Exhibit 10.1

 

EXECUTION VERSION

 

 

SENIOR UNSECURED TERM CREDIT AGREEMENT

 

dated as of

 

December 8, 2008,

 

among

 

EXCO OPERATING COMPANY, LP,
as Borrower

 

CERTAIN SUBSIDIARIES OF BORROWER,
as Guarantors

 

The Lenders Party Hereto

 

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

 

J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Lead Arranger

 

$300,000,000 Senior Unsecured Term Facility

 

 

[g295891km01i001.jpg]

 

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

 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I

DEFINITIONS

1

 

 

 

Section 1.01.

Defined Terms

1

 

 

 

Section 1.02.

Types of Loans and Borrowings

18

 

 

 

Section 1.03.

Terms Generally

18

 

 

 

Section 1.04.

Accounting Terms; GAAP

19

 

 

 

Section 1.05.

Oil and Gas Definitions

19

 

 

 

Section 1.06.

Time of Day

19

 

 

 

ARTICLE II

THE CREDITS

19

 

 

 

Section 2.01.

Commitments

19

 

 

 

Section 2.02.

Repayment of Loans

20

 

 

 

Section 2.03.

[Reserved]

20

 

 

 

Section 2.04.

Requests for Borrowings

20

 

 

 

Section 2.05.

[Reserved]

20

 

 

 

Section 2.06.

Funding of Borrowings

20

 

 

 

Section 2.07.

Interest Elections

21

 

 

 

Section 2.08.

Repayment of Loans; Evidence of Debt

22

 

 

 

Section 2.09.

Optional Prepayment of Loans

23

 

 

 

Section 2.10.

Mandatory Prepayment of Loans

24

 

 

 

Section 2.11.

Fees

24

 

 

 

Section 2.12.

Interest

25

 

 

 

Section 2.13.

Alternate Rate of Interest

26

 

 

 

Section 2.14.

Increased Costs

26

 

 

 

Section 2.15.

Break Funding Payments

27

 

 

 

Section 2.16.

Taxes

27

 

 

 

Section 2.17.

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

29

 

 

 

Section 2.18.

Mitigation Obligations; Replacement of Lenders

30

 

 

 

ARTICLE III

[RESERVED]

32

 

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

32

 

 

 

Section 4.01.

Organization; Powers

32

 

 

 

Section 4.02.

Authorization; Enforceability

32

 

i

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

 

 

 

Page

 

 

 

Section 4.03.

Governmental Approvals; No Conflicts

32

 

 

 

Section 4.04.

Financial Condition; No Material Adverse Change

32

 

 

 

Section 4.05.

Properties

33

 

 

 

Section 4.06.

Litigation and Environmental Matters

33

 

 

 

Section 4.07.

Compliance with Laws and Agreements

34

 

 

 

Section 4.08.

Investment Company Status

34

 

 

 

Section 4.09.

Taxes

34

 

 

 

Section 4.10.

ERISA

34

 

 

 

Section 4.11.

Disclosure

34

 

 

 

Section 4.12.

Labor Matters

35

 

 

 

Section 4.13.

Capitalization and Credit Party Information

35

 

 

 

Section 4.14.

Margin Stock

35

 

 

 

Section 4.15.

Oil and Gas Interests

35

 

 

 

Section 4.16.

Insurance

35

 

 

 

Section 4.17.

Solvency

36

 

 

 

ARTICLE V

CONDITIONS

36

 

 

 

Section 5.01.

Effective Date

36

 

 

 

ARTICLE VI

AFFIRMATIVE COVENANTS

39

 

 

 

Section 6.01.

Financial Statements; Other Information

39

 

 

 

Section 6.02.

Notices of Material Events

41

 

 

 

Section 6.03.

Existence; Conduct of Business

41

 

 

 

Section 6.04.

Payment of Obligations

42

 

 

 

Section 6.05.

Maintenance of Properties; Insurance

42

 

 

 

Section 6.06.

Books and Records; Inspection Rights

42

 

 

 

Section 6.07.

Compliance with Laws

42

 

 

 

Section 6.08.

Use of Proceeds

42

 

 

 

Section 6.09.

[Reserved]

43

 

 

 

Section 6.10.

[Reserved]

43

 

 

 

Section 6.11.

Swap Agreements

43

 

 

 

Section 6.12.

Operation of Oil and Gas Interests

43

 

 

 

Section 6.13.

Restricted Subsidiaries

43

 

 

 

ARTICLE VII

NEGATIVE COVENANTS

44

 

ii

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

 

 

 

Page

 

 

 

Section 7.01.

Indebtedness

44

 

 

 

Section 7.02.

Liens

45

 

 

 

Section 7.03.

Fundamental Changes

46

 

 

 

Section 7.04.

Investments, Loans, Advances, Guarantees and Acquisitions

47

 

 

 

Section 7.05.

Swap Agreements

47

 

 

 

Section 7.06.

Restricted Payments

48

 

 

 

Section 7.07.

Transactions with Affiliates

48

 

 

 

Section 7.08.

Restrictive Agreements

48

 

 

 

Section 7.09.

Disqualified Stock; Fiscal Year

48

 

 

 

Section 7.10.

Amendments to Organizational Documents and Certain Liens and Guarantees

49

 

 

 

Section 7.11.

Financial Covenants

49

 

 

 

Section 7.12.

Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities

49

 

 

 

ARTICLE VIII

GUARANTEE OF OBLIGATIONS

49

 

 

 

Section 8.01.

Guarantee of Payment

49

 

 

 

Section 8.02.

Guarantee Absolute

50

 

 

 

Section 8.03.

Guarantee Irrevocable

50

 

 

 

Section 8.04.

Reinstatement

50

 

 

 

Section 8.05.

Subrogation

50

 

 

 

Section 8.06.

Subordination

51

 

 

 

Section 8.07.

Payments Generally

51

 

 

 

Section 8.08.

Setoff

51

 

 

 

Section 8.09.

Formalities

52

 

 

 

Section 8.10.

Limitations on Guarantee

52

 

 

 

ARTICLE IX

EVENTS OF DEFAULT

52

 

 

 

ARTICLE X

THE ADMINISTRATIVE AGENT

54

 

 

 

ARTICLE XI

MISCELLANEOUS

56

 

 

 

Section 11.01.

Notices

56

 

 

 

Section 11.02.

Waivers; Amendments

57

 

 

 

Section 11.03.

Expenses; Indemnity; Damage Waiver

58

 

 

 

Section 11.04.

Successors and Assigns

59

 

 

 

Section 11.05.

Survival

63

 

iii

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

 

 

 

Page

 

 

 

Section 11.06.

Counterparts; Integration; Effectiveness

63

 

 

 

Section 11.07.

Severability

63

 

 

 

Section 11.08.

Right of Setoff

63

 

 

 

Section 11.09.

GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

64

 

 

 

Section 11.10.

WAIVER OF JURY TRIAL

64

 

 

 

Section 11.11.

Headings

65

 

 

 

Section 11.12.

Confidentiality

65

 

 

 

Section 11.13.

Interest Rate Limitation

65

 

 

 

Section 11.14.

USA PATRIOT Act

66

 

iv

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

 

SCHEDULES:

 

Schedule 2.01 – Applicable Percentages and Initial Commitments

Schedule 4.06 – Disclosed Matters

Schedule 4.13 – Capitalization and Credit Party Information

Schedule 7.01 – Existing Indebtedness

Schedule 7.02 – Existing Liens

Schedule 7.07 – Transactions with Affiliates

Schedule 7.08 – Existing Restrictions

 

EXHIBITS:

 

Exhibit A – Form of Assignment and Assumption

Exhibit B – Form of Opinion of Borrower’s Counsel

Exhibit C – Form of Counterpart Agreement

Exhibit D – Form of Solvency Certificate

Exhibit E – Form of Note

 

v

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

 

SENIOR UNSECURED TERM CREDIT AGREEMENT dated as of December 8, 2008, among EXCO
OPERATING COMPANY, LP, as Borrower, CERTAIN SUBSIDIARIES OF BORROWER, as
Guarantors, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as
Administrative Agent.

 

The parties hereto agree as follows:

 

Article I

 

Definitions

 

SECTION 1.01.                             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 is, or the Loans comprising such Borrowing are, bearing interest at a rate
determined by reference to the Alternate Base Rate.

 

“Acquisition” means, the acquisition by the Borrower or any Restricted
Subsidiary, whether by purchase, merger (and, in the case of a merger with any
such Person, with such Person being the surviving corporation) or otherwise, of
all or substantially all of the Equity Interest of, or the business, property or
fixed assets of or business line or unit or a division of, any other Person
primarily engaged in the business of producing oil or natural gas or the
acquisition by the Borrower or any Restricted Subsidiary of property or assets
consisting of Oil and Gas Interests.

 

“Adjusted LIBO Rate” means, (a) with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum equal to (i) the LIBO Rate for such
Interest Period multiplied by (ii) the Statutory Reserve Rate and (b) with
respect to any ABR Borrowing for any day, an interest rate per annum equal to
(i) the 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) multiplied by
(ii) the Statutory Reserve Rate.

 

“Administrative Agent” means JPMorgan Chase Bank, N.A. in its capacity as
contractual representative of the Lenders hereunder pursuant to Article X and
not in its individual capacity as a Lender, and any successor agent appointed
pursuant to Article X.

 

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

 

“Advance Payment Contract” means any contract whereby any Credit Party either
(a) receives or becomes entitled to receive (either directly or indirectly) any
payment (an “Advance Payment”) to be applied toward payment of the purchase
price of Hydrocarbons produced or to be produced from Oil and Gas Interests
owned by any Credit Party and which Advance Payment is, or is to be, paid in
advance of actual delivery of such production to or for the account of the
purchaser regardless of such production, or (b) grants an option or right of

 

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

 

refusal to the purchaser to take delivery of such production in lieu of payment,
and, in either of the foregoing instances, the Advance Payment is, or is to be,
applied as payment in full for such production when sold and delivered or is, or
is to be, applied as payment for a portion only of the purchase price thereof or
of a percentage or share of such production; provided that inclusion of the
standard “take or pay” provision in any gas sales or purchase contract or any
other similar contract shall not, in and of itself, constitute such contract as
an Advance Payment Contract for the purposes hereof.

 

“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.

 

“Agreement” means this Senior Unsecured Term Credit Agreement, dated as of
December 8, 2008, as it may be amended, restated, supplemented or otherwise
modified from time to time.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus one-half of one percent (½ of 1%) and (c) the
Adjusted LIBO Rate plus one percent (1%); provided that, for the avoidance of
doubt, the Adjusted LIBO Rate for any day shall be based on the rate appearing
on the Reuters BBA Libor Rates Page 3750 (or on any successor or substitute
page of such service) 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 Federal
Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate, respectively.

 

“Applicable Percentage” means, with respect to any Lender at any time, the
percentage of the aggregate Commitments represented by such Lender’s Commitment
at such time or, from and after the Effective Date, of the aggregate outstanding
Loans represented by such Lender’s outstanding Loans.  The initial amount of
each Lender’s Applicable Percentage is as set forth on Schedule 2.01.

 

“Applicable Margin” means, for any day, (i) with respect to any ABR Loan, five
percent (5.00%) and (i) with respect to any Eurodollar Loan, six percent
(6.00%).

 

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

 

“Approved Fund” has the meaning assigned to such term in Section 11.04.

 

“Arranger” means J.P. Morgan Securities Inc., in its capacity as sole bookrunner
and lead arranger.

 

2

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

 

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an Eligible Assignee, and accepted by the Administrative Agent, in
the form of Exhibit A or any other form approved by the Administrative Agent.

 

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.

 

“Board of Directors” means (1) with respect to a corporation, the Board of
Directors of the corporation or any committee thereof duly authorized to act on
behalf of such board; (2) with respect to a partnership, the Board of Directors
of the general partner of the partnership; (3) with respect to a limited
liability company, the managing member or members or any controlling committee
of managing members thereof; and (4) with respect to any other Person, the board
or committee of such Person serving a similar function.

 

“Borrower” means EXCO Operating Company, LP, a Delaware limited partnership, and
its successors and permitted assigns.

 

“Borrower Materials” has the meaning assigned to such term in Section 6.01.

 

“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 Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.04.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York, New York or Dallas, Texas are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

 

“Capital Lease Obligations” of any Person means the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying
the right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.

 

“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, for purposes of
Section 2.14(b), by any lending office of such Lender or by such Lender’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.

 

“Change of Control” means (a) the acquisition of greater than fifty percent
(50%) of the voting or economic interest in the General Partner by any Person
other than a wholly

 

3

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

 

owned direct or indirect Subsidiary of EXCO; (b) the General Partner shall cease
to own and control, of record, beneficially and directly, one hundred percent
(100%) of the general partnership interest of the Borrower or cease to be the
sole managing partner of the Borrower; or (c) the occurrence of a “Change of
Control” as such term is defined in the EXCO Credit Agreement.

 

“Charges” has the meaning assigned to such term in Section 11.13.

 

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

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans to the Borrower on the Effective Date in the aggregate principal
amount outstanding not to exceed the amount set forth opposite such Lender’s
name on Schedule 2.01.  The amount of each Lender’s Commitment (which amount is
such Lender’s Applicable Percentage of the aggregate Commitments) is set forth
in Schedule 2.01.  The aggregate amount of the Commitments is $300,000,000.

 

“Consolidated Current Assets” means, as of any date of determination, the total
of (i) the consolidated current assets of the Borrower and the Restricted
Subsidiaries determined in accordance with GAAP as of such date and calculated
on a combined basis, plus, all Unused Commitments (as defined in the Revolving
Credit Agreement) as of such date, (ii) less any non-cash assets required to be
included in consolidated current assets of the Borrower and the Restricted
Subsidiaries as a result of the application of FASB Statement 133 as of such
date.

 

“Consolidated Current Liabilities” means, as of any date of determination, the
total of (i) consolidated current liabilities of the Borrower and the Restricted
Subsidiaries, as determined in accordance with GAAP as of such date, (ii) less
current maturities of the Revolving Loans, (iii) less any non-cash obligations
required to be included in consolidated current liabilities of the Borrower and
the Restricted Subsidiaries as a result of the application of FASB Statement 133
as of such date.

 

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

 

“Consolidated EBITDAX” means, with respect to the Borrower and its Restricted
Subsidiaries for any period, Consolidated Net Income for such period; plus,
without duplication and to the extent deducted in the calculation of
Consolidated Net Income for such period, the sum of (a) income or franchise
Taxes paid or accrued; (b) Consolidated Interest Expense; (c) amortization,
depletion and depreciation expense; (d) any non-cash losses or charges on any
Swap Agreement resulting from the requirements of FASB Statement 133 for that
period; (e) oil and gas exploration expenses (including all drilling,
completion, geological and geophysical costs) for such period; (f) losses from
sales or other dispositions of assets (other than Hydrocarbons produced in the
ordinary course of business) and other extraordinary or non-recurring losses;
(g) workover expenses for such period, (h) cash payments made during such period
as a result of the early termination of any Swap Agreement (giving effect to any
netting agreements), and (i) other non-cash charges (excluding accruals for cash
expenses made in the ordinary course of business); minus, to the extent included
in the calculation of Consolidated Net

 

4

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

 

Income for such period; (j) the sum of (1) any non-cash gains on any Swap
Agreements resulting from the requirements of FASB Statement 133 for that
period; (2) extraordinary or non-recurring gains; and (3) gains from sales or
other dispositions of assets (other than Hydrocarbons produced in the ordinary
course of business); provided that, with respect to the determination of
Borrower’s compliance with the leverage ratio set forth in Section 7.11(b) for
any period, Consolidated EBITDAX shall be adjusted to give effect, on a pro
forma basis, to any Acquisitions made during such period as if such Acquisitions
were made at the beginning of such period.

 

“Consolidated Funded Indebtedness” means, as of any date and without
duplication, Indebtedness of the Borrower and the Restricted Subsidiaries of the
type described in clauses (a), (b), (c), (d), (e), (f), (g) or (h) of the
definition of Indebtedness, minus Surplus Cash.

