Exhibit 10.2

 

  Wachovia Bank, National Association     Wachovia Capital Markets, LLC     One
Wachovia Center   LOGO [g86153logo_ex102.jpg]  

301 South College Street

Charlotte, NC 28288-0737

     

CONFIDENTIAL

June 1, 2007

Atlas Pipeline Partners, LP

c/o Atlas Pipeline Partners GP, LLC

712 Fifth Avenue, 10th Floor

New York, New York 10019

Attention: Daniel C. Herz

 

Re:   Project Big Lake I Commitment Letter   $1,150 Million Senior Secured
Credit Facilities

Ladies and Gentlemen:

You have advised Wachovia Bank, National Association (“Wachovia Bank”), and
Wachovia Capital Markets, LLC (“Wachovia Securities” and, together with Wachovia
Bank, the “Wachovia Parties” or “we” or “us”) that Atlas Pipeline Partners, LP
(“Atlas”, “Borrower” or “you”) intend to acquire (the “Acquisition”) certain
assets from Anadarko Petroleum Corporation, a Delaware corporation (the
“Seller”) consisting of all of the gathering pipeline, processing plants and
associated compression and related assets currently known as the Chaney Dell and
Midikiff/Benedum Systems (the “Acquired Business”) pursuant to two master
formation agreements between Atlas and the Seller (collectively, the
“Acquisition Agreement”). The date on which the Acquisition is consummated is
referred to as the “Closing Date”.

We understand that the total funds needed to finance the Acquisition, to pay
fees, commissions and expenses in connection with the Transactions (as defined
below) and to finance ongoing working capital requirements of the Borrower (as
defined in Annex A) and certain of its subsidiaries following the Transactions
will include:

(a) senior secured credit facilities of up to $ 1,150.0 million to the Borrower
consisting of (i) a senior secured term loan facility of up to $900.0 million
(the “Term Loan Facility”), and (ii) a senior secured revolving credit facility
of up to $250.0 million (the “Revolving Credit Facility” and, together with the
Term Loan Facility, the “Credit Facilities”), up to $60.0 million of which may
be drawn on the Closing Date, each as described in the Summary of Proposed Terms
and Conditions attached hereto as Annex A (the “Term Sheet”); and

(b) issuance of common equity by Atlas (such issuance, the “Equity Issuance”).

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As used herein, the term “Transactions” means, collectively, the Acquisition,
the borrowings under the Credit Facilities, refinancing of certain existing
Atlas debt, the Equity Issuance and the payments of fees, commissions and
expenses in connection with each of the foregoing.

1. Commitments.

(a) You have requested that Wachovia Bank commit to provide the Credit
Facilities. Wachovia Bank is pleased to advise you of its commitment to provide
to the Borrower 100% of the principal amount of the Credit Facilities (the
“Commitments”), in each case upon the terms and subject to the conditions set
forth in this Commitment Letter, in the Term Sheets and the Conditions Annex
attached as Annex B hereto (the “Conditions Annex”). We acknowledge and agree
that our commitment is not conditioned upon a successful syndication.

(b) It is agreed that Wachovia Securities acting alone or through or with
affiliates selected by it, will act as the sole lead bookrunner and sole lead
arranger (in such capacity, the “Arranger”) for a syndicate of financial
institutions and other entities (such financial institutions and other entities
committing to the Credit Facilities, including Wachovia Bank, the “Lenders”). It
is also agreed that Wachovia Bank will act as the sole and exclusive
administrative agent (in such capacity, the “Administrative Agent”) for the
Credit Facilities.

2. Conditions to Commitments. The Commitments of Wachovia Bank and the
undertakings of Wachovia Securities hereunder are subject to:

(a) your written acceptance, and compliance with the terms and conditions, of a
letter dated the date hereof from the Wachovia Parties to you (the “Fee Letter”)
pursuant to which you agree to pay, or cause to be paid, to the Wachovia Parties
certain fees and expenses and to fulfill certain other obligations in connection
with the Facilities to the extent that you have accepted this Commitment Letter
with respect to such Credit Facilities; and

(b) the satisfaction of all other conditions described herein and in the
Conditions Annex.

3. Syndication.

(a) You agree to actively assist us in achieving a timely syndication of the
Credit Facilities that is satisfactory to us. To assist us in our syndication
efforts, you agree, upon our request, to (i) provide, and cause your affiliates,
advisors, and, to the extent possible using your reasonable best efforts, the
Seller and the Acquired Business to provide, to the Arranger and each of the
Lenders all information reasonably requested to successfully complete the
syndication, (ii) assist, and cause your affiliates, advisors and, to the extent
possible using your reasonable best efforts, the Seller and the Acquired
Business to assist, the Arranger in the preparation of one or more confidential
information memoranda and other marketing materials to be used in connection
with the syndication, (iii) make available (including at one or more meetings of
prospective Lenders) your representatives and, to the extent possible using your
reasonable best efforts, representatives of the Seller and the Acquired Business
on reasonable prior notice and at reasonable times and places, (iv) use your
reasonable best efforts to ensure that the Credit Facilities have received a
rating from Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”) and
(v) use your reasonable best efforts to assist our syndication efforts through
your existing lending relationships.

(b) From the date hereof and through the completion of the syndication of the
Credit Facilities, you shall take all necessary steps so that there are no
competing offers, placements or arrangements of any debt securities or bank
financings by or on behalf of the Borrower or any of its affiliates. The
agreement in the immediately preceeding sentence shall survive the termination
of this Commitment Letter if the Credit Facilities shall have been entered into
but syndication is not completed.

