interest.

 

(a)                                 Base Rate Advances.  Each Base Rate Advance
shall bear interest at the Adjusted Base Rate in effect from time to time plus
the Applicable Margin for Base Rate Advances for such period.  The Borrower
shall pay to Administrative Agent for the ratable account of each Lender all
accrued but unpaid interest on such Lender’s Base Rate Advances on each
March 31, June 30, September 30, and December 31 commencing on June 30, 2013,
and on the Maturity Date.

 

(b)                                 Eurodollar Advances.  Each Eurodollar
Advance shall bear interest during its Interest Period equal to at all times the
Eurodollar Rate for such Interest Period plus the Applicable Margin for
Eurodollar Advances for such period.  The Borrower shall pay to the
Administrative Agent for the ratable account of each Lender all accrued but
unpaid interest on each of such Lender’s Eurodollar Advances on

 

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the last day of the Interest Period therefor (provided that for Eurodollar
Advances with Interest Periods of six months or more, accrued but unpaid
interest shall also be due on the day three months from the first day of such
Interest Period), on the date any Eurodollar Advance is repaid, and on the
Maturity Date.

 

(c)                                  Default Rate.  Notwithstanding the
foregoing, upon (i) the occurrence and during the continuance of any Event of
Default pursuant to Section 7.1(a) or Section 7.1(g), or (ii) at the request of
the Required Lenders upon the occurrence and during the continuance of any other
Event of Default, all amounts shall bear interest, after as well as before
judgment, at the Default Rate.  Interest accrued pursuant to this
Section 2.8(c) and all interest accrued but unpaid on or after the Maturity Date
shall be due and payable on demand.

 

Section 2.9                                    Illegality.  If any Lender shall
notify the Borrower that it has determined that any Change in Law has made it
unlawful, or that any central bank or other Governmental Authority asserts that
it is unlawful, for such Lender or its applicable Lending Office to perform its
obligations under this Agreement to make, maintain, or fund any Eurodollar
Advances of such Lender then outstanding hereunder, (a) the Borrower shall, no
later than 10:00 a.m. (Denver, Colorado time) (i) if not prohibited by law, on
the last day of the Interest Period for each outstanding Eurodollar Advance or
(ii) if required by such notice, on the second Business Day following its
receipt of such notice, prepay all of the Eurodollar Advances of such Lender
then outstanding, together with accrued interest on the principal amount prepaid
to the date of such prepayment and amounts, if any, required to be paid pursuant
to Section 2.10 as a result of such prepayment being made on such date, (b) such
Lender shall simultaneously make a Base Rate Advance to the Borrower on such
date in an amount equal to the aggregate principal amount of the Eurodollar
Advances prepaid to such Lender, and (c) the right of the Borrower to select
Eurodollar Advances from such Lender for any subsequent Borrowing shall be
suspended until such Lender shall notify the Borrower that the circumstances
causing such suspension no longer exist.  Each Lender agrees to use commercially
reasonable efforts (consistent with its internal policies and legal and
regulatory restrictions) to designate a different Lending Office if the making
of such designation would avoid the effect of this paragraph and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

 

Section 2.10                             Breakage Costs.  Upon demand of any
Lender (with a copy to the Administrative Agent) from time to time, the Borrower
shall promptly compensate such Lender for and hold such Lender harmless from any
loss, cost or expense incurred by it as a result of:

 

(a)                                 any continuation, conversion, payment or
prepayment (including any deemed payment or repayment and any reallocated
repayment to Non-Defaulting Lenders provided for in Section 2.12(a) or
Section 2.16) of any Advance other than a Base Rate Advance on a day other than
the last day of the Interest Period for such Advance (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)                                 any failure by the Borrower (for a reason
other than the failure of such Lender to make an Advance) to prepay, borrow,
continue or Convert any Advance other than a Base Rate Advance on the date or in
the amount notified by the Borrower; or

 

(c)                                  any assignment of an Eurodollar Advance on
a day other than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 2.14;

 

including any foreign exchange losses and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Advance,
from fees payable to terminate the deposits from which such funds were obtained
or from the performance of any foreign exchange contract.  The Borrower shall
also pay any customary administrative fees charged by such Lender in connection

 

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with the foregoing.  For purposes of calculating amounts payable by the Borrower
to the Lenders under this Section 2.10, the requesting Lender shall be deemed to
have funded the Eurodollar Advances made by it at the Eurodollar Base Rate used
in determining the Eurodollar Rate for such Advance by a matching deposit or
other borrowing in the offshore interbank market for Dollars for a comparable
amount and for a comparable period, whether or not such Eurodollar Advance was
in fact so funded.

 

Section 2.11                             Increased Costs.

 

(a)                                 Eurodollar Advances.  If any Change in Law
shall:

 

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

 

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

 

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

 

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

 

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

 

(c)                                  Certificates for Reimbursement.  A
certificate of a Lender or the Issuing Lender setting forth the amount or
amounts necessary to compensate such Lender or the Issuing Lender or its holding

 

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company, as the case may be, as specified in paragraph (a) or (b) of this
Section and delivered to the Borrower, shall be conclusive absent manifest
error.  The Borrower shall pay such Lender or the Issuing Lender, as the case
may be, the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

(d)                                 Delay in Requests.  Failure or delay on the
part of any Lender or Issuing Lender to demand compensation pursuant to this
Section 2.11 shall not constitute a waiver of such Lender’s or such Issuing
Lender’s right to demand such compensation, provided that the Borrower shall not
be required to compensate a Lender or Issuing Lender pursuant to this
Section 2.11 for any increased costs incurred or reductions suffered more than
180 days prior to the date that such Lender or Issuing Lender, as the case may
be, notifies the Borrower and the Administrative Agent of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or
Issuing Lender’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof).

 

Section 2.12                             Payments and Computations.

 

(a)                                 Payments.  All payments of principal,
interest, and other amounts to be made by the Borrower under this Agreement and
other Credit Documents shall be made to the Administrative Agent in Dollars and
in immediately available funds, without setoff, deduction, or counterclaim.

 

(b)                                 Payment Procedures. The Borrower shall make
each payment under this Agreement and under the Notes not later than 10:00 a.m.
(Denver, Colorado time) on the day when due in Dollars to the Administrative
Agent at the location referred to in the Notes (or such other location as the
Administrative Agent shall designate in writing to the Borrower) in same day
funds.  The Administrative Agent will promptly thereafter, and in any event
prior to the close of business on the day any timely payment is made, cause to
be distributed like funds relating to the payment of principal, interest or fees
ratably (other than amounts payable solely to the Administrative Agent or a
specific Lender pursuant to Sections 2.9, 2.10, 2.11, 2.13, 2.14, and 9.2 and
such other provisions herein which expressly provide for payments to a specific
Lender, but after taking into account payments effected pursuant to Section 9.1)
in accordance with each Lender’s applicable Pro Rata Share to the Lenders for
the account of their respective applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.  Upon receipt of other amounts due
solely to the Administrative Agent, the Issuing Lender or a specific Lender, the
Administrative Agent shall distribute such amounts to the appropriate party to
be applied in accordance with the terms of this Agreement.

 

(c)                                  Non-Business Day Payments.  Whenever any
payment shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest or
fees, as the case may be; provided that if such extension would cause payment of
interest on or principal of Eurodollar Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.

 

(d)                                 Computations.  All computations of interest
for Base Rate Advances shall be made by the Administrative Agent on the basis of
a year of 365/366 days and all computations of all other interest and fees shall
be made by the Administrative Agent on the basis of a year of 360 days, in each
case for the actual number of days (including the first day, but excluding the
last day) occurring in the period for which such interest or fees are payable. 
Each determination by the Administrative Agent of an amount of interest or fees
shall be conclusive and binding for all purposes, absent manifest error.

 

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(e)                                  Sharing of Payments, Etc.  If any Lender
shall, by exercising any right of setoff or counterclaim or otherwise, obtain
payment in respect of any principal of or interest on any of its Advances or
other obligations hereunder resulting in such Lender receiving payment of a
proportion of the aggregate amount of its Advances and accrued interest thereon
or other such obligations greater than its Pro Rata Share thereof as provided
herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value)
participations in the Advances and such other obligations of the other Lenders,
or make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Advances and other amounts owing them; provided that:

 

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

 

(ii)                                  the provisions of this paragraph shall not
be construed to apply to (x) any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement (including the application
of funds arising from the existence of a Defaulting Lender), or (y) any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Advances or participations in Letter of Credit
Exposure to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply).

 

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

 

(f)                                   Obligations of Lenders Several.  The
obligations of the Lenders hereunder to make Advances, to fund participations in
Letters of Credit and to make payments pursuant to Section 9.2(b) are several
and not joint.  The failure of any Lender to make any Advance, to fund any such
participation or to make any payment under Section 9.2(b) on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan, to purchase its participation or to make its
payment under Section 9.2(b).

 

Section 2.13                             Taxes.

 

(a)                                 Defined Terms.  For purposes of this
Section 2.13, the term “Lender” includes any the Issuing Lender and the term
“applicable law” includes FATCA.

 

(b)                                 Payments Free of Taxes.  Any and all
payments by or on account of any obligation of any Credit Party under any Credit
Document shall be made without deduction or withholding for any Taxes, except as
required by applicable law.  If any applicable law (as determined in the good
faith discretion of an applicable withholding agent) requires the deduction or
withholding of any Tax from any such payment by a withholding agent, then the
applicable withholding agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Credit Party
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings of Indemnified Taxes

 

41

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applicable to additional sums payable under this Section) the applicable
Recipient receives an amount equal to the sum it would have received had no such
deduction or withholding been made.

 

(c)                                  Payment of Other Taxes by the Borrower. 
The Credit Parties shall timely pay to the relevant Governmental Authority in
accordance with applicable law, or at the option of the Administrative Agent
timely reimburse it for the payment of, any Other Taxes.

 

(d)                                 Indemnification by the Borrower.  The Credit
Parties shall jointly and severally indemnify each Recipient, within 10 days
after demand therefor, for the full amount of any Indemnified Taxes (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section) payable or paid by such Recipient or required to be withheld
or deducted from a payment to such Recipient 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, however, that no Credit Party shall be required to indemnify a
Recipient for Indemnified Taxes pursuant to this Section 2.13(d) unless such
Recipient notifies the Borrower of the indemnification claim for such
Indemnified Taxes no later than 270 days after the earlier of (i) the date on
which the relevant Governmental Authority makes written demand upon the
Recipient for payment of such Indemnified Taxes, and (ii) the date on which such
Recipient has made payment of such Indemnified Taxes. A certificate as to the
amount of such payment or liability delivered to the Borrower by a Lender (with
a copy to the Administrative Agent), or by the Administrative Agent on its own
behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(e)                                  Indemnification by the Lenders.  Each
Lender shall severally indemnify the Administrative Agent, within 10 days after
demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but
only to the extent that the any Credit Party has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the
obligation of the Credit Parties to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of Section 9.7(d) relating to the
maintenance of a Participant Register and (iii) any Excluded Taxes attributable
to such Lender, in each case, that are payable or paid by the Administrative
Agent in connection with any Credit Document, and any reasonable expenses
arising therefrom or with respect thereto, whether or not such Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability
delivered to any Lender by the Administrative Agent shall be conclusive absent
manifest error.  Each Lender hereby authorizes the Administrative Agent to set
off and apply any and all amounts at any time owing to such Lender under any
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 (e).

 

(f)                                   Evidence of Payments.  As soon as
practicable after any payment of Taxes by any Credit Party to a Governmental
Authority pursuant to this Section 2.13, such Credit Party shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.

 

(g)                                  Status of Lenders.

 

(i)                                     Any Lender that is entitled to an
exemption from or reduction of withholding Tax with respect to payments made
under any Credit Document shall deliver to the Borrower and the Administrative
Agent, at the time or times reasonably requested by the Borrower or the
Administrative Agent, such properly completed and executed documentation
reasonably requested by the Borrower or the Administrative Agent as will permit
such payments to be made without withholding or at a reduced rate of
withholding.  In addition, any Lender, if reasonably

 

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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 2.13(g)(ii)(A), (ii)(B) and (ii)(D) 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.

 

(ii)                                  Without limiting the generality of the
foregoing,

 

(A)                               any Lender that is a U.S. Person shall deliver
to the Borrower and the Administrative Agent on or prior to the date on which
such Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt
from U.S. federal backup withholding Tax;

 

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

 

(i.)                                  in the case of a Foreign Lender claiming
the benefits of an income tax treaty to which the United States is a party
(x) with respect to payments of interest under any Credit Document, executed
originals of IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) establishing
an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the
“interest” article of such tax treaty and (y) with respect to any other
applicable payments under any Credit Document, IRS Form W-8BEN or IRS
Form W-8BEN-E (as applicable) establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “business profits” or “other
income” article of such tax treaty;

 

(ii.)                               executed originals of IRS Form W-8ECI;

 

(iii.)                            in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate substantially in the form of Exhibit K-1 to the effect
that such Foreign Lender is not a “bank” within the meaning of
Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign
corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN or IRS
Form W-8BEN-E (as applicable); or

 

(iv.)                           to the extent a Foreign Lender is not the
beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS
Form W-

 

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8ECI, IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable), a U.S. Tax
Compliance Certificate substantially in the form of Exhibit K-2 or
Exhibit K-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit K-4 on
behalf of each such direct and indirect partner.

 

(C)                               any Foreign Lender shall, to the extent it is
legally entitled to do so, deliver to the Borrower and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior to
the date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the reasonable request of the Borrower or the
Administrative Agent), executed originals of any other form prescribed by
applicable law as a basis for claiming exemption from or a reduction in U.S.
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

 

(D)                               if a payment made to a Recipient under any
Credit Document would be subject to U.S. federal withholding Tax imposed by
FATCA if such Recipient 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 Recipient shall deliver to the
Borrower and the Administrative Agent at the time or times prescribed by law and
at such time or times reasonably requested by the Borrower or the Administrative
Agent such documentation prescribed by applicable law (including as prescribed
by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Recipient has complied with
such Recipient’s obligations under FATCA or to determine the amount to deduct
and withhold from such payment.  Solely for purposes of this clause (D), “FATCA”
shall include any amendments made to FATCA after the date of this Agreement.

 

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

 

(h)                                 Treatment of Certain Refunds.  If any party
determines, in its sole discretion exercised in good faith, that it has received
a refund of any Taxes as to which it has been indemnified pursuant to this
Section 2.13 (including by the payment of additional amounts pursuant to this
Section 2.13), it shall pay to the indemnifying party an amount equal to such
refund (but only to the extent of indemnity payments made under this
Section with respect to the Taxes giving rise to such refund), net of all
out-of-pocket expenses (including Taxes) of such indemnified party and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund).  Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (h) (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental

 

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Authority.  Notwithstanding anything to the contrary in this paragraph (h), in
no event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this paragraph (h) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the Tax subject to indemnification and
giving rise to such refund had not been deducted, withheld or otherwise imposed
and the indemnification payments or additional amounts with respect to such Tax
had never been paid.  This paragraph shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
relating to its Taxes that it deems confidential) to the indemnifying party or
any other Person.

 

(i)                                     Survival.  Each party’s obligations
under this Section 2.13 shall survive the resignation or replacement of the
Administrative Agent or any assignment of rights by, or the replacement of, a
Lender, the termination of the Commitments and the repayment, satisfaction or
discharge of all obligations under any Credit Document.

 

(j)                                    Administrative Agent Documentation. On or
before the date that Wells Fargo (or any successor or replacement Administrative
Agent) becomes the Administrative Agent hereunder, it shall deliver to the
Borrower two duly executed originals of either (i) IRS Form W-9, or (ii) such
other documentation as will establish that the Borrower can make payments to the
Administrative Agent without deduction or withholding of any Taxes imposed by
the United States, including Taxes imposed under FATCA.

 

Section 2.14                             Mitigation Obligations; Replacement of
Lenders.

 

(a)                                 Designation of a Different Lending Office. 
If any Lender requests compensation under Section 2.11, or requires the Borrower
to pay any Indemnified Taxes or additional amounts to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.13,
then such Lender shall (at the request of the Borrower) use reasonable efforts
to designate a different lending office for funding or booking its Advances
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.11 or 2.13, as the case may be, in the future, and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.  The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

(b)                                 Replacement of Lenders.  If any Lender
requests compensation under Section 2.11, or if the Borrower is required to pay
any Indemnified Taxes or additional amounts to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.13 and, in each
case, such Lender has declined or is unable to designate a different lending
office in accordance with Section 2.14(a), or if any Lender is a Defaulting
Lender, a Non-Consenting Lender or a Non-Increasing Lender, then the Borrower
may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 9.7), all of its interests, rights (other than its
existing rights to payments pursuant to Section 2.11 or Section 2.13) and
obligations under this Agreement and the related Credit Documents to an Eligible
Assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that:

 

(i)                                     the Borrower shall have paid to the
Administrative Agent the assignment fee (if any) specified in Section 9.7;

 

(ii)                                  such Lender shall have received payment of
an amount equal to the outstanding principal of its Advances and participations
in Letter of Credit Exposure, accrued interest thereon,

 

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accrued fees and all other amounts payable to it hereunder and under the other
Credit Documents (including any amounts under Section 2.10) from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts);

 

(iii)                               in the case of any such assignment resulting
from a claim for compensation under Section 2.11 or payments required to be made
pursuant to Section 2.13, such assignment will result in a reduction in such
compensation or payments thereafter;

 

(iv)                              such assignment does not conflict with
applicable Legal Requirements; and

 

(v)                                 in the case of any assignment resulting from
a Lender becoming a Non-Consenting Lender or a Non-Increasing Lender, the
applicable assignee shall have consented to the applicable amendment, waiver,
consent or Borrowing Base increase.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply. Solely for purposes of effecting any assignment involving a
Defaulting Lender under this Section 2.14 and to the extent permitted under
applicable Legal Requirements, each Lender hereby designates and appoints the
Administrative Agent as true and lawful agent and attorney-in-fact, with full
power and authority, for and on behalf of and in the name of such Lender to
execute, acknowledge and deliver the Assignment and Assumption required
hereunder if such Lender is a Defaulting Lender and such Lender shall be bound
thereby as fully and effectively as if such Lender had personally executed,
acknowledged and delivered the same.

 

Section 2.15                             Cash Collateral.  At any time that
there shall exist a Defaulting Lender, within one Business Day following the
written request of the Administrative Agent or the Issuing Lender (with a copy
to the Administrative Agent) the Borrower shall Cash Collateralize the Issuing
Lender’s Fronting Exposure with respect to such Defaulting Lender (determined
after giving effect to Section 2.16(a)(iv) and any Cash Collateral provided by
such Defaulting Lender) in an amount not less than the Minimum Collateral
Amount.

 

(a)                                 Grant of Security Interest.  The Borrower,
and to the extent provided by any Defaulting Lender, such Defaulting Lender,
hereby grants to the Administrative Agent, for the benefit of the Issuing
Lender, and agrees to maintain, a first priority security interest in all such
Cash Collateral as security for the Defaulting Lenders’ obligation to fund
participations in respect of Letter of Credit Obligations, to be applied
pursuant to clause (b) below.  If at any time the Administrative Agent
determines that Cash Collateral is subject to any right or claim of any Person
other than the Administrative Agent and the Issuing Lender as herein provided,
or that the total amount of such Cash Collateral is less than the Minimum
Collateral Amount, the Borrower will, promptly upon demand by the Administrative
Agent, pay or provide to the Administrative Agent additional Cash Collateral in
an amount sufficient to eliminate such deficiency (after giving effect to any
Cash Collateral provided by the Defaulting Lender).

 

(b)                                 Application.  Notwithstanding anything to
the contrary contained in this Agreement, Cash Collateral provided under this
Section 2.15 or Section 2.16 in respect of Letters of Credit shall be applied to
the satisfaction of the Defaulting Lender’s obligation to fund participations in
respect of Letter of Credit Obligations (including, as to Cash Collateral
provided by a Defaulting Lender, any interest accrued on such obligation) for
which the Cash Collateral was so provided, prior to any other application of
such property as may otherwise be provided for herein.