 

“Consolidated Interest Expense” means for any period, without duplication, the
aggregate of all interest paid or accrued by the Borrower and its Restricted
Subsidiaries, on a consolidated basis, in respect of Indebtedness of any such
Person, on a consolidated basis, including all interest, fees and costs payable
with respect to the obligations related to such Indebtedness (other than fees
and costs which may be capitalized as transaction costs in accordance with GAAP)
and the interest component of Capitalized Lease Obligations, all as determined
in accordance with GAAP.

 

“Consolidated Net Income” means for any period, the consolidated net income (or
loss) of the Borrower and its Consolidated Subsidiaries, as applicable,
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Consolidated Subsidiary of the Borrower, or is merged into or
consolidated with the Borrower or any of its Consolidated Subsidiaries, as
applicable, (b) the income (or deficit) of any Person in which any other Person
(other than the Borrower or any of its Restricted Subsidiaries) has an Equity
Interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Restricted Subsidiaries during such
period and (c) the undistributed earnings of any Consolidated Subsidiary of the
Borrower, to the extent that the declaration or payment of dividends or similar
distributions by such Consolidated Subsidiary is not at the time permitted by
the terms of any contractual obligation (other than under any Loan Document) or
by any law applicable to such Consolidated Subsidiary.

 

“Consolidated Subsidiaries” means, for any Person, any Subsidiary or other
entity the accounts of which would be consolidated with those of such Person in
its consolidated financial statements in accordance with GAAP.

 

“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.

 

“Counterpart Agreement” means a Counterpart Agreement substantially in the form
of Exhibit C delivered by a Guarantor pursuant to Section 6.13.

 

5

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

 

“Credit Parties” means collectively, Borrower, and each Guarantor and each
individually, a “Credit Party”.

 

“Crude Oil” means all crude oil and condensate.

 

“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.

 

“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.

 

“Disqualified Stock” means any Equity Interest, which, 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, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (other than solely as a result of a
change in control or asset sale), in whole or in part, on or prior to the
Maturity Date.

 

“Dollars” or “$” refers to lawful money of the United States of America.

 

“Effective Date” means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 11.02).

 

“Eligible Assignee” means any Person that qualifies as an assignee pursuant to
Section 11.04(b)(i); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.

 

“Engagement Letter” means that certain engagement letter, dated as of
December 5, 2008, among Arranger, JPMorgan Chase Bank, N.A., and Borrower.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

 

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

 

“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity

 

6

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

 

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
from time to time.

 

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

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the thirty (30) day notice period is waived); (b) the existence
with respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by any Credit Party or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of any
Plan; (e) the receipt by any Credit Party or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by any Credit Party or any of its ERISA Affiliates of any liability with respect
to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or
(g) the receipt by any Credit Party or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from any Credit Party or any ERISA Affiliate
of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan is, 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 to such term in Article IX.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America, or by the 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 is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.18(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender 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 to comply with Section 2.16(e),
except to the extent that such Foreign Lender (or its assignor, if any) was

 

7

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

 

entitled, at the time of designation of a new lending office (or assignment), to
receive additional amounts from the Borrower with respect to such withholding
tax pursuant to Section 2.16(a).

 

“EXCO” means EXCO Resources, Inc., a Texas corporation, and its successors and
assigns.

 

“EXCO Credit Agreement” means that certain Second Amended and Restated Credit
Agreement, dated as of May 2, 2007, among EXCO, as borrower, certain
subsidiaries of EXCO, as guarantors, the financial institutions from time to
time a party thereto, as lenders and JPMorgan Chase Bank, N.A., as
administrative agent, as amended, modified, supplemented or restated from time
to time.

 

“Existing Swap Agreements” means any Swap Agreement between any Credit Party and
any Approved Counterparty in effect on the Effective Date.

 

“FASB” means Financial Accounting Standards Board.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100th 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 1/100th 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.

 

“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which any Credit Party 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.

 

“GAAP” means generally accepted accounting principles in the United States of
America.

 

“General Partner” means EXCO Partners OLP GP, LLC, a Delaware limited liability
company, and its successors and permitted assigns.

 

“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 properly exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.

 

“Guarantee” of or by any Person (in this definition, the “guarantor”) means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment

 

8

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

 

of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.

 

“Guaranteed Liabilities” has the meaning assigned to such term in Section 8.01.

 

“Guarantor” means each Restricted Subsidiary that is a party hereto or hereafter
executes and delivers to the Administrative Agent and the Lenders, a Counterpart
Agreement pursuant to Section 6.13 or otherwise.

 

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

 

“Hydrocarbons” means all Crude Oil and Natural Gas produced from or attributable
to the Oil and Gas Interests of the Credit Parties.

 

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest
charges are paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such Person,
(e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed,
(g) all Guarantees by such Person of Indebtedness of others, (h) all Capital
Lease Obligations of such Person, (i) all obligations, contingent or otherwise,
of such Person as an account party in respect of letters of credit and letters
of guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers’ acceptances.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” has the meaning assigned to such term in Section 11.03.

 

9

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

 

“Information” has the meaning assigned to such term in Section 11.12.

 

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.07.

 

“Interest Payment Date” means with respect to any ABR Loan or any Eurodollar
Loan, the last day of each calendar month.

 

“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
thereafter, as the Borrower may elect; provided, that (i) 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 (ii) any Interest Period
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
month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made.

 

“Lender Counterparty” has the meaning assigned to such term in the Revolving
Credit Agreement.

 

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the greater of (i) the rate appearing on Reuters BBA Libor Rates
Page 3750 (or on any successor or substitute page of such service, or any
successor to or substitute for such service, providing rate quotations
comparable to those currently provided on such page of such service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two
(2) Business Days prior to the commencement of such Interest Period, as the rate
for dollar deposits with a maturity comparable to such Interest Period and
(ii) four percent (4.00%) per annum.  In the event that such rate described in
clause (i) is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any

 

10

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

 

of the foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

 

“Loan Documents” means this Agreement, any promissory notes executed in
connection herewith, the Engagement Letter and any other agreements, documents,
certificates and instruments executed in connection with this Agreement.

 

“Loans” means the loans made by the Lenders to the Borrower on the Effective
Date pursuant to this Agreement.

 

“Material Adverse Effect” means a material adverse effect on (a) the assets or
properties, financial condition, businesses or operations of the Borrower and
the Restricted Subsidiaries taken as a whole, (b) the ability of any Credit
Party to carry out its business as of the date of this Agreement or as proposed
at the date of this Agreement to be conducted, (c) the ability of any Credit
Party to perform fully and on a timely basis its respective obligations under
any of the Loan Documents to which it is a party, or (d) the validity or
enforceability of any of the Loan Documents or the rights and remedies of the
Administrative Agent or the Lenders under this Agreement and the other Loan
Documents.

 

“Material Indebtedness” means Indebtedness permitted under Section 7.01(h) and
any other Indebtedness (other than the Loans), or obligations in respect of one
or more Swap Agreements, of the Borrower or any one or more of the Restricted
Subsidiaries in an aggregate principal amount exceeding $50,000,000.  For
purposes of determining Material Indebtedness, the “principal amount” of the
obligations of the Borrower or any Guarantor in respect of any Swap Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Guarantor would be required to pay if such
Swap Agreement were terminated at such time.

 

“Maturity Date” means January 15, 2010.

 

“Maximum Liability” has the meaning assigned to such term in Section 8.10.

 

“Maximum Rate” has the meaning assigned to such term in Section 11.13.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

 

“Natural Gas” means all natural gas, distillate or sulphur, natural gas liquids
and all products recovered in the processing of natural gas (other than
condensate) including, without limitation, natural gasoline, coalbed methane
gas, casinghead gas, iso-butane, normal butane, propane and ethane (including
such methane allowable in commercial ethane).

 

“Net Cash Proceeds” means, with respect to any sale, transfer, assignment or
disposition of any assets by the Borrower or any Restricted Subsidiary,
including any Oil and Gas Interests, the excess, if any, of (a) the sum of cash
and cash equivalents received in connection with such sale, but only as and when
so received, over (b) the sum of (i) the principal

 

11

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

 

amount of any Indebtedness that is secured by such asset and that is required to
be repaid in connection with the sale thereof (other than the Revolving Loans),
(ii) the out-of-pocket expenses incurred by the Borrower or such Restricted
Subsidiary in connection with such sale, (iii) all legal, title and recording
tax expense and all federal, state, provincial, foreign and local taxes required
to be accrued as a liability under GAAP as a consequence of such sale, (iv) all
distributions and other payments required to be made to minority interest
holders in Restricted Subsidiaries as a result of such sale, (v) the deduction
of appropriate amounts provided by the seller as a reserve, in accordance with
GAAP, against any liabilities associated with the property or other assets
disposed of in such sale and retained by the Borrower or any Restricted
Subsidiary after such sale, (vi) cash payments made to satisfy obligations
resulting from early terminations of Swap Agreements in connection with or as a
result of any such sale or other disposition of Oil and Gas Interests, (vii) the
principal amount of the Revolving Loans that the Borrower is required to prepay
as a result of such sale, transfer, assignment or disposition and (viii) any
portion of the purchase price from such sale placed in escrow, whether as a
reserve for adjustment of the purchase price, for satisfaction of indemnities in
respect of such sale or otherwise in connection with such sale; provided
however, that upon the termination of that escrow, Net Cash Proceeds will be
increased by any portion of funds in the escrow that are released to the
Borrower or any Restricted Subsidiary.

 

“Net Working Capital” means, on any date of determination, the sum of
(a) Consolidated Current Assets as of such date (calculated without including
Unused Commitments (as defined in the Revolving Credit Agreement) as of such
date) minus (b) Consolidated Current Liabilities as of such date.

 

“Non-Consenting Lender” has the meaning assigned to such term in
Section 2.18(c).

 

“Obligations” means any and all obligations of every nature, contingent or
otherwise, whether now existing or hereafter arising, of any Credit Party from
time to time owed to the Administrative Agent, the Lenders or any of them
arising under or in connection with any Loan Document, whether for principal,
interest, funding indemnification amounts, fees, expenses, indemnification or
otherwise.

 

“Off-Balance Sheet Liability” of a Person means (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (ii) any liability under any Sale and Leaseback Transaction which
is not a Capital Lease Obligation, (iii) any liability under any so-called
“synthetic lease” transaction entered into by such Person, (iv) any Advance
Payment Contract, or (v) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding from the foregoing clauses (iii) through
(v) operating leases and usual and customary oil, gas and mineral leases.

 

“Oil and Gas Interest(s)” means: (a) direct and indirect interests in and rights
with respect to oil, gas, mineral and related properties and assets of any kind
and nature, direct or indirect, including, without limitation, wellbore
interests, working, royalty and overriding royalty interests, mineral interests,
leasehold interests, production payments, operating rights, net profits
interests, other non-working interests, contractual interests, non-operating
interests and rights in

 

12

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

 

any pooled, unitized or communitized acreage by virtue of such interest being a
part thereof; (b) interests in and rights with respect to Hydrocarbons other
minerals or revenues therefrom and contracts and agreements in connection
therewith and claims and rights thereto (including oil and gas leases, operating
agreements, unitization, communitization and pooling agreements and orders,
division orders, transfer orders, mineral deeds, royalty deeds, oil and gas
sales, exchange and processing contracts and agreements and, in each case,
interests thereunder), and surface interests, fee interests, reversionary
interests, reservations and concessions related to any of the foregoing;
(c) easements, rights-of-way, licenses, permits, leases, and other interests
associated with, appurtenant to, or necessary for the operation of any of the
foregoing; (d) interests in oil, gas, water, disposal and injection wells,
equipment and machinery (including well equipment and machinery), oil and gas
production, gathering, transmission, compression, treating, processing and
storage facilities (including tanks, tank batteries, pipelines and gathering
systems), pumps, water plants, electric plants, gasoline and gas processing
plants, refineries and other tangible or intangible, movable or immovable, real
or personal property and fixtures located on, associated with, appurtenant to,
or necessary for the operation of any of the foregoing; and (e) all seismic,
geological, geophysical and engineering records, data, information, maps,
licenses and interpretations.

 

“Organizational Documents” means (a) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (b) with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (c) with respect to any general partnership, its partnership
agreement, as amended, and (d) with respect to any limited liability company,
its certificate of formation or articles of organization, as amended, and its
limited liability company agreement or operating agreement, as amended.

 

“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.

 

“Participant” has the meaning assigned to such term in Section 11.04.

 

“Payment Currency” has the meaning assigned to such term in Section 8.07.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.

 

“Permitted Encumbrances” means:

 

(a)                                  Liens imposed by law for Taxes that are not
yet due or are being contested in compliance with Section 6.04;

 

(b)                                 carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s and other like Liens imposed by law, and contractual
Liens granted to operators and non-operators under oil and gas operating
agreements, in each case, arising in the ordinary course of business or incident
to the exploration, development, operation and maintenance of Oil and Gas
Interests

 

13

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

 

and securing obligations that are not overdue by more than thirty (30) days or
are being contested in compliance with Section 6.04;

 

(c)                                  pledges and deposits made in the ordinary
course of business in compliance with workers’ compensation, unemployment
insurance and other social security laws or regulations;

 

(d)                                 deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in the
ordinary course of business;

 

(e)                                  judgment liens in respect of judgments that
do not constitute an Event of Default under clause (k) of Article IX;

 

(f)                                    easements, zoning restrictions,
rights-of-way, servitudes, permits, surface leases, and similar encumbrances on
real property imposed by law or arising in the ordinary course of business that
do not secure any monetary obligations and do not materially detract from the
value of the affected property or interfere with the ordinary conduct of
business of any Credit Party;

 

(g)                                 royalties, overriding royalties,
reversionary interests and similar burdens with respect to the Oil and Gas
Interests owned by the Borrower or such Restricted Subsidiary, as the case may
be, if the net cumulative effect of such burdens does not operate to deprive the
Borrower or any Restricted Subsidiary of any material right in respect of its
assets or properties (except for rights customarily granted with respect to such
interests);

 

(h)                                 Liens arising from Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Borrower or any Restricted Subsidiary in the ordinary course of business
covering the property under the lease; and

 

(i)                                     preferential rights to purchase, and
provisions requiring a third party’s consent prior to assignment and similar
restraints on alienation, in each case, granted pursuant to an oil and gas
operating agreement and arising in the ordinary course of business or incident
to the exploration, development, operation and maintenance of Oil and Gas
Interests; provided such right, requirement or restraint does not material
affect the value of such Oil and Gas Interests;

 

provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness (other than contractual Liens described in the foregoing
clause (b) granted to operators and non-operators under oil and gas operating
agreements to the extent the obligations secured by such Liens constitute
Indebtedness).

 

“Permitted Investments” means:

 

(a)                                  U.S. Government Securities;

 

(b)                                 investments in demand and time deposit
accounts, certificates of deposit and money market deposits maturing within one
hundred eighty (180) days of the date of acquisition thereof issued by a bank or
trust company which is organized under the laws of the

 

14

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

 

United States of America, any State thereof or any foreign country recognized by
the United States of America, and which bank or trust company has capital,
surplus and undivided profits aggregating in excess of $50,000,000 (or the
foreign currency equivalent thereof) and has outstanding debt which is rated “A”
(or such similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act of 1933, as amended) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor;

 

(c)                                  investments in deposits available for
withdrawal on demand with any commercial bank that is organized under the laws
of any country in which the Borrower or any Restricted Subsidiary maintains an
office or is engaged in the oil and gas business; provided, however, that
(i) all such deposits have been made in such accounts in the ordinary course of
business and (ii) such deposits do not at any one time exceed $10,000,000 in the
aggregate;

 

(d)                                 repurchase obligations with a term of not
more than thirty (30) days for underlying securities of the types described in
clause (a) above entered into with a bank meeting the qualifications described
in clause (b) above;

 

(e)                                  investments in commercial paper, maturing
not more than ninety (90) days after the date of acquisition, issued by a
corporation (other than an Affiliate or the Borrower) organized and in existence
under the laws of the United States of America or any foreign country recognized
by the United States of America with a rating at the time as of which any
investment therein is made of “P-1” (or higher) according to Moody’s or “A-l”
(or higher) according to S&P;

 

(f)                                    investments in securities with maturities
of six months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least “A” by S&P
or “A” by Moody’s; and

 

(g)                                 investments in money market funds that
invest substantially all their assets in securities of the types described in
clauses (a) through (f) above

 

“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)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which any Credit Party or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Platform” has the meaning assigned to such term in Section 6.01.