 

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(c) The Arranger and/or one or more of its affiliates will exclusively manage
all aspects of the syndication of the Credit Facilities (in consultation with
you), including decisions as to the selection and number of potential Lenders to
be approached, when they will be approached, whose commitments will be accepted,
when they will participate and the final allocations of the commitments and any
related fees among the Lenders, and the Arranger will exclusively perform all
functions and exercise all authority as is customarily performed and exercised
in such capacities. Any agent or arranger or other titles or roles awarded to
other Lenders are subject to the Arranger’s prior written approval. You agree
that no Lender will receive compensation outside the terms contained herein and
in the Fee Letter in order to obtain its commitment to participate in the Credit
Facilities and that the Arranger shall have sole discretion with respect to the
allocation and distribution of fees among the Lenders.

4. Information.

(a) You hereby represent and warrant that (i) all information (other than the
Projections, as defined below) concerning the Borrower, the Acquired Business
and their respective subsidiaries and the Transactions (the “Information”) that
has been or will be made available to the Wachovia Parties or the Lenders by
you, the Seller, the Acquired Business or any of your or their respective
representatives, subsidiaries or affiliates is, or will be when furnished,
complete and correct in all material respects and does not, or will not when
furnished, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances under which such statements are made
(it being understood that your representations regarding Information and
Projections in each case, with respect to the Acquired Business, shall be
limited to the best of your knowledge) and (ii) all financial projections
concerning the Borrower, the Acquired Business and their respective subsidiaries
that have been or will be made available to the Wachovia Parties or the Lenders
by you, the Seller, the Acquired Business or any of your or their respective
representatives, subsidiaries or affiliates (the “Projections”) have been or
will be prepared in good faith based upon reasonable assumptions at the time
they were made. You agree to supplement, or cause to be supplemented, the
Information and the Projections from time to time until the Closing Date and, if
requested by the Arranger, for a period after the Closing Date, such period to
end upon the completion of a successful syndication of the Credit Facilities so
that the conditions and representations and warranties contained in the
preceding sentence remain correct in all material respects. In syndicating the
Credit Facilities, we will be entitled to use and rely primarily on the
Information and the Projections without responsibility for independent check or
verification thereof.

(b) You will assist us in preparing Information Materials, including
Confidential Information Memoranda, for distribution to prospective Lenders. If
requested, you also will assist us in preparing an additional version of the
Information Materials (the “Public-Side Version”) to be used by prospective
Lenders’ public-side employees and representatives (“Public-Siders”) who do not
wish to receive material non-public information (within the meaning of United
States federal securities laws) with respect to the Atlas, the Acquired Business
and any of their respective securities (“MNPI”) and who may be engaged in
investment and other market related activities with respect to any such entity’s
securities or loans. Before distribution of any Information Materials, you agree
to execute and deliver to us (i) a letter in which you authorize distribution of
the Information Materials to a prospective Lender’s employees willing to receive
MNPI (“Private-Siders”) and (ii) a separate letter in which you authorize
distribution of the Public-Side Version to Public-Siders and represent that no
MNPI is contained therein. You also acknowledge that Public-Siders employed by
the Wachovia Parties or their affiliates, consisting of publishing debt
analysts, may participate in any meetings or telephone conference calls held

 

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pursuant to Section 3(a); provided that such analysts shall not publish any
information obtained from such meetings or calls until the syndication of the
Credit Facilities has been completed upon the making of allocations by Wachovia
Securities and Wachovia Securities freeing the Credit Facilities to trade

(c) You agree that the following documents may be distributed to both
Private-Siders and Public-Siders, unless you advise the Arranger in writing
(including by email) within a reasonable time prior to their intended
distribution that such materials should only be distributed to Private-Siders:
(a) administrative materials prepared by the Arranger for prospective Lenders
(such as a lender meeting invitation, lender allocation, if any, and funding and
closing memoranda), (b) notification of changes in the terms of the Credit
Facilities and (c) other materials intended for prospective Lenders after the
initial distribution of Information Materials. If you advise us that any of the
foregoing should be distributed only to Private-Siders, then Public-Siders will
not receive such materials without further discussions with you.

(d) You hereby authorize the Arranger to distribute drafts of definitive
documentation with respect to the Credit Facilities to Private-Siders and
Public-Siders.

5. Indemnification.

(a) You hereby agree to indemnify and hold harmless the Wachovia Parties and
each of their respective affiliates, directors, officers, employees, partners,
representatives and agents and each of their respective heirs, successors and
assigns (each, an “Indemnified Party”) from and against any and all actions,
suits, losses, claims, damages, liabilities and expenses of any kind or nature,
joint or several, to which such Indemnified Party may become subject, related to
or arising out of (i) any element of the Transactions, including, without
limitation, the execution and delivery of this Commitment Letter, the Financing
Documentation (as defined in Annex A) and the closing of the Transactions and
(ii) the use or the contemplated use of the proceeds of the Credit Facilities,
and to reimburse any Indemnified Party for all out-of-pocket expenses (including
reasonable attorneys’ fees, expenses and charges) on demand as they are incurred
in connection with the investigation of, preparation for, or defense of any
pending or threatened claim or any action or proceeding arising therefrom;
provided that no Indemnified Party shall have any right to indemnification for
any of the foregoing to the extent resulting from its own gross negligence or
willful misconduct as determined by a final non-appealable judgment of a court
of competent jurisdiction. This Commitment Letter is addressed solely to you,
and none of the Wachovia Parties nor any other Indemnified Party shall be liable
to you or your affiliates or any other person for any indirect or consequential
damages that may be alleged as a result of this Commitment Letter or any element
of the Transactions or in respect of transmission of Informational Materials by
Electronic Means.

(b) You shall not settle any such claim or action arising out of the
Transactions without the prior written consent of each Indemnified Party
affected thereby, which consent will not be unreasonably withheld, unless such
settlement provides for a full and unconditional release of all liabilities
arising out of such claim or action against such Indemnified Party and does not
include any statement as to or an admission of fault, culpability or failure to
act by or on behalf of any Indemnified Party.

(c) You agree that no Indemnified Party shall have any liability to you or any
person asserting claims by or on behalf of you in connection with or as a result
of the Commitments or any matter referred to in this Commitment Letter except to
the extent that any losses, claims, damages, liabilities or expenses incurred by
you results from the gross negligence or willful misconduct of the Wachovia
Parties in performing the services that are the subject of this Commitment
Letter.

 

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6. Confidentiality. This Commitment Letter and the Fee Letter, together with the
contents hereof and thereof, are confidential and, except for the disclosure
hereof or thereof on a confidential basis to your accountants, attorneys and
other professional advisors retained in connection with the Transactions or as
otherwise required by law, may not be disclosed by you in whole or in part to
any person or entity without our prior written consent; provided that it is
understood and agreed that you may disclose, after your acceptance of this
Commitment Letter, and the Fee Letter, (a) this Commitment Letter, but not the
Fee Letter, on a confidential basis to the board of directors, officers and
advisors of the Seller and the Acquired Business in connection with their
consideration of the Transactions and (b) such documents (excluding the Fee
Letter) in any required filings with the Securities and Exchange Commission and
other applicable regulatory authorities and stock exchanges. In addition, the
Wachovia Parties shall be permitted to use information related to the
syndication and arrangement of the Credit Facilities in connection with
obtaining a CUSIP number, marketing, press releases or other transactional
announcements or updates provided to investor or trade publications, subject to
confidentiality obligations or disclosure restrictions reasonably requested by
you. Furthermore, the Wachovia Parties hereby notify you that pursuant to the
requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “Patriot Act”), each of them is required to obtain,
verify and record information that identifies you in accordance with the Patriot
Act. Prior to the Closing Date, Wachovia Bank and Wachovia Securities shall have
the right to review and approve any public announcement or public filing made by
you after the date hereof relating to the Credit Facilities or to any of the
Wachovia Parties in connection therewith, before any such announcement or filing
is made (such approval not to be unreasonably withheld or delayed).

7. Other Services.

(a) Nothing contained herein shall limit or preclude the Wachovia Parties or any
of their affiliates from carrying on any business with, providing banking or
other financial services to, or from participating in any capacity, including as
an equity investor in, any party whatsoever, including, without limitation, any
competitor, supplier or customer of you, the Seller, the Acquired Business or
any of your or their affiliates, or any other party that may have interests
different than or adverse to such parties.

(b) You acknowledge that the Arranger and its affiliates (the term “Arranger” as
used in this paragraph being understood to include such affiliates) may be
providing debt financing, equity capital or other services (including financial
advisory services) to other companies with which you, the Seller, the Acquired
Business or your or their respective affiliates may have conflicting interests
regarding the Transactions and otherwise and that the Arranger may act as it
deems appropriate in acting in such capacities. You and your affiliates further
acknowledge and agree that in connection with all aspects of the Transactions
and the transactions contemplated by this Commitment Letter, you and your
affiliates, on the one hand, and the Arranger, on the other hand, have an arm’s
length business relationship that creates no fiduciary duty on the part of the
Arranger and each expressly disclaims any fiduciary relationship. The Arranger
will not use confidential information obtained from you, the Seller or the
Acquired Business in connection with the performance by the Arranger of services
for other companies and will not furnish any such information to other
companies. You also acknowledge that the Arranger has no obligation in
connection with the Transactions to use, or to furnish to you, the Seller, the
Acquired Business or your or their respective subsidiaries, confidential
information obtained from other companies or entities.

8. Expiration of Commitments. This Commitment Letter and the Commitments of
Wachovia Bank and the undertakings of Wachovia Securities set forth herein
shall, in the event this Commitment Letter is accepted by you as provided in the
last paragraph hereof, automatically terminate without further action or notice
at 5:00 p.m. (Eastern Standard Time) on September 1, 2007 (the “Expiration
Date”), if the Closing Date shall not have occurred by such time.

 

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9. Survival and Joint and Several Liability of Acquired Business and Guarantors.
The sections of this Commitment Letter relating to Indemnification,
Confidentiality and Other Services shall survive any termination or expiration
of this Commitment Letter or the Commitments of Wachovia Bank or the
undertakings of Wachovia Securities set forth herein, and the Sections relating
to Syndication and Information shall survive until completion of the syndication
of the Credit Facilities.

10. Governing Law, Etc. This Commitment Letter, together with the Term Sheet,
the Fee Letter and, if applicable, the Engagement Letter, embody the entire
agreement and understanding among the Wachovia Parties and you with respect to
the specific matters set forth above and supersede all prior agreements and
understandings relating to the subject matter hereof. No party has been
authorized by any of the Wachovia Parties to make any oral or written statements
inconsistent with this Commitment Letter. This Commitment Letter and the Fee
Letter shall not be assignable by you without the prior written consent of the
Wachovia Parties, and any purported assignment without such consent shall be
void. This Commitment Letter is intended to be for the benefit of the parties
hereto and is not intended to confer any benefits upon, or create any rights in
favor of, any person other than the parties hereto, the Lenders and, with
respect to the indemnification provided under the heading “Indemnification,”
each Indemnified Party. This Commitment Letter may be executed in separate
counterparts and delivery of an executed signature page of this Commitment
Letter by facsimile or electronic mail shall be effective as delivery of
manually executed counterpart hereof; provided that such facsimile transmission
or electronic mail transmission shall be promptly followed by the original
thereof. This Commitment Letter may only be amended or modified by an agreement
in writing signed by each of you and the Wachovia Parties that specifically
provides such with reference to this Commitment Letter. This Commitment Letter
shall be governed by, and construed in accordance with, the laws of the State of
New York without regard to principles of conflicts of law to the extent that the
application of the laws of another jurisdiction will be required thereby. The
parties hereby waive any right to trial by jury with respect to any claim or
action arising out of this Commitment Letter. The parties hereto hereby submit
to the non-exclusive jurisdiction of the federal and New York State courts
located in the City of New York (and appellate courts thereof) in connection
with any dispute related to this Commitment Letter or any of the matters
contemplated hereby, and agree that service of any process, summons, notice or
document by registered mail addressed to you or each of the Wachovia Parties
shall be effective service of process against you or each of the Wachovia
Parties for any suit, action or proceeding relating to any such dispute. The
parties hereto irrevocably and unconditionally waive any objection to the laying
of such venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding has been brought in an
inconvenient forum. A final judgment in any such suit, action or proceeding
brought in any such court may be enforced in any other courts to whose
jurisdiction you or each of the Wachovia Parties are or may be subject by suit
upon judgment.

[Signature Pages Follow]

 

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If you are in agreement with the foregoing, please indicate acceptance of the
terms hereof by signing the enclosed counterpart of this Commitment Letter and
returning it to the Arranger, together with executed counterparts of the Fee
Letter by no later than 11:59 p.m. (Eastern Standard Time) on June 1, 2007. This
Commitment Letter, the Commitments of Wachovia Bank and the undertakings of
Wachovia Securities set forth herein and the agreement of the Arranger to
provide the services set forth herein, shall automatically terminate at such
time without further action or notice unless signed counterparts of this
Commitment Letter and the Fee Letter shall have been delivered to the Arranger
in accordance with the terms of the immediately preceding sentence.

 

Sincerely, WACHOVIA BANK, NATIONAL ASSOCIATION

By:

 

 

Name:

 

Title:

  WACHOVIA CAPITAL MARKETS, LLC

By:

 

 

Name:

 

Title:

 

 

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Agreed to and accepted as of the date first above written: ATLAS PIPELINE
PARTNERS, L.P.

By:

 

Atlas Pipeline Partners, GP, LLC

its General Partner

By:

 

 

Name:

 

Title:

 

 

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ANNEX A

$1,150,000,000

SENIOR SECURED CREDIT FACILITIES

SUMMARY OF PROPOSED TERMS AND CONDITIONS

Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter to which this Summary of Proposed
Terms and Conditions is attached.

 

Borrower:

   Atlas Pipeline Partners, LP (the “Borrower”) Sole Lead Arranger and Sole
Bookrunner:    Wachovia Capital Markets, LLC will act as sole lead arranger and
sole bookrunner (in such capacity, the “Arranger”).

Lenders:

   Wachovia Bank, National Association and a syndicate of financial institutions
and other entities (each a “Lender”, and collectively, the “Lenders”) arranged
by the Arranger in consultation with the Borrower. Administrative Agent, Issuing
Bank and Swingline Lender:    Wachovia Bank, National Association (in such
capacity, the “Administrative Agent”, the “Issuing Bank” or the “Swingline
Lender”, as the case may be).

Credit Facilities:

   Senior secured credit facilities (the “Credit Facilities”) in an aggregate
principal amount of up to $1,150 million, such Credit Facilities to consist of:
  

(a)    Revolving Credit Facility. A six-year revolving credit facility (with
subfacilities for letters of credit and swingline loans each in a maximum amount
to be mutually determined and on customary terms and conditions with
compensation to be agreed) in an aggregate principal amount of up to $250.0
million (the “Revolving Credit Facility”); and

 

(b)    Term Loan Facility. A seven-year term loan facility in an aggregate
principal amount of up to $900.0 million (the “Term Loan Facility”).

Use of Proceeds:

  

The Term Loan Facility will be used on the Closing Date, together with the
proceeds of the Equity Issuance, and, if applicable, a portion of the Revolving
Credit Facility, to finance (a) the consummation of the Acquisition; (b) the
refinancing of the existing revolving credit facility of Atlas and (c) the
payment of fees and expenses incurred in connection with the Acquisition, the
Credit Facilities and the Equity Issuance (collectively, the “Transactions”).

 

The Revolving Credit Facility will be used to provide a portion of the financing
for the Acquisition and ongoing working capital and for other general corporate
purposes of the Borrower and its subsidiaries.

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Availability:

  

The Revolving Credit Facility will be available on a revolving basis from and
after the Closing Date until the final maturity date thereof; provided that up
to $60.0 million may be drawn on the Closing Date.

 

The Term Loan Facility will be available only in a single draw of the full
amount of the Term Loan Facility on the Closing Date.

Documentation:

   The documentation for the Credit Facilities will include, among other items,
a credit agreement (the “Credit Agreement”), guarantees and appropriate pledge,
security, mortgage and other collateral documents (collectively, the “Financing
Documentation”), all consistent with this Term Sheet; provided that the
Financing Documentation will not be in a form or upon terms that would impair
the availability of funding thereunder if the conditions to the Commitment
Letter (and the annexes and schedules thereto) are met.

Guarantors:

   The obligations of the Borrower under the Credit Facilities and under any
hedging agreements entered into between any Loan Party (as defined below) and
any counterparty that is a Lender (or any affiliate thereof) at the time such
hedging agreement is executed will be unconditionally guaranteed, on a joint and
several basis, by each guarantor under the existing revolving credit facility of
Borrower and each existing or subsequently acquired or organized direct and
indirect subsidiary thereof, other than the Borrower and any joint venture
entities formed by Atlas, any affiliate of Atlas and the Seller in connection
with the Acquisition (any such joint ventures, the “Anadarko JV”) unless any
such Anadarko JV guarantees any other indebtedness of the Borrower or its
subsidiaries (each a “Guarantor”; and such guarantee being referred to herein as
a “Guarantee”); provided that Guarantees by foreign subsidiaries will be
required only to the extent such Guarantees do not cause the incurrence of
material tax costs. The Borrower and the Guarantors are herein referred to as
the “Loan Parties,” and individually, as a “Loan Party.”

Security:

   There will be granted to the Administrative Agent for the benefit of the
Lenders and any counterparty to any hedging agreement that is a Lender (or any
affiliate thereof) at the time such hedging agreement is executed valid and
perfected first priority (subject to certain customary exceptions to be set
forth in the Financing Documentation and to be satisfactory to the
Administrative Agent) liens and security interests in all of the following:   

(a)    All present and future capital stock or other membership, equity,
ownership or profit interests of or in (collectively, “Equity Interests”) each
of the Loan Parties and 66% of the voting stock (and 100% of the non-voting
stock) of all present and future first-tier foreign subsidiaries of any Loan
Party (to the extent, and for so long as, the pledge of any greater percentage
would have material adverse tax consequences for the Borrower); and

 

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(b)    substantially all of the tangible and intangible properties and assets
(including, without limitation, all equipment, inventory, accounts, deposit
accounts, licenses, contract and other intangible rights, investment property,
fixtures, cash, owned real property interests, leased real property interests
and intellectual property and all proceeds of the foregoing) of the Loan
Parties.

   All of the foregoing are collectively referred to as the “Collateral”. All
such security interests will be created pursuant to and will comply with
Financing Documentation reasonably satisfactory to the Administrative Agent. On
the Closing Date, such security interests will have become perfected (or
arrangements for the perfection thereof reasonably satisfactory to the
Administrative Agent will have been made). Notwithstanding the foregoing, assets
will be excluded from the Collateral in circumstances where the Administrative
Agent and the Borrower agree the cost of obtaining a security interest in such
assets are excessive in relation to the value afforded thereby, or if the
granting of a security interest in such asset would be prohibited by contract or
applicable law.

Final Maturity:

  

The final maturity of the Revolving Credit Facility will occur on the sixth
anniversary of the Closing Date (the “Revolving Credit Maturity Date”) and the
commitments with respect to the Revolving Credit Facility will automatically
terminate on such date.

 

The final maturity of the Term Loan Facility will occur on the seventh
anniversary of the Closing Date (the “Term Loan Maturity Date”).

Amortization:

  

The Revolving Credit Facility will be payable in full on the Revolving Credit
Maturity Date.

 

The Term Loan Facility will be payable in full on the Term Loan Maturity Date.

Interest Rates and Fees:

   Interest rates and fees in connection with the Credit Facilities will be as
specified in the Fee Letter and on Schedule I attached hereto.
Mandatory Prepayments and Commitment Reductions:    Subject to the next
paragraph, the Credit Facilities will be required to be prepaid with:   

(a)    100% of the net cash proceeds of the issuance or incurrence of debt by
the Borrower or any of its subsidiaries, subject to baskets and other exceptions
(including an amount of permitted debt) to be mutually agreed upon;

  

(b)    50% of the net cash proceeds from any issuance of equity securities or
from any capital contribution (other than the Equity Issuance), by the Borrower
or any of its subsidiaries, subject to exceptions and leverage based step-downs
to be mutually agreed upon; and

 

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(c)    100% of the net cash proceeds of all asset sales and other asset
dispositions (including insurance and condemnation recoveries) by the Borrower
or any of their respective subsidiaries, subject to baskets, reinvestment
provisions and other limited exceptions to be mutually agreed upon.

   Any application of a mandatory prepayment will be applied first, to the Term
Loan Facility, and second, to the outstanding principal balance of the Revolving
Credit Facility equal to the aggregate amount of such required prepayments.
Optional Prepayments and Commitment Reductions:    Advances under the First Lien
Credit Facilities may be prepaid and unused commitments under the Revolving
Credit Facility may be reduced at any time, in whole or in part, at the option
of the Borrower, upon notice and in minimum principal amounts and in multiples
to be agreed upon, without premium or penalty (except LIBOR breakage costs). Any
optional prepayment of the First Lien Term Loan Facility will be applied as
directed by the Borrower. Conditions to Initial Extensions of Credit:    The
making of the initial extensions of credit under the Credit Facilities will be
subject to satisfaction of the conditions precedent set forth in Section 2 of
the Commitment Letter and in the Conditions Annex.

Conditions to All Extensions

of Credit:

   Each extension of credit under the Credit Facilities will be subject to the
(a) absence of any default and (b) continued accuracy of representations and
warranties in all material respects (except to the extent that any such
representation and warranty is qualified by materiality), it being understood
that, except for those set forth in the Commitment Letter and the Conditions
Annex, the Financing Documentation shall contain no material condition precedent
to, or limitation on the amount of funds available at the time of, the initial
borrowing. Representations and Warranties:    Usual and customary for facilities
of this type and such others as may be reasonably requested by the Arranger,
including, without limitation, the following (which will be applicable to the
Borrower and its subsidiaries and be subject to materiality thresholds and
exceptions to be mutually agreed): corporate status, financial statements;
capital structure; corporate power and authority; no default; no conflict with
laws or material agreements; enforceability; absence of material litigation,
environmental regulations and liabilities; ERISA; necessary consents and
approvals; compliance with all applicable laws and regulations including
Regulations U and X, Investment Company Act, the Patriot Act, environmental laws
and as to not being a sanctioned person; payment of taxes and other obligations;
ownership of properties; intellectual property; liens; insurance; solvency;
absence of any material adverse change; senior debt status; investments,
location of collateral; brokers’ fees; labor matters; material contracts; no
burdensome restrictions; security documents; and accuracy of disclosure.

 

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Affirmative Covenants:

   Usual and customary for facilities of this type and such others as may be
reasonably requested by the Arranger, including, without limitation, the
following (which will be applicable to the Borrower and its subsidiaries and be
subject to materiality thresholds and exceptions to be mutually agreed): use of
proceeds; payment of taxes and other obligations; continuation of business and
maintenance of existence and rights and privileges; maintenance of all material
contracts, necessary consents, approvals, licenses and permits; compliance with
laws and regulations (including environmental laws, ERISA and the Patriot Act);
maintenance of property and insurance (including hazard and business
interruption insurance); maintenance of books and records; right of the Lenders
to inspect property and books and records; notices of defaults, litigation and
other material events; financial and collateral reporting (including annual
audited and quarterly unaudited financial statements and annual updated
budgets); additional Guarantors and Collateral and further assurances
(including, without limitation, with respect to security interests in
after-acquired property).

Negative Covenants:

   Usual and customary for facilities of this type and such others as may be
reasonably requested by the Arranger, including, without limitation, the
following (which will be applicable to the Borrower and its subsidiaries and be
subject to materiality thresholds and exceptions to be mutually agreed):
limitation on debt (with a carve-out for incurrence of unsecured or subordinated
debt); limitation on liens; limitation on further negative pledges; limitation
on investments; limitation on dividends and distributions (other than the
payment of dividends or distributions out of operating surplus of Atlas pursuant
to the Second Amended and Restated Agreement of Limited Partnership of Atlas and
joint venture distribution of the Anadarko JV in compliance with the Acquisition
Agreement), issuances of equity interests, redemptions and repurchases of equity
interests; limitation on mergers, acquisitions and asset sales; limitation on
contingent obligations and guarantees; limitation on sale-leaseback
transactions; limitation on prepayments, redemptions and purchases of
subordinated and certain other debt; limitation on transactions with affiliates;
limitation on dividend and other payment restrictions affecting subsidiaries;
limitation on changes in line of business, fiscal year and accounting practices;
limitation on speculative transactions; limitation on amendment of organic
documents and material contracts and limitation on additional designated senior
debt. In addition, the Anadarko JV shall be subject to further restrictions on,
among other things, the incurrence of certain indebtedness or liens.

 

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Financial Covenants:

  

Usual and customary for facilities of this type and such others as may be
reasonably requested by the Arranger, including, without limitation, the
following:

 

(a)    Maximum Total Leverage Ratio; and

 

(b)    Minimum Interest Coverage Ratio.

 

The financial covenants will apply to Borrower and its subsidiaries on a
consolidated basis, with definitions, step-ups or step-downs (as applicable) to
be mutually agreed upon.

Required Interest Rate Hedging:    The Borrower will discuss with the Arranger
interest rate protection from one or more Lenders or others acceptable to the
Arranger in respect an amount to be agreed of the Term Loan Facility for a
period and on terms to be agreed in the Financing Documentation.

Events of Default:

   Usual and customary for facilities of this type and such others as may be
reasonably requested by the Arranger, including, without limitation, the
following (with materiality thresholds, exceptions and grace periods to be
mutually agreed): non-payment of obligations; breach of representation or
warranty; non-performance of covenants and obligations; default on other
material debt (including secured hedging agreements); change of control (to be
defined as mutually agreed); bankruptcy or insolvency; impairment of security;
ERISA; material judgments; actual or asserted invalidity or unenforceability of
any Financing Documentation or liens securing obligations under the Financing
Documentation; material uninsured loss; termination or default under material
contracts or licenses; and failure to constitute senior debt and designated
senior debt. Yield Protection and Increased Costs:    Customary for facilities
similar to the Credit Facilities.

Assignments and Participations:

   Each Lender will, subject in certain circumstances to the approval of the
Administrative Agent and the Borrower (such consents not to be unreasonably
withheld or delayed), be permitted to make assignments in acceptable minimum
amounts; provided that no consent by the Borrower shall be required for
assignments (a) during the period commencing on the Closing Date and ending on
the date that is 90 days following the Closing Date, (b) to a Lender, an
affiliate of a Lender or an approved fund, or (c) after the occurrence and
during the continuance of an event of default. Participations will be permitted
without the consent of the Borrower or the Administrative Agent.

Required Lenders:

   On any date of determination, those Lenders who collectively hold more than
50% of the outstanding loans and unfunded commitments under the Credit
Facilities, or if the Credit Facilities have been terminated, those Lenders who
collectively hold more than 50% of the aggregate outstandings (the “Required
Lenders”).

 

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Amendments and Waivers:

   Amendments and waivers of the provisions of the Financing Documentation will
require the approval of the Required Lenders, except that the consent of all the
Lenders affected thereby will be required with respect to (a) increases in the
commitment of such Lenders, (b) reductions of principal, interest or fees, (c)
extensions of scheduled maturities or times for payment, (d) changes in the
voting percentages and (e) releases of all or substantially all of the value of
the Collateral or Guarantees (other than in connection with transactions
permitted pursuant to the Financing Documentation).

Indemnification:

   The Loan Parties will indemnify the Arranger, the Administrative Agent, each
of the Lenders and their respective affiliates, partners, directors, officers,
agents and advisors and hold them harmless from and against all liabilities,
damages, claims, costs, expenses (including reasonable fees, disbursements,
settlement costs and other charges of counsel) relating to the Transactions or
any transactions related thereto and the Borrower’s use of the loan proceeds or
the commitments; provided, that such indemnity will not, as to any indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such indemnitee.

Expenses:

   The Loan Parties will reimburse the Arranger and the Administrative Agent
(and all Lenders in the case of enforcement costs and documentary taxes) for all
reasonable out-of-pocket costs and expenses in connection with the syndication,
negotiation, execution, delivery and administration of the Financing
Documentation and any amendment or waiver with respect thereto.
Governing Law and Forum:    New York. Waiver of Jury Trial and Punitive and
Consequential Damages:    All parties to the Financing Documentation waive the
right to trial by jury and the right to claim punitive or consequential
damages..

Counsel for the Arranger:

   Cahill Gordon & Reindel LLP.

 

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SCHEDULE I TO ANNEX A

INTEREST AND FEES

 

Interest:

   At the Borrower’s option, loans will bear interest based on the Base Rate or
LIBOR, as described below:    A. Base Rate Option    Interest will be at the
Base Rate plus the applicable Interest Margin (as described below). The “Base
Rate” is defined as the higher of (a) the Federal Funds Rate, as published by
the Federal Reserve Bank of New York plus 1/2 of 1% and (b) the prime commercial
lending rate of the Administrative Agent, as established from time to time at is
principal U.S. office (which such rate is an index or base rate and will not
necessarily be its lowest or best rate charged to its customers or other banks).
Interest shall be payable quarterly in arrears and (i) with respect to Base Rate
Loans based on the Federal Funds Rate, shall be calculated on the basis of the
actual number of days elapsed in a year of 360 days and (ii) with respect to
Base Rate loans based on the prime commercial lending rate of the Administrative
Agent, shall be calculated on the basis of the actual number of days elapsed in
a year of 365/366 days.    Base Rate borrowings will be made on same day notice
and will be in minimum amounts to be agreed upon.    B. LIBOR Option    Interest
will be determined for periods (“Interest Periods”) of one, two, three or six
months (or nine or twelve months if agreed to by all relevant Lenders) as
selected by the Borrower and will be at an annual rate equal to the London
Interbank Offered Rate (“LIBOR”) for the corresponding deposits of U.S. dollars
plus the applicable Interest Margin. LIBOR will be determined by the
Administrative Agent at the start of each Interest Period and will be fixed
through such period. Interest will be paid at the end of each Interest Period
or, in the case of Interest Periods longer than three months, quarterly, and
will be calculated on the basis of the actual number of days elapsed in a year
of 360 days. LIBOR will be adjusted for maximum statutory reserve requirements
(if any).    LIBOR borrowings will be made on three business days’ prior notice
and will be in minimum amounts to be agreed upon.    Swingline loans will bear
interest at the Base Rate plus the application Interest Margin.

Default Interest:

   (a) Automatically upon the occurrence and during the continuance of any
payment event of default or upon a bankruptcy event of default of the Borrower
or any other Loan Party, or (b) at the election of the Required

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     Lenders, upon the occurrence and during the continuance of any other event
of default, all amounts due and
payable with respect to any loan hereunder shall bear interest at a rate per
annum of two percent (2%) in
excess of the rate then applicable to such loan (including the applicable
Interest Margin) and shall be payable
on demand of the Administrative Agent.

Interest Margins:

   The initial applicable Interest Margin will be:   

(a)    with respect to the Revolving Credit Facility, (i) 2.50% in the case of
LIBOR loans and (ii) 1.50% in the case of Base Rate Loans, and after delivery of
financial statements for the first full fiscal quarter ending after the Closing
Date will be determined in accordance with the applicable pricing grid to be
agreed; and

  

(b)    with respect to the Term Loan Facility, (i) 2.50% in the case of LIBOR
loans and (ii) 1.50% in the case of Base Rate Loans; provided, that if Borrower
shall have the option to issue the Term Loan with up to 1.25% of original issue
discount (in 25 basis point increments) and if Borrower exercises such option,
the Interest Margin with respect to the Term Loan Facility in the first year
after the Closing Date will be reduced by 0.25% for each increment of 0.25% of
original issue discount;

  

provided that if after the delivery of the financial statements for the period
ending twelve months after the Closing Date the consolidated Maximum Total
Leverage Ratio of Borrower is above a level to be agreed, the Interest Margin
with respect to the Term Loan Facility and the Revolving Credit Facility will be
increased in accordance with the applicable pricing grid to be agreed.

 

Notwithstanding the foregoing, in the event the Credit Facilities have not
received a rating from both S&P and Moody’s on or prior to the 90th day
following the Closing Date, the Interest Margin in respect of the Revolving
Credit Facility and the Term Loan Facility will increase by 25 basis points over
the then otherwise applicable Interest Margin and will increase by an additional
25 basis points if the Credit Facilities have not received such ratings on or
prior to the 180th day following the Closing Date.

 

Upon receipt of a rating for the Credit Facilities from each of S&P and Moody’s,
the Interest Margin with respect to the first year after the Closing Date will
be equal to the lower of the Interest Margin as determined above and the Ratings
Based Spread. Following the one year anniversary of the Closing Date if the
Credit Facilities have received ratings from each of S&P and Moody’s, the
Interest Margin will be equal to the Ratings Based Spread. The “Ratings Based
Spread” shall mean (i) if the Borrower’s corporate family rating is at least B1
(stable outlook) from Moody’s and corporate credit rating is at least B+ (stable
outlook) from S&P, 2.25% in the case of LIBOR loans and 1.25% in the case of
Base Rate Loans; and (ii) if otherwise, 2.50% in the case of LIBOR loans and
1.50% in the case of Base Rate Loans.

 

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Commitment Fee:

   A commitment fee (the “Commitment Fee”) will accrue on the unused amounts of
the commitments under the Revolving Credit Facility. Swing Line Loans will, for
purposes of the commitment fee calculations only, not be deemed to be a
utilization of the Revolving Credit Facility. Such Commitment Fee will initially
be 0.50% per annum and after delivery of financial statements for the first full
fiscal quarter ending after the Closing Date will be determined in accordance
with the applicable pricing grid to be agreed. All accrued Commitment Fees will
be payable quarterly in arrears (calculated on a 360-day basis) for the account
of the First Lien Lenders under the Revolving Credit Facility and will accrue
from the Closing Date.

Letter of Credit Fees:

   The Borrower will pay (a) the Issuing Bank, a fronting fee equal to 12.5
basis points per annum and (b) the Lenders under the Revolving Credit Facility,
stand-by letter of credit participation fees equal to the Interest Margin for
LIBOR Loans under the Revolving Credit Facility, in each case, on the undrawn
amount of all outstanding letters of credit. In addition, the Borrower will pay
the Issuing Bank customary issuance fees.

Other Fees:

   The Arranger and the Administrative Agent will receive such other fees as
will have been agreed in a fee letter between them and the Borrower.

 

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ANNEX B

$1,150,000,000 SENIOR SECURED CREDIT FACILITIES

CONDITIONS ANNEX

Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter (including, where indicated, the
Annexes thereto) to which this Annex is attached

 

Conditions to Closing and Initial Funding of the Facilities:    (a) The Arranger
will have received (i) execution copies of documentation for the Acquisition and
other aspects of the Transactions, including the Acquisition Agreement and all
exhibits and schedules thereto and (ii) execution copies of the Anadarko JV
documents and any other any joint venture arrangements and related agreements
entered into in connection with the Transactions, in each case, consistent with
the drafts previously provided to the Arranger. The Acquisition will have been
consummated in accordance with the terms and conditions of the Acquisition
Agreement without any waiver, modification or consent thereunder or under the
Anadarko JV documents that is materially adverse to the Lenders (as reasonably
determined by the Arranger) unless approved by the Arranger.    (b) The
Acquisition, the borrowings under the Credit Facilities and the other elements
of the Transactions shall not conflict with, result in a breach or violation of,
or constitute a default under, any indenture, mortgage, deed of trust or loan
agreement or with the operating agreement, certificate of incorporation or
by-laws of the Borrower or any other Guarantor, or any statute, rule or
regulation or any judgment, order or decree of any governmental authority or
court or any arbitrator applicable to the Borrower or any other Guarantor.   
(c) Financing Documentation (as defined in Annex A) reflecting and consistent
with the terms and conditions set forth herein and in the Term Sheet will have
been executed and delivered, and the Administrative Agent will have received
such customary legal opinions, documents and other instruments as are customary
for transactions of this type including, without limitation, a certificate of
the chief financial officer of the Borrower as to the solvency of each Loan
Party after giving effect to each element of the Transactions and all documents,
instruments, reports and policies required to insure, perfect or evidence the
Administrative Agent’s security interest in the collateral securing the Credit
Facilities will have been executed and/or delivered and, to the extent
applicable, be in proper form for filing (including UCC and intellectual
property searches, insurance policies, surveys, title reports and policies,
appraisals and environmental reports), subject to customary exceptions for
post-closing completion of steps not practicable to be completed sooner.

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  (d) The Arranger will have received (i) copies of carve-out consolidating
unaudited financial and volumetric information for the Acquired Business and its
subsidiaries for the three fiscal years most recently ended and interim
carve-out unaudited financial and volumetric information for each quarterly
period ended since the last fiscal year end financial statements ending at least
45 days prior to Closing Date with comparison to prior period in form consistent
with the information included in The Chaney Dell & Midkiff/Benedum Systems
Confidential Information Memorandum dated February 2007, (ii) pro forma
consolidating financial statements for the Borrower and its subsidiaries for the
four-quarter period most recently ending at least 45 days prior to the Closing
Date giving pro forma effect to the Acquisition and a pro forma balance sheet of
the Borrower and its subsidiaries as of the Closing Date; (iii) unless
previously provided, projections prepared by management of balance sheets,
income statements and cashflow statements of the Borrower and its subsidiaries,
which will be quarterly for the first fiscal year after the Closing Date and
annually thereafter for the term of the Credit Facilities (and which will not be
inconsistent with information provided to the Arranger prior to the delivery of
the Commitment Letter) and (iv) audited financial statements of the Borrower for
fiscal year ended December 31, 2006 and unaudited financial statements of the
Borrower for the most recently completed three-month period required to be filed
with the SEC by the Exchange Act.   (e) The Arranger shall have received a
customary CIM and the reasonable assistance and participation of management for
purposes of hosting a meeting with prospective lenders under the Credit
Facility, in each case, no later than June 27, 2007.   (f) Pro forma for the
Acquisition, the Borrower shall have hedged 80% (averaged over three years) of
its natural gas, natural gas liquids and condensates volume for no less than
three years at a price and in a manner reasonably acceptable to the Arranger.

 

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