 

(c)                                  Termination of Requirement.  Cash
Collateral (or the appropriate portion thereof) provided to reduce the Issuing
Lender’s Fronting Exposure shall no longer be required to be held as Cash

 

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Collateral pursuant to this Section 2.15 following (i) the elimination of the
applicable Fronting Exposure (including by the termination of Defaulting Lender
status of the applicable Lender), or (ii) the determination by the
Administrative Agent and the Issuing Lender that there exists excess Cash
Collateral; provided that, subject to Section 2.16 the Person providing Cash
Collateral and the Issuing Lender may agree that Cash Collateral shall be held
to support future anticipated Fronting Exposure or other obligations and
provided further that to the extent that such Cash Collateral was provided by
the Borrower, such Cash Collateral shall remain subject to the security interest
granted pursuant to the Credit Documents.

 

Section 2.16                             Defaulting Lenders.

 

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

 

(i)                                     Waivers and Amendments.  Such Defaulting
Lender’s right to approve or disapprove any amendment, waiver or consent with
respect to this Agreement shall be restricted as set forth in the definition of
Required Lenders, as applicable.

 

(ii)                                  Defaulting Lender Waterfall. Any payment
of principal, interest, fees or other amounts received by the Administrative
Agent for the account of such Defaulting Lender (whether voluntary or mandatory,
at maturity, pursuant to Article 7 or otherwise) or received by the
Administrative Agent from a Defaulting Lender pursuant to Section 7.4 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 the Issuing Lender
hereunder; third, to Cash Collateralize the Issuing Lender’s Fronting Exposure
with respect to such Defaulting Lender in accordance with Section 2.15; fourth,
as the Borrower may request (so long as no Default or Event of Default exists),
to the funding of any Advance in respect of which such Defaulting Lender has
failed to fund its portion thereof as required by this Agreement, as determined
by the Administrative Agent; fifth, if so determined by the Administrative Agent
and the Borrower, to be held in a deposit account and released pro rata in order
to (x) satisfy such Defaulting Lender’s potential future funding obligations
with respect to Advances under this Agreement and (y) Cash Collateralize the
Issuing Lender’s future Fronting Exposure with respect to such Defaulting Lender
with respect to future Letters of Credit issued under this Agreement, in
accordance with Section 2.15; sixth, to the payment of any amounts owing to the
Lenders, or the Issuing Lender as a result of any judgment of a court of
competent jurisdiction obtained by any Lender, or the Issuing Lender against
such Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; seventh, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; and eighth, to such Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Advances or Letter
of Credit Exposure in respect of which such Defaulting Lender has not fully
funded its appropriate share, and (y) such Advances were made or the related
Letters of Credit were issued at a time when the conditions set forth in
Section 3.2 were satisfied or waived, such payment shall be applied solely to
pay the Advances of, and Letter of Credit Exposure owed to, all Non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any
Advances of, or Letter of Credit Exposure owed to, such Defaulting Lender until
such time as all Advances and funded and unfunded participations in Letter of
Credit

 

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Obligations are held by the Lenders pro rata in accordance with the Commitments
without giving effect to Section 2.16(a)(iv). Any payments, prepayments or other
amounts paid or payable to a Defaulting Lender that are applied (or held) to pay
amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this
Section 2.16(a)(ii) shall be deemed paid to and redirected by such Defaulting
Lender, and each Lender irrevocably consents hereto.

 

(iii)                               Certain Fees.

 

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

 

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

 

(C)                               With respect to any Letter of Credit Fee not
required to be paid to any Defaulting Lender pursuant to clause (A) or
(B) above, the Borrower shall (x) pay to each Non-Defaulting Lender that portion
of any such fee otherwise payable to such Defaulting Lender with respect to such
Defaulting Lender’s participation in Letter of Credit Obligations that has been
reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay
to the Issuing Lender the amount of any such fee otherwise payable to such
Defaulting Lender to the extent allocable to the Issuing Lender’s Fronting
Exposure to such Defaulting Lender, and (z) not be required to pay the remaining
amount of any such fee.

 

(iv)                              Reallocation of Participations to Reduce
Fronting Exposure.  All or any part of such Defaulting Lender’s participation in
Letter of Credit Obligations shall be reallocated among the Non-Defaulting
Lenders in accordance with their respective Pro Rata Shares (calculated without
regard to such Defaulting Lender’s Commitment) but only to the extent such
reallocation does not cause the aggregate outstanding amount of all Advances of
any Non-Defaulting Lender plus the Letter of Credit Exposure of such
Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  No
reallocation hereunder shall constitute a waiver or release of any claim of any
party hereunder against a Defaulting Lender arising from that Lender having
become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a
result of such Non-Defaulting Lender’s increased exposure following such
reallocation.

 

(b)                                 Defaulting Lender Cure.  If the Borrower,
the Administrative Agent and the Issuing Lender agree in writing that a Lender
is no longer a Defaulting Lender, the Administrative Agent will so notify the
parties hereto, whereupon as of the effective date specified in such notice and
subject to any conditions set forth therein (which may include arrangements with
respect to any Cash Collateral), that Lender will, to the extent applicable,
purchase at par that portion of outstanding Advances of the other Lenders or
take such other actions as the Administrative Agent may determine to be
necessary to cause the Advances and funded and unfunded participations in
Letters of Credit to be held pro rata by the Lenders in accordance with the
Commitments (without giving effect to Section 2.16(a)(iv), whereupon such Lender
will cease to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
the Borrower while that Lender was a Defaulting Lender; and provided, further,
that except to the extent otherwise expressly agreed by the

 

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affected parties, no change hereunder from Defaulting Lender to Lender will
constitute a waiver or release of any claim of any party hereunder arising from
that Lender’s having been a Defaulting Lender.

 

(c)                                  New Letters of Credit.  So long as any
Lender is a Defaulting Lender, the Issuing Lender shall not be required to
issue, extend, renew or increase any Letter of Credit unless it is satisfied
that it will have no Fronting Exposure after giving effect thereto.

 

(d)                                 Termination of Defaulting Lender.  The
Borrower may terminate the unused amount of the Commitment of any Lender that is
a Defaulting Lender upon notice to the Administrative Agent (which shall
promptly notify the Lenders thereof), and in such event the provisions of
Section 2.16(a)(ii) 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
(i) no Event of Default shall have occurred and be continuing, and (ii) such
termination shall not be deemed to be a waiver or release of any claim the
Borrower, the Administrative Agent, the Issuing Lender or any Lender may have
against such Defaulting Lender.

 

ARTICLE 3
CONDITIONS OF LENDING

 

Section 3.1                                    Conditions Precedent to Initial
Borrowing.  The obligations of each Lender to make the initial Advance and of
the Issuing Lender to make issue the initial Letters of Credit, shall be subject
to the conditions precedent that:

 

(a)                                 Documentation.  The Administrative Agent
shall have received the following, duly executed by all the parties thereto, in
form and substance reasonably satisfactory to the Administrative Agent and the
Lenders:

 

(i)                                     this Agreement and all attached Exhibits
and Schedules and the Notes, if requested by the applicable Lenders, payable to
each applicable Lender or its registered assigns;

 

(ii)                                  the Guaranty executed by all Subsidiaries
of the Borrower existing on the Closing Date;

 

(iii)                               the Security Agreement executed by each
Credit Party, together with appropriate UCC-1 financing statements, if any,
necessary or desirable for filing with the appropriate authorities and any other
documents, agreements, or instruments necessary to create, perfect or maintain
an Acceptable Security Interest in the Collateral described in the Security
Agreement;

 

(iv)                              the Mortgages encumbering at least 80% by
value of the Credit Parties’ Proven Reserves described in the initial
Independent Engineer’s Report;

 

(v)                                 certificates of insurance naming the
Administrative Agent as loss payee with respect to property insurance, or
additional insured with respect to liability insurance, and covering the
Borrower’s or its Subsidiaries Properties with such insurance carriers, for such
amounts and covering such risks that are acceptable to the Administrative Agent;

 

(vi)                              a certificate from an authorized officer of
the Borrower dated as of the Effective Date stating that as of such date (A) all
representations and warranties of the Borrower set forth in this Agreement are
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on such
date, except that any representation and warranty which

 

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by its terms is made as of a specified date shall be required to be true and
correct only as of such specified date, (B) no Default has occurred and is
continuing; and (C) all conditions precedent set forth in this Section 3.1 have
been met;

 

(vii)                           a secretary’s certificate from each Credit Party
certifying such Person’s (A) officers’ incumbency, (B) authorizing resolutions,
(C) organizational documents, and (D) governmental approvals, if any, with
respect to the Credit Documents to which such Person is a party;

 

(viii)                        certificates of good standing for each Credit
Party in each state in which each such Person is organized or qualified to do
business, which certificate shall be (A) dated a date not earlier than 30 days
prior to Effective Date or (B) otherwise effective on the Closing Date;

 

(ix)                              a legal opinion of Vinson & Elkins L.L.P. as
outside counsel to the Credit Parties, in form and substance reasonably
acceptable to the Administrative Agent;

 

(x)                                 a legal opinion of Davis Graham & Stubbs as
local Colorado counsel to the Credit Parties, in form and substance reasonably
acceptable to the Administrative Agent;

 

(xi)                              a legal opinion of Davis Graham & Stubbs as
local North Dakota counsel to the Credit Parties, in form and substance
reasonably acceptable to the Administrative Agent;

 

(xii)                           the initial Independent Engineer’s Report dated
effective as of a date acceptable to the Administrative Agent;

 

(xiii)                        a certificate from the Borrower certifying a copy
of the Management Agreement, including any amendments, modifications or side
letters with respect thereto, as in full force and effect as of the Closing
Date;

 

(xiv)                       the Pledge Agreement executed by the Borrower,
together with any pledged stock or membership interest certificates and
instruments of transfer in form and substance acceptable to the Administrative
Agent and granting the Administrative Agent an Acceptable Security Interest in
such certificated Equity Interests; and

 

(xv)                          such other documents, governmental certificates,
agreements, and lien searches as the Administrative Agent or any Lender may
reasonably request.

 

(b)                                 Consents; Authorization; Conflicts.  The
Borrower shall have received any consents, licenses and approvals required in
accordance with applicable law, or in accordance with any document, agreement,
instrument or arrangement to which the Borrower or any Subsidiary is a party, in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement and the other Credit Documents.  In addition,
the Borrower and the Subsidiaries shall have all such material consents,
licenses and approvals required in connection with the continued operation of
the Borrower and the Subsidiaries, and such approvals shall be in full force and
effect, and all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on this Agreement and the actions
contemplated hereby.

 

(c)                                  Representations and Warranties.  The
representations and warranties contained in Article 4 and in each other Credit
Document shall be true and correct in all material respects (except to the
extent that such representation or warranty is qualified by materiality, in
which case such representation or

 

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warranty shall be true and correct in all respects) on and as of the Closing
Date before and after giving effect to the initial Borrowings or issuance (or
deemed issuance) of Letters of Credit and to the application of the proceeds
from such Borrowing, as though made on and as of such date.

 

(d)                                 Fee Letter.  The Borrower shall have
executed and delivered the Fee Letter.

 

(e)                                  Other Proceedings.  No action, suit,
investigation or other proceeding (including without limitation, the enactment
or promulgation of a statute or rule) by or before any arbitrator or any
Governmental Authority shall be threatened or pending and no preliminary or
permanent injunction or order by a state or federal court shall have been
entered (i) in connection with this Agreement, any other credit agreement, or
any transaction contemplated hereby or thereby or (ii) which in the judgment of
the Administrative Agent could reasonably be expected to result in a Material
Adverse Change.

 

(f)                                   Other Reports.  The Administrative Agent
shall have received, in form and substance reasonably satisfactory to it, all
environmental reports (including all available (i) Phase I Environmental Site
Assessment Reports and (ii) Phase II Environmental Site Assessment Reports), and
such other reports, audits or certifications as it may reasonably request.

 

(g)                                  Material Adverse Change.  Since January 31,
2014, there shall not have occurred any event, development or circumstance that
has or could reasonably be expected to result in a Material Adverse Change.

 

(h)                                 No Default.  No Default shall have occurred
and be continuing.

 

(i)                                     Solvency.  The Administrative Agent
shall have received a certificate in form and substance reasonably satisfactory
to the Administrative Agent from a senior financial officer or such other
officer acceptable to the Administrative Agent of the Borrower and each
Guarantor certifying that, before and after giving effect to the initial
Borrowings made hereunder on the Closing Date, the Borrower and its Subsidiaries
are Solvent (assuming with respect to each Guarantor, that the fraudulent
conveyance savings language contained in the Guaranty applicable to such
Guarantor will be given full effect).

 

(j)                                    Delivery of Financial Statements.  The
Administrative Agent shall have received true and correct copies of
(i) satisfactory consolidated financial statements for the Borrower and its
Subsidiaries for the fiscal year 2014, and interim unaudited financial
statements for the Borrower and its Subsidiaries for each fiscal quarter ended
since the last audited financial statements, and (ii) projections prepared by
management of balance sheets, income statements and cashflow statements of the
Borrower and its Subsidiaries, covering the first full year after the Closing
Date, on a quarterly basis.

 

(k)                                 Title.  The Administrative Agent shall be
satisfied in its sole discretion with the title to the Oil and Gas Properties
included in the Borrowing Base and that such Oil and Gas Properties constitute
at least 80% of the present value of the Proven Reserves of the Credit Parties
as determined by the Administrative Agent in its sole discretion.

 

(l)                                     Reserve Report.  The Administrative
Agent shall have received a Reserve Report, dated as of a date acceptable to the
Administrative Agent.

 

(m)                             Notices of Borrowing.  The Administrative Agent
shall have received Notices of Borrowing from the Borrower, with appropriate
insertions and executed by a duly appointed Responsible Officer of the Borrower.

 

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(n)                                 USA Patriot Act.  The Administrative Agent
shall have received all documentation and other information that is required by
regulatory authorities under applicable “know your customer” and
anti-money-laundering rules and regulations, including, without limitation, the
Patriot Act.

 

(o)                                 Capital Structure.  The capital and
ownership structure and the equityholder arrangements of the Borrower and its
Subsidiaries (and all agreements relating thereto) will be reasonably
satisfactory to the Administrative Agent.

 

(p)                                 Due Diligence.  The Administrative Agent
shall have completed and be satisfied in its sole discretion with the corporate
(or other organizational), environmental and financial due diligence of the
Credit Parties and its Affiliates.

 

(q)                                 Liens.  The Administrative Agent shall have
received evidence satisfactory to it that there are no Liens encumbering (i) any
of the Credit Parties’ respective Property other than Permitted Liens, and
(ii) the Equity Interests in the Borrower.

 

(r)                                    Payment of Fees.  The Borrower shall have
paid the fees and expenses required to be paid as of the Closing Date by
Sections 2.7(d) and 9.1 or any other provision of a Credit Document.

 

Section 3.2                                    Conditions Precedent to Each
Borrowing and to Each Issuance, Extension or Renewal of a Letter of Credit.  The
obligation of each Lender to make an Advance on the occasion of each Borrowing
(including the initial Borrowing), the obligation of each Issuing Lender to
issue, increase, renew or extend a Letter of Credit (including the deemed
issuance of Letters of Credit) and of any reallocation of Letter of Credit
Exposure provided in Section 2.15, shall be subject to the further conditions
precedent that on the date of such Borrowing or such issuance, increase, renewal
or extension:

 

(a)                                 Representations and Warranties.  As of the
date of the making of any Advance or issuance, increase, renewal or extension of
any Letter of Credit or the reallocation of the Letter of Credit Exposure, the
representations and warranties made by any Credit Party or any officer or
employee of any Credit Party contained in the Credit Documents shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on such date, except
that any representation and warranty which by its terms is made as of a
specified date shall be required to be true and correct only as of such
specified date and each request for the making of any Advance or issuance,
increase, renewal or extension of any Letter of Credit, or the reallocation of
the Letter of Credit Exposure and the making of such Advance or the issuance,
increase, renewal or extension of such Letter of Credit or the reallocation of
the Letter of Credit Exposure shall be deemed to be a reaffirmation of such
representations and warranties.  Each of: (i) the giving of the applicable
Notice of Borrowing or Letter of Credit Application, (ii) the acceptance by the
Borrower of the proceeds of such Borrowing, (iii) the issuance, increase, or
extension of such Letter of Credit, and (iv) the reallocation of the Letter of
Credit Exposure, shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing, such issuance, increase, or extension of
such Letter of Credit or such reallocation, as applicable, that the foregoing
condition precedent has been met.

 

(b)                                 Event of Default.  As of the date of the
making of any Advance, the issuance, increase, renewal or extension of any
Letter of Credit, or the reallocation of the Letter of Credit Exposure, as
applicable, no Default or Event of Default shall exist, and the making of such
Advance or issuance, increase, renewal or extension of such Letter of Credit, or
the reallocation of the Letter of Credit Exposure would not cause a Default or
Event of Default.  Each of: (i) the giving of the applicable Notice of Borrowing
or Letter of Credit Application, (ii) the acceptance by the Borrower of the
proceeds of such Borrowing, (iii) the issuance, increase, or extension of such
Letter of Credit, and (iv) the reallocation of

 

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the Letter of Credit Exposure, shall constitute a representation and warranty by
the Borrower that on the date of such Borrowing, such issuance, increase, or
extension of such Letter of Credit or such reallocation, as applicable, that the
foregoing condition precedent has been met.

 

Section 3.3                                    Determinations Under Sections 3.1
and 3.2.  For purposes of determining compliance with the conditions specified
in Sections 3.1 and 3.2 each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Credit Documents shall have
received written notice from such Lender prior to the Borrowings hereunder
specifying its objection thereto and such Lender shall not have made available
to the Administrative Agent such Lender’s ratable portion of such Borrowings.

 

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

 

Each Credit Party hereto represents and warrants as follows:

 

Section 4.1                                    Organization.  Each Credit Party
is duly and validly organized and existing and in good standing under the laws
of its jurisdiction of incorporation or formation.  Each Credit Party is
authorized to do business and is in good standing in all jurisdictions in which
such qualifications or authorizations are necessary except where the failure to
be so qualified or authorized could not reasonably be expected to result in a
Material Adverse Change.  As of the Effective Date, each Credit Party’s type of
organization and jurisdiction of incorporation or formation are set forth on
Schedule 4.1.

 

Section 4.2                                    Authorization.  The execution,
delivery, and performance by each Credit Party of each Credit Document to which
such Credit Party is a party and the consummation of the transactions
contemplated thereby (a) are within such Credit Party’s powers, (b) have been
duly authorized by all necessary corporate, limited liability company or
partnership action, (c) do not contravene any articles or certificate of
incorporation or bylaws, partnership or limited liability company agreement
binding on or affecting such Credit Party, (d) do not contravene any law or any
contractual restriction binding on or affecting such Credit Party except where
such contravention could not reasonably be expected to result in a Material
Adverse Change, (e) do not result in or require the creation or imposition of
any Lien prohibited by this Agreement, and (f) do not require any authorization
or approval or other action by, or any notice or filing with, any Governmental
Authority other than those that have been obtained.  At the time of each Advance
or the issuance, renewal, extension or increase of each Letter of Credit, such
Advance and the use of the proceeds of such Advance or the issuance, renewal,
extension or increase of such Letter of Credit are within the Borrower’s
corporate powers, have been duly authorized by all necessary action and do not
contravene (i) the Borrower’s certificate of incorporation or by-laws, or
(ii) any Legal Requirement or any contractual restriction binding on or
affecting the Borrower, will not result in or require the creation or imposition
of any Lien prohibited by this Agreement, and do not require any authorization
or approval or other action by, or any notice or filing with, any Governmental
Authority other than those that have been obtained or provided.

 

Section 4.3                                    Enforceability.  The Credit
Documents have each been duly executed and delivered by each Credit Party that
is a party thereto and each Credit Document constitutes the legal, valid, and
binding obligation of each Credit Party that is a party thereto enforceable
against such Credit Party in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
at the time in effect affecting the rights of creditors generally and by general
principles of equity whether applied by a court of law or equity.

 

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Section 4.4                                    Financial Condition.

 

(a)                                 The Borrower has delivered to the
Administrative Agent audited consolidated financial statements for the Parent
and its Subsidiaries dated as of January 31, 2014 for the fiscal year ended
thereon.  The financial statements referred to in the preceding sentence fairly
present, in all material respects, the financial condition of the Parent, the
Borrower and its Subsidiaries on the date thereof and the results of their
operations and cash flows for the periods then ended, have been prepared in
accordance with GAAP and do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.  As of the date of the aforementioned financial statements, there
were no material contingent obligations, liabilities for taxes, unusual forward
or long-term commitments, or unrealized or anticipated losses of the applicable
Persons, except as disclosed therein and adequate reserves for such items have
been made in accordance with GAAP.

 

(b)                                 Since the Closing Date, after giving pro
forma effect to all Advances made hereunder on the Closing Date, no event or
condition has occurred that could reasonably be expected to result in a Material
Adverse Change.

 

Section 4.5                                    Title; Ownership and Liens; Real
Property.  Each Credit Party (a) has good and defensible title to all of its Oil
and Gas Properties in all material respects, free and clear of all Liens except
for Permitted Liens, and (b) has good and indefeasible title to all of its other
material Properties, free and clear of all Liens except for Permitted Liens.
None of the Property owned by a Credit Party is subject to any Lien except
Permitted Liens.

 

Section 4.6                                    True and Complete Disclosure. 
All written factual information (whether delivered before or after the date of
this Agreement) prepared by or on behalf of the Borrower and its Subsidiaries
and furnished to the Administrative Agent or the Lenders for purposes of or in
connection with this Agreement, any other Credit Document or any transaction
contemplated hereby or thereby does not contain any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein not misleading.  There is no fact known to any officer of any Credit
Party on the date of this Agreement that has not been disclosed to the
Administrative Agent that could reasonably be expected to result in a Material
Adverse Change.  All projections, estimates, budgets, and pro forma financial
information furnished by or on behalf of any Credit Party, were prepared on the
basis of assumptions, data, information, tests, or conditions (including current
and reasonably foreseeable business conditions) believed to be reasonable at the
time such projections, estimates, and pro forma financial information were
furnished.

 

Section 4.7                                    Litigation.  There are no
actions, suits, or proceedings pending or, to any Credit Party’s knowledge,
threatened against any Credit Party, at law, in equity, or in admiralty, or by
or before any Governmental Authority, which could reasonably be expected to
result in a Material Adverse Change.  Additionally, except as disclosed in
writing to the Administrative Agent and the Lenders, there is no pending or, to
the knowledge of any Credit Party, threatened action or proceeding instituted
against any Credit Party which seeks to adjudicate any Credit Party as bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
Property.

 

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Section 4.8                                    Compliance with Agreements.

 

(a)                                 No Credit Party is a party to any indenture,
loan or credit agreement or any lease or any other types of agreement or
instrument or subject to any charter or corporate restriction or provision of
applicable law or governmental regulation the performance of or compliance with
which could reasonably be expected to cause a Material Adverse Change.  No
Credit Party is in default under or with respect to any contract, agreement,
lease or any other types of agreement or instrument to which any Credit Party is
a party and which could reasonably be expected to cause a Material Adverse
Change.  To the best knowledge of the Credit Parties, no Credit Party is in
default under, or has received a notice of default under, any contract,
agreement, lease or any other document or instrument to which the Borrower or
its Subsidiaries is a party which is continuing and which, if not cured, could
reasonably be expected to cause a Material Adverse Change.

 

(b)                                 No Default has occurred and is continuing.

 

Section 4.9                                    Pension Plans.  (a) Except for
matters that could not reasonably be expected to result in a Material Adverse
Change, all Plans are in compliance with all applicable provisions of ERISA,
(b) no Termination Event has occurred with respect to any Plan that would result
in an Event of Default under Section 7.1(i), and, except for matters that could
not reasonably be expected to result in a Material Adverse Change, each Plan has
complied with and been administered in accordance with applicable provisions of
ERISA and the Code, (c) no “accumulated funding deficiency” (as defined in
Section 302 of ERISA) has occurred with respect to any Plan, and for plan years
after December 31, 2007, no unpaid minimum required contribution exists with
respect to any Plan, and there has been no excise tax imposed under Section 4971
of the Code with respect to any Plan, (d) the present value of all benefits
vested under each Plan (based on the assumptions used to fund such Plan) did
not, as of the last annual valuation date applicable thereto, exceed the value
of the assets of such Plan allocable to such vested benefits in an amount that
could reasonably be expected to result in a Material Adverse Change, (e) no
Credit Party nor any member of the Controlled Group has had a complete or
partial withdrawal from any Multiemployer Plan for which there is any
unsatisfied withdrawal liability that could reasonably be expected to result in
a Material Adverse Change or an Event of Default under Section 7.1(j), and
(f) except for matters that could not reasonably result in a Material Adverse
Change, as of the most recent valuation date applicable thereto, no Credit Party
nor any member of the Controlled Group would become subject to any liability
under ERISA if the Borrower or any Subsidiary has received notice that any
Multiemployer Plan is insolvent or in reorganization.  Based upon GAAP existing
as of the date of this Agreement and current factual circumstances, no Credit
Party has any reason to believe that the annual cost during the term of this
Agreement to the Borrower or any Subsidiary for post-retirement benefits to be
provided to the current and former employees of the Borrower or any Subsidiary
under Plans that are welfare benefit plans (as defined in Section 3(1) of ERISA)
could, in the aggregate, reasonably be expected to cause a Material Adverse
Change.

 

Section 4.10                             Environmental Condition.

 

(a)                                 Permits, Etc.  Each Credit Party (i) has
obtained all Environmental Permits necessary for the ownership and operation of
its Properties and the conduct of its businesses, except where failure to obtain
such Environment Permits could not reasonably be expected to result in a
Material Adverse Change; (ii) has at all times been and is in compliance with
all terms and conditions of such Environmental Permits and with all other
requirements of applicable Environmental Laws, except where failure to comply
could not reasonably be expected to result in a Material Adverse Change;
(iii) has not received written notice of any violation or alleged violation of
any Environmental Law or Environmental Permit, except where such violation could
not reasonably be expected to result in a Material Adverse Change; and (iv) is
not subject to any actual or contingent Environmental Claim which could
reasonably be expected to cause a Material Adverse Change.

 

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(b)                                 Certain Liabilities.  To the Credit Parties’
best knowledge, none of the present or previously owned or operated Property of
any Credit Party or of any Subsidiary thereof, wherever located, (i) has been
placed on or proposed to be placed on the National Priorities List, the
Comprehensive Environmental Response Compensation Liability Information System
list, or their state or local analogs, or have been otherwise investigated,
designated, listed, or identified as a potential site for removal, remediation,
cleanup, closure, restoration, reclamation, or other response activity under any
Environmental Laws; (ii) is subject to a Lien, arising under or in connection
with any Environmental Laws, that attaches to any revenues or to any Property
owned or operated by any Credit Party, wherever located, which could reasonably
be expected to cause a Material Adverse Change; or (iii) has been the site of
any Release of Hazardous Substances or Hazardous Wastes from present or past
operations which has caused at the site or at any third-party site any condition
that has resulted in or could reasonably be expected to result in the need for
Response that could cause a Material Adverse Change.

 

(c)                                  Certain Actions.  Without limiting the
foregoing, (i) all necessary material notices have been properly filed, and no
further action is required under current applicable Environmental Law as to each
Response or other restoration or remedial project undertaken by the Borrower,
any of its Subsidiaries or any of the Borrower’s or such Subsidiary’s former
Subsidiaries on any of their presently or formerly owned or operated Property,
except for (x) such failure to properly file notices and (y) such failure to
take further action which, in each case (x) and (y), could not be reasonably
expected to cause a Material Adverse Change, and (ii) the present and, to the
Credit Parties’ best knowledge, future liability, if any, of the Borrower or of
any Subsidiary which could reasonably be expected to arise in connection with
requirements under Environmental Laws will not result in a Material Adverse
Change.

 

Section 4.11                             Subsidiaries.  As of the Effective
Date, the Borrower has no Subsidiaries other than those listed on Schedule
4.11.  Each Subsidiary of the Borrower (including any such Subsidiary formed or
acquired subsequent to the Effective Date) has complied with the requirements of
Section 5.6.

 

Section 4.12                             Investment Company Act.  No Credit
Party is an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. 
No Credit Party is subject to regulation under any Federal or state statute,
regulation or other Legal Requirement which limits its ability to incur Debt.

 

Section 4.13                             Taxes.  Proper and accurate (in all
material respects), federal, state, local and foreign tax returns, reports and
statements required to be filed (after giving effect to any extension granted in
the time for filing) by each Credit Party or any member of the Affiliated Group
as defined under Section 1504 of the Code (hereafter collectively called the
“Tax Group”) have been filed with the appropriate Governmental Authorities, and
all taxes (which are material in amount) and other impositions due and payable
have been timely paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for non-payment thereof except where
contested in good faith by appropriate proceeding and for which adequate
reserves have been established in compliance with GAAP.  Neither the Borrower
nor any member of the Tax Group has given, or been requested to give, a waiver
of the statute of limitations relating to the payment of any federal, state,
local or foreign taxes or other impositions.  None of the Property owned by the
Borrower or any other member of the Tax Group is Property which the Borrower or
any member of the Tax Group is required to treat as being owned by any other
Person pursuant to the provisions of Section 168(f)(8) of the Code.  Proper and
accurate amounts have been withheld by the Borrower and all other members of the
Tax Group from their employees for all periods to comply in all material
respects with the tax, social security and unemployment withholding provisions
of applicable federal, state, local and foreign law.

 

Section 4.14                             Permits, Licenses, Etc.  Each Credit
Party possesses all permits, licenses, patents, patent rights or licenses,
trademarks, trademark rights, trade names rights, and copyrights which are

 

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material to the conduct of its business except where failure to possess could
not reasonably be expected to result in a Material Adverse Change.  Each Credit
Party manages and operates its business in accordance with all applicable Legal
Requirements except where the failure to so manage or operate could not
reasonably be expected to result in a Material Adverse Change; provided that
this Section 4.14 does not apply with respect to Environmental Permits.

 

Section 4.15                             Use of Proceeds.  The proceeds of the
Advances will be used by the Borrower for the purposes described in
Section 6.6.  No Credit Party is engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U).  No proceeds of any Advance will be used to purchase or carry any
margin stock in violation of Regulation T, U or X.

 

Section 4.16                             Condition of Property; Casualties.  The
material Properties used or to be used in the continuing operations of Credit
Parties, are in good working order and condition, normal wear and tear
excepted.  Neither the business nor the Oil and Gas Properties or material
Properties of the Credit Parties has been affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of such Property or
cancellation of contracts, permits or concessions by a Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy. The
Credit Parties own no real property (other than Oil and Gas Properties) which
either (x) is material to the operations of the Credit Parties or (y) has a fair
market value in excess of $2,000,000, except as (a) is set forth on Schedule
4.16. (b) is disclosed on a schedule to the Compliance Certificate delivered
pursuant to Section 5.2(e), or (c) has been acquired since the delivery of the
previous Compliance Certificate.

 

Section 4.17                             Insurance.  Each of the Credit Parties
carries insurance (which may be carried by the Borrower on a consolidated basis)
with reputable insurers in respect of such of their respective Properties, in
such amounts and against such risks as is customarily maintained by other
Persons of similar size engaged in similar businesses.

 

Section 4.18                             Security Interest.  Each Credit Party
has authorized the filing of financing statements sufficient when filed to
perfect the Lien created by the Security Documents.  When such financing
statements are filed in the offices noted therein, the Administrative Agent will
have a valid and perfected security interest in all Collateral that is capable
of being perfected by filing financing statements.

 

Section 4.19                             OFAC; Anti-Terrorism.  No Credit Party
is in violation of any of the country or list based economic and trade sanctions
administered and enforced by OFAC.  No Credit Party (a) is a Sanctioned Person
or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or
(c) derives revenues from investments in, or transactions with Sanctioned
Persons or Sanctioned Entities.  No proceeds of any Advance will be used to fund
any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Entity.

 

Section 4.20                             Solvency.  Before and after giving
effect to the making of each Advance and the issuance, increase, or amendment of
each Letter of Credit, the Borrower and its consolidated Subsidiaries are, when
taken as a whole, Solvent.

 

Section 4.21                             Gas Contracts.  No Credit Party, as of
the date hereof or as disclosed to the Administrative Agent in writing, (a) is
obligated in any material respect by virtue of any prepayment made under any
contract containing a “take-or-pay” or “prepayment” provision or under any
similar agreement to deliver Hydrocarbons produced from or allocated to any of
the Borrower’s and its Subsidiaries’ Oil and Gas Properties at some future date
without receiving full payment therefor at the

 

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time of delivery, but only to the extent that such obligations or prepayments
exceed $50,000,000 outstanding in the aggregate at any time, and excluding any
take-or-pay obligations under the RockPile Agreement, the Caliber Agreements, or
any Approved Transportation Agreement or (b) except as has been disclosed to the
Administrative Agent, has produced gas, in any material amount, subject to
balancing rights of third parties or subject to balancing duties under Legal
Requirements.

 

Section 4.22                             Liens, Leases, Etc.  None of the
Property of any Credit Party is subject to any Lien other than Permitted Liens. 
On the date of this Agreement, all governmental actions and all other filings,
recordings, registrations, third party consents and other actions which are
necessary to create and perfect the Liens provided for in the Security Documents
will have been made, obtained and taken in all relevant jurisdictions.  Other
than to the extent such could not reasonably be expected to cause a Material
Adverse Change, (i) all leases and agreements for the conduct of business of the
Borrower and its Subsidiaries are valid and subsisting, in full force and effect
and there exists no default or event of default or circumstance which with the
giving of notice or lapse of time or both would give rise to a default by the
Borrower or any Subsidiary, or to the Borrower’s knowledge, by any of the other
parties thereto, under any such leases or agreements.  Neither the Borrower nor
any of its Subsidiaries is a party to any agreement or arrangement (other than
this Agreement and the Security Documents), or subject to any order, judgment,
writ or decree, that either restricts or purports to restrict its ability to
grant Liens to secure the Obligations against their respective Properties.

 

Section 4.23                             Hedging Agreements.  Schedule 4.23 sets
forth, as of the date hereof, a true and complete list of all Interest Hedge
Agreements, Hydrocarbon Hedge Agreements, and Hedging Arrangements of the Credit
Parties, the material terms thereof (including the type, term, effective date,
termination date and notional amounts or volumes), the net mark to market value
thereof, all credit support agreements relating thereto (including any margin
required or supplied), and the counterparty to each such agreement.

 

Section 4.24                             Material Agreements.  Schedule 4.24
sets forth a complete and correct list of all material agreements, leases,
indentures, purchase agreements, obligations in respect of letters of credit,
guarantees, joint venture agreements, and other instruments in effect or to be
in effect as of the date hereof (other than the agreements set forth in Schedule
4.23) providing for, evidencing, securing or otherwise relating to any Debt of
the Credit Parties in excess of $2,500,000 individually or in the aggregate, and
all obligations of the Credit Parties to issuers of surety or appeal bonds
issued for account of any Credit Party, and such list correctly sets forth the
names of the debtor or lessee and creditor or lessor with respect to the Debt or
lease obligations outstanding or to be outstanding and the Property subject to
any Lien securing such Debt or lease obligation.  Also set forth on Schedule
4.24 hereto is a complete and correct list, as of the date of this Agreement, of
all material agreements and other instruments of the Borrower and its
Subsidiaries relating to the purchase, transportation by pipeline, gas
processing, marketing, sale and supply of natural gas and other Hydrocarbons and
which provides for liabilities of the Credit Parties in excess of $5,000,000. 
The Borrower has heretofore delivered to the Administrative Agent a complete and
correct copy of all such material credit agreements, indentures, purchase
agreements, contracts, letters of credit, guarantees, joint venture agreements,
or other instruments, including any modifications or supplements thereto, as in
effect on the date hereof.

 

ARTICLE 5
AFFIRMATIVE COVENANTS

 

So long as any Obligation shall remain unpaid, any Lender shall have any
Commitment hereunder, or there shall exist any Letter of Credit Exposure, each
Credit Party agrees to comply with the following covenants.

 

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Section 5.1                                    Organization.  Each Credit Party
shall, and shall cause each of its respective Subsidiaries to, preserve and
maintain its partnership, limited liability company or corporate existence,
rights, franchises and privileges in the jurisdiction of its organization, and
qualify and remain qualified as a foreign business entity in each jurisdiction
in which qualification is necessary in view of its business and operations or
the ownership of its Properties and where failure to qualify could reasonably be
expected to cause a Material Adverse Change; provided, however, that nothing
herein contained shall prevent any transaction permitted by Section 6.7.

 

Section 5.2                                    Reporting.

 

(a)                                 Annual Financial Reports.  The Borrower
shall provide, or shall cause to be provided, to the Administrative Agent, as
soon as available, but in any event within 90 days after the end of each fiscal
year of the Borrower (commencing with the fiscal year ended January 31, 2013), a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year, and the related consolidated and
consolidating statements of income or operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with SEC guidelines and GAAP, such consolidated statements to be
audited and accompanied by a report and opinion of an independent certified
public accountant of nationally recognized standing reasonably acceptable to the
Administrative Agent, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit, and such consolidating statements to be
certified by the chief executive officer or chief financial officer of the
Borrower, to the effect that (i) such statements fairly present, in all material
respects, the financial condition, results of operations, shareholders’ equity
and cash flows of the Borrower and its Subsidiaries in accordance with SEC
guidelines and GAAP and do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading, and (ii) there were no material contingent obligations, liabilities
for taxes, unusual forward or long-term commitments, or unrealized or
anticipated losses of the Borrower and its Subsidiaries, except as disclosed
therein and adequate reserves for such items have been made in accordance with
SEC guidelines and GAAP;

 

(b)                                 Quarterly Financials.  The Borrower shall
provide, or shall cause to be provided, to the Administrative Agent, as soon as
available, but in any event within 45 days after the end of each fiscal quarter
of each fiscal year of the Borrower (commencing with the fiscal quarter ending
April 30, 2013), (i) consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated and consolidating statements of income or operations,
shareholder’s equity and cash flows for such fiscal quarter and for the portion
of the Borrower’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail, such consolidated statements to be certified by the
chief executive officer or the chief financial officer of the Borrower as
(A) fairly presenting, in all material respects the financial condition, results
of operations, shareholders’ equity and cash flows of the Borrower and its
Subsidiaries in accordance with SEC guidelines and GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes, and do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading, and (B) showing that there were no
material contingent obligations, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses of the Borrower and
its Subsidiaries, except as disclosed therein and adequate reserves for such
items have been made in accordance with SEC guidelines and GAAP, and (ii) a copy
of the management discussion and analysis with respect to such financial
statements;

 

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Documents required to be delivered pursuant to Section 5.2(a) or (b) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (1) on which the Borrower posts such documents,
or provides a link thereto, on the Borrower’s website on the Internet at
www.trianglepetroleum.com or (2) on which such documents are posted on the
Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that: (i) upon request, the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and, upon
request, each Lender (by telecopier or electronic mail) of the posting of any
such documents and, upon request, provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.

 

(c)                                  Oil and Gas Reserve Reports. The Borrower
shall provide, or shall cause to be provided, to the Administrative Agent:

 

(i)                                     As soon as available but in any event on
or before October 1 of each year, an Internal Engineering Report dated effective
as of the immediately preceding September 1st;

 

(ii)                                  As soon as available but in any event on
or before April 1 of each year an Independent Engineering Report dated effective
as of the immediately preceding March 1st;

 

(iii)                               Such other information as may be reasonably
requested by the Administrative Agent or any Lender with respect to the Oil and
Gas Properties included or to be included in the Borrowing Base.

 

(d)                                 Production and Hedging Reports.  As soon as
available and in any event within 45 days after the end of each quarter,
commencing with the quarter ending October 31, 2014, a report certified by the
chief executive officer or chief financial officer of the Borrower in form and
substance satisfactory to the Administrative Agent prepared by the Borrower
(i) covering each of the Oil and Gas Properties of the Borrower and its
Subsidiaries and detailing on a quarterly basis (A) the production, revenue, and
price information and associated operating expenses for each such quarter,
(B) any changes to any producing reservoir, production equipment, or producing
well during each such quarter, which changes could reasonably be expected to
cause a Material Adverse Change, and (C) any sales of the Borrower’s or any
Subsidiaries’ Oil and Gas Properties during each such quarter, (ii) setting
forth a true and complete list of all Hedging Arrangements of the Borrower and
its Subsidiaries and detailing the material terms thereof (including the type,
term, effective date, termination date and notional amounts or volumes), the net
mark to market value thereof, all credit support agreements relating thereto
(including any margin required or supplied), and the counterparty to each such
agreement; provided that, such required listing shall, in no event, be construed
as permitting such credit supports which are not permitted under the terms of
this Agreement; and (iii) certifying the Borrower’s compliance with Section 5.13
hereof;

 

(e)                                  Compliance Certificate.  Concurrently with
the delivery of the financial statements referred to in Section 5.2(a) and
(b) above, the Borrower shall provide to the Administrative Agent a duly
completed Compliance Certificate signed by the chief executive officer or chief
financial officer of the Borrower, commencing with the fiscal year ended
January 31, 2015.

 

(f)                                   Annual Budget.  As soon as available and
in any event within 90 days after the end of each fiscal year of the Borrower,
the Borrower shall provide to the Administrative Agent an annual

 

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operating, capital and cash flow budget for the immediately following fiscal
year and detailed on a quarterly basis;

 

(g)                                  Defaults.  The Credit Parties shall provide
to the Administrative Agent promptly, but in any event within five Business Days
after the occurrence thereof, a notice of each Default or Event of Default known
to the Responsible Officer of the Borrower or to any of its Subsidiaries,
together with a statement of a Responsible Officer of the Borrower setting forth
the details of such Default or Event of Default and the actions which the Credit
Parties have taken and proposes to take with respect thereto;

 

(h)                                 Other Creditors.  The Credit Parties shall
provide to the Administrative Agent promptly after the giving or receipt
thereof, copies of any default notices given or received by the Borrower or by
any of its Subsidiaries pursuant to the terms of any indenture, loan agreement,
credit agreement, or similar agreement, including any notice of cancellation or
similar notice under the RockPile Agreement, whether or not a formal notice
default;

 

(i)                                     Litigation.  The Credit Parties shall
provide to the Administrative Agent promptly after the commencement thereof, and
in any event no later than 5 days after, notice of all actions, suits, and
proceedings before any Governmental Authority, affecting the Borrower or any of
its Subsidiaries or any of their respective assets that has a claim for damages
in excess of $10,000,000 or that could otherwise result in a cost, expense or
loss to the Borrower or any of its Subsidiaries in excess of $10,000,000;

 

(j)                                    Environmental Notices.  Promptly upon,
and in any event no later than 5 days after, the receipt thereof, or the
acquisition of knowledge thereof, by any Credit Party, the Credit Parties shall
provide the Administrative Agent with a copy of any form of request, claim,
complaint, order, notice, summons or citation received from any Governmental
Authority or any other Person, (i) concerning violations or alleged violations
of Environmental Laws, which seeks to impose liability therefore in excess of
$10,000,000, (ii) concerning any action or omission on the part of any of the
Credit Parties or any of their former Subsidiaries in connection with Hazardous
Waste or Hazardous Substances which could reasonably result in the imposition of
liability in excess of $10,000,000 or requiring that action be taken to respond
to or clean up a Release of Hazardous Substances or Hazardous Waste into the
environment and such action or clean-up could reasonably be expected to exceed
$10,000,000, including without limitation any information request related to, or
notice of, potential responsibility under CERCLA, or (iii) concerning the filing
of a Lien upon, against or in connection with the Borrower, any Subsidiary, or
any of their respective former Subsidiaries, or any of their material leased or
owned Property, wherever located;

 

(k)                                 Material Adverse Changes.  The Credit
Parties shall provide to the Administrative Agent prompt written notice of any
event, development or circumstance that has had or would reasonably be expected
to give rise to a Material Adverse Change;

 

(l)                                     Termination Events.  As soon as possible
and in any event (i) within 30 days after the Borrower or any member of the
Controlled Group knows or has reason to know that any Termination Event
described in clause (a) of the definition of Termination Event with respect to
any Plan has occurred, and (ii) within 10 days after the Borrower or any member
of the Controlled Group knows or has reason to know that any other Termination
Event with respect to any Plan has occurred, the Credit Parties shall provide to
the Administrative Agent a statement of an authorized officer of the Borrower
describing such Termination Event and the action, if any, which the Borrower or
any Affiliate of the Borrower proposes to take with respect thereto;

 

(m)                             Termination of Plans.  Promptly and in any event
within 10 Business Days after receipt thereof by the Borrower or any member of
the Controlled Group from the PBGC, the Credit Parties shall

 

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provide to the Administrative Agent copies of each notice received by the
Borrower or any such member of the Controlled Group of the PBGC’s intention to
terminate any Plan or to have a trustee appointed to administer any Plan;

 

(n)                                 Other ERISA Notices.  Promptly and in any
event within 10 Business Days after receipt thereof by the Borrower or any
member of the Controlled Group from a Multiemployer Plan sponsor, the Credit
Parties shall provide to the Administrative Agent a copy of each notice received
by the Borrower or any member of the Controlled Group concerning the imposition
or amount of withdrawal liability imposed on the Borrower or any member of the
Controlled Group pursuant to Section 4202 of ERISA;

 

(o)                                 Other Governmental Notices.  Promptly and in
any event within five Business Days after receipt thereof by a Credit Party, the
Credit Parties shall provide to the Administrative Agent a copy of any notice,
summons, citation, or proceeding seeking to modify in any material respect,
revoke, or suspend any material contract, license, permit, or agreement with any
Governmental Authority;

 

(p)                                 Disputes; etc.  The Credit Parties shall
provide to the Administrative Agent prompt written notice of (i) any claims,
legal or arbitration proceedings, proceedings before any Governmental Authority,
or disputes, or to the knowledge of any Credit Party, any such actions
threatened, or affecting the Borrower or any Subsidiary, which, if adversely
determined, could reasonably be expected to cause a Material Adverse Change, or
any material labor controversy of which a Credit Party has knowledge resulting
in or reasonably considered to be likely to result in a strike against the
Borrower or any Subsidiary, and (ii) any claim, judgment, Lien or other
encumbrance (other than a Permitted Lien) affecting any Property of the Borrower
or any Subsidiary, if the value of the claim, judgment, Lien, or other
encumbrance affecting such Property shall exceed $10,000,000;

 

(q)                                 Management Letters; Other Accounting
Reports.  Promptly upon receipt thereof, a copy of each other report or letter
submitted to the Borrower or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the books
of the Borrower and its Subsidiaries, and a copy of any response by the Borrower
or any Subsidiary of the Borrower, or the board of directors or managers (or
other applicable governing body) of the Borrower or any Subsidiary of the
Borrower, to such letter;

 

(r)                                    Other Information.  Promptly upon
request, the Credit Parties shall provide to the Administrative Agent such other
information respecting the business, operations, or Property of the Borrower or
any Subsidiary, financial or otherwise, as any Lender through the Administrative
Agent may reasonably request.

 

Section 5.3                                    Insurance.

 

(a)                                 Each Credit Party shall, and shall cause
each of its Subsidiaries to, carry and maintain all such other insurance in such
amounts and against such risks as is customarily maintained by other Persons of
similar size engaged in similar businesses and acceptable to the Administrative
Agent and with reputable insurers acceptable to the Administrative Agent.

 

(b)                                 Copies of all policies of insurance or
certificates thereof covering the property or business of the Credit Parties,
and endorsements and renewals thereof, certified as true and correct copies of
such documents by a Responsible Officer of the Borrower shall be delivered by
Borrower to and retained by the Administrative Agent.  All policies of property
insurance with respect to the Collateral either shall have attached thereto a
lender’s loss payable endorsement in favor of the Administrative Agent for its
benefit and the ratable benefit of the Secured Parties or name the
Administrative Agent as loss payee for its benefit and the ratable benefit of
the Secured Parties, in either case, in form reasonably

 

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satisfactory to the Administrative Agent, and all policies of liability
insurance shall name the Administrative Agent for its benefit and the ratable
benefit of the Secured Parties as an additional insured.  All policies or
certificates of insurance shall set forth the coverage, the limits of liability,
the name of the carrier, the policy number, and the period of coverage.  All
such policies shall contain a provision that notwithstanding any contrary
agreements between the Borrower, its Subsidiaries, and the applicable insurance
company, such policies will not be canceled or allowed to lapse without renewal
without at least 30 days’ (or such shorter period as may be accepted by the
Administrative Agent) prior written notice to the Administrative Agent.

 

(c)                                  If at any time the area in which any
improved real property constituting Collateral is located is designated a “flood
hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), the Borrower shall, and shall cause
each of its Subsidiaries to, obtain flood insurance in such total amount as
required by Regulation H of the Federal Reserve Board, as from time to time in
effect and all official rulings and interpretations thereunder or thereof, and
otherwise comply with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as it may be amended from time to time.

 

(d)                                 Notwithstanding Section 2.5(c)(ii) of this
Agreement, after the occurrence and during the continuance of an Event of
Default, all proceeds of insurance, including any casualty insurance proceeds,
property insurance proceeds, proceeds from actions, and any other proceeds,
shall be paid directly to the Administrative Agent and if necessary, assigned to
the Administrative Agent, to be applied in accordance with Section 7.6 of this
Agreement, whether or not the Secured Obligations are then due and payable.

 

(e)                                  In the event that any insurance proceeds
are paid to any Credit Party in violation of clause (d), such Credit Party shall
hold the proceeds in trust for the Administrative Agent, segregate the proceeds
from the other funds of such Credit Party, and promptly pay the proceeds to the
Administrative Agent with any necessary endorsement.  Upon the request of the
Administrative Agent, each of the Borrower and its Subsidiaries shall execute
and deliver to the Administrative Agent any additional assignments and other
documents as may be necessary or desirable to enable the Administrative Agent to
directly collect the proceeds as set forth herein.

 

Section 5.4                                    Compliance with Laws.  Each
Credit Party shall, and shall cause each of its Subsidiaries to, comply with all
federal, state, and local laws and regulations (including Environmental Laws)
which are applicable to the operations and Property of any Credit Party and
maintain all related permits necessary for the ownership and operation of each
Credit Party’s Property and business, except in any case where the failure to so
comply could not reasonably be expected to result in a Material Adverse Change.
Without limitation of the foregoing, the Borrower shall, and shall cause each of
its Subsidiaries to, (a) maintain and possess all authorizations, Permits,
licenses, trademarks, trade names, rights and copyrights which are necessary to
the conduct of its business, except where the failure to so comply could not
reasonably be expected to result in a Material Adverse Change, and (b) obtain,
as soon as practicable, all consents or approvals required from any states of
the United States (or other Governmental Authorities) necessary to grant the
Administrative Agent an Acceptable Security Interest in at least 80% by value
(or if an Event of Default exists and is continuing, 100% by value) of the
Proven reserves attributable to the Borrower’s and its Subsidiaries’ Oil and Gas
Properties.

 

Section 5.5                                    Taxes.  Each Credit Party shall,
and shall cause each of its Subsidiaries to pay and discharge all material
taxes, assessments, and other charges and claims related thereto imposed on the
Borrower or any of its Subsidiaries prior to the date on which penalties attach
other than any tax, assessment, charge, or claims which is being contested in
good faith and for which adequate reserves have been established in compliance
with GAAP.

 

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Section 5.6                                    New Subsidiaries.  The Borrower
shall deliver to the Administrative Agent each of the items set forth in Part A
of Schedule III attached hereto with respect to each Subsidiary of the Borrower
created after the Closing Date and within the time requirements set forth in
Schedule III.

 

Section 5.7                                    Agreement to Pledge; Security. 
Each Credit Party agrees that at all times before the termination of this
Agreement, payment in full of the Obligations, the termination and return of all
Letters of Credit (other than Letters of Credit as to which arrangements
satisfactory to the Issuing Lender in its sole discretion have been made) and
termination in full of the Commitments, the Administrative Agent shall have an
Acceptable Security Interest in the Collateral (subject to the limitations in
this Section 5.7)to secure the performance and payment of the Secured
Obligations.  Each Credit Party shall, and shall cause each of its Domestic
Subsidiaries to, promptly grant to the Administrative Agent a Lien in any
Property of such Credit Party or such Domestic Subsidiary now owned or hereafter
acquired (other than owned or leased real property unless otherwise requested by
the Administrative Agent or Equity Interests of a CFC or a FSHCO) and to take
such actions as may be required under the Security Documents to ensure that the
Administrative Agent has an Acceptable Security Interest in such Property;
provided that so long as no Default or Event of Default has occurred and is
continuing, the Administrative Agent shall not be permitted to request or the
Borrower be required to grant an Acceptable Security Interest in any Oil and Gas
Properties that exceeds 80% by value of all of the Credit Parties’ Proven
Reserves.  Notwithstanding the foregoing, the Borrower shall, and shall cause
each Domestic Subsidiary to take such actions, including execution and delivery
of any Security Documents necessary to create, perfect and maintain an
Acceptable Security Interest in favor of the Administrative Agent in 100% of the
Equity Interests issued by any Domestic Subsidiary which is owned by the
Borrower or any Domestic Subsidiary.

 

Section 5.8                                    Deposit Accounts.  Each Credit
Party shall, and shall cause each of its Subsidiaries to maintain their
principal operating accounts and other deposit accounts with a Lender so long as
such accounts with any Lender (other than the Lender serving as the
Administrative Agent) are subject to Account Control Agreements.

 

Section 5.9                                    Records; Inspection.  Each Credit
Party shall, and shall cause each of its Subsidiaries to maintain proper,
complete and consistent books of record with respect to such Person’s
operations, affairs, and financial condition.  From time to time upon reasonable
prior notice, each Credit Party shall permit any Lender and shall cause each of
its Subsidiaries to permit any Lender, at such reasonable times and intervals
and to a reasonable extent and under the reasonable guidance of officers of or
employees delegated by officers of such Credit Party or such Subsidiary, to,
subject to any applicable confidentiality considerations, examine and copy the
books and records of such Credit Party or such Subsidiary, to visit and inspect
the Property of such Credit Party or such Subsidiary, and to discuss the
business operations and Property of such Credit Party or such Subsidiary with
the officers and directors thereof.

 

Section 5.10                             Maintenance of Property.  Each Credit
Party shall, and shall cause each of its Subsidiaries to, maintain their owned,
leased, or operated Property in good condition and repair, normal wear and tear
excepted; and shall abstain from, cause each of its Subsidiaries to abstain
from, and conduct due diligence with respect to any Properties to be acquired to
confirm that the seller has abstained from, knowingly or willfully permitting
the commission of waste or other injury, destruction, or loss of natural
resources, or the occurrence of pollution, contamination, or any other condition
in, on or about the owned or operated Property involving the Environment that
could reasonably be expected to result in Response activities and that could
reasonably be expected to cause a Material Adverse Change.

 

Section 5.11                             Title Evidence and Opinions.  The
Borrower shall from time to time upon the reasonable request of the
Administrative Agent, take such actions and execute and deliver such

 

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documents and instruments as the Administrative Agent shall require to ensure
that the Administrative Agent shall, at all times, have received satisfactory
title evidence, which title evidence shall be in form and substance acceptable
to the Administrative Agent in its sole reasonable discretion and shall include
information regarding the before payout and after payout ownership interests
held by the Borrower and the Borrower’s Subsidiaries, for all wells located on
the Oil and Gas Properties, covering at least 80% of the present value of the
Proven Reserves of the Borrower and its Subsidiaries as determined by the
Administrative Agent.

 

Section 5.12                             Further Assurances; Cure of Title
Defects.  The Borrower shall, and shall cause each Subsidiary to, cure promptly
any defects in the creation and issuance of the Notes and the execution and
delivery of the Security Documents, this Agreement and the other Credit
Documents.  The Borrower hereby authorizes the Administrative Agent to file any
financing statements without the signature of the Borrower or such Subsidiary,
as applicable, to the extent permitted by applicable law in order to perfect or
maintain the perfection of any security interest granted under any of the Credit
Documents.  The Borrower at its expense will, and will cause each Subsidiary to,
promptly execute and deliver to the Administrative Agent upon request all such
other documents, agreements and instruments to comply with or accomplish the
covenants and agreements of the Borrower or any Subsidiary, as the case may be,
in the Security Documents and this Agreement, or to further evidence and more
fully describe the collateral intended as security for the Obligations, or to
correct any omissions in the Security Documents, or to state more fully the
security obligations set out herein or in any of the Security Documents, or to
perfect, protect or preserve any Liens created pursuant to any of the Security
Documents, or to make any recordings, to file any notices or obtain any
consents, all as may be necessary or appropriate in connection therewith or to
enable the Administrative Agent to exercise and enforce its rights and remedies
with respect to any Collateral.  Within 30 days after (a) a request by the
Administrative Agent or the Lenders to cure any title defects or exceptions
which are not Permitted Liens raised by such information or (b) a notice by the
Administrative Agent that the Borrower has failed to comply with Section 5.11
above, the Borrower shall (i) cure such title defects or exceptions which are
not Permitted Liens or substitute acceptable Oil and Gas Properties with no
title defects or exceptions except for Permitted Liens covering Collateral of an
equivalent value and (ii) deliver to the Administrative Agent satisfactory title
evidence (including supplemental or new title opinions meeting the foregoing
requirements) in form and substance acceptable to the Administrative Agent in
its reasonable business judgment as to the Borrower’s and its Subsidiaries’
ownership of such Oil and Gas Properties and the Administrative Agent’s Liens
and security interests therein as are required to maintain compliance with
Section 5.11.

 

Section 5.13                             Leases; Development and Maintenance. 
The Borrower shall, and shall cause its Subsidiaries to, (a) pay and discharge
promptly, or cause to be paid and discharged promptly, all rentals, delay
rentals, royalties, overriding royalties, payments out of production and other
indebtedness or obligations accruing under, and perform or cause to be performed
each and every act, matter or thing required by each and all of, the oil and gas
leases and all other agreements and contracts constituting or affecting the Oil
and Gas Properties of the Borrower and its Subsidiaries (except where the amount
thereof is being contested in good faith by appropriate proceedings), (b) do all
other things necessary to keep unimpaired its rights thereunder and prevent any
forfeiture thereof or default thereunder, and operate or cause to be operated
such Properties as a prudent operator would in accordance with industry standard
practices and in compliance with all applicable proration and conservation Legal
Requirements and any other Legal Requirements of every Governmental Authority,
whether state, federal, municipal or other jurisdiction, from time to time
constituted to regulate the development and operations of oil and gas properties
and the production and sale of oil, gas and other Hydrocarbons therefrom, and
(c) maintain (or cause to be maintained) the Leases, wells, units and acreage to
which the Oil and Gas Properties of the Borrower and its Subsidiaries pertain in
a prudent manner consistent with industry standard practices.

 

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ARTICLE 6
NEGATIVE COVENANTS

 

So long as any Obligation shall remain unpaid, any Lender shall have any
Commitment hereunder, or there shall exist any Letter of Credit Exposure, each
Credit Party agrees to comply with the following covenants.

 

Section 6.1                                    Debt.  No Credit Party shall, nor
shall it permit any of its Subsidiaries to, create, assume, incur, suffer to
exist, or in any manner become liable, directly, indirectly, or contingently in
respect of, any Debt other than the following (collectively, the “Permitted
Debt”):

 

(a)                                 the Obligations;

 

(b)                                 intercompany Debt incurred in the ordinary
course of business owed by any Credit Party to any other Credit Party; provided
that, if applicable, such Debt as an investment is also permitted in
Section 6.3;

 

(c)                                  Debt consisting of sureties or bonds
provided to any Governmental Authority or other Person and assuring payment of
contingent liabilities of a Credit Party in connection with the operation of its
Oil and Gas Properties, including with respect to plugging, facility removal and
abandonment of its Oil and Gas Properties;

 

(d)                                 purchase money indebtedness or Capital
Leases in an aggregate principal amount not to exceed $2,000,000 at any time;
provided no Credit Party may enter into additional indebtedness of the type
described in this clause (d) if a Default is continuing or entering into the
additional indebtedness could reasonably be expected to cause a Default;

 

(e)                                  Hedging Arrangements to the extent not
prohibited under Section 6.15;

 

(f)                                   Debt in the form of (i) accounts payable
to trade creditors for goods or services, (ii) payment obligations to a Banking
Services Provider under commercial cards to the extent that such payment
obligations arise in connection with the payment by such Banking Services
Provider of accounts payable to trade creditors of the Credit Parties for goods
or services, and (iii) current operating liabilities (other than for borrowed
money) which in each case is not more than 90 days past due, in each case
incurred in the ordinary course of business, as presently conducted, unless
contested in good faith by appropriate proceedings and adequate reserves for
such items have been made in accordance with GAAP;

 

(g)                                  Reserved;

 

(h)                                 Reserved;

 

(i)                                     Debt consisting of senior unsecured
notes issuances (the “Permitted Notes”); provided that:

 

(i)                                     the Borrower is in pro forma compliance
with Sections 6.16 and 6.17 after giving effect to any such issuance;

 

(ii)                                  such Debt is not secured by any Lien;

 

(iii)                               no principal amount of such Debt matures
earlier than six months after the Maturity Date;

 

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(iv)                              no Default or Event of Default is occurring at
the time of, or would occur as a result of, any such issuance;

 

(v)                                 the agreement or indenture governing any
such Debt shall have covenants and restrictions that are no more restrictive
than those set forth in the Credit Documents;

 

(vi)                              the agreement or indenture governing any such
debt shall not have any restriction on the ability of the Borrower or any of its
Subsidiaries to guarantee the Secured Obligations or to pledge assets as
Collateral for the Secured Obligations; and

 

(vii)                           upon the issuance of any such Debt, the
Borrowing Base shall be automatically reduced in accordance with Section 2.2(e);

 

(j)                                    [Reserved];

 

(k)                                 unsecured Debt not otherwise permitted under
the preceding provisions of this Section 6.1; provided that, the aggregate
principal amount thereof shall not exceed $1,000,000 at any time.

 

Section 6.2                                    Liens.  No Credit Party shall,
nor shall it permit any of its Subsidiaries to, create, assume, incur, or suffer
to exist any Lien on the Property of any Credit Party or any Subsidiary, whether
now owned or hereafter acquired, or assign any right to receive any income,
other than the following (collectively, the “Permitted Liens”):

 

(a)                                 Liens securing the Secured Obligations
pursuant to the Security Documents;

 

(b)                                 Liens imposed by law, such as materialmen’s,
mechanics’, carriers’, workmen’s and repairmen’s liens, and other similar liens
arising in the ordinary course of business securing obligations which are not
overdue for a period of more than 30 days or are being contested in good faith
by appropriate procedures or proceedings and for which adequate reserves have
been established;

 

(c)                                  Liens for taxes, assessment, or other
governmental charges which are not yet due and payable or which are being
actively contested in good faith by appropriate proceedings and adequate
reserves for such items have been made in accordance with GAAP;

 

(d)                                 Liens securing purchase money debt or
Capital Lease obligations permitted under Section 6.1(d); provided that each
such Lien encumbers only the Property purchased in connection with the creation
of any such purchase money debt or the subject of any such Capital Lease, and
all proceeds thereof (including insurance proceeds), and the amount secured
thereby is not increased;

 

(e)                                  encumbrances consisting of minor easements,
zoning restrictions, or other restrictions on the use of real property that do
not (individually or in the aggregate) materially affect the value of the assets
encumbered thereby or materially impair the ability of any Credit Party to use
such assets in its business, and none of which is violated in any material
aspect by existing or proposed structures or land use;

 

(f)                                   judgment and attachment Liens not giving
rise to an Event of Default, provided that (i) any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall not
have been finally terminated or the period within which such proceeding may be
initiated shall not have expired and (ii) no action to enforce such Lien has
been commenced;

 

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(g)                                  Liens in favor a banking institution
arising by operation of law encumbering deposits in accounts that are not
subject to Account Control Agreements and that are not required to be subject to
Account Control Agreements in accordance with the terms hereof held by such
banking institution incurred in the ordinary course of business and which are
within the general parameters customary in the banking industry;

 

(h)                                 Liens arising under operating agreements,
unitization and pooling agreements and orders, farmout agreements, gas balancing
agreements, and other agreements, in each case that are customary in the oil,
gas and mineral production business and that are entered into by any Credit
Party in the ordinary course of business provided that (i) such Liens are taken
into account in computing the net revenue interests and working interests of the
Borrower or any of its Subsidiaries warranted in the Security Documents or this
Agreement, (ii) such Liens do not secure borrowed money, (iii) such Liens secure
amounts that are not yet due or are being contested in good faith by appropriate
proceedings, if such reserve as may be required by GAAP shall have been made
therefor and (iv) such Liens are limited to the assets that are the subject of
such agreements; and

 

(i)                                     royalties, overriding royalties, net
profits interests, production payments, reversionary interests, calls on
production, preferential purchase rights and other burdens on or deductions from
the proceeds of production, that do not secure Debt for borrowed money and that
are taken into account in computing the net revenue interests and working
interests of the Credit Parties warranted in the Security Documents or in this
Agreement.

 

Section 6.3                                    Investments.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, make or hold any direct
or indirect investment in any Person, including capital contributions to the
Person, investments in or the acquisition of the debt or equity securities of
the Person, or any loans, guaranties, trade credit, or other extensions of
credit to any Person, other than the following (collectively, the “Permitted
Investments”):

 

(a)                                 investments in the form of trade credit to
customers of a Credit Party arising in the ordinary course of business and
represented by accounts from such customers;

 

(b)                                 Liquid Investments;

 

(c)                                  loans, advances and equity contributions by
a Credit Party to any other Credit Party;

 

(d)                                 creation of any additional Subsidiaries
domiciled in the U.S. in compliance with Section 5.6 and Schedule III;

 

(e)                                  investments (i) in direct ownership
interests in additional Oil and Gas Properties and gas gathering systems related
thereto or (ii) related to farm-out, farm-in, joint operating, joint venture or
area of mutual interest agreements, gathering systems, pipelines or other
similar arrangements which are usual and customary in the oil and gas
exploration and production business located within the geographic boundaries of
the United States of America; provided that if requested by the Administrative
Agent, such assets are pledged as Collateral pursuant to Section 5.7; and

 

(f)                                   investments in any Equity Interests of a
Person that is not a Subsidiary, which Equity Interests are received pursuant to
Section 6.8(v); provided that such assets are pledged as Collateral pursuant to
Section 5.7.

 

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Section 6.4                                    Acquisitions.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, make any Acquisition
(other than any action that would otherwise be permitted by Section 6.3 to the
extent such action constitutes an Acquisition) without the consent of the
Required Lenders.

 

Section 6.5                                    Agreements Restricting Liens.  No
Credit Party shall, nor shall it permit any of its Subsidiaries to, create,
incur, assume or permit to exist any contract, agreement or understanding (other
than (i) this Agreement, the Security Documents, (ii) agreements governing Debt
permitted by Sections 6.1(d) to the extent such restrictions govern only the
asset financed pursuant to such Debt, and (iii) any prohibition or limitation
that exists pursuant to applicable requirements of a Governmental Authority)
which in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property, whether now owned or hereafter
acquired, to secure the Secured Obligations or restricts any Subsidiary from
paying Restricted Payments to the Borrower, or which requires the consent of or
notice to other Persons in connection therewith.

 

Section 6.6                                    Use of Proceeds; Use of Letters
of Credit.  No Credit Party shall, nor shall it permit any of its Subsidiaries
to: (a) use the proceeds of the Advances or the Letters of Credit for any
purposes other than (i) working capital purposes of any Credit Party,
(ii) capital expenditures of any Credit Party, or (iii) other general corporate
purposes of any Credit Party.  No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, use any part of the proceeds of
Advances or Letters of Credit for any purpose which violates, or is inconsistent
with, Regulations T, U, or X.

 

Section 6.7                                    Corporate Actions; Accounting
Changes.

 

(a)                                 No Credit Party shall, nor shall it permit
any of its Subsidiaries to, merge or consolidate with or into any other Person,
except that the Borrower may merge with any of its wholly-owned Subsidiaries,
and any Credit Party may merge or be consolidated with or into any other Credit
Party; provided that (i) in any merger involving the Borrower, the Borrower
shall be the surviving entity, and (ii) at the time of any such merger or
consolidation and immediately after giving effect thereto, no Default, Event of
Default or Borrowing Base Deficiency shall have occurred and the Administrative
Agent shall continue to have an Acceptable Security Interest in the Collateral.

 

(b)                                 No Credit Party shall, nor shall it permit
any of its Subsidiaries to, (i) without 30 days prior written notice to the
Administrative Agent, change its name, change its state of incorporation,
formation or organization, change its organizational identification number or
reorganize in another jurisdiction, (ii) create or suffer to exist any
Subsidiary not existing on the date of this Agreement, provided that, the
Borrower may create or acquire a new Subsidiary if the Credit Parties and such
new Subsidiary complies with Section 5.6 and Schedule III, and such transactions
otherwise comply with the terms of this Agreement, (iii) sell or otherwise
dispose of any of its ownership interest in any of its Subsidiaries, or in any
manner rearrange its business structure as it exists on the date of this
Agreement (except as would be permitted by Section 6.7(a) or Section 6.8),
(iv) without prior written notice to, and prior consent of, the Administrative
Agent, amend, supplement, modify or restate its articles or certificate of
incorporation or formation, limited partnership agreement, bylaws, limited
liability company agreements, or other equivalent organizational documents, or
(v) change its method of accounting employed in the preparation of the financial
statements referred to in Section 4.4 or change the fiscal year end of the
Borrower unless required to conform to GAAP or approved in writing by the
Administrative Agent.

 

Section 6.8                                    Sale of Assets.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, sell, convey, or
otherwise transfer any of its Property (including, without limitation, any
working interest, overriding royalty interest, production payments, net profits
interest, royalty interest, or mineral fee interest) other than, so long as no
Default exists or would result therefrom:

 

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(i)                                     the sale of Hydrocarbons or Liquid
Investments in the ordinary course of business,

 

(ii)                                  Asset Sales of equipment that is
(A) obsolete, worn out or uneconomic and disposed of in the ordinary course of
business, (B) no longer necessary for the business of such Person or
(C) contemporaneously replaced by equipment of at least comparable value and
use,

 

(iii)                               Asset Sales of Property between or among
Credit Parties;

 

(iv)                              Asset Sales of Oil and Gas Properties which
are not attributable to Proven Reserves and which is not Collateral or which is
not otherwise required pursuant to the terms of this Agreement to be Collateral;

 

(v)                                 the Asset Sale of Oil and Gas Properties
which are attributable to Proven Reserves; provided that, (A) the consideration
received by the Credit Party in respect of such Asset Sale shall be either
(1) cash, cash equivalents, or shall be attributable to Oil and Gas Properties
classified as Proven Reserves or (2) cash, cash equivalents, or shall be
attributable to Oil and Gas Properties classified as Proven Reserves or Equity
Interests in Persons owning Oil and Gas Properties that classify as Proven
Reserves; provided that 75% of the consideration described in this clause (2) is
in the form of cash, (B) the consideration received in respect of such Asset
Sale shall be equal to or greater than the fair market value of such Oil and Gas
Properties, interest therein or Subsidiary subject of such Asset Sale (as
reasonably determined by the board of directors or the equivalent governing body
of the Borrower and, if requested by the Administrative Agent, the Borrower
shall deliver a certificate of a Responsible Officer of the Borrower certifying
to that effect), (C) if any such Asset Sale is of a Subsidiary owning Oil and
Gas Properties, such Asset Sale shall include all the Equity Interests of such
Subsidiary; and (D) if the BB Deduction Amount exceeds 7% of the most recently
redetermined Borrowing Base, then the Borrowing Base shall be reduced in
accordance with Section 2.2(e);

 

(vi)                              the Asset Sale of Hedging Arrangements;
provided that, (A) 100% of the consideration received in respect of such Asset
Sale shall be cash or cash equivalents or other Hedging Arrangements, (B) the
consideration received in respect of such Asset Sale shall be equal to or
greater than the fair market value of such Hedging Arrangements; and (C) if the
BB Deduction Amount exceeds 7% of the most recently redetermined Borrowing Base,
then the Borrowing Base shall be reduced in accordance with Section 2.2(e); and

 

(vii)                           Asset Sales of other Property (other than Oil
and Gas Properties or Hedging Arrangements) not to exceed $10,000,000 during any
fiscal year.

 

Section 6.9                                    Restricted Payments.  No Credit
Party shall make, nor shall it permit any of its Subsidiaries to make any
Restricted Payments except that:

 

(a)                                 so long as no Default, Event of Default or
Borrowing Base Deficiency exists or would result therefrom (i) the Subsidiaries
of the Borrower may make Restricted Payments to the Borrower or any other Credit
Party that is a Subsidiary of the Borrower, and (ii) the Credit Parties may make
Restricted Payments in respect of Subordinated Debt permitted pursuant to
Section 6.1(b) or (h);

 

(b)                                 so long as no Default, Event of Default or
Borrowing Base Deficiency exists or would result therefrom, the Borrower may
make Tax Group Payments to Parent provided that (i) each Tax Group Payment is
made to Parent within 30 days of the delivery of the documentary evidence to the
Administrative Agent referred to in clause (ii) below and is made to reimburse
Parent for paying the

 

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Taxes of the Borrower and its Subsidiaries, and (ii) concurrently with the
delivery of the Compliance Certificate referred to in Section 5.2(e), the
Borrower furnishes the Administrative Agent with documentary evidence in such
form reasonably satisfactory to the Administrative Agent that Parent paid the
federal income and similar state and local Taxes of the Borrower and its
Subsidiaries;

 

(c)                                  the Borrower and any Subsidiary may pay any
management fee or similar fee to any Affiliate of the Borrower or its
Subsidiaries pursuant to the Management Agreement; provided that any amendments,
modifications, or side letters with respect to the Management Agreement after
the Closing Date are acceptable to the Administrative Agent;

 

(d)                                 so long as no Default, Event of Default or
Borrowing Base Deficiency exists or would result therefrom, the Borrower may
make Restricted Payments in an aggregate amount not to exceed $15,000,000 per
fiscal year; and

 

(e)                                  so long as no Default, Event of Default or
Borrowing Base Deficiency exists or would result therefrom, the Borrower may
make Restricted Payments in an aggregate amount not to exceed the lesser of
(i) the net amount of any cash contribution or equity proceeds received from the
Parent since the Closing Date and not previously distributed by the Borrower as
a Restricted Payment, and (ii) $80,000,000.

 

Section 6.10                             Affiliate Transactions.  No Credit
Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of
transactions (including, but not limited to, the purchase, sale, lease or
exchange of Property, the making of any investment, the giving of any guaranty,
the assumption of any obligation or the rendering of any service) with any of
its Affiliates which are not Credit Parties unless such transaction or series of
transactions is on terms no less favorable to the Borrower or any Subsidiary, as
applicable, than those that could be obtained in a comparable arm’s length
transaction with a Person that is not such an Affiliate except the restrictions
in this Section 6.10 shall not apply to: (a) the Restricted Payments permitted
under Section 6.9, if any, (b) Investments by a Credit Party in the form of
Equity Interests of another Credit Party, and (c) reasonable and customary
director, officer and employee compensation (including bonuses), indemnification
and other benefits (including retirement, health, stock option and other benefit
plans).

 

Section 6.11                             Line of Business.  No Credit Party
shall, and shall not permit any of its Subsidiaries to, engage to any material
extent in any business other than businesses of the type conducted by the
Borrower and its Subsidiaries on the Effective Date and businesses reasonably
related thereto.

 

Section 6.12                             Hazardous Materials.  No Credit Party
(a) shall, nor shall it permit any of its Subsidiaries to, create, handle,
transport, use, or dispose of any Hazardous Substance or Hazardous Waste, except
in the ordinary course of its business and except in compliance with
Environmental Law other than to the extent that such non-compliance could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change or in any liability to the Lenders or the Administrative Agent,
and (b) shall, nor shall it permit any of its Subsidiaries to, release any
Hazardous Substance or Hazardous Waste into the environment and shall not permit
any Credit Party’s or any Subsidiary’s Property to be subjected to any release
of Hazardous Substance or Hazardous Waste, except in compliance with
Environmental Law other than to the extent that such non-compliance could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change or in any liability on the Lenders or the Administrative Agent.

 

Section 6.13                             Compliance with ERISA.  Except for
matters that individually or in the aggregate could not reasonably be expected
to cause a Material Adverse Change, no Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly: (a) engage in any
transaction in connection with

 

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which the Borrower or any Subsidiary could be subjected to either a civil
penalty assessed pursuant to section 502(c), (i) or (l) of ERISA or a tax
imposed by Chapter 43 of Subtitle D of the Code; (b) terminate, or permit any
member of the Controlled Group to terminate, any Plan in a manner, or take any
other action with respect to any Plan, which could result in any liability to
the Borrower, any Subsidiary or any member of the Controlled Group to the PBGC;
(c) fail to make, or permit any member of the Controlled Group to fail to make,
full payment when due of all amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, the Borrower, a Subsidiary or
member of the Controlled Group is required to pay as contributions thereto;
(d) permit to exist, or allow any Subsidiary or any member of the Controlled
Group to permit to exist, any accumulated funding deficiency (or unpaid minimum
required contribution for plan years after December 31, 2007) within the meaning
of Section 302 of ERISA or section 412 of the Code, whether or not waived, with
respect to any Plan; (e) permit, or allow any member of the Controlled Group to
permit, the actuarial present value of the benefit liabilities (as “actuarial
present value of the benefit liabilities” shall have the meaning specified in
section 4041 of ERISA) under any Plan that is regulated under Title IV of ERISA
to exceed the current value of the assets (computed on a plan termination basis
in accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities; (f) contribute to or assume an obligation to contribute to, or
permit any member of the Controlled Group to contribute to or assume an
obligation to contribute to, any Multiemployer Plan; (g) acquire, or permit any
member of the Controlled Group to acquire, an interest in any Person that causes
such Person to become a member of the Controlled Group if such Person sponsors,
maintains or contributes to, or at any time in the six-year period preceding
such acquisition has sponsored, maintained, or contributed to, (1) any
Multiemployer Plan, or (2) any other Plan that is subject to Title IV of ERISA
under which the actuarial present value of the benefit liabilities under such
Plan exceeds the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Plan allocable to such
benefit liabilities; (h) incur, or permit any member of the Controlled Group to
incur, a liability to or on account of a Plan under sections 515, 4062, 4063,
4064, 4201 or 4204 of ERISA; or (i) contribute to or assume an obligation to
contribute to any employee welfare benefit plan, as defined in section 3(1) of
ERISA, maintained to provide benefits to former employees of such entities, that
may not be terminated by such entities in their sole discretion at any time
without any liability.

 

Section 6.14                             Sale and Leaseback Transactions.  No
Credit Party shall, nor shall it permit any of its Subsidiaries to, sell or
transfer to a Person any Property, whether now owned or hereafter acquired, if
at the time or thereafter the Borrower or a Subsidiary shall lease as lessee
such Property or any part thereof or other Property which the Borrower or a
Subsidiary intends to use for substantially the same purpose as the Property
sold or transferred.

 

Section 6.15                             Limitation on Hedging.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to enter into or maintain a
position in any Hedging Arrangement which,

 

(a)                                 is for speculative purposes or is for any
purpose other than as a part of its normal business operations as a risk
management strategy and/or hedge against changes resulting from market
conditions related to the Borrower’s or its Subsidiaries’ operations;

 

(b)                                 is secured (unless such Hedging Arrangement
is with a Swap Counterparty) or obligates any Credit Party to any margin call
requirements or otherwise requires the Borrower or any of its Subsidiaries to
put up money, assets, letters of credit, or other security or includes any
deferred premium payment;

 

(c)                                  with respect to Hedging Arrangements
related to commodities, is longer than 60 months in duration from the date such
Hedging Arrangement is entered into;

 

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(d)                                 with respect to Hedging Arrangements related
to commodities for the first 36 months following any date of determination:

 

(i)                                     covers notional volumes in excess of 85%
of the anticipated production of gas volumes attributable to Proven Reserves of
the Borrower and its Subsidiaries, as reflected in the most recently delivered
Engineering Report under Section 2.2;

 

(ii)                                  covers notional volumes in excess of 85%
of the anticipated production of natural gas liquids volumes attributable to
Proven Reserves of the Borrower and its Subsidiaries, as reflected in the most
recently delivered Engineering Report under Section 2.2;

 

(iii)                               covers notional volumes in excess of 85% of
the anticipated production of oil volumes attributable to Proven Reserves of the
Borrower and its Subsidiaries, as reflected in the most recently delivered
Engineering Report under Section 2.2;

 

provided, however, that the foregoing volume limitations shall not apply to put
option contracts that are not related to corresponding calls, collars, or swaps;

 

(e)                                  with respect to Hedging Arrangements
related to commodities for the 37th through 60th month following any date of
determination:

 

(i)                                     covers notional volumes in excess of the
greater of (A) 65% of the anticipated production of gas volumes attributable to
Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the
anticipated production of gas volumes attributable to PDP Reserves of the
Borrower and its Subsidiaries, in each case as reflected in the most recently
delivered Engineering Report under Section 2.2;

 

(ii)                                  covers notional volumes in excess of the
greater of (A) 65% of the anticipated production of natural gas liquids volumes
attributable to Proven Reserves of the Borrower and its Subsidiaries and (B) 90%
of the anticipated production of natural gas liquids volumes attributable to PDP
Reserves of the Borrower and its Subsidiaries, in each case as reflected in the
most recently delivered Engineering Report under Section 2.2;

 

(iii)                               covers notional volumes in excess of the
greater of (A) 65% of the anticipated production of oil volumes attributable to
Proven Reserves of the Borrower and its Subsidiaries and (B) 90% of the
anticipated production of oil volumes attributable to PDP Reserves of the
Borrower and its Subsidiaries, in each case as reflected in the most recently
delivered Engineering Report under Section 2.2;

 

provided, however, that the foregoing volume limitations shall not apply to put
option contracts that are not related to corresponding calls, collars, or swaps;
or

 

(f)                                   with respect to Hedging Arrangements
related to interest rates:

 

(i)                                     relates to payment obligations on Debt
which is not permitted to be incurred under Section 6.1 above;

 

(ii)                                  results in the aggregate notional amount
of all such Hedging Arrangements exceeding 75% of the anticipated outstanding
principal balance of the Debt under this Agreement;

 

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(iii)                               is with a counterparty or has a guarantor of
the obligation of the counterparty who (unless such counterparty is a Lender or
one of its Affiliates) at the time the Hedging Arrangement is made is rated
lower than A by S & P or A2 by Moody’s;

 

(iv)                              as to any such Hedging Arrangement covering
the Debt incurred under this Agreement, is with a counterparty that is not a
Lender or an Affiliate of a Lender; or

 

(v)                                 has a floating rate index that does not
generally match the index used to determine the floating rates of interest on
the corresponding Debt to be hedged by such Hedging Arrangement;

 

provided that, if, as of any Test Date the aggregate notional volumes of all
Hedging Arrangements covering natural gas, crude oil or natural gas liquids,
respectively, for any month in the fiscal quarter preceding such Test Date
exceed the actual volumes of production for such commodity for such month, then
Borrower shall (A) furnish to Administrative Agent, no later than 5:00 pm
Mountain Time on such Test Date, a statement setting forth in reasonable detail
the calculation of such determination and (B) no later than 15 days after such
Test Date, (1) furnish to Administrative Agent an updated Engineering Report
(the “Updated Report”), (2) terminate, create off-setting positions or otherwise
unwind existing Hedging Arrangements such that, at such time, future hedging
volumes will otherwise comply with this Section 6.15 on a going forward basis,
and (3) furnish to Administrative Agent a certificate executed by a Responsible
Officer certifying that as of the date of such certificate the Borrower is in
compliance with Section 6.15.

 

Section 6.16                             Leverage Ratio.  Borrower shall not
permit the Leverage Ratio as of each fiscal quarter end, beginning with the
fiscal quarter ending January 31, 2013, to be more than 4.00 to 1.00.

 

Section 6.17                             Current Ratio. The Borrower shall not
permit the ratio of, as of the last day of each fiscal quarter of the Borrower,
beginning with the fiscal quarter ending January 31, 2013, the Borrower’s and
its consolidated Subsidiaries’ (a) consolidated current assets to
(b) consolidated current liabilities, to be less than 1.00 to 1.00.  For
purposes of this calculation (i) “current assets” shall include, as of the date
of calculation, the Availability but shall exclude any asset representing a
valuation account arising from the application of ASC 815, and (ii) “current
liabilities” shall exclude, as of the date of calculation, the current portion
of long—term Debt existing under this Agreement and any liabilities representing
a valuation account arising from the application of ASC 815.

 

Section 6.18                             Operating Leases.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, enter into any lease that
constitutes an operating lease under GAAP if the obligations of a Credit Party
or such Subsidiary as lessee under such lease would cause its lease payments
(excluding payments for taxes, insurance, and other non-rental expenses to the
extent not included within the stated amount of the rental payments under such
lease) in respect of all such leases entered into by the Credit Parties to
exceed $5,000,000 during any fiscal year of the Borrower.

 

Section 6.19                             Prepayment of Certain Debt and Other
Obligations.  No Credit Party shall, nor shall it permit any of its Subsidiaries
to, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Debt, except (a) the prepayment of the
Obligations in accordance with the terms of this Agreement, (b) regularly
scheduled or required repayments or redemptions of Permitted Debt and
refinancings and refundings of such Permitted Debt so long as such refinancings
and refundings would otherwise comply with Section 6.1 or Section 6.21, as
applicable, (c) so long as no Event of Default exists or would result therefrom,
other prepayments of Permitted Debt not described in the immediately preceding
clauses (a) and (b).

 

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Section 6.20                             Gas Imbalances, Take-or-Pay or Other
Prepayments.  The Borrower shall not, nor shall it permit any of its
Subsidiaries to:

 

(a)                                 allow gas imbalances (other than those
imbalances which (a) occur in the normal course of business and (b) do not
exceed 2% of the value of the Proven Reserves of the Credit Parties);

 

(b)                                 incur or permit to exist take-or-pay
obligations other than any take-or-pay obligations under the RockPile Agreement,
the Caliber Agreements, or any Approved Transportation Agreements, except to the
extent that such take-or-pay obligations, when combined with the amount of any
prepayments described in clause (c) below, do not exceed $50,000,000 outstanding
in the aggregate at any time; or

 

(c)                                  receive or allow prepayments which would
require the Borrower or any Subsidiary to deliver their respective Hydrocarbons
produced from the Borrower’s or Subsidiary’s Oil and Gas Properties at some
future time without then or thereafter receiving full payment therefor, except
to the extent that such prepayments, when combined with the amount of any take
or pay obligations described in clause (b) above, do not exceed $50,000,000
outstanding in the aggregate at any time.

 

ARTICLE 7
DEFAULT AND REMEDIES

 

Section 7.1                                    Events of Default.  The
occurrence of any of the following events shall constitute an “Event of Default”
under this Agreement and any other Credit Document:

 

(a)                                 Payment Failure.  Any Credit Party (i) fails
to pay any principal when due under this Agreement or (ii) fails to pay, within
three Business Days of when due, any interest or other amount due under this
Agreement or any other Credit Document, including payments of fees,
reimbursements, and indemnifications;

 

(b)                                 False Representation or Warranties.  Any
representation or warranty made or deemed to be made by any Credit Party or any
officer thereof in this Agreement, in any other Credit Document or in any
certificate delivered in connection with this Agreement or any other Credit
Document is incorrect, false or otherwise misleading in any material respect
(except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) at the time it was made or deemed made;

 

(c)                                  Breach of Covenant.  (i) Any breach by any
Credit Party of any of the covenants in Section 5.1, Section 5.2(g),
Section 5.3(a) or Article 6 of this Agreement or the corresponding covenants in
any Guaranty or (ii) any breach by any Credit Party of any other covenant
contained in this Agreement or any other Credit Document and such breach shall
remain unremedied for a period of thirty days following the earlier of (A) the
date on which Administrative Agent gave notice of such failure to Borrower and
(B) the date any officer of the Borrower or any Subsidiary acquires knowledge of
such failure (such grace period to be applicable only in the event such Default
can be remedied by corrective action of the Borrower or any Subsidiary);

 

(d)                                 Guaranties.  Any provisions in the
Guaranties shall at any time (before its expiration according to its terms) and
for any reason cease to be in full force and effect and valid and binding on the
Guarantors party thereto or shall be contested by any party thereto; any
Guarantor shall deny it has any liability or obligation under such Guaranties;
or any Guarantor shall cease to exist other than as expressly permitted by the
terms of this Agreement;

 

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(e)                                  Security Documents.  Any Security Document
shall at any time and for any reason cease to create an Acceptable Security
Interest in the Property purported to be subject to such agreement in accordance
with the terms of such agreement or any material provisions thereof shall cease
to be in full force and effect and valid and binding on the Credit Party that is
a party thereto or any such Person shall so state in writing (unless released or
terminated pursuant to the terms of such Security Document);

 

(f)                                   Cross-Default. (i) The Borrower or any
Guarantor shall fail to pay any principal of or premium or interest on its Debt
which is outstanding in a principal amount of at least $5,000,000 individually
or when aggregated with all such Debt of the Borrower and the Subsidiaries so in
default (but excluding the Obligations) when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; (ii) any
other event shall occur or condition shall exist under any agreement or
instrument relating to Debt which is outstanding in a principal amount of at
least $5,000,000 individually or when aggregated with all such Debt of the
Borrower and the Subsidiaries so in default (other than Debt the Obligations),
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt prior to
the stated maturity thereof; or (iii) any such Debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment); provided that, for purposes of this paragraph (f), the
“principal amount” of the obligations in respect of Hedging Arrangements at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that would be required to be paid if such Hedging Arrangements were
terminated at such time;

 

(g)                                  Bankruptcy and Insolvency.  (i) Except as
permitted under Section 6.7 above, any Credit Party or any Subsidiary of the
Borrower shall terminate its existence or dissolve or (ii) any Credit Party or
any Subsidiary of the Borrower (A) admits in writing its inability to pay its
debts generally as they become due; makes an assignment for the benefit of its
creditors; consents to or acquiesces in the appointment of a receiver,
liquidator, fiscal agent, or trustee of itself or any of its Property; files a
petition under bankruptcy or other laws for the relief of debtors; or consents
to any reorganization, arrangement, workout, liquidation, dissolution, or
similar relief or (B) shall have had, without its consent: any court enter an
order appointing a receiver, liquidator, fiscal agent, or trustee of itself or
any of its Property; any petition filed against it seeking reorganization,
arrangement, workout, liquidation, dissolution or similar relief under
bankruptcy or other laws for the relief of debtors and such petition shall not
be dismissed, stayed, or set aside for an aggregate of 60 days, whether or not
consecutive;

 

(h)                                 Settlements; Adverse Judgment.  The Borrower
or any of its Subsidiaries enters into a settlement of any claim against any of
them when a suit has been filed or suffers final judgments against any of them
since the date of this Agreement in an aggregate amount, less any insurance
proceeds covering such settlements or judgments which are received or as to
which the insurance carriers admit liability, greater than $25,000,000 and, in
the case of final judgments, either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgments or (ii) there shall be any period
of 30 consecutive days during which a stay of enforcement of such judgments, by
reason of a pending appeal or otherwise, shall not be in effect;

 

(i)                                     Termination Events.  Any Termination
Event with respect to a Plan shall have occurred, and, 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent, such
Termination Event shall not have been corrected and shall have created and
caused to be continuing a material risk of Plan termination or liability for
withdrawal from the Plan as a “substantial employer” (as defined in
Section 4001(a)(2) of ERISA), which termination could reasonably be expect to
result in a liability of, or liability for withdrawal could reasonably be
expected to be, greater than $25,000,000;

 

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(j)                                    Plan Withdrawals.  The Borrower or any
member of the Controlled Group as employer under a Multiemployer Plan shall have
made a complete or partial withdrawal from such Multiemployer Plan and such
withdrawing employer shall have incurred a withdrawal liability in an annual
amount exceeding $25,000,000;

 

(k)                                 Credit Documents; Lien.  Any material
provision of any Credit Document shall for any reason cease to be valid and
binding on a Credit Party or any of their respective Subsidiaries or any such
Person shall so state in writing or the Administrative Agent shall fail to have
an Acceptable Security Interest in Property required to be Collateral under the
Credit Documents; or

 

(l)                                     Change in Control.  The occurrence of a
Change in Control.

 

Section 7.2                                    Optional Acceleration of
Maturity.  If any Event of Default shall have occurred and be continuing, then,
and in any such event:

 

(a)                                 the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare that the obligation of each Lender to make Advances and the
obligation of the Issuing Lender to issue Letters of Credit shall be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Obligations, the Notes, all interest thereon, and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Obligations, the Notes, all such interest, and all such amounts shall become and
be forthwith due and payable in full, without presentment, demand, protest or
further notice of any kind (including, without limitation, any notice of intent
to accelerate or notice of acceleration), all of which are hereby expressly
waived by each of the Credit Parties,

 

(b)                                 the Borrower shall, on demand of the
Administrative Agent at the request or with the consent of the Required Lenders,
deposit with the Administrative Agent into the Cash Collateral Account an amount
of cash equal to the outstanding Letter of Credit Exposure as security for the
Secured Obligations to the extent the Letter of Credit Obligations are not
otherwise paid or cash collateralized at such time, and

 

(c)                                  the Administrative Agent shall at the
request of, or may with the consent of, the Required Lenders proceed to enforce
its rights and remedies under the Security Documents, the Guaranties, or any
other Credit Document for the ratable benefit of the Secured Parties by
appropriate proceedings.

 

Section 7.3                                    Automatic Acceleration of
Maturity.  If any Event of Default pursuant to Section 7.1(g) shall occur:

 

(a)                                 the obligation of each Lender to make
Advances and the obligation of the Issuing Lender to issue Letters of Credit
shall immediately and automatically be terminated and the Obligations, the
Notes, all interest on the Notes, and all other amounts payable under this
Agreement shall immediately and automatically become and be due and payable in
full, without presentment, demand, protest or any notice of any kind (including,
without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by each of the Credit
Parties,

 

(b)                                 the Borrower shall, on demand of the
Administrative Agent at the request or with the consent of the Required Lenders,
deposit with the Administrative Agent into the Cash Collateral Account an amount
of cash equal to the outstanding Letter of Credit Exposure as security for the
Secured Obligations to the extent the Letter of Credit Obligations are not
otherwise paid or cash collateralized at such time, and

 

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(c)                                  the Administrative Agent shall at the
request of, or may with the consent of, the Required Lenders proceed to enforce
its rights and remedies under the Security Documents, the Guaranties, or any
other Credit Document for the ratable benefit of the Secured Parties by
appropriate proceedings.

 

Section 7.4                                    Set-off.  Upon (a) the occurrence
and during the continuance of any Event of Default and (b) the making of the
request or the granting of the consent, if any, specified by Section 7.2 to
authorize the Administrative Agent to declare the Notes and any other amount
payable hereunder due and payable pursuant to the provisions of Section 7.2 or
the automatic acceleration of the Notes and all amounts payable under this
Agreement pursuant to Section 7.3, the Administrative Agent and each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Administrative Agent or such Lender to or for the credit
or the account of any Credit Party against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement, the Notes held by the
Administrative Agent or such Lender, and the other Credit Documents,
irrespective of whether or not the Administrative Agent or such Lender shall
have made any demand under this Agreement, such Note, or such other Credit
Documents, and although such obligations may be unmatured.  Each Lender agrees
to promptly notify the Borrower 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.  The rights of the Administrative
Agent and each Lender under this Section 7.4 are in addition to any other rights
and remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.

 

Section 7.5                                    Remedies Cumulative, No Waiver. 
No right, power, or remedy conferred to any Lender in this Agreement or the
Credit Documents, or now or hereafter existing at law, in equity, by statute, or
otherwise shall be exclusive, and each such right, power, or remedy shall to the
full extent permitted by law be cumulative and in addition to every other such
right, power or remedy.  No course of dealing and no delay in exercising any
right, power, or remedy conferred to any Lender in this Agreement and the Credit
Documents or now or hereafter existing at law, in equity, by statute, or
otherwise shall operate as a waiver of or otherwise prejudice any such right,
power, or remedy.  Any Lender may cure any Event of Default without waiving the
Event of Default.  No notice to or demand upon the Borrower or any other Credit
Party shall entitle the Borrower or any other Credit Party to similar notices or
demands in the future.

 

Section 7.6                                    Application of Payments.  Prior
to an Event of Default, all payments made hereunder shall be applied by the
Administrative Agent as directed by the Borrower, but subject to the terms of
this Agreement, including the application of prepayments according to
Section 2.5 and Section 2.12. During the existence of an Event of Default, all
payments and collections received by the Administrative Agent (other than as a
result of the exercise of remedies against Collateral or against the Borrower or
any Subsidiary) shall be applied by the Administrative Agent in its discretion,
but subject to the terms of this Agreement, including the application of
prepayments according to Section 2.5 and Section 2.12. During the existence of
an Event of Default, all payments and collections received by the Administrative
Agent as a result of the exercise of remedies against Collateral or against the
Borrower or any Subsidiary shall be applied to the Secured Obligations in
accordance with Section 2.12 and otherwise in the following order:

 

FIRST, to the payment of all costs and expenses incurred by the Administrative
Agent (in its capacity as such hereunder or under any other Credit Document) in
connection with this Agreement or any of the Secured Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Administrative Agent as secured party
hereunder or under any other Credit Document on behalf of any Credit Party and

 

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any other costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Credit Document;

 

SECOND, to the payment of all accrued interest constituting part of the Secured
Obligations (the amounts so applied to be distributed ratably among the Secured
Parties in accordance with the amounts of the Secured Obligations described in
this clause “SECOND” owed to them on the date of any such distribution);

 

THIRD, to the payment of any Secured Obligations not addressed in clauses
“FIRST” or “SECOND” of this Section 7.6(c) (including, without limitation, any
principal, fees or expenses, Letter of Credit Obligations, Obligations to make
deposits into the Cash Collateral Account, Secured Obligations owing to Swap
Counterparties in respect of Hedging Arrangements, and Banking Services
Obligations) constituting part of the Secured Obligations (the amounts so
applied to be distributed ratably among the Secured Parties in accordance with
the amounts of the Secured Obligations described in this clause “THIRD” owed to
them on the date of any such distribution); and

 

FOURTH, to the Credit Parties, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

 

Notwithstanding the foregoing, payments and collections received by the Lender
from any Credit Party that is not a Qualified ECP Guarantor (and any proceeds
received in respect of such Credit Party’s Collateral shall not be applied to
Excluded Swap Obligations with respect to any Credit Party, provided, however,
that the Lender shall make such adjustments as it determines are appropriate
with respect to payments and collections received from the other Credit Parties
(or proceeds received in respect of such other Credit Parties’ Collateral) to
preserve, as nearly as possible, the allocation to Secured Obligations otherwise
set forth above in this Section 7.6 (assuming that, solely for purposes of such
adjustments, Secured Obligations includes Excluded Swap Obligations).

 

ARTICLE 8
THE ADMINISTRATIVE AGENT

 

Section 8.1                                    Appointment, Powers, and
Immunities.

 

(a)                                 Each of the Lenders and the Issuing Lender
hereby irrevocably appoints Wells Fargo Bank, National Association to act on its
behalf as the Administrative Agent hereunder and under the other Credit
Documents and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof or thereof, together with such actions and powers as are
reasonably incidental thereto.  The provisions of this Article are solely for
the benefit of the Administrative Agent, the Lenders and the Issuing Lender, and
neither the Borrower nor any other Credit Party shall have rights as a
third-party beneficiary of any of such provisions.  It is understood and agreed
that the use of the term “agent” herein or in any other Credit Documents (or any
other similar term) with reference to the Administrative Agent is not intended
to connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead such term is used as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between contracting parties.

 

(b)                                 Each Lender irrevocably appoints the
Administrative Agent as its agent and bailee for the purpose of perfecting Liens
(whether pursuant to Section 8-301(a)(2) of the UCC or otherwise), for the
benefit of the Secured Parties, in assets in which, in accordance with the UCC
or any other applicable Legal Requirement a security interest can be perfected
by possession or control.  Should any Lender

 

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(other than the Administrative Agent) obtain possession or control of any such
Collateral, such Lender shall notify the Administrative Agent thereof, and,
promptly following the Administrative Agent’s request therefor, shall deliver
such Collateral to the Administrative Agent or otherwise deal with such
Collateral in accordance with the Administrative Agent’s instructions.

 

Section 8.2                                    Rights as a Lender.  Such Persons
serving as the Administrative Agent hereunder shall each have the same rights
and powers in its capacity as a Lender as any other Lender and may exercise the
same as though it were not the Administrative Agent, and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Persons serving as the Administrative Agent
hereunder in its individual capacity.  Such Persons and their 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 business with, the Borrower or any Subsidiary or other Affiliate thereof as
if such Person were not the Administrative Agent hereunder and without any duty
to account therefor to the Lenders.

 

Section 8.3                                    Exculpatory Provisions.

 

(a)                                 The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Credit Documents, and their respective duties hereunder shall be administrative
in nature.  Without limiting the generality of the foregoing, the Administrative
Agent:

 

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

 

(ii)                                  shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Credit Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as shall
be expressly provided for herein or in the other Credit Documents); provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Credit Document or applicable law,
including for the avoidance of doubt any action that may be in violation of the
automatic stay under any Debtor Relief Law or that may effect a forfeiture,
modification or termination of property of a Defaulting Lender in violation of
any Debtor Relief Law; and

 

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

 

(b)                                 The Administrative Agent shall not be liable
for any action taken or not taken by it (i) with the consent or at the request
of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary, or as the Administrative Agent shall believe in good faith
shall be necessary, under the circumstances as provided in Sections 9.3 and
Section 7.2), or (ii) in the absence of its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction by final and
nonappealable judgment.  The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent in writing by the Borrower, a Lender or the
Issuing Lender.

 

(c)                                  The Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or

 

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any other Credit Document, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Credit Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article 3 or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.

 

Section 8.4                                    Reliance by Administrative
Agent.  The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person.  The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In determining
compliance with any condition hereunder to the making of an Advance, or the
issuance, extension, renewal or increase of a Letter of Credit, that by its
terms must be fulfilled to the satisfaction of a Lender or the Issuing Lender,
the Administrative Agent may presume that such condition is satisfactory to such
Lender or the Issuing Lender unless the Administrative Agent shall have received
notice to the contrary from such Lender or the Issuing Lender prior to the
making of such Advance or the issuance of such Letter of Credit.  The
Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.

 

Section 8.5                                    Delegation of Duties.  The
Administrative Agent may perform any and all of its duties and exercise its
rights and powers hereunder or under any other 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 and all of its
duties and exercise its rights and powers by or through their respective Related
Parties.  The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facility evidenced by this Agreement as well as
activities as the Administrative Agent.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any sub-agents 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-agents.

 

Section 8.6                                    Resignation of Administrative
Agent.

 

(a)                                 The Administrative Agent may at any time
give notice of its resignation to the Lenders, the Issuing Lender and the
Borrower.  Upon receipt of any such notice of resignation, the Required Lenders
shall have the right, subject to the approval of the Borrower so long as no
Default or Event of Default shall have occurred and is continuing (such approval
not to be unreasonably withheld), to appoint a successor, which shall be a bank
with an office in the United States, or an Affiliate of any such bank with an
office in the United States.  If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation (or such
earlier day as shall be agreed by the Required Lenders) (the “Resignation
Effective Date”), then the retiring Administrative Agent may (but shall not be
obligated to), on behalf of the Lenders and the Issuing Lender, appoint a
successor Administrative Agent meeting the qualifications set forth above. 
Whether or not a successor has been appointed, such resignation shall become
effective in accordance with such notice on the Resignation Effective Date.

 

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(b)                                 If the Person serving as Administrative
Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof,
the Required Lenders may, or, so long as no Default or Event of Default has
occurred or is continuing, upon the request of the Borrower, the Required
Lenders shall, to the extent permitted by applicable law, by notice in writing
to the Borrower and such Person remove such Person as Administrative Agent and,
so long as no Default or Event of Default has occurred and is continuing, with
the approval of the Borrower (such approval not to be unreasonably withheld),
appoint a successor. If no such successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days (or
such earlier day as shall be agreed by the Required Lenders) (the “Removal
Effective Date”), then such removal shall nonetheless become effective in
accordance with such notice on the Removal Effective Date.

 

(c)                                  With effect from the Resignation Effective
Date or the Removal Effective Date (as applicable) (1) the retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Credit Documents and (2) except for any indemnity
payments owed to the retiring or removed Administrative Agent, all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the Issuing
Lender directly, until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided for above.  Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring or removed Administrative Agent (other than any rights to
indemnity payments owed to the retiring or removed Administrative Agent), and
the retiring or removed Administrative Agent shall be discharged from all of its
duties and obligations hereunder or under the other Credit Documents.  The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the retiring or removed Administrative Agent’s
resignation or removal hereunder and under the other Credit Documents, the
provisions of this Article and Section 9.1 shall continue in effect for the
benefit of such retiring or removed 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 or removed Administrative Agent was
acting as Administrative Agent.

 

Section 8.7                                    Non-Reliance on Administrative
Agent and Other Lenders.  Each Lender and the Issuing Lender acknowledges that
it has, independently and without reliance upon the Administrative Agent or any
other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender and the Issuing Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Credit Document or any related
agreement or any document furnished hereunder or thereunder.

 

Section 8.8                                    No Other Duties, etc.  Anything
herein to the contrary notwithstanding, none of the Bookrunners, Arrangers or
any other titles, if any, listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Credit
Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or the Issuing Lender hereunder.

 

Section 8.9                                    Administrative Agent May File
Proofs of Claim.  In case of the pendency of any proceeding under any Debtor
Relief Law or any other judicial proceeding relative to any Credit Party, the
Administrative Agent (irrespective of whether the principal of any Advance or
Letter of Credit 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:

 

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(a)                                 to file and prove a claim for the whole
amount of the principal and interest owing and unpaid in respect of the
Advances, Letter of Credit Obligations and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders, the Issuing Lender and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the Issuing Lender and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders, the Issuing Lender and the Administrative Agent under
Sections 2.7, 9.1 and 9.2) allowed in such judicial proceeding; and

 

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

 

(c)                                  and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Lender and the Issuing Lender to make
such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders and the Issuing Lender, to pay to the Administrative Agent any
amount due for the reasonable compensation, expenses, disbursements and advances
of the Administrative Agent and its agents and counsel, and any other amounts
due the Administrative Agent under Sections 2.7, 9.1, or 9.2.

 

Section 8.10                             Collateral and Guaranty Matters.

 

(a)                                 The Secured Parties irrevocably authorize
the Administrative Agent, at its option and in its discretion,

 

(i)                                     to release any Lien on any property
granted to or held by the Administrative Agent under any Credit Document
(A) upon Payment in Full of Obligations, (B) that is sold or otherwise disposed
of or to be sold or otherwise disposed of as part of or in connection with any
sale or other disposition permitted under the Credit Documents, (C) constituting
property in which no Credit Party owned an interest at the time the Lien was
granted or at any time thereafter, or (D) constituting property leased to any
Credit Party under a lease which has expired or has been terminated in a
transaction permitted under this Agreement or is about to expire and which has
not been, and is not intended by such Credit Party to be, renewed or extended,
or (E) subject to Section 9.3,  if approved, authorized or ratified in writing
by the Required Lenders;

 

(ii)                                  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 6.1(d);

 

(iii)                               to release any Guarantor from its
obligations under the Guaranty if such Person ceases to be a Subsidiary as a
result of a transaction permitted under the Credit Documents; and

 

(iv)                              to take any action in exigent circumstances as
may be reasonably necessary to preserve any rights or privileges of the Secured
Parties under the Credit Documents or applicable Legal Requirements.

 

Upon request by the Administrative Agent at any time, the Secured Parties will
confirm in writing the Administrative Agent’s authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this
Section 8.10. By accepting the benefit of the Liens granted pursuant to the
Security Documents, each Secured Party hereby agrees to the terms of this
paragraph (a).

 

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(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 for any failure to monitor or maintain any portion of the Collateral.

 

(c)                                  Notwithstanding anything contained in any
of the Credit Documents to the contrary, the Credit Parties, the Administrative
Agent, and each Secured Party hereby agree that no Secured Party shall have any
right individually to realize upon any of the Collateral or to enforce the
Guaranties, it being understood and agreed that all powers, rights and remedies
hereunder and under the Security Documents may be exercised solely by
Administrative Agent on behalf of the Secured Parties in accordance with the
terms hereof and the other Credit Documents.  By accepting the benefit of the
Liens granted pursuant to the Security Documents, each Secured Party not party
hereto hereby agrees to the terms of this paragraph (c).

 

ARTICLE 9
MISCELLANEOUS

 

Section 9.1                                    Costs and Expenses.  The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates (including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent), in connection with
the syndication of the facilities, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Credit Documents, or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing
Lender in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder, and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
Issuing Lender (including the fees, charges and disbursements of any counsel for
the Administrative Agent and its Affiliates, any Lender or the Issuing Lender),
in connection with the enforcement or protection of its rights (A) in connection
with this Agreement and the other Credit Documents, including its rights under
this Section, or (B) in connection with the Advances made or Letters of Credit
issued hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Advances or Letters of
Credit.

 

Section 9.2                                    Indemnification; Waiver of
Damages.

 

(a)                                 INDEMNIFICATION.  THE BORROWER SHALL
INDEMNIFY THE ADMINISTRATIVE AGENT (AND ANY SUB-AGENT THEREOF), EACH LENDER AND
THE ISSUING LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH
SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE
HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES, PENALTIES AND
RELATED EXPENSES (INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF
ANY COUNSEL FOR ANY INDEMNITEE), INCURRED BY ANY INDEMNITEE OR ASSERTED AGAINST
ANY INDEMNITEE BY ANY PERSON (INCLUDING THE BORROWER OR ANY OTHER CREDIT PARTY)
OTHER THAN SUCH INDEMNITEE AND ITS RELATED PARTIES ARISING OUT OF, IN CONNECTION
WITH, OR AS A RESULT OF (I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT, ANY
OTHER CREDIT DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR
THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS
HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY, (II) ANY ADVANCE OR LETTER OF CREDIT OR

 

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THE USE OR PROPOSED USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE
ISSUING LENDER TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE
DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH
THE TERMS OF SUCH LETTER OF CREDIT), (III) ANY ACTUAL OR ALLEGED PRESENCE OR
RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE
BORROWER OR ANY OF ITS SUBSIDIARIES, OR ANY ENVIRONMENTAL LIABILITY RELATED IN
ANY WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (IV) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER
BROUGHT BY A THIRD PARTY OR BY THE BORROWER OR ANY OTHER CREDIT PARTY, AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, IN ALL CASES, WHETHER
OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE,
CONTRIBUTORY OR SOLE NEGLIGENCE OF THE APPLICABLE INDEMNITEE; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE. 
THIS SECTION 9.2(a) SHALL NOT APPLY WITH RESPECT TO TAXES OTHER THAN ANY TAXES
THAT REPRESENT LOSSES, CLAIMS, DAMAGES, ETC. ARISING FROM ANY NON-TAX CLAIM.

 

(b)                                 Reimbursement by Lenders.  To the extent
that the Borrower for any reason fails to indefeasibly pay any amount required
under Section 9.1 or paragraph (a) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Administrative Agent (or
any sub-agent thereof), the Issuing Lender, or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the Administrative Agent (or any sub-agent thereof), the
Issuing Lender, or such Related Party, as the case may be, such Lender’s Pro
Rata Share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought based on each Lender’s share of the Commitments
at such time, or, if the Commitments have been terminated, such Lender’s share
of the aggregate outstanding amount of all Advances and plus the Letter of
Credit Exposure at such time) of such unpaid amount (including any such unpaid
amount in respect of a claim asserted by such Lender); provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent), the Administrative Agent (or any
sub-agent thereof), the Issuing Lender in its capacity as such, or against any
Related Party of any of the foregoing acting for the Administrative Agent (or
any such sub-agent), the Administrative Agent (or any sub-agent thereof), or the
Issuing Lender in connection with such capacity.  The obligations of the Lenders
under this paragraph (c) are subject to the provisions of Section 2.12(f).

 

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

 

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(d)                                 Payments.  All payments required to be made
under this Section 9.2 shall be made within 10 days of demand therefor.

 

(e)                                  Survival.  Each party’s obligations under
this Section shall survive the termination of the Credit Documents and payment
of the obligations hereunder.

 

Section 9.3                                    Waivers and Amendments.  No
amendment or waiver of any provision of this Agreement, the Notes, or any other
Credit Document (other than the Fee Letter), nor consent to any departure by the
Borrower or any Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Lenders and the Borrower,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided that:

 

(a)                                 no amendment, waiver, or consent shall,
unless in writing and signed by all the Lenders and the Borrower, do any of the
following: (i)  reduce the principal of, or interest on, the Notes,
(ii) postpone or extend any date fixed for any payment of principal of, or
interest on, the Notes, including, without limitation, the Maturity Date, or
(iii) change the number of Lenders which shall be required for the Lenders to
take any action hereunder or under any other Credit Document;

 

(b)                                 no amendment, waiver, or consent shall,
unless in writing and signed by all the Lenders and the Borrower, do any of the
following:  (i) waive any of the conditions specified in Section 3.1 or
Section 3.2, (ii) reduce any fees or other amounts payable hereunder or under
any other Credit Document (other than those specifically addressed above in this
Section 9.3), (iii) increase the aggregate Commitments, (iv) postpone or extend
any date fixed for any payment of any fees or other amounts payable hereunder
(other than those otherwise specifically addressed in this Section 9.3),
(v) amend Section 2.12(e), Section 7.6, this Section 9.3 or any other provision
in any Credit Document which expressly requires the consent of, or action or
waiver by, all of the Lenders, (vii) release any Guarantor from its obligation
under any Guaranty or, except as specifically provided in the Credit Documents
and as a result of transactions permitted by the terms of this Agreement,
release all or a material portion of the Collateral except as permitted under
Section 8.10(a); or (viii) amend the definitions of “Required Lenders” or
“Maximum Exposure Amount”;

 

(c)                                  no Commitment of a Lender or any
obligations of a Lender may be increased or extended without such Lender’s
written consent;

 

(d)                                 no amendment, waiver, or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any other Credit Document; and

 

(e)                                  no amendment, waiver or consent shall,
unless in writing and signed by an Issuing Lender in addition to the Lenders
required above to take such action, affect the rights or duties of such Issuing
Lender under this Agreement or any other Credit Document.

 

Section 9.4                                    Severability.  In case one or
more provisions of this Agreement or the other Credit Documents shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality, and enforceability of the remaining provisions contained
herein or therein shall not be affected or impaired thereby.

 

Section 9.5                                    Survival of Representations and
Obligations.  All representations and warranties contained in this Agreement or
made in writing by or on behalf of the Credit Parties in connection herewith
shall survive the execution and delivery of this Agreement and the other Credit
Documents, the making of the Advances or the issuance of any Letters of Credit
and any investigation made by or on

 

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behalf of the Lenders, none of which investigations shall diminish any Lender’s
right to rely on such representations and warranties.  All obligations of the
Borrower or any other Credit Party provided for in Sections 2.10, 2.11, 2.13(c),
9.1 and 9.2 and all of the obligations of the Lenders in Section 8.5 shall
survive any termination of this Agreement and repayment in full of the
Obligations.

 

Section 9.6                                    Binding Effect.  This Agreement
shall become effective when it shall have been executed by the Borrower and the
Administrative Agent, and when the Administrative Agent shall have, as to each
Lender, either received a counterpart hereof executed by such Lender or been
notified by such Lender that such Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Administrative Agent,
and each Lender and their respective successors and assigns, except that neither
the Borrower nor any other Credit Party shall have the right to assign its
rights or delegate its duties under this Agreement or any interest in this
Agreement without the prior written consent of each Lender.

 

Section 9.7                                    Successors and Assigns.

 

(a)                                 Successors and Assigns Generally.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that neither the Borrower nor any other Credit Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender, and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an assignee in accordance with the provisions of paragraph (b) of this
Section, (ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section, or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this
Section (and any other attempted assignment or transfer by any party hereto
shall be null and void).  Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in paragraph (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement

 

(b)                                 Assignments by Lenders.  Any Lender may at
any time assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Advances at the time owing to it); provided that any such assignment
shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                               in the case of an assignment of the entire
remaining amount of the assigning Lender’s Commitment and/or the Advances at the
time owing to it or contemporaneous assignments to related Approved Funds that
equal at least the amount specified in paragraph (b)(i)(B) of this Section in
the aggregate or in the case of an assignment to a Lender, an Affiliate of a
Lender or an Approved Fund, no minimum amount need be assigned; and

 

(B)                               in any case not described in paragraph
(b)(i)(A) of this Section, the aggregate amount of the Commitment (which for
this purpose includes Advances outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the
Advances of the assigning Lender subject to each such assignment (determined as
of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if “Trade Date” is

 

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specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $5,000,000, unless each of the Administrative Agent and, so long as no
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed).

 

(ii)                                  Proportionate Amounts.  Each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement with respect to
the Advance or the Commitment assigned.

 

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

 

(A)                               the consent of the Borrower (such consent not
to be unreasonably withheld or delayed) shall be required unless (x) a Default
has occurred and is continuing at the time of such assignment, or (y) such
assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;
provided that the Borrower shall be deemed to have consented to any such
assignment unless it shall object thereto by written notice to the
Administrative Agent within 5 Business Days after having received notice thereof
and provided, further, that the Borrower’s consent shall not be required during
the primary syndication of the credit facility evidenced by this Agreement;

 

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

 

(C)                               the consent of the Issuing Lender shall be
required for any assignment hereunder.

 

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

 

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

 

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

 

(vii)                           Certain Additional Payments.  In connection with
any assignment of rights and obligations of any Defaulting Lender hereunder, no
such assignment shall be effective unless and until, in addition to the other
conditions thereto set forth herein, the parties to the assignment shall make
such additional payments to the Administrative Agent in an aggregate amount
sufficient, upon distribution thereof as appropriate (which may be outright
payment, purchases by the assignee of participations or subparticipations, or
other compensating actions, including funding, with the consent of the Borrower
and the Administrative Agent, the applicable Pro Rata Share of Advances
previously requested but not funded by the Defaulting Lender, to each of which
the

 

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applicable assignee and assignor hereby irrevocably consent), to (x) pay and
satisfy in full all payment liabilities then owed by such Defaulting Lender to
the Administrative Agent, the Issuing Lender, and each other Lender hereunder
(and interest accrued thereon), and (y) acquire (and fund as appropriate) its
full pro rata share of all Advances and participations in Letters of Credit in
accordance with its Pro Rata Share.  Notwithstanding the foregoing, in the event
that any assignment of rights and obligations of any Defaulting Lender hereunder
shall become effective under applicable law without compliance with the
provisions of this paragraph, then the assignee of such interest shall be deemed
to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs.

 

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 2.11, 9.1, 9.2, and 9.3 with respect to facts and
circumstances occurring prior to the effective date of such assignment;
provided, that except to the extent otherwise expressly agreed by the affected
parties, no assignment by a Defaulting Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d) of
this Section.

 

(c)                                  Register.  The Administrative Agent, acting
solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain
at its address referred to in Section 9.9 a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts (and
stated interest) of the Advances owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Credit
Parties, the Administrative Agent, the Issuing Lender 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.  The Register
shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

 

(d)                                 Participations.  Any Lender may at any time,
without the consent of, or notice to, the Borrower or the Administrative Agent,
sell participations to any Person (other than a natural Person, or a holding
company, investment vehicle or trust for, or owned and operated for the primary
benefit of, a natural person, or the Borrower or any of the Borrower’s
Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such
Lender’s rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Advances owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, and (iii) the Borrower, the Administrative
Agent, the Issuing Lender and Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender’s rights and obligations under
this Agreement.  For the avoidance of doubt, each Lender shall be responsible
for the indemnity under Section 9.2 (d) with respect to any payments made by
such Lender to its Participant(s).

 

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Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in Section 9.3(a), (b), or
(c) that affects such Participant.  The Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.11, 2.10 and 2.13 (subject to
the requirements and limitations therein, including the requirements under
Section 2.13 (it being understood that the documentation required under
Section 2.13(g) shall be delivered to the participating Lender)) to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section; provided that such Participant
(A) agrees to be subject to the provisions of Sections 2.14 as if it were an
assignee under paragraph (b) of this Section; and (B) shall not be entitled to
receive any greater payment under Sections 2.11 or 2.13, with respect to any
participation, than its participating Lender would have been entitled to
receive, except to the extent such entitlement to receive a greater payment
results from a Change in Law that occurs after the Participant acquired the
applicable participation.  Each Lender that sells a participation agrees, at the
Borrower’s request and expense, to use reasonable efforts to cooperate with the
Borrower to effectuate the provisions of Section 2.14(b) with respect to any
Participant.  To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 7.4 as though it were a Lender; provided
that such Participant agrees to be subject to Section 2.12(e) as though it were
a Lender.  Each Lender that sells a participation shall, acting solely for this
purpose as a non-fiduciary agent of the Borrower, maintain a register on which
it enters the name and address of each Participant and the principal amounts
(and stated interest) of each Participant’s interest in the Advances or other
obligations under the Credit Documents (the “Participant Register”); provided
that no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant’s interest in any commitments, loans,
letters of credit or its other obligations under any Credit Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations.  The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary.  For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register.

 

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

 

Section 9.8                                    Confidentiality.  Each of the
Administrative Agent, the Lenders and the Issuing Lender agree to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its Related Parties (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent required or requested by any
regulatory authority purporting to have jurisdiction over such Person or its
Related Parties (including any self-regulatory authority, such as the National
Association of Insurance Commissioners); (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process;
(d) to any other party hereto; (e) in connection with the exercise of any
remedies hereunder or under any other Credit Document or any action or
proceeding relating to this Agreement or any other Credit Document or the
enforcement of rights hereunder or thereunder; (f) subject to an agreement
containing provisions substantially the same as those of this Section, to
(i) any assignee of or Participant in, or any prospective

 

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assignee of or Participant in, any of its rights and obligations under this
Agreement, or (ii) any actual or prospective party (or its Related Parties) to
any swap, derivative or other transaction under which payments are to be made by
reference to the Borrower and its obligations, this Agreement or payments
hereunder; (g) on a confidential basis to (i)  any rating agency in connection
with rating the Borrower or its Subsidiaries or the credit facility evidenced by
this Agreement or (ii) the CUSIP Service Bureau or any similar agency in
connection with the issuance and monitoring of CUSIP numbers with respect to the
credit facility evidenced by this Agreement; (h) with the consent of the
Borrower; or (i) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section, or (y) becomes available to
the Administrative Agent, any Lender, the Issuing Lender or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Borrower. In addition, the Administrative Agent and the Lenders may disclose the
existence of this Agreement and information about this Agreement to market data
collectors, similar service providers to the lending industry, and service
providers to the Administrative Agent and the Lenders in connection with the
administration of this Agreement, the other Credit Documents and the
Commitments.

 

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

 

Section 9.9                                    Notices, Etc.

 

(a)                                 Subject to clause (b) below, all notices and
other communications (other than Notices of Borrowing and Notices of
Continuation or Conversion, which are governed by Article 2 of this Agreement)
shall be in writing and hand delivered with written receipt, telecopied, sent by
facsimile (with a hard copy sent as otherwise permitted in this Section 9.9),
sent by a nationally recognized overnight courier, or sent by certified mail,
return receipt requested as follows: if to a Credit Party, as specified on
Schedule I, if to the Administrative Agent or the Issuing Lender, at its credit
contact specified under its name on Schedule I, and if to any Lender at is
credit contact specified in its Administrative Questionnaire.  Each party may
change its notice address by written notification to the other parties.  All
such notices and communications shall be effective when delivered, except that
notices and communications to any Lender or the Issuing Lender pursuant to
Article 2 shall not be effective until received and, in the case of telecopy,
such receipt is confirmed by such Lender or Issuing Lender, as applicable,
verbally or in writing.

 

(b)                                 Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Article 2 or Section 5.2(g) or
(k) of this Agreement unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in their
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.

 

Section 9.10                             Usury Not Intended.  It is the intent
of each Credit Party and each Lender in the execution and performance of this
Agreement and the other Credit Documents to contract in strict compliance with
applicable usury laws, including conflicts of law concepts, governing the
Advances of

 

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each Lender including such applicable laws of the State of New York, if any, and
the United States of America from time to time in effect.  In furtherance
thereof, the Lenders and the Credit Parties stipulate and agree that none of the
terms and provisions contained in this Agreement or the other Credit Documents
shall ever be construed to create a contract to pay, as consideration for the
use, forbearance or detention of money, interest at a rate in excess of the
Maximum Rate and that for purposes of this Agreement “interest” shall include
the aggregate of all charges which constitute interest under such laws that are
contracted for, charged or received under this Agreement; and in the event that,
notwithstanding the foregoing, under any circumstances the aggregate amounts
taken, reserved, charged, received or paid on the Advances, include amounts
which by applicable law are deemed interest which would exceed the Maximum Rate,
then such excess shall be deemed to be a mistake and each Lender receiving same
shall credit the same on the principal of its Notes (or if such Notes shall have
been paid in full, refund said excess to the Borrower).  In the event that the
maturity of the Notes are accelerated by reason of any election of the holder
thereof resulting from any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest may never include more than the Maximum Rate, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the applicable Notes (or, if the
applicable Notes shall have been paid in full, refunded to the Borrower of such
interest).  In determining whether or not the interest paid or payable under any
specific contingencies exceeds the Maximum Rate, the Credit Parties and the
Lenders shall to the maximum extent permitted under applicable law amortize,
prorate, allocate and spread in equal parts during the period of the full stated
term of the Notes all amounts considered to be interest under applicable law at
any time contracted for, charged, received or reserved in connection with the
Obligations.  The provisions of this Section shall control over all other
provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.

 

Section 9.11                             Usury Recapture.  In the event the rate
of interest chargeable under this Agreement at any time is greater than the
Maximum Rate, the unpaid principal amount of the Advances shall bear interest at
the Maximum Rate until the total amount of interest paid or accrued on the
Advances equals the amount of interest which would have been paid or accrued on
the Advances if the stated rates of interest set forth in this Agreement had at
all times been in effect. In the event, upon payment in full of the Advances,
the total amount of interest paid or accrued under the terms of this Agreement
and the Advances is less than the total amount of interest which would have been
paid or accrued if the rates of interest set forth in this Agreement had, at all
times, been in effect, then the Borrower shall, to the extent permitted by
applicable law, pay the Administrative Agent for the account of the Lenders an
amount equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged on its Advances if the Maximum Rate had,
at all times, been in effect and (B) the amount of interest which would have
accrued on its Advances if the rates of interest set forth in this Agreement had
at all times been in effect and (ii) the amount of interest actually paid under
this Agreement on its Advances.  In the event the Lenders ever receive, collect
or apply as interest any sum in excess of the Maximum Rate, such excess amount
shall, to the extent permitted by law, be applied to the reduction of the
principal balance of the Advances, and if no such principal is then outstanding,
such excess or part thereof remaining shall be paid to the Borrower.

 

Section 9.12                             Governing Law; Service of Process. 
This Agreement, the Notes and the other Credit Documents (unless otherwise
expressly provided therein) shall be deemed a contract under, and shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York without regard to conflicts of laws principles (other than
Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New
York).  Each Letter of Credit shall be governed by either (i) the Uniform
Customs and Practice for Documentary Credits (2007 Revision), International
Chamber of Commerce Publication No. 600, or (ii) the International Standby
Practices (ISP98), International Chamber of Commerce Publication No. 590, in
either case, including any subsequent revisions thereof

 

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approved by a Congress of the International Chamber of Commerce and adhered to
by the Issuing Lender.  The Borrower hereby agrees that service of copies of the
summons and complaint and any other process which may be served in any such
action or proceeding may be made by mailing or delivering a copy of such process
to the Borrower at the address set forth for the Borrower in this Agreement. 
Nothing in this Section shall affect the rights of any Lender to serve legal
process in any other manner permitted by the law or affect the right of any
Lender to bring any action or proceeding against the Borrower or its Property in
the courts of any other jurisdiction.

 

Section 9.13                             Submission to Jurisdiction.  The
parties hereto hereby agree that any suit or proceeding arising in respect of
this Agreement or any other Credit Document, or any of the matters contemplated
hereby or thereby will be tried exclusively in the U.S. District Court for the
Southern District of New York or, if such court does not have subject matter
jurisdiction, in any state court located in the City and County of New York, and
the parties hereto hereby agree to submit to the exclusive jurisdiction of, and
venue in, such court.  Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
applicable law.  The parties hereto hereby agree that service of any process,
summons, notice or document by registered mail addressed to the applicable
parties will be effective service of process against such party for any action
or proceeding relating to any such dispute.  Each party hereto hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable Legal Requirement, any objection that it may now or hereafter have to
the laying of venue of any action or proceeding arising out of or relating to
this Agreement in any court referred to in this Section.  Each of the parties
hereto irrevocably waives, to the fullest extent permitted by applicable Legal
Requirement, the defense of any inconvenient forum to the maintenance of such
action or proceeding in any such court.

 

Section 9.14                             Execution in Counterparts;
Effectiveness; Electronic Execution.

 

(a)                                 This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Except as provided
in Section 3.1, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof that, when taken together, bear the signatures
of each of the other parties hereto.  Delivery of an executed counterpart of a
signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or
“tif”) format shall be effective as delivery of a manually executed counterpart
of this Agreement.

 

(b)                                 Electronic Execution of Assignments.  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.

 

Section 9.15                             Waiver of Jury Trial.  THE BORROWER,
THE LENDERS, THE ISSUING LENDER, AND THE ADMINISTRATIVE AGENT HEREBY ACKNOWLEDGE
THAT THEY HAVE BEEN REPRESENTED BY AND HAVE CONSULTED WITH COUNSEL OF THEIR
CHOICE, AND HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

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Section 9.16                             USA Patriot Act.  Each Lender that is
subject to the Patriot Act and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies each Credit Party that pursuant to the
requirements of the Patriot Act it is required to obtain, verify and record
information that identifies such Credit Party, which information includes the
name and address of such Credit Party and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify such Credit Party
in accordance with the Patriot Act.

 

Section 9.17                             Enduring Security.  The parties hereto
acknowledge and agree that:

 

(a)                                 it is the parties intent that the Liens
created or intended to be created under the Credit Documents secure, among other
things, all obligations of the Credit Parties owing to any Swap Counterparty
under any Hedging Arrangement even after such Swap Counterparty ceases to be a
Lender or an Affiliate of a Lender hereunder; provided, however, as provided in
the definition of “Swap Counterparty”, (i) when any Swap Counterparty assigns or
otherwise transfers any interest held by it under any Hedging Arrangement to any
other Person pursuant to the terms of such agreement, the obligations thereunder
shall be secured by such Liens only if such assignee or transferee is also then
a Lender or an Affiliate of a Lender and (ii) if a Swap Counterparty ceases to
be a Lender hereunder or an Affiliate of a Lender hereunder, obligations owing
to such Swap Counterparty shall be secured by such Liens only to the extent such
obligations arise from transactions under such individual Hedging Arrangements
(and not the Master Agreement between such parties) entered into prior to the
Effective Date or at the time such Swap Counterparty was a Lender hereunder or
an Affiliate of a Lender hereunder, without giving effect to any extension,
increases, or modifications thereof which are made after such Swap Counterparty
ceases to be a Lender hereunder or an Affiliate of a Lender hereunder; and

 

(b)                                 the Borrower’s and its Subsidiaries’ ability
to enter into, or otherwise be party to, Hedging Arrangements are limited by the
terms under this Agreement, including the limitations in Section 6.15 above
which restricts, among other things, the Borrower’s and its Subsidiaries’
ability to enter into, or otherwise be party to, secured Hedging Arrangements
with counterparties that are not Swap Counterparties or Hedging Arrangements
that have margin call requirements.

 

Section 9.18                             Keepwell.  Each Qualified ECP Guarantor
hereby jointly and severally absolutely, unconditionally and irrevocably
undertakes to provide such funds or other support as may be needed from time to
time by each other Credit Party to honor all of its obligations under this
Agreement in respect of Swap Obligations (provided, however, that each Qualified
ECP Guarantor shall only be liable under this Section 9.18 for the maximum
amount of such liability that can be hereby incurred without rendering its
obligations under this Section 9.18, or otherwise under this Agreement, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount). The obligations of each Qualified ECP Guarantor
under this Section shall remain in full force and effect until the termination
of all Commitments and payment in full of all Secured Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit (other than Letters of Credit as to which other arrangements
satisfactory to the Administrative Agent and the Issuing Lender have been made).
Each Qualified ECP Guarantor intends that this Section 9.18 constitute, and this
Section 9.18 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.

 

Section 9.19                             No Advisory or Fiduciary
Responsibility.  In connection with all aspects of each transaction contemplated
hereby (including in connection with any amendment, waiver or other modification
hereof or of any other Credit Document), the Borrower acknowledges and agrees,
and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent,
the Arranger, and the Lenders are arm’s-length

 

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commercial transactions between the Borrower and its Affiliates, on the one
hand, and the Administrative Agent, the Arranger, and the Lenders, on the other
hand, (B) the Borrower has consulted its own legal, accounting, regulatory and
tax advisors to the extent it has deemed appropriate, and (C) the Borrower is
capable of evaluating, and understands and accepts, the terms, risks and
conditions of the transactions contemplated hereby and by the other Credit
Documents; (ii) (A) the Administrative Agent, the Arranger and each Lender is
and has been acting solely as a principal and, except as expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any
other Person and (B) neither the Administrative Agent, the Arranger nor any
Lender has any obligation to the Borrower or any of its Affiliates with respect
to the transactions contemplated hereby except those obligations expressly set
forth herein and in the other Credit Documents; and (iii) the Administrative
Agent, the Arranger and the Lenders and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from
those of the Borrower and its Affiliates, and neither the Administrative Agent,
the Arranger, nor any Lender has any obligation to disclose any of such
interests to the Borrower or its Affiliates.  To the fullest extent permitted by
law, the Borrower hereby waives and releases any claims that it may have against
the Administrative Agent, the Arranger or any Lender with respect to any breach
or alleged breach of agency or fiduciary duty in connection with any aspect of
any transaction contemplated hereby.

 

Section 9.20                             Amendment and Restatement.  This
Agreement represents a full and complete amendment and restatement of the
Existing Credit Agreement, and the Existing Credit Agreement is deemed replaced
hereby as of the effectiveness of this Agreement.  The indebtedness under the
Existing Credit Agreement continues under this Agreement and the execution of
this Agreement does not indicate a payment, satisfaction, novation, or discharge
thereof.  All security and support for the indebtedness under the Existing
Credit Agreement continues to secure and support the Obligations hereunder.

 

Section 9.21                             Confirmation of Flood Policies and
Procedures.  Wells Fargo has adopted internal policies and procedures that
address requirements placed on federally regulated lenders under the National
Flood Insurance Reform Act of 1994 and related legislation (the “Flood Laws”). 
Wells Fargo, as Administrative Agent, will post on the applicable electronic
platform (or otherwise distribute to each Lender) documents that it receives in
connection with the Flood Laws; however, Wells Fargo reminds each Lender and
Participant that, pursuant to the Flood Laws, each federally regulated Lender
(whether acting as a Lender or Participant) is responsible for assuring its own
compliance with the flood insurance requirements

 

Section 9.22                             Cashless Settlement.  Notwithstanding
anything to the contrary contained in this Agreement, any Lender may exchange,
continue or rollover all or a portion of its Advances in connection with any
refinancing, extension, loan modification or similar transaction permitted by
the terms of this Agreement, pursuant to a cashless settlement mechanism
approved by the Borrower, the Administrative Agent and such Lender.

 

Section 9.23                             Integration.  THIS WRITTEN AGREEMENT
AND THE CREDIT DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND SUPERSEDE ALL PRIOR UNDERSTANDINGS AND
AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATING TO THE TRANSACTIONS PROVIDED FOR
HEREIN AND THEREIN.  ADDITIONALLY, THIS AGREEMENT AND THE CREDIT DOCUMENTS
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

 

IN EXECUTING THIS AGREEMENT, EACH CREDIT PARTY HERETO HEREBY WARRANTS AND
REPRESENTS IT IS NOT RELYING ON ANY STATEMENT OR

 

95

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REPRESENTATION OTHER THAN THOSE IN THIS AGREEMENT AND IS RELYING UPON ITS OWN
JUDGMENT AND ADVICE OF ITS ATTORNEYS.

 

[Remainder of this page intentionally left blank.  Signature pages follow.]

 

96

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EXECUTED as of the date first above written.

 

 

 

BORROWER:

 

 

 

TRIANGLE USA PETROLEUM CORPORATION

 

 

 

 

 

By:

/s/ Justin Bliffen

 

Name:

Justin Bliffen

 

Title:

Chief Financial Officer

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]-

 

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ADMINISTRATIVE AGENT/LENDERS:

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Issuing Lender,
and a Lender

 

 

 

 

 

By:

/s/ Michaela E. Braun

 

Name:

Michaela E. Braun

 

Title:

Director

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]-

 

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LENDERS:

 

 

 

BANK OF AMERICA, N.A., as a Lender

 

 

 

 

 

By:

/s/ Joseph Scott

 

Name:

Joseph Scott

 

Title:

Director

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]-

 

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

 

 

THE BANK OF NOVA SCOTIA, as a Lender

 

 

 

 

 

By:

/s/ Alan Dawson

 

Name:

Alan Dawson

 

Title:

Director

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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

 

 

 

 

 

By:

/s/ Stephanie Balette

 

Name:

Stephanie Balette

 

Title:

Authorized Officer

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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KEYBANK NATIONAL ASSOCIATION, as a Lender

 

 

 

 

 

By:

/s/ John Dravenstott

 

Name:

John Dravenstott

 

Title:

Vice President

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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

 

 

IBERIABANK, as a Lender

 

 

 

 

 

By:

/s/ Moni Collins

 

Name:

Moni Collins

 

Title:

Senior Vice President

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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

 

 

CITIBANK, N.A., as a Lender

 

 

 

 

 

By:

/s/ Dustin S. Hansen

 

Name:

Dustin S. Hansen

 

Title:

Senior Vice President

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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

 

 

COMERICA BANK, as a Lender

 

 

 

 

 

By:

/s/ Devin S. Eaton

 

Name:

Devin S. Eaton

 

Title:

Relationship Manager

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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

 

 

BOKF, NA, as a Lender

 

 

 

 

 

By:

/s/ Parker Heikes

 

Name:

Parker Heikes

 

Title:

Vice President

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

 

as a Lender

 

 

 

 

 

By:

/s/ Michael Spaight

 

Name:

Michael Spaight

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

By:

/s/ Lingzi Huang

 

Name:

Lingzi Huang

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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

 

 

TORONTO DOMINION (NEW YORK) LLC, as a Lender

 

 

 

 

 

By:

/s/ Masood Fikree

 

Name:

Masood Fikree

 

Title:

Authorized Signatory

 

[SIGNATURE PAGE TO 2nd A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM
CORPORATION]

 

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