 

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. 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

 

15

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

 

change is publicly announced as being effective.  THE PRIME RATE IS A REFERENCE
RATE AND MAY NOT BE JPMORGAN CHASE BANK, N.A.’S LOWEST RATE.

 

“Prior Term Loan Credit Agreement” means that certain Senior Unsecured Term
Credit Agreement, dated as of July 15, 2008, among Borrower, certain
Subsidiaries of Borrower, as Guarantors, the lenders party thereto and JPMorgan
Chase Bank, N.A. as Administrative Agent, as amended, restated, supplemented or
otherwise modified from time to time.

 

“Projections” means the Borrower’s forecasted (a) balance sheets, (b) profit and
loss statements, and (c) cash flow statements, all prepared on a basis
consistent with the historical financial statements described in Section 4.04
and after giving effect to the Transactions, together with appropriate
supporting details and a statement of underlying assumptions, in each case in
form and substance satisfactory to the Lenders and for the period from the
Effective Date through December 31, 2013.

 

“Public Lender” has the meaning assigned to such term in Section 6.01.

 

“Register” has the meaning assigned to such term in Section 11.04.

 

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

 

“Required Lenders” means, at any time, Lenders having more than 50% of the
aggregate unpaid principal amount of the Loans then outstanding.

 

“Responsible Officer” means the chief executive officer, president, vice
president, chief financial officer, principal accounting officer, treasurer or
assistant treasurer of a Credit Party.  Any document delivered hereunder that is
signed by a Responsible Officer of a Credit Party shall be conclusively presumed
to have been authorized by all necessary corporate, partnership and/or other
action on the part of such Credit Party and such Responsible Officer shall be
conclusively presumed to have acted on behalf of such Credit Party.

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any Credit
Party, 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 any Credit Party or any option, warrant or other right to acquire
any such Equity Interests in any Credit Party.

 

“Restricted Subsidiary” means any Subsidiary of any Credit Party.

 

“Revolving Agent” means JPMorgan Chase Bank, N.A. in its capacity as contractual
representative of the financial institutions and other Persons from time to time
a party to the Revolving Facility and any successor agent appointed pursuant to
the terms of the Revolving Facility Documents.

 

16

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

 

“Revolving Commitment” means the Aggregate Commitment as such term is defined in
the Revolving Credit Agreement from time to time.

 

“Revolving Credit Agreement” means that certain Amended and Restated Credit
Agreement dated as of March 30, 2007, by and among Borrower, certain
Subsidiaries of Borrower, the lenders from time to time party thereto and
JPMorgan Chase Bank, N.A., as administrative agent, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

 

“Revolving Credit Exposure” means the Aggregate Credit Exposure as such term is
defined in the Revolving Credit Agreement from time to time.

 

“Revolving Facility” means the revolving loan facility evidenced by the
Revolving Facility Documents.

 

“Revolving Facility Documents” means the Revolving Credit Agreement and any
promissory notes executed in connection therewith, security instruments and any
other agreements, documents and certificates executed in connection with such
Revolving Credit Agreement, as the same may be amended, modified, supplemented
or restated from time to time.

 

“Revolving Loans” means the revolving loans made under the Revolving Facility.

 

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill
Corporation.

 

“Sale and Leaseback Transaction” means any sale or other transfer of any
property by any Person with the intent to lease such property as lessee.

 

“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 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.

 

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
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
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than
fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent
(50%) of the general partnership interests are, as of such

 

17

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

 

date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent. Unless the context otherwise
clearly requires, references herein to a “Subsidiary” refer to a Subsidiary of
the Borrower.

 

“Surplus Cash” means the lesser of (i) cash and cash equivalents of the Borrower
and its Restricted Subsidiaries, on a consolidated basis that constitute
Permitted Investments and (ii) the amount by which Net Working Capital exceeds
zero ($0.00).

 

“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement 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 similar transaction or
any combination of these transactions; provided that 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 Credit Parties shall
be a Swap Agreement.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

 

“Transactions” means the (i) the execution, delivery and performance by the
Credit Parties of this Agreement and the Loan Documents, (ii) the borrowing of
Loans on the Effective Date, and (iii) the use of the proceeds thereof in
accordance with Section 6.08.

 

“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 Adjusted LIBO Rate or the Alternate Base Rate.

 

“U.S. Government Securities” means direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02.                             TYPES OF LOANS AND BORROWINGS.  FOR
PURPOSES OF THIS AGREEMENT, LOANS MAY BE CLASSIFIED AND REFERRED TO BY TYPE
(E.G., A “EURODOLLAR LOAN” OR AN “ABR LOAN”) AND BORROWINGS ALSO MAY BE
CLASSIFIED AND REFERRED TO BY TYPE (E.G., A “EURODOLLAR BORROWING” OR AN “ABR
BORROWING”).

 

SECTION 1.03.                             TERMS GENERALLY.  THE DEFINITIONS OF
TERMS HEREIN SHALL APPLY EQUALLY TO THE SINGULAR AND PLURAL FORMS OF THE TERMS
DEFINED.  WHENEVER THE CONTEXT MAY REQUIRE, ANY PRONOUN SHALL INCLUDE THE
CORRESPONDING MASCULINE, FEMININE AND NEUTER FORMS.  THE WORDS “INCLUDE”,
“INCLUDES” AND “INCLUDING” SHALL BE DEEMED TO BE FOLLOWED BY THE PHRASE “WITHOUT

 

18

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

 

LIMITATION”.  THE WORD “WILL” SHALL BE CONSTRUED TO HAVE THE SAME MEANING AND
EFFECT AS THE WORD “SHALL”.  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 OR OTHERWISE MODIFIED (SUBJECT TO ANY
RESTRICTIONS ON SUCH AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS SET FORTH HEREIN),
(B) ANY REFERENCE HEREIN TO ANY PERSON SHALL BE CONSTRUED TO INCLUDE SUCH
PERSON’S SUCCESSORS AND ASSIGNS, (C) THE WORDS “HEREIN”, “HEREOF” AND
“HEREUNDER”, AND WORDS OF SIMILAR IMPORT, SHALL BE CONSTRUED TO REFER TO THIS
AGREEMENT IN ITS ENTIRETY AND NOT TO ANY PARTICULAR PROVISION HEREOF, (D) ALL
REFERENCES HEREIN TO ARTICLES, SECTIONS, EXHIBITS AND SCHEDULES SHALL BE
CONSTRUED TO REFER TO ARTICLES AND SECTIONS OF, AND EXHIBITS AND SCHEDULES TO,
THIS AGREEMENT AND (E) THE WORDS “ASSET” AND “PROPERTY” SHALL BE CONSTRUED TO
HAVE THE SAME MEANING AND EFFECT AND TO REFER TO ANY AND ALL TANGIBLE AND
INTANGIBLE ASSETS AND PROPERTIES, INCLUDING CASH, SECURITIES, ACCOUNTS AND
CONTRACT RIGHTS.

 

SECTION 1.04.                             ACCOUNTING TERMS; GAAP.  EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED HEREIN, ALL TERMS OF AN ACCOUNTING OR FINANCIAL
NATURE SHALL BE CONSTRUED IN ACCORDANCE WITH GAAP, AS IN EFFECT FROM TIME TO
TIME; PROVIDED THAT, IF THE BORROWER NOTIFIES THE ADMINISTRATIVE AGENT THAT THE
BORROWER REQUEST AN AMENDMENT TO ANY PROVISION HEREOF TO ELIMINATE THE EFFECT OF
ANY CHANGE OCCURRING AFTER THE DATE HEREOF IN GAAP OR IN THE APPLICATION THEREOF
ON THE OPERATION OF SUCH PROVISION (OR IF THE ADMINISTRATIVE AGENT NOTIFIES THE
BORROWER THAT THE REQUIRED LENDERS REQUEST AN AMENDMENT TO ANY PROVISION HEREOF
FOR SUCH PURPOSE), REGARDLESS OF WHETHER ANY SUCH NOTICE IS GIVEN BEFORE OR
AFTER SUCH CHANGE IN GAAP OR IN THE APPLICATION THEREOF, THEN SUCH PROVISION
SHALL BE INTERPRETED ON THE BASIS OF GAAP AS IN EFFECT AND APPLIED IMMEDIATELY
BEFORE SUCH CHANGE SHALL HAVE BECOME EFFECTIVE UNTIL  SUCH NOTICE SHALL HAVE
BEEN WITHDRAWN OR SUCH PROVISION  AMENDED IN ACCORDANCE HEREWITH.

 

SECTION 1.05.                             OIL AND GAS DEFINITIONS.  FOR PURPOSES
OF THIS AGREEMENT, THE TERMS “PROVED OR PROVEN RESERVES,” “PROVED DEVELOPED
RESERVES,” “PROVED OR PROVEN UNDEVELOPED RESERVES,” “PROVED OR PROVEN DEVELOPED
NONPRODUCING RESERVES” AND “PROVED OR PROVEN DEVELOPED PRODUCING RESERVES,” HAVE
THE MEANING GIVEN SUCH TERMS FROM TIME TO TIME AND AT THE TIME IN QUESTION BY
THE SOCIETY OF PETROLEUM ENGINEERS OF THE AMERICAN INSTITUTE OF MINING
ENGINEERS.

 

SECTION 1.06.                             TIME OF DAY.  UNLESS OTHERWISE
SPECIFIED, ALL REFERENCES TO TIMES OF DAY SHALL BE REFERENCES TO CENTRAL TIME
(DAYLIGHT OR STANDARD, AS APPLICABLE).

 

ARTICLE II

 

THE CREDITS

 

SECTION 2.01.                             COMMITMENTS.  SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH HEREIN, EACH LENDER AGREES TO MAKE A LOAN TO THE BORROWER
ON THE EFFECTIVE DATE IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED THE AMOUNT
OF THE COMMITMENT OF SUCH LENDER.  THE LOANS MAY FROM TIME TO TIME BE EURODOLLAR
LOANS OR ABR LOANS, AS DETERMINED BY THE BORROWER AND NOTIFIED TO THE
ADMINISTRATIVE AGENT IN ACCORDANCE WITH SECTIONS 2.04 AND 2.07.  AMOUNTS OF
LOANS REPAID OR PREPAID MAY NOT BE REBORROWED.

 

19

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

 

SECTION 2.02.                             REPAYMENT OF LOANS.  THE BORROWER
SHALL REPAY THE AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF THE LOANS ON THE
MATURITY DATE.

 

SECTION 2.03.                             [RESERVED].

 

SECTION 2.04.                             REQUESTS FOR BORROWINGS.  TO REQUEST
THAT THE LENDERS MAKE LOANS ON THE EFFECTIVE DATE, 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., THREE (3) BUSINESS DAYS BEFORE
THE DATE OF THE PROPOSED EURODOLLAR BORROWING OR (B) IN THE CASE OF AN ABR
BORROWING, NOT LATER THAN 11:00 A.M., ONE (1) BUSINESS DAY BEFORE THE DATE OF
THE PROPOSED ABR BORROWING.  EACH SUCH TELEPHONIC BORROWING REQUEST SHALL BE
IRREVOCABLE AND SHALL BE CONFIRMED PROMPTLY BY HAND DELIVERY OR TELECOPY TO THE
ADMINISTRATIVE AGENT OF A WRITTEN BORROWING REQUEST IN A FORM APPROVED BY THE
ADMINISTRATIVE AGENT AND SIGNED BY THE BORROWER.  EACH SUCH TELEPHONIC AND
WRITTEN BORROWING REQUEST SHALL SPECIFY THE FOLLOWING INFORMATION:

 

(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”; AND

 

(V)                       THE LOCATION AND NUMBER OF THE BORROWER’S ACCOUNT TO
WHICH FUNDS ARE TO BE DISBURSED, WHICH SHALL COMPLY WITH THE REQUIREMENTS OF
SECTION 2.06.

 

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 (1) month’s duration.  Promptly
following receipt of the Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

SECTION 2.05.                             [RESERVED]

 

SECTION 2.06.                             FUNDING OF BORROWINGS.

 

(A)                                  EACH LENDER SHALL MAKE EACH LOAN TO BE MADE
BY IT HEREUNDER ON THE EFFECTIVE DATE BY WIRE TRANSFER OF IMMEDIATELY AVAILABLE
FUNDS BY 12:00 NOON 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 DESIGNATED BY
THE BORROWER IN THE APPLICABLE BORROWING REQUEST.

 

20

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

 

(B)                                 UNLESS THE ADMINISTRATIVE AGENT SHALL HAVE
RECEIVED NOTICE FROM A LENDER PRIOR TO THE EFFECTIVE DATE THAT SUCH LENDER WILL
NOT MAKE AVAILABLE TO THE ADMINISTRATIVE AGENT SUCH LENDER’S SHARE OF SUCH
BORROWING TO BE MADE ON THE EFFECTIVE DATE, THE ADMINISTRATIVE AGENT MAY ASSUME
THAT SUCH LENDER HAS MADE SUCH SHARE AVAILABLE ON SUCH DATE IN ACCORDANCE WITH
PARAGRAPH (A) OF THIS SECTION 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 ABR LOANS.  IF SUCH
LENDER PAYS SUCH AMOUNT TO THE ADMINISTRATIVE AGENT, THEN SUCH AMOUNT SHALL
CONSTITUTE SUCH LENDER’S LOAN INCLUDED IN SUCH BORROWING.

 

SECTION 2.07.                             INTEREST ELECTIONS.

 

(A)                                  THE BORROWING TO BE MADE ON THE EFFECTIVE
DATE SHALL BE AN ABR BORROWING; PROVIDED THAT THE INTEREST PERIOD FOR ANY
EURODOLLAR BORROWING REQUESTED ON THE EFFECTIVE DATE AND DURING THE THIRTY (30)
DAY PERIOD FOLLOWING THE EFFECTIVE DATE PURSUANT TO AN INTEREST ELECTION REQUEST
SHALL BE OF ONE (1) MONTH’S DURATION, UNLESS OTHERWISE AGREED BY THE BORROWER
AND THE ADMINISTRATIVE AGENT.  THEREAFTER, THE BORROWER MAY ELECT TO CONVERT
SUCH LOANS TO A DIFFERENT TYPE OR TO CONTINUE SUCH LOANS AND, IN THE CASE OF
EURODOLLAR LOANS, MAY ELECT INTEREST PERIODS THEREFOR, ALL AS PROVIDED IN THIS
SECTION.  THE BORROWER MAY ELECT DIFFERENT OPTIONS WITH RESPECT TO DIFFERENT
PORTIONS OF THE LOANS, 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)                                 TO MAKE AN ELECTION PURSUANT TO THIS
SECTION, THE BORROWER SHALL NOTIFY THE ADMINISTRATIVE AGENT OF SUCH ELECTION BY
TELEPHONE BY THE TIME THAT A BORROWING REQUEST WOULD BE REQUIRED UNDER SECTION
2.04 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 TELECOPY TO THE ADMINISTRATIVE AGENT OF A WRITTEN
INTEREST ELECTION REQUEST IN A FORM APPROVED BY THE ADMINISTRATIVE AGENT AND
SIGNED BY THE BORROWER.

 

(C)                                  EACH TELEPHONIC AND WRITTEN INTEREST
ELECTION REQUEST SHALL SPECIFY THE FOLLOWING INFORMATION:

 

(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

 

21

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

 

INFORMATION TO BE SPECIFIED PURSUANT TO CLAUSES (III) AND (IV) BELOW SHALL BE
SPECIFIED FOR EACH RESULTING BORROWING);

 

(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 (1) month’s duration.

 

(D)                                 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)                                  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 AND THE
ADMINISTRATIVE AGENT, AT THE REQUEST OF THE REQUIRED LENDERS, SO NOTIFIES THE
BORROWER, THEN, SO LONG AS AN EVENT OF DEFAULT IS CONTINUING (I) NO OUTSTANDING
BORROWING MAY BE CONVERTED TO OR CONTINUED AS A EURODOLLAR BORROWING AND
(II) UNLESS REPAID, EACH EURODOLLAR BORROWING SHALL BE CONVERTED TO AN ABR
BORROWING AT THE END OF THE INTEREST PERIOD APPLICABLE THERETO.

 

(F)                                    ALL CONVERSIONS AND CONTINUATIONS OF
EURODOLLAR LOANS SHALL BE IN AN AGGREGATE AMOUNT THAT IS AN INTEGRAL MULTIPLE OF
$1,000,000 AND NOT LESS THAN $1,000,000.  ALL CONVERSIONS AND CONTINUATIONS OF
ABR LOANS SHALL BE IN AN AGGREGATE AMOUNT THAT IS AN INTEGRAL MULTIPLE OF
$100,000 AND NOT LESS THAN $100,000.  LOANS 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 FOUR (4) EURODOLLAR BORROWINGS OUTSTANDING.

 

SECTION 2.08.                             REPAYMENT OF LOANS; EVIDENCE OF DEBT.

 

(A)                                  THE BORROWER HEREBY UNCONDITIONALLY
PROMISES TO PAY TO THE ADMINISTRATIVE AGENT FOR THE ACCOUNT OF EACH LENDER THE
THEN UNPAID PRINCIPAL AMOUNT OF EACH LOAN ON THE MATURITY DATE.

 

(B)                                 BORROWER AND EACH SURETY, ENDORSER,
GUARANTOR AND OTHER PARTY EVER LIABLE FOR PAYMENT OF ANY SUMS OF MONEY PAYABLE
UNDER THIS AGREEMENT, JOINTLY AND SEVERALLY WAIVE PRESENTMENT AND DEMAND FOR
PAYMENT, NOTICE OF INTENTION TO ACCELERATE THE

 

22

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

 

MATURITY, PROTEST, NOTICE OF PROTEST AND NONPAYMENT, AS TO THE PAYMENTS DUE
UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND AS TO EACH AND ALL
INSTALLMENTS HEREUNDER AND THEREUNDER, AND AGREE THAT THEIR LIABILITY UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL NOT BE AFFECTED BY ANY RENEWAL OR
EXTENSION IN THE TIME OF PAYMENT HEREOF, OR IN ANY INDULGENCES, OR BY ANY
RELEASE OR CHANGE IN ANY SECURITY FOR THE PAYMENT OF THE OBLIGATIONS, AND HEREBY
CONSENT TO ANY AND ALL SUCH RENEWALS, EXTENSIONS, INDULGENCES, RELEASES OR
CHANGES.

 

(C)                                  EACH LENDER SHALL MAINTAIN IN ACCORDANCE
WITH ITS USUAL PRACTICE AN ACCOUNT OR ACCOUNTS EVIDENCING THE INDEBTEDNESS OF
THE BORROWER TO SUCH LENDER RESULTING FROM EACH LOAN MADE BY SUCH LENDER,
INCLUDING THE AMOUNTS OF PRINCIPAL AND INTEREST PAYABLE AND PAID TO SUCH LENDER
FROM TIME TO TIME HEREUNDER.

 

(D)                                 THE ADMINISTRATIVE AGENT SHALL MAINTAIN
ACCOUNTS IN WHICH IT SHALL RECORD (I) THE AMOUNT OF EACH LOAN MADE HEREUNDER,
THE TYPE THEREOF AND THE INTEREST PERIOD APPLICABLE THERETO, (II) THE AMOUNT OF
ANY PRINCIPAL OR INTEREST DUE AND PAYABLE OR TO BECOME DUE AND PAYABLE FROM THE
BORROWER TO EACH LENDER HEREUNDER AND (III) THE AMOUNT OF ANY SUM RECEIVED BY
THE ADMINISTRATIVE AGENT HEREUNDER FOR THE ACCOUNT OF THE LENDERS AND EACH
LENDER’S SHARE THEREOF.

 

(E)                                  THE ENTRIES MADE IN THE ACCOUNTS MAINTAINED
PURSUANT TO PARAGRAPH (C) OR (D) OF THIS SECTION SHALL BE PRIMA FACIE EVIDENCE
OF THE EXISTENCE AND AMOUNTS OF THE OBLIGATIONS RECORDED THEREIN; PROVIDED THAT
THE FAILURE OF ANY LENDER OR THE ADMINISTRATIVE AGENT TO MAINTAIN SUCH ACCOUNTS
OR ANY ERROR THEREIN SHALL NOT IN ANY MANNER AFFECT THE OBLIGATION OF THE
BORROWER TO REPAY THE LOANS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.

 

(F)                                    ANY LENDER OR PARTICIPANT MAY REQUEST
THAT LOANS MADE BY IT BE EVIDENCED BY A PROMISSORY NOTE.  IN SUCH EVENT, THE
BORROWER SHALL PREPARE, EXECUTE AND DELIVER TO SUCH LENDER OR PARTICIPANT A
PROMISSORY NOTE PAYABLE TO THE ORDER OF SUCH LENDER OR PARTICIPANT (OR, IF
REQUESTED BY SUCH LENDER OR PARTICIPANT, TO SUCH LENDER OR PARTICIPANT AND ITS
REGISTERED ASSIGNS) AND IN THE FORM ATTACHED HERETO AS EXHIBIT E.  THEREAFTER,
THE LOANS EVIDENCED BY SUCH PROMISSORY NOTE AND INTEREST THEREON SHALL AT ALL
TIMES (INCLUDING AFTER ASSIGNMENT PURSUANT TO SECTION 11.04) BE REPRESENTED BY
ONE OR MORE PROMISSORY NOTES IN SUCH FORM PAYABLE TO THE ORDER OF THE PAYEE
NAMED THEREIN (OR, IF SUCH PROMISSORY NOTE IS A REGISTERED NOTE, TO SUCH PAYEE
AND ITS REGISTERED ASSIGNS).

 

SECTION 2.09.                             OPTIONAL PREPAYMENT OF LOANS.

 

(A)                                  THE BORROWER SHALL HAVE THE RIGHT AT ANY
TIME AND FROM TIME TO TIME TO PREPAY THE LOANS, IN WHOLE AND OR IN PART IN AN
AGGREGATE AMOUNT THAT IS AN INTEGRAL MULTIPLE OF $5,000,000 AND NOT LESS THAN
$10,000,000, WITHOUT PREMIUM OR PENALTY, SUBJECT TO PRIOR NOTICE IN ACCORDANCE
WITH PARAGRAPH (B) OF THIS SECTION.

 

(B)                                 THE BORROWER SHALL NOTIFY THE ADMINISTRATIVE
AGENT BY TELEPHONE (CONFIRMED BY TELECOPY) OF ANY PREPAYMENT HEREUNDER (I) IN
THE CASE OF PREPAYMENT OF EURODOLLAR LOANS, NOT LATER THAN 11:00 A.M. THREE
(3) BUSINESS DAYS BEFORE THE DATE OF

 

23

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

 

PREPAYMENT OR (II) IN THE CASE OF PREPAYMENT OF AN ABR LOAN, NOT LATER THAN
11:00 A.M. ONE (1) BUSINESS DAY BEFORE THE DATE OF PREPAYMENT.  EACH SUCH NOTICE
SHALL BE IRREVOCABLE AND SHALL SPECIFY THE PREPAYMENT DATE AND THE PRINCIPAL
AMOUNT OF THE LOANS OR PORTION THEREOF TO BE PREPAID.  PROMPTLY FOLLOWING
RECEIPT OF ANY SUCH NOTICE RELATING TO THE LOANS, THE ADMINISTRATIVE AGENT SHALL
ADVISE THE LENDERS OF THE CONTENTS THEREOF.  EACH PARTIAL PREPAYMENT OF THE
LOANS SHALL BE IN AN AMOUNT THAT WOULD BE PERMITTED IN THE CASE OF CONVERSION OR
CONTINUATION OF THE SAME TYPE AS PROVIDED IN SECTION 2.07(F).  EACH PREPAYMENT
OF THE LOANS SHALL BE APPLIED RATABLY TO THE LOANS OUTSTANDING.  PREPAYMENTS
SHALL BE ACCOMPANIED BY ACCRUED INTEREST TO THE EXTENT REQUIRED BY SECTION 2.12
AND SHALL BE SUBJECT TO THE PAYMENT OF ANY FUNDING INDEMNIFICATION AMOUNTS
REQUIRED BY SECTION 2.15.

 

SECTION 2.10.                             MANDATORY PREPAYMENT OF LOANS.

 

(A)                                  THE BORROWER SHALL PREPAY THE LOANS AS
PROVIDED IN SECTION 7.03(A).

 

(B)                                 AMOUNTS APPLIED TO THE PREPAYMENT OF THE
LOANS PURSUANT TO THIS SECTION SHALL BE FIRST APPLIED RATABLY TO ABR LOANS THEN
OUTSTANDING AND, UPON PAYMENT IN FULL OF ALL OUTSTANDING ABR LOANS, SECOND, TO
EURODOLLAR LOANS THEN OUTSTANDING, AND IF MORE THAN ONE EURODOLLAR BORROWING IS
THEN OUTSTANDING, TO EACH SUCH EURODOLLAR BORROWING 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, SUBJECT TO
THE PAYMENT OF ANY FUNDING INDEMNIFICATION AMOUNTS REQUIRED BY SECTION 2.15 BUT
WITHOUT PENALTY OR PREMIUM.

 

SECTION 2.11.                             FEES.

 

(A)                                  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 PURSUANT TO THE TERMS OF THE ENGAGEMENT LETTER.

 

(B)                                 THE BORROWER AGREES TO PAY TO THE
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE LENDERS, ON THE EFFECTIVE DATE, AN
UPFRONT FEE IN AN AMOUNT EQUAL TO SEVEN PERCENT (7.00%) OF THE AGGREGATE
PRINCIPAL AMOUNT OF THE LOANS MADE TO THE BORROWER ON THE EFFECTIVE DATE.

 

(C)                                  THE BORROWER AGREES TO PAY TO THE
ADMINISTRATIVE AGENT, FOR THE BENEFIT OF THE LENDERS, (I) AN INITIAL DURATION
FEE IN AN AMOUNT EQUAL TO FIVE PERCENT (5.00%) OF THE AGGREGATE PRINCIPAL AMOUNT
OF THE LOANS OUTSTANDING UNDER THIS AGREEMENT ON JUNE 15, 2009, WHICH INITIAL
DURATION FEE SHALL BE PAYABLE ON SUCH DATE AND (II) AN ADDITIONAL DURATION FEE
IN AN AMOUNT EQUAL TO THREE PERCENT (3.00%) OF THE AGGREGATE PRINCIPAL AMOUNT OF
THE LOANS OUTSTANDING UNDER THIS AGREEMENT ON SEPTEMBER 15, 2009, WHICH
ADDITIONAL DURATION FEE SHALL BE PAYABLE ON SUCH DATE.

 

(D)                                 ALL FEES PAYABLE HEREUNDER SHALL BE PAID ON
THE DATES DUE, IN IMMEDIATELY AVAILABLE FUNDS, TO THE ADMINISTRATIVE AGENT.  ALL
FEES PAID PURSUANT TO CLAUSE (B) OF THIS SECTION 2.11 SHALL BE DISTRIBUTED BY
THE ADMINISTRATIVE AGENT RATABLY AMONG THE LENDERS

 

24

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

 

PARTY TO THIS AGREEMENT ON THE EFFECTIVE DATE.  ALL FEES PAID PURSUANT TO CLAUSE
(C) OF THIS SECTION 2.11 SHALL BE DISTRIBUTED BY THE ADMINISTRATIVE AGENT
RATABLY AMONG THE LENDERS PARTY TO THIS AGREEMENT ON THE DATE SUCH DURATION FEE
IS PAID BY THE BORROWER.  SUBJECT TO SECTION 11.13, FEES PAID PURSUANT TO THIS
SECTION 2.11 SHALL NOT BE REFUNDABLE UNDER ANY CIRCUMSTANCES.

 

SECTION 2.12.                             INTEREST.

 

(A)                                  THE ABR LOANS COMPRISING EACH ABR BORROWING
SHALL BEAR INTEREST AT A RATE PER ANNUM EQUAL TO THE ALTERNATE BASE RATE PLUS
THE APPLICABLE MARGIN; PROVIDED THAT FOR THE AVOIDANCE OF DOUBT, THE INTEREST
RATE FOR ANY ABR LOAN SHALL NEVER BE LESS THAN TEN PERCENT (10%).

 

(B)                                 THE EURODOLLAR LOANS SHALL BEAR INTEREST AT
A RATE PER ANNUM EQUAL TO THE ADJUSTED LIBO RATE FOR THE INTEREST PERIOD IN
EFFECT FOR SUCH LOANS PLUS THE APPLICABLE MARGIN; PROVIDED THAT FOR THE
AVOIDANCE OF DOUBT, THE INTEREST RATE FOR ANY EURODOLLAR LOAN SHALL NEVER BE
LESS THAN TEN PERCENT (10%).

 

(C)                                  NOTWITHSTANDING THE FOREGOING, (I) SO LONG
AS ANY EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, THE AGGREGATE
PRINCIPAL AMOUNT OF ALL LOANS OUTSTANDING SHALL BEAR INTEREST, AFTER AS WELL AS
BEFORE JUDGMENT, AT A RATE PER ANNUM EQUAL TO TWO PERCENT (2%) PLUS THE RATE
OTHERWISE APPLICABLE TO SUCH LOANS AS PROVIDED IN THE PRECEDING PARAGRAPHS OF
THIS SECTION, AND (II) IF ANY INTEREST ON ANY LOAN OR ANY FEE OR OTHER AMOUNT
PAYABLE BY THE BORROWER OR ANY OTHER CREDIT PARTY HEREUNDER 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 PARAGRAPH (A) OF THIS SECTION.

 

(D)                                 ACCRUED INTEREST ON EACH LOAN SHALL BE
PAYABLE IN ARREARS ON EACH INTEREST PAYMENT DATE FOR SUCH LOAN AND ON THE
MATURITY DATE; PROVIDED THAT (I) INTEREST ACCRUED PURSUANT TO PARAGRAPH (C) OF
THIS SECTION SHALL BE PAYABLE ON DEMAND, (II) IN THE EVENT OF ANY REPAYMENT OR
PREPAYMENT OF ANY LOAN, 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)                                  ALL INTEREST HEREUNDER SHALL BE COMPUTED ON
THE BASIS OF A YEAR OF 360 DAYS, 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.

 

25

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

 

SECTION 2.13.                             ALTERNATE RATE OF INTEREST.  IF PRIOR
TO THE COMMENCEMENT OF ANY INTEREST PERIOD FOR A EURODOLLAR BORROWING:

 

(A)                                  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, FOR SUCH INTEREST PERIOD; OR

 

(B)                                 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 (OR LENDER) OF MAKING OR MAINTAINING THEIR LOANS (OR ITS LOAN) INCLUDED
IN SUCH BORROWING FOR SUCH INTEREST PERIOD;

 

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy 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, any Interest Election
Request that requests the conversion of any Borrowing to, or continuation of any
Borrowing as, a Eurodollar Borrowing shall be ineffective.

 

SECTION 2.14.                             INCREASED COSTS.

 

(A)                                    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)                                 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 hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.

 

(B)                                 IF ANY LENDER DETERMINES THAT ANY CHANGE IN
LAW REGARDING CAPITAL REQUIREMENTS HAS OR WOULD HAVE THE EFFECT OF REDUCING THE
RATE OF RETURN ON SUCH LENDER’S CAPITAL OR ON THE CAPITAL OF SUCH LENDER’S
HOLDING COMPANY, IF ANY, AS A CONSEQUENCE OF THIS AGREEMENT OR THE LOANS MADE BY
SUCH LENDER TO A LEVEL BELOW THAT WHICH SUCH LENDER OR SUCH LENDER’S HOLDING
COMPANY COULD HAVE ACHIEVED BUT FOR SUCH CHANGE IN LAW (TAKING INTO
CONSIDERATION SUCH LENDER’S POLICIES AND THE POLICIES OF SUCH LENDER’S HOLDING
COMPANY WITH RESPECT TO CAPITAL ADEQUACY), THEN FROM TIME TO TIME THE BORROWER
WILL PAY TO SUCH LENDER SUCH ADDITIONAL AMOUNT OR AMOUNTS AS WILL COMPENSATE
SUCH LENDER OR SUCH LENDER’S HOLDING COMPANY FOR ANY SUCH REDUCTION SUFFERED.

 

26

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

 

(C)                                  A CERTIFICATE OF A LENDER SETTING FORTH
(I) THE AMOUNT OR AMOUNTS REASONABLY NECESSARY TO COMPENSATE SUCH LENDER OR ITS
HOLDING COMPANY, AS THE CASE MAY BE, AS SPECIFIED IN PARAGRAPH (A) OR (B) OF
THIS SECTION, (II)  THE FACTUAL BASIS FOR SUCH COMPENSATION AND (III) THE MANNER
IN WHICH SUCH AMOUNT OR AMOUNTS WERE CALCULATED SHALL BE DELIVERED TO THE
BORROWER. SUCH CERTIFICATE SHALL BE CONCLUSIVE ABSENT MANIFEST ERROR. THE
BORROWER SHALL PAY SUCH LENDER THE AMOUNT SHOWN AS DUE ON ANY SUCH CERTIFICATE
WITHIN TEN (10) DAYS AFTER RECEIPT THEREOF.

 

(D)                                 FAILURE OR DELAY ON THE PART OF ANY LENDER
TO DEMAND COMPENSATION PURSUANT TO THIS SECTION SHALL NOT CONSTITUTE A WAIVER OF
SUCH LENDER’S RIGHT TO DEMAND SUCH COMPENSATION; PROVIDED THAT THE BORROWER
SHALL NOT BE REQUIRED TO COMPENSATE A LENDER PURSUANT TO THIS SECTION FOR ANY
INCREASED COSTS OR REDUCTIONS INCURRED MORE THAN ONE HUNDRED EIGHTY (180) DAYS
PRIOR TO THE DATE THAT SUCH LENDER NOTIFIES THE BORROWER OF THE CHANGE IN LAW
GIVING RISE TO SUCH INCREASED COSTS OR REDUCTIONS AND OF SUCH LENDER’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 ONE
HUNDRED EIGHTY (180) DAY PERIOD REFERRED TO ABOVE SHALL BE EXTENDED TO INCLUDE
THE PERIOD OF RETROACTIVE EFFECT THEREOF.

 

SECTION 2.15.                             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 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 (REGARDLESS OF WHETHER SUCH NOTICE MAY BE
REVOKED UNDER SECTION 2.09(B) AND IS REVOKED IN ACCORDANCE THEREWITH), (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 2.18, 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
INCLUDE AN AMOUNT DETERMINED BY SUCH LENDER 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
MARKET. A CERTIFICATE OF ANY LENDER SETTING FORTH ANY AMOUNT OR AMOUNTS THAT
SUCH LENDER IS ENTITLED TO RECEIVE PURSUANT TO THIS SECTION 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 TEN
(10) DAYS AFTER RECEIPT THEREOF.

 

SECTION 2.16.                             TAXES.

 

(A)                                  ANY AND ALL PAYMENTS BY OR ON ACCOUNT OF
ANY OBLIGATION OF THE BORROWER HEREUNDER SHALL BE MADE FREE AND CLEAR OF AND
WITHOUT DEDUCTION FOR ANY INDEMNIFIED

 

27

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

 

TAXES OR OTHER TAXES; PROVIDED THAT IF THE BORROWER SHALL BE REQUIRED TO DEDUCT
ANY INDEMNIFIED TAXES OR OTHER TAXES FROM SUCH PAYMENTS, THEN (I) THE SUM
PAYABLE SHALL BE INCREASED AS NECESSARY SO THAT AFTER MAKING ALL REQUIRED
DEDUCTIONS (INCLUDING DEDUCTIONS APPLICABLE TO ADDITIONAL SUMS PAYABLE UNDER
THIS SECTION) THE ADMINISTRATIVE AGENT OR LENDER (AS THE CASE MAY BE) RECEIVES
AN AMOUNT EQUAL TO THE SUM IT WOULD HAVE RECEIVED HAD NO SUCH DEDUCTIONS BEEN
MADE, (II) THE BORROWER SHALL MAKE SUCH DEDUCTIONS AND (III) THE BORROWER SHALL
PAY THE FULL AMOUNT DEDUCTED TO THE RELEVANT GOVERNMENTAL AUTHORITY IN
ACCORDANCE WITH APPLICABLE LAW.

 

(B)                                 IN ADDITION, THE BORROWER SHALL PAY ANY
OTHER TAXES TO THE RELEVANT GOVERNMENTAL AUTHORITY IN ACCORDANCE WITH APPLICABLE
LAW.

 

(C)                                  THE BORROWER SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT AND EACH LENDER, WITHIN 10 DAYS AFTER WRITTEN DEMAND
THEREFOR, FOR THE FULL AMOUNT OF ANY INDEMNIFIED TAXES OR OTHER TAXES PAID BY
THE ADMINISTRATIVE AGENT OR SUCH LENDER, 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) 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 DELIVERED TO THE
BORROWER BY A LENDER OR BY THE ADMINISTRATIVE AGENT ON ITS OWN BEHALF OR ON
BEHALF OF A LENDER, SETTING FORTH (I) THE AMOUNT OF SUCH PAYMENT OR LIABILITY
REASONABLY NECESSARY TO COMPENSATE THE ADMINISTRATIVE AGENT OR SUCH LENDER, AS
THE CASE MAY BE, (II) THE FACTUAL BASIS FOR SUCH COMPENSATION AND (III) THE
MANNER IN WHICH SUCH AMOUNT OR AMOUNTS WERE CALCULATED, SHALL BE CONCLUSIVE
ABSENT MANIFEST ERROR.

 

(D)                                 AS SOON AS PRACTICABLE AFTER ANY PAYMENT OF
INDEMNIFIED TAXES OR OTHER TAXES BY THE BORROWER TO A GOVERNMENTAL AUTHORITY,
THE BORROWER SHALL DELIVER TO THE ADMINISTRATIVE AGENT THE ORIGINAL OR A
CERTIFIED COPY OF A RECEIPT ISSUED BY SUCH GOVERNMENTAL AUTHORITY EVIDENCING
SUCH PAYMENT, A COPY OF THE RETURN REPORTING SUCH PAYMENT OR OTHER EVIDENCE OF
SUCH PAYMENT REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT.

 

(E)                                  ANY FOREIGN LENDER THAT IS ENTITLED TO AN
EXEMPTION FROM OR REDUCTION OF WITHHOLDING TAX UNDER THE LAW OF THE JURISDICTION
IN WHICH THE BORROWER IS LOCATED, OR ANY TREATY TO WHICH SUCH JURISDICTION IS A
PARTY, WITH RESPECT TO PAYMENTS UNDER THIS AGREEMENT SHALL DELIVER TO THE
BORROWER (WITH A COPY TO THE ADMINISTRATIVE AGENT), AT THE TIME OR TIMES
PRESCRIBED BY APPLICABLE LAW, SUCH PROPERLY COMPLETED AND EXECUTED DOCUMENTATION
PRESCRIBED BY APPLICABLE LAW OR REASONABLY REQUESTED BY THE BORROWER AS WILL
PERMIT SUCH PAYMENTS TO BE MADE WITHOUT WITHHOLDING OR AT A REDUCED RATE.

 

(F)                                    IF THE ADMINISTRATIVE AGENT OR A LENDER
DETERMINES, IN ITS SOLE DISCRETION, THAT IT HAS RECEIVED A REFUND OF ANY TAXES
OR OTHER TAXES AS TO WHICH IT HAS BEEN INDEMNIFIED BY THE BORROWER OR WITH
RESPECT TO WHICH THE BORROWER HAS PAID ADDITIONAL AMOUNTS PURSUANT TO THIS
SECTION 2.16, IT SHALL PAY OVER SUCH REFUND TO THE BORROWER (BUT ONLY TO THE
EXTENT OF INDEMNITY PAYMENTS MADE, OR ADDITIONAL AMOUNTS PAID, BY THE

 

28

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

 

BORROWER UNDER THIS SECTION 2.16 WITH RESPECT TO THE TAXES OR OTHER TAXES GIVING
RISE TO SUCH REFUND), NET OF ALL OUT-OF-POCKET EXPENSES OF THE ADMINISTRATIVE
AGENT OR SUCH LENDER AND WITHOUT INTEREST (OTHER THAN ANY INTEREST PAID BY THE
RELEVANT GOVERNMENTAL AUTHORITY WITH RESPECT TO SUCH REFUND); PROVIDED, THAT THE
BORROWER, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT OR SUCH LENDER, AGREES TO
REPAY THE AMOUNT PAID OVER TO THE BORROWER (PLUS ANY PENALTIES, INTEREST OR
OTHER CHARGES IMPOSED BY THE RELEVANT GOVERNMENTAL AUTHORITY) TO THE
ADMINISTRATIVE AGENT OR SUCH LENDER IN THE EVENT THE ADMINISTRATIVE AGENT OR
SUCH LENDER IS REQUIRED TO REPAY SUCH REFUND TO SUCH GOVERNMENTAL AUTHORITY.
THIS SECTION SHALL NOT BE CONSTRUED TO REQUIRE THE ADMINISTRATIVE AGENT OR ANY
LENDER TO MAKE AVAILABLE ITS TAX RETURNS (OR ANY OTHER INFORMATION RELATING TO
ITS TAXES WHICH IT DEEMS CONFIDENTIAL) TO THE BORROWER OR ANY OTHER PERSON.

 

SECTION 2.17.                             PAYMENTS GENERALLY; PRO RATA
TREATMENT; SHARING OF SET-OFFS.

 

(A)                                  THE BORROWER SHALL MAKE EACH PAYMENT
REQUIRED TO BE MADE BY IT HEREUNDER (WHETHER OF PRINCIPAL, INTEREST OR FEES OR
OF AMOUNTS PAYABLE UNDER SECTION 2.14, SECTION 2.15 OR SECTION 2.16, OR
OTHERWISE) PRIOR TO 12:00 NOON ON THE DATE WHEN DUE, IN IMMEDIATELY AVAILABLE
FUNDS, WITHOUT SET-OFF OR COUNTERCLAIM. 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 AT JPMORGAN LOAN SERVICES, 21 SOUTH CLARK ST., 19TH FLOOR, CHICAGO,
ILLINOIS 60603-2003, EXCEPT AS EXPRESSLY PROVIDED HEREIN AND EXCEPT THAT
PAYMENTS PURSUANT TO SECTION 2.14, SECTION 2.15, SECTION 2.16 AND SECTION 11.03
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)                                 IF AT ANY TIME INSUFFICIENT FUNDS ARE
RECEIVED BY AND AVAILABLE TO THE ADMINISTRATIVE AGENT AND TO PAY FULLY ALL
AMOUNTS OF PRINCIPAL, INTEREST, FEES AND OTHER OBLIGATIONS 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 THEN DUE HEREUNDER, RATABLY AMONG THE PARTIES ENTITLED
THERETO IN ACCORDANCE WITH THE AMOUNTS OF PRINCIPAL THEN DUE TO SUCH PARTIES.

 

(C)                                  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 RESULTING IN SUCH LENDER RECEIVING
PAYMENT OF A GREATER PROPORTION OF THE AGGREGATE AMOUNT OF ITS LOANS 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 OF OTHER LENDERS TO THE EXTENT NECESSARY SO THAT

 

29

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

 

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; PROVIDED THAT (I) IF ANY SUCH PARTICIPATIONS ARE
PURCHASED AND ALL OR ANY PORTION OF THE PAYMENT GIVING RISE THERETO IS
RECOVERED, SUCH PARTICIPATIONS SHALL BE RESCINDED AND THE PURCHASE PRICE
RESTORED TO THE EXTENT OF SUCH RECOVERY, WITHOUT INTEREST, AND (II) THE
PROVISIONS OF THIS PARAGRAPH SHALL NOT BE CONSTRUED TO APPLY TO 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 TO ANY ASSIGNEE OR
PARTICIPANT, OTHER THAN TO THE BORROWER OR ANY SUBSIDIARY OR AFFILIATE THEREOF
(AS TO WHICH THE PROVISIONS OF THIS PARAGRAPH SHALL APPLY).  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.

 

(D)                                 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 HEREUNDER THAT THE
BORROWER WILL NOT MAKE SUCH PAYMENT, THE ADMINISTRATIVE AGENT MAY ASSUME THAT
THE BORROWER HAS MADE SUCH PAYMENT ON SUCH DATE IN ACCORDANCE HEREWITH AND MAY,
IN RELIANCE UPON SUCH ASSUMPTION, DISTRIBUTE TO THE LENDERS THE AMOUNT DUE. IN
SUCH EVENT, IF THE BORROWER HAS NOT IN FACT MADE SUCH PAYMENT, THEN EACH OF THE
LENDERS SEVERALLY AGREES TO REPAY TO THE ADMINISTRATIVE AGENT FORTHWITH ON
DEMAND THE AMOUNT SO DISTRIBUTED TO SUCH LENDER 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.

 

(E)                                  IF ANY LENDER SHALL FAIL TO MAKE ANY
PAYMENT REQUIRED TO BE MADE BY IT PURSUANT TO SECTION 2.06 OR SECTION 2.17(D) OR
SECTION 11.03(C), 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.

 

SECTION 2.18.                             MITIGATION OBLIGATIONS; REPLACEMENT OF
LENDERS.

 

(A)                                  IF ANY LENDER REQUESTS COMPENSATION UNDER
SECTION 2.14, 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 2.16, 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 2.14 OR
SECTION 2.16, 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

 

30

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

 

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)                                 IF ANY LENDER REQUESTS COMPENSATION UNDER
SECTION 2.14, 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 2.16, OR IF ANY LENDER DEFAULTS IN ITS OBLIGATION TO FUND LOANS
HEREUNDER, 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 11.04), 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
(I) THE BORROWER SHALL HAVE RECEIVED THE PRIOR WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT, WHICH CONSENT SHALL NOT UNREASONABLY BE WITHHELD,
(II) SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF AN AMOUNT EQUAL TO THE
OUTSTANDING PRINCIPAL OF ITS LOANS, 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 (III) IN THE CASE OF ANY SUCH ASSIGNMENT
RESULTING FROM A CLAIM FOR COMPENSATION UNDER SECTION 2.14 OR PAYMENTS REQUIRED
TO BE MADE PURSUANT TO SECTION 2.16, 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.

 

(C)                                  IF IN CONNECTION WITH ANY PROPOSED
AMENDMENT, MODIFICATION, TERMINATION, WAIVER OR CONSENT WITH RESPECT TO ANY OF
THE PROVISIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AS CONTEMPLATED BY
SECTION 11.02, THE CONSENT OF REQUIRED LENDERS SHALL HAVE BEEN OBTAINED BUT THE
CONSENT OF ONE OR MORE OF SUCH OTHER LENDERS (EACH A “NON-CONSENTING LENDER”)
WHOSE CONSENT IS REQUIRED HAS NOT BEEN OBTAINED; THEN, THE BORROWER MAY ELECT TO
REPLACE SUCH NON-CONSENTING LENDER AS A LENDER PARTY TO THIS AGREEMENT IN
ACCORDANCE WITH AND SUBJECT TO THE RESTRICTIONS CONTAINED IN, AND CONSENTS
REQUIRED BY SECTION 11.04; PROVIDED THAT (I) THE BORROWER SHALL HAVE RECEIVED
THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT, WHICH CONSENT SHALL NOT
UNREASONABLY BE WITHHELD, (II) SUCH LENDER SHALL HAVE RECEIVED PAYMENT OF AN
AMOUNT EQUAL TO THE OUTSTANDING PRINCIPAL OF ITS LOANS, 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 (III) IN THE CASE
OF ANY SUCH ASSIGNMENT RESULTING FROM A CLAIM FOR COMPENSATION UNDER
SECTION 2.14 OR PAYMENTS REQUIRED TO BE MADE PURSUANT TO SECTION 2.16, 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.

 

31

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

 

ARTICLE III

 

[RESERVED]

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Each Credit Party represents and warrants to the Lenders that: (it being
understood and agreed that with respect to the Effective Date such
representations and warranties are deemed to be made concurrently with and after
giving effect to the consummation of the Transactions):

 

SECTION 4.01.                             ORGANIZATION; POWERS. EACH CREDIT
PARTY IS DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF
THE JURISDICTION OF ITS ORGANIZATION, HAS ALL REQUISITE POWER AND AUTHORITY TO
CARRY ON ITS BUSINESS AS NOW CONDUCTED AND, EXCEPT WHERE THE FAILURE TO DO SO,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE EFFECT, IS QUALIFIED TO DO BUSINESS IN, AND IS IN GOOD
STANDING IN, EVERY JURISDICTION WHERE SUCH QUALIFICATION IS REQUIRED.

 

SECTION 4.02.                             AUTHORIZATION; ENFORCEABILITY. THE
TRANSACTIONS ARE WITHIN EACH CREDIT PARTY’S CORPORATE, LIMITED LIABILITY COMPANY
OR PARTNERSHIP POWERS AND HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE,
LIMITED LIABILITY COMPANY OR PARTNERSHIP AND, IF REQUIRED, STOCKHOLDER ACTION.
THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY EACH CREDIT PARTY AND
CONSTITUTES A LEGAL, VALID AND BINDING OBLIGATION OF EACH CREDIT PARTY,
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 4.03.                             GOVERNMENTAL 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, EXCEPT SUCH AS
HAVE BEEN OBTAINED OR MADE AND ARE IN FULL FORCE AND EFFECT AND, AFTER THE
EFFECTIVE DATE, IN THE CASE OF EXCO, THE FILING OF THIS AGREEMENT AND RELATED
LOAN DOCUMENTS BY EXCO WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, (B) WILL
NOT VIOLATE ANY APPLICABLE LAW OR REGULATION OR THE CHARTER, BY-LAWS OR OTHER
ORGANIZATIONAL DOCUMENTS OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR ANY
ORDER OF ANY GOVERNMENTAL AUTHORITY, (C) WILL NOT VIOLATE OR RESULT IN A DEFAULT
UNDER ANY INDENTURE, AGREEMENT OR OTHER INSTRUMENT EVIDENCING MATERIAL
INDEBTEDNESS, OR GIVE RISE TO A RIGHT THEREUNDER TO REQUIRE ANY PAYMENT TO BE
MADE BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY, AND (D) WILL NOT RESULT IN
THE CREATION OR IMPOSITION OF ANY LIEN ON ANY ASSET OF THE BORROWER OR ANY
RESTRICTED SUBSIDIARY NOT OTHERWISE PERMITTED UNDER SECTION 7.02.

 

SECTION 4.04.                             FINANCIAL CONDITION; NO MATERIAL
ADVERSE CHANGE.

 

(A)                                  THE BORROWER HAS HERETOFORE FURNISHED TO
THE LENDERS THE UNAUDITED CONSOLIDATED BALANCE SHEET AND RELATED STATEMENTS OF
INCOME AND CASH FLOWS OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES FOR
(I) THE TWELVE (12) MONTH PERIOD ENDING

 

32

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

 

DECEMBER 31, 2007 AND (II) THE NINE (9) MONTH PERIOD ENDING SEPTEMBER 30, 2008. 
SUCH FINANCIAL STATEMENTS PRESENT FAIRLY, IN ALL MATERIAL RESPECTS, THE
FINANCIAL POSITION AND RESULTS OF OPERATIONS AND CASH FLOWS OF THE BORROWER AND
ITS CONSOLIDATED SUBSIDIARIES AS OF SUCH DATES AND FOR SUCH PERIODS IN
ACCORDANCE WITH GAAP, SUBJECT TO YEAR-END AUDIT ADJUSTMENTS AND THE ABSENCES OF
FOOTNOTES.

 

(B)                                 SINCE DECEMBER 31, 2007, THERE HAS BEEN NO
MATERIAL ADVERSE CHANGE IN THE BUSINESS, ASSETS, OPERATIONS, PROSPECTS OR
CONDITION, FINANCIAL OR OTHERWISE, OF THE BORROWER AND ITS SUBSIDIARIES, TAKEN
AS A WHOLE (IT BEING UNDERSTOOD THAT CHANGES IN COMMODITY PRICES FOR
HYDROCARBONS AFFECTING THE OIL AND GAS INDUSTRY AS A WHOLE DO NOT CONSTITUTE A
MATERIAL ADVERSE CHANGE).

 

SECTION 4.05.                             PROPERTIES.

 

(A)                                  EXCEPT AS OTHERWISE PROVIDED IN
SECTION 4.15 WITH RESPECT TO PROVED RESERVES INCLUDED IN THE OIL AND GAS
INTERESTS OF THE BORROWER AND EACH RESTRICTED SUBSIDIARY, THE BORROWER AND EACH
RESTRICTED SUBSIDIARY HAS GOOD TITLE TO, OR VALID LEASEHOLD INTERESTS IN, ALL
SUCH REAL AND PERSONAL PROPERTY MATERIAL TO ITS BUSINESS, EXCEPT FOR MINOR
DEFECTS IN TITLE THAT DO NOT INTERFERE WITH ITS ABILITY TO CONDUCT ITS BUSINESS
AS CURRENTLY CONDUCTED OR TO UTILIZE SUCH PROPERTIES FOR THEIR INTENDED
PURPOSES.

 

(B)                                 THE BORROWER AND EACH RESTRICTED SUBSIDIARY
OWNS, OR IS LICENSED TO USE, ALL TRADEMARKS, TRADENAMES, COPYRIGHTS, PATENTS AND
OTHER INTELLECTUAL PROPERTY MATERIAL TO ITS BUSINESS, AND THE USE THEREOF BY THE
BORROWER AND SUCH RESTRICTED SUBSIDIARIES, AS THE CASE MAY BE, 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 4.06.                             LITIGATION AND ENVIRONMENTAL MATTERS.

 

(A)                                  THERE ARE NO ACTIONS, SUITS,
INVESTIGATIONS, OR PROCEEDINGS BY OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL
AUTHORITY PENDING AGAINST OR, TO THE KNOWLEDGE OF THE BORROWER, THREATENED
AGAINST OR AFFECTING THE BORROWER OR ANY RESTRICTED SUBSIDIARY, (I) AS TO WHICH
THERE IS A REASONABLE POSSIBILITY OF AN ADVERSE DETERMINATION AND THAT, IF
ADVERSELY DETERMINED, COULD REASONABLY BE EXPECTED, INDIVIDUALLY OR IN THE
AGGREGATE, TO RESULT IN A MATERIAL ADVERSE EFFECT (OTHER THAN THE DISCLOSED
MATTERS) OR (II) THAT INVOLVE THIS AGREEMENT OR THE TRANSACTIONS.

 

(B)                                 EXCEPT FOR THE DISCLOSED MATTERS AND EXCEPT
WITH RESPECT TO ANY OTHER MATTERS THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD
NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, NEITHER THE
BORROWER NOR ANY RESTRICTED SUBSIDIARY TO THE BORROWER’S KNOWLEDGE (I) HAS
FAILED TO COMPLY WITH ANY ENVIRONMENTAL LAW OR TO OBTAIN, MAINTAIN OR COMPLY
WITH ANY PERMIT, LICENSE OR OTHER APPROVAL REQUIRED UNDER ANY ENVIRONMENTAL LAW,
(II) HAS BECOME SUBJECT TO ANY ENVIRONMENTAL LIABILITY, (III) HAS RECEIVED
NOTICE OF ANY CLAIM WITH RESPECT TO ANY ENVIRONMENTAL LIABILITY OR (IV) KNOWS OF
ANY BASIS FOR ANY ENVIRONMENTAL LIABILITY.

 

33

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

 

(C)                                  SINCE THE DATE OF THIS AGREEMENT, THERE HAS
BEEN NO CHANGE IN THE STATUS OF THE DISCLOSED MATTERS THAT, INDIVIDUALLY OR IN
THE AGGREGATE, HAS RESULTED IN, OR MATERIALLY INCREASED THE LIKELIHOOD OF, A
MATERIAL ADVERSE EFFECT.

 

SECTION 4.07.                             COMPLIANCE WITH LAWS AND AGREEMENTS.
THE BORROWER AND EACH RESTRICTED SUBSIDIARY IS IN COMPLIANCE WITH ALL LAWS,
REGULATIONS AND ORDERS OF ANY GOVERNMENTAL AUTHORITY APPLICABLE TO IT OR ITS
PROPERTY AND ALL INDENTURES, AGREEMENTS AND OTHER INSTRUMENTS BINDING UPON 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. NO DEFAULT HAS OCCURRED AND IS CONTINUING.

 

SECTION 4.08.                             INVESTMENT COMPANY STATUS. NEITHER THE
BORROWER NOR ANY RESTRICTED SUBSIDIARY IS AN “INVESTMENT COMPANY” AS DEFINED IN,
OR SUBJECT TO REGULATION UNDER, THE INVESTMENT COMPANY ACT OF 1940.

 

SECTION 4.09.                             TAXES. THE BORROWER AND EACH
RESTRICTED SUBSIDIARY HAS TIMELY FILED OR CAUSED TO BE FILED ALL 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 BORROWER OR SUCH
RESTRICTED SUBSIDIARY, AS APPLICABLE, HAS SET ASIDE ON ITS BOOKS ADEQUATE
RESERVES OR (B) TO THE EXTENT THAT THE FAILURE TO DO SO COULD NOT REASONABLY BE
EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.

 

SECTION 4.10.                             ERISA. NO ERISA EVENT HAS OCCURRED OR
IS REASONABLY EXPECTED TO OCCUR THAT, WHEN TAKEN TOGETHER WITH ALL OTHER SUCH
ERISA EVENTS FOR WHICH LIABILITY IS REASONABLY EXPECTED TO OCCUR, COULD
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT. THE PRESENT VALUE
OF ALL ACCUMULATED BENEFIT OBLIGATIONS UNDER EACH PLAN (BASED ON THE ASSUMPTIONS
USED FOR PURPOSES OF FASB STATEMENT 87) DID NOT, AS OF THE DATE OF THE MOST
RECENT FINANCIAL STATEMENTS REFLECTING SUCH AMOUNTS, EXCEED BY MORE THAN
$5,000,000 THE FAIR MARKET VALUE OF THE ASSETS OF SUCH PLAN, AND THE PRESENT
VALUE OF ALL ACCUMULATED BENEFIT OBLIGATIONS OF ALL UNDERFUNDED PLANS (BASED ON
THE ASSUMPTIONS USED FOR PURPOSES OF FASB STATEMENT 87) DID NOT, AS OF THE DATE
OF THE MOST RECENT FINANCIAL STATEMENTS REFLECTING SUCH AMOUNTS, EXCEED BY MORE
THAN $25,000,000 THE FAIR MARKET VALUE OF THE ASSETS OF ALL SUCH UNDERFUNDED
PLANS.

 

SECTION 4.11.                             DISCLOSURE. THE BORROWER HAS DISCLOSED
TO THE LENDERS ALL AGREEMENTS, INSTRUMENTS AND CORPORATE OR OTHER RESTRICTIONS
TO WHICH IT OR ANY RESTRICTED SUBSIDIARY IS SUBJECT, AND ALL OTHER MATTERS KNOWN
TO IT, THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD REASONABLY BE EXPECTED TO
RESULT IN A MATERIAL ADVERSE EFFECT. NONE OF THE OTHER REPORTS, FINANCIAL
STATEMENTS, CERTIFICATES OR OTHER INFORMATION FURNISHED BY OR ON BEHALF OF THE
BORROWER OR ANY RESTRICTED SUBSIDIARY TO THE ADMINISTRATIVE AGENT OR ANY LENDER
IN CONNECTION WITH THE NEGOTIATION OF THIS AGREEMENT OR DELIVERED HEREUNDER (AS
MODIFIED OR SUPPLEMENTED BY OTHER INFORMATION SO FURNISHED) CONTAINS ANY
MATERIAL MISSTATEMENT OF FACT OR OMITS TO STATE ANY MATERIAL FACT NECESSARY TO
MAKE THE STATEMENTS THEREIN, IN THE LIGHT OF THE CIRCUMSTANCES UNDER WHICH THEY
WERE MADE, NOT MISLEADING; PROVIDED THAT, WITH RESPECT TO THE PROJECTIONS, THE
BORROWER REPRESENTS ONLY THAT SUCH INFORMATION WAS PREPARED IN GOOD FAITH BASED
ON ASSUMPTIONS BELIEVED TO BE REASONABLE AT THE TIME.

 

34

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

 

SECTION 4.12.                             LABOR MATTERS. THERE ARE NO STRIKES,
LOCKOUTS OR SLOWDOWNS AGAINST THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES
PENDING OR, TO THE KNOWLEDGE OF THE BORROWER, THREATENED THAT COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. THE HOURS WORKED BY AND PAYMENTS
MADE TO EMPLOYEES OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES HAVE NOT BEEN
IN VIOLATION OF THE FAIR LABOR STANDARDS ACT OR ANY OTHER LAW DEALING WITH SUCH
MATTERS TO THE EXTENT THAT SUCH VIOLATION COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.

 

SECTION 4.13.                             CAPITALIZATION AND CREDIT PARTY
INFORMATION. SCHEDULE 4.13 LISTS, AS OF THE EFFECTIVE DATE FOR THE BORROWER AND
FOR EACH RESTRICTED SUBSIDIARY, ITS FULL LEGAL NAME, ITS JURISDICTION OF
ORGANIZATION, ITS ORGANIZATIONAL IDENTIFICATION NUMBER, ITS FEDERAL TAX
IDENTIFICATION NUMBER, THE NUMBER OF SHARES OF CAPITAL STOCK OR OTHER EQUITY
INTERESTS OUTSTANDING AND THE OWNER(S) OF SUCH EQUITY INTERESTS.

 

SECTION 4.14.                             MARGIN STOCK. NEITHER THE BORROWER NOR
ANY RESTRICTED SUBSIDIARY IS ENGAGED PRINCIPALLY, OR AS ONE OF ITS IMPORTANT
ACTIVITIES, IN THE BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF PURCHASING OR
CARRYING MARGIN STOCK (WITHIN THE MEANING OF REGULATION U ISSUED BY THE BOARD),
AND NO PART OF THE PROCEEDS OF ANY LOAN WILL BE USED TO PURCHASE OR CARRY ANY
MARGIN STOCK OR TO EXTEND CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING OR
CARRYING MARGIN STOCK.

 

SECTION 4.15.                             OIL AND GAS INTERESTS. EACH CREDIT
PARTY HAS GOOD AND DEFENSIBLE TITLE TO SUBSTANTIALLY ALL OF THE PROVED RESERVES
INCLUDED IN ITS OIL AND GAS INTERESTS (FOR PURPOSES OF THIS SECTION 4.15,
“PROVED OIL AND GAS INTERESTS”), FREE AND CLEAR OF ALL LIENS EXCEPT LIENS
PERMITTED PURSUANT TO SECTION 7.02.  ALL SUCH PROVED OIL AND GAS INTERESTS ARE
VALID, SUBSISTING, AND IN FULL FORCE AND EFFECT, AND ALL RENTALS, ROYALTIES, AND
OTHER AMOUNTS DUE AND PAYABLE IN RESPECT THEREOF HAVE BEEN DULY PAID. EACH WELL
DRILLED IN RESPECT OF PROVED PRODUCING OIL AND GAS INTERESTS (1) IS CAPABLE OF,
AND IS PRESENTLY, EITHER PRODUCING HYDROCARBONS IN COMMERCIALLY PROFITABLE
QUANTITIES OR IN THE PROCESS OF BEING WORKED OVER OR ENHANCED, AND THE CREDIT
PARTY THAT OWNS SUCH PROVED PRODUCING OIL AND GAS INTERESTS IS CURRENTLY
RECEIVING PAYMENTS FOR ITS SHARE OF PRODUCTION, WITH NO FUNDS IN RESPECT OF ANY
THEREOF BEING PRESENTLY HELD IN SUSPENSE, OTHER THAN ANY SUCH FUNDS BEING HELD
IN SUSPENSE PENDING DELIVERY OF APPROPRIATE DIVISION ORDERS, AND (2) HAS BEEN
DRILLED, BOTTOMED, COMPLETED, AND OPERATED IN COMPLIANCE WITH ALL APPLICABLE
LAWS, IN THE CASE OF CLAUSES (1) AND (2), EXCEPT WHERE ANY FAILURE TO SATISFY
CLAUSE (1) OR TO COMPLY WITH CLAUSE (2) WOULD NOT HAVE A MATERIAL ADVERSE
EFFECT, AND NO SUCH WELL WHICH IS CURRENTLY PRODUCING HYDROCARBONS IS SUBJECT TO
ANY PENALTY IN PRODUCTION BY REASON OF SUCH WELL HAVING PRODUCED IN EXCESS OF
ITS ALLOWABLE PRODUCTION.

 

SECTION 4.16.                             INSURANCE. THE CERTIFICATE SIGNED BY
THE RESPONSIBLE OFFICER THAT ATTESTS TO THE EXISTENCE AND ADEQUACY OF, AND
SUMMARIZES, THE PROPERTY AND CASUALTY INSURANCE PROGRAM MAINTAINED BY THE CREDIT
PARTIES THAT HAS BEEN FURNISHED BY THE BORROWER TO THE ADMINISTRATIVE AGENT AND
THE LENDERS AS OF THE EFFECTIVE DATE, IS COMPLETE AND ACCURATE IN ALL MATERIAL
RESPECTS AS OF THE EFFECTIVE DATE AND DEMONSTRATES THE BORROWER’S AND THE
RESTRICTED SUBSIDIARIES’ COMPLIANCE WITH SECTION 6.05.

 

35

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

 

SECTION 4.17.         SOLVENCY.

 

(A)           IMMEDIATELY AFTER THE CONSUMMATION OF THE TRANSACTIONS AND
IMMEDIATELY FOLLOWING THE MAKING OF THE LOANS ON THE EFFECTIVE DATE AND AFTER
GIVING EFFECT TO THE APPLICATION OF THE PROCEEDS THEREOF, (1) THE FAIR VALUE OF
THE ASSETS OF THE CREDIT PARTIES ON A CONSOLIDATED BASIS, AT A FAIR VALUATION,
WILL EXCEED THE DEBTS AND LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, OF
THE CREDIT PARTIES ON A CONSOLIDATED BASIS; (2) THE PRESENT FAIR SALEABLE VALUE
OF THE REAL AND PERSONAL PROPERTY OF THE CREDIT PARTIES ON A CONSOLIDATED BASIS
WILL BE GREATER THAN THE AMOUNT THAT WILL BE REQUIRED TO PAY THE PROBABLE
LIABILITY OF THE CREDIT PARTIES ON A CONSOLIDATED BASIS ON THEIR DEBTS AND OTHER
LIABILITIES, SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND OTHER
LIABILITIES BECOME ABSOLUTE AND MATURED; (3) THE CREDIT PARTIES ON A
CONSOLIDATED BASIS WILL BE ABLE TO PAY THEIR DEBTS AND LIABILITIES,
SUBORDINATED, CONTINGENT OR OTHERWISE, AS SUCH DEBTS AND LIABILITIES BECOME
ABSOLUTE AND MATURED; AND (4) THE CREDIT PARTIES ON A CONSOLIDATED BASIS WILL
NOT HAVE UNREASONABLY SMALL CAPITAL WITH WHICH TO CONDUCT THE BUSINESSES IN
WHICH THEY ARE ENGAGED AS SUCH BUSINESSES ARE NOW CONDUCTED AND ARE PROPOSED TO
BE CONDUCTED AFTER THE DATE HEREOF.

 

(B)           THE CREDIT PARTIES DO NOT INTEND TO, AND DO NOT BELIEVE THAT THEY
WILL, INCUR DEBTS BEYOND THEIR ABILITY TO PAY SUCH DEBTS AS THEY MATURE, TAKING
INTO ACCOUNT THE TIMING OF AND AMOUNTS OF CASH TO BE RECEIVED BY IT AND THE
TIMING OF THE AMOUNTS OF CASH TO BE PAYABLE ON OR IN RESPECT OF ITS
INDEBTEDNESS.

 

ARTICLE V

 

CONDITIONS

 

SECTION 5.01.         EFFECTIVE DATE.  THE OBLIGATIONS OF THE LENDERS TO MAKE
THE LOANS HEREUNDER SHALL NOT BECOME EFFECTIVE UNTIL THE DATE ON WHICH EACH OF
THE FOLLOWING CONDITIONS IS SATISFIED (OR WAIVED IN ACCORDANCE WITH
SECTION 11.02):

 

(A)           THE ADMINISTRATIVE AGENT (OR ITS COUNSEL) SHALL HAVE RECEIVED FROM
EACH PARTY HERETO EITHER (I) A COUNTERPART OF THIS AGREEMENT SIGNED ON BEHALF OF
SUCH PARTY OR (II) WRITTEN EVIDENCE SATISFACTORY TO THE ADMINISTRATIVE AGENT
(WHICH MAY INCLUDE TELECOPY TRANSMISSION OF A SIGNED SIGNATURE PAGE OF THIS
AGREEMENT) THAT SUCH PARTY HAS SIGNED A COUNTERPART OF THIS AGREEMENT.

 

(B)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A FAVORABLE WRITTEN
OPINION (ADDRESSED TO THE ADMINISTRATIVE AGENT AND THE LENDERS AND DATED THE
EFFECTIVE DATE) OF HAYNES AND BOONE, LLP, COUNSEL FOR THE CREDIT PARTIES,
SUBSTANTIALLY IN THE FORM OF EXHIBIT B, AND COVERING SUCH OTHER MATTERS RELATING
TO THE CREDIT PARTIES, AND THIS AGREEMENT AS THE REQUIRED LENDERS SHALL
REASONABLY REQUEST.  THE CREDIT PARTIES HEREBY REQUEST SUCH COUNSEL TO DELIVER
SUCH OPINION.

 

(C)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SUCH DOCUMENTS AND
CERTIFICATES AS THE ADMINISTRATIVE AGENT OR ITS COUNSEL MAY REASONABLY REQUEST
RELATING TO THE ORGANIZATION, EXISTENCE AND GOOD STANDING OF EACH CREDIT PARTY,
THE AUTHORIZATION OF

 

36

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

 

THE TRANSACTIONS AND ANY OTHER LEGAL MATTERS RELATING TO THE CREDIT PARTIES,
THIS AGREEMENT OR THE TRANSACTIONS, ALL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ADMINISTRATIVE AGENT AND ITS COUNSEL.

 

(D)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A CERTIFICATE, DATED
THE EFFECTIVE DATE AND SIGNED BY A RESPONSIBLE OFFICER OF THE BORROWER,
CONFIRMING THAT THE BORROWER HAS (I) COMPLIED WITH THE CONDITIONS SET FORTH IN
PARAGRAPHS (J), (K), (Q) AND (R) OF THIS SECTION 5.01 AND (II) COMPLIED WITH THE
COVENANTS SET FORTH IN SECTION 6.05 (AND DEMONSTRATING SUCH COMPLIANCE BY THE
ATTACHMENT OF AN INSURANCE SUMMARY AND INSURANCE CERTIFICATES EVIDENCING THE
COVERAGE DESCRIBED IN SUCH SUMMARY).

 

(E)           THE ADMINISTRATIVE AGENT, THE LENDERS AND THE ARRANGER SHALL HAVE
RECEIVED ALL FEES AND OTHER AMOUNTS DUE AND PAYABLE ON OR PRIOR TO THE EFFECTIVE
DATE, AND, TO THE EXTENT INVOICED, REIMBURSEMENT OR PAYMENT OF ALL OUT-OF-POCKET
EXPENSES REQUIRED TO BE REIMBURSED OR PAID BY THE BORROWER HEREUNDER, INCLUDING
ALL FEES, EXPENSES AND DISBURSEMENTS OF COUNSEL FOR THE ADMINISTRATIVE AGENT TO
THE EXTENT INVOICED ON OR PRIOR TO THE EFFECTIVE DATE.

 

(F)            THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED PROMISSORY NOTES
DULY EXECUTED BY THE BORROWER FOR EACH LENDER THAT HAS REQUESTED THE DELIVERY OF
A PROMISSORY NOTE PURSUANT TO AND IN ACCORDANCE WITH SECTION 2.08(F).

 

(G)           ON OR PRIOR TO THE EFFECTIVE DATE, THE ADMINISTRATIVE AGENT SHALL
HAVE RECEIVED A BORROWING REQUEST ACCEPTABLE TO THE ADMINISTRATIVE AGENT SETTING
FORTH THE LOANS REQUESTED BY THE BORROWER ON THE EFFECTIVE DATE, THE TYPE AND
AMOUNT OF EACH LOAN AND THE ACCOUNTS TO WHICH SUCH LOANS ARE TO BE FUNDED;
PROVIDED THAT ALL BORROWINGS ON THE EFFECTIVE DATE SHALL BE ABR BORROWINGS.

 

(H)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED A SOLVENCY
CERTIFICATE IN THE FORM ATTACHED HERETO AS EXHIBIT D, DATED THE EFFECTIVE DATE,
AND SIGNED BY A RESPONSIBLE OFFICER OF THE BORROWER.

 

(I)            THE LENDERS SHALL HAVE RECEIVED FROM THE BORROWER (I) A PRO FORMA
CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES
BASED ON THE CONSOLIDATED BALANCE SHEET OF THE BORROWER AND ITS CONSOLIDATED
SUBSIDIARIES AS OF SEPTEMBER 30, 2008 AND REFLECTING THE CONSUMMATION OF THE
TRANSACTIONS, THE RELATED FINANCINGS AND OTHER TRANSACTIONS CONTEMPLATED BY THE
LOAN DOCUMENTS TO OCCUR ON OR PRIOR TO THE EFFECTIVE DATE, WHICH PRO FORMA
BALANCE SHEET SHALL BE PREPARED CONSISTENT IN ALL RESPECTS WITH THE INFORMATION
PREVIOUSLY PROVIDED BY THE BORROWER TO THE ADMINISTRATIVE AGENT AND THE LENDERS
AND OTHERWISE IN FORM AND SUBSTANCE SATISFACTORY TO THE ADMINISTRATIVE AGENT,
(II) A PRO FORMA STATEMENT OF OPERATIONS OF THE BORROWER AND ITS CONSOLIDATED
SUBSIDIARIES FOR THE TWELVE MONTH PERIOD ENDING AS OF THE DATE OF THE PRO FORMA
BALANCE SHEET DESCRIBED IN THE IMMEDIATELY PRECEDING CLAUSE (I) AND (III) THE
PROJECTIONS.

 

(J)            EACH CREDIT PARTY SHALL HAVE OBTAINED ALL APPROVALS REQUIRED FROM
ANY GOVERNMENTAL AUTHORITY AND ALL CONSENTS OF OTHER PERSONS, IN EACH CASE THAT
ARE NECESSARY

 

37

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

 

OR ADVISABLE IN CONNECTION WITH THE TRANSACTIONS AND EACH OF THE FOREGOING SHALL
BE IN FULL FORCE AND EFFECT AND IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE ADMINISTRATIVE AGENT.  ALL APPLICABLE WAITING PERIODS SHALL HAVE EXPIRED
WITHOUT ANY ACTION BEING TAKEN OR THREATENED BY ANY COMPETENT AUTHORITY WHICH
WOULD RESTRAIN, PREVENT OR OTHERWISE IMPOSE ADVERSE CONDITIONS ON THE
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR THE FINANCING THEREOF AND NO
ACTION, REQUEST FOR STAY, PETITION FOR REVIEW OR REHEARING, RECONSIDERATION, OR
APPEAL WITH RESPECT TO ANY OF THE FOREGOING SHALL BE PENDING, AND THE TIME FOR
ANY APPLICABLE AGENCY TO TAKE ACTION TO SET ASIDE ITS CONSENT ON ITS OWN MOTION
SHALL HAVE EXPIRED.

 

(K)           THERE SHALL NOT EXIST ANY ACTION, SUIT, INVESTIGATION, LITIGATION
OR PROCEEDING OR OTHER LEGAL OR REGULATORY DEVELOPMENTS, PENDING OR THREATENED
IN ANY COURT OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY THAT, IN THE
REASONABLE OPINION OF ADMINISTRATIVE AGENT, SINGLY OR IN THE AGGREGATE,
MATERIALLY IMPAIRS THE TRANSACTIONS, THE FINANCING THEREOF OR ANY OF THE OTHER
TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR THAT COULD HAVE A MATERIAL
ADVERSE EFFECT.

 

(L)            ALL PARTNERSHIP, CORPORATE AND OTHER PROCEEDINGS TAKEN OR TO BE
TAKEN IN CONNECTION WITH THE TRANSACTIONS AND ALL DOCUMENTS INCIDENTAL THERETO
SHALL BE REASONABLY SATISFACTORY IN FORM AND SUBSTANCE TO ADMINISTRATIVE AGENT
AND ITS COUNSEL, AND ADMINISTRATIVE AGENT AND SUCH COUNSEL SHALL HAVE RECEIVED
ALL SUCH COUNTERPART ORIGINALS OR CERTIFIED COPIES OF SUCH DOCUMENTS AS
ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.

 

(M)          THE ADMINISTRATIVE AGENT AND THE LENDERS SHALL HAVE RECEIVED THE
UNAUDITED FINANCIAL STATEMENTS DESCRIBED IN SECTION 4.04(A).

 

(N)           THE BORROWER SHALL HAVE DELIVERED TO THE ADMINISTRATIVE AGENT A
DESCRIPTION OF THE SOURCES AND USES OF FUNDING FOR THE TRANSACTIONS THAT IS
CONSISTENT WITH THE TERMS OF THE LOAN DOCUMENTS AND OTHERWISE SATISFACTORY TO
THE ADMINISTRATIVE AGENT AND THE ARRANGER AND THE CAPITALIZATION, STRUCTURE AND
EQUITY OWNERSHIP OF THE BORROWER AFTER THE TRANSACTIONS SHALL BE SATISFACTORY TO
THE LENDERS IN ALL RESPECTS.

 

(O)           THE REVOLVING AGENT, THE CREDIT PARTIES AND THE LENDERS PARTY TO
THE REVOLVING FACILITY (OR AT LEAST THE REQUIRED PERCENTAGE THEREOF) SHALL HAVE
EXECUTED AND DELIVERED THE THIRD AMENDMENT TO THE REVOLVING FACILITY AND A DULY
EXECUTED COPY THEREOF SHALL HAVE BEEN DELIVERED TO THE ADMINISTRATIVE AGENT.

 

(P)           THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED SATISFACTORY EVIDENCE
THAT CONTEMPORANEOUS WITH THE FUNDING OF THE LOANS ON THE EFFECTIVE DATE, THE
PRIOR TERM LOAN CREDIT AGREEMENT WILL BE TERMINATED AND ALL OBLIGATIONS OWING TO
ANY LENDER, AGENT OR ANY OTHER PERSON THEREUNDER SHALL HAVE BEEN PAID IN FULL
AND ALL COMMITMENTS OF ANY LENDER, AGENT OR ANY OTHER PERSON THEREUNDER TO MAKE
ANY FUTURE LOANS SHALL HAVE BEEN TERMINATED.

 

(Q)           THE REPRESENTATIONS AND WARRANTIES OF EACH CREDIT PARTY SET FORTH
IN THE LOAN DOCUMENTS SHALL BE TRUE AND CORRECT IN ALL MATERIAL RESPECTS ON AND
AS OF THE EFFECTIVE DATE.

 

38

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

 

(R)            AT THE TIME OF AND IMMEDIATELY AFTER GIVING EFFECT TO THE LOANS
MADE ON THE EFFECTIVE DATE, NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING.

 

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. 
Notwithstanding the foregoing, the obligations of the Lenders to make the Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 11.02) at or prior to 3:00 p.m. on
December 12, 2008.

 

ARTICLE VI

 

AFFIRMATIVE COVENANTS

 

Until the principal of and interest on each Loan and all fees payable hereunder
shall have been paid in full, each Credit Party covenants and agrees with the
Lenders that:

 

SECTION 6.01.         FINANCIAL STATEMENTS; OTHER INFORMATION.  THE BORROWER
WILL FURNISH TO THE ADMINISTRATIVE AGENT AND EACH LENDER:

 

(A)           WITHIN NINETY (90) DAYS AFTER THE END OF EACH FISCAL YEAR OF THE
BORROWER, THE AUDITED CONSOLIDATED (AND UNAUDITED CONSOLIDATING) BALANCE SHEET
AND RELATED CONSOLIDATED (AND WITH RESPECT TO STATEMENTS OF OPERATIONS,
CONSOLIDATING) STATEMENTS OF OPERATIONS, PARTNERS’ EQUITY AND CASH FLOWS OF THE
BORROWER AND ITS CONSOLIDATED SUBSIDIARIES 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 A FIRM OF INDEPENDENT PUBLIC ACCOUNTANTS
REASONABLY ACCEPTABLE TO 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 BORROWER AND ITS CONSOLIDATED SUBSIDIARIES ON A CONSOLIDATED
BASIS IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED;

 

(B)           WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH FISCAL QUARTER
OF THE BORROWER, THE CONSOLIDATED (AND UNAUDITED CONSOLIDATING) BALANCE SHEET
AND RELATED CONSOLIDATED (AND WITH RESPECT TO STATEMENTS OF OPERATIONS,
CONSOLIDATING) STATEMENTS OF OPERATIONS, PARTNERS’ EQUITY AND CASH FLOWS OF THE
BORROWER AND ITS CONSOLIDATED SUBSIDIARIES 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 A RESPONSIBLE OFFICER AS PRESENTING FAIRLY IN ALL
MATERIAL RESPECTS THE FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE
BORROWER AND ITS CONSOLIDATED SUBSIDIARIES ON A CONSOLIDATED AND CONSOLIDATING
BASIS IN ACCORDANCE WITH GAAP CONSISTENTLY APPLIED, SUBJECT TO NORMAL YEAR-END
AUDIT ADJUSTMENTS AND THE ABSENCE OF FOOTNOTES;

 

(C)           CONCURRENTLY WITH ANY DELIVERY OF FINANCIAL STATEMENTS UNDER
CLAUSE (A) OR (B) ABOVE, A CERTIFICATE IN A FORM REASONABLY ACCEPTABLE TO
ADMINISTRATIVE AGENT SIGNED

 

39

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

 

BY A RESPONSIBLE OFFICER OF THE BORROWER (I) CERTIFYING AS TO WHETHER A DEFAULT
HAS OCCURRED AND, IF A DEFAULT HAS OCCURRED, SPECIFYING THE DETAILS THEREOF AND
ANY ACTION TAKEN OR PROPOSED TO BE TAKEN WITH RESPECT THERETO, AND (II) SETTING
FORTH REASONABLY DETAILED CALCULATIONS DEMONSTRATING COMPLIANCE WITH CLAUSES
(A), (B) AND (C) OF SECTION 7.11;

 

(D)           PROMPTLY AFTER THE SAME BECOME PUBLICLY AVAILABLE, COPIES OF ALL
PERIODIC AND OTHER REPORTS, PROXY STATEMENTS AND OTHER MATERIALS FILED BY THE
BORROWER OR ANY SUBSIDIARY WITH THE SECURITIES AND EXCHANGE COMMISSION, OR ANY
GOVERNMENTAL AUTHORITY SUCCEEDING TO ANY OR ALL OF THE FUNCTIONS OF SAID
COMMISSION, OR WITH ANY NATIONAL SECURITIES EXCHANGE, OR DISTRIBUTED BY THE
BORROWER TO ITS SHAREHOLDERS GENERALLY, AS THE CASE MAY BE; AND

 

(E)           PROMPTLY FOLLOWING ANY REQUEST THEREFOR, SUCH OTHER INFORMATION
REGARDING THE OPERATIONS, BUSINESS AFFAIRS AND FINANCIAL CONDITION OF ANY CREDIT
PARTY, OR COMPLIANCE WITH THE TERMS OF THIS AGREEMENT, AS THE ADMINISTRATIVE
AGENT OR ANY LENDER MAY REASONABLY REQUEST.

 

Documents required to be delivered pursuant to Section 6.01(a) or
Section 6.01(b) or Section 6.01(d) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower’s
website on the Internet at the website address identified in Section 11.01 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 that requests
the Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent or such Lender and
(ii) the Borrower shall notify the Administrative Agent and each Lender (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Administrative Agent by electronic mail electronic versions (i.e., soft
copies) of such documents.  Notwithstanding anything contained herein, in every
instance the Borrower shall be required to provide paper copies of the
Compliance Certificates required by Section 6.01(c) to the Administrative
Agent.  Except for such Compliance Certificates, the Administrative Agent shall
have no obligation to request the delivery or to maintain copies of the
documents referred to above, and in any event shall have no responsibility to
monitor compliance by the Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

 

The Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arranger will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) by posting the Borrower Materials on IntraLinks or another similar
electronic system (the “Platform”) and (b) certain of the Lenders may be
“public-side” Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Borrower or its securities) (each, a
“Public Lender”).  The Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and
conspicuously marked “PUBLIC” which, at a minimum, shall mean

 

40

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

 

that the word “PUBLIC” shall appear prominently on the first page thereof;
(x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized the Administrative Agent, the Arranger and the Lenders to treat such
Borrower Materials as either publicly available information or not material
information (although it may be sensitive and proprietary) with respect to the
Borrower or its securities for purposes of United States Federal and state
securities laws; (y) all Borrower Materials marked “PUBLIC” are permitted to be
made available through a portion of the Platform designated “Public Investor;”
and (z) the Administrative Agent and the Arranger shall be entitled to treat
Borrower’s Materials that are not marked “PUBLIC” as being suitable only for
posting on a portion of the Platform not designated “Public Investor.”

 

SECTION 6.02.         NOTICES OF MATERIAL EVENTS.  THE BORROWER WILL FURNISH TO
THE ADMINISTRATIVE AGENT AND EACH LENDER PROMPT WRITTEN NOTICE OF THE FOLLOWING:

 

(A)           THE OCCURRENCE OF ANY DEFAULT;

 

(B)           THE FILING OR COMMENCEMENT OF ANY ACTION, SUIT OR PROCEEDING BY OR
BEFORE ANY ARBITRATOR OR GOVERNMENTAL AUTHORITY AGAINST OR AFFECTING ANY CREDIT
PARTY OR ANY AFFILIATE THEREOF THAT, IF ADVERSELY DETERMINED, COULD REASONABLY
BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT;

 

(C)           THE OCCURRENCE OF ANY ERISA EVENT THAT, ALONE OR TOGETHER WITH ANY
OTHER ERISA EVENTS THAT HAVE OCCURRED, COULD REASONABLY BE EXPECTED TO RESULT IN
LIABILITY OF THE BORROWER AND THE RESTRICTED SUBSIDIARIES IN AN AGGREGATE AMOUNT
EXCEEDING $25,000,000;

 

(D)           ANY WRITTEN NOTICE OR WRITTEN CLAIM TO THE EFFECT THAT ANY CREDIT
PARTY IS OR MAY BE LIABLE TO ANY PERSON AS A RESULT OF THE RELEASE BY ANY CREDIT
PARTY, OR ANY OTHER PERSON OF ANY HAZARDOUS MATERIALS INTO THE ENVIRONMENT,
WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT;

 

(E)           ANY WRITTEN NOTICE ALLEGING ANY VIOLATION OF ANY ENVIRONMENTAL LAW
BY ANY CREDIT PARTY, WHICH COULD REASONABLY BE EXPECTED TO HAVE A MATERIAL
ADVERSE EFFECT;

 

(F)            THE RECEIPT BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY OF ANY
MANAGEMENT LETTER OR COMPARABLE ANALYSIS PREPARED BY THE AUDITORS FOR THE
BORROWER OR ANY SUCH RESTRICTED SUBSIDIARY; AND

 

(G)           ANY OTHER DEVELOPMENT THAT RESULTS IN, OR COULD REASONABLY BE
EXPECTED TO RESULT IN, A MATERIAL ADVERSE EFFECT.

 

Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and any action
taken or proposed to be taken with respect thereto.

 

SECTION 6.03.         EXISTENCE; CONDUCT OF BUSINESS.  THE BORROWER WILL, AND
WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, DO OR CAUSE TO BE DONE ALL THINGS
NECESSARY TO PRESERVE, RENEW AND KEEP

 

41

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

 

IN FULL FORCE AND EFFECT ITS LEGAL EXISTENCE AND THE RIGHTS, LICENSES, PERMITS,
PRIVILEGES AND FRANCHISES MATERIAL TO THE CONDUCT OF ITS BUSINESS; PROVIDED THAT
THE FOREGOING SHALL NOT PROHIBIT ANY MERGER, CONSOLIDATION, LIQUIDATION OR
DISSOLUTION PERMITTED UNDER SECTION 7.03.

 

SECTION 6.04.         PAYMENT OF OBLIGATIONS.  THE BORROWER WILL, AND WILL CAUSE
EACH RESTRICTED SUBSIDIARY TO, PAY ITS OBLIGATIONS, INCLUDING TAX LIABILITIES,
THAT, IF NOT PAID, COULD RESULT IN A MATERIAL ADVERSE EFFECT 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, (B) THE
BORROWER OR SUCH RESTRICTED SUBSIDIARY HAS SET ASIDE ON ITS BOOKS ADEQUATE
RESERVES WITH RESPECT THERETO IN ACCORDANCE WITH GAAP AND (C) THE FAILURE TO
MAKE PAYMENT PENDING SUCH CONTEST COULD NOT REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE EFFECT.

 

SECTION 6.05.         MAINTENANCE OF PROPERTIES; INSURANCE.  THE BORROWER WILL,
AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, USE COMMERCIALLY REASONABLE
EFFORTS TO CAUSE EACH OPERATOR OF ITS OIL AND GAS INTERESTS TO, (A) KEEP AND
MAINTAIN ALL PROPERTY MATERIAL TO THE CONDUCT OF ITS BUSINESS IN GOOD WORKING
ORDER AND CONDITION, ORDINARY WEAR AND TEAR EXCEPTED, AND (B) 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.  ON OR
PRIOR TO THE EFFECTIVE DATE AND THEREAFTER, UPON REQUEST OF THE ADMINISTRATIVE
AGENT, THE BORROWER WILL FURNISH OR CAUSE TO BE FURNISHED TO THE ADMINISTRATIVE
AGENT FROM TIME TO TIME A SUMMARY OF THE RESPECTIVE INSURANCE COVERAGE OF THE
BORROWER AND ITS RESTRICTED SUBSIDIARIES IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT, AND, IF REQUESTED, WILL FURNISH THE
ADMINISTRATIVE AGENT COPIES OF THE APPLICABLE POLICIES.  UPON DEMAND BY
ADMINISTRATIVE AGENT, THE BORROWER WILL CAUSE ANY INSURANCE POLICIES COVERING
ANY SUCH PROPERTY TO BE ENDORSED (A) TO PROVIDE THAT SUCH POLICIES MAY NOT BE
CANCELLED, REDUCED OR AFFECTED IN ANY MANNER FOR ANY REASON WITHOUT FIFTEEN (15)
DAYS PRIOR NOTICE TO ADMINISTRATIVE AGENT, AND (B) TO PROVIDE FOR SUCH OTHER
MATTERS AS THE LENDERS MAY REASONABLY REQUIRE.

 

SECTION 6.06.         BOOKS AND RECORDS; INSPECTION RIGHTS.  THE BORROWER WILL,
AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, KEEP PROPER BOOKS OF RECORD AND
ACCOUNT IN WHICH FULL, TRUE AND CORRECT ENTRIES ARE MADE OF ALL DEALINGS AND
TRANSACTIONS IN RELATION TO ITS BUSINESS AND ACTIVITIES.  THE BORROWER WILL, AND
WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, PERMIT ANY REPRESENTATIVES DESIGNATED
BY THE ADMINISTRATIVE AGENT OR ANY LENDER, 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, PROVIDED AN OFFICER OF THE BORROWER HAS THE REASONABLE OPPORTUNITY
TO PARTICIPATE, ITS INDEPENDENT ACCOUNTANTS, ALL AT SUCH REASONABLE TIMES AND AS
OFTEN AS REASONABLY REQUESTED.

 

SECTION 6.07.         COMPLIANCE WITH LAWS.  THE BORROWER WILL, AND WILL CAUSE
EACH 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.

 

SECTION 6.08.         USE OF PROCEEDS.  THE PROCEEDS OF THE LOANS WILL BE USED
ONLY TO REPAY IN FULL THE OUTSTANDING PRINCIPAL AMOUNT OF THE INDEBTEDNESS UNDER
THE PRIOR TERM LOAN CREDIT

 

42

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

 

AGREEMENT.  NO PART OF THE PROCEEDS OF ANY LOAN WILL BE USED, WHETHER DIRECTLY
OR INDIRECTLY, TO PURCHASE OR CARRY ANY MARGIN STOCK (AS DEFINED IN REGULATION U
ISSUED BY THE BOARD).

 

SECTION 6.09.         [RESERVED].

 

SECTION 6.10.         [RESERVED].

 

SECTION 6.11.         SWAP AGREEMENTS.  EXCEPT FOR SWAP AGREEMENTS FOR WHICH THE
BORROWER OR ANY RESTRICTED SUBSIDIARY MAY EXERCISE EARLY TERMINATION RIGHTS AS A
RESULT OF ANY BREACH BY THE APPROVED COUNTERPARTY PARTY THERETO, THE BORROWER
WILL, AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, MAINTAIN THE EXISTING SWAP
AGREEMENTS.  UPON THE REQUEST OF THE ADMINISTRATIVE AGENT, THE BORROWER SHALL,
WITHIN THIRTY (30) DAYS OF SUCH REQUEST, PROVIDE TO THE ADMINISTRATIVE AGENT AND
EACH LENDER COPIES OF ALL AGREEMENTS, DOCUMENTS AND INSTRUMENTS EVIDENCING THE
SWAP AGREEMENTS NOT PREVIOUSLY DELIVERED TO THE ADMINISTRATIVE AGENT AND
LENDERS, CERTIFIED AS TRUE AND CORRECT BY A RESPONSIBLE OFFICER OF THE BORROWER,
AND SUCH OTHER INFORMATION REGARDING SUCH SWAP AGREEMENTS AS THE ADMINISTRATIVE
AGENT AND LENDERS MAY REASONABLY REQUEST.

 

SECTION 6.12.         OPERATION OF OIL AND GAS INTERESTS.

 

(A)           EACH BORROWER WILL, AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO,
MAINTAIN, DEVELOP AND OPERATE ITS OIL AND GAS INTERESTