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SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 4, 2018 among
CENTENNIAL RESOURCE PRODUCTION, LLC, as Borrower, Any Parent Guarantor Party
Hereto, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and The Lenders
Party Hereto JPMORGAN CHASE BANK, N.A. as Lead Arranger, WELLS FARGO BANK, N.A.,
ROYAL BANK OF CANADA AND COMERICA BANK, as Co-Syndication Agents, BMO HARRIS
BANK, N.A., CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH, AND U.S. BANK
NATIONAL ASSOCIATION, as Co-Documentation Agents, and JPMORGAN CHASE BANK, N.A.,
as Sole Bookrunner US 5625732v.13

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TABLE OF CONTENTS Page ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS Section 1.01
Terms Defined Above
..............................................................................................1
Section 1.02 Certain Defined Terms
.............................................................................................1
Section 1.03 Types of Loans and Borrowings
............................................................................32
Section 1.04 Terms Generally; Rules of Construction
...............................................................32 Section 1.05
Accounting Terms and Determinations; GAAP
....................................................32 ARTICLE II THE CREDITS
Section 2.01 Commitment
..........................................................................................................33
Section 2.02 Loans and Borrowings
...........................................................................................33
Section 2.03 Requests for
Borrowings........................................................................................34
Section 2.04 Interest Elections
....................................................................................................35
Section 2.05 Funding of Borrowings
..........................................................................................36
Section 2.06 Termination and Reduction of Commitments and Aggregate Maximum
Credit Amounts; Increase, Reduction and Termination of Aggregate Elected
Commitment Amounts
..............................................................................37
Section 2.07 Borrowing Base
.....................................................................................................41
Section 2.08 Letters of Credit
.....................................................................................................44
ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES Section 3.01
Repayment of Loans
..............................................................................................51
Section 3.02
Interest....................................................................................................................51
Section 3.03 Alternate Rate of Interest
.......................................................................................52
Section 3.04 Prepayments
...........................................................................................................53
Section 3.05 Fees
........................................................................................................................55
ARTICLE IV PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS Section 4.01
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
.............................57 Section 4.02 Presumption of Payment by the
Borrower .............................................................58 Section
4.03 Certain Deductions by the Administrative Agent
..................................................58 Section 4.04 Disposition of
Proceeds
.........................................................................................59
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Page ARTICLE V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
Section 5.01 Increased Costs
......................................................................................................59
Section 5.02 Break Funding Payments
.......................................................................................60
Section 5.03 Taxes
......................................................................................................................61
Section 5.04 Mitigation Obligations; Replacement of Lenders
..................................................64 Section 5.05 Illegality
.................................................................................................................65
ARTICLE VI CONDITIONS PRECEDENT Section 6.01 Effective Date
........................................................................................................65
Section 6.02 Each Credit Event
..................................................................................................68
ARTICLE VII REPRESENTATIONS AND WARRANTIES Section 7.01 Organization; Powers
.............................................................................................68
Section 7.02 Authority; Enforceability
.......................................................................................69
Section 7.03 Approvals; No Conflicts
........................................................................................69
Section 7.04 Financial Condition; No Material Adverse Change
...............................................69 Section 7.05 Litigation
................................................................................................................70
Section 7.06 Environmental
Matters...........................................................................................70
Section 7.07 Compliance with the Laws and Agreements; No Defaults or Borrowing
Base Deficiency
.....................................................................................................71
Section 7.08 Investment Company Act
......................................................................................71
Section 7.09 Taxes
......................................................................................................................72
Section 7.10 ERISA
....................................................................................................................72
Section 7.11 Disclosure; No Material Misstatements
.................................................................72 Section 7.12
Insurance
................................................................................................................73
Section 7.13 Restriction on Liens
...............................................................................................73
Section 7.14 Subsidiaries
............................................................................................................73
Section 7.15 Location of Business and Offices
..........................................................................74
Section 7.16 Properties; Titles, Etc.
............................................................................................74
Section 7.17 Maintenance of Properties
.....................................................................................75
Section 7.18 Gas Imbalances, Prepayments
...............................................................................75
Section 7.19 Marketing of Production
........................................................................................75
Section 7.20 Swap Agreements and Qualified ECP Counterparty
.............................................76 Section 7.21 Use of Loans and
Letters of Credit
........................................................................76
Section 7.22 Solvency
.................................................................................................................76
Section 7.23 Anti-Corruption Laws and
Sanctions.....................................................................76
Section 7.24 EEA Financial Institutions
.....................................................................................77
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Page ARTICLE VIII AFFIRMATIVE COVENANTS Section 8.01 Financial Statements; Other
Information ...............................................................77
Section 8.02 Notices of Material
Events.....................................................................................81
Section 8.03 Existence; Conduct of Business
.............................................................................82
Section 8.04 Payment of
Obligations..........................................................................................82
Section 8.05 Performance of Obligations under Loan
Documents.............................................82 Section 8.06 Operation
and Maintenance of
Properties..............................................................82
Section 8.07 Insurance
................................................................................................................83
Section 8.08 Books and Records; Inspection Rights
..................................................................83 Section
8.09 Compliance with Laws
..........................................................................................83
Section 8.10 Environmental
Matters...........................................................................................84
Section 8.11 Further
Assurances.................................................................................................85
Section 8.12 Reserve Reports
.....................................................................................................85
Section 8.13 Title Information
....................................................................................................86
Section 8.14 Collateral and Guaranty Agreements
.....................................................................87 Section
8.15 ERISA Compliance
................................................................................................89
Section 8.16 Unrestricted Subsidiaries
.......................................................................................89
Section 8.17 Commodity Exchange Act Keepwell Provisions
...................................................89 Section 8.18 Post-Closing
Delivery of Account Control Agreements .......................................90
ARTICLE IX NEGATIVE COVENANTS Section 9.01 Financial Covenants
...............................................................................................90
Section 9.02 Debt
........................................................................................................................91
Section 9.03 Liens
.......................................................................................................................92
Section 9.04 Dividends and Distributions and Redemptions of Permitted Senior
Unsecured Notes
....................................................................................................92
Section 9.05 Investments, Loans and Advances
.........................................................................94
Section 9.06 Designation and Conversion of Restricted and Unrestricted
Subsidiaries ............95 Section 9.07 Nature of Business; No International
Operations ..................................................96 Section 9.08
Proceeds of Notes
..................................................................................................96
Section 9.09 ERISA Compliance
................................................................................................97
Section 9.10 Sale or Discount of Receivables
............................................................................97
Section 9.11 Mergers, Etc
...........................................................................................................97
Section 9.12 Sale of Properties and Termination of Swap Agreements
.....................................97 Section 9.13 Transactions with
Affiliates
...................................................................................99
Section 9.14 Subsidiaries
..........................................................................................................100
Section 9.15 Negative Pledge Agreements; Dividend Restrictions
..........................................100 Section 9.16 Gas Imbalances,
Take-or-Pay or Other Prepayments ..........................................100
Section 9.17 Swap Agreements
................................................................................................100
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Page ARTICLE X EVENTS OF DEFAULT; REMEDIES Section 10.01 Events of Default
.................................................................................................103
Section 10.02 Remedies
..............................................................................................................105
ARTICLE XI THE AGENTS Section 11.01 Appointment;
Powers...........................................................................................106
Section 11.02 Duties and Obligations of Administrative
Agent.................................................106 Section 11.03 Action
by Administrative Agent
..........................................................................107
Section 11.04 Reliance by Administrative Agent
.......................................................................108
Section 11.05 Subagents
.............................................................................................................108
Section 11.06 Resignation of Administrative Agent
..................................................................108 Section
11.07 Agents as Lenders
................................................................................................109
Section 11.08 No Reliance
..........................................................................................................109
Section 11.09 Administrative Agent May File Proofs of Claim
.................................................109 Section 11.10 Authority of
Administrative Agent to Release Collateral, Liens and Guarantors
............................................................................................................110
Section 11.11 Agents
..................................................................................................................111
Section 11.12 Certain ERISA Matters
........................................................................................111
ARTICLE XII MISCELLANEOUS Section 12.01 Notices
.................................................................................................................113
Section 12.02 Waivers; Amendments
.........................................................................................114
Section 12.03 Expenses, Indemnity; Damage Waiver
................................................................116 Section
12.04 Successors and
Assigns........................................................................................119
Section 12.05 Survival; Revival; Reinstatement
........................................................................122
Section 12.06 Counterparts; Integration; Effectiveness
..............................................................123 Section 12.07
Severability
..........................................................................................................123
Section 12.08 Right of
Setoff......................................................................................................123
Section 12.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS
............................................................................................................124
Section 12.10 Headings
..............................................................................................................125
Section 12.11 Confidentiality
.....................................................................................................125
Section 12.12 Interest Rate Limitation
.......................................................................................126
Section 12.13 EXCULPATION PROVISIONS
.........................................................................127
Section 12.14 Collateral Matters; Swap Agreements
.................................................................127 Section
12.15 No Third Party Beneficiaries
...............................................................................127
Section 12.16 USA Patriot Act Notice
.......................................................................................128
Section 12.17 No Advisory or Fiduciary Responsibility
............................................................128 Section 12.18
Amendment and Restatement
..............................................................................129
Section 12.19 True-up Loans
......................................................................................................129
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Page Section 12.20 Acknowledgement and Consent to Bail-In of EEA Financial
Institutions ..........129 Section 12.21 Exiting Lender
.....................................................................................................130
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ANNEXES, EXHIBITS AND SCHEDULES Annex I Allocation of Maximum Credit Amounts and
Elected Commitments vi

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THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 4, 2018, is
among: CENTENNIAL RESOURCE PRODUCTION, LLC, a limited liability company duly
formed and existing under the laws of the State of Delaware (the “Borrower”), as
the borrower; the Parent (defined below) from time to time party hereto, as a
parent guarantor; each of the Lenders from time to time party hereto; and
JPMORGAN CHASE BANK, N.A. (in its individual capacity, “JPMorgan”), as
administrative agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Administrative Agent”). R E C I T A L S A. The
Borrower, the Administrative Agent and the other agents and lenders party
thereto are parties to that certain Amended and Restated Credit Agreement dated
as of October 15, 2014, pursuant to which such lenders provided certain loans to
and extensions of credit on behalf of the Borrower (as renewed, extended,
amended or otherwise modified from time prior to the date hereof, the “Existing
A&R Credit Agreement”). B. The parties hereto desire to amend and restate in its
entirety the Existing A&R Credit Agreement in the form of this Agreement to (i)
renew and rearrange the indebtedness outstanding under the Existing A&R Credit
Agreement (but not to repay or pay off any such indebtedness) and (ii) amend
certain other terms of the Existing A&R Credit Agreement in certain respects as
provided in this Agreement. C. In consideration of the mutual covenants and
agreements herein contained and of the loans, extensions of credit and
commitments hereinafter referred to, the parties hereto agree that the Existing
A&R Credit Agreement is hereby amended, renewed, extended and restated in its
entirety in the form of this Agreement on (and subject to) the terms and
conditions set forth herein. The parties hereto further agree as follows:
ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS Section 1.01 Terms Defined Above.
As used in this Agreement, each term defined above has the meaning indicated
above. Section 1.02 Certain Defined Terms. As used in this Agreement, the
following terms have the meanings specified below: “ABR”, when used in reference
to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising
such Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate. “Act” has the meaning assigned such term in Section 12.16.
“Additional Lender” has the meaning given to such term in Section 2.06(c)(i).
“Additional Lender Certificate” has the meaning given to such term in Section
2.06(c)(ii)(G). 1

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“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to the LIBO Rate for such Interest Period multiplied
by the Statutory Reserve Rate. “Administrative Questionnaire” means an
Administrative Questionnaire in a form supplied by the Administrative Agent.
“Affected Loans” has the meaning assigned such term in Section 5.05. “Affiliate”
means, with respect to a specified Person, another Person that directly, or
indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Agents” means, collectively,
the Administrative Agent, the Arranger, the Co-Syndication Agents, and the
Co-Documentation Agents, and “Agent” shall mean any of them individually, as the
context requires. “Aggregate Elected Commitment Amounts” at any time shall equal
the sum of the Elected Commitments, as the same may be increased, reduced or
terminated pursuant to Section 2.06(c). As of the Effective Date, the Aggregate
Elected Commitment Amounts are $600,000,000.00. “Aggregate Maximum Credit
Amounts” at any time shall equal the sum of the Maximum Credit Amounts, as the
same may be reduced or terminated pursuant to Section 2.06. “Agreement” means
this Second Amended and Restated Credit Agreement, as the same may from time to
time be amended, modified, supplemented or restated. “Alternate Base Rate”
means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate
in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and
(c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if
such day is not a Business Day, the immediately preceding Business Day) plus 1%,
provided that for the purpose of this definition, the Adjusted LIBO Rate for any
day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not
available for such one month Interest Period, the Interpolated Rate) at
approximately 11:00 a.m. London time on such day. Any change in the Alternate
Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively. If the
Alternate Base Rate is being used as an alternate rate of interest pursuant to
Section 3.03 hereof, then the Alternate Base Rate shall be the greater of clause
(a) and (b) above and shall be determined without reference to clause (c) above.
For the avoidance of doubt, if the Alternate Base Rate shall be less than zero
percent, such rate shall be deemed to be zero percent for purposes of this
Agreement. “Anti-Corruption Laws” means all state or federal laws, rules, and
regulations applicable to the Parent, the Borrower or any of their Affiliates
from time to time concerning or relating to bribery or corruption, including,
without limitation, the FCPA. 2

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“Applicable Margin” means for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the Commitment Fee Rate, as the case may be,
the rate per annum set forth in the Borrowing Base Utilization Grid below based
upon the Borrowing Base Utilization Percentage then in effect: Borrowing Base
Utilization Grid Borrowing Base < 25% > 25% < > 50% < > 75% < > 90% Utilization
50% 75% 90% Percentage Eurodollar Loans 1.500% 1.750% 2.000% 2.250% 2.500% ABR
Loans 0.500% 0.750% 1.000% 1.250% 1.500% Commitment 0.375% 0. 375% 0.500% 0.500%
0.500% Fee Rate Each change in the Applicable Margin shall apply during the
period commencing on the effective date of such change and ending on the date
immediately preceding the effective date of the next such change. “Applicable
Percentage” means, with respect to any Lender, the percentage of the Aggregate
Maximum Credit Amounts represented by such Lender’s Maximum Credit Amount as
such percentage is set forth on Annex I; provided that in the case of Section
2.08(l) when a Defaulting Lender shall exist, “Applicable Percentage” as used in
such Section 2.08(l) shall mean the percentage of the Aggregate Maximum Credit
Amounts (disregarding any Defaulting Lender’s Maximum Credit Amount) represented
by such Lender’s Maximum Credit Amount; provided that for purposes of this
definition, if the Commitments are terminated pursuant to this Agreement, then
each Lender’s Commitment and the total Commitments shall be the amounts thereof
immediately prior to giving effect to any such termination of such Commitments.
“Approved Counterparty” means each of (a) any Lender or any Affiliate of a
Lender and (b) any other Person if such Person or its credit support provider
with respect to its Swap Agreements with Credit Parties has a long term senior
unsecured debt rating of A-/A3 by S&P or Moody’s (or their equivalent) or
higher. “Approved Fund” means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.
“Approved Petroleum Engineers” means (a) Netherland, Sewell & Associates, Inc.,
(b) Ryder Scott Company Petroleum Consultants, L.P., (c) Miller and Lents, Ltd.
and (d) any other independent petroleum engineers reasonably acceptable to the
Administrative Agent and the Borrower. 3

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“Arranger” means JPMorgan Chase Bank, N.A., in its capacity as sole lead
arranger and sole bookrunner hereunder. “ASC” means the Financial Accounting
Standards Board Accounting Standards Codification, as in effect from time to
time. “Assignment and Assumption” means an assignment and assumption entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 12.04(b)), and accepted by the Administrative Agent, in the
form of Error! Reference source not found. or any other form approved by the
Administrative Agent. “Availability Period” means the period from and including
the Effective Date to but excluding the Termination Date. “Bail-In Action” means
the exercise of any Write-Down and Conversion Powers by the applicable EEA
Resolution Authority in respect of any liability of any EEA Financial
Institution. “Bail-In Legislation” means, with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law for such EEA Member
Country from time to time which is described in the EU Bail-In Legislation
Schedule. “Bank Products” means any of the following bank services: (a)
commercial credit cards, (b) stored value cards, and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services). “Bank Products Provider” means any Lender or Affiliate of a
Lender that provides Bank Products to the Borrower, any Restricted Subsidiary or
any Guarantor. “Benefit Plan” means any of (a) an “employee benefit plan” (as
defined in section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a
“plan” as defined in section 4975 of the Code to which section 4975 of the Code
applies, and (c) any Person whose assets include (for purposes of the Plan Asset
Regulations or otherwise for purposes of Title I of ERISA or section 4975 of the
Code) the assets of any such “employee benefit plan” or “plan”. “Board” means
the Board of Governors of the Federal Reserve System of the United States of
America or any successor Governmental Authority. “Borrowing” means Loans of the
same Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect. “Borrowing
Base” means at any time an amount equal to the amount determined in accordance
with Section 2.07, as the same may be adjusted from time to time pursuant to
Section 8.13(c) or Section 9.12(e)(v). “Borrowing Base Deficiency” means, at any
time in question, the amount by which the total Revolving Credit Exposures
exceed the Borrowing Base then in effect. 4

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“Borrowing Base Utilization Percentage” means, as of any day, the fraction
expressed as a percentage, the numerator of which is the sum of the Revolving
Credit Exposures of the Lenders on such day, and the denominator of which is the
Borrowing Base in effect on such day. “Borrowing Request” means a request by the
Borrower for a Borrowing in accordance with Section 2.03. “Business Day” means
any day that is not a Saturday, Sunday or other day on which commercial banks in
New York City or Denver, Colorado are authorized or required by law to remain
closed; and if such day relates to a Borrowing or continuation of, a payment or
prepayment of principal of or interest on, or a conversion of or into, or the
Interest Period for, a Eurodollar Loan or a notice by the Borrower with respect
to any such Borrowing or continuation, payment, prepayment, conversion or
Interest Period, any day which is also a day on which banks are open for
dealings in dollar deposits in the London interbank market. “Capital Leases”
means, in respect of any Person, all leases which shall have been, or should
have been, in accordance with GAAP as in effect on the Effective Date, recorded
as capital leases on the balance sheet of the Person liable (whether contingent
or otherwise) for the payment of rent thereunder; provided that any obligations
of such Person (whether entered into before or after the Effective Date) that
would have been classified as an operating lease pursuant to GAAP as in effect
on the Effective Date will be deemed not to be a Capital Lease. “Casualty Event”
means any loss, casualty or other insured damage to, or any nationalization,
taking under power of eminent domain or by condemnation or similar proceeding
of, any Property of the Parent or any of its Restricted Subsidiaries having a
book value in excess of the Threshold Amount. “Centennial Resource Development”
means Centennial Resource Development, Inc., a Delaware corporation formerly
known as Silver Run Acquisition Corporation. “Change in Control” means (a) any
Person or “group” (within the meaning of Rules 13d- 3 and 13d-5 of the
Securities Exchange Act) other than Riverstone shall have acquired beneficial
ownership or control of Equity Interests representing more than 50% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of Centennial Resource Development, (b) the occupation of a majority
of the seats (other than vacant seats) on the board of directors of Centennial
Resource Development by Persons who were neither (i) nominated, appointed or
approved for consideration by shareholders for election by the board of
directors of Centennial Resource Development or (ii) appointed by directors so
nominated, appointed or approved, (c) the failure of Centennial Resource
Development to (i) own more than 50% of the Equity Interests of the Borrower
with ordinary voting power to elect or appoint the managers of the Borrower or
(ii) Control the Borrower, or (d) the failure of the Parent (at any time that
the Parent is not the Borrower) to own 100% of the Equity Interests in the
Borrower. “Change in Law” means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 5.01(b), by any lending office of such 5

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Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement;
provided, however, for the purposes of this Agreement, the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, guidelines or
directives in connection therewith or promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision or the United States or
foreign regulatory authorities, in each case, pursuant to Basel III, are deemed
to have gone into effect and to have been adopted after the date of this
Agreement. “Code” means the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute. “Co-Documentation Agents” means,
collectively, BMO Harris Bank, N.A., Canadian Imperial Bank of Commerce, New
York Branch, and U.S. Bank National Association. “Commitment” means, with
respect to each Lender, the commitment of such Lender to make Loans and to
acquire participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Credit
Exposure hereunder, as such commitment may be (a) modified from time to time
pursuant to Section 2.06 and (b) modified from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.04. The amount
representing each Lender’s Commitment shall at any time be the least of (i) such
Lender’s Maximum Credit Amount, (ii) such Lender’s Applicable Percentage of the
then effective Borrowing Base and (iii) such Lender’s Elected Commitment. The
total Commitment is the aggregate amount of the Commitments of all Lenders.
“Commitment Fee Rate” is the rate per annum set forth in the definition of
“Applicable Margin”. “Commodity Exchange Act” means the Commodity Exchange Act
(7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute,
and any regulations promulgated thereunder. “Consolidated Net Income” means with
respect to the Parent and the Consolidated Restricted Subsidiaries, for any
period, the net income (or loss) of the Parent and the Consolidated Restricted
Subsidiaries after allowances for taxes for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from such net income (to the extent otherwise included therein) the
following: (a) the net income of any Person in which the Parent or any
Consolidated Restricted Subsidiary has an interest (which interest does not
cause the net income of such other Person to be consolidated with the net income
of the Parent and the Consolidated Restricted Subsidiaries in accordance with
GAAP), except to the extent of the amount of dividends or distributions actually
paid in cash during such period by such other Person to the Parent or to a
Consolidated Restricted Subsidiary, as the case may be; (b) the net income (but
not loss) during such period of any Consolidated Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar distributions or
transfers or loans by that Consolidated Restricted Subsidiary is not at the time
permitted by operation of the terms of its charter or any agreement, instrument
or Governmental Requirement applicable to such Consolidated Restricted
Subsidiary or is otherwise restricted or prohibited, in each case determined 6

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in accordance with GAAP; (c) the net income (or loss) of any Person acquired in
a pooling-of- interests transaction for any period prior to the date of such
transaction; (d) any extraordinary, unusual or non-recurring gains or losses
during such period, (e) any non-cash gains or losses or positive or negative
adjustments under ASC 815 as the result of changes in the fair market value of
derivatives; and (f) any gains or losses attributable to writeups or writedowns
of assets, including ceiling test writedowns. “Consolidated Restricted
Subsidiaries” means any Restricted Subsidiaries that are Consolidated
Subsidiaries. “Consolidated Subsidiaries” means each Subsidiary of the Parent
(whether now existing or hereafter created or acquired) the financial statements
of which shall be (or should have been) consolidated with the financial
statements of the Parent in accordance with GAAP. “Consolidated Unrestricted
Subsidiaries” means any Unrestricted Subsidiaries that are Consolidated
Subsidiaries. “Control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
“Co-Syndication Agents” means, collectively, Wells Fargo Bank, N.A., Royal Bank
of Canada and Comerica Bank. “Credit Parties” means, collectively, the Borrower
and each Guarantor, and “Credit Party” means any one of the foregoing. “Debt”
means, for any Person, the sum of the following (without duplication): (a) all
obligations of such Person for borrowed money or evidenced by bankers’
acceptances, debentures, notes, bonds or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services; (d) all
obligations under Capital Leases; (e) all obligations under Synthetic Leases;
(f) all Debt (as defined in the other clauses of this definition) of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) a Lien on any Property of such
Person, whether or not such Debt is assumed by such Person; 7

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(g) all Debt (as defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the Debt (howsoever such assurance shall be made) to the extent
of the lesser of the amount of such Debt and the maximum stated amount of such
guarantee or assurance against loss; (h) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or covenants
of others and, to the extent entered into as a means of providing credit support
for the obligations of others and not primarily to enable such Person to acquire
any such Property, all obligations or undertakings of such Person to purchase
the Debt or Property of others; (i) obligations to deliver commodities, goods or
services, including, without limitation, Hydrocarbons, in consideration of one
or more advance payments (not including substantially contemporaneous payments),
other than gas balancing arrangements in the ordinary course of business; (j)
obligations to pay for goods or services even if such goods or services are not
actually received or utilized by such Person (other than obligations contained
in firm transportation or supply agreements or other take or pay contracts, in
each case arising in the ordinary course of business); (k) any Debt of a
partnership for which such Person is liable either by agreement, by operation of
law or by a Governmental Requirement but only to the extent of such liability;
(l) Disqualified Capital Stock; and (m) the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment; provided, however, that “Debt”
does not include (i) obligations with respect to surety or performance bonds and
similar instruments entered into in the ordinary course of business in
connection with the operation of Oil and Gas Properties or with respect to
appeal bonds, (ii) accounts payable and accrued expenses, liabilities or other
obligations to pay the deferred purchase price of Property or services, from
time to time incurred in the ordinary course of business which are not greater
than one hundred twenty (120) days past the date of invoice or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP, or (iii) Bank Products and
endorsements of negotiable instruments for collection. The Debt of any Person
shall include all obligations of such Person of the character described above to
the extent such Person remains legally liable in respect thereof notwithstanding
that any such obligation is not included as a liability of such Person under
GAAP. “Default” means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default. “Defaulting Lender” means, subject to
Section 2.08(l)(v), any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two (2) Business Days of the date such Loans were
required to be funded hereunder, or (ii) pay to the Administrative Agent, any
Issuing Bank or any other Lender any other amount required to be paid by it
hereunder (including in respect of its 8

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participation in Letters of Credit) within two (2) Business Days of the date
when due, (b) has notified the Borrower, the Administrative Agent or any Issuing
Bank in writing that it does not intend to comply with its funding obligations
hereunder, or has made a public statement to that effect, (c) has failed, within
three (3) 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 bankruptcy or insolvency laws
or become the subject of a Bail-In Action, 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 2.08(l)(v)) upon delivery of written notice of such
determination to the Borrower, each Issuing Bank and each Lender. “Disqualified
Capital Stock” means any Equity Interest that, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable) or
upon the happening of any event, matures or is mandatorily redeemable for any
consideration other than other Equity Interests (which would not constitute
Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise,
or is convertible or exchangeable for Debt of the type described in clause (a)
of the definition thereof or redeemable for any consideration other than other
Equity Interests (which would not constitute Disqualified Capital Stock) at the
option of the holder thereof, in whole or in part (but if in part, only with
respect to such amount that meets the criteria set forth in this definition), on
or prior to the date that is 91 days after the Maturity Date at the time of
issuance of such Equity Interests; provided that (i) any Equity Interests that
would not constitute Disqualified Capital Stock but for provisions thereof
giving holders thereof (or the holders of any security into which such Equity
Interest is convertible or for which such Equity Interest is exchangeable) the
right to require the issuer thereof to redeem such Equity Interests upon the
occurrence of any change of control or any asset sale offer occurring prior to
the date that is 91 days after the Maturity Date at the time of issuance of such
Equity Interests shall not constitute Disqualified Capital Stock if such Equity
Interest provides that the issuer thereof will not redeem any such Equity
Interest pursuant to such provisions prior to the date on which there are no
Loans, LC Exposure or other obligations hereunder outstanding and all of the
Commitments are terminated and (ii) any Equity Interests that are issued to any
employee or to any plan for the benefit of employees of the issuer thereof or by
any such plan to such employees shall not constitute Disqualified Capital Stock
solely because such Equity Interests may be required to be repurchased by the
issuer thereof as a result of such employee’s termination, death or disability.
9

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“dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary” means any Restricted Subsidiary that is organized under
the laws of the United States of America or any state thereof or the District of
Columbia, including, without limitation (except at such times that the Borrower
is the Parent), the Borrower. “EBITDAX” means, for any period, the sum of
Consolidated Net Income for such period plus (a) without duplication, the
following expenses or charges to the extent deducted from Consolidated Net
Income in such period: (i) interest, (ii) income taxes (however denominated),
(iii) depreciation, depletion, amortization and other similar noncash charges,
including, without limitation, any non-cash compensation charge or expense,
including any charge or expense arising from the grants of stock appreciation or
similar rights, stock options, restricted stock, profits interests or other
equity-based incentive awards or other equity-based compensation, (iv)
exploration expenses, including plugging and abandonment expenses, (v)
transaction costs, expenses and charges with respect to the acquisition or
disposition of Oil and Gas Properties or the incurrence, issuance, repayment,
refinancing, amendment or other modification of Debt or issuance of Equity
Interests, in each case including any transaction undertaken but not completed,
incurred in such period in an aggregate amount not to exceed the lesser of (A)
$10,000,000 and (B) 5% of EBITDAX, in either case, in any Reference Period, and
(vi) costs, fees and expenses incurred by the Credit Parties in connection with
the closing of this Agreement and the Transactions occurring on or about the
Effective Date, minus (b) all noncash income added to Consolidated Net Income.
For the purposes of calculating EBITDAX (including any component thereof) for
any period of four (4) consecutive fiscal quarters (each, a “Reference Period”)
pursuant to any determination of the financial ratio contained in Section
9.01(a), if at any time during such Reference Period the Parent or any
Restricted Subsidiary shall have made any Material Disposition or Material
Acquisition, the EBITDAX for such Reference Period shall be calculated after
giving pro forma effect thereto as if such Material Disposition or Material
Acquisition had occurred on the first day of such Reference Period (such
calculations to be reasonably acceptable to the Administrative Agent). “EEA
Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clause (a) or clause (b) of this
definition and is subject to consolidated supervision with its parent. “EEA
Member Country” means any of the member states of the European Union, Iceland,
Liechtenstein, and Norway. “EEA Resolution Authority” means any public
administrative authority or any person entrusted with public administrative
authority of any EEA Member Country (including any delegee) having
responsibility for the resolution of any EEA Financial Institution. “Effective
Date” means the date on which the conditions specified in Section 6.01 are
satisfied (or waived in accordance with Section 12.02). 10

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“Elected Commitment” means, as to each Lender, the amount set forth opposite
such Lender’s name on Annex I under the caption “Elected Commitment”, as the
same may be increased, reduced or terminated from time to time in connection
with an optional increase, reduction or termination of the Aggregate Elected
Commitment Amounts pursuant to Section 2.06(c). “Elected Commitment Increase
Certificate” has the meaning given to such term in Section 2.06(c)(ii)(F).
“Election Notice” has the meaning assigned to such term in Section 3.04(c)(ii).
“Engineering Reports” has the meaning assigned such term in Section 2.07(c)(i).
“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety, the environment, the preservation or reclamation of
natural resources, or the management, Release or threatened Release of any
Hazardous Materials, in effect in any and all jurisdictions in which the Parent
or any Restricted Subsidiary is conducting, or at any time has conducted,
business, or where any Property of the Parent or any Restricted Subsidiary is
located, including, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean
Air Act, as amended, the Comprehensive Environmental, Response, Compensation,
and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and other
environmental conservation or protection Governmental Requirements.
“Environmental Permit” means any permit, registration, license, notice,
approval, consent, exemption, variance, or other authorization required under or
issued pursuant to applicable Environmental Laws. “Equity Interests” means
shares of capital stock, partnership interests, membership interests in a
limited liability company, beneficial interests in a trust or other equity
ownership interests in a Person, and any warrants, options or other rights
entitling the holder thereof to purchase or acquire any such Equity Interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
and any successor statute, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Parent or a Restricted Subsidiary would be deemed to be
a “single employer” within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code. “ERISA Event” means
(a) a “Reportable Event” described in section 4043 of ERISA with respect to any
Plan, other than a Reportable Event as to which the provisions of thirty (30)
days’ notice to the PBGC are waived, (b) the failure to satisfy the “minimum
funding standard” (as defined in section 412 of the Code or section 302 of
ERISA), whether or not waived, with respect 11

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to any Plan, (c) the filing pursuant to section 412 of the Code or section 302
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the withdrawal or partial withdrawal of the Parent, a
Subsidiary or any ERISA Affiliate from a Plan during a plan year in which it was
a “substantial employer” as defined in section 4001(a)(2) of ERISA, or the
withdrawal or partial withdrawal of the Parent, a Subsidiary or any ERISA
Affiliate from a Multiemployer Plan, (e) the filing of a notice of intent to
terminate a Plan or the treatment of a Plan amendment as a termination under
section 4041 of ERISA, (f) the institution of proceedings to terminate a Plan by
the PBGC, (g) receipt of a notice of withdrawal liability pursuant to Section
4202 of ERISA, (h) the receipt by Parent, a Subsidiary or any ERISA Affiliate of
any notice concerning a determination that a Multiemployer Plan is, or is
expected to be, insolvent within the meaning of Title IV of ERISA, or (i) 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.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time. “Eurodollar”, when used in reference to any Loan or
Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing,
are bearing interest at a rate determined by reference to the Adjusted LIBO
Rate. “Event of Default” has the meaning assigned such term in Section 10.01.
“Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental
charges or levies which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; (b) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) landlord’s, operators’, vendors’,
carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’,
materialmen’s, construction or other like Liens, in each case, arising in the
ordinary course of business or incident to the exploration, development,
operation and maintenance of Oil and Gas Properties each of which is in respect
of obligations that are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP; provided that any such Lien referred to in this clause
that is not a statutory Lien arising by operation of law does not materially
impair the use of the Property covered by such Lien for the purposes for which
such Property is held by the Parent or any Restricted Subsidiary or materially
impair the value of such Property subject thereto; (d) Liens which arise in the
ordinary course of business under operating agreements, joint venture
agreements, oil and gas partnership agreements, oil and gas leases, farm- out
agreements, division orders, contracts for the sale, transportation or exchange
of oil and natural gas, unitization and pooling declarations and agreements,
area of mutual interest agreements, 12

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overriding royalty agreements, marketing agreements, processing agreements, net
profits agreements, development agreements, gas balancing or deferred production
agreements, injection, repressuring and recycling agreements, salt water or
other disposal agreements, seismic or other geophysical permits or agreements,
and other agreements which are usual and customary in the oil and gas business
and are for claims which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP, provided that any such Lien referred to in this clause
does not materially impair the use of the Property covered by such Lien for the
purposes for which such Property is held by the Parent or any Restricted
Subsidiary or materially impair the value of such Property subject thereto; (e)
Liens arising solely by virtue of any statutory or common law provision relating
to banker’s liens, rights of set-off or similar rights and remedies arising in
the ordinary course of business and burdening only deposit accounts or other
funds maintained with a creditor depository institution, provided that no such
deposit account is a dedicated cash collateral account or is subject to
restrictions against access by the depositor in excess of those set forth by
regulations promulgated by the Board and no such deposit account is intended by
the Parent or any of its Restricted Subsidiaries to provide collateral to the
depository institution; (f) Liens in favor of depository banks arising under
documentation governing deposit accounts which Liens secure the payment of
returned items, settlement item amounts, customary bank fees for maintaining
deposit accounts, and similar items and fees; (g) (i) easements, restrictions,
servitudes, permits, conditions, covenants, exceptions, reservations, zoning and
land use requirements in any Property of the Parent or any Restricted Subsidiary
for the purpose of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil, coal or other minerals or
timber, and other like and/or usual and customary purposes, or for the joint or
common use of real estate, rights of way, facilities and equipment, that do not
secure any Debt and in the aggregate do not materially impair the use of such
Property for the purposes of which such Property is held by the Parent or any
Restricted Subsidiary or materially impair the value of such Property subject
thereto, and (ii) Immaterial Title Deficiencies; (h) Liens on cash or securities
pledged to secure (either directly, or indirectly by securing letters of credit
that in turn secure) performance of tenders, surety and appeal bonds, government
contracts, performance and return of money bonds, bids, trade contracts, leases,
statutory obligations, regulatory obligations, obligations in respect of
workers’ compensation, unemployment insurance or other forms of governmental
benefits or insurance and other obligations of a like nature incurred in the
ordinary course of business; (i) title and ownership interests of lessors
(including sub-lessors) of Property leased by such lessors to the Parent or to
any Restricted Subsidiary, Liens and encumbrances encumbering such lessors’
titles and interests in such property and to which Parent’s or such Restricted
Subsidiary’s leasehold interests may be subject or subordinate, in each case
whether or not evidenced by Uniform Commercial Code financing statement filings
or other documents of record, provided that such Liens do not secure Funded Debt
of the Parent or of any Restricted Subsidiary and do not encumber Property of
any Parent or any Restricted Subsidiary other than the Property that is the
subject of such leases and items located thereon; provided further that any 13

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such Lien referred to in this clause does not materially impair the use of the
Property covered by such Lien for the purposes for which such Property is held
by the Parent or any Restricted Subsidiary or materially impair the value of
such Property subject thereto, (j) judgment and attachment Liens not giving rise
to an Event of Default under Section 10.01(k); (k) Liens of licensors of
software and other intangible Property licensed by such licensors to the Parent
and/or to any Restricted Subsidiary, including, without limitation, restrictions
and prohibitions on encumbrances and transferability with respect to such
Property and the Parent’s and/or such Restricted Subsidiary’s interests therein
imposed by such licenses, and Liens encumbering such licensors’ titles and
interests in such Property and to which the Parent’s or such Restricted
Subsidiary’s license interests may be subject or subordinate, in each case,
whether or not evidenced by Uniform Commercial Code financing statement filings
or other documents of record, provided that such Liens do not encumber Property
of the Parent or of any Restricted Subsidiary other than the software and other
intangible Property that is the subject of such licenses; (l) Liens solely on
any cash earnest money deposits made by the Borrower or any of the Restricted
Subsidiaries in connection with any acquisitions permitted hereunder; and (m)
Liens on insurance policies and the proceeds thereof securing the financing of
the premiums with respect thereto in each case to the extent such financing is
in the Credit Parties’ ordinary course of business; provided, that (i) no
intention to subordinate the first priority Lien granted in favor of the
Administrative Agent and the Lenders is to be hereby implied or expressed by the
permitted existence of such Excepted Liens and (ii) the term “Excepted Liens”
shall not include any Lien securing Debt for borrowed money other than the
Indebtedness. “Excluded Swap Obligation” means, with respect to any Credit Party
individually determined on a Credit Party by Credit Party basis, any
Indebtedness in respect of any Swap Agreement or any other any “swap”, as
defined in Section 1(a)(47) of the Commodities Exchange Act (in this definition,
“Swap Indebtedness”) if, and solely to the extent that, all or a portion of the
guarantee by such Credit Party of, or the grant by such Credit Party of a
security interest to secure, such Swap Indebtedness (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 at the time such guarantee or grant of a security
interest becomes effective with respect to such related Swap Indebtedness. If
any Swap Indebtedness arises under a master agreement governing more than one
transaction, such exclusion shall apply only to the portion of such Swap
Indebtedness that is attributable to transactions for which such guarantee or
security interest is or becomes illegal. “Excluded Taxes” means, with respect to
the Administrative Agent, any Lender, the Issuing Bank or any other recipient of
any payment to be made by or on account of any obligation 14

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[centennial2ndarcreditagr022.jpg]
of the Borrower or any Guarantor hereunder or under any other Loan Document, (a)
income taxes (however denominated) or franchise taxes (including Texas margin
tax) imposed on (or measured by) its net income by the United States of America
or such other jurisdiction under the laws of which such recipient is organized
or in which its principal office is located or, in the case of any Lender, in
which its applicable lending office is located, (b) any branch profits taxes
imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower or any Guarantor is located, (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 5.04(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender pursuant to a law in effect at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Lender’s failure or inability to
comply with Section 5.03(f), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts with respect to such
withholding tax pursuant to Section 5.03(a) or Section 5.03(c), and (d) any
withholding taxes imposed by FATCA. “Existing Letters of Credit” means the
letters of credit listed on Annex II hereto. “Existing Loan Documents” has the
meaning given to the term “Loan Documents” in the Existing A&R Credit Agreement.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof 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. “FCPA” means the Foreign Corrupt Practices Act
of 1977, as amended. “Federal Funds Effective Rate” means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it. Notwithstanding
anything to the contrary contained herein, in no event shall the Federal Funds
Effective Rate be less than 0%. “Fee Letter” means that certain Fee Letter dated
as of the Effective Date between JPMorgan and the Borrower. “Financial Officer”
means, for any Person, the chief financial officer, the principal accounting
officer, and the treasurer of such Person. Unless otherwise specified, all
references herein to a Financial Officer means a Financial Officer of the
Parent. 15

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[centennial2ndarcreditagr023.jpg]
“Financial Statements” means the financial statement or statements referred to
in Section 7.04(a). “Flood Insurance Regulations” means (a) the National Flood
Insurance Act of 1968 as now or hereafter in effect or any successor statute
thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in
effect or any successor statute thereto, (c) the National Flood Insurance Reform
Act of 1994 (amending 42 USC § 4001, et seq.), as the same may be amended or
recodified from time to time, and (d) the Flood Insurance Reform Act of 2004 and
any regulations promulgated thereunder. “Foreign Lender” means any Lender that
is organized under the laws of a jurisdiction other than that in which the
Borrower is located. For purposes of this definition, the United States of
America, each State thereof and the District of Columbia shall be deemed to
constitute a single jurisdiction. “Foreign Subsidiary” means any Restricted
Subsidiary that is not a Domestic Subsidiary. “Fronting Exposure” means, at any
time there is a Defaulting Lender, with respect to an Issuing Bank, such
Defaulting Lender’s LC Exposure other than LC Exposure as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or cash collateralized in accordance with the terms hereof. “Funded
Debt” means the principal amount of all Debt other than (a) contingent
obligations in respect of Debt described in clause (b) of the definition of
“Debt”, (b) Debt described in clauses (c), (i), (j), (k), (l) and (m) of the
definition of “Debt”, and (c) Debt described in clauses (f), (g) or (h) of the
definition of “Debt” in respect of Debt of others described in clauses (a) or
(b) of this definition “GAAP” means generally accepted accounting principles in
the United States of America as in effect from time to time subject to the terms
and conditions set forth in Section 1.05. “Governmental Authority” means the
government of the United States of America, any other nation or any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supranational bodies
such as the European Union or the European Central Bank). “Governmental
Requirement” means any law, statute, code, ordinance, order, determination,
rule, regulation, judgment, decree, injunction, franchise, permit, certificate,
license, rules of common law, authorization or other directive or requirement,
whether now or hereinafter in effect, of any Governmental Authority.
“Guarantors” means the Parent and each Domestic Subsidiary (other than the
Borrower) that guarantees the Indebtedness pursuant to Section 8.14(b).
“Guaranty Agreement” means a Second Amended and Restated Guaranty Agreement
executed by the Guarantors in substantially the form of Error! Reference source
not found. 16

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[centennial2ndarcreditagr024.jpg]
unconditionally guarantying, on a joint and several basis, payment of the
Indebtedness, as the same may be amended, modified or supplemented from time to
time. “Hazardous Material” means any substance regulated or as to which
liability might arise under any applicable Environmental Law including: (a) any
chemical, compound, material, product, byproduct, substance or waste defined as
or included in the definition or meaning of “hazardous substance,” “hazardous
material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous
substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar
meaning or import found in any applicable Environmental Law; (b) Hydrocarbons,
petroleum products, petroleum substances, natural gas, oil, oil and gas waste,
crude oil, and any components, fractions, or derivatives thereof; and (c)
radioactive materials, explosives, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon, infectious or medical wastes. “Highest Lawful
Rate” means, with respect to each Lender, the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the Notes or on other Indebtedness under laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws
allow as of the date hereof. “Hydrocarbon Interests” means all rights, titles,
interests and estates in and to oil and gas leases, oil, gas and mineral leases,
or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding
royalty and royalty interests, net profit interests and production payment
interests, including any reserved or residual interests of whatever nature.
“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
products refined or separated therefrom. “Immaterial Subsidiary” shall mean any
Restricted Subsidiary designated by the Borrower as an Immaterial Subsidiary if
and for so long as such Immaterial Subsidiary, together with all other
Immaterial Subsidiaries so designated as Immaterial Subsidiaries, does not have
total assets at such time exceeding $50,000,000.00 in the aggregate; provided
that no Subsidiary may be an Immaterial Subsidiary if it owns Oil and Gas
Properties that are included in the then effective Borrowing Base. “Immaterial
Title Deficiencies” means minor defects or deficiencies in title which do not
diminish by more than 5% the total value of the Proved Oil and Gas Properties
evaluated in the Reserve Report used in the most recent determination of the
Borrowing Base. “Impacted Interest Period” has the meaning given to such term in
the definition of “LIBO Rate” contained herein. “Indebtedness” means any and all
amounts owing or to be owing by the Borrower, the Parent, any other Restricted
Subsidiary, or any other Guarantor (whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising): (a) to any Agent, the Issuing Bank or any Lender
under any Loan Document, including, without limitation, all interest on any of
the Loans (including any interest 17

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that accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of any Credit Party (or
could accrue but for the operation of applicable bankruptcy or insolvency laws),
whether or not such interest is allowed or allowable as a claim in any such
case, proceeding or other action); (b) to any Secured Swap Provider under any
Swap Agreement including any Swap Agreement in existence prior to the date
hereof, but excluding any additional transactions or confirmations entered into
after such Secured Swap Provider ceases to be a Lender or an Affiliate of a
Lender and excluding any amounts owing or to be owing under a Swap Agreement
after assignment of such Swap Agreement by a Secured Swap Provider to another
Person that is not a Lender or an Affiliate of a Lender; (c) to any Bank
Products Provider in respect of Bank Products; and (d) all renewals, extensions
and/or rearrangements of any of the above; provided that solely with respect to
any Guarantor that is not an “eligible contract participant” under the Commodity
Exchange Act, Excluded Swap Obligations with respect to such Guarantor shall be
excluded from the “Indebtedness” owing by such Guarantor. “Indemnified Taxes”
means Taxes other than Excluded Taxes and Other Taxes. “Industry Competitor”
means any Person (other than Borrower, any Guarantor or any of their Affiliates
or Subsidiaries) that (a) is identified in writing by the Borrower to the
Administrative Agent and (b) directly or indirectly, is actively engaged as one
of its principal businesses in lease acquisitions, exploration and production
operations or development of oil and gas properties (including the drilling and
completion of producing wells). “Initial Reserve Report” means, collectively,
the reserve reports and other reserve engineering information provided by the
Borrower to the Administrative Agent and the Lenders prior to the Effective Date
and utilized by the Administrative Agent and the Lenders in determining the
initial Borrowing Base hereunder. “Interest Election Request” means a request by
the Borrower to convert or continue a Borrowing in accordance with Section 2.04.
“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of
each March, June, September and December and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months’ duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months’ duration after
the first day of such Interest Period. “Interest Period” means with respect to
any Eurodollar Borrowing, the period commencing on the date of such Borrowing
and ending on the numerically corresponding day in the calendar month that is
one, two, three or six months (or, with the consent of each Lender, twelve
months) thereafter, as the Borrower may elect; provided that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
pertaining to a Eurodollar Borrowing that commences on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar 18

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month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing. “Interim Redetermination” has the meaning assigned to such term in
Section 2.07(b). “Interim Redetermination Date” means the date on which a
Borrowing Base that has been redetermined pursuant to an Interim Redetermination
becomes effective as provided in Section 2.07(d). “Interpolated Rate” means, at
any time, for any Interest Period, the rate per annum (rounded to the same
number of decimal places as the LIBO Screen Rate) determined by the
Administrative Agent (which determination shall be conclusive and binding absent
manifest error) to be equal to the rate that results from interpolating on a
linear basis between: (a) the LIBO Screen Rate for the longest period (for which
the LIBO Screen Rate is available) that is shorter than the Impacted Interest
Period and (b) the LIBO Screen Rate for the shortest period (for which the LIBO
Screen Rate is available) that exceeds the Impacted Interest Period, in each
case, at such time. “Investment” means, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of Equity
Interests in any other Person (including, without limitation, any “short sale”
or any sale of any securities at a time when such securities are not owned by
the Person entering into such short sale); (b) the making of any deposit with,
or advance, loan or capital contribution to, assumption of Funded Debt of,
purchase or other acquisition of any other Funded Debt of, or other extension of
credit to, any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or otherwise, to
resell such Property to such Person); (c) the purchase or acquisition (in one or
a series of transactions) of Property (other than Equity Interests) of another
Person that constitutes a business unit both before and after such acquisition;
or (d) the entering into of any guarantee of, or other surety obligation
(including the deposit of any Equity Interests to be sold) with respect to,
Funded Debt or other liability of any other Person and (without duplication) any
amount committed to be advanced, lent or extended to such Person, provided in
each case that accounts receivable (including obligations of joint working
interest owners) arising in the ordinary course of business do not constitute
Investments. “Issuing Bank” means (a) JPMorgan and (b) any other Lender
identified by the Borrower pursuant to Section 2.08 (and reasonably acceptable
to the Administrative Agent) that agrees to act as an Issuing Bank, in each case
in its capacity as the issuer of Letters of Credit hereunder, and its successors
in such capacity as provided in Section 2.08(i). Any Issuing Bank may, in its
discretion, arrange for one or more Letters of Credit to be issued by Affiliates
of such Issuing Bank, in which case the term “Issuing Bank” shall include any
such Affiliate with respect to Letters of Credit issued by such Affiliate.
“Issuing Bank Agreement” has the meaning assigned to such term in Section 2.08.
“LC Commitment” means, at any time, the greater of (a) $25,000,000 and (b) 5% of
the Borrowing Base, but, in any event, not greater than the aggregate LC
Issuance Limits of the Issuing Banks. 19

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“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit. “LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
“LC Issuance Limits” means, with respect to each Issuing Bank, the amount set
forth on Annex III opposite such Issuing Bank’s name, or in the case of any
Lender that becomes an Issuing Bank after the Effective Date as contemplated by
Section 2.08, the amount set forth in an Issuing Bank Agreement executed by such
Lender. “Lenders” means the Persons listed on Annex I, any Person that shall
have become a party hereto pursuant to an Assignment and Assumption, and any
Person that shall have become a party hereto as an Additional Lender pursuant to
Section 2.06(c), other than, in each case, any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption. “Letter of Credit” means
any letter of credit issued pursuant to this Agreement and any Existing Letter
of Credit. “Letter of Credit Agreements” means all letter of credit applications
and other agreements (including any amendments, modifications or supplements
thereto) submitted by the Borrower, or entered into by the Borrower, with the
Issuing Bank relating to any Letter of Credit. “LIBO Rate” means, with respect
to any Eurodollar Borrowing for any Interest Period, the LIBO Screen Rate at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period; provided that if the LIBO Screen Rate
shall not be available at such time for such Interest Period (an “Impacted
Interest Period”) then the LIBO Rate shall be the Interpolated Rate.
Notwithstanding the above, to the extent that “Adjusted LIBO Rate” is used in
connection with an ABR Borrowing, such rate shall be determined as modified by
the definition of Alternate Base Rate. “LIBO Screen Rate” means, for any day and
time, with respect to any Eurodollar Borrowing for any Interest Period, the
London interbank offered rate as administered by ICE Benchmark Administration
(or any other Person that takes over the administration of such rate for dollars
for a period equal in length to such Interest Period) as displayed on such day
and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such
rate (or, in the event such rate does not appear on a Reuters page or screen, on
any successor or substitute page on such screen that displays such rate, or on
the appropriate page of such other information service that publishes such rate
from time to time as selected by the Administrative Agent in its reasonable
discretion), provided that if the LIBO Screen Rate shall be less than zero
percent, such rate shall be deemed to be zero percent for the purposes of this
Agreement. “Lien” means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not limited to (a)
the lien or security interest arising from a deed of trust, mortgage, pledge,
security 20

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agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of Oil
and Gas Properties. The term “Lien” shall include encumbrances, easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations, in each case, where the effect is to secure an obligation owed to,
or a claim by, a Person other than the owner of the Property. For the purposes
of this Agreement, the Parent and its Restricted Subsidiaries shall be deemed to
be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.
“Liquidity” means, as of any date of determination, the sum of (a) the aggregate
unused amount of the total Commitments under this Agreement as of such date (but
only to the extent that the Borrower is permitted to borrow such amounts under
the terms of this Agreement including, without limitation, Section 6.02 hereof)
and (b) the aggregate amount of unrestricted cash and cash equivalents of the
Borrower and its Restricted Subsidiaries at such date. “Loan” means any
revolving loan made to the Borrower pursuant to Article II, and “Loans” means,
collectively, two or more such Loans, as the context requires. “Loan Documents”
means this Agreement, the Notes, the Letter of Credit Agreements, the Letters of
Credit, the Fee Letter and the Security Instruments. “Majority Lenders” means,
(a) if there are less than three Lenders at such time, all Lenders, and (b) if
there are three or more Lenders at such time, (i) at any time while no Loans or
LC Exposure is outstanding, Lenders having greater than fifty percent (50%) of
the Aggregate Maximum Credit Amounts; and (ii) at any time while any Loans or LC
Exposure is outstanding, Lenders holding Revolving Credit Exposures and unused
Commitments representing greater than fifty percent (50%) of the sum of the
outstanding aggregate principal amount of the Loans and participation interests
in Letters of Credit (without regard to any sale by a Lender of a participation
in any Loan under Section 12.04(c)) and unused Commitments; provided that the
Maximum Credit Amounts and the principal amount of the Loans and participation
interests in Letters of Credit of the Defaulting Lenders (if any) shall be
excluded from the determination of Majority Lenders. “Material Acquisition”
means any acquisition of Property or series of related acquisitions of Property
that involves the payment of consideration by the Parent and/or its Restricted
Subsidiaries in excess of a dollar amount equal to ten percent (10%) of the then
effective Borrowing Base; provided that a Material Acquisition shall not include
any acquisition of Oil and Gas Properties to which no Proved Reserves are
attributed or any acquisition of any Equity Interests in any Unrestricted
Subsidiary. “Material Adverse Effect” means a material adverse change in, or
material adverse effect on (a) the business, operations, Property or condition
(financial or otherwise) of the Parent and the Restricted Subsidiaries taken as
a whole, (b) the ability of the Credit Parties to perform their obligations,
taken as a whole, under the Loan Documents, (c) the validity or enforceability
of any Loan Document or (d) the rights and remedies of or benefits available to,
taken as a whole, the Administrative Agent, any other Agent, the Issuing Bank or
any Lender under any Loan Document. 21

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“Material Disposition” means any Transfer of Property or series of related
Transfers of property that yields gross proceeds to the Parent or any of its
Restricted Subsidiaries in excess of a dollar amount equal to ten percent (10%)
of the then effective Borrowing Base; provided that a Material Disposition shall
not include any Transfer of Oil and Gas Properties to which no Proved Reserves
are attributed or any Transfer of any Equity Interests in any Unrestricted
Subsidiary. “Material Indebtedness” means Debt (other than the Loans and Letters
of Credit), or obligations in respect of one or more Swap Agreements, of any one
or more of the Parent and its Restricted Subsidiaries in an aggregate principal
amount exceeding the Threshold Amount. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Parent or any
Restricted Subsidiary in respect of any Swap Agreement at any time shall be the
Swap Termination Value of such Swap Agreement. “Maturity Date” means May 4,
2023. “Maximum Credit Amount” means, as to each Lender, the amount set forth
opposite such Lender’s name on Annex I under the caption “Maximum Credit
Amounts”, as the same may be (a) reduced or terminated from time to time in
connection with a reduction or termination of the Aggregate Maximum Credit
Amounts pursuant to Section 2.06(b), (b) modified from time to time pursuant to
Section 2.06(c) or (c) modified from time to time pursuant to any assignment
permitted by Section 12.04(b). “Moody’s” means Moody’s Investors Service, Inc.
and any successor thereto that is a nationally recognized rating agency.
“Mortgaged Property” means any Property owned by the Borrower or any Guarantor
which is subject to the Liens existing and to exist under the terms of any
mortgages or deeds of trust that are Security Instruments. “Multiemployer Plan”
means a multiemployer plan as defined in section 4001(a)(3) of ERISA under which
the Borrower, a Restricted Subsidiary or an ERISA Affiliate has any obligation
or liability. “New Borrowing Base Notice” has the meaning assigned such term in
Section 2.07(d). “Non-Defaulting Lender” means, at any time, each Lender that is
not a Defaulting Lender at such time. “Notes” means the promissory notes of the
Borrower described in Section 2.02(d) evidencing the Loans and being
substantially in the form of Error! Reference source not found., together with
all amendments, modifications, replacements, extensions and rearrangements
thereof. “NYFRB” means the Federal Reserve Bank of New York. “NYFRB Rate” means,
for any day, the greater of (a) the Federal Funds Effective Rate in effect on
such day and (b) the Overnight Bank Funding Rate in effect on such day (or for
any day that is not a Business Day, for the immediately preceding Business Day);
provided that if none of 22

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such rates are published for any day that is a Business Day, the term “NYFRB
Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on
such day received by the Administrative Agent from a federal funds broker of
recognized standing selected by it; provided, further, that if any of the
aforesaid rates shall be less than zero percent, such rate shall be deemed to be
zero percent for purposes of this Agreement. “OFAC” means the Office of Foreign
Assets Control of the United States Department of the Treasury. “Oil and Gas
Properties” means (a) Hydrocarbon Interests; (b) all rights and interests
incidental to any Hydrocarbon Interests, including, without limitation, all
rights and interests with respect to any presently existing or future pooled,
communitized or unitized acreage which may affect all or any portion of such
Hydrocarbon Interests by virtue of any such Hydrocarbon Interests being a part
thereof (including without limitation all units created under orders,
regulations and rules of any Governmental Authority); (c) all operating
agreements, contracts and other agreements, including production sharing
contracts and agreements, which relate to any Hydrocarbon Interests or the
production, sale, purchase, exchange or processing of Hydrocarbons from or
attributable to such Hydrocarbon Interests; (d) all Hydrocarbons in and under
and which may be produced and saved or attributable to any Hydrocarbon
Interests, including all oil in tanks, and all rents, issues, profits, proceeds,
products, revenues and other incomes from or attributable to such Hydrocarbon
Interests; (e) all tenements, hereditaments, appurtenances and Properties in any
manner appertaining, belonging, affixed or incidental to Hydrocarbon Interests
and (f) all Property, real or personal, now owned or hereinafter acquired and
situated upon, used, or held for use in connection with the operating, working
or development of any of such Hydrocarbon Interests (excluding drilling rigs,
automotive equipment, rental equipment or other personal Property which may be
on such premises for the purpose of drilling a well or for other similar
temporary uses) and including any and all oil wells, gas wells, injection wells
or other wells, buildings, structures, fuel separators, liquid extraction
plants, plant compressors, pumps, pumping units, field gathering systems, tanks
and tank batteries, fixtures, valves, fittings, machinery and parts, engines,
boilers, meters, apparatus, equipment, appliances, tools, implements, cables,
wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements
and servitudes together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing. Unless otherwise
expressly provided herein, all references in this Agreement to “Oil and Gas
Properties” refer to Oil and Gas Properties owned by the Parent and its
Restricted Subsidiaries, as the context requires. “Other Taxes” means any and
all present or future stamp or documentary taxes or any other excise or Property
taxes, charges or similar levies arising from any payment made hereunder or from
the execution, delivery or enforcement of, or otherwise with respect to, this
Agreement and any other Loan Document. “Overnight Bank Funding Rate” means, for
any day, the rate comprised of both overnight federal funds and overnight
Eurodollar borrowings by U.S.-managed banking offices of depository institutions
(as such composite rate shall be determined by the NYFRB as set forth on its
public website from time to time) and published on the next succeeding Business
Day by the NYFRB as an overnight bank funding rate (from and after such date as
the NYFRB shall commence to publish such composite rate). 23

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“Parent” initially means the Borrower. If any Person acquires one hundred
percent (100%) of the outstanding Equity Interests in the Borrower and executes
and delivers a Parent Joinder Agreement to the Administrative Agent, that Person
will become the Parent and the Borrower will automatically cease to be the
Parent. “Parent Joinder Agreement” means an agreement substantially in the form
of Error! Reference source not found. (or otherwise in form and substance
acceptable to the Administrative Agent). “Participant” has the meaning set forth
in Section 12.04(c)(i). “Participant Register” has the meaning set forth in
Section 12.04(c)(i). “PBGC” means the Pension Benefit Guaranty Corporation, or
any successor thereto. “Permitted Senior Unsecured Notes” means those notes
(whether senior, senior subordinated, or subordinated) that may be issued by the
Parent or the Borrower (or by any Credit Party as co-issuer); provided that such
Permitted Senior Unsecured Notes shall: (a) be unsecured; (b) not provide for
any scheduled payment of principal, mandatory Redemptions or scheduled sinking
fund payment on or before the date that is at least 180 days following the
Maturity Date in effect at the time of issuance (other than provisions requiring
Redemption or offers to Redeem in connection with asset sales or a change in
control); and (c) contain financial and negative covenants and events of default
that are, taken as a whole, no more restrictive with respect to the Credit
Parties than the financial and negative covenants and Events of Default herein
(as determined in good faith by senior management of the Parent). “Permitted
Senior Unsecured Notes Documents” means the Permitted Senior Unsecured Notes,
all guarantees thereof and all other agreements, documents or instruments
executed and delivered by any Credit Party in connection with, or pursuant to,
the issuance of Permitted Senior Unsecured Notes. “Permitted Tax Distributions”
means,, (a) with respect to any taxable period (1) for which the Borrower and/or
any of its Subsidiaries are members of a consolidated, combined, affiliated,
unitary or similar income tax group for U.S. federal and/or applicable state or
local income tax purposes, or (2) for which the Borrower is a partnership or
disregarded entity for U.S. federal income tax purposes that is wholly owned
(directly or indirectly) by a C corporation for U.S. federal and/or applicable
state or local income tax purposes, distributions in an amount not to exceed the
amount of any U.S. federal, state and/or local income taxes that the Borrower
and/or its Subsidiaries, as applicable, would have paid for such taxable period
had the Borrower and/or its Subsidiaries, as applicable, been a stand-alone
corporate taxpayer or a standalone corporate group; provided that distributions
pursuant to this clause (a) in respect of an Unrestricted Subsidiary shall be
permitted only to the extent that cash distributions were made by such
Unrestricted Subsidiary to the Borrower or any of its Restricted Subsidiaries
for such purpose, and (b) without duplication of clause (a) and with respect to
any taxable period for which the Borrower is a partnership or disregarded entity
for U.S. federal income tax purposes (other than a partnership or disregarded
entity described in clause (a)(2) above), distributions to the holders of the
Equity Interests of the Borrower, on a pro rata basis, at such times and in such
amounts as necessary to 24

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enable Centennial Resource Development to timely satisfy all of its U.S.
federal, state and local and non-U.S. tax liabilities to the extent attributable
to the Borrower and its Subsidiaries (determined by taking into account any U.S.
federal, state and/or local (as applicable) loss carryforwards and accounting
for any limitations on such loss carryforwards of Centennial Resource
Development attributable to its ownership of the Borrower and its subsidiaries
for prior taxable periods). “Person” means any natural person, corporation,
limited liability company, trust, joint venture, association, company,
partnership, Governmental Authority or other entity. “Plan” means any employee
pension benefit plan (other than a Multiemployer Plan), as defined in section
3(2) of ERISA, that is subject to Title IV of ERISA, section 302 of ERISA or
section 412 of the Code and that (a) is currently or hereafter sponsored,
maintained or contributed to by the Parent, a Restricted Subsidiary or an ERISA
Affiliate or (b) was at any time during the six calendar years preceding the
date hereof, sponsored, maintained or contributed to by the Parent or a
Restricted Subsidiary or an ERISA Affiliate. “Plan Asset Regulations” means 29
CFR § 2510.3-101 et seq., as modified by section 3(42) of ERISA, as amended from
time to time. “Prime Rate” means the rate of interest per annum publicly
announced from time to time by JPMorgan as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective. Such rate is set by the Administrative Agent as a general reference
rate of interest, taking into account such factors as the Administrative Agent
may deem appropriate; it being understood that many of the Administrative
Agent’s commercial or other loans are priced in relation to such rate, that it
is not necessarily the lowest or best rate actually charged to any customer and
that the Administrative Agent may make various commercial or other loans at
rates of interest having no relationship to such rate. “Property” means any
interest in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, cash, securities,
accounts and contract rights. “Proposed Borrowing Base” has the meaning assigned
to such term in Section 2.07(c)(i). “Proposed Borrowing Base Notice” has the
meaning assigned to such term in Section 2.07(c)(ii). “Proved Developed
Producing Reserves” or “PDP” means “proved developed producing oil and gas
reserves” as such term is defined by the SEC in its standards and guidelines.
“Proved Oil and Gas Properties” means Oil and Gas Properties to which Proved
Reserves are attributed. References herein to the “total value” of Proved Oil
and Gas Properties refer to the present value of the PDP that are attributed
thereto in the then most recent Reserve Report plus risk-discounted portions (as
determined by the Administrative Agent) of the present value of the Proved
Reserves other than PDP that attributed thereto in such Reserve Report. 25

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“Proved Reserves” or “Proved” means collectively, “proved oil and gas reserves,”
“proved developed producing oil and gas reserves,” “proved developed
non-producing oil and gas reserves” (consisting of proved developed shut-in oil
and gas reserves and proved developed behind pipe oil and gas reserves), and
“proved undeveloped oil and gas reserves,” as such terms are defined by the SEC
in its standards and guidelines. “PTE” means a prohibited transaction class
exemption issued by the U.S. Department of Labor, as any such exemption may be
amended from time to time. “Purchase Money Debt” means Debt, the proceeds of
which are used to finance the acquisition, construction, or improvement of
inventory, equipment or other Property in the ordinary course of business;
provided, however, that such Debt is incurred no later than 120 days after such
acquisition or the completion of such construction or improvement. “Qualified
ECP Counterparty” means, in respect of any Swap Agreement, each Credit Party
that (a) has total assets exceeding $10,000,000 at the time any guaranty of
obligations under such Swap Agreement or grant of the relevant security interest
becomes effective or (b) otherwise constitutes an “eligible contract
participant” under the Commodity Exchange Act and can cause another Person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
“Redemption” means with respect to any Debt, the repurchase, redemption,
prepayment, repayment, defeasance or any other acquisition or retirement for
value (or the segregation of funds with respect to any of the foregoing) of such
Debt. “Redeem” has the correlative meaning thereto. “Redetermination Date”
means, with respect to any Scheduled Redetermination or any Interim
Redetermination, the date that the redetermined Borrowing Base related thereto
becomes effective pursuant to Section 2.07(d). “Reference Period” has the
meaning assigned to such term in the definition of “EBITDAX”. “Register” has the
meaning assigned such term in Section 12.04(b)(iv). “Regulation D” means
Regulation D of the Board, as the same may be amended, supplemented or replaced
from time to time. “Related Parties” means, with respect to any specified
Person, such Person’s Affiliates and the respective directors, officers,
employees, agents and advisors (including attorneys, accountants and experts) of
such Person and such Person’s Affiliates. “Release” means any depositing,
spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning,
emptying, discharging, migrating, injecting, escaping, leaching, dumping, or
disposing. “Remedial Work” has the meaning assigned such term in Section
8.10(a). 26

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“Required Lenders” means, (a) if there are less than three Lenders at such time,
all Lenders, and (b) if there are three or more Lenders at such time, (i) at any
time while no Loans or LC Exposure is outstanding, Lenders having at least
sixty-six and two-thirds percent (66-2/3%) of the Aggregate Maximum Credit
Amounts; and (ii) at any time while any Loans or LC Exposure is outstanding,
Lenders having Revolving Credit Exposures and unused Commitments representing at
least sixty-six and two-thirds percent (66-2/3%) of the sum of the outstanding
aggregate principal amount of the Loans and participation interests in Letters
of Credit (without regard to any sale by a Lender of a participation in any Loan
under Section 12.04(c)) and unused Commitments; provided that the Maximum Credit
Amounts and the principal amount of the Loans and participation interests in
Letters of Credit of the Defaulting Lenders (if any) shall be excluded from the
determination of Required Lenders. “Reserve Report” means a report, in form and
substance reasonably satisfactory to the Administrative Agent, setting forth, as
of the dates set forth in Section 8.12(a) (or such other date in the event of an
Interim Redetermination) the Proved Reserves attributable to the Oil and Gas
Properties of the Credit Parties, together with a projection of the rate of
production and future net income, taxes, operating expenses and capital
expenditures with respect thereto as of such date, based upon the pricing
assumptions consistent with SEC reporting requirements at the time and
reflecting Swap Agreements in place with respect to such production. To the
extent that any Oil and Gas Properties included in such report are owned by a
Credit Party that is not a Qualified ECP Counterparty, the Borrower or the
Parent will identify such Credit Party and such Oil and Gas Properties to the
Administrative Agent. The Initial Reserve Report is also a “Reserve Report”
hereunder. “Responsible Officer” means, as to any Person, the chief executive
officer, the president, and any Financial Officer of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Parent or the Borrower, as applicable. “Restricted
Payment” means any return of capital, dividend or distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in the Parent
or any of its Restricted Subsidiaries, or any payment (whether in cash,
securities or other Property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Parent or any of its Restricted
Subsidiaries. “Restricted Subsidiary” means any Subsidiary of the Parent that is
not an Unrestricted Subsidiary, including, without limitation (except at such
times that the Borrower is the Parent), the Borrower. “Revolving Credit
Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and its LC Exposure at such
time. “Riverstone” means Riverstone Investment Group LLC (the “Manager”),
Riverstone Global Energy and Power Fund VI, L.P., Riverstone Non-ECI Partners,
L.P., and Riverstone Energy Limited, together with the parallel investment
entities and alternative investment entities of the foregoing, and any future
investment fund or co-investment fund managed by the Manager 27

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or any of its Affiliates, and any Affiliates of one or more of the foregoing;
provided that in no event will any portfolio company of any of the foregoing be
included in the definition of “Riverstone”. “Rolling Period” means any period of
four (4) consecutive fiscal quarters ending on the last day of a fiscal quarter.
“Sanctioned Country” means, at any time, a country or territory which is itself
the subject or target of any Sanctions (including without limitation, at the
time of this Agreement, Cuba, Iran, North Korea and Syria). “Sanctioned Person”
means, at any time, (a) any Person listed in any Sanctions-related list of
designated Persons maintained by OFAC, the U.S. Department of the Treasury or
the U.S. Department of State, (b) any Person operating, organized or resident in
a Sanctioned Country or (c) any Person owned or controlled by any such Person or
Persons described in the foregoing clauses (a) or (b). “Sanctions” means
economic or financial sanctions or trade embargoes imposed, administered or
enforced from time to time by the U.S. government, including without limitation
those administered by OFAC, the U.S. Department of the Treasury or the U.S.
Department of State. “S&P” means S&P Global Ratings and any successor thereto
that is a nationally recognized rating agency. “Scheduled Redetermination” has
the meaning assigned such term in Section 2.07(b). “Scheduled Redetermination
Date” means April 1st and October 1st of each year, commencing October 1, 2018,
(or such date promptly thereafter as reasonably practicable). “Scheduled
Redetermination Effective Date” means the date on which a Borrowing Base that
has been redetermined pursuant to a Scheduled Redetermination becomes effective
as provided in Section 2.07(d). “SEC” means the Securities and Exchange
Commission or any successor Governmental Authority. “Secured Parties” means,
collectively, the Administrative Agent, the Lenders, the Issuing Bank, the Bank
Products Providers and Secured Swap Providers, and “Secured Party” means any of
them individually. “Secured Swap Agreement” means any Swap Agreement between the
Borrower or any Subsidiary and any Secured Swap Provider. “Secured Swap
Provider” means any Person (other than the Borrower or any Subsidiary) that (a)
is a Lender or an Affiliate of a Lender on the Effective Date and is a party to
a Swap Agreement with the Borrower or any Restricted Subsidiary on the Effective
Date, (b) hereafter enters into a Swap Agreement with the Borrower or any
Restricted Subsidiary while such Person 28

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is a Lender or an Affiliate of a Lender, or (c) is a Lender or an Affiliate of a
Lender at the time any such Swap Agreement is assigned or transferred to it (by
novation or otherwise) by another Secured Swap Provider. Any Person that at any
time is a Secured Swap Provider with respect to a particular Secured Swap
Agreement shall not thereafter cease to be a Secured Swap Provider with respect
to such Secured Swap Agreement because such Person ceases to be a Lender or an
Affiliate of a Lender, provided that (x) any such Person that ceases to be a
Lender or an Affiliate of a Lender shall not be a Secured Swap Provider with
respect to any Swap Agreement that it thereafter enters into while it is not a
Lender or an Affiliate of a Lender, and (y) any Person that assigns or transfers
a Secured Swap Agreement as contemplated in clause (c) of this definition shall
cease to be a Secured Swap Provider with respect to such Secured Swap Agreement
to the extent of such assignment or transfer. “Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder. “Securities Exchange Act” means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder. “Security
Agreement” means a Second Amended and Restated Pledge and Security Agreement
among the Credit Parties and the Administrative Agent in substantially the form
of Error! Reference source not found. (or otherwise in form and substance
acceptable to the Administrative Agent) granting Liens and a security interest
on the Credit Parties’ personal property constituting Collateral (as defined
therein) in favor of the Administrative Agent for the benefit of the Secured
Parties to secure the Indebtedness, as the same may be amended, modified,
supplemented or restated from time to time. “Security Instruments” means the
Guaranty Agreement, the Security Agreement, each of the mortgages, deeds of
trust and other agreements or instruments described in Error! Reference source
not found., and any and all other guaranties, mortgages, deeds of trust,
security agreements, pledge agreements, or other agreements or instruments now
or hereafter executed and delivered by the Borrower or any other Person (other
than Notes, Swap Agreements with any Lenders or any Affiliate of a Lender, or
participation or similar agreements between any Lender and any participant or
similar party with respect to any Indebtedness) as security for, or as a
guaranty of, the payment or performance of the Indebtedness, in each case as
such agreement or instrument may be amended, modified, supplemented or restated
from time to time. “Statutory Reserve Rate” means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D or any comparable regulation. The
Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage. 29

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“subsidiary” means, with respect to any Person (the “parent”) at any date, any
other Person the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other Person of which Equity Interests representing more than 50% of the equity
or more than 50% of the ordinary voting power (irrespective of whether or not at
the time Equity Interests of any other class or classes of such Person shall
have or might have voting power by reason of the happening of any contingency)
are, as of such date, owned, controlled or held by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent. “Subsidiary” means any subsidiary of the Parent, including, without
limitation (except at such times that the Borrower is the Parent), the Borrower.
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or similar agreement, whether exchange traded,
“over-the-counter” or otherwise, involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities,
or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any other similar derivative transaction or any
combination of these transactions (including any option to enter into any of the
foregoing); provided that (a) no phantom stock or similar plan providing for
payments only on account of services provided by current or former directors,
officers, employees or consultants of the Parent or its Subsidiaries shall be a
Swap Agreement and (b) no transaction that is intended to be physically settled
(including any sale of a commodity for a deferred shipment or delivery that is
intended to be physically settled) shall be a Swap Agreement. If multiple
transactions are entered into under a master agreement, each such transaction
that constitutes a Swap Agreement shall be a separate Swap Agreement for the
purposes of this Agreement. For the sole purpose of Section 9.17, the term “Swap
Agreement” shall be deemed to exclude all purchased put options or floors for
Hydrocarbons that are not related to corresponding calls, collars or swaps and
with respect to which neither the Parent nor any Restricted Subsidiary has any
payment obligation other than premiums and charges the total amount of which are
fixed and known at the time such transaction is entered into. “Swap Termination
Value” means, in respect of any one or more Swap Agreements, after taking into
account the effect of any legally enforceable netting agreement relating to such
Swap Agreements, (a) for any date on or after the date such Swap Agreements have
been closed out and termination value(s) determined in accordance therewith,
such termination value(s) and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the mark-to-market value(s) for such
Swap Agreements, as determined by the counterparties to such Swap Agreements.
“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of United States federal income
taxes, if the lessee in respect thereof is obligated to either purchase for an
amount in excess of, or pay upon early termination an amount in excess of, 80%
of the residual value of the Property subject to such operating lease upon
expiration or early termination of such lease. 30

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“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
“Termination Date” means the earlier of the Maturity Date and the date of
termination of the Commitments. “Threshold Amount” means the greater of (i)
$32,000,000 and (ii) 4% of the Borrowing Base then in effect. “Total Funded
Debt” means, at any date, all Funded Debt of the Parent and the Consolidated
Restricted Subsidiaries on a consolidated basis and, so long as there are no
Loans outstanding on such date, calculated net of unrestricted cash and cash
equivalents, in each case, held by the Borrower and its Restricted Subsidiaries.
“Transactions” means, with respect to (a) the Borrower, the execution, delivery
and performance by the Borrower of this Agreement and each other Loan Document
to which it is a party, the borrowing of Loans, the issuance of Letters of
Credit hereunder, the grant of Liens by the Borrower on Mortgaged Properties
pursuant to the Security Instruments, and (b) each Guarantor, the execution,
delivery and performance by such Guarantor of each Loan Document to which it is
a party, the guaranteeing of the Indebtedness and the other obligations under
the Guaranty Agreement by such Guarantor and such Guarantor’s grant of Liens on
Mortgaged Properties pursuant to the Security Instruments. “Transfer” has the
meaning assigned to such term in Section 9.12. “Type”, when used in reference to
any Loan or Borrowing, refers to whether the rate of interest on such Loan, or
on the Loans comprising such Borrowing, is determined by reference to the
Alternate Base Rate or the Adjusted LIBO Rate. “Unrestricted Subsidiary” means
any Subsidiary of the Parent designated as such on Schedule 7.14 or which the
Parent or the Borrower has designated in writing to the Administrative Agent to
be an Unrestricted Subsidiary pursuant to Section 9.06; provided that in no
event may the Borrower be designated as an Unrestricted Subsidiary.
“Unrestricted Subsidiary Distribution” means any cash dividend or distribution
received by the Parent or any Restricted Subsidiary from any Unrestricted
Subsidiary. “U.S. Tax Compliance Certificate” has the meaning set forth in
Section 5.03(f). “Wholly-Owned Subsidiary” means any Restricted Subsidiary of
which all of the outstanding Equity Interests (other than any directors’
qualifying shares mandated by applicable law), on a fully-diluted basis, are
owned by the Parent, the Borrower or one or more of the Wholly- Owned
Subsidiaries or are owned by the Parent, the Borrower and one or more of the
Wholly- Owned Subsidiaries, or any combination thereof. “Withholding Agent”
means any Credit Party or the Administrative Agent. 31

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“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule. Section 1.03 Types of Loans and Borrowings. For purposes
of this Agreement, Loans and Borrowings, respectively, may be classified and
referred to by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).
Section 1.04 Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” as used in this Agreement shall be deemed to be
followed by the phrase “without limitation”. The words “will” and “shall” as
used in this Agreement shall be construed to have the same meaning and effect.
The word “or” is not exclusive. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented, restated or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth in the Loan Documents), (b) except as otherwise provided herein, any
reference herein to any law shall be construed as referring to such law as
amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time, (c) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions
contained in the Loan Documents), (d) the words “herein”, “hereof” and
“hereunder”, and words of similar import as used in this Agreement, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) with respect to the determination of any time period, the
word “from” as used in this Agreement means “from and including” and the word
“to” means “to and including” and (f) any reference herein to Articles,
Sections, Annexes, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Annexes, Exhibits and Schedules to, this
Agreement. No provision of this Agreement or any other Loan Document shall be
interpreted or construed against any Person solely because such Person or its
legal representative drafted such provision. Section 1.05 Accounting Terms and
Determinations; GAAP. Unless otherwise specified herein, all accounting terms
used herein shall be interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements and certificates
and reports as to financial matters required to be furnished to the
Administrative Agent or the Lenders hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent with the Financial Statements except
for changes in which Borrower’s independent certified public accountants concur
and which are disclosed to Administrative Agent on or before the next date on
which financial statements are required to be delivered to the Lenders pursuant
to Section 8.01(a); provided that, unless the Borrower and the Majority Lenders
shall otherwise agree in writing, no such change shall modify or affect the
manner in which compliance with the covenants contained herein is computed such
that all such computations shall be conducted utilizing financial information
presented consistently with prior periods. Notwithstanding anything herein to
the contrary, for the purposes of calculating any of the ratios tested under
Section 9.01, and the components of each of such ratios, all Unrestricted
Subsidiaries, and their subsidiaries (including 32

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their assets, liabilities, income, losses, cash flows, and the elements thereof)
shall be excluded, except for any Unrestricted Subsidiary Distributions (other
than Unrestricted Subsidiary Distributions that have been used or will be used
by the Parent to make distributions under Section 9.04(a)(v)), which shall be
deemed to be income to the Parent or such Restricted Subsidiary when actually
received by it. ARTICLE II THE CREDITS Section 2.01 Commitment. Subject to the
terms and conditions set forth herein, each Lender agrees to make Loans to the
Borrower during the Availability Period in an aggregate principal amount that
will not result in (a) such Lender’s Revolving Credit Exposure exceeding such
Lender’s Commitment or (b) the total Revolving Credit Exposures exceeding the
total Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, repay and reborrow the
Loans. Section 2.02 Loans and Borrowings. (a) Borrowings; Several Obligations.
Each Loan shall be made as part of a Borrowing consisting of Loans made by the
Lenders ratably in accordance with their respective Commitments. The failure of
any Lender to make any Loan required to be made by it shall not relieve any
other Lender of its obligations hereunder; provided that the Commitments are
several and no Lender shall be responsible for any other Lender’s failure to
make Loans as required. (b) Types of Loans. Subject to Section 3.03, each
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith. Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement. (c) Minimum Amounts; Limitation on Number of
Borrowings. At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $250,000 and not less than $500,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000 and not less than $200,000; provided that an ABR
Borrowing may be in an aggregate amount that is equal to the entire unused
balance of the total Commitments or that is required to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.08(e).
Borrowings of more than one Type may be outstanding at the same time, provided
that there shall not at any time be more than a total of ten (10) Eurodollar
Borrowings outstanding. Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to convert or
continue, a Loan if the Interest Period requested with respect thereto would end
after the Maturity Date. (d) Notes. If requested by a Lender, the Loans made by
such Lender shall be evidenced by a Note, of the Borrower in substantially the
form of Error! Reference source not found., dated, (i) in the case of any Lender
party hereto as of the date of this Agreement, as of the 33

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date of this Agreement, (ii) in the case of any Lender that becomes a party
hereto pursuant to an Assignment and Assumption, as of the effective date of the
Assignment and Assumption, or (iii) in the case of any Lender that becomes a
party hereto in connection with an increase in the Aggregate Elected Commitment
Amounts pursuant to Section 2.06(c), as of the effective date of such increase,
in each case, payable to such Lender in a principal amount equal to its Maximum
Credit Amount, as in effect on such date, and otherwise duly completed. In the
event that any Lender’s Maximum Credit Amount increases or decreases for any
reason (whether pursuant to Section 2.06, Section 12.04(b) or otherwise), the
Borrower shall, upon request of such Lender, deliver or cause to be delivered,
to the extent such Lender is then holding a Note, on the effective date of such
increase or decrease, a new Note, payable to such Lender in a principal amount
equal to its Maximum Credit Amount after giving effect to such increase or
decrease, and otherwise duly completed, whereupon such Lender will promptly
return to the Borrower the Notes so replaced. The date, amount, Type, interest
rate and, if applicable, Interest Period of each Loan made by each Lender, and
all payments made on account of the principal thereof, shall be recorded by such
Lender on its books for its Note. Failure to make any such recordation shall not
affect any Lender’s or the Borrower’s rights or obligations in respect of such
Loans or affect the validity of any transfer by any Lender of its Note. Section
2.03 Requests for Borrowings. To request a Borrowing, the Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 11:00 a.m., Denver, Colorado time, three
Business Days before the date of the proposed Borrowing or (b) in the case of an
ABR Borrowing, not later than 10:00 a.m., Denver, Colorado time, on the date of
the proposed Borrowing; provided that no such notice shall be required for any
deemed request of an ABR Borrowing to finance the reimbursement of an LC
Disbursement as provided in Section 2.08(e). Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile or other electronic transmission to the Administrative Agent (or other
communication in writing acceptable to the Administrative Agent) of a written
Borrowing Request in substantially the form of Error! Reference source not
found. (or such other form as may be agreed to by the Administrative Agent and
the Borrower) and signed by the Borrower. Each such telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02: (i) the aggregate amount of the requested Borrowing; (ii) the date
of such Borrowing, which shall be a Business Day; (iii) whether such Borrowing
is to be an ABR Borrowing or a Eurodollar Borrowing; (iv) in the case of a
Eurodollar Borrowing, the initial Interest Period to be applicable thereto,
which shall be a period contemplated by the definition of the term “Interest
Period”; (v) the amount of the then effective Borrowing Base, the amount of the
then effective Aggregate Elected Commitment Amounts, the current total Revolving
Credit Exposures (without regard to the requested Borrowing) and the pro forma
total Revolving Credit Exposures (giving effect to the requested Borrowing); and
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(vi) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.05. If no
election as to the Type of Borrowing is specified, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period is specified with respect to
any requested Eurodollar Borrowing, then the Borrower shall be deemed to have
selected an Interest Period of one month’s duration. Each Borrowing Request
shall constitute a representation by the Borrower that the amount of the
requested Borrowing shall not cause the total Revolving Credit Exposures to
exceed the total Commitments (i.e., the least of (A) the Aggregate Maximum
Credit Amounts, (B) the then effective Borrowing Base and (C) the then effective
Aggregate Elected Commitment Amounts). Promptly following receipt of a Borrowing
Request in accordance with this Section 2.03, the Administrative Agent shall
advise each Lender of the details thereof and of the amount of such Lender’s
Loans to be made as part of the requested Borrowing. Section 2.04 Interest
Elections. (a) Conversion and Continuance. Each Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.04. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. (b) Interest Election Requests. To make an election pursuant
to this Section 2.04, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or facsimile to the Administrative Agent (or
other communication in writing or electronic transmission acceptable to the
Administrative Agent) of a written Interest Election Request in substantially
the form of Error! Reference source not found. (or such other form as may be
agreed to by the Administrative Agent and the Borrower) and signed by the
Borrower. (c) Information in Interest Election Requests. Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.02: (i) the Borrowing to which such Interest Election
Request applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant to
Section 2.04(c)(iii) and (iv) shall be specified for each resulting Borrowing);
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(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day; (iii) whether the resulting Borrowing is
to be an ABR Borrowing or a Eurodollar Borrowing; and (iv) if the resulting
Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable
thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term “Interest Period”. If any such
Interest Election Request requests a Eurodollar Borrowing but does not specify
an Interest Period, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. (d) Notice to Lenders by the
Administrative Agent. Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender’s portion of each resulting Borrowing. (e) Effect of
Failure to Deliver Timely Interest Election Request and Events of Default on
Interest Election. If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing, then so long as such Event of Default is
continuing: (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing (and any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto. Section 2.05 Funding of Borrowings. (a)
Funding by Lenders. Each Lender shall make each Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds by
12:00 p.m. (noon), Denver, Colorado time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent or any Lender designated by
the Borrower in the applicable Borrowing Request; provided that ABR Loans made
to finance the reimbursement of an LC Disbursement as provided in Section
2.08(e) shall be remitted by the Administrative Agent to the Issuing Bank.
Nothing herein shall be deemed to obligate any Lender to obtain the funds for
its Loan in any particular place or manner or to constitute a representation by
any Lender that it has obtained or will obtain the funds for its Loan in any
particular place or manner. (b) Presumption of Funding by the Lenders. Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender’s share of such 36

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Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with Section 2.05(a) and may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Administrative Agent, then the applicable
Lender and the Borrower severally agree to pay to the Administrative Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Administrative Agent, at (i) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation or (ii) in the case of the Borrower, the interest rate
applicable to the Loans comprising such Borrowing that such Lender failed to
fund. If such Lender pays such amount to the Administrative Agent, then such
amount shall constitute such Lender’s Loan included in such Borrowing. Any
payment by the Borrower pursuant to this Section 2.05(b) shall be without
prejudice to any claim the Borrower may have against a Lender that shall have
failed to make such payment to the Administrative Agent. Section 2.06
Termination and Reduction of Commitments and Aggregate Maximum Credit Amounts;
Increase, Reduction and Termination of Aggregate Elected Commitment Amounts. (a)
Scheduled Termination of Commitments. Unless previously terminated, the
Commitments shall terminate on the Maturity Date. If at any time the Aggregate
Maximum Credit Amounts, the Borrowing Base or the Aggregate Elected Commitment
Amounts is terminated or reduced to zero, then the Commitments shall terminate
on the effective date of such termination or reduction. (b) Optional Termination
and Reduction of Aggregate Maximum Credit Amounts. (i) The Borrower may at any
time terminate, or from time to time reduce, the Aggregate Maximum Credit
Amounts; provided that (A) each reduction of the Aggregate Maximum Credit
Amounts shall be in an amount that is an integral multiple of $500,000 and not
less than $500,000, (B) the Borrower shall not terminate or reduce the Aggregate
Maximum Credit Amounts if, (1) after giving effect to any concurrent prepayment
of the Loans in accordance with Section 3.04(c), the total Revolving Credit
Exposures would exceed the total Commitments or (2) the Aggregate Maximum Credit
Amount would be less than $5,000,000 (unless, with respect to this clause (2),
the Aggregate Maximum Credit Amounts are reduced to $0), and (C) upon any
reduction of the Aggregate Maximum Credit Amounts that would otherwise result in
the Aggregate Maximum Credit Amounts being less than the Aggregate Elected
Commitment Amounts, the Aggregate Elected Commitment Amounts shall be
automatically reduced (ratably among the Lenders in accordance with each
Lender’s Applicable Percentage) so that they equal the Aggregate Maximum Credit
Amounts as so reduced. (ii) The Borrower shall notify the Administrative Agent
of any election to terminate or reduce the Aggregate Maximum Credit Amounts
under Section 2.06(b)(i) at least three Business Days prior to the effective
date of such termination or reduction (or such lesser period as may be
reasonably acceptable to the Administrative Agent), specifying such election and
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the effective date thereof. Promptly following receipt of any notice, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section 2.06(b)(ii) shall be
irrevocable; provided that a notice of termination of the Aggregate Maximum
Credit Amounts delivered by the Borrower, or a payoff letter or similar
communication accepted by the Administrative Agent, may state that such notice
is conditioned upon the effectiveness of other credit facilities or the closing
of a specified transaction, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date of such termination or reduction) if such condition is not
satisfied. Any termination or reduction of the Aggregate Maximum Credit Amounts
shall be permanent and may not be reinstated. Each reduction of the Aggregate
Maximum Credit Amounts shall be made ratably among the Lenders in accordance
with each Lender’s Applicable Percentage. (c) Increases, Reductions and
Terminations of Aggregate Elected Commitment Amounts. (i) Subject to the
conditions set forth in Section 2.06(c)(ii), the Borrower may increase the
Aggregate Elected Commitment Amounts then in effect by increasing the Elected
Commitment of a Lender or by causing a Person that is acceptable to the
Administrative Agent that at such time is not a Lender to become a Lender (any
such Person that is not at such time a Lender and becomes a Lender, an
“Additional Lender”). Notwithstanding anything to the contrary contained in this
Agreement, in no case shall an Additional Lender be a natural person, an
Industry Competitor, the Borrower or any Affiliate of the Borrower. (ii) Any
increase in the Aggregate Elected Commitment Amounts shall be subject to the
following additional conditions: (A) such increase shall not be less than
$15,000,000 unless the Administrative Agent otherwise consents, and no such
increase shall be permitted if after giving effect thereto the Aggregate Elected
Commitment Amounts exceed the Borrowing Base then in effect; (B) following any
Scheduled Redetermination Date, the Borrower may not increase the Aggregate
Elected Commitment Amounts more than once before the next Scheduled
Redetermination Date (for the sake of clarity, all increases in the Aggregate
Elected Commitment Amount effective on a single date shall be deemed a single
increase in the Aggregate Elected Commitment Amount for purposes of this Section
2.06(c)(ii)(B)); (C) no Default shall have occurred and be continuing on the
effective date of such increase; (D) on the effective date of such increase, no
Eurodollar Borrowings shall be outstanding or if any Eurodollar Borrowings are
outstanding, then the effective date of such increase shall be the last day of
the Interest Period in respect of such Eurodollar Borrowings unless the Borrower
pays any compensation required by Section 5.02; (E) no Lender’s Elected
Commitment may be increased without the consent of such Lender; 38

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(F) if the Borrower elects to increase the Aggregate Elected Commitment Amounts
by increasing the Elected Commitment of a Lender, the Borrower and such Lender
shall execute and deliver to the Administrative Agent a certificate
substantially in the form of Error! Reference source not found. (an “Elected
Commitment Increase Certificate”); and (G) if the Borrower elects to increase
the Aggregate Elected Commitment Amounts by causing an Additional Lender to
become a party to this Agreement, then the Borrower and such Additional Lender
shall execute and deliver to the Administrative Agent a certificate
substantially in the form of Error! Reference source not found. (an “Additional
Lender Certificate”), together with an Administrative Questionnaire and a
processing and recordation fee of $3,500 (provided that the Administrative Agent
may, in its discretion, elect to waive such processing and recordation fee in
connection with any such increase), and the Borrower shall (1) if requested by
the Additional Lender, deliver a Note payable to such Additional Lender in a
principal amount equal to its Maximum Credit Amount, and otherwise duly
completed and (2) pay any applicable fees as may have been agreed to between the
Borrower and the Additional Lender, and, to the extent applicable and agreed to
by the Borrower, the Administrative Agent. (iii) Subject to acceptance and
recording thereof pursuant to Section 2.06(c)(iv), from and after the effective
date specified in the Elected Commitment Increase Certificate or the Additional
Lender Certificate (or if any Eurodollar Borrowings are outstanding, then the
last day of the Interest Period in respect of such Eurodollar Borrowings, unless
the Borrower has paid any compensation required by Section 5.02: (A) the amount
of the Aggregate Elected Commitment Amounts shall be increased as set forth
therein, and (B) in the case of an Additional Lender Certificate, any Additional
Lender party thereto shall be a party to this Agreement and have the rights and
obligations of a Lender under this Agreement and the other Loan Documents. In
addition, the Lender or the Additional Lender, as applicable, shall purchase a
pro rata portion of the outstanding Loans (and participation interests in
Letters of Credit) of each of the other Lenders (and such Lenders hereby agree
to sell and to take all such further action to effectuate such sale) such that
each Lender (including any Additional Lender, if applicable) shall hold its
Applicable Percentage of the outstanding Loans (and participation interests)
after giving effect to the increase in the Aggregate Elected Commitment Amounts
(and the resulting modifications of each Lender’s Maximum Credit Amount pursuant
to Section 2.06(c)(iv) or Section 2.06(c)(v)). (iv) Upon its receipt of a duly
completed Elected Commitment Increase Certificate or an Additional Lender
Certificate, executed by the Borrower and the Lender or by the Borrower and the
Additional Lender party thereto, as applicable, the processing and recording fee
referred to in Section 2.06(c)(ii), if required, the Administrative
Questionnaire referred to in Section 2.06(c)(ii) and the break-funding payments
from the Borrower, if any, required by Section 5.02, if applicable, the
Administrative Agent shall accept such Elected Commitment Increase Certificate
or Additional Lender Certificate and record the information contained therein in
the Register required to be maintained by the Administrative Agent pursuant to
Section 12.04(b)(iv). No increase in the Aggregate Elected 39

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Commitment Amounts shall be effective for purposes of this Agreement unless it
has been recorded in the Register as provided in this Section 2.06(c)(iv). (v)
Upon any increase in the Aggregate Elected Commitment Amounts pursuant to
Section 2.06(c)(iv), (A) each Lender’s Maximum Credit Amount shall be
automatically deemed amended to the extent necessary so that each such Lender’s
Applicable Percentage equals the percentage of the Aggregate Elected Commitment
Amounts represented by such Lender’s Elected Commitment, in each case after
giving effect to such increase, and (B) Annex I to this Agreement shall be
deemed amended to reflect the Elected Commitment of each Lender (including any
Additional Lender) as thereby increased, any changes in the Lenders’ Maximum
Credit Amounts pursuant to the foregoing clause (A), and any resulting changes
in the Lenders’ Applicable Percentages. (vi) The Borrower may from time to time
terminate or reduce the Aggregate Elected Commitment Amounts; provided that (A)
each reduction of the Aggregate Elected Commitment Amounts shall be in an amount
that is an integral multiple of $1,000,000 and not less than $1,000,000 and (B)
the Borrower shall not reduce the Aggregate Elected Commitment Amounts if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 3.04(c), the total Revolving Credit Exposures would exceed the Aggregate
Elected Commitment Amounts as reduced. (vii) The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Aggregate
Elected Commitment Amounts under Section 2.06(c)(vi) at least three Business
Days prior to the effective date of such termination or reduction (or such
lesser period as may be reasonably acceptable to the Administrative Agent),
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this Section
2.06(c)(vii) shall be irrevocable; provided that a notice of termination of the
Aggregate Elected Commitment Amounts delivered by the Borrower may state that
such notice is conditioned upon the effectiveness of other credit facilities or
the closing of a specified transaction, in which case such notice may be revoked
by the Borrower (by notice to the Administrative Agent on or prior to the
specified effective date of such termination) if such condition is not
satisfied. Any termination or reduction of the Aggregate Elected Commitment
Amounts shall be permanent and may not be reinstated, except pursuant to Section
2.06(c)(i). Each reduction of the Aggregate Elected Commitment Amounts shall be
made ratably among the Lenders in accordance with each Lender’s Applicable
Percentage. (viii) Upon any redetermination or other adjustment in the Borrowing
Base pursuant to this Agreement that would otherwise result in the Borrowing
Base becoming less than the Aggregate Elected Commitment Amounts, the Aggregate
Elected Commitment Amounts shall be automatically reduced (ratably among the
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Percentage) so that they equal such redetermined Borrowing Base (and Annex I
shall be deemed amended to reflect such amendments to each Lender’s Elected
Commitment and the Aggregate Elected Commitment Amounts). (ix) Contemporaneously
with any increase in the Borrowing Base pursuant to this Agreement, if (A) the
Borrower elects to increase the Aggregate Elected Commitment Amount and (B) each
Lender has consented to such increase in its Elected Commitment, then the
Aggregate Elected Commitment Amount shall be increased (ratably among the
Lenders in accordance with each Lender’s Applicable Percentage) by the amount
requested by the Borrower without the requirement that any Lender deliver an
Elected Commitment Increase Certificate or that the Borrower pay any amounts
under Section 5.02, and Annex I shall be deemed amended to reflect such
amendments to each Lender’s Elected Commitment and the Aggregate Elected
Commitment Amount. The Administrative Agent shall record the information
regarding such increases in the Register required to be maintained by the
Administrative Agent pursuant to Section 12.04(b)(iv). (x) If, after giving
effect to any reduction in the Aggregate Elected Commitment Amounts pursuant to
this Section 2.06(c), the total Revolving Credit Exposures exceeds the total
Commitments, then the Borrower shall (A) prepay the Borrowings on the date of
such termination or reduction in an aggregate principal amount equal to such
excess, and (B) if any excess remains after prepaying all of the Borrowings as a
result of an LC Exposure, pay to the Administrative Agent on behalf of the
Lenders an amount equal to such excess to be held as cash collateral as provided
in Section 2.08(j). Section 2.07 Borrowing Base. (a) Initial Borrowing Base. For
the period from and including the Effective Date to but excluding the first
Redetermination Date, the amount of the Borrowing Base shall be $800,000,000.
Notwithstanding the foregoing, the Borrowing Base may be subject to further
adjustments in between Scheduled Redeterminations from time to time pursuant to
Section 2.07(e), Section 8.13(c) or Section 9.12(e)(v). (b) Scheduled and
Interim Redeterminations. The Borrowing Base shall be redetermined periodically
on each Scheduled Redetermination Date in accordance with this Section 2.07 (a
“Scheduled Redetermination”), and, subject to Section 2.07(d), such redetermined
Borrowing Base shall become effective and applicable to the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders on each Scheduled
Redetermination Effective Date. In addition, (i) the Borrower may, by notifying
the Administrative Agent thereof, and the Administrative Agent may, at the
direction of the Required Lenders, by notifying the Borrower thereof, one time
between any two successive Scheduled Redeterminations, each elect to cause the
Borrowing Base to be redetermined between Scheduled Redeterminations in
accordance with this Section 2.07 and (ii) the Borrower may elect, in addition
to any such elections permitted to be made by it pursuant to the foregoing
clause (i), by notifying the Administrative Agent of any Material Acquisition,
to cause the Borrowing Base to be redetermined between 41

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Scheduled Redeterminations (each such redetermination described in clauses (i)
and (ii) being an “Interim Redetermination”) in accordance with this Section
2.07. (c) Scheduled and Interim Redetermination Procedure. (i) Each Scheduled
Redetermination and each Interim Redetermination shall be effectuated as
follows: Upon receipt by the Administrative Agent of (A) the Reserve Report and
the certificate required to be delivered by the Borrower to the Administrative
Agent, in the case of a Scheduled Redetermination, pursuant to Section 8.12(a)
and (c), and, in the case of an Interim Redetermination, pursuant to Section
8.12(b) and (c), and (B) such other reports, data and supplemental information,
including, without limitation, the information provided pursuant to Section
8.12(c), as may, from time to time, be reasonably requested by the Majority
Lenders (the Reserve Report, such certificate and such other reports, data and
supplemental information being the “Engineering Reports”), the Administrative
Agent shall evaluate the information contained in the Engineering Reports and
shall, in good faith, propose a new Borrowing Base (the “Proposed Borrowing
Base”) based upon such information and such other information (including,
without limitation, the status of title information with respect to the Oil and
Gas Properties as described in the Engineering Reports and the existence of any
other Debt, the Credit Parties’ other assets, liabilities, fixed charges, cash
flow, business, properties, prospects, management and ownership, hedged and
unhedged exposure to price, price and production scenarios, interest rate and
operating cost changes) as the Administrative Agent deems appropriate in its
sole discretion and consistent with its normal oil and gas lending criteria for
revolving lines of credit at the particular time. In no event shall the Proposed
Borrowing Base exceed the Aggregate Maximum Credit Amounts; (ii) The
Administrative Agent shall notify the Borrower and the Lenders of the Proposed
Borrowing Base (the “Proposed Borrowing Base Notice”) after the Administrative
Agent has received complete Engineering Reports from the Borrower and has had a
reasonable opportunity to determine the Proposed Borrowing Base in accordance
with Section 2.07(c)(i); and (iii) Any Proposed Borrowing Base that would
increase the Borrowing Base then in effect must be approved by all of the
Lenders (other than any Defaulting Lenders) as provided in this Section
2.07(c)(iii); and any Proposed Borrowing Base that would decrease or maintain
the Borrowing Base then in effect must be approved or be deemed to have been
approved by the Required Lenders as provided in this Section 2.07(c)(iii). Upon
receipt of the Proposed Borrowing Base Notice, each Lender shall have fifteen
(15) days to agree with the Proposed Borrowing Base or disagree with the
Proposed Borrowing Base by proposing an alternate Borrowing Base. If, in the
case of any Proposed Borrowing Base that would decrease or maintain the
Borrowing Base then in effect, at the end of such fifteen (15) days, any Lender
has not communicated its approval or disapproval in writing to the
Administrative Agent, such silence shall be deemed to be an approval of the
Proposed Borrowing Base. If, in the case of any Proposed Borrowing Base that
would increase the Borrowing Base then in effect, at the end of such fifteen
(15) days, any Lender has not communicated its approval or disapproval in
writing to the Administrative Agent, such silence shall be deemed to be a
disapproval of the Proposed Borrowing Base. If, at the end of such 15-day
period, all of the Lenders (other than any Defaulting Lenders), in the case of a
Proposed Borrowing Base that would increase the Borrowing Base then in effect,
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or the Required Lenders, in the case of a Proposed Borrowing Base that would
decrease or maintain the Borrowing Base then in effect, have approved or, in the
case of a decrease or reaffirmation, deemed to have approved, as aforesaid, then
the Proposed Borrowing Base shall, subject to Section 12.02(b)(ii), become the
new Borrowing Base, effective on the date specified in Section 2.07(d). If,
however, at the end of such 15-day period, all of the Lenders (other than any
Defaulting Lenders) or the Required Lenders, as applicable, have not approved
or, in the case of a decrease or reaffirmation, deemed to have approved, as
aforesaid, then the Administrative Agent shall poll the Lenders to ascertain the
highest Borrowing Base then acceptable to (x) in the case of a decrease or
reaffirmation, a number of Lenders sufficient to constitute the Required Lenders
and (y) in the case of an increase, all of the Lenders (other than any
Defaulting Lenders), and such amount shall, subject to Section 12.02(b)(ii),
become the new Borrowing Base, effective on the date specified in Section
2.07(d). (d) Effectiveness of a Redetermined Borrowing Base. After a
redetermined Borrowing Base is approved or is deemed to have been approved by
all of the Lenders or the Required Lenders, as applicable, pursuant to Section
2.07(c)(iii), the Administrative Agent shall notify the Borrower and the Lenders
of the amount of the redetermined Borrowing Base (the “New Borrowing Base
Notice”), and such amount shall become the new Borrowing Base, effective and
applicable to the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders: (i) in the case of a Scheduled Redetermination, (A) if the
Administrative Agent shall have received the Engineering Reports required to be
delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and
complete manner, then on the applicable Scheduled Redetermination Date following
such notice, or (B) if the Administrative Agent shall not have received the
Engineering Reports required to be delivered by the Borrower pursuant to Section
8.12(a) and (c) in a timely and complete manner, then on the Business Day next
succeeding delivery of such notice; and (ii) in the case of an Interim
Redetermination, on the Business Day next succeeding delivery of such notice.
Such amount shall then become the Borrowing Base until the next Scheduled
Redetermination Effective Date, the next Interim Redetermination Date or the
next adjustment to the Borrowing Base under Section 2.07(e), Section 8.13(c) or
Section 9.12(e)(v), whichever occurs first. Notwithstanding the foregoing, no
Scheduled Redetermination or Interim Redetermination shall become effective
until the New Borrowing Base Notice related thereto is received by the Borrower.
(e) Automatic Reduction of Borrowing Base – Issuance of Permitted Senior
Unsecured Notes. Upon any issuance of Permitted Senior Unsecured Notes (other
than Permitted Senior Unsecured Notes that extend, refinance or replace then
existing Permitted Senior Unsecured Notes, up to the sum of (i) the principal
amount of such then existing Permitted Senior Unsecured Notes that are
refinanced or replaced plus (ii) an amount equal to the unpaid accrued interest
and premium thereon and fees and expenses incurred in connection with such
extension, refinancing or replacement), the Borrowing Base shall automatically
be decreased by an amount equal to 25% of the aggregate notional amount of such
Permitted Senior Unsecured Notes issued at such time. Such decrease in the
Borrowing Base shall occur automatically upon the issuance of such Permitted
Senior Unsecured Notes on the date of issuance, without any vote of Lenders or
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by Administrative Agent. Upon any such reduction in the Borrowing Base, the
Administrative Agent shall promptly deliver a New Borrowing Base Notice to the
Borrower and the Lenders. Section 2.08 Letters of Credit. (a) General. Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of dollar denominated Letters of Credit for its own account or for the
account of any of its Restricted Subsidiaries, in a form reasonably acceptable
to the Administrative Agent and the Issuing Bank, at any time and from time to
time during the Availability Period in an amount not to exceed (i) in the
aggregate for all Letters of Credit, the LC Commitment, and (ii) for any
particular Issuing Bank, such Issuing Bank’s LC Issuance Limit; provided that
the Borrower may not request the issuance, amendment, renewal or extension of
Letters of Credit hereunder if a Borrowing Base Deficiency exists at such time
or would exist as a result thereof. In the event of any inconsistency between
the terms and conditions of this Agreement and the terms and conditions of any
form of letter of credit application or other agreement submitted by the
Borrower to, or entered into by the Borrower with, the Issuing Bank relating to
any Letter of Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. The
Existing Letters of Credit shall be deemed to have been issued hereunder as of
the Effective Date. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or facsimile (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (not less than five (5)
Business Days in advance of the requested date of issuance, amendment, renewal
or extension (or such lesser advance notice as is acceptable to both the Issuing
Bank and the Administrative Agent)) a notice: (i) requesting the issuance of a
Letter of Credit or identifying the Letter of Credit to be amended, renewed or
extended; (ii) specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day); (iii) specifying the date on which such Letter
of Credit is to expire (which shall comply with Section 2.08(c)); (iv)
specifying the amount of such Letter of Credit; (v) specifying the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit; and (vi)
specifying the amount of the then effective Borrowing Base and the then
effective Aggregate Elected Commitment Amounts and whether a Borrowing Base
Deficiency exists at such time, the current total Revolving Credit Exposures
(without regard to the requested Letter of Credit or the requested amendment,
renewal or extension of an outstanding Letter of Credit) and the pro forma total
Revolving Credit Exposures (giving effect to the requested 44

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Letter of Credit or the requested amendment, renewal or extension of an
outstanding Letter of Credit). Each notice shall constitute a representation and
warranty by the Borrower that after giving effect to the requested issuance,
amendment, renewal or extension, as applicable, (x) the LC Exposure shall not
exceed the LC Commitment and (y) the total Revolving Credit Exposures shall not
exceed the total Commitments (i.e., the least of (i) the Aggregate Maximum
Credit Amounts, (ii) the then effective Borrowing Base and (iii) the then
effective Aggregate Elected Commitment Amounts). No letter of credit issued by
the Issuing Bank (if the Issuing Bank is not the Administrative Agent) shall be
deemed to be a “Letter of Credit” issued under this Agreement unless the Issuing
Bank has requested and received written confirmation from the Administrative
Agent that the representations by Borrower contained in the foregoing clauses
(x) and (y) are true and correct. If requested by the Issuing Bank, the Borrower
also shall submit a letter of credit application on the Issuing Bank’s standard
form in connection with any request for a Letter of Credit; provided that, in
the event of any conflict between such application or any Letter of Credit
Agreement and the terms of this Agreement, the terms of this Agreement shall
control. (c) Expiration Date. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) (A) in the case of Letters of Credit
issued to the Texas Railroad Commission, the date that is 460 days after the
date of issuance of such Letter of Credit or (B) in the case of all other
Letters of Credit, the date that is one year after the date of the issuance of
such Letter of Credit (or, with respect to each of the foregoing clauses (A) and
(B), in the case of any renewal or extension thereof, one year after such
renewal or extension) and (ii) the date that is five Business Days prior to the
Maturity Date. Each Letter of Credit with a one (1) year term and each Letter of
Credit issued to the Texas Railroad Commission with a term longer than one (1)
year but less than or equal to 460 days may provide for the renewal thereof for
additional one (1) year periods; provided that no such period shall extend
beyond the date described in clause (ii) above. (d) Participations. By the
issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing
the amount thereof) and without any further action on the part of the Issuing
Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each
Lender hereby acquires from the Issuing Bank, a participation in such Letter of
Credit equal to such Lender’s Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing
Bank and not reimbursed by the Borrower on the date due as provided in Section
2.08(e), or of any reimbursement payment required to be refunded to the Borrower
for any reason. Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this Section 2.08(d) in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default, the existence
of a Borrowing Base Deficiency or reduction or termination of the Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. 45

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(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect
of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement not
later than 11:00 a.m., Denver, Colorado time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Denver, Colorado time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not later than 11:00 a.m., Denver, Colorado time, on (i) the Business
Day that the Borrower receives such notice, if such notice is received prior to
10:00 a.m., Denver, Colorado time, on the day of receipt, or (ii) the Business
Day immediately following the day that the Borrower receives such notice, if
such notice is not received prior to such time on the day of receipt; provided
that unless the Borrower has notified the Administrative Agent that it intends
to reimburse all or part of such LC Disbursement without using Loan proceeds or
has submitted a Borrowing Request with respect thereto, the Borrower shall,
subject to the conditions to Borrowing set forth herein, be deemed to have
requested, and the Borrower does hereby request under such circumstances, that
such payment be financed with an ABR Borrowing in an equivalent amount and, to
the extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Borrowing. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.05 with respect to Loans made by such
Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to
the Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower
pursuant to this Section 2.08(e), the Administrative Agent shall distribute such
payment to the Issuing Bank or, to the extent that Lenders have made payments
pursuant to this Section 2.08(e) to reimburse the Issuing Bank, then to such
Lenders and the Issuing Bank as their interests may appear. Any payment made by
a Lender pursuant to this Section 2.08(e) to reimburse the Issuing Bank for any
LC Disbursement (other than the funding of ABR Loans as contemplated above)
shall not constitute a Loan and shall not relieve the Borrower of its obligation
to reimburse such LC Disbursement. (f) Obligations Absolute. The Borrower’s
obligation to reimburse LC Disbursements as provided in Section 2.08(e) shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term
or provision therein, (ii) any draft or other document presented under a Letter
of Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, (iii) payment by
the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit or
any Letter of Credit Agreement, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.08(f), constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank,
nor any of their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or 46

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transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank’s failure to exercise due care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence, bad faith or willful misconduct on the part
of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised all requisite
due care in each such determination. In furtherance of the foregoing and without
limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit. (g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
facsimile) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement. (h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, until the Borrower shall have reimbursed the Issuing Bank
for such LC Disbursement (either with its own funds or a Borrowing under Section
2.08(e)), the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Loans. Interest accrued pursuant to this Section 2.08(h) shall
be for the account of the Issuing Bank, except that interest accrued on and
after the date of payment by any Lender pursuant to Section 2.08(e) to reimburse
the Issuing Bank shall be for the account of such Lender to the extent of such
payment. (i) Replacement of the Issuing Bank. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such replacement of the Issuing Bank. At
the time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 3.05(b). From and after the effective date of any such replacement, (i)
the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the 47

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term “Issuing Bank” shall be deemed to refer to such successor or to any
previous Issuing Bank, or to such successor and all previous Issuing Banks, as
the context shall require. After the replacement of the Issuing Bank hereunder,
the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of the Issuing Bank under this Agreement with
respect to Letters of Credit issued by it prior to such replacement, but shall
not be required to issue additional Letters of Credit. (j) Cash
Collateralization. If (i) any Event of Default shall occur and be continuing and
the Borrower receives notice from the Administrative Agent or the Majority
Lenders demanding the deposit of cash collateral pursuant to this Section
2.08(j), or (ii) the Borrower is required to pay to the Administrative Agent the
excess attributable to an LC Exposure in connection with any prepayment pursuant
to Section 3.04(c), then the Borrower shall deposit, in an account with the
Administrative Agent, in the name of the Administrative Agent and for the
benefit of the Lenders, an amount in cash equal to (A) in the case of an Event
of Default, the LC Exposure, and (B) in the case of a payment required by
Section 3.04(c), the amount of such excess as provided in Section 3.04(c), as of
such date plus any accrued and unpaid interest thereon; provided that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Parent or any Restricted Subsidiary described in Section 10.01(h)
or Section 10.01(i). The Borrower hereby grants to the Administrative Agent, for
the benefit of the Issuing Bank and the Lenders, an exclusive first priority and
continuing perfected security interest in and Lien on such account and all cash,
checks, drafts, certificates and instruments, if any, from time to time
deposited or held in such account, all deposits or wire transfers made thereto,
any and all investments purchased with funds deposited in such account, all
interest, dividends, cash, instruments, financial assets and other Property from
time to time received, receivable or otherwise payable in respect of, or in
exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor. The Borrower’s obligation to deposit amounts pursuant
to this Section 2.08(j) shall be absolute and unconditional, without regard to
whether any beneficiary of any such Letter of Credit has attempted to draw down
all or a portion of such amount under the terms of a Letter of Credit, and, to
the fullest extent permitted by applicable law, shall not be subject to any
defense or be affected by a right of set-off, counterclaim or recoupment which
the Parent or any of its Restricted Subsidiaries may now or hereafter have
against any such beneficiary, the Issuing Bank, the Administrative Agent, the
Lenders or any other Person for any reason whatsoever. Such deposit shall be
held as collateral securing the payment and performance of the Indebtedness. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent (in consultation with the
Borrower) and at the Borrower’s risk and expense, such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall be applied by the Administrative
Agent to reimburse the Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC
Exposure at such time or, if the maturity of the Loans has been accelerated, be
applied to satisfy other obligations of the Borrower and the Guarantors under
this Agreement or the other Loan Documents. If the Borrower is required to
provide an amount of cash collateral hereunder as a result of the occurrence of
an Event of Default, 48

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and the Borrower is not otherwise required to pay to the Administrative Agent
the excess attributable to an LC Exposure in connection with any prepayment
pursuant to Section 3.04(c), then such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived. (k) Designation of Additional
Issuing Banks. From time to time, the Borrower may designate as additional
Issuing Banks one or more Lenders which are reasonably acceptable to the
Administrative Agent that agree to serve in such capacity as provided herein.
The acceptance by a Lender of any appointment as an Issuing Bank hereunder shall
be evidenced by an agreement (an “Issuing Bank Agreement”), which shall be in a
form reasonably satisfactory to the Borrower and the Administrative Agent, shall
set forth the LC Issuance Limit of such Lender and shall be executed by such
Lender, the Borrower and the Administrative Agent and, from and after the
effective date of such Issuing Bank Agreement, (i) such Lender shall have all
the rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents, (ii) references herein and in the other Loan Documents to the
term “Issuing Bank” shall be deemed to include such Lender in its capacity as an
Issuing Bank, and (iii) such Issuing Bank shall have the LC Issuance Limit set
forth in such Issuing Bank Agreement and Annex III shall be deemed to be
automatically be amended to reflect such LC Issuance Limit. (l) Defaulting
Lenders. Notwithstanding any provision of this Agreement to the contrary, 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 Section 12.02. (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 X or otherwise) or
received by the Administrative Agent from a Defaulting Lender pursuant to
Section 12.08 shall be applied at such time or times as may be determined by the
Administrative Agent as follows: first, to the payment of any amounts owing by
such Defaulting Lender to the Administrative Agent hereunder; second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to
any Issuing Bank hereunder; third, to cash collateralize the Issuing Banks’
Fronting Exposures with respect to such Defaulting Lender in accordance with
Section 2.08(j); fourth, as the Borrower may request (so long as no Default or
Event of Default exists), to the funding of any Loan in respect of which 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 Loans under this Agreement and (y)
cash collateralize the Issuing Banks’ future Fronting Exposures with respect to
such Defaulting Lender with respect to future Letters of Credit issued under
this Agreement, in accordance with Section 2.08(j); sixth, to the payment of any
amounts owing to the Lenders or the Issuing Banks as a result of any judgment of
a court of competent jurisdiction obtained by any Lender or the Issuing Banks
against such Defaulting Lender as a result of such Defaulting Lender’s breach of
its obligations under this Agreement; seventh, so long as no 49

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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 Loans or LC Disbursements in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (y) such Loans were made
or the related Letters of Credit were issued at a time when the conditions set
forth in Section 6.02 were satisfied or waived, such payment shall be applied
solely to pay the Loans of, and LC Disbursements owed to, all Non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans
of, or LC Disbursements owed to, such Defaulting Lender until such time as all
Loans and funded and unfunded participations in Letters of Credit hereunder are
held by the Lenders pro rata in accordance with the Commitments without giving
effect to Section 2.08(l)(iii). 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
2.08(l) shall be deemed paid to and redirected by such Defaulting Lender, and
each Lender irrevocably consents hereto. (iii) Reallocation of Participations to
Reduce Fronting Exposure. All or any part of such Defaulting Lender’s
participation in Letters of Credit hereunder shall be reallocated among the
Non-Defaulting Lenders in accordance with their respective Applicable
Percentages (calculated without regard to such Defaulting Lender’s Maximum
Credit Amount) but only to the extent that such reallocation does not cause the
aggregate Revolving Credit Exposure of any 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. (iv) Cash Collateral. If the
reallocation described in clause (iii) above cannot, or can only partially, be
effected, the Borrower shall, without prejudice to any right or remedy available
to it hereunder or under law, cash collateralize the Issuing Banks’ Fronting
Exposures in accordance with the procedures set forth in Section 2.08(j). (v)
Defaulting Lender Cure. If the Borrower, the Administrative Agent and each
Issuing Bank agree in writing that a Lender is no longer a Defaulting Lender,
the Administrative Agent will so notify the parties hereto, whereupon as of the
effective date specified in such notice and subject to any conditions set forth
therein (which may include arrangements with respect to any cash collateral),
that Lender will, to the extent applicable, purchase at par that portion of
outstanding Loans of the other Lenders or take such other actions as the
Administrative Agent may determine to be necessary to cause the Loans and funded
and unfunded participations in Letters of Credit to be held pro rata by the
Lenders in accordance with the Commitments (without giving effect to Section
2.08(l)(iii), whereupon such Lender will cease to be a Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while that Lender was a
Defaulting Lender; and provided, further, that except to the extent otherwise
expressly agreed by the affected parties, no 50

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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. (vi) New Letters of Credit. So long as any Lender is a
Defaulting Lender, no Issuing Bank shall be required to issue, extend, renew or
increase any Letter of Credit unless it is satisfied that it will have no
Fronting Exposure after giving effect thereto. (vii) Termination of a Defaulting
Lender. The Borrower may terminate the unused amount of the Commitment of any
Lender that is a Defaulting Lender upon not less than three (3) Business Days’
prior notice to the Administrative Agent (which shall promptly notify the
Lenders thereof), and in such event the provisions of Section 2.08(l)(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, any Issuing Bank, or any Lender may have against such
Defaulting Lender. ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS;
FEES Section 3.01 Repayment of Loans. The Borrower hereby unconditionally
promises to pay in full to the Administrative Agent, for the account of each
Lender, the then unpaid principal amount of such Lender’s Loans, together with
all accrued interest thereon, on the Termination Date. Section 3.02 Interest.
(a) ABR Loans. The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Margin, but in no event to exceed
the Highest Lawful Rate. (b) Eurodollar Loans. The Loans comprising each
Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Margin, but in
no event to exceed the Highest Lawful Rate. (c) Post-Default Rate.
Notwithstanding the foregoing, (i) if any principal of or interest on any Loan
or any fee or other amount payable by the Borrower or any Guarantor hereunder or
under any other Loan Document is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after
as well as before judgment, at a rate per annum equal to two percent (2%) plus
the rate applicable to ABR Loans as provided in Section 3.02(a) (including the
Applicable Margin but in no event to exceed the Highest Lawful Rate) and shall
be payable on demand by the Administrative Agent, (ii) if any Event of Default
of the type described in Section 10.01(h), Section 10.01(i) or Section 10.01(j)
occurs and is continuing (and only for so long as it continues), then all
outstanding principal, fees and other obligations under any Loan Document shall
automatically bear interest at a rate per annum equal to two percent (2%) plus
the rate applicable to ABR Loans as provided in Section 3.02(a) (including the
Applicable Margin but in no event to exceed the Highest Lawful Rate) and shall
be payable on demand by the Administrative Agent and (iii) if any Event of
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continuing (and only for so long as it continues) (other than an Event of
Default described in Section 10.01(a), Section 10.01(b), Section 10.01(h),
Section 10.01(i) or Section 10.01(j)), then at the election of the Majority
Lenders (or the Administrative Agent at the direction of Majority Lenders) and
after written notice to the Borrower, all outstanding principal, fees and other
obligations under any Loan Document shall bear interest at a rate per annum
equal to two percent (2%) plus the rate applicable to ABR Loans as provided in
Section 3.02(a) (including the Applicable Margin but in no event to exceed the
Highest Lawful Rate) and shall be payable on demand by the Administrative Agent.
(d) Interest Payment Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Termination Date;
provided that (i) interest accrued pursuant to Section 3.02(c) shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than an optional prepayment of an ABR Loan prior to the Termination Date),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment, and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion. (e) Interest Rate Computations. All interest hereunder
shall be computed on the basis of a year of 360 days, unless such computation
would exceed the Highest Lawful Rate, in which case interest shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), except that
interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is based on the Prime Rate shall be computed on the basis of
a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error, and be binding upon the
parties hereto. Section 3.03 Alternate Rate of Interest. (a) If prior to the
commencement of any Interest Period for a Eurodollar Borrowing: (i) the
Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate, as applicable (including, without
limitation, because the LIBO Screen Rate is not available or published on a
current basis), for such Interest Period; or (ii) the Administrative Agent is
advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly reflect the
cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period; then the Administrative Agent shall give
notice thereof to the Borrower and the Lenders by telephone or fax as promptly
as practicable thereafter and, until the Administrative Agent notifies the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist, (A) any Interest Election Request that requests the conversion of
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a Eurodollar Borrowing shall be ineffective and (B) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing. (b) If at any time the Administrative Agent determines (which
determination shall be conclusive absent manifest error) that (i) the
circumstances set forth in clause (a)(i) have arisen and such circumstances are
unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i)
have not arisen but the supervisor for the administrator of the LIBO Screen Rate
or a Governmental Authority having jurisdiction over the Administrative Agent
has made a public statement identifying a specific date after which the LIBO
Screen Rate shall no longer be used for determining interest rates for loans,
then the Administrative Agent and the Borrower shall endeavor to establish an
alternate rate of interest to the LIBO Rate that gives due consideration to the
then prevailing market convention for determining a rate of interest for
syndicated loans in the United States at such time, and shall enter into an
amendment to this Agreement to reflect such alternate rate of interest and such
other related changes to this Agreement as may be applicable. Notwithstanding
anything to the contrary in Section 12.02, such amendment shall become effective
without any further action or consent of any other party to this Agreement so
long as the Administrative Agent shall not have received, within five Business
Days of the date notice of such alternate rate of interest is provided to the
Lenders, a written notice from the Required Lenders stating that such Required
Lenders object to such amendment. Until an alternate rate of interest shall be
determined in accordance with this clause (b) (but, in the case of the
circumstances described in clause (ii) of the first sentence of this Section
3.03(b), only to the extent the LIBO Screen Rate for such Interest Period is not
available or published at such time on a current basis), (x) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (y) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
shall be made as an ABR Borrowing; provided that, if such alternate rate of
interest shall be less than zero percent, such rate shall be deemed to be zero
percent for the purposes of this Agreement. Section 3.04 Prepayments. (a)
Optional Prepayments. The Borrower shall have the right at any time and from
time to time to prepay any Borrowing in whole or in part, subject to prior
notice in accordance with Section 3.04(b). (b) Notice and Terms of Optional
Prepayment. The Borrower shall notify the Administrative Agent by telephone
(confirmed by facsimile) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Denver,
Colorado time, three Business Days before the date of prepayment, or (ii) in the
case of prepayment of an ABR Borrowing, not later than 10:00 a.m., Denver,
Colorado time, on the date of prepayment. Each such notice shall be irrevocable
and shall specify the prepayment date and the principal amount of each Borrowing
or portion thereof to be prepaid; provided that, if a conditional notice of
prepayment is given as contemplated by Section 2.06(b), then such notice of
prepayment may be revoked if such notice of termination is revoked in accordance
with Section 2.06(b). Promptly following receipt of any such notice relating to
a Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing shall be in an amount that
would be permitted in the case of an advance of a Borrowing of the same Type as
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provided in Section 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 3.02. (c)
Mandatory Prepayments. (i) If, after giving effect to any termination or
reduction of the Aggregate Maximum Credit Amounts pursuant to Section 2.06(b),
the total Revolving Credit Exposures exceeds the total Commitments, then the
Borrower shall (A) prepay the Borrowings on the date of such termination or
reduction in an aggregate principal amount equal to such excess, and (B) if any
excess remains after prepaying all of the Borrowings as a result of an LC
Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
equal to such excess to be held as cash collateral as provided in Section
2.08(j). (ii) Upon any redetermination of or adjustment to the amount of the
Borrowing Base in accordance with Section 2.07 (other than Section 2.07(e)) or
Section 8.13(c), if there exists a Borrowing Base Deficiency, then the Borrower
shall within twenty (20) days following receipt of the New Borrowing Base Notice
in accordance with Section 2.07(d) or the date the adjustment occurs (or such
longer period, not to exceed thirty (30) days, acceptable to the Administrative
Agent), provide written notice (the “Election Notice”) to the Administrative
Agent stating the action which the Borrower proposes to take to eliminate such
Borrowing Base Deficiency, and the Borrower shall thereafter, at its option,
either: (A) within ten (10) days following its delivery of the Election Notice
(or such longer period, not to exceed 180 days, acceptable to the Administrative
Agent), by instruments reasonably satisfactory in form and substance to the
Administrative Agent, provide the Administrative Agent with additional security
consisting of Oil and Gas Properties with value and quality satisfactory to the
Administrative Agent and the Required Lenders in their sole discretion to
eliminate such Borrowing Base Deficiency, (B) within ten (10) days following its
delivery of the Election Notice, prepay without premium or penalty, the
Borrowings in an amount sufficient to eliminate such Borrowing Base Deficiency
and, if any Borrowing Base Deficiency remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount necessary to eliminate such remaining Borrowing
Base Deficiency to be held as cash collateral as provided in Section 2.08(j),
(C) elect to prepay (and thereafter pay), without premium or penalty, the
principal amount of Loans necessary to eliminate such Borrowing Base Deficiency
in not more than six (6) equal monthly installments plus accrued interest
thereon with the first such monthly payment being due within ten (10) days
following its delivery of the Election Notice (and, if any Borrowing Base
Deficiency remains after prepaying all of the Borrowings as a result of an LC
Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
necessary to eliminate such remaining Borrowing Base Deficiency to be held as
cash collateral as provided in Section 2.08(j)), or 54

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(D) by any combination of prepayment and additional security as provided in the
preceding clauses (A), (B) or (C), eliminate such Borrowing Base Deficiency;
provided that all payments required to be made pursuant to this Section
3.04(c)(ii) must be made on or prior to the Termination Date. (iii) Upon any
reduction of the Borrowing Base pursuant to Section 2.07(e) in connection with
issuance of Permitted Senior Unsecured Notes or pursuant to Section 9.12(e)(v),
then if there exists a Borrowing Base Deficiency, the Borrower shall prepay the
Borrowings in an amount sufficient to eliminate such Borrowing Base Deficiency
and, if any Borrowing Base Deficiency remains after prepaying all of the
Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
behalf of the Lenders an amount necessary to eliminate such remaining Borrowing
Base Deficiency to be held as cash collateral as provided in Section 2.08(j).
The Borrower shall be obligated to make such prepayment and/or deposit of cash
collateral on the date of the issuance of such Permitted Senior Unsecured Notes
or, with respect to any Transfer or Swap Monetization pursuant to Section
9.12(e)(v), on the date when it receives proceeds from such Transfer or Swap
Monetization; provided that all payments required to be made pursuant to this
Section 3.04(c)(iii) must be made on or prior to the Termination Date. (iv) Each
prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied first
to any ABR Borrowings then outstanding and thereafter to any Eurodollar
Borrowings then outstanding, and if more than one Eurodollar Borrowing is then
outstanding, to each such Eurodollar Borrowing in order of priority beginning
with the Eurodollar Borrowing with the least number of days remaining in the
Interest Period applicable thereto and ending with the Eurodollar Borrowing with
the most number of days remaining in the Interest Period applicable thereto. (v)
Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be applied
ratably to the Loans included in the prepaid Borrowings. Prepayments pursuant to
this Section 3.04(c) shall be accompanied by accrued interest to the extent
required by Section 3.02. (d) No Premium or Penalty. All prepayments permitted
or required under this Section 3.04 or otherwise under the Loan Documents shall
be without premium or penalty, except as required under Section 5.02. Section
3.05 Fees. (a) Commitment Fees. Subject to Section 3.05(d) below, the Borrower
agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee, which shall accrue at the applicable Commitment Fee Rate on the
average daily amount of the unused amount of the Commitment of such Lender
during the period from and including the date of this Agreement to but excluding
the Termination Date (it being understood that LC Exposure shall constitute
usage of the Commitments for purposes of this Section 3.05(a)). Accrued
commitment fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the Termination Date, commencing on
the first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a 55

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year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). (b) Letter of Credit Fees. Subject to Section 3.05(d) below, the Borrower
agrees to pay (i) to the Administrative Agent for the account of each Lender a
participation fee with respect to its participations in Letters of Credit, which
shall accrue at the same Applicable Margin used to determine the interest rate
applicable to Eurodollar Loans on the average daily amount of such Lender’s LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the date of this Agreement
to but excluding the later of the date on which such Lender’s Commitment
terminates and the date on which such Lender ceases to have any LC Exposure,
(ii) to the Issuing Bank, for its own account, a fronting fee, which shall
accrue at the rate of 0.125% per annum on the average daily amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the date of this Agreement
to but excluding the later of the date of termination of the Commitments and the
date on which there ceases to be any LC Exposure, provided that in no event
shall such fee be less than $500 during any quarter, and (iii) to the Issuing
Bank, for its own account, its standard fees with respect to the issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall
be payable on the third Business Day following such last day, commencing on the
first such date to occur after the date of this Agreement; provided that all
such fees shall be payable on the Termination Date and any such fees accruing
after the Termination Date shall be payable on demand. Any other fees payable to
the Issuing Bank pursuant to this Section 3.05(b) shall be payable within 10
days after demand. All participation fees and fronting fees shall be computed on
the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case interest shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day). (c) Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times separately agreed upon between the Borrower and the Administrative
Agent in the Fee Letter. (d) Defaulting Lender Fees. Subject to Section 2.08(l):
(i) No Defaulting Lender shall be entitled to receive any Defaulting Lender’s
ratable share of the fees described in Section 3.05(a) for any period during
which that Lender is a Defaulting Lender (and the Borrower shall not be required
to pay any such fee that otherwise would have been required to have been paid to
that Defaulting Lender). (ii) Each Defaulting Lender shall be entitled to
receive such Defaulting Lender’s ratable share of the fees described in Section
3.05(b) for any period during which that Lender is a Defaulting Lender only to
the extent allocable to its Applicable Percentage of the stated amount of
Letters of Credit for which it has provided cash collateral pursuant to Section
2.08(j). (iii) With respect to any fee not required to be paid to any Defaulting
Lender pursuant to clause (i) or (ii) above, the Borrower shall (x) pay to each
Non-Defaulting 56

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Lender that portion of any such fee otherwise payable to such Defaulting Lender
with respect to such Defaulting Lender’s participation in Letters of Credit
hereunder that has been reallocated to such Non-Defaulting Lender pursuant to
Section 2.08(l)(iii), (y) pay to each Issuing Bank the amount of any such fee
otherwise payable to such Defaulting Lender to the extent allocable to such
Issuing Bank’s Fronting Exposure to such Defaulting Lender, and (z) not be
required to pay the remaining amount of any such fee. (e) Borrowing Base
Increase Fees. The Borrower agrees to pay to the Administrative Agent, for the
account of each Lender then party to this Agreement, a Borrowing Base increase
fee in an amount to be set forth in a separate written agreement on the amount
of any increase of the Borrowing Base above the highest previous Borrowing Base
in effect during the term of this Agreement, payable on the effective date of
any such increase to the Borrowing Base. ARTICLE IV PAYMENTS; PRO RATA
TREATMENT; SHARING OF SET-OFFS Section 4.01 Payments Generally; Pro Rata
Treatment; Sharing of Set-offs. (a) Payments by the Borrower. The Borrower shall
make each payment required to be made by it hereunder (whether of principal,
interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 5.01, Section 5.02, Section 5.03 or otherwise) prior to 11:00 a.m.,
Denver, Colorado time, on the date when due, in immediately available funds,
without defense, deduction, recoupment, set-off or counterclaim. Fees, once
paid, shall be fully earned and shall not be refundable under any circumstances,
absent manifest error. Any amounts received after such time on any date may, in
the discretion of the Administrative Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at its offices
specified in Section 12.01, except payments to be made directly to the Issuing
Bank as expressly provided herein and except that payments pursuant to Section
5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly to the
Persons entitled thereto. The Administrative Agent shall distribute any such
payments received by it for the account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars. (b) Application of Insufficient
Payments. If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties. 57

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(c) Sharing of Payments by Lenders. If any Lender shall, by exercising any right
of set-off or counterclaim or otherwise, obtain payment in respect of any
principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and/or participations in LC Disbursements of
other Lenders, as applicable, to the extent necessary 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 Loans
and/or participations in LC Disbursements; 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 Section 4.01(c) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Parent or any Restricted Subsidiary or Affiliate thereof (as to which the
provisions of this Section 4.01(c) shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation. Section
4.02 Presumption of Payment by the Borrower. Unless the Administrative Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders or the Issuing Bank, as the case may be, the amount due. In such event,
if the Borrower has not in fact made such payment, then each of the Lenders or
the Issuing Bank, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation. Section 4.03 Certain Deductions by the
Administrative Agent. If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.05(a), Section 2.08(d), Section 2.08(e) or
Section 4.02, or otherwise hereunder, then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid. If at any time prior to the acceleration
or maturity of the Loans, the Administrative Agent shall receive any payment in
respect of principal of a Loan or a reimbursement of an LC Disbursement while
one or more Defaulting Lenders shall be party to this Agreement, the
Administrative Agent shall apply such payment first to the Borrowing(s) for
which such Defaulting Lender(s) shall have failed to fund its pro rata share
until such time as such Borrowing(s) are paid in full or each Lender (including
each 58

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Defaulting Lender) is owed its Applicable Percentage of the Loans then
outstanding, as applicable. After acceleration or maturity of the Loans, all
principal will be paid ratably as provided in Section 10.02(c). Section 4.04
Disposition of Proceeds. The Security Instruments contain assignments by the
Borrower and/or the Guarantors unto and in favor of the Administrative Agent for
the benefit of the Secured Parties of all of the Borrower’s or each Guarantor’s
interest in and to production and all proceeds attributable thereto which may be
produced from or allocated to the Mortgaged Property. The Security Instruments
further provide in general for the application of such proceeds to the
satisfaction of the Indebtedness and other obligations described therein and
secured thereby. Notwithstanding the assignments contained in such Security
Instruments, unless an Event of Default has occurred and is continuing, (a) the
Administrative Agent and the Lenders will neither notify the purchaser or
purchasers of such production nor take any other action to cause such proceeds
to be remitted to the Administrative Agent or the Lenders, but the
Administrative Agent and the Lenders will instead permit such proceeds to be
paid to and used by the Parent and its Restricted Subsidiaries and (b) the
Lenders hereby authorize the Administrative Agent to take such actions as may be
necessary or useful to cause such proceeds to be paid to the Parent and/or such
Restricted Subsidiaries. ARTICLE V INCREASED COSTS; BREAK FUNDING PAYMENTS;
TAXES; ILLEGALITY Section 5.01 Increased Costs. (a) Eurodollar Changes in Law.
If any Change in Law shall: (i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or (ii) subject any Lender or
the Administrative Agent to any Taxes (other than (A) Indemnified Taxes, or (B)
Excluded 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 London interbank
market any other condition affecting this Agreement or Eurodollar Loans made by
such Lender; and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Loan) or to reduce the amount of any
sum received or receivable by such Lender or the Administrative Agent (whether
of principal, interest or otherwise) with respect to any Eurodollar Loan, then
the Borrower will pay to such Lender or the Administrative Agent such additional
amount or amounts as will compensate such Lender or the Administrative Agent for
such additional costs incurred or reduction suffered. (b) Capital Requirements.
If any Lender or the Issuing Bank determines that any Change in Law regarding
capital or liquidity requirements has or would have the effect of 59

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reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on
the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy and liquidity), then from time to time upon
receipt of a certificate described in subsection (c) below, the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional
amount or amounts as will compensate such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company for any such reduction suffered.
(c) Certificates. A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in Section 5.01(a) or (b)
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender or the Issuing Bank, as the case may
be, the amount shown as due on any such certificate within thirty (30) days
after receipt thereof. (d) Effect of Failure or Delay in Requesting
Compensation. Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section 5.01 shall not constitute a waiver
of such Lender’s or the Issuing Bank’s right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section 5.01 for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender’s or the Issuing Bank’s
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270- day period referred to above shall be extended to include the period of
retroactive effect thereof. Section 5.02 Break Funding Payments. In the event of
(a) the payment of any principal of any Eurodollar Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan into an ABR Loan other
than on the last day of the Interest Period applicable thereto, (c) the failure
to borrow, convert, continue or prepay any Eurodollar Loan on the date specified
in any notice delivered pursuant hereto, or (d) the assignment of any Eurodollar
Loan other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 5.04(b), then, in any
such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, such loss,
cost or expense to any Lender shall be deemed to be the excess, if any, of (i)
the amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the eurodollar
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A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within thirty (30)
days after receipt thereof. Section 5.03 Taxes. (a) Payments Free of Taxes. Any
and all payments by or on account of any obligation of the Borrower or any
Guarantor under any Loan Document shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
applicable Withholding Agent shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
by the Borrower or any Guarantor as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5.03(a)), the Administrative Agent, Lender or Issuing Bank (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the applicable Withholding Agent shall make such
deductions and (iii) the applicable Withholding Agent shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law. (b) Payment of Other Taxes by the Borrower. The Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law. (c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within ten (10) days
after written demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes payable or paid by the Administrative Agent, such Lender or the
Issuing Bank, as the case may be, on or with respect to any payment by or on
account of any obligation of the Borrower hereunder (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 5.03) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate of the Administrative Agent, a Lender or
the Issuing Bank as to the amount of such payment or liability under this
Section 5.03 shall be delivered to the Borrower and shall be conclusive absent
manifest error. (d) Indemnification by the Lenders. Each Lender shall severally
indemnify the Administrative Agent, within thirty (30) days after demand
therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to
the extent that Borrower has not already indemnified the Administrative Agent
for such Indemnified Taxes and without limiting the obligation of the Borrower
to do so), (ii) any Taxes attributable to such Lender’s failure to comply with
the provisions of Section 12.04(c) relating to the maintenance of a Participant
Register and (iii) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to any Lender by the Administrative Agent shall be
conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or 61

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otherwise payable by the Administrative Agent to the Lender from any other
source against any amount due to the Administrative Agent under this paragraph
(d). (e) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent. (f) 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
Loan Document shall deliver to the Withholding Agent, at the time or times
reasonably requested by the Withholding Agent, such properly completed and
executed documentation reasonably requested by the Withholding Agent as will
permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if reasonably requested by the Withholding
Agent, shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Withholding Agent as will enable the Withholding
Agent to determine whether or not such Lender is subject to backup withholding
or information reporting requirements. Notwithstanding anything to the contrary
in the preceding two sentences, the completion, execution and submission of such
documentation (other than such documentation set forth in Section 5.03(f)(ii)(A)
and (ii)(B) and Section 5.03(g) 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, in the event that the Borrower is a “United
States person” as defined in Section 7701(a)(30) of the Code, (A) any Lender
that is a “United States person” as defined in Section 7701(a)(3) of the Code
shall deliver to the Withholding 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 Withholding Agent), executed copies 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 Withholding 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 Withholding Agent), whichever of
the following is applicable: (1) 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 Loan Document, executed copies 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 Loan Document, IRS Form W-8BEN (or IRS Form W-8BEN-E, as applicable)
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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;
(2) executed copies of IRS Form W-8ECI; (3) 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 Error!
Reference source not found. 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 871(h)(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 copies of IRS
Form W-8BEN (or IRS Form W-8BEN- E, as applicable); or (4) to the extent a
Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY,
accompanied by IRS Form W-8ECI, IRS Form W- 8BEN (or IRS Form W-8BEN-E, as
applicable), a U.S. Tax Compliance Certificate substantially in the form of
Error! Reference source not found. or Error! Reference source not found., 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 Error! Reference source not found. on
behalf of each such direct and indirect partner; and (C) any Foreign Lender
shall, to the extent it is legally entitled to do so, deliver to the Withholding
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
Withholding Agent), executed copies 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 Withholding Agent to
determine the withholding or deduction required to be made. 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 Withholding Agent in writing of its legal
inability to do so. (g) FATCA. If a payment made to a Lender under this
Agreement would be subject to United States federal withholding tax imposed by
FATCA if such Lender fails to comply with the applicable reporting requirements
of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code,
as applicable), such Lender shall deliver to the Withholding Agent, at the time
or times prescribed by law and at such time or times reasonably requested by the
Withholding Agent, such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Withholding Agent as may be necessary
for the Withholding Agent to comply with its obligations under FATCA, to
determine that such Lender has complied with such Lender’s obligations under
FATCA or to determine the amount to deduct and withhold from such payment. 63

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Solely for purposes of this Section 5.03(g), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement. (h) Treatment of
Certain Refunds. If the Administrative Agent, a Lender or the Issuing Bank
determines, in its sole discretion exercised in good faith, that it has received
a refund of any Indemnified Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 5.03, it shall pay to the Borrower
an amount equal to such refund (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 5.03 with
respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net
of all out-of-pocket expenses of the Administrative Agent, such Lender or the
Issuing Bank, as the case may be, and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund). The
Borrower, 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 Authority. Notwithstanding anything to the contrary
in this paragraph (h), in no event will the indemnified party be required to pay
any amount to the Borrower pursuant to this paragraph (h) to the extent such
payment 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 Borrower or
any other Person. Section 5.04 Mitigation Obligations; Replacement of Lenders.
(a) Designation of Different Lending Office. If any Lender requests compensation
under Section 5.01, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.03, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
5.01 or Section 5.03, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. 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 (i) any Lender
requests compensation under Section 5.01, (ii) the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 5.03, (iii) any Lender becomes a
Defaulting Lender hereunder, (iv) Lenders holding 80% or more of the Commitments
have provided their consent to any proposed increase in the Borrowing Base in
accordance with the terms of this Agreement but any Lender has not provided such
consent, (v) any Lender has given notice that it is unable to make or maintain
Eurodollar Loans but Lenders constituting Majority Lenders have not given such
notice or (vi) Lenders whose aggregate Applicable 64

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Percentages are 80% or more have provided their consent to any proposed
amendment or waiver of any term or provision of this Agreement or any Loan
Document but any Lender has not provided such consent, 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 Section 12.04(b)),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that(A) if such assignee is not
already a Lender, the Borrower shall have received the prior written consent of
the Administrative Agent, which consent shall not unreasonably be withheld,(B)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, 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) and(C) in the case of
any such assignment resulting from a claim for compensation under Section 5.01
or payments required to be made pursuant to Section 5.03, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and 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. Section 5.05
Illegality. Notwithstanding any other provision of this Agreement, in the event
that it becomes unlawful for any Lender or its applicable lending office to
honor its obligation to make or maintain Eurodollar Loans either generally or
having a particular Interest Period hereunder, then (a) such Lender shall
promptly notify the Borrower and the Administrative Agent thereof and such
Lender’s obligation to make such Eurodollar Loans shall be suspended (the
“Affected Loans”) until such time as such Lender may again make and maintain
such Eurodollar Loans and (b) all Affected Loans which would otherwise be made
by such Lender shall be made instead as ABR Loans (and, if such Lender so
requests by notice to the Borrower and the Administrative Agent, all Affected
Loans of such Lender then outstanding shall be automatically converted into ABR
Loans on the date specified by such Lender in such notice) and, to the extent
that Affected Loans are so made as (or converted into) ABR Loans, all payments
of principal which would otherwise be applied to such Lender’s Affected Loans
shall be applied instead to its ABR Loans. ARTICLE VI CONDITIONS PRECEDENT
Section 6.01 Effective Date. This Agreement, including the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit (other
than the Existing Letters of Credit) hereunder, shall not become effective until
the date on which each of the following conditions and each of the conditions
under Section 6.02 is satisfied (or waived in accordance with Section 12.02):
(a) The Administrative Agent, the Arranger and the Lenders shall have received
all commitment, facility and agency fees and all other fees and amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
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(including, without limitation, the fees and expenses of Vinson & Elkins L.L.P.,
counsel to the Administrative Agent, that have then been invoiced). (b) The
Administrative Agent shall have received one or more certificates of a
Responsible Officer of the Borrower and each Guarantor setting forth (i)
resolutions of its board of directors (or comparable governing body) with
respect to the authorization of the Borrower or such Guarantor to execute and
deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of the Borrower
or such Guarantor (y) who are authorized to sign the Loan Documents to which the
Borrower or such Guarantor is a party and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the transactions
contemplated hereby, (iii) specimen signatures of such authorized officers, and
(iv) the articles or certificate of incorporation and bylaws (or comparable
organizational documents for any Credit Parties that are not corporations) of
the Borrower and such Guarantor, certified as being true and complete. The
Administrative Agent and the Lenders may conclusively rely on such certificates
until the Administrative Agent receives notice in writing from the Borrower to
the contrary. (c) The Administrative Agent shall have received certificates of
the appropriate State agencies with respect to the existence, qualification and
good standing of the Borrower and each Guarantor from their respective states of
formation. (d) The Administrative Agent shall have received from each party
hereto counterparts (in such number as may be requested by the Administrative
Agent) of this Agreement signed on behalf of such party. (e) The Administrative
Agent shall have received duly executed Notes payable to each Lender requesting
a Note in principal amounts equal to its Maximum Credit Amount, dated as of the
date hereof. (f) The Administrative Agent shall have received from each
signatory thereto duly executed counterparts (in such number as may be requested
by the Administrative Agent) of the Security Instruments described on Error!
Reference source not found.. In connection with the execution and delivery of
the Security Instruments, the Administrative Agent shall: (i) be reasonably
satisfied that the Security Instruments (A) create first priority, perfected
Liens (subject to Liens permitted under Section 9.03 and any limitations
expressly set out in such Security Instruments) on all Property purported to be
pledged as collateral pursuant to the Security Instruments and not described in
clause (B) below (including, without limitation, all Equity Interests owned by
any Credit Party in the Restricted Subsidiaries), and (B) create first priority,
perfected Liens (subject only to Excepted Liens) on at least 85% of the total
value of the Proved Oil and Gas Properties evaluated in the Initial Reserve
Report; and (ii) have received certificates, if any, together with undated,
blank stock powers for each such certificate, representing all of the issued and
outstanding Equity Interests owned by any Credit Party in each of the other
Credit Parties. 66

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(g) The Administrative Agent shall have received an opinion of Latham & Watkins
LLP and local counsel in any jurisdictions reasonably requested by the
Administrative Agent, in each case, in form and substance acceptable to the
Administrative Agent and its counsel. (h) The Administrative Agent shall have
received a certificate of insurance coverage of the Credit Parties evidencing
that the Credit Parties are carrying insurance in accordance with Section 7.12.
(i) The Administrative Agent shall have received title information as the
Administrative Agent may reasonably require satisfactory to the Administrative
Agent setting forth the status of title to at least 80% of the total value of
the Proved Oil and Gas Properties evaluated in the Initial Reserve Report. (j)
The Administrative Agent shall be reasonably satisfied with the environmental
condition of the Oil and Gas Properties of the Parent and its Restricted
Subsidiaries. (k) The Administrative Agent shall have received a certificate of
a Responsible Officer of the Borrower certifying that the Borrower has received
all consents and approvals required by Section 7.03. (l) The Administrative
Agent shall have received (i) the financial statements referred to in Section
7.04(a) and (ii) the Initial Reserve Report accompanied by a certificate
covering the matters described in Section 8.12(c). (m) The Administrative Agent
shall have received appropriate UCC search certificates and county-level real
property record search results reflecting no prior Liens encumbering the
Properties of the Parent and its Restricted Subsidiaries for each jurisdiction
requested by the Administrative Agent; other than those being assigned or
released on or prior to the Effective Date or Liens permitted by Section 9.03.
(n) The Administrative Agent shall have received from the Credit Parties, to the
extent requested by the Lenders or the Administrative Agent, all documentation
and other information required by regulatory authorities under applicable “know
your customer” and anti- money laundering rules and regulations, including the
USA Patriot Act. Without limiting the generality of the provisions of Section
11.04, for purposes of determining compliance with the conditions specified in
this Section 6.01, each Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter required under this Section 6.01 to be consented to or approved
by or acceptable or satisfactory to a Lender unless the Administrative Agent
shall have received notice from such Lender prior to the Effective Date
specifying its objection thereto. All documents executed or submitted pursuant
to this Section 6.01 by and on behalf of the Parent or any of its Subsidiaries
shall be in form and substance reasonably satisfactory to the Administrative
Agent and its counsel. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit hereunder shall not become effective
unless each of the foregoing conditions is satisfied (or waived pursuant to
Section 12.02) at or prior to 2:00 p.m., Denver, Colorado time, on May 15, 2018
(and, in the event such conditions are not so satisfied or waived, the
Commitments shall terminate at such time). The Administrative Agent shall notify
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the Borrower and the Lenders of the Effective Date, and such notice shall be
conclusive and binding. Section 6.02 Each Credit Event. The obligation of each
Lender to make a Loan on the occasion of any Borrowing (including the initial
funding but excluding any conversion or continuation of a Loan), and of the
Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject
to the satisfaction of the following conditions: (a) At the time of and
immediately after giving effect to such Borrowing or the issuance, amendment,
renewal or extension of such Letter of Credit, as applicable, no Default or
Borrowing Base Deficiency shall have occurred and be continuing. (b) The
representations and warranties of the Borrower and the Guarantors set forth in
this Agreement and in the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Borrowing or the date of
issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the extent (i) that any such representations and
warranties are expressly limited to an earlier date, in which case, on and as of
the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, such representations and
warranties shall continue to be true and correct in all material respects as of
such specified earlier date, and (ii) that any such representation and warranty
is expressly qualified by materiality or by reference to Material Adverse
Effect, in which case such representation and warranty (as so qualified) shall
continue to be true and correct in all respects. (c) The making of such Loan or
the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, would not conflict with, or cause any Lender or the Issuing Bank to
violate or exceed, any applicable Governmental Requirement. (d) The receipt by
the Administrative Agent of a Borrowing Request in accordance with Section 2.03
or a request for a Letter of Credit (or an amendment, extension or renewal of a
Letter of Credit) in accordance with Section 2.08(b), as applicable. Each
request for a Borrowing and each request for the issuance, amendment, renewal or
extension of any Letter of Credit shall be deemed to constitute a representation
and warranty by the Borrower on the date thereof as to the matters specified in
Section 6.02(a) and Section 6.02(b). ARTICLE VII REPRESENTATIONS AND WARRANTIES
The Borrower and (to the extent that the Parent is not the Borrower) the Parent
jointly and severally represent and warrant to the Lenders that: Section 7.01
Organization; Powers. Each of the Parent and the Restricted Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority, and has
all material governmental licenses, authorizations, consents and approvals
necessary, to own its assets and to carry on its business as now conducted, and
is qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where failure to have such power,
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authorizations, consents, approvals and qualifications could not reasonably be
expected to have a Material Adverse Effect. Section 7.02 Authority;
Enforceability. The Transactions are within the Borrower’s and each Guarantor’s
corporate, limited liability company, or partnership powers and have been duly
authorized by all necessary corporate, limited liability company, or partnership
action and, if required, stockholder action (including, without limitation, any
action required to be taken by any class of directors, managers or supervisors
of the Borrower or any other Person, whether interested or disinterested, in
order to ensure the due authorization of the Transactions). Each Loan Document
to which the Borrower and each Guarantor is a party has been duly executed and
delivered by the Borrower and such Guarantor and constitutes a legal, valid and
binding obligation of the Borrower and such Guarantor, as applicable,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law. Section 7.03 Approvals; No
Conflicts. The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority
or any other third Person (including shareholders or any class of directors,
managers or supervisors, as applicable, whether interested or disinterested, of
the Parent, the Borrower or any other Person), nor is any such consent,
approval, registration, filing or other action necessary for the validity or
enforceability of any Loan Document or the consummation of the Transactions,
except such as have been obtained or made and are in full force and effect other
than (i) the recording and filing of the Security Instruments as required by
this Agreement, and (ii) those third party approvals or consents which, if not
made or obtained, would not cause a Default hereunder, or could not reasonably
be expected to have a Material Adverse Effect, (b) will not violate (i) any
applicable law or regulation or any order of any Governmental Authority which
would not reasonably be expected to have a Material Adverse Effect or (ii) the
limited liability company agreements, charter, bylaws or other organizational
documents of the Parent or any Restricted Subsidiary, (c) will not violate or
result in a default under any indenture or other agreement pursuant to which any
Material Indebtedness is outstanding or by which the Parent or any Restricted
Subsidiary or any of their Properties is bound, or give rise to a right
thereunder to require any payment to be made by the Parent or such Restricted
Subsidiary, and (d) will not result in the creation or imposition of any Lien on
any Property of the Parent or any Restricted Subsidiary (other than the Liens
created by the Loan Documents). Section 7.04 Financial Condition; No Material
Adverse Change. (a) The Borrower has heretofore furnished or caused to be
furnished to the Lenders (i) Centennial Resource Development’s audited
consolidated balance sheet and statements of operations, shareholders’ equity
and cash flows as of and for the fiscal year ended December 31, 2017 and (ii)
the Borrower’s unaudited consolidated balance sheet and related statements of
income and cash flows as of the end of and for such year, in each case,
certified by one of its respective Financial Officers. Such financial statements
present fairly, in all material respects, the consolidated financial position
and income and cash flows of Centennial Resource Development and the Borrower
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and for such periods in accordance with GAAP, subject to the absence of
footnotes in the case of the unaudited annual financial statements of the
Borrower. (b) No Material Adverse Effect has occurred since December 31, 2017.
(c) Neither the Parent nor any Restricted Subsidiary has on the date hereof,
after giving effect to the Transactions, any material Debt (including
Disqualified Capital Stock), any material liabilities for past due taxes, or any
material contingent liabilities, off-balance sheet liabilities or partnership
liabilities that, in each case, would be required by GAAP to be reflected or
noted in audited financial statements except as referred to or reflected or
provided for in the Financial Statements, in Schedule 9.02, or in other written
information provided by any Credit Party to Administrative Agent and the Lenders
prior to the date hereof. Section 7.05 Litigation. Except as set forth in
Schedule 7.05, there are no actions, suits, investigations or proceedings by or
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Parent or the Borrower, threatened against or affecting the
Parent or any Restricted Subsidiary (i) not fully covered by insurance (except
for normal deductibles) as to which there is a reasonable probability of an
adverse determination that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect or (ii) that involve any challenge by any Credit Party to the validity or
enforceability of any material provision of any Loan Document (including,
without limitation, any provision relating to the Credit Parties’ obligations to
repay the Indebtedness or any provision relating to the validity or perfection
of any Lien created by any Loan Document). Section 7.06 Environmental Matters.
Except for such matters as set forth on Schedule 7.06 or that, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect: (a) the Parent and its Restricted Subsidiaries and each of their
respective Properties and operations thereon are, and within all applicable
statute of limitation periods have been, in compliance with all applicable
Environmental Laws. (b) the Parent and its Restricted Subsidiaries have obtained
all Environmental Permits required for their respective operations and each of
their Properties, with all such Environmental Permits being currently in full
force and effect, and none of the Parent or its Restricted Subsidiaries has
received any written notice or otherwise has knowledge that any such existing
Environmental Permit will be revoked or that any application for any new
Environmental Permit or renewal of any existing Environmental Permit will be
protested or denied. (c) there are no claims, demands, suits, orders, inquiries,
or proceedings concerning any violation of, or any liability (including as a
potentially responsible party) under, any applicable Environmental Laws that is
pending or, to the Parent’s or the Borrower’s knowledge, threatened against the
Parent or any Restricted Subsidiary or any of their respective Properties or as
a result of any operations at such Properties. (d) none of the Properties of the
Parent or any Restricted Subsidiary contain or have contained any: (i)
underground storage tanks; (ii) asbestos-containing materials; (iii) landfills
or dumps; (iv) hazardous waste management units as defined pursuant to RCRA or
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comparable state law; or (v) sites on or nominated for the National Priority
List promulgated pursuant to CERCLA or any state remedial priority list
promulgated or published pursuant to any comparable state law. (e) there has
been no Release or, to the Parent’s or the Borrower’s knowledge, threatened
Release, of Hazardous Materials at, on, under or from the Parent’s or any
Restricted Subsidiary’s Properties, there are no investigations, remediations,
abatements, removals, or monitorings of Hazardous Materials required under
applicable Environmental Laws at such Properties and, to the knowledge of the
Parent and the Borrower, none of such Properties are adversely affected by any
Release or threatened Release of a Hazardous Material originating or emanating
from any other real property. (f) neither the Parent nor any Restricted
Subsidiary has received any written notice asserting an alleged liability or
obligation under any applicable Environmental Laws with respect to the
investigation, remediation, abatement, removal, or monitoring of any Hazardous
Materials at, under, or Released or threatened to be Released from any real
properties offsite the Parent’s or any Restricted Subsidiary’s Properties and,
to the Parent’s and the Borrower’s knowledge, there are no conditions or
circumstances that could reasonably be expected to result in the receipt of such
written notice. (g) there has been no exposure of any Person or Property to any
Hazardous Materials as a result of or in connection with the operations and
businesses of any of the Parent’s or its Restricted Subsidiaries’ Properties
that could reasonably be expected to form the basis for a claim for damages or
compensation. (h) the Parent and its Restricted Subsidiaries have made available
to the Lenders complete and correct copies of all third party environmental site
assessment reports and studies on environmental matters (including matters
relating to any alleged non-compliance with or liability under Environmental
Laws) reasonably requested by the Administrative Agent that are in any of the
Parent’s or the Restricted Subsidiaries’ possession or control and relating to
their respective Properties or operations thereon. Section 7.07 Compliance with
the Laws and Agreements; No Defaults or Borrowing Base Deficiency. (a) Each of
the Parent and the Restricted Subsidiaries is in compliance with all
Governmental Requirements applicable to it or its Property and all agreements
and other instruments binding upon it or its Property, and possesses all
licenses, permits, franchises, exemptions, approvals and other governmental
authorizations necessary for the ownership of its Property and the conduct of
its business, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. (b) No Default or Borrowing Base Deficiency has occurred and is
continuing. Section 7.08 Investment Company Act. Neither the Parent nor any
Restricted Subsidiary is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of, or subject to regulation under, the
Investment Company Act of 1940, as amended. 71

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Section 7.09 Taxes. Each of the Parent and its Restricted Subsidiaries has
timely filed or caused to be filed all federal income Tax returns and reports,
and all other material Tax returns and reports required to have been filed and
has paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings and
for which the Parent or such Restricted Subsidiary, as applicable, has set aside
on its books adequate reserves in accordance with GAAP or (b) to the extent that
the failure to do so could not reasonably be expected to result in a Material
Adverse Effect. The charges, accruals and reserves on the books of the Parent
and its Restricted Subsidiaries in respect of Taxes and other governmental
charges are, in the reasonable opinion of the Borrower, adequate. Other than Tax
Liens permitted by clause (a) of the definition of “Excepted Liens”, no Tax Lien
has been filed and, to the knowledge of the Parent and the Borrower, no claim is
being asserted with respect to any such Tax or other such governmental charge.
Section 7.10 ERISA. (a) Except for such matters that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect:
(i) The Parent, its Restricted Subsidiaries and each ERISA Affiliate have
complied in all material respects with ERISA and, where applicable, the Code
regarding each Plan and Multiemployer Plan. (ii) Each Plan is, and has been,
established and maintained in substantial compliance with its terms, ERISA and,
where applicable, the Code. (iii) No ERISA Event has occurred in the six-year
period preceding the date hereof or is reasonably expected to occur. (iv) The
present value of all accumulated benefit obligations under each Plan (based on
the assumptions used for purposes of Accounting Standards Codification No. 715:
Compensation-Retirement Benefits, or any applicable successor) did not, as of
the date of the most recent financial statements reflecting such amounts, exceed
the fair market value of the assets of such Plan allocable to such accrued
benefits. (v) No act, omission or transaction has occurred which could result in
imposition on the Parent, any Restricted Subsidiary or any ERISA Affiliate
(whether directly or indirectly) of (A) either a civil penalty assessed pursuant
to subsections (c), (i), (l) or (m) of section 502 of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (B) breach of fiduciary duty
liability damages under section 409 of ERISA. (vi) Full payment when due has
been made of all amounts which the Parent, its Restricted Subsidiaries or any
ERISA Affiliate is required under the terms of each Plan, Multiemployer Plan or
applicable law to have paid as contributions to such Plan or Multiemployer Plan.
(b) None of the Parent or any of its Subsidiaries is an entity deemed to hold
“plan assets” (within the meaning of the Plan Asset Regulations). Section 7.11
Disclosure; No Material Misstatements. The certificates, financial statements,
reports, and other written information, taken as a whole, furnished by or on
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the Borrower or any Guarantor to the Administrative Agent and the Lenders in
connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto, do not contain any material misstatement of fact or
omit to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were or are made, not misleading as
of the date such information is dated or certified; provided that (a) to the
extent any such certificate, statement, report, or information was based upon or
constitutes a forecast or projection, the Parent and the Borrower jointly and
severally represent only that it acted in good faith and utilized reasonable
assumptions at the time such information was furnished in the preparation of
such certificate, statement, report, or information (it being recognized by the
Lenders, however, that projections as to future events are not to be viewed as
facts and that results during the period(s) covered by such projections may
differ from the projected results and that such differences may be material and
that the Parent and the Borrower make no representation that such projections
will be realized), (b) with respect to any financial statements so furnished,
the Parent and the Borrower jointly and severally represent only that (except as
noted otherwise therein or as otherwise customary for non-annual financial
statements) such financial statements present fairly in all material respects
the financial condition and results of operations of the described Persons in
accordance with GAAP consistently applied, and (c) as to statements, information
and reports supplied by third parties, the Parent and the Borrower jointly and
severally represent only that it is not aware of any material misstatement or
omission therein. There are no statements or conclusions in any Reserve Report
which are based upon or include material misleading information or fail to take
into account known material information regarding the matters reported therein,
it being understood that projections concerning volumes attributable to the Oil
and Gas Properties of the Parent and its Restricted Subsidiaries and production
and cost estimates contained in each Reserve Report are necessarily based upon
professional opinions, estimates and projections and that the Parent and its
Restricted Subsidiaries do not warrant that such opinions, estimates and
projections will ultimately prove to have been accurate. Section 7.12 Insurance.
The Parent has, and has caused all of its Restricted Subsidiaries to have, (a)
all insurance policies sufficient for the compliance by each of them with all
material Governmental Requirements and all material agreements and (b) insurance
coverage in such amounts and against such risk that are usually insured against
by companies similarly situated and engaged in the same or a similar business
for the assets and operations of the Parent and its Restricted Subsidiaries. The
Administrative Agent and the Lenders have been named as additional insureds in
respect of such liability insurance policies and the Administrative Agent has
been named as loss payee with respect to Property loss insurance. Section 7.13
Restriction on Liens. Neither the Parent nor any of its Restricted Subsidiaries
is a party to any material agreement or arrangement (other than agreements
governing Debt permitted by Section 9.02 which create Liens permitted by Section
9.03), or subject to any order, judgment, writ or decree, which either restricts
or purports to restrict its ability to grant Liens to the Administrative Agent
for the benefit of the Secured Parties on or in respect of their Properties to
secure the Indebtedness and the Loan Documents, in each case, except as
permitted by Section 9.15. Section 7.14 Subsidiaries. Except as set forth on
Schedule 7.14 or as disclosed in writing to the Administrative Agent (which
shall promptly furnish a copy to the Lenders), which, upon such disclosure,
shall be deemed to be a supplement to Schedule 7.14, neither the Borrower nor 73

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the Parent has any Subsidiaries (other than, in the case of the Parent, the
Borrower) or has any Foreign Subsidiaries. Schedule 7.14 identifies each
Subsidiary as either Restricted or Unrestricted and, unless otherwise disclosed
on such schedule, each Restricted Subsidiary on such schedule is a Wholly-Owned
Subsidiary. Section 7.15 Location of Business and Offices. The Borrower’s
jurisdiction of organization is the State of Delaware; the name of the Borrower
as listed in the public records of its jurisdiction of organization is
Centennial Resource Production, LLC; and the organizational identification
number of the Borrower in its jurisdiction of organization is 5196860 (or, in
each case, as set forth in a notice delivered to the Administrative Agent
pursuant to Section 8.01(m) in accordance with Section 12.01). The Borrower’s
principal place of business and chief executive offices are located at the
address specified in Section 12.01 (or as set forth in a notice delivered
pursuant to Section 8.01(m) and Section 12.01(c)). Each Restricted Subsidiary of
the Borrower’s jurisdiction of organization, name as listed in the public
records of its jurisdiction of organization, organizational identification
number in its jurisdiction of organization, and the location of its chief
executive office is stated on Schedule 7.14 (or as set forth in a notice
delivered pursuant to Section 8.01(m)). Section 7.16 Properties; Titles, Etc.
(a) Subject to Immaterial Title Deficiencies, each of the Parent and the
Restricted Subsidiaries has good and defensible title to the Oil and Gas
Properties evaluated in the most recently delivered Reserve Report and good
title to all its material personal Properties, in each case, free and clear of
all Liens except Liens permitted by Section 9.03. After giving full effect to
the Excepted Liens (including Immaterial Title Deficiencies), the Parent or the
Restricted Subsidiary specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report, and the ownership of such Properties does not
in any material respect obligate the Parent or such Restricted Subsidiary to
bear the costs and expenses relating to the maintenance, development and
operations of each such Property in an amount in excess of the working interest
of each Property set forth in the most recently delivered Reserve Report that is
not offset by a corresponding proportionate increase in the Parent’s or such
Restricted Subsidiary’s net revenue interest in such Property or in the revenues
therefrom. (b) All material leases and agreements necessary for the conduct of
the business of the Parent and its Restricted Subsidiaries are valid and
subsisting, in full force and effect, and there exists no default or event or
circumstance which with the giving of notice or the passage of time or both
would give rise to a default under any such lease or leases, which could
reasonably be expected to have a Material Adverse Effect. (c) The rights and
Properties presently owned, leased or licensed by the Parent and its Restricted
Subsidiaries including, without limitation, all easements and rights of way,
include all rights and Properties necessary to permit the Parent and its
Restricted Subsidiaries to conduct their business in all material respects in
substantially the same manner as its business has been conducted prior to the
date hereof, unless the Borrower determines in good faith that the continued
maintenance of such Property is no longer economically desirable, necessary or
useful to the business of the Credit Parties or such Properties are Transferred
in accordance Section 9.12. 74

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(d) All of the Properties of the Parent and its Restricted Subsidiaries which
are reasonably necessary for the operation of their businesses are in good
working condition and are maintained in accordance with prudent business
standards, ordinary wear and tear excepted. (e) The Parent and each Restricted
Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights,
patents and other intellectual Property material to its business (including,
without limitation, all databases, geological data, geophysical data,
engineering data, seismic data, maps, interpretations and other technical
information material to its business), and the use thereof by the Parent and
such Restricted Subsidiary does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect. Section 7.17 Maintenance of Properties. Except for such acts or failures
to act as could not be reasonably expected to have a Material Adverse Effect,
the Oil and Gas Properties (and Properties unitized therewith) of the Parent and
its Restricted Subsidiaries have been maintained, operated and developed in a
good and workmanlike manner and in conformity with all Governmental Requirements
and in conformity with the provisions of all leases, subleases or other
contracts comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties of the Parent and its
Restricted Subsidiaries. Specifically in connection with the foregoing, except
for those as could not be reasonably expected to have a Material Adverse Effect,
(a) no Oil and Gas Property of the Parent or any Restricted Subsidiary is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (b) the
wells comprising a part of the Oil and Gas Properties (or Properties unitized
therewith) of the Parent or any Restricted Subsidiary are producing only from
the Oil and Gas Properties (or in the case of wells located on Properties pooled
or unitized therewith, such pooled or unitized Properties) of the Parent or such
Restricted Subsidiary. All pipelines, wells, gas processing plants, platforms
and other material improvements, fixtures and equipment owned in whole or in
part by the Parent or any of its Restricted Subsidiaries that are necessary to
conduct normal operations are being maintained in a state adequate to conduct
normal operations, and with respect to such of the foregoing which are operated
by the Parent or any of its Restricted Subsidiaries, in a manner consistent with
the Parent’s or its Restricted Subsidiaries’ past practices (other than those
the failure of which to maintain in accordance with this Section 7.17 could not
reasonably be expected to have a Material Adverse Effect). Section 7.18 Gas
Imbalances, Prepayments. Except as set forth on Schedule 7.18 or on the most
recent certificate delivered pursuant to Section 8.12(c), on a net basis there
are no gas imbalances, take or pay or other prepayments which would require the
Parent or any of its Restricted Subsidiaries to deliver Hydrocarbons produced
from their Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor exceeding 2.5% of the aggregate annual
production of gas from the Oil and Gas Properties of the Parent and its
Restricted Subsidiaries during the most recent calendar year (on an mcf
equivalent basis). Section 7.19 Marketing of Production. Except for contracts
listed and in effect on the date hereof on Schedule 7.19, or hereafter either
disclosed in writing to the Administrative Agent or included in the most
recently delivered Reserve Report (with respect to all of which contracts the
Borrower represents that the Parent or its Restricted Subsidiaries are receiving
a price for all 75

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production sold thereunder which is computed substantially in accordance with
the terms of the relevant contract), no material agreements exist which are not
cancelable on 90 days’ notice or less without penalty or detriment for the sale
of production from the Parent’s or its Restricted Subsidiaries’ Hydrocarbons
(including, without limitation, calls on or other rights to purchase,
production, whether or not the same are currently being exercised) that (a)
pertain to the sale of production at a fixed price and (b) have a maturity or
expiry date of longer than six (6) months. Section 7.20 Swap Agreements and
Qualified ECP Counterparty. Schedule 7.20, as of the date hereof, and after the
date hereof, each report required to be delivered by the Borrower pursuant to
Section 8.01(e), sets forth, a true and complete list of all Swap Agreements of
the Parent and each Restricted Subsidiary, the material terms thereof (including
the type, effective date, termination date and notional amounts or volumes), the
estimated net mark to market value thereof, as of the end of the most recently
ended fiscal quarter for which such information is available, all credit support
agreements (other than the Loan Documents) relating thereto (including any
margin required or supplied) and the counterparty to each such agreement. The
Borrower is a Qualified ECP Counterparty. Section 7.21 Use of Loans and Letters
of Credit. The proceeds of the Loans and the Letters of Credit shall be used to
renew, amend, modify, and extend existing indebtedness of the Borrower under the
Existing A&R Credit Agreement, pay fees, commissions and expenses in connection
with the foregoing, provide working capital for exploration and production
operations, finance acquisitions of Oil and Gas Properties permitted hereunder
and for general corporate purposes. The Parent and its Restricted Subsidiaries
are not engaged principally, or as one of its or their important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying margin stock (within the meaning of
Regulation T, U or X of the Board). No part of the proceeds of any Loan or
Letter of Credit will be used for any purpose which violates the provisions of
Regulations T, U or X of the Board. The Borrower will not request any Borrowing
or Letter of Credit, and the Borrower shall not use, and shall procure that the
Parent and its other Subsidiaries and its or their respective directors,
officers, employees and agents shall not use, the proceeds of any Borrowing or
Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or
authorization of the payment or giving of money, or anything else of value, to
any Person in violation of any Anti-Corruption Laws, (b) for the purpose of
funding, financing or facilitating any activities, business or transaction of or
with any Sanctioned Person, or in any Sanctioned Country, or (c) in any manner
that would knowingly or negligently result in the violation of any Sanctions
applicable to any party hereto. Section 7.22 Solvency. After giving effect to
the transactions contemplated hereby (including, for the avoidance of doubt,
each Borrowing or issuance of Letter of Credit hereunder), (a) the Borrower and
the Guarantors on a consolidated basis are not insolvent as such term is used
and defined in the United States Bankruptcy Code and (b) the Borrower and the
Guarantors, taken as a whole, will not have (and will have no reason to believe
that it will have thereafter) unreasonably small capital for the conduct of its
business. Section 7.23 Anti-Corruption Laws and Sanctions. The Parent and the
Borrower have implemented and maintain in effect such policies and procedures,
if any, as they reasonably deem appropriate, in light of their businesses and
international activities (if any), to ensure compliance by the Parent, the
Borrower and its other Subsidiaries and their respective directors, officers, 76

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employees and agents with Anti-Corruption Laws and applicable Sanctions, and the
Parent, the Borrower and its other Subsidiaries and their respective officers
and employees and, to the knowledge of the Parent and the Borrower, their
respective directors and agents, are in compliance with Anti-Corruption Laws and
applicable Sanctions in all material respects. None of (a) the Parent, the
Borrower and its other Subsidiaries or any of their respective directors,
officers or employees, or (b) to the knowledge of the Parent and the Borrower,
any agent of the Parent, the Borrower or any other Subsidiary that will act in
any capacity in connection with or benefit from the credit facility established
hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of
proceeds or other transaction contemplated by this Agreement will violate any
Anti- Corruption Law, applicable Sanctions, the Act, or the Trading with the
Enemy Act, as amended. The Parent, the Borrower and its other Subsidiaries are
in compliance in all material respects with the Act. Section 7.24 EEA Financial
Institutions. No Credit Party is an EEA Financial Institution. ARTICLE VIII
AFFIRMATIVE COVENANTS Until the Commitments have expired or been terminated and
the principal of and interest on each Loan and all fees payable hereunder and
all other amounts payable under the Loan Documents shall have been paid in full
and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of the Borrower and (to the
extent that the Parent is not the Borrower) the Parent covenants and agrees with
the Lenders that: Section 8.01 Financial Statements; Other Information. The
Borrower will furnish or will cause the Parent to furnish to the Administrative
Agent (which shall promptly make a copy thereof available to the Lenders): (a)
Annual Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than the fifth day after the
date on which such financial statements are required to be filed with the SEC
after giving effect to any permitted extensions pursuant to Rule 12b-25 under
the Securities Exchange Act, commencing with the fiscal year ending December 31,
2018, (i) at any time when Centennial Resource Development (A) owns more than
50% of the Equity Interests of the Borrower with ordinary voting power to elect
or appoint the managers of the Borrower and is not the Parent and (B) owns no
other assets and has no other operations other than those ancillary to its
ownership of such Equity Interests, (1) Centennial Resource Development’s
audited consolidated balance sheet and related statements of operations,
shareholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by independent public accountants of recognized national
standing or that are otherwise reasonably acceptable to the Administrative Agent
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of Centennial Resource
Development and its consolidated subsidiaries on a consolidated basis in
accordance with GAAP consistently applied and (2) the Borrower’s unaudited
consolidated balance sheet and related statements of income and cash flows 77

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as of the end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all certified by one of its
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, subject to the absence of footnotes and (ii) at any other time, as soon
as available, but in any event in accordance with then applicable law and not
later than one hundred twenty (120) days after the end of each fiscal year of
the Parent (or, if the Parent or the Borrower is required to file such financial
statements with the SEC at such time, on or before the fifth day after the date
on which such financial statements are required to be filed with the SEC after
giving effect to any permitted extensions pursuant to Rule 12b-25 under the
Securities Exchange Act), commencing with the fiscal year ending December 31,
2018, the Parent’s audited consolidated balance sheet and related statements of
operations, shareholders’ equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by independent public accountants of
recognized national standing or that are otherwise reasonably acceptable to the
Administrative Agent (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Parent and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied. (b) Quarterly Financial Statements.
As soon as available, but in any event in accordance with then applicable law
and not later than seventy-five (75) days after the end of each of the first
three fiscal quarters of each fiscal year of the Parent (or, if the Parent or
the Borrower is required to file such financial statements with the SEC at such
time, on or before the fifth day after the date on which such financial
statements are required to be filed with the SEC after giving effect to any
permitted extensions pursuant to Rule 12b-25 under the Securities Exchange Act),
commencing with the fiscal quarter ending March 31, 2018, the Parent’s
consolidated balance sheet and related statements of operations and cash flows
as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Parent and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes. (c) Certificate
of Financial Officer – Compliance. Concurrently with any delivery of financial
statements under Section 8.01(a) or Section 8.01(b), a certificate of a
Financial Officer in substantially the form of Error! Reference source not
found. hereto (or such other form agreed to by the Administrative Agent and the
Borrower) (i) certifying as to whether a Default then exists and, if a Default
then exists, specifying the details thereof and any action taken or proposed to
be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Section 9.01, and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the financial statements referred to in Section 7.04(a) and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate. 78

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(d) Certificate of Financial Officer – Consolidating Information. If, at any
time, all of the Consolidated Subsidiaries of the Parent are not Consolidated
Restricted Subsidiaries, then concurrently with any delivery of financial
statements under Section 8.01(a) or Section 8.01(b), a certificate of a
Financial Officer setting forth consolidating spreadsheets that show all
Consolidated Unrestricted Subsidiaries and the eliminating entries, in such form
as would be presentable to the auditors of the Parent. (e) Certificate of
Financial Officer – Swap Agreements. Concurrently with the delivery of each
Reserve Report hereunder (other than the Initial Reserve Report), a certificate
of a Financial Officer, in form and substance reasonably satisfactory to the
Administrative Agent, setting forth as of a recent date, a true and complete
list of all Swap Agreements of the Parent and each Restricted Subsidiary, the
material terms thereof (including the type, effective date, termination date and
notional amounts or volumes), the estimated net mark-to-market value therefor,
as of the end of the most recently ended fiscal quarter for which such
information is available, any new credit support agreements relating thereto
(other than the Loan Documents), any margin required or supplied under any
credit support document (other than the Loan Documents), and the counterparty to
each such agreement. (f) Certificate of Insurer – Insurance Coverage.
Concurrently with any delivery of financial statements under Section 8.01(a),
one or more certificates of insurance coverage from the Parent’s insurance
brokers or insurers with respect to the insurance required by Section 8.07, in
form and substance reasonably satisfactory to the Administrative Agent, and, if
requested by the Administrative Agent, copies of the applicable policies. (g)
SEC and Other Filings; Reports to Shareholders. If the Parent or any Restricted
Subsidiary becomes a publicly traded company, then promptly after the same
becomes publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent or any Restricted Subsidiary
with the SEC, or with any national securities exchange, or distributed by the
Parent to its equity holders generally, as the case may be. (h) Notices Under
Material Instruments. Promptly after the furnishing thereof, copies of any
financial statement, report or notice furnished to or by any Person pursuant to
the terms of any preferred stock designation, indenture, loan or credit or other
similar agreement with respect to Material Indebtedness, other than this
Agreement and not otherwise required to be furnished to the Lenders pursuant to
any other provision of this Section 8.01. (i) Lists of Purchasers. Promptly
following the written request of the Administrative Agent, a list of all Persons
(and their addresses for notices) purchasing Hydrocarbons from the Parent or any
Restricted Subsidiary on a basis other than spot sales. (j) Notice of Sales of
Hydrocarbon Interests. In the event the Parent or any Restricted Subsidiary
intends to Transfer any Proved Oil and Gas Properties with a total value with
respect to any single sale in excess of $10,000,000, or any Equity Interests in
any Subsidiary in accordance with Section 9.12, reasonable prior written notice
of such Transfer, the anticipated price thereof and the anticipated date of
closing and any other details thereof requested by the Administrative Agent. 79

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(k) Notice of Casualty Events. Prompt written notice, and in any event within
three Business Days, of the occurrence of any Casualty Event or the commencement
of any action or proceeding that could reasonably be expected to result in a
Casualty Event. (l) Issuance of Permitted Senior Unsecured Notes. In the event
the Parent or the Borrower intends to issue Permitted Senior Unsecured Notes,
prior written notice of such intended offering of such Permitted Senior
Unsecured Notes, the anticipated amount thereof, and the anticipated date of
closing and promptly when available will furnish a copy of the preliminary
offering memorandum (if any) and the final offering memorandum (if any). (m)
Information Regarding Borrower and Guarantors. Prompt written notice (and in any
event not less than five (5) days prior thereto (or such lesser time period as
may be reasonably acceptable to the Administrative Agent) in the case of any
change of name or jurisdiction of organization) of any change (i) in the
Borrower or any Guarantor’s corporate name, (ii) in the Borrower or any
Guarantor’s corporate structure, (iii) in the Borrower or any Guarantor’s
jurisdiction of organization or such Person’s organizational identification
number in such jurisdiction of organization, and (iv) in the Borrower or any
Guarantor’s federal taxpayer identification number. (n) Production Report and
Lease Operating Statements. Concurrently with each delivery of a certificate
pursuant to Section 8.12(c), a report setting forth, for each calendar month
during the then current fiscal year to the date of such Reserve Report (to the
extent production, sales, tax and expense data is then available), the volume of
production and sales attributable to production (and the prices at which such
sales were made and the revenues derived from such sales) for each such calendar
month from the Oil and Gas Properties, and setting forth the related ad valorem,
severance and production taxes and lease operating expenses attributable thereto
and incurred for each such calendar month, and setting forth the operator of
record for the Oil and Gas Properties. (o) Notices of Certain Changes. Promptly
after the execution thereof, copies of any amendment, modification or supplement
to the certificate or articles of incorporation or formation, bylaws,
certificate or articles of organization, regulations or limited liability
company agreement, any preferred stock designation or any other organic document
of the Parent or any Restricted Subsidiary if such amendment, modification or
supplement is material to the Lenders. (p) Notice of Investments in Unrestricted
Subsidiaries and Unrestricted Subsidiary Distributions. Promptly following the
Parent or any Restricted Subsidiary making any Investment in an Unrestricted
Subsidiary after the Effective Date, the Borrower shall deliver written notice
thereof to the Administrative Agent specifying the name of the Unrestricted
Subsidiary in which such Investment was made, the date of such Investment and
the amount of such Investment. Promptly following any Credit Party’s receipt of
any Unrestricted Subsidiary Distribution after the Effective Date from an
Unrestricted Subsidiary in which a Credit Party has made an Investment after the
Effective Date pursuant to Section 9.05(i), the Borrower shall deliver written
notice thereof specifying the amount of such Unrestricted Subsidiary
Distribution, the date on which such Unrestricted Subsidiary Distribution was
received, and whether or not the proceeds of such Unrestricted Subsidiary
Distribution have been or will be used by the Borrower to make distributions
permitted under Section 9.04(a)(v). 80

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(q) Other Requested Information. Promptly following any reasonable request
therefor, such other information regarding the operations, business affairs and
financial condition of the Parent or any Restricted Subsidiary (including,
without limitation, any Plan and any reports or other information filed with
respect thereto under the Code or under ERISA), or compliance with the terms of
this Agreement or any other Loan Document, or in order to assist the
Administrative Agent and the Lenders in maintaining compliance with the Act, in
each case as the Administrative Agent may reasonably request. Documents required
to be delivered pursuant to Section 8.01(a), Section 8.01(b) or Section 8.01(g)
(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 (a) on which the Borrower posts such documents,
or provides a link thereto on the Borrower’s public website; or (b) 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) the Borrower shall deliver paper
copies of such documents to the Administrative Agent or any Lender upon its
request to the Borrower to deliver such paper copies until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and each
Lender of the posting of any such documents and provide to the Administrative
Agent by electronic mail electronic versions (i.e., soft copies) of such
documents. The Administrative Agent shall have no obligation to request the
delivery of or to maintain paper copies of the documents referred to above, and
in any event shall have no responsibility to monitor compliance by the Borrower
with any such request by a Lender for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents. Section 8.02 Notices of Material Events. The Borrower will furnish to
the Administrative Agent (which shall promptly make a copy thereof available to
the Lenders) prompt (and in any event within three Business Days) written notice
of the following: (a) the occurrence of any Default; (b) the filing or
commencement of, or the threat in writing of, any action, suit, proceeding,
investigation or arbitration by or before any arbitrator or Governmental
Authority against or affecting the Parent or any Restricted Subsidiary not
previously disclosed in writing to the Lenders or any material adverse
development in any action, suit, proceeding, investigation or arbitration
(whether or not previously disclosed to the Lenders) that, in either case, could
reasonably be expected to result in a Material Adverse Effect; and (c) the
occurrence of any condition or event that the senior executive officers of the
Parent have determined to constitute a Material Adverse Effect in their
reasonable discretion. Each notice delivered under this Section 8.02 shall be
accompanied by a statement of a Responsible Officer setting forth the details of
the event or development requiring such notice and any action taken or proposed
to be taken with respect thereto. 81

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Section 8.03 Existence; Conduct of Business. The Parent and the Borrower will,
and will cause each other Restricted Subsidiary to, (a) do or cause to be done
all things necessary to preserve, renew and keep in full force and effect (i)
its legal existence and (ii) the rights, licenses, permits, privileges and
franchises material to the conduct of its business and (b) maintain, if
necessary, its qualification to do business in each other jurisdiction in which
its Oil and Gas Properties are located or the ownership of its Properties
requires such qualification, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 9.11. Section 8.04 Payment of Obligations.
The Parent and the Borrower will, and will cause each other Restricted
Subsidiary to, pay its obligations, including Tax liabilities of the Parent and
all of its Restricted Subsidiaries before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, and the Parent or such Restricted
Subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP or (b) the failure to make payment could not reasonably be
expected to result in a Material Adverse Effect or result in the seizure or levy
of any material Property of the Parent or any Restricted Subsidiary. Section
8.05 Performance of Obligations under Loan Documents. The Borrower will pay the
Loans in accordance with the terms hereof, and the Parent and the Borrower will,
and will cause each other Restricted Subsidiary to, do and perform every act and
discharge all of the obligations to be performed and discharged by them under
the Loan Documents, including, without limitation, this Agreement, at the time
or times and in the manner specified taking into consideration any grace periods
therein. Section 8.06 Operation and Maintenance of Properties. The Parent and
the Borrower, at their own expense, will, and will cause each other Restricted
Subsidiary to: (a) operate its Oil and Gas Properties and other material
Properties or cause such Oil and Gas Properties and other material Properties to
be operated in a careful and efficient manner in accordance with the practices
of the industry and in compliance with all applicable contracts and agreements
and in compliance with all Governmental Requirements, including, without
limitation, applicable proration requirements and Environmental Laws, and all
applicable laws, rules and regulations of every other Governmental Authority
from time to time constituted to regulate the development and operation of its
Oil and Gas Properties and the production and sale of Hydrocarbons and other
minerals therefrom, except, in each case, where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. (b) keep and maintain
all Property material to the conduct of its business in good working order and
condition (ordinary wear and tear excepted), and preserve, maintain and keep in
good repair, working order and efficiency (ordinary wear and tear and depletion
excepted) all of its Oil and Gas Properties except, in each case, where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect. (c) promptly pay and discharge, or make reasonable and customary efforts
to cause to be paid and discharged, all delay rentals, royalties, expenses and
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under the leases or other agreements affecting or pertaining to its Oil and Gas
Properties and will do all other things necessary to keep unimpaired their
rights with respect thereto and prevent any forfeiture thereof or default
thereunder, except where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect. (d) promptly perform or make reasonable
and customary efforts to cause to be performed, in accordance with customary
industry standards, the obligations required by each and all of the assignments,
deeds, leases, sub-leases, contracts and agreements affecting its interests in
its Oil and Gas Properties and other material Properties, except in each case
where the failure to do so could not reasonably be expected to result in a
Material Adverse Effect. (e) to the extent a Credit Party is not the operator of
any Property, the Parent and the Borrower shall (or shall cause the applicable
Restricted Subsidiary to) use reasonable efforts to cause the operator to comply
with this Section 8.06, but the failure of the operator so to comply will not
constitute a Default or Event of Default. Section 8.07 Insurance. The Parent and
the Borrower will, and will cause each other Restricted Subsidiary to, maintain,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations. The Administrative Agent on behalf of itself and each of the Lenders
shall be named as “additional insured” in respect of such liability insurance
policies, and the Administrative Agent shall be named as a loss payee with
respect to property loss insurance for collateral subject to the Security
Instruments and such policies shall provide that the Administrative Agent shall
receive not less than 30 days’ prior notice of cancellation or non-renewal (or,
if less, the maximum advance notice that the applicable carrier will agree to
provide). Section 8.08 Books and Records; Inspection Rights. The Parent and the
Borrower will, and will cause each other Restricted Subsidiary to, keep proper
books of record and account in which full, true and correct entries in
conformance with GAAP are made of all dealings and transactions in relation to
its business and activities. The Parent and the Borrower will, and will cause
each other Restricted Subsidiary to, permit any representatives designated by
the Administrative Agent, upon reasonable prior notice, to visit and inspect its
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants (so long as a member of the Borrower's senior management team is
present during all such discussions), all at such reasonable times and as often
as reasonably requested, provided that so long as no Event of Default has
occurred and is continuing, such visits and inspections shall not occur more
than once in any 12-month period. Section 8.09 Compliance with Laws. The Parent
and the Borrower will, and will cause each other Restricted Subsidiary to,
comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its Property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. The Parent and the Borrower will maintain in effect
and enforce such policies and procedures, if any, as they reasonably deem
appropriate, in light of their businesses and international activities (if any),
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other Subsidiaries and each of their respective directors, officers, employees
and agents with Anti- Corruption Laws and applicable Sanctions. Section 8.10
Environmental Matters. (a) The Parent and the Borrower shall at their sole
expense: (i) comply, and cause their Properties and operations and each other
Restricted Subsidiary and each other Restricted Subsidiary’s Properties and
operations to comply, with all applicable Environmental Laws, to the extent the
breach thereof could be reasonably expected to have a Material Adverse Effect;
(ii) not Release or threaten to Release, and cause each Restricted Subsidiary
not to Release or threaten to Release, any Hazardous Material on, under, about
or from any of the Parent’s or its Restricted Subsidiaries’ Properties or any
other property offsite the Property to the extent caused by the Parent’s or any
of its Restricted Subsidiaries’ operations except in compliance with applicable
Environmental Laws, to the extent such Release or threatened Release could
reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or
file, and cause each other Restricted Subsidiary to timely obtain or file, all
Environmental Permits, if any, required under applicable Environmental Laws to
be obtained or filed in connection with the operation or use of the Parent’s or
its Restricted Subsidiaries’ Properties, to the extent such failure to obtain or
file could reasonably be expected to have a Material Adverse Effect; (iv)
promptly commence and diligently prosecute to completion, and cause each other
Restricted Subsidiary to promptly commence and diligently prosecute to
completion, any assessment, evaluation, investigation, monitoring, containment,
cleanup, removal, repair, restoration, remediation or other remedial obligations
(collectively, the “Remedial Work”) to the extent any Remedial Work is required
or reasonably necessary under applicable Environmental Laws because of or in
connection with the actual or suspected past, present or future Release or
threatened Release of any Hazardous Material on, under, about or from any of the
Parent’s or its Restricted Subsidiaries’ Properties, to the extent failure to do
so could reasonably be expected to have a Material Adverse Effect; (v) conduct,
and cause each other Restricted Subsidiaries to conduct, their respective
operations and businesses in a manner that will not expose any Property or
Person to Hazardous Materials that could reasonably be expected to cause the
Parent or its Restricted Subsidiaries to owe damages or compensation that could
reasonably be expected to cause a Material Adverse Effect; and (vi) establish
and implement, and shall cause each other Restricted Subsidiary to establish and
implement, such procedures as may be necessary to continuously determine and
assure that the Parent’s and its Restricted Subsidiaries’ obligations under this
Section 8.10(a) are timely and fully satisfied, to the extent failure to do so
could reasonably be expected to have a Material Adverse Effect. (b) If the
Parent or any Restricted Subsidiary receives written notice of any action,
investigation or inquiry by any Governmental Authority or any threatened demand
or lawsuit by any Person against the Parent or its Restricted Subsidiaries or
their Properties, in each case in connection with any Environmental Laws, the
Borrower will within fifteen (15) days after any Responsible Officer learns
thereof give written notice of the same to the Administrative Agent if the
Parent or the Borrower could reasonably anticipate that such action will result
in liability (whether individually or in the aggregate) in excess of the
Threshold Amount, not fully covered by insurance, subject to normal deductibles.
(c) In connection with any acquisition by any Credit Party of any Oil and Gas
Property, other than an acquisition of additional interests in Oil and Gas
Properties in which such 84

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Credit Party previously held an interest, to the extent any Credit Party obtains
or is provided with same, the Borrower will, and will cause each other Credit
Party to, promptly following any Credit Party’s obtaining or being provided with
the same, deliver to the Administrative Agent such final and non-privileged
material environmental reports of such Oil and Gas Properties as are reasonably
requested by the Administrative Agent, the delivery of which will not violate
any applicable confidentiality agreement entered into in good faith with an
unaffiliated third party. Section 8.11 Further Assurances. (a) The Parent and
the Borrower at their sole expense will, and will cause each other Restricted
Subsidiary to, promptly execute and deliver to the Administrative Agent all such
other documents, agreements and instruments reasonably requested by the
Administrative Agent to comply with, cure any defects or accomplish the
conditions precedent, covenants and agreements of the Parent or any Restricted
Subsidiary, as the case may be, in the Loan Documents, including the Notes, or
to further evidence and more fully describe the collateral intended as security
for the Indebtedness, or to correct any omissions in this Agreement or the
Security Instruments, or to state more fully the obligations secured therein, or
to perfect, protect or preserve any Liens created pursuant to this Agreement or
any of the Security Instruments or the priority thereof, or to make any
recordings, file any notices or obtain any consents, all as may be reasonably
necessary or appropriate in connection therewith. (b) The Parent and the
Borrower hereby authorize the Administrative Agent to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Mortgaged Property and other collateral under the Security Instruments
without the signature of the Parent, the Borrower or any other Guarantor where
permitted by law. A carbon, photographic or other reproduction of the Security
Instruments or any financing statement covering such Mortgaged Property,
collateral or any part thereof shall be sufficient as a financing statement
where permitted by law. The Parent and the Borrower acknowledge and agree that
any such financing statement may describe the collateral as “all assets” or “all
personal property” of the applicable Credit Party or words of similar effect as
may be required by the Administrative Agent. Section 8.12 Reserve Reports. (a)
On or before March 1st and September 1st of each year, commencing September 1,
2018, the Borrower shall furnish to the Administrative Agent and the Lenders a
Reserve Report evaluating the Oil and Gas Properties of the Credit Parties as of
the immediately preceding January 1st and July 1st. The Reserve Report as of
January 1 of each year shall be prepared by one or more Approved Petroleum
Engineers, and each other Reserve Report required hereunder shall be prepared by
or under the supervision of the chief engineer of the Borrower who shall certify
such Reserve Report to have been prepared in accordance with the procedures used
in the immediately preceding January 1 Reserve Report. (b) In the event of an
Interim Redetermination, the Borrower shall furnish to the Administrative Agent
and the Lenders a Reserve Report prepared by or under the supervision of the
chief engineer of the Borrower who shall certify such Reserve Report to have
been prepared in accordance with the procedures used in the immediately
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For any Interim Redetermination requested by the Administrative Agent or the
Borrower pursuant to Section 2.07(b), the Borrower shall provide such Reserve
Report with an “as of” date as required by the Administrative Agent as soon as
possible, but in any event no later than thirty (30) days following the receipt
of such request (or, in the case of an Interim Redetermination requested by the
Borrower, such other date as the Administrative Agent may agree). (c) With the
delivery of each such Reserve Report, the Borrower shall provide to the
Administrative Agent and the Lenders a certificate of the Borrower confirming
that in all material respects: (i) the Parent and the Borrower acted in good
faith and utilized reasonable assumptions at the time such information was
furnished in the preparation of such Reserve Report and that to their knowledge
there are no statements or conclusions in such Reserve Report which are based
upon or include material misleading information or fail to take into account
material information known to them regarding the matters reported therein, (ii)
the Parent or its Restricted Subsidiaries own good and defensible title to the
Oil and Gas Properties evaluated in such Reserve Report as required in this
Agreement and such Properties are free of all Liens except Liens permitted by
Section 9.03, (iii) except as set forth on an exhibit to the certificate, on a
net basis there are no gas imbalances, take or pay or other prepayments in
excess of the volume specified in Section 7.18 with respect to its Oil and Gas
Properties evaluated in such Reserve Report which would require the Parent or
any Restricted Subsidiary to deliver Hydrocarbons either generally or produced
from such Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor, (iv) none of the Parent’s or any Restricted
Subsidiary’s Proved Oil and Gas Properties have been sold since the date of the
last Borrowing Base determination except as set forth on an exhibit to the
certificate, which certificate shall list all of its Proved Oil and Gas
Properties sold and in such detail as reasonably required by the Administrative
Agent, (v) attached to the certificate is a list of all marketing agreements
entered into subsequent to the later of the date hereof or the most recently
delivered Reserve Report which the Borrower could reasonably be expected to have
been obligated to list on Schedule 7.19 had such agreement been in effect on the
date hereof, (vi) attached thereto is a schedule of the Proved Oil and Gas
Properties evaluated by such Reserve Report that are Mortgaged Properties which
sets out the percentage of the total value of the Proved Oil and Gas Properties
evaluated in such Reserve Report and demonstrates that the total value of such
Proved Oil and Gas Properties is in compliance with Section 8.14(a), and (vii)
to the extent, if any, that any Oil and Gas Properties included in such report
are owned by a Credit Party that is not a Qualified ECP Counterparty, such
Credit Party and such Oil and Gas Properties are specified in such report.
Section 8.13 Title Information. (a) On or before the delivery to the
Administrative Agent and the Lenders of each Reserve Report required by Section
8.12(a), the Borrower will deliver title information in form and substance
acceptable to the Administrative Agent covering enough of the Oil and Gas
Properties evaluated by such Reserve Report that were not included in the
immediately preceding Reserve Report, so that the Administrative Agent shall
have received together with title information previously delivered to the
Administrative Agent, satisfactory title information on at least 80% of the
total value of the Proved Oil and Gas Properties evaluated by such Reserve
Report. (b) If the Borrower has provided title information for additional
Properties under Section 8.13(a), the Borrower shall, within 60 days after
notice from the Administrative 86

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Agent that title defects or exceptions (excluding Excepted Liens) exist with
respect to such additional Properties, either (i) cure any such title defects or
exceptions (including defects or exceptions as to priority) which are not
permitted by Section 9.03 raised by such information, (ii) substitute acceptable
Mortgaged Properties with no title defects or exceptions (excluding Excepted
Liens) having an equivalent value or (iii) deliver title information in form and
substance acceptable to the Administrative Agent so that the Administrative
Agent shall have received, together with title information previously delivered
to the Administrative Agent, satisfactory title information on at least 80% of
the total value of the Proved Oil and Gas Properties evaluated by such Reserve
Report. (c) If the Borrower fails to cure any title defect (excluding Excepted
Liens) requested by the Administrative Agent to be cured within the 60-day
period or the Borrower fails to comply with the requirements to provide
acceptable title information covering 80% of the total value of the Proved Oil
and Gas Properties evaluated in the most recent Reserve Report, such failure
shall not be a Default, but instead the Administrative Agent and/or the Required
Lenders shall have the right to exercise the following remedy in their sole
discretion from time to time, and any failure to so exercise this remedy at any
time shall not be a waiver as to future exercise of the remedy by the
Administrative Agent or the Lenders. Such remedy is to have the Administrative
Agent declare that such unacceptable Mortgaged Property shall not count towards
the 80% requirement and for the Administrative Agent to send a notice to the
Borrower and the Lenders that the then outstanding Borrowing Base shall be
reduced by an amount as determined by the Required Lenders to cause the Borrower
to be in compliance with the requirement to provide acceptable title information
on 80% of the total value of the Proved Oil and Gas Properties. This new
Borrowing Base shall become effective immediately after receipt of such notice.
Section 8.14 Collateral and Guaranty Agreements. (a) In connection with each
redetermination of the Borrowing Base, the Borrower shall review the Reserve
Report and the list of current Mortgaged Properties (as described in Section
8.12(c)(vi)) to ascertain whether the Mortgaged Properties represent at least
85% of the total value of the Proved Oil and Gas Properties evaluated in the
most recently completed Reserve Report after giving effect to exploration and
production activities, acquisitions, dispositions and production. In the event
that the Mortgaged Properties do not represent at least 85% of such total value,
then the Borrower shall, and shall cause the Parent and its other Restricted
Subsidiaries to, grant, no later than thirty (30) days after delivery of the
certificate required under Section 8.12(c) (or such longer period acceptable to
the Administrative Agent), to the Administrative Agent as security for the
Indebtedness first priority Liens and security interests (subject only to Liens
permitted by Section 9.03) on additional Proved Oil and Gas Properties of the
Credit Parties that are not already subject to a Lien of the Security
Instruments such that after giving effect thereto, the Mortgaged Properties will
represent at least 85% of such total value. All such Liens will be created and
perfected by and in accordance with the provisions of deeds of trust, security
agreements and financing statements or other Security Instruments, all in form
and substance reasonably satisfactory to the Administrative Agent and in
sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes. In order to comply with the foregoing, if
any Restricted Subsidiary places a Lien on its Oil and Gas Properties and such
Restricted Subsidiary is not a Guarantor, then it shall become a Guarantor and
comply with Section 8.14(b). 87

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(b) In the event that (i) the Parent creates or acquires any Restricted
Subsidiary other than an Immaterial Subsidiary (including by designating any
Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the terms hereof)
or (ii) any Domestic Subsidiary incurs or guarantees any Funded Debt, the
Borrower shall, or shall cause the Parent to, promptly cause such Restricted
Subsidiary (if other than the Borrower) to execute and deliver the Guaranty
Agreement and the Security Agreement (or supplements thereto or assumption
agreements thereto, as applicable) pursuant to which such Restricted Subsidiary
shall guarantee the Indebtedness and grant liens and security interests in its
personal property that constitutes Collateral (as defined in the Security
Agreement). In the event that the Parent creates or acquires any Restricted
Subsidiary other than an Immaterial Subsidiary, the Credit Party that owns the
Equity Interests in such new Restricted Subsidiary shall execute and deliver a
supplement to the Security Agreement pursuant to which such Credit Party will
confirm the pledge of all of the Equity Interests of such new Restricted
Subsidiary to secure the Indebtedness. In connection with the foregoing, the
Credit Parties shall (i) deliver original stock certificates, if any, evidencing
the Equity Interests of such new Restricted Subsidiary, together with an
appropriate undated stock power for each certificate duly executed in blank by
the registered owner thereof and (ii) execute and deliver such other additional
closing documents, certificates and legal opinions as shall reasonably be
requested by the Administrative Agent. Parent and Borrower shall cause any
Subsidiary (if other than the Borrower) that guarantees the obligations with
respect to any Permitted Senior Unsecured Notes to become a Guarantor by
executing and delivering to the Administrative Agent an assumption agreement
with respect to the Guaranty Agreement. (c) The Parent will at all times cause
the other material tangible and intangible assets of the Parent and each
Restricted Subsidiary (including, without limitation, all Swap Agreements)
purported to be pledged as collateral pursuant to the Security Instruments to be
or be made subject to a Lien under the Security Instruments. (d) Promptly
following the acquisition by any Person of one hundred percent (100%) of the
outstanding Equity Interests in the Borrower, the Borrower will give notice of
such event to the Administrative Agent and the Borrower will cause such Person
to become a party to this Agreement by executing and delivering a Parent Joinder
Agreement to the Administrative Agent. Pursuant to such Parent Joinder Agreement
and the Guaranty Agreement as supplemented thereby, the Parent will guarantee
the Indebtedness. Pursuant to such Parent Joinder Agreement and the Security
Agreement as supplemented thereby, the Parent will grant liens and security
interests in its personal property that constitutes Collateral (as defined in
the Security Agreement), including all of its Equity Interests in the Borrower
to secure the Indebtedness. In connection with the foregoing, the Parent will
(i) deliver the original stock certificates, if any, evidencing its Equity
Interests in the Borrower, together with an appropriate undated stock power for
each certificate duly executed in blank by Parent and (ii) execute and deliver
such other additional closing documents, certificates and legal opinions as
shall reasonably be requested by the Administrative Agent. (e) Notwithstanding
any provision in any of the Loan Documents to the contrary, in no event is any
Building (as defined in the applicable Flood Insurance Regulations) or
Manufactured (Mobile) Home (as defined in the applicable Flood Insurance
Regulations) owned by any Credit Party included in the Mortgaged Property and no
Building or Manufactured (Mobile) Home shall be encumbered by any Security
Instrument; provided that (i) the applicable Credit 88

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Party’s interests in all lands and Hydrocarbons situated under any such Building
or Manufactured (Mobile) Home shall not be excluded from the Mortgaged Property
and shall be encumbered by all applicable Security Instruments and (ii) the
Borrower shall not, and shall not permit the Parent nor any of its other
Restricted Subsidiaries to, permit to exist any Lien on any Building or
Manufactured (Mobile) Home except Liens permitted by Section 9.03. Section 8.15
ERISA Compliance. The Parent and the Borrower will (a) promptly furnish, and
will cause each other Restricted Subsidiary to promptly furnish, to the
Administrative Agent after request therefor by the Administrative Agent, copies
of the most recent annual report with respect to each Plan or any trust created
thereunder, and (b) promptly upon a Responsible Officer of Parent's knowledge of
(i) the occurrence of any “prohibited transaction,” as described in section 406
of ERISA or in section 4975 of the Code for which no exception exists or is
available by statute, regulation, administrative exemption, or otherwise, in
connection with any Plan or any trust created thereunder and that is reasonably
expected to result in liability to the Parent or any Restricted Subsidiary that
is expected to have a Material Adverse Effect, (ii) the occurrence of an ERISA
Event that is expected to have a Material Adverse Effect or (iii) the present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Accounting Standards Codification No. 715:
Compensation-Retirement Benefits, or any applicable successor), as of the date
of the most recent financial statements reflecting such amounts, exceeding the
fair market value of the assets of such Plan allocable to such accrued benefits,
if such excess is reasonably expected to have a Material Adverse Effect,
promptly furnish to the Administrative Agent a written notice specifying the
nature thereof, what action the Parent, the Restricted Subsidiary or the ERISA
Affiliate is taking or proposes to take with respect thereto, and, when known by
a Responsible Officer of Parent, any action taken or proposed by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto.
Section 8.16 Unrestricted Subsidiaries. The Parent and the Borrower will: (a)
cause the management, business and affairs of each of the Parent and its
Restricted Subsidiaries to be conducted in such a manner (including, without
limitation, by keeping separate books of account, furnishing separate financial
statements of Unrestricted Subsidiaries to creditors and potential creditors
thereof and by not permitting Properties of the Borrower and the Parent and its
other respective Restricted Subsidiaries to be commingled) so that each
Unrestricted Subsidiary that is a corporation will be treated as a corporate
entity separate and distinct from the Parent and the Restricted Subsidiaries;
provided that, notwithstanding the foregoing, the Parent and the Restricted
Subsidiaries may enter into servicing arrangements with Unrestricted
Subsidiaries so long as such arrangements are permitted under Section 9.13. (b)
not, and not permit any of the Restricted Subsidiaries to, incur, assume,
guarantee or be or become liable for any Funded Debt of any of the Unrestricted
Subsidiaries. (c) not permit any Unrestricted Subsidiary to hold any Equity
Interest in, or any Funded Debt of, the Parent or any Restricted Subsidiary.
Section 8.17 Commodity Exchange Act Keepwell Provisions. The Borrower hereby
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 that
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participant” under the Commodity Exchange Act in order for such Credit Party to
honor its obligations under the Guaranty Agreement and any other Loan Documents
with respect to Swap Agreements (provided, however, that the Borrower shall only
be liable under this Section 8.17 for the maximum amount of such liability that
can be hereby incurred without rendering its obligations under this Section
8.17, or otherwise under this Agreement or any Loan Document, as it relates to
such other Credit Parties, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of the Borrower under this Section 8.17 shall remain in full force
and effect until all Indebtedness is paid in full to the Lenders, the
Administrative Agent, the Issuing Bank and all Secured Swap Providers, and all
of the Lenders’ Commitments are terminated. The Borrower intends that this
Section 8.17 constitute, and this Section 8.17 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 8.18 Post-Closing Delivery of Account Control Agreements.
Notwithstanding the requirements set forth in Section 4.10 of the Security
Agreement, the Credit Parties shall, no later than thirty (30) days after the
Effective Date (or such later date as the Administrative Agent may agree in its
sole discretion), with respect to each Deposit Account, Commodity Account and
Securities Account (each as defined in the Security Agreement) of the Credit
Parties in existence on the Effective Date (other than, in each case, De Minimis
Accounts (as defined in the Security Agreement)), deliver to the Administrative
Agent duly executed Control Agreements (as defined in the Security Agreement) in
accordance with and to the extent required by the Security Agreement. ARTICLE IX
NEGATIVE COVENANTS Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder and all
other amounts payable under the Loan Documents have been paid in full and all
Letters of Credit have expired or terminated and all LC Disbursements shall have
been reimbursed, each of the Borrower and (to the extent that the Parent is not
the Borrower) the Parent covenants and agrees with the Lenders that: Section
9.01 Financial Covenants. (a) Ratio of Total Funded Debt to EBITDAX. The Parent
and the Borrower will not permit, as of the last day of any Rolling Period
commencing with the Rolling Period ending March 31, 2018, the Parent’s ratio of
(i) Total Funded Debt as of such day to (ii) EBITDAX for the Rolling Period
ending on such day to be greater than 4.00 to 1.00. (b) Current Ratio. The
Parent and the Borrower will not permit, as of the last day of any Rolling
Period commencing with the Rolling Period ending March 31, 2018, the Parent’s
ratio of (i) consolidated current assets of the Parent and its Consolidated
Restricted Subsidiaries (including the unused amount of the total Commitments
(but only to the extent that the Borrower is permitted to borrow such amount
under the terms of this Agreement, including, without limitation, Section 6.02
hereof), but excluding non-cash assets under ASC 815 and any 90

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cash equity proceeds then being held by the Parent or a Restricted Subsidiary
for purposes of making Restricted Payments pursuant to Section 9.04(a)(v)) to
(ii) consolidated current liabilities of the Parent and its Consolidated
Restricted Subsidiaries (excluding non-cash obligations under ASC 815 and
current maturities under this Agreement) to be less than 1.00 to 1.00. Section
9.02 Debt. The Parent and the Borrower will not, and will not permit any of the
other Restricted Subsidiaries to, incur, create, assume or suffer to exist any
Debt, except: (a) the Loans or other Indebtedness arising under the Loan
Documents or any guaranty of or suretyship arrangement for the Loans or other
Indebtedness arising under the Loan Documents. (b) Debt of the Parent and its
Restricted Subsidiaries existing on the date hereof that is reflected on
Schedule 9.02. (c) Debt under Capital Leases or that constitutes Purchase Money
Debt; provided that the Debt permitted by this clause (c) shall not exceed, at
the time any such Debt is incurred (and after giving effect to such incurrence),
an aggregate principal amount equal to the greater of (i) $10,000,000 and (ii)
2.5% of the Borrowing Base in effect at such time. (d) intercompany Debt between
the Parent and any Restricted Subsidiary or between Restricted Subsidiaries,
provided that such Debt is subordinated to the Indebtedness as and to the extent
provided in the Guaranty Agreement. (e) Debt constituting a guaranty by the
Parent or by a Restricted Subsidiary of other Debt permitted to be incurred
under this Section 9.02. (f) Debt under the Permitted Senior Unsecured Notes and
guarantees thereof by any Credit Party; provided that after giving effect to the
issuance thereof, the application of the proceeds thereof, and any automatic
reduction of the Borrowing Base pursuant to Section 2.07(e) on account thereof:
(A) the Parent shall be in pro forma compliance with Section 9.01 as of the most
recently ended fiscal quarter for which financial statements have been or are
required to be delivered pursuant to Section 8.01(a) or Section 8.01(b) and (B)
no Event of Default or Borrowing Base Deficiency shall exist. (g) Debt arising
from agreements of the Borrower or any Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations (including
earn- outs), in each case entered into in connection with Investments in or
Transfers of any business, assets or Stock permitted hereunder. (h) Debt of the
Borrower or any Restricted Subsidiary consisting of obligations to pay insurance
premiums incurred in the ordinary course of business. (i) other unsecured Funded
Debt; provided that the Funded Debt permitted by this clause (i) shall not
exceed, at the time any such Funded Debt is incurred (and after giving effect to
such incurrence), an aggregate principal amount equal to the greater of (i)
$10,000,000 and (ii) 2.5% of the Borrowing Base in effect at such time. 91

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(j) Debt not permitted by the foregoing clauses (a) through (i) which is
approved in writing by the Majority Lenders. Section 9.03 Liens. The Parent and
the Borrower will not, and will not permit any other Restricted Subsidiary to,
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except: (a) Liens securing the payment of any
Indebtedness. (b) Excepted Liens. (c) Liens securing Capital Leases and Purchase
Money Debt permitted by Section 9.02(c) but only on the Property under lease or
the Property purchased, constructed or improved with such Purchase Money Debt.
(d) additional Liens on Property (excluding Proved Oil and Gas Properties and
Equity Interests of the Borrower or its Restricted Subsidiaries pledged as
Collateral) so long as the aggregate principal amount of the obligations secured
thereby does not at any time exceed $5,000,000. The Liens permitted by this
Section 9.03 shall be construed to allow for Liens on the improvements, fixtures
and/or accessions to Property which are permitted to be subject to such Liens
and on the proceeds of such Property (including any insurance for such property)
as determined in accordance with the Uniform Commercial Code. Section 9.04
Dividends and Distributions and Redemptions of Permitted Senior Unsecured Notes.
(a) Dividends and Distributions. The Parent and the Borrower will not, and will
not permit any other Subsidiary to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment to its Equity Interest holders,
except: (i) the Parent may declare and pay dividends with respect to its Equity
Interests payable solely in additional shares of its Equity Interests (other
than Disqualified Capital Stock); (ii) Subsidiaries may declare and make
Restricted Payments ratably with respect to their Equity Interests; (iii) the
Parent may make Restricted Payments pursuant to and in accordance with stock
option plans or other equity incentive or benefit plans for management or
employees of the Parent and its Subsidiaries; (iv) the Parent may make Permitted
Tax Distributions in accordance with the last sentence of this Section 9.04; (v)
the Parent may, substantially contemporaneously with (and in any event within
three (3) Business Days after) its receipt of (A) any Unrestricted Subsidiary
Distribution received directly from any Unrestricted Subsidiary or indirectly
from the Borrower or (B) the proceeds of any Transfer of any Equity Interests in
any Unrestricted Subsidiary, make cash distributions or dividends to its members
in an amount not to exceed the amount of the corresponding Unrestricted
Subsidiary Distribution or such net proceeds, respectively; provided that prior
to or contemporaneously with making such cash distribution or dividend described
in this clause (v), the Borrower shall make a principal payment on the
Borrowings in an aggregate amount equal to (1) the aggregate amount of cash
Investments made by the Parent and/or the Restricted Subsidiaries in such
Unrestricted Subsidiary from and after the Effective Date pursuant to Section
9.05(i) minus (2) the aggregate amount of principal payments previously made
pursuant to this 92

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proviso that were calculated with reference to Investments made pursuant to
Section 9.05(i); (vi) the Borrower may make Restricted Payments to the Parent;
(vii) the declaration and payment of Restricted Payments by the Borrower or a
Restricted Subsidiary to Centennial Resource Development in amounts required for
Centennial Resource Development to pay, in each case without duplication, (A)
franchise, excise and similar taxes, and other fees, taxes and expenses required
to maintain Centennial Resource Development’s corporate existence; (B) salary,
bonus, severance, expense reimbursement and other benefits payable to, and
indemnities provided on behalf of, employees, directors, officers, members of
management, consultants and independent contractors of Centennial Resource
Development and any payroll, social security or similar taxes payable in respect
thereof; (C) general corporate or other operating, administrative, compliance
and overhead costs and expenses (including expenses relating to auditing and
other accounting matters) of Centennial Resource Development; (D) reasonable (as
determined in good faith by the Borrower) fees and expenses (other than fees and
expenses paid to Affiliates of the Borrower) related to any equity or debt
offering of Centennial Resource Development (whether or not successful);
provided that all or substantially all of the proceeds of such offering are
permanently contributed to the capital of the Borrower; and (E) payments of
interest and/or principal on Debt, the proceeds of which have been contributed
to the Borrower or any Restricted Subsidiary and that has been guaranteed by, or
is otherwise, considered Debt of, the Borrower incurred in accordance with
Section 9.02 to the extent such payments are not otherwise prohibited hereunder,
(viii) the non-cash repurchase of Equity Interests in the Borrower, or the
repurchase of Equity Interests in the Borrower using cash proceeds from a
substantially concurrent contribution by Centennial Resource Development of
common equity, capital to the Borrower, in either case to effect an redemption
or exchange pursuant to the terms of the Borrower's Limited Liability Company
Agreement and (ix) the Parent may make cash distributions; provided that, in the
case of the this clause (ix) (A) no Default or Event of Default exists or
results from the making of such Restricted Payment, (B) after giving effect to
such Restricted Payment, Liquidity is not less than twenty percent (20%) of the
Borrowing Base then in effect and (C) after giving effect to such Restricted
Payment, the Parent’s ratio of Total Funded Debt (as of such date) to EBITDAX
(for the most recent Rolling Period for which financial statements have been, or
are required to have been, delivered pursuant to Section 8.01(a) or (b)) shall
not exceed 3.00 to 1.00 on a pro forma basis. Permitted Tax Distributions may be
made quarterly and annually, based on Centennial Resource Development’s federal
income tax filing obligations. (b) Redemption of Permitted Senior Unsecured
Notes; Amendment of Terms of Permitted Senior Unsecured Notes Documents. The
Parent and the Borrower will not, and will not permit any other Credit Party to,
prior to the date that is 180 days after the Maturity Date: (i) call, make or
offer to make any optional or voluntary Redemption of or otherwise optionally or
voluntarily Redeem (whether in whole or in part) any Permitted Senior Unsecured
Notes, except that, so long as no Event of Default exists, the Borrower may,
substantially contemporaneously with its receipt of any cash proceeds from (A)
any issuance of Permitted Senior Unsecured Notes or (B) any sale of Equity
Interests in the Parent (other than Disqualified Capital Stock), prepay or
otherwise Redeem Permitted Senior Unsecured Notes in an amount no greater than
the amount of the net cash proceeds of such issuance of Permitted Senior
Unsecured Notes or such sale of Equity Interests of the Parent; or 93

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(ii) amend, modify, waive or otherwise change, consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Permitted Senior Unsecured Notes Documents (except to the extent a new issuance
of Permitted Senior Unsecured Notes, the proceeds of which were used to Redeem
existing Permitted Senior Unsecured Notes pursuant to the foregoing clause (i),
would be permitted to have such terms as so amended, modified, waived or
otherwise changed) if the effect thereof would be to (A) shorten its maturity or
average life, (B) increase the amount of any payment of principal thereof, (C)
increase the rate or shorten any period for payment of interest thereon, or (D)
modify or amend financial or negative covenants or events of default such that
the resulting financial and negative covenants and events of default in respect
thereof, taken as a whole, are more restrictive with respect to the Credit
Parties than the financial and negative covenants and Events of Default in this
Agreement without this Agreement being contemporaneously amended to add similar
provisions (as determined in good faith by senior management of the Parent).
Section 9.05 Investments, Loans and Advances. The Parent and the Borrower will
not, and will not permit any other Restricted Subsidiary to, make or permit to
remain outstanding any Investments in or to any Person, except that the
foregoing restriction shall not apply to: (a) Investments as of the Effective
Date which are disclosed to the Lenders in Schedule 9.05. (b) accounts
receivable arising in the ordinary course of business. (c) direct obligations of
the United States or any agency thereof, or obligations guaranteed by the United
States or any agency thereof, in each case maturing within one year from the
date of acquisition thereof. (d) commercial paper maturing within one year from
the date of acquisition thereof rated in the highest grade by S&P, Moody’s or
Fitch Investor Service. (e) demand deposits, and time deposits (including
certificates of deposit) maturing within one year from the date of creation
thereof, with (or issued by) any Lender or any office located in the United
States of any other bank or trust company which is organized under the laws of
the United States or any state thereof, has capital, surplus and undivided
profits aggregating at least $100,000,000 (as of the date of such bank or trust
company’s most recent financial reports) and has a short term deposit rating of
no lower than A2 or P2, as such rating is set forth from time to time, by S&P or
Moody’s, respectively. (f) shares of any SEC registered 2a-7 money market fund
that has net assets of at least $500,000,000 and the highest rating obtainable
from either Moody’s or S&P. (g) Investments (i) made by the Borrower in or to
the Guarantors and (ii) made by the Parent or any Restricted Subsidiary in or to
the Borrower or any Guarantor (in each case including any Person that becomes a
Guarantor at or about the time of such Investment). (h) subject to the limits in
Section 9.07, Investments of the type described in clause (c) of the definition
of “Investment” in direct ownership interests in additional Oil and Gas
Properties and gas gathering systems related thereto or related to farm-out,
farm-in, joint operating, 94

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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. (i) Investments in Unrestricted
Subsidiaries, provided that, at the time such Investment is made, (i) no
Default, Event of Default or Borrowing Base Deficiency exists or results from
the making of such Investment, (ii) the aggregate amount of such Investments
(after giving effect to such Investment) made under this Section 9.05(i) does
not exceed the greater of (A) $30,000,000 and (B) 2.5% of the Borrowing Base
then in effect, and (iii) after giving effect to such Investment, the Borrower’s
Liquidity is not less than fifteen percent (15%) of the Borrowing Base then in
effect. (j) loans or advances to employees, officers or directors (i) in the
ordinary course of business of the Parent or any of its Restricted Subsidiaries,
in each case only as permitted by applicable law or (ii) to finance or fund
capital commitments to purchase Equity Interests in the Parent pursuant to
agreements among the Parent and its Equity Interest holders; provided that the
Investments made pursuant to this clause (j) do not exceed $2,000,000 in
aggregate principal amount at any time outstanding. (k) Guarantee obligations
permitted by Section 9.02. (l) Investments in stock, obligations or securities
received in settlement of debts arising from Investments permitted under this
Section 9.05 or from accounts receivable arising in the ordinary course of
business, which Investments are obtained by the Parent or any Restricted
Subsidiary as a result of a bankruptcy or other insolvency proceeding of, or
difficulties in collecting from, the obligor in respect of such obligations. (m)
other Investments, provided that at the time such Investment is made (and after
giving effect to such Investment), the aggregate amount of Investments made
under this Section 9.05(m) does not exceed the greater of (i) $20,000,000 and
(ii) 2.5% of the Borrowing Base in effect at such time. (n) loans or advances by
the Borrower or any Restricted Subsidiary to the Parent to the extent that the
Borrower or any Restricted Subsidiary could make a Restricted Payment pursuant
to Section 9.04(a)(vii). Section 9.06 Designation and Conversion of Restricted
and Unrestricted Subsidiaries. (a) Unless designated as an Unrestricted
Subsidiary on Schedule 7.14 as of the date hereof or thereafter, assuming
compliance with Section 9.06(b), any Person that becomes a Subsidiary of the
Parent or any of its Restricted Subsidiaries shall be classified as a Restricted
Subsidiary. (b) The Borrower may designate by written notification thereof to
the Administrative Agent, any Restricted Subsidiary (other than the Borrower),
including a newly formed or newly acquired Subsidiary, as an Unrestricted
Subsidiary if (i) prior, and after giving effect, to such designation, neither
an Event of Default nor a Borrowing Base Deficiency would exist, (ii) such
designation is deemed to be an Investment in an Unrestricted Subsidiary in an 95

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amount equal to the fair market value as of the date of such designation of the
Parent’s direct and indirect ownership interest in such Subsidiary and such
Investment would be permitted to be made at the time of such designation under
Section 9.05(i), and (iii) such Subsidiary is not a “restricted subsidiary” or
guarantor with respect to any Permitted Senior Unsecured Notes. Except as
provided in this Section 9.06(b), no Restricted Subsidiary may be redesignated
as an Unrestricted Subsidiary. (c) The Borrower may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary if after giving effect to such
designation, (i) the representations and warranties of the Borrower, the Parent
and its other Restricted Subsidiaries contained in each of the Loan Documents
are true and correct on and as of such date as if made on and as of the date of
such redesignation (or, if stated to have been made expressly as of an earlier
date, were true and correct as of such date), (ii) no Default would exist and
(iii) the Borrower complies with the requirements of Section 8.14, Section 8.16
and Section 9.14. Section 9.07 Nature of Business; No International Operations.
The Parent and the Borrower will not, and will not permit any other Restricted
Subsidiary to, allow any material change to be made in the character of its
business as an independent oil and gas exploration and production company. From
and after the date hereof, the Parent and its Domestic Subsidiaries will not
acquire or make any other expenditure (whether such expenditure is capital,
operating or otherwise) in or related to, any Oil and Gas Properties not located
within the geographical boundaries of the United States or of the offshore
federal waters of the United States, and the Parent and the Borrower will not,
and will not permit any of the other Restricted Subsidiaries to, enter into
marketing contracts other than in the normal course of, or ancillary to, the
exploration and production business. The Borrower shall at all times remain
organized under the laws of the United States of America or any State thereof or
the District of Columbia. Section 9.08 Proceeds of Notes. The Parent and the
Borrower will not permit the proceeds of the Notes to be used for any purpose
other than those permitted by Section 7.21. Neither the Parent, the Borrower nor
any Person acting on behalf of the Borrower has taken or will take any action
which might cause any of the Loan Documents to violate Regulations T, U or X or
any other regulation of the Board or to violate Section 7 of the Securities
Exchange Act or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect. If requested by the Administrative
Agent, the Borrower will furnish to the Administrative Agent on behalf of any
Lender included in such request, a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 or such other form referred to
in Regulation U, Regulation T or Regulation X of the Board, as the case may be.
The Borrower will not request any Borrowing or Letter of Credit, and the
Borrower shall not use, and shall procure that the Parent and its other
Subsidiaries and its or their respective directors, officers, employees and
agents shall not use, the proceeds of any Borrowing or Letter of Credit (a) in
furtherance of an offer, payment, promise to pay, or authorization of the
payment or giving of money, or anything else of value, to any Person in
violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing
or facilitating any activities, business or transaction of or with any
Sanctioned Person, or in any Sanctioned Country, or (c) in any manner that would
knowingly or negligently result in the violation of any Sanctions applicable to
any party hereto. 96

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Section 9.09 ERISA Compliance. The Parent and the Borrower will not, and will
not permit any other Restricted Subsidiary to, at any time: (a) engage in any
transaction in connection with which the Parent, a Restricted Subsidiary or any
ERISA Affiliate could be subjected to either a civil penalty assessed pursuant
to subsections (c), (i), (l) or (m) of section 502 of ERISA or a tax imposed by
Chapter 43 of Subtitle D of the Code, except where such penalty or tax could not
reasonably be expected to have a Material Adverse Effect. (b) fail to make full
payment when due of all amounts which, under the provisions of any Plan,
Multiemployer Plan, agreement relating thereto or applicable law, the Parent, a
Restricted Subsidiary or any ERISA Affiliate is required to pay as contributions
thereto, except where such failure could not reasonably be expected to have a
Material Adverse Effect. Section 9.10 Sale or Discount of Receivables. Except
for the sale of defaulted notes or accounts receivable in connection with the
compromise or collection thereof and not in connection with any financing
transaction, the Parent and the Borrower will not, and will not permit any other
Restricted Subsidiary to, sell (with or without recourse) any of its notes
receivable or accounts receivable to any Person other than Borrower or any
Guarantor. Section 9.11 Mergers, Etc. The Parent and the Borrower will not, and
will not permit any other Restricted Subsidiary to, merge into or with or
consolidate with any other Person, or permit any other Person to merge into or
consolidate with it, or Transfer (whether in one transaction or in a series of
transactions) all or substantially all of its Property to any other Person
(whether now owned or hereafter acquired) (any such transaction, a
“consolidation”), or liquidate or dissolve; provided that (a) any Restricted
Subsidiary (other than the Borrower) may participate in a consolidation with the
Borrower or the Parent (provided that the Borrower or the Parent shall be the
continuing or surviving entity), (b) any Restricted Subsidiary (other than the
Borrower) that does not own any Proved Oil and Gas Property, commodity Swap
Agreements or any Equity Interests in a Subsidiary that directly or indirectly
owns any Proved Oil and Gas Property or commodity Swap Agreements may
participate in a liquidation, (c) the Borrower or any Restricted Subsidiary may
participate in a consolidation with another Restricted Subsidiary (provided that
the Borrower is the continuing or surviving entity if party to such
consolidation) and (d) the Borrower or any Restricted Subsidiary may participate
in a consolidation with another Person that was first designated a Restricted
Subsidiary (and which designation constituted an “Investment” and was permitted
by Section 9.05) at the time of such consolidation); provided that (i) if the
Borrower is party to such consolidation, the Borrower must be the continuing or
surviving entity and (ii) if a Restricted Subsidiary is party to such
consolidation, such Restricted Subsidiary must be the continuing or surviving
entity. Section 9.12 Sale of Properties and Termination of Swap Agreements. The
Parent and the Borrower will not, and will not permit any other Restricted
Subsidiary to, sell, assign, farm- out, convey or otherwise transfer
(collectively, a “Transfer”) any Property to any Person other than a Credit
Party or to enter into any Swap Monetization in respect of commodities except
for: (a) the sale of Hydrocarbons in the ordinary course of business; 97

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(b) farmouts of undeveloped acreage and undeveloped depths and Transfers in
connection with such farmouts; (c) Transfers of equipment and other personal
property that is no longer necessary for the business of the Parent or such
Restricted Subsidiary or is replaced by equipment or other personal property of
at least comparable value and use; (d) Transfers of Oil and Gas Properties to
which no Proved Reserves are attributed, and Transfers of any of the Equity
Interests in any Unrestricted Subsidiary; (e) Transfers not permitted under the
preceding subsections (a) through (d) of any other Oil and Gas Property or any
interest therein or of Equity Interests in any Restricted Subsidiary that owns
Oil and Gas Properties other than the Borrower, and Swap Monetizations; provided
that (i) if a Borrowing Base Deficiency exists at the time of such Transfer or
Swap Monetization, then the cash consideration received by any Credit Party in
respect of such Transfer or Swap Monetization shall be applied first to prepay
Loans and/or cash collateralize LC Exposure until such Borrowing Base Deficiency
is eliminated in full; (ii) no Event of Default exists or results from such
Transfer or Swap Monetization; (iii) at least 75% of the consideration received
in respect of any such Transfer of Oil and Gas Properties or any interest
therein or of any such Restricted Subsidiary shall be cash, rights with respect
to post-closing settlement or indemnification obligations of the transferee or
its Affiliates, or (provided no Borrowing Base Deficiency will exist after the
application of the cash proceeds of such Transfer) new Oil and Gas Properties
acceptable to the Administrative Agent in its sole discretion acquired, and the
total of all such consideration received in respect of any such Transfer shall
be equal to or greater than the fair market value of the Oil and Gas Properties,
interests therein and/or Restricted Subsidiaries that are the subject of such
Transfer as reasonably determined by the Parent and/or the Borrower (and, if
requested by the Administrative Agent, the Borrower shall deliver a certificate
of a Responsible Officer of the Borrower certifying to such determination); (iv)
the consideration received in respect of any such Swap Monetization shall be
equal to or greater than the fair market value of the consideration provided by
the Credit Parties in such transaction as reasonably determined by the Parent
and/or the Borrower (and, if requested by the Administrative Agent, the Borrower
shall deliver a certificate of a Responsible Officer of the Borrower certifying
to such determination); (v) if the aggregate value (which, for purposes hereof,
shall mean the value the Administrative Agent attributes to such Oil and Gas
Property and/or Swap Agreement for purposes of the most recent determination of
the Borrowing Base (which Borrowing Base was approved by the requisite Lenders
in accordance with Section 2.07)) of such Oil and Gas Properties Transferred,
when aggregated with the Swap Monetization of Swap Agreements pursuant to the
terms of this Agreement, since the later of (A) the last Scheduled
Redetermination Date and (B) the date that the Borrowing Base was last adjusted
pursuant to this Section 9.12(e)(v), is in excess 98

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of five percent (5%) of the Borrowing Base, then the Borrowing Base will be
automatically reduced by an amount determined by the Administrative Agent and
approved by the Required Lenders, which redetermined Borrowing Base shall be
effective upon delivery by the Administrative Agent of the related New Borrowing
Base Notice under Section 2.07(d), and if a Borrowing Base Deficiency exists
after such reduction in the Borrowing Base, the Borrower shall prepay Borrowings
in accordance with Section 3.04(c)(iii); (vi) if any such Transfer is of a
Restricted Subsidiary (other than the Borrower) owning Oil and Gas Properties,
such Transfer shall include all the Equity Interests of such Restricted
Subsidiary; and (vii) for purposes of this Section 9.12(e), any Oil and Gas
Property owned by a Restricted Subsidiary that is designated or redesignated as
an Unrestricted Subsidiary pursuant to Section 9.06(b) shall be deemed to be
Transferred by such Subsidiary to a Person that is not a Credit Party at the
time of such designation. For purposes of this Section 9.12, “Swap Monetization”
means the liquidation, monetization, unwinding, termination or transfer (by
novation or otherwise) of any commodity Swap Agreement taken into account by the
Lenders in determining the most recent Borrowing Base, or the amendment of any
such Swap Agreement in any way that could reasonably be expected to reduce the
Borrowing Base value thereof, provided that none of the following shall
constitute a Swap Monetization: (w) the novation of such Swap Agreement from one
Credit Party to another Credit Party, with an Approved Counterparty being the
“remaining party” for purposes of such novation, (x) the novation of such Swap
Agreement from the existing counterparty to an Approved Counterparty, with the
Borrower or the applicable Credit Party being the “remaining party” for purposes
of such novation, (y) the termination of such Swap Agreement at the end of its
stated term, or (z) the early termination of a Swap Agreement if, upon such
early termination, it is replaced, in a substantially contemporaneous
transaction, with one or more Swap Agreements covering Hydrocarbons of the type
that were hedged pursuant to such replaced Swap Agreements with notional
volumes, prices and tenors not less favorable to the Borrower or such Credit
Party as those set forth in such replaced Swap Agreements and without cash
payments to any Credit Party in connection therewith. Section 9.13 Transactions
with Affiliates. The Parent and the Borrower will not, and will not permit any
other Restricted Subsidiary to, enter into any transaction, including, without
limitation, any Transfer of Property or the rendering of any service, with any
Affiliate involving aggregate consideration in excess of $5,000,000 (other than
the Credit Parties) unless such transactions are otherwise not prohibited under
this Agreement and are upon fair and reasonable terms no less favorable to it
than it would obtain in a comparable arm’s length transaction with a Person not
an Affiliate, provided that the restrictions set forth in this Section 9.13
shall not apply to (a) Investments permitted by Section 9.05, (b) the execution
and delivery of any Loan Document, (c) transactions listed on Schedule 9.13, (d)
payments made pursuant to Section 9.04(a) or otherwise expressly permitted under
this Agreement, (e) the issuance and sale of Equity Interests in the Parent and
any amendments to the terms of any Equity Interests issued by the Parent
(excluding in each case any such Equity Interests that would be, or any
amendments that would cause any such Equity Interests to become, Disqualified
Capital Stock, (f) the performance of employment, equity award, equity option or
equity appreciation agreements, plans or other similar 99

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compensation or benefit plans or arrangements entered into by any Credit Party
in the ordinary course of its business with its employees, officers and
directors and (g) reasonable and customary fees and compensation to, and
indemnity provided on behalf of, officers, directors, and employees of any
Credit Party in their capacity as such). Section 9.14 Subsidiaries. The Parent
and the Borrower will not, and will not permit any other Restricted Subsidiary
to, create or acquire any additional Restricted Subsidiary or redesignate an
Unrestricted Subsidiary as a Restricted Subsidiary unless the Borrower gives
prompt written notice to the Administrative Agent of such creation or
acquisition and complies with Section 8.14(b). The Borrower shall not, and shall
not permit the Parent or any other Restricted Subsidiary to, Transfer any Equity
Interests in any Restricted Subsidiary except in compliance with Section 9.12.
Neither the Parent nor any Restricted Subsidiary shall have any Foreign
Subsidiaries. The Parent will not permit any Person other than the Parent or
another Credit Party to own any Equity Interests in any Guarantor. Section 9.15
Negative Pledge Agreements; Dividend Restrictions. The Parent and the Borrower
will not, and will not permit any other Restricted Subsidiary to, create, incur,
assume or suffer to exist any contract, agreement or understanding (other than
(a) this Agreement and the Security Instruments, (b) agreements with respect to
Purchase Money Debt or Capital Leases secured by Liens permitted by Section
9.03(c), but then only with respect to Property which is the subject of such
Capital Lease or Purchase Money Debt, (c) customary restrictions and conditions
with respect to the sale or disposition of Property or Equity Interests
permitted under Section 9.12 pending the consummation of such sale or
disposition, (d) any leases or licenses or similar contracts as they affect any
Property or Lien subject to a lease or license and (e) agreements and
understandings contained in joint venture agreements or other similar agreements
entered into in the ordinary course of business in respect to the disposition or
distribution of assets of such joint venture), which in any way prohibits or
restricts the granting, conveying, creation or imposition of any Lien on any of
its Property in favor of the Administrative Agent for the benefit of itself and
the Secured Parties, or restricts any Restricted Subsidiary from paying
dividends or making distributions to the Borrower or any Guarantor. Section 9.16
Gas Imbalances, Take-or-Pay or Other Prepayments. Except as set forth on
Schedule 7.18 or on the most recent certificate delivered pursuant to Section
8.12(c), the Parent and the Borrower will not, and will not permit any other
Restricted Subsidiary to, allow gas imbalances, take-or-pay or other prepayments
with respect to the Oil and Gas Properties of the Parent or any Restricted
Subsidiary that would require the Parent or such Restricted Subsidiary to
deliver Hydrocarbons at some future time without then or thereafter receiving
full payment therefor to exceed 2.5% of the aggregate annual production of gas
from the Oil and Gas Properties of the Parent and its Restricted Subsidiaries
during the most recent calendar year (on an mcf equivalent basis). Section 9.17
Swap Agreements. (a) The Parent and the Borrower will not, and will not permit
any other Restricted Subsidiary to, enter into any Swap Agreements for
speculative purposes. The Parent and the Borrower will not, and will not permit
any other Restricted Subsidiary to, enter into any Swap Agreements with any
Person other than: 100

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(i) Subject to clause (b) of this Section 9.17, Swap Agreements with an Approved
Counterparty in respect of commodities the notional volumes of which (when
aggregated with other commodity Swap Agreements then in effect) do not exceed,
as of the date such Swap Agreement is entered into (and for each month during
the period during which such Swap Agreement is in effect), 85% of the reasonably
anticipated production of crude oil, natural gas and natural gas liquids and
condensate, calculated separately and, in each case, as such production is
forecast from the Parent’s and its Restricted Subsidiaries’ Oil and Gas
Properties constituting Proved Reserves as set forth on the most recent Reserve
Report delivered pursuant to the terms of this Agreement; provided, however,
that such Swap Agreements shall not, in any case, have a tenor of greater than
five (5) years. It is understood that Swap Agreements in respect of commodities
which may, from time to time, “hedge” the same volumes, but different elements
of commodity risk thereof (such as, for example, basis risk and price risk),
shall not be aggregated together when calculating the foregoing limitations on
notional volumes or for any other purpose of this Section. (ii) Upon the signing
of a binding purchase and sale agreement for Oil and Gas Properties (such Oil
and Gas Properties, the “Proposed Acquisition Properties”) between such Credit
Party and a third party seller, Swap Agreements in respect of commodities (a)
with an Approved Counterparty, (b) with a tenor not to exceed three years
commencing with the first full month after such Swap Agreement is executed, and
(c) the notional volumes for which do not exceed 85% of the reasonably
anticipated production from the Proposed Acquisition Properties constituting
Proved Reserves for each month from each of crude oil, natural gas and natural
gas liquids and condensate, calculated separately and as set forth in a reserve
report delivered to the Administrative Agent (in form and detail reasonably
acceptable to the Administrative Agent) covering such Proposed Acquisition
Properties; provided that, (x) upon the earlier to occur of (1) the 10th day
after such purchase and sale agreement is terminated or any Credit Party
otherwise knows that such purchase and sale agreement shall not be consummated
and (2) the 90th day after the date upon which the applicable purchase and sale
agreement was entered into in each case with such extensions as agreed to by the
Administrative Agent in its sole discretion, all Swap Agreements entered into
under this Section 9.17(a)(ii) that would not otherwise have been permitted to
be entered into under Section 9.17(a)(i) above (at the time entered into) will
be unwound or otherwise terminated, (y) notwithstanding anything to the contrary
herein, the notional volumes for Swap Agreements entered into under this Section
9.17(a)(ii) (when aggregated with other commodity Swap Agreements then in effect
pursuant to Section 9.17(a)(i) other than basis differential swaps on volumes
already hedged pursuant to other Swap Agreements) shall not exceed, as of the
date such Swap Agreement is executed, 100% of reasonably anticipated production
from the Credit Party’s Oil and Gas Properties constituting Proved Reserves (as
set forth in the most recent Reserve Report delivered pursuant to the terms of
this Agreement and excluding, for the avoidance of doubt, anticipated production
from the Proposed Acquisition Properties) for each month of each of crude oil,
natural gas, and natural gas liquids and condensate, calculated separately and
(z) at all times prior to the closing of the applicable acquisition, when Swap
Agreements are outstanding under this Section 9.17(a)(ii), Liquidity shall be no
less than 15% of the Borrowing Base then in effect. (iii) Swap Agreements in
respect of interest rates with an Approved Counterparty, as follows: 101

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(A) Swap Agreements effectively converting interest rates from fixed to
floating, the notional amounts of which (when aggregated with all other Swap
Agreements of the Parent and its Restricted Subsidiaries then in effect
effectively converting interest rates from fixed to floating) do not exceed 50%
of the then outstanding principal amount of the Credit Parties' Debt for
borrowed money which bears interest at a fixed rate, and which Swap Agreements
shall not, in any case, have a tenor beyond the maturity date of such Debt, and
(B) Swap Agreements effectively converting interest rates from floating to
fixed, the notional amounts of which (when aggregated with all other Swap
Agreements of the Parent and its Restricted Subsidiaries then in effect
effectively converting interest rates from floating to fixed) do not exceed 75%
of the then outstanding principal amount of the Credit Parties' Debt for
borrowed money which bears interest at a floating rate, and which Swap
Agreements shall not, in any case, have a tenor beyond the maturity date of such
Debt. (b) Except as otherwise permitted by clause (a)(ii) above, if, after the
end of any calendar quarter, commencing with calendar quarter ending June 30,
2018, the Borrower determines that the volume of all Swap Agreements in respect
of commodities for which settlement payments were calculated in such calendar
quarter (other than Swap Agreements that “hedge” the same volumes but different
elements of commodity risk) exceeded 100% of actual production of Hydrocarbons
in such calendar quarter, then the Borrower (i) shall promptly notify the
Administrative Agent of such determination and (ii) shall, no later than 30 days
after such determination (or such longer period acceptable to the Administrative
Agent), terminate (only to the extent such terminations are permitted pursuant
to Section 9.12), create off-setting positions, or otherwise unwind or monetize
(only to the extent such unwinds or monetizations are permitted pursuant to
Section 9.12) existing Swap Agreements such that, at such time, future hedging
volumes will not exceed 100% of reasonably anticipated projected production for
the then-current and any succeeding calendar quarters. (c) In no event shall any
Swap Agreement contain any requirement, agreement or covenant for the Parent or
any Restricted Subsidiary to post collateral, credit support (including in the
form of letters of credit) or margin (other than pursuant to the Security
Instruments) to secure their obligations under such Swap Agreement. (d) The
Parent and the Borrower will not, and will not permit any other Restricted
Subsidiary to, terminate or monetize any Swap Agreement in respect of
commodities without the prior written consent of the Required Lenders except to
the extent such terminations are permitted pursuant to Section 9.12. (e) For
purposes of entering into or maintaining Swap Agreement trades or transactions
under Section 9.17(a)(i) and Section 9.17(b), respectively, forecasts of
reasonably anticipated production from the Parent's and its Restricted
Subsidiaries' Proved Reserves as set forth on the most recent Reserve Report
delivered pursuant to the terms of this Agreement shall be deemed to be updated
to account for any increase or decrease therein anticipated because of
information obtained by the Parent or any of its Restricted Subsidiaries and
delivered to the Administrative Agent subsequent to the publication of such
Reserve Report including, without limitation, (i) the Parent’s or any of its
Restricted Subsidiaries’ internal forecasts of production decline rates for
existing wells, (ii) additions to or deletions from anticipated future
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from new wells, (iii) completed dispositions, and (iv) completed acquisitions
coming on stream or failing to come on stream; provided that (A) any such
supplemental information shall be reasonably satisfactory to the Administrative
Agent and (B) if any such supplemental information is delivered, such
information shall be presented on a net basis (i.e., it shall take into account
both increases and decreases in anticipated production subsequent to publication
of the most recent Reserve Report). ARTICLE X EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following events shall
constitute an “Event of Default”: (a) the Borrower shall fail to pay any
principal of any Loan or any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof, by acceleration or
otherwise. (b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in Section 10.01(a))
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five (5)
Business Days. (c) any representation or warranty made or deemed made by or on
behalf of the Parent, the Borrower or any other Restricted Subsidiary in or in
connection with any Loan Document or any amendment or modification of any Loan
Document or waiver under such Loan Document, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any material respect when made
or deemed made (or, to the extent that any such representation and warranty is
qualified by materiality, such representation and warranty shall prove to have
been incorrect when made or deemed made). (d) the Borrower shall fail to give
notice of any Default as required under Section 8.02(a), the Parent, the
Borrower or any other Restricted Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in Section 8.01(l), Section 8.02(b),
Section 8.02(c), Section 8.03(a)(i) (with respect to the Parent and the
Borrower), Section 8.14, Section 8.18 or in Article IX. (e) the Parent, the
Borrower or any other Restricted Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in Section 10.01(a), Section 10.01(b) or Section 10.01(d)) or any
other Loan Document, and such failure shall continue unremedied for a period of
thirty (30) days after the earlier to occur of (i) a Responsible Officer of the
Parent, the Borrower or any other Restricted Subsidiary having knowledge of such
default, or (ii) receipt of notice thereof by the Borrower from the
Administrative Agent. (f) the Parent, the Borrower or any other Restricted
Subsidiary shall fail to make any payment (whether of principal or interest and
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Material Indebtedness, when and as the same shall become due and payable, and
such failure to pay shall extend beyond any applicable grace period. (g) any
event or condition occurs that results in any Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
any Material Indebtedness to become due, or to require the Redemption thereof or
any offer to Redeem to be made in respect thereof, prior to its scheduled
maturity or require the Parent, the Borrower or any other Restricted Subsidiary
to make a mandatory Redemption offer in respect thereof. (h) an involuntary
proceeding shall be commenced or an involuntary petition shall be filed seeking
(i) liquidation, reorganization or other relief in respect of the Parent, the
Borrower or any other Restricted Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Parent, the Borrower or any other Restricted Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for sixty (60) days or an order or decree
approving or ordering any of the foregoing shall be entered. (i) the Parent, the
Borrower or any other Restricted Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in Section 10.01(h), (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Parent, the Borrower or any other Restricted Subsidiary
or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing. (j) the Parent, the Borrower
or any other Restricted Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due. (k) one or more
judgments for the payment of money in an aggregate amount in excess of the
Threshold Amount (to the extent not covered by independent third party insurance
as to which the insurer does not dispute coverage) shall be rendered against the
Parent, the Borrower, any other Restricted Subsidiary or any combination thereof
and the same shall not be discharged, vacated or stayed within thirty (30) days
after becoming a final judgment. (l) the Loan Documents after delivery thereof
shall for any reason, except to the extent permitted by the terms thereof, cease
to be in full force and effect and valid, binding and enforceable in accordance
with their terms against the Borrower or a Guarantor party thereto or shall be
repudiated by any of them, or cease to create a valid and perfected Lien of the
priority required thereby on any of the collateral purported to be covered
thereby (except to the extent permitted by the terms of this Agreement or such
Loan Document), or the Parent, the Borrower or any other Restricted Subsidiary
or any of their Affiliates shall so state in writing. 104

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(m) a Change in Control shall occur. (n) an ERISA Event shall have occurred
that, when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect. Section 10.02
Remedies. (a) In the case of an Event of Default other than one described in
Section 10.01(h), Section 10.01(i) or Section 10.01(j), at any time thereafter
during the continuance of such Event of Default, the Administrative Agent may,
and at the request of the Majority Lenders, shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Notes and the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
and the Guarantors accrued hereunder and under the Notes and the other Loan
Documents (including, without limitation, the payment of cash collateral to
secure the LC Exposure as provided in Section 2.08(j)), shall become due and
payable immediately, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other notice of any kind, all of which are
hereby waived by the Borrower and each Guarantor; and in case of an Event of
Default described in Section 10.01(h), Section 10.01(i) or Section 10.01(j), the
Commitments shall automatically terminate and the Notes and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
the other obligations of the Borrower and the Guarantors accrued hereunder and
under the Notes and the other Loan Documents (including, without limitation, the
payment of cash collateral to secure the LC Exposure as provided in Section
2.08(j)), shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower and each Guarantor. (b) In the case of the occurrence of an Event
of Default, the Administrative Agent and the Lenders will have all other rights
and remedies available at law and equity. (c) All proceeds realized from the
liquidation or other disposition of collateral or otherwise received after
maturity of the Loans, whether by acceleration or otherwise, shall be applied:
(i) first, to payment or reimbursement of that portion of the Indebtedness
constituting fees, expenses and indemnities payable to the Administrative Agent
in its capacity as such; (ii) second, pro rata to payment or reimbursement of
that portion of the Indebtedness constituting fees, expenses and indemnities
payable to the Lenders; (iii) third, pro rata to payment of accrued interest on
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(iv) fourth, pro rata to payment of principal outstanding on the Loans, LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time, and Indebtedness referred to in clause (b) of the definition of
Indebtedness owing to Secured Swap Providers; (v) fifth, pro rata to any other
Indebtedness; (vi) sixth, to serve as cash collateral to be held by the
Administrative Agent to secure the remaining LC Exposure; and (vii) seventh, any
excess, after all of the Indebtedness shall have been indefeasibly paid in full
in cash, shall be paid to the Borrower or as otherwise required by any
Governmental Requirement. Notwithstanding the foregoing, amounts received from
any Credit Party that is not an “eligible contract participant” under the
Commodity Exchange Act shall not be applied to any obligations that constitute
Excluded Swap Obligations with respect to such Credit Party (it being
understood, that in the event that any amount is applied to Indebtedness other
than Excluded Swap Obligations as a result of this clause, the Administrative
Agent shall make such adjustments as it determines are appropriate to
distributions pursuant to clause fourth above from amounts received from
“eligible contract participants” under the Commodity Exchange Act to ensure, as
nearly as possible, that the proportional aggregate recoveries with respect to
Indebtedness described in clause fourth above by the holders of any Excluded
Swap Obligations are the same as the proportional aggregate recoveries with
respect to other Indebtedness pursuant to clause fourth above). ARTICLE XI THE
AGENTS Section 11.01 Appointment; Powers. Each of the Lenders and the Issuing
Bank hereby irrevocably appoints the Administrative Agent as its agent 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 and the other Loan Documents, together with such actions and powers as
are reasonably incidental thereto. Section 11.02 Duties and Obligations of
Administrative Agent. The Administrative Agent shall not have any duties or
obligations except those expressly set forth in the Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing (the use of the term “agent” herein and
in the other Loan Documents 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; rather, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties), (b) the
Administrative Agent shall have no duty to take any discretionary action or
exercise any discretionary powers, except as provided in Section 11.03, and (c)
except as expressly set forth herein, the Administrative Agent shall not have
any duty to disclose, and shall not be liable for the failure to disclose, any
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any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
under any other Loan Document 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 in any other Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, (v) the satisfaction of
any condition set forth in Article VI or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent
or as to those conditions precedent expressly required to be to the
Administrative Agent’s satisfaction, (vi) the existence, value, perfection or
priority of any collateral security or the financial or other condition of the
Parent and its Subsidiaries or any other obligor or guarantor, or (vii) any
failure by the Borrower or any other Person (other than itself) to perform any
of its obligations hereunder or under any other Loan Document or the performance
or observance of any covenants, agreements or other terms or conditions set
forth herein or therein. For purposes of determining compliance with the
conditions specified in Article VI, 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 a Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the proposed closing date specifying
its objection thereto. Section 11.03 Action by Administrative Agent. The
Administrative Agent shall have no duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise in writing as directed by the
Majority Lenders (or such other number, percentage or class of the Lenders as
shall be necessary under the circumstances as provided in Section 12.02) and in
all cases the Administrative Agent shall be fully justified in failing or
refusing to act hereunder or under any other Loan Documents unless it shall (a)
receive written instructions from the Majority Lenders or the Lenders, as
applicable, (or such other number, percentage or class of the Lenders as shall
be necessary under the circumstances as provided in Section 12.02) specifying
the action to be taken and (b) be indemnified to its satisfaction by the Lenders
against any and all liability and expenses which may be incurred by it by reason
of taking or continuing to take any such action. The instructions as aforesaid
and any action taken or failure to act pursuant thereto by the Administrative
Agent shall be binding on all of the Lenders. If a Default has occurred and is
continuing, then the Administrative Agent shall take such action with respect to
such Default as shall be directed by the requisite Lenders in the written
instructions (with indemnities) described in this Section 11.03, provided that,
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default as it shall
deem advisable in the best interests of the Lenders. In no event, however, shall
the Administrative Agent be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement, the Loan Documents or applicable law. If a Default has occurred and
is continuing, no Agent shall have any obligation to perform any act in respect
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Agent shall not be liable for any action taken or not taken by it with the
consent or at the request of the Majority Lenders or the Lenders (or such other
number, percentage or class of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02), and otherwise the Administrative
Agent shall not be liable for any action taken or not taken by it hereunder or
under any other Loan Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith
INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence, bad
faith or willful misconduct. Section 11.04 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent 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 be made by the proper Person, and shall not incur any liability for
relying thereon and each of the Borrower, the Lenders and the Issuing Bank
hereby waives the right to dispute the Administrative Agent’s record of such
statement, except in the case of gross negligence, bad faith or willful
misconduct by the Administrative Agent. 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. The Administrative Agent may deem and treat the
payee of any Note as the holder thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof permitted hereunder shall
have been filed with the Administrative Agent. Section 11.05 Subagents. The
Administrative Agent may perform any and all its duties and exercise its rights
and powers 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 its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding Sections
of this Article XI shall apply to any such sub- agent and to the Related Parties
of the Administrative Agent and any such sub-agent, and shall apply to their
respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Section 11.06 Resignation of Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided in this Section
11.06, the Administrative Agent may resign at any time by notifying the Lenders,
the Issuing Bank and the Borrower. Upon any such resignation, the Majority
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor. If no successor shall have been so appointed by the Majority Lenders
and shall have accepted such appointment within thirty (30) days after the
retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint
a successor Administrative Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank; provided that in no event
shall any such successor Administrative Agent be a Defaulting Lender. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
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between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article XI and Section 12.03 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while it was acting as Administrative
Agent. Section 11.07 Agents as Lenders. Each bank serving as an Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not an Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Parent or any Subsidiary or other Affiliate
thereof as if it were not an Agent hereunder. Section 11.08 No Reliance. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent, any other Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and each other Loan Document
to which it is a party. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document, any related agreement or any document furnished hereunder or
thereunder. The Agents shall not be required to keep themselves informed as to
the performance or observance by the Parent or any of its Subsidiaries of this
Agreement, the Loan Documents or any other document referred to or provided for
herein or to inspect the Properties or books of the Parent or its Subsidiaries.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
no Agent or Arranger shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the affairs, financial condition
or business of the Borrower (or any of its Affiliates) which may come into the
possession of such Agent or any of its Affiliates. In this regard, each Lender
acknowledges that Vinson & Elkins L.L.P. is acting in this transaction as
special counsel to the Administrative Agent only, except to the extent otherwise
expressly stated in any legal opinion or any Loan Document. Each other party
hereto will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein. Section 11.09 Administrative Agent May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Parent or any of its Subsidiaries, the Administrative
Agent (irrespective of whether the principal of any Loan shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise: (a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Indebtedness
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 and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
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respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 12.03) allowed in such judicial proceeding;
and (b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such
payments to the Administrative Agent and, in the event that the Administrative
Agent shall consent to the making of such payments directly to the Lenders, to
pay to the Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and its agents
and counsel, and any other amounts due the Administrative Agent under Section
12.03. Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.
Section 11.10 Authority of Administrative Agent to Release Collateral, Liens and
Guarantors. By accepting the benefits of the Security Instruments, each Secured
Party hereby acts and agrees as follows: (a) each Secured Party hereby
authorizes the Administrative Agent to take the following actions, and the
Administrative Agent hereby agrees to take such actions at the request of the
Borrower: (i) to release any Lien on any Property granted to or held by
Administrative Agent under any Loan Document: (A) to the extent such Property
is, or is to be, sold, released or otherwise disposed of as permitted pursuant
to the terms of the Loan Documents; or (B) to the extent such Property did not
belong to any Credit Party at the time such Lien was granted, or to the extent
the Credit Parties hold interests in such Property only under a lease that has
expired or is about to expire and which has not been, and is not intended by the
Credit Parties to be, renewed or extended, or to the extent such Property is not
a Proved Oil and Gas Property and was not required to be mortgaged pursuant to
the terms of the Loan Documents; or (C) if approved, authorized or ratified in
writing by the Majority Lenders (or, if approval, authorization or ratification
by all Lenders is required under Section 12.02(b), then by all Lenders); (D)
upon (1) termination of all Commitments, payment in full of all Indebtedness
(other than contingent indemnification obligations for which no claim has been
made) owing to the Administrative Agent, the Issuing Bank and the Lenders under
the Loan Documents and owing to any Secured Swap Provider under any Secured Swap
Agreement (other 110

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than any Secured Swap Provider that has advised the Administrative Agent that
the Indebtedness owing to it are otherwise adequately provided for or novated),
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 applicable Issuing Bank have been made) and (2) termination of all
Secured Swap Agreements with Secured Swap Providers (other than any Secured Swap
Provider that has advised the Administrative Agent that such Secured Swap
Agreements are otherwise adequately provided for or novated); or (E) Upon
redesignation of a Restricted Subsidiary as an Unrestricted Subsidiary in
accordance with Section 9.06(b); (ii) to release any Guarantor from its
obligations under any Guaranty Agreement and any other Loan Document if such
Person ceases to be a Restricted Subsidiary of the Borrower as a result of a
transaction permitted under the Loan Documents; (iii) to subordinate (or
release) any Lien on any Property granted to or held by the Administrative Agent
under any Loan Document to any Lien on such Property that is permitted by
Section 9.03(c); and (iv) to execute and deliver to the Borrower, at the
Borrower’s sole cost and expense, any and all releases of Liens and guaranties,
termination statements, assignments or other documents necessary or useful to
accomplish or evidence the foregoing. (b) Notwithstanding anything contained in
any of the Loan Documents to the contrary, no Person other than the
Administrative Agent has any individual right to realize upon any of the
Mortgaged Property or other collateral under the Security Instruments, to
enforce any Liens on Mortgaged Property or any such other collateral, or to
enforce any Guaranty Agreement, and all powers, rights and remedies under the
Security Instruments may be exercised solely by Administrative Agent on behalf
of the Persons secured or otherwise benefitted thereby. (c) By accepting the
benefit of the Liens granted pursuant to the Security Instruments, each Person
secured by such Liens that is not a party hereto agrees to the terms of this
Section 11.10 and agrees that, notwithstanding anything to the contrary in any
Secured Swap Agreement or any master agreement or other agreement relating
thereto, each Credit Party is authorized and permitted to grant and assign to
Administrative Agent under the Security Documents security interests in all
Secured Swap Agreements and all rights with respect thereto. Section 11.11
Agents. No Agent other than the Administrative Agent shall have any duties,
responsibilities or liabilities under this Agreement and the other Loan
Documents other than their duties, responsibilities and liabilities in their
capacity as Lenders hereunder. Section 11.12 Certain ERISA Matters. (a) Each
Lender (x) represents and warrants, as of the date such Person became a Lender
party hereto, to, and (y) covenants, from the date such Person became a Lender
party hereto to the date such Person ceases being a Lender party hereto, for the
benefit of, the Administrative Agent, and each Arranger and their respective
Affiliates, and not, for the avoidance of doubt, to or for the benefit of the
Parent, the Borrower or any other Credit Party, that at least one of the
following is and will be true: 111

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(i) such Lender is not using “plan assets” (within the meaning of the Plan Asset
Regulations) of one or more Benefit Plans in connection with the Loans, the
Letters of Credit or the Commitments, (ii) the transaction exemption set forth
in one or more PTEs, such as PTE 84-14 (a class exemption for certain
transactions determined by independent qualified professional asset managers),
PTE 95-60 (a class exemption for certain transactions involving insurance
company general accounts), PTE 90-1 (a class exemption for certain transactions
involving insurance company pooled separate accounts), PTE 91-38 (a class
exemption for certain transactions involving bank collective investment funds)
or PTE 96-23 (a class exemption for certain transactions determined by in-house
asset managers), is applicable with respect to such Lender’s entrance into,
participation in, administration of and performance of the Loans, the Letters of
Credit, the Commitments and this Agreement, and the conditions for exemptive
relief thereunder are and will continue to be satisfied in connection therewith,
(iii) (A) such Lender is an investment fund managed by a “Qualified Professional
Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender
to enter into, participate in, administer and perform the Loans, the Letters of
Credit, the Commitments and this Agreement, (C) the entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement satisfies the requirements of sub-sections (b)
through (g) of Part I of PTE 84- 14 and (D) to the best knowledge of such
Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied
with respect to such Lender’s entrance into, participation in, administration of
and performance of the Loans, the Letters of Credit, the Commitments and this
Agreement, or (iv) such other representation, warranty and covenant as may be
agreed in writing between the Administrative Agent, in its sole discretion, and
such Lender. (b) In addition, unless sub-clause (i) in the immediately preceding
clause (a) is true with respect to a Lender or such Lender has not provided
another representation, warranty and covenant as provided in sub-clause (iv) in
the immediately preceding clause (a), such Lender further (x) represents and
warrants, as of the date such Person became a Lender party hereto, to, and (y)
covenants, from the date such Person became a Lender party hereto to the date
such Person ceases being a Lender party hereto, for the benefit of, the
Administrative Agent, and each Arranger and their respective Affiliates, and
not, for the avoidance of doubt, to or for the benefit of the Parent, the
Borrower or any other Credit Party, that: (i) neither the Administrative Agent,
or the Arranger or any of their respective Affiliates is a fiduciary with
respect to the assets of such Lender (including in connection with the
reservation or exercise of any rights by the Administrative Agent under this
Agreement, any Loan Document or any documents related to hereto or thereto),
(ii) the Person making the investment decision on behalf of such Lender with
respect to the entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is independent (within 112

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the meaning of 29 CFR § 2510.3-21, as amended from time to time) and is a bank,
an insurance carrier, an investment adviser, a broker-dealer or other person
that holds, or has under management or control, total assets of at least $50
million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E), (iii)
the Person making the investment decision on behalf of such Lender with respect
to the entrance into, participation in, administration of and performance of the
Loans, the Letters of Credit, the Commitments and this Agreement is capable of
evaluating investment risks independently, both in general and with regard to
particular transactions and investment strategies (including in respect of the
obligations), (iv) the Person making the investment decision on behalf of such
Lender with respect to the entrance into, participation in, administration of
and performance of the Loans, the Letters of Credit, the Commitments and this
Agreement is a fiduciary under ERISA or the Code, or both, with respect to the
Loans, the Letters of Credit, the Commitments and this Agreement and is
responsible for exercising independent judgment in evaluating the transactions
hereunder, and (v) no fee or other compensation is being paid directly to the
Administrative Agent, or the Arranger or any of their respective Affiliates for
investment advice (as opposed to other services) in connection with the Loans,
the Letters of Credit, the Commitments or this Agreement. (c) The Administrative
Agent, and each Arranger hereby informs the Lenders that each such Person is not
undertaking to provide impartial investment advice, or to give advice in a
fiduciary capacity, in connection with the transactions contemplated hereby, and
that such Person has a financial interest in the transactions contemplated
hereby in that such Person or an Affiliate thereof (i) may receive interest or
other payments with respect to the Loans, the Letters of Credit, the Commitments
and this Agreement, (ii) may recognize a gain if it extended the Loans, the
Letters of Credit or the Commitments for an amount less than the amount being
paid for an interest in the Loans, the Letters of Credit or the Commitments by
such Lender or (iii) may receive fees or other payments in connection with the
transactions contemplated hereby, the Loan Documents or otherwise, including
structuring fees, commitment fees, arrangement fees, facility fees, upfront
fees, underwriting fees, ticking fees, agency fees, administrative agent or
collateral agent fees, utilization fees, minimum usage fees, letter of credit
fees, fronting fees, deal-away or alternate transaction fees, amendment fees,
processing fees, term out premiums, banker’s acceptance fees, breakage or other
early termination fees or fees similar to the foregoing. ARTICLE XII
MISCELLANEOUS Section 12.01 Notices. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
Section 12.01(b)), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by facsimile, as follows: 113

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(i) if to the Borrower, to it at 1401 17th Street, Suite 1000, Denver, Colorado
80202, Attention: George Glyphis (gglyphis@centennialresource.com; Facsimile No.
(303) 845-9516); (ii) If to the Administrative Agent or Issuing Bank, to it at
JPMorgan Chase Bank, N.A., 10 South Dearborn, Floor 7, IL1 0010, Chicago,
Illinois 60603, Attention of Loan and Agency Services, (Facsimile No. (888)
292-9533), with a copy to JPMorgan Chase Bank, N.A., 2200 Ross Avenue, Floor 3,
Dallas, Texas 75201-2787, Attention of Cathy Johann (Facsimile No. (214)
965-2884), and for all correspondence other than borrowings, continuation,
conversion and Letter of Credit requests, 1125 17th Street, Floor 3, Denver,
Colorado 80202, Attention: Ryan Fuessel (Facsimile: (832) 487-1765); and (iii)
if to any other Lender, to it at its address (or facsimile number) set forth in
its Administrative Questionnaire. Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have been
given when received; notices sent by facsimile shall be deemed to have been
given when sent (except that, if not given during normal business hours for the
recipient, shall be deemed to have been given at the opening of business on the
next business day for the recipient). Notices delivered through electronic
communications, to the extent provided in paragraph (b) below, shall be
effective as provided in said paragraph (b). (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 and the applicable Lender; provided that the foregoing shall not apply to
notices by the Borrower to the Administrative Agent or the Lenders pursuant to
Article II, Article III, Article IV and Article V unless otherwise agreed by the
Administrative Agent and the applicable Lender, if any. The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications. (c) Any party hereto may change
its address or facsimile number for notices and other communications hereunder
by notice to the other parties hereto. All notices and other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to have been given on the date of receipt. Section 12.02
Waivers; Amendments. (a) No failure on the part of the Administrative Agent, any
other Agent, the Issuing Bank or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege, or any abandonment or discontinuance of steps to enforce such right,
power or privilege, under any of the Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under any of the Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies of the Administrative Agent, any other Agent, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
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exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by Section 12.02(b), and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any other Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time. (b) Subject to Section 2.08(k) and Section 3.03(b), neither this
Agreement nor any provision hereof nor any Security Instrument nor any provision
thereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Borrower and the Majority Lenders or
by the Borrower and the Administrative Agent with the consent of the Majority
Lenders; provided that no such agreement (including, for the avoidance of doubt,
any New Borrowing Base Notice) shall (i) increase the Commitments or the Maximum
Credit Amount of any Lender without the written consent of such Lender, (ii)
increase the Borrowing Base without the written consent of each Lender (other
than any Defaulting Lender), decrease or maintain the Borrowing Base without the
consent of the Required Lenders, or modify Section 2.07(c) in any manner that
results in an increase in the Borrowing Base without the consent of each Lender
(other than any Defaulting Lender); provided that a Borrowing Base
redetermination may be delayed by the Required Lenders (but in no event shall
any such Borrowing Base redetermination be delayed past the next Scheduled
Redetermination without the consent of all Lenders), (iii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or
reduce any fees payable hereunder, or reduce any other Indebtedness hereunder or
under any other Loan Document, without the written consent of each Lender
affected thereby provided, however, that only the consent of the Majority
Lenders shall be necessary to waive any obligation of the Borrower to pay
interest or fees at the default rate of interest provided in Section 3.02(c),
(iv) postpone the scheduled date of payment or prepayment of the principal
amount of any Loan or LC Disbursement (excluding mandatory prepayments pursuant
to Section 3.04(c)), or any interest thereon, or any fees payable hereunder, or
any other Indebtedness hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or postpone or extend the Maturity
Date or the Termination Date without the written consent of each Lender affected
thereby, (v) change Section 4.01(b) or Section 4.01(c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (vi) waive or amend Section 3.04(c), Section 6.01,
Section 10.02(c) or Section 12.14 or change the definition of the terms
“Domestic Subsidiary”, “Foreign Subsidiary”, or “Subsidiary”, without the
written consent of each Lender (other than any Defaulting Lender), (vii) release
any Guarantor (except as set forth in Section 11.10 or in the Guaranty
Agreement), release all or substantially all of the collateral (other than as
provided in Section 11.10), or reduce the percentage set forth in Section
8.14(a) to less than 85%, without the written consent of each Lender (other than
any Defaulting Lender), (viii) change any of the provisions of this Section
12.02(b) or the definition of “Majority Lenders” or, subject to the following
clause (ix), any other provision hereof specifying the number, percentage or
class of Lenders required to waive, amend or modify any rights hereunder or
under any other Loan Documents or make any determination or grant any consent
hereunder or any other Loan Documents, without the written consent of each
Lender (other than any Defaulting Lender), or (ix) change the definition of
“Majority Lenders” or “Required Lenders” without the written consent of each
Lender (other than 115

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any Defaulting Lender); provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent, any
other Agent, or the Issuing Bank hereunder or under any other Loan Document
without the prior written consent of the Administrative Agent, such other Agent
or the Issuing Bank, as the case may be. Notwithstanding the foregoing, (w) any
supplement to Schedule 7.14 (Subsidiaries) shall be effective simply by
delivering to the Administrative Agent a supplemental schedule clearly marked as
such and, upon receipt, the Administrative Agent will promptly deliver a copy
thereof to the Lenders, (x) the Borrower and the Administrative Agent may amend
this Agreement or any other Loan Document without the consent of any of the
Lenders in order to correct, amend or cure any ambiguity, omission,
inconsistency, illegality or defect therein, or correct any typographical error
or other manifest error in any Loan Document or otherwise effectuate the intent
of the parties hereto, (y) the Administrative Agent and the Borrower (or other
applicable Credit Party) may enter into any amendment, modification or waiver of
this Agreement or any other Loan Document or enter into any new Loan Document or
other agreement or instrument to effect the granting, perfection, protection,
expansion or enhancement of any Lien to secure, or the guarantee of, the
Indebtedness for the benefit of the Secured Parties or as required by any
Governmental Requirement to give effect to, protect or otherwise enhance the
rights or benefits of the Secured Parties under the Loan Documents, in each case
without the consent of any Lender, and (z) the Administrative Agent and the
Borrower (or other applicable Credit Party) may enter into an amendment,
modification or waiver of this Agreement or of any other Loan Document or enter
into any agreement or instrument to join additional Persons as Credit Parties
pursuant to the terms thereof. Section 12.03 Expenses, Indemnity; Damage Waiver.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Administrative Agent, the reasonable travel, photocopy,
mailing, courier, telephone and other similar expenses, and the cost of
environmental invasive and non-invasive assessments and audits and surveys and
appraisals, in connection with the syndication of the credit facilities provided
for herein, the preparation, negotiation, execution, delivery and administration
(both before and after the execution hereof and including advice of counsel to
the Administrative Agent as to the rights and duties of the Administrative Agent
and the Lenders with respect thereto) of this Agreement and the other Loan
Documents and any amendments, modifications or waivers of or consents related to
the provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
costs, expenses, Taxes, assessments and other charges incurred by the
Administrative Agent in connection with any filing, registration, recording or
perfection of any security interest contemplated by this Agreement or any
Security Instrument or any other document referred to therein, (iii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, (iv) all out-of-pocket expenses incurred by
any Agent or the Issuing Bank, including the fees, charges and disbursements of
any counsel for any Agent or the Issuing Bank, in connection with the
enforcement or protection of its rights in connection with this Agreement or any
other Loan Document, including its rights under this Section 12.03, or in
connection with the Loans made or Letters of Credit issued hereunder, including,
without limitation, all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit. The
Borrower also 116

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agrees to pay, during the continuance of an Event of Default, all reasonable
out-of-pocket expenses of one additional legal counsel representing the Lenders
as a group to the extent such legal fees are incurred by the Lenders in
connection with the enforcement or protection of their rights in connection with
this Agreement or any other Loan Document, including their rights under this
Section 12.03. (b) THE BORROWER SHALL INDEMNIFY EACH AGENT, EACH ARRANGER, THE
ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING
PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND DEFEND AND
HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
PENALTIES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE REASONABLE FEES,
CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR
ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A
RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE
PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF
THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE
OF THE PARENT, THE BORROWER OR ANY OTHER RESTRICTED SUBSIDIARY TO COMPLY WITH
THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY
GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY
BREACH OF ANY WARRANTY OR COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN
ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS
DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE
OF THE PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY THE
ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE
DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH
THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER ANY
LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER
IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v)
ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF
THE PARENT AND ITS RESTRICTED SUBSIDIARIES BY THE PARENT AND ITS RESTRICTED
SUBSIDIARIES, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE
THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY
ENVIRONMENTAL LAW APPLICABLE TO THE PARENT OR ANY RESTRICTED SUBSIDIARY OR ANY
OF THEIR PROPERTIES OR OPERATIONS, INCLUDING, THE PRESENCE, GENERATION, STORAGE,
RELEASE, THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL
OR TREATMENT OF HAZARDOUS MATERIALS ON OR AT ANY OF THEIR PROPERTIES, (ix) THE
BREACH OR NON-COMPLIANCE BY THE PARENT OR ANY RESTRICTED SUBSIDIARY WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE PARENT OR ANY RESTRICTED SUBSIDIARY, (x) THE
PAST OWNERSHIP BY THE PARENT OR ANY 117

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RESTRICTED SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF
THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD
RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR
TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE PARENT OR ANY RESTRICTED SUBSIDIARY OR ANY
ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY OWNED OR OPERATED BY THE PARENT OR ANY OF ITS RESTRICTED SUBSIDIARIES,
(xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE PARENT OR ANY OF ITS
RESTRICTED SUBSIDIARIES, OR (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; provided THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES (X) ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM
THE GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (Y)
RESULT FROM A CLAIM BROUGHT BY THE BORROWER, THE PARENT OR ANY OF ITS
SUBSIDIARIES AGAINST AN INDEMNITEE FOR BREACH IN BAD FAITH OF SUCH INDEMNITEE’S
OBLIGATIONS HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT, IF THE BORROWER, THE
PARENT OR ANY OF ITS SUBSIDIARIES HAS OBTAINED A FINAL AND NONAPPEALABLE
JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION. THIS SECTION 12.03(B) SHALL NOT APPLY WITH RESPECT TO TAXES OTHER
THAN ANY TAXES THAT REPRESENT LOSSES, CLAIMS, DAMAGES, ETC. ARISING FROM ANY
NON-TAX CLAIM. (c) To the extent that the Borrower fails to pay any amount
required to be paid by it to any Agent, the Arranger or the Issuing Bank under
Section 12.03(a) or (b), each Lender severally agrees to pay to such Agent, such
Arranger or the Issuing Bank, as the case may be, such Lender’s Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought), of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent,
such Arranger or the Issuing Bank in its capacity as such. 118

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(d) All amounts due under this Section 12.03 shall be payable promptly after
written demand therefor. (e) No Indemnitee shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed by it through telecommunications, electronic or other
information transmission systems in connection with this Agreement or the other
Loan Documents or the transactions contemplated hereby or thereby, other than to
the extent that such damages are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence,
bad faith or willful misconduct of such Indemnitee. Section 12.04 Successors and
Assigns. (a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section 12.04. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement, and except for the foregoing Persons there are no third party
beneficiaries to this Agreement. (b) (i) Subject to the conditions set forth in
Section 12.04(b)(ii), any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of: (A) the
Borrower, provided that no consent of the Borrower shall be required if such
assignment is to a Lender, an Affiliate of a Lender, an Approved Fund or, if an
Event of Default has occurred and is continuing; and (B) the Administrative
Agent, provided that no consent of the Administrative Agent shall be required
for an assignment to an assignee that is a Lender immediately prior to giving
effect to such assignment. (ii) Assignments shall be subject to the following
additional conditions: (A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Assumption with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $5,000,000 119

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unless each of the Borrower and the Administrative Agent otherwise consent,
provided that no such consent of the Borrower shall be required if an Event of
Default has occurred and is continuing; (B) each total and partial assignment
shall be made as an assignment of a proportionate part of all the assigning
Lender’s rights and obligations under this Agreement, including, without
limitation, its Commitment, Maximum Credit Amount, LC Exposure, participations
in Letters of Credit, and outstanding Loans; (C) the parties to each assignment
shall execute and deliver to the Administrative Agent an Assignment and
Assumption, together with a processing and recordation fee of $3,500; (D) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire; and (E) in no event may any Lender assign all
or a portion of its rights and obligations under this Agreement to a natural
person, a Defaulting Lender, an Industry Competitor or to the Borrower or any
Affiliate of the Borrower. (iii) Subject to Section 12.04(b)(iv) and the
acceptance and recording thereof by the Administrative Agent, from and after the
effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Section 5.01, Section 5.02, Section 5.03 and
Section 12.03). Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 12.04 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.04(c). (iv) The Administrative Agent, acting solely for this purpose as a
non- fiduciary agent of the Borrower, shall maintain at one of its offices 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 Maximum Credit
Amount and Elected Commitment of, and principal amount (and stated interest) of
the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable
time and from time to time upon reasonable prior notice. In connection with any
changes to the Register, if necessary, the Administrative Agent will reflect the
revisions on Annex I and forward a copy of such revised Annex I to the Borrower,
the Issuing Bank and each Lender. 120

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(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in Section 12.04(b) and any written
consent to such assignment required by Section 12.04(b), the Administrative
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this Section 12.04(b). (c) (i) Any Lender may, without the consent of the
Borrower, the Administrative Agent or the Issuing Bank, sell participations to
one or more banks or other Persons (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (C) the Borrower, the Administrative Agent, the Issuing Bank
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and (D) no participation may be sold to the Borrower, any Affiliate of
the Borrower, any natural person or any Industry Competitor. 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 the first proviso to Section 12.02(b) that
affects such Participant. In addition such agreement must provide that the
Participant be bound by the provisions of Section 12.03. Subject to Section
12.04(c)(ii), the Borrower agrees that each Participant shall be entitled to the
benefits of Section 5.01, Section 5.02 and Section 5.03 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to Section
12.04(b). To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 12.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 4.01(c) 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 Loans or other
obligations under the Loan Documents (the “Participant Register”); provided that
no Lender shall have any obligation to disclose all or any portion of the
Participant Register (including the identity of any Participant or any
information relating to a Participant's interest in any commitments, loans,
letters of credit or its other obligations under any Loan Document) to any
Person except to the extent that such disclosure is necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1(c) of the United States Treasury Regulations. The
entries in the Participant Register shall be conclusive absent manifest error,
and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. For the avoidance of
doubt, the Administrative Agent (in its capacity as Administrative Agent) shall
have no responsibility for maintaining a Participant Register. (ii) Each
Participant agrees (A) to be subject to the provisions of Section 5.03 (subject
to the requirements and limitations therein, including the requirements under
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Section 5.03(f) (it being understood that the documentation required under
Section 5.03(f) shall be delivered to the participating Lender)) as if it were
an assignee under paragraph (b) of this Section; and (B) that it shall not be
entitled to receive any greater payment under Sections 5.01 or 5.03, 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. (d) 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, without limitation, any pledge or
assignment to secure obligations to a Federal Reserve Bank or other central bank
having jurisdiction over such Lender, and this Section 12.04 shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto. (e) Notwithstanding any other provisions of this
Section 12.04, no transfer or assignment of the interests or obligations of any
Lender or any grant of participations therein shall be permitted if such
transfer, assignment or grant would require any Credit Party to file a
registration statement with the SEC or to qualify the Loans under the “Blue Sky”
laws of any state. Section 12.05 Survival; Revival; Reinstatement. (a) All
covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any
such other party or on its behalf and notwithstanding that the Administrative
Agent, any other Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of Section 5.01, Section 5.02, Section 5.03 and
Section 12.03 and Article XI shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement, any other Loan
Document or any provision hereof or thereof. (b) To the extent that any payments
on the Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Administrative Agent’s and the Lenders’ Liens, security
interests, rights, powers and remedies under this Agreement and each Loan
Document shall continue in full force and effect. In such event, each Loan
Document shall be automatically reinstated and the Borrower shall take such 122

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action as may be reasonably requested by the Administrative Agent and the
Lenders to effect such reinstatement. Section 12.06 Counterparts; Integration;
Effectiveness. (a) This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. (b) This Agreement, the other Loan Documents and any separate
letter agreements with respect to fees payable to the Administrative Agent
constitute the entire contract among the parties relating to the subject matter
hereof and thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof and
thereof. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. (c) Except as
provided in Section 6.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by facsimile or other electronic transmission (e.g. .pdf)
shall be effective as delivery of a manually executed counterpart of this
Agreement. Section 12.07 Severability. Any provision of this Agreement or any
other Loan Document held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof or thereof; and
the invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction. Section 12.08 Right of
Setoff. If an Event of Default shall have occurred and be continuing, each
Lender and each of its Affiliates 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 obligations (of whatsoever kind, including, without
limitations obligations under Swap Agreements) at any time owing by such Lender
or Affiliate to or for the credit or the account of the Parent or any Restricted
Subsidiary against any of and all the obligations of the Parent or any
Restricted Subsidiary owed to such Lender now or hereafter existing under this
Agreement or any other Loan Document, irrespective of whether or not such Lender
shall have made any demand under this Agreement or any other Loan Document and
although such obligations may be unmatured; provided that in the event that any
Defaulting Lender shall exercise any such right of setoff, (x) all amounts so
set off shall be paid over immediately to the Administrative Agent for further
application in accordance with the provisions of Sections 2.08(l) and 3.05(d),
and, pending such payment, shall be segregated by such 123

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Defaulting Lender from its other funds and deemed held in trust for the benefit
of the Administrative Agent and the Lenders, and (y) the Defaulting Lender shall
provide promptly to the Administrative Agent a statement describing in
reasonable detail the obligations owing to such Defaulting Lender as to which it
exercised such right of setoff. The rights of each Lender under this Section
12.08 are in addition to other rights and remedies (including other rights of
setoff) which such Lender or its Affiliates may have. Each Lender and Issuing
Bank agrees to notify the Borrower and the Administrative Agent promptly after
any such setoff and application; provided that the failure to give such notice
shall not affect the validity of such setoff and application. Section 12.09
GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) THIS AGREEMENT
AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW
PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE INTEREST AT
THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED. (b) ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT FROM ANY THEREOF, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR ITSELF
AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO
JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING
JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION. (c)
EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO
SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION). NOTHING HEREIN SHALL AFFECT
THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION. 124

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(d) EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; PROVIDED THAT NOTHING CONTAINED IN THIS SECTION
12.09(d)(ii) SHALL LIMIT THE BORROWER’S INDEMNIFICATION OBLIGATIONS TO THE
EXTENT SET FORTH IN SECTION 12.03 TO THE EXTENT SUCH SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES ARE INCLUDED IN ANY THIRD PARTY CLAIM IN
CONNECTION WITH WHICH SUCH INDEMNITEE IS OTHERWISE ENTITLED TO INDEMNIFICATION
HEREUNDER; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 12.09. Section 12.10 Headings. Article and Section
headings and the Table of Contents used herein are for convenience of reference
only, are not part of this Agreement and shall not affect the construction of,
or be taken into consideration in interpreting, this Agreement. Section 12.11
Confidentiality. Each of the Administrative Agent, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority having jurisdiction over such Administrative Agent,
Issuing Bank or Lender, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement or any other Loan Document, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
for the express benefit of the Borrower containing provisions substantially the
same as those of this Section 12.11, to (i) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any actual or prospective counterparty
(or its advisors) to any Swap Agreement relating to the Borrower and its
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 12.11 or (ii) becomes available to the Administrative Agent, the
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower. For the purposes of this Section 12.11, “Information” means all
information received from the Parent or any Restricted Subsidiary relating to
the Parent or any Restricted Subsidiary and their businesses, 125

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other than any such information that is available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
the Parent or a Restricted Subsidiary; provided that, in the case of information
received from the Parent or any Restricted Subsidiary 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 12.11 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. Notwithstanding anything herein to the contrary,
“Information” shall not include, and the Parent, the Parent’s Subsidiaries, the
Administrative Agent, each Lender and the respective Affiliates of each of the
foregoing (and the respective partners, directors, officers, employees, agents,
advisors and other representatives of the aforementioned Persons), and any other
party, may disclose to any and all Persons, without limitation of any kind (a)
any information with respect to the United States federal and state income tax
treatment of the transactions contemplated hereby and any facts that may be
relevant to understanding the United States federal or state income tax
treatment of such transactions (“tax structure”), which facts shall not include
for this purpose the names of the parties or any other person named herein, or
information that would permit identification of the parties or such other
persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or tax structure, and (b)
all materials of any kind (including opinions or other tax analyses) that are
provided to the Borrower, the Administrative Agent or such Lender relating to
such tax treatment or tax structure. Section 12.12 Interest Rate Limitation. It
is the intention of the parties hereto that each Lender shall conform strictly
to usury laws applicable to it. Accordingly, if the transactions contemplated
hereby would be usurious as to any Lender under laws applicable to it (including
the laws of the United States of America, any State therein, or any other
jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Loan Documents or any
agreement entered into in connection with or as security for the Notes, it is
agreed as follows: (i) the aggregate of all consideration which constitutes
interest under law applicable to any Lender that is contracted for, taken,
reserved, charged or received by such Lender under any of the Loan Documents or
agreements or otherwise in connection with the Notes shall under no
circumstances exceed the maximum amount allowed by such applicable law, and any
excess shall be canceled automatically and if theretofore paid shall be credited
by such Lender on the principal amount of the Indebtedness (or, to the extent
that the principal amount of the Indebtedness shall have been or would thereby
be paid in full, refunded by such Lender to the Borrower); and (ii) in the event
that the maturity of the Notes is accelerated by reason of an 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 under law applicable to any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by such Lender as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited by such Lender on the
principal amount of the Indebtedness (or, to the extent that the principal
amount of the Indebtedness shall have been or would thereby be paid in full,
refunded by such Lender to the Borrower). All sums paid or agreed to be paid to
any Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to such Lender, be amortized, prorated,
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until payment in full so that the rate or amount of interest on account of any
Loans hereunder does not exceed the maximum amount allowed by such applicable
law. If at any time and from time to time (i) the amount of interest payable to
any Lender on any date shall be computed at the Highest Lawful Rate applicable
to such Lender pursuant to this Section 12.12 and (ii) in respect of any
subsequent interest computation period the amount of interest otherwise payable
to such Lender would be less than the amount of interest payable to such Lender
computed at the Highest Lawful Rate applicable to such Lender, then the amount
of interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.12. To the extent that Chapter 303 of the Texas
Finance Code is relevant for the purpose of determining the Highest Lawful Rate
applicable to a Lender, such Lender elects to determine the applicable rate
ceiling under such Chapter by the weekly ceiling from time to time in effect.
Chapter 346 of the Texas Finance Code does not apply to the Borrower’s
obligations hereunder. Section 12.13 EXCULPATION PROVISIONS. EACH OF THE PARTIES
HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT
READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF
THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN
REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY
ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING
THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO
AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF
ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT “CONSPICUOUS.” Section 12.14 Collateral Matters; Swap
Agreements. The benefit of the Security Instruments and of the provisions of
this Agreement relating to any collateral securing the Indebtedness shall also
extend to and be available to the Secured Swap Providers, subject to the
limitations in the above definition of “Secured Swap Provider”. No Lender or
Affiliate of a Lender shall have any voting or consent rights under any Loan
Document in its capacity as a Secured Swap Provider or as a result of the
existence of obligations owed to it under any Swap Agreements. Section 12.15 No
Third Party Beneficiaries. This Agreement, the other Loan Documents, and the
agreement of the Lenders to make Loans and the Issuing Bank to issue, amend,
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extend Letters of Credit hereunder are solely for the benefit of the Borrower,
and no other Person (including, without limitation, any Subsidiary of the Parent
(other than the Borrower) or any obligor, contractor, subcontractor, supplier or
materialsman) shall have any rights, claims, remedies or privileges hereunder or
under any other Loan Document against the Administrative Agent, any other Agent,
the Issuing Bank or any Lender for any reason whatsoever. There are no third
party beneficiaries other than as expressly provided herein with respect to
Secured Swap Providers, Indemnitees (as provided in Section 12.03), and
Participants (as provided in Section 12.04). Section 12.16 USA Patriot Act
Notice. Each Lender hereby notifies the Parent and the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (as amended from time to time, including any
successor statute, the “Act”), it is required to obtain, verify and record
information that identifies the Parent and the Borrower, which information
includes the name and address of the Parent and the Borrower and other
information that will allow such Lender to identify the Parent and the Borrower
in accordance with the Act. Section 12.17 No Advisory or Fiduciary
Responsibility. In connection with all aspects of each transaction contemplated
hereby (including in connection with any amendment, waiver or other modification
hereof or of any other Loan Document), each of the Parent and the Borrower
acknowledges and agrees, and acknowledges the other Restricted Subsidiaries’
understanding, that: (a) (i) no fiduciary, advisory or agency relationship
between the Parent and its Restricted Subsidiaries and the Administrative Agent
or any Lender is intended to be or has been created in respect of the
transactions contemplated hereby or by the other Loan Documents, irrespective of
whether the Administrative Agent or any Lender has advised or is advising the
Parent or any Restricted Subsidiary on other matters; (ii) the arranging and
other services regarding this Agreement provided by the Administrative Agent and
the Lenders are arm’s-length commercial transactions between the Parent and its
Restricted Subsidiaries, on the one hand, and the Administrative Agent and the
Lenders, on the other hand; (iii) the Borrower has consulted its own legal,
accounting, regulatory and tax advisors to the extent that it has deemed
appropriate; and (iv) the Borrower is capable of evaluating, and understands and
accepts, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; and (b) (i) the Administrative Agent and the
Lenders each 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 Parent or any of
its Restricted Subsidiaries, or any other Person; (ii) neither the
Administrative Agent nor the Lenders has any obligation to the Parent or any of
its Restricted Subsidiaries with respect to the transactions contemplated hereby
except those obligations expressly set forth herein and in the other Loan
Documents; and (iii) the Administrative Agent and the Lenders and their
respective Affiliates may be engaged, for their own accounts or the accounts of
customers, in a broad range of transactions that involve interests that differ
from those of the Parent and its Restricted Subsidiaries, and neither the
Administrative Agent nor the Lenders has any obligation to disclose any of such
interests to the Parent or its Restricted Subsidiaries. To the fullest extent
permitted by Law, the Borrower hereby waives and releases any claims that it may
have against the Administrative Agent and the Lenders with respect to any breach
or alleged breach of agency or fiduciary duty in connection with any aspect of
any transaction contemplated hereby. 128

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Section 12.18 Amendment and Restatement. It is the intention of the parties
hereto that this Agreement amends, restates, supersedes and replaces the
Existing A&R Credit Agreement in its entirety; provided, that, (a) such
amendment and restatement shall operate to renew, amend, modify, and extend all
of the rights, duties, liabilities and obligations of the Borrower under the
Existing A&R Credit Agreement and under the Existing Loan Documents, which
rights, duties, liabilities and obligations are hereby renewed, amended,
modified and extended, and shall not act as a novation thereof, and (b) the
Liens securing the Indebtedness under and as defined in the Existing A&R Credit
Agreement and the rights, duties, liabilities and obligations of the Borrower
and the Guarantors under the Existing A&R Credit Agreement and the Existing Loan
Documents to which they are a party shall not be extinguished but shall be
carried forward and shall secure such Indebtedness, obligations and liabilities
as amended, renewed, extended and restated hereby. The parties hereto ratify and
confirm each of the Existing Loan Documents entered into prior to the Effective
Date (but excluding the Existing A&R Credit Agreement) and agree that such
Existing Loan Documents continue to be legal, valid, binding and enforceable in
accordance with their terms (except to the extent amended, restated and/or
superseded in connection with the transactions contemplated hereby), however,
for all matters arising prior to the Effective Date (including the accrual and
payment of interest and fees, and matters relating to indemnification and
compliance with financial covenants), the terms of the Existing A&R Credit
Agreement (as unmodified by this Agreement) shall control and are hereby
ratified and confirmed. The Borrower represents and warrants that, as of the
Effective Date, there are no claims or offsets against, or defenses or
counterclaims to, its obligations (or the obligations of any Guarantor) under
the Existing A&R Credit Agreement or any of the other Existing Loan Documents.
Section 12.19 True-up Loans. Upon the effectiveness of this Agreement, (a) each
Lender who holds Loans in an aggregate amount less than its Applicable
Percentage (after giving effect to this amendment and restatement) of all Loans
shall advance new Loans which shall be disbursed to the Administrative Agent and
used to repay Loans outstanding to each Lender who holds Loans in an aggregate
amount greater than its Applicable Percentage of all Loans, (b) each Lender’s
participation in each Letter of Credit shall be automatically adjusted to equal
its Applicable Percentage (after giving effect to this amendment and
restatement), and (c) such other adjustments shall be made as the Administrative
Agent shall specify so that each Lender’s Revolving Credit Exposure equals its
Applicable Percentage (after giving effect to this amendment and restatement) of
the total Revolving Credit Exposures of all of the Lenders. Section 12.20
Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Loan Document or in any other
agreement, arrangement or understanding among any such parties, each party
hereto acknowledges that any liability of any EEA Financial Institution arising
under any Loan Document, to the extent such liability is unsecured, may be
subject to the write-down and conversion powers of an EEA Resolution Authority
and agrees and consents to, and acknowledges and agrees to be bound by: (a) the
application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and (b) the effects of
any Bail-In Action on any such liability, including, if applicable: 129

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(i) a reduction in full or in part or cancellation of any such liability; (ii) a
conversion of all, or a portion of, such liability into shares or other
instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or (iii) the variation of the terms
of such liability in connection with the exercise of the write-down and
conversion powers of any EEA Resolution Authority. Section 12.21 Exiting Lender.
Deutsche Bank AG, New York Branch (the “Exiting Lender”), hereby sells, assigns,
transfers and conveys to the Lenders hereto, and each of the Lenders hereto
hereby purchases and accepts, so much of the aggregate Commitments under, and
Loans outstanding under, the Existing A&R Credit Agreement such that, after
giving effect to this Agreement (a) such Exiting Lender shall (i) be paid in
full in cash for all amounts owing under the Existing A&R Credit Agreement as
agreed and calculated by such Exiting Lender and the Administrative Agent in
accordance with the Existing A&R Credit Agreement, (ii) cease to be a “Lender”
under the Existing A&R Credit Agreement and the “Loan Documents” as defined
therein and (iii) relinquish its rights and be released from its obligations
under the Existing A&R Credit Agreement and the other “Loan Documents” as
defined therein, and (b) the Maximum Credit Amount and Elected Commitment of
each Lender shall be as set forth on Annex I hereto. The foregoing assignments,
transfers and conveyances are without recourse to such Exiting Lender and
without any warranties whatsoever by the Administrative Agent or such Exiting
Lender as to title, enforceability, collectability, documentation or freedom
from liens or encumbrances, in whole or in part, other than the warranty of such
Exiting Lender that it has not previously sold, transferred, conveyed or
encumbered such interests. The assignee Lenders and the Administrative Agent
shall make all appropriate adjustments in payments under the Existing Credit
Agreement, the “Notes” and the other “Loan Documents” thereunder for periods
prior to the adjustment date among themselves. The Exiting Lender is executing
this Agreement for the sole purpose of evidencing its agreement to this Section
12.21 only and for no other purpose and shall have no obligations under this
Agreement except as set forth in this Section 12.21. [SIGNATURES BEGIN NEXT
PAGE] 130

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The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written. BORROWER: CENTENNIAL RESOURCE PRODUCTION, LLC, a
Delaware limited liability company By: /s/ George Glyphis Name: George Glyphis
Title: Vice President, Chief Financial Officer [SIGNATURE PAGE TO SECOND AMENDED
AND RESTATED CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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ADMINISTRATIVE AGENT AND LENDER: JPMORGAN CHASE BANK, N.A., as Administrative
Agent, Issuing Bank and a Lender By: /s/ Garrett Sacco Name: Garrett Sacco
Title: Authorized Officer [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: WELLS FARGO BANK, N.A., as a Lender By: /s/ Jonathan Herrick Name:
Jonathan Herrick Title: Director [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: COMERICA BANK, as a Lender By: /s/ Cassandra M. Lucas Name: Cassandra M.
Lucas Title: Portfolio Manager [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: BMO HARRIS BANK, N.A. By: /s/ James V. Ducote Name: James V. Ducote
Title: Managing Director [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH By: /s/ Trudy Nelson
Name: Trudy Nelson Title: Authorized Signatory By: /s/ Donovan C. Broussard
Name: Donovan C. Broussard Title: Authorized Signatory [SIGNATURE PAGE TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: U.S. BANK NATIONAL ASSOCIATION By: /s/ Ben J. Leonard Name: Ben J.
Leonard Title: Vice President [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: BRANCH BANKING AND TRUST COMPANY By: /s/ James Giordano Name: James
Giordano Title: Senior Vice President [SIGNATURE PAGE TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: ROYAL BANK OF CANADA By: /s/ Emilee Scott Name: Emilee Scott Title:
Authorized Signatory [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: CITIBANK, N.A. By: /s/ Jeff Ard Name: Jeff Ard Title: Vice President
[SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT – CENTENNIAL
RESOURCE PRODUCTION, LLC]

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LENDER: FIFTH THIRD BANK By: /s/ Jonathan H Lee Name: Jonathan H Lee Title:
Director [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT –
CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: CAPITAL ONE, NATIONAL ASSOCIATION By: /s/ Cameron Breitenbach Name:
Cameron Breitenbach Title: Vice President [SIGNATURE PAGE TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: KEYBANK, N.A., as a Lender By: /s/ David M. Bornstein Name: David M.
Bornstein Title: Senior Vice President [SIGNATURE PAGE TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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LENDER: PNC BANK, NATIONAL ASSOCIATION By: /s/ Sandra Salazar Name: Sandra
Salazar Title: Managing Director [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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EXITING LENDER: DEUTSCHE BANK AG, NEW YORK BRANCH By: /s/ Maria Guinchard Name:
Maria Guinchard Title: Vice President By: /s/ Alicia Schug Name: Alicia Schug
Title: Vice President [SIGNATURE PAGE TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT – CENTENNIAL RESOURCE PRODUCTION, LLC]

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ANNEX I ALLOCATION OF MAXIMUM CREDIT AMOUNTS AND ELECTED COMMITMENTS Applicable
Maximum Credit Elected Name of Lender Percentage Amount Commitment JPMorgan
Chase Bank, 10.00000000% $150,000,000.00 $60,000,000.00 N.A. Comerica Bank
10.00000000% $150,000,000.00 $60,000,000.00 Royal Bank of Canada 10.00000000%
$150,000,000.00 $60,000,000.00 Wells Fargo Bank, N.A. 10.00000000%
$150,000,000.00 $60,000,000.00 BMO Harris Bank, 6.66666666% $100,000,000.00
$40,000,000.00 N.A. Canadian Imperial 6.66666666% $100,000,000.00 $40,000,000.00
Bank of Commerce, New York Branch Citibank, N.A. 6.66666666% $100,000,000.00
$40,000,000.00 Fifth Third Bank 6.66666666% $100,000,000.00 $40,000,000.00 U.S.
Bank National 6.66666666% $100,000,000.00 $40,000,000.00 Association Branch
Banking and 6.66666666% $100,000,000.00 $40,000,000.00 Trust Company Capital
One, National 6.66666666% $100,000,000.00 $40,000,000.00 Association KeyBank,
National 6.66666666% $100,000,000.00 $40,000,000.00 Association PNC Bank,
National 6.66666666% $100,000,000.00 $40,000,000.00 Association 100. 00000000%
TOTAL $1,500,000,000.00 $600,000,000.00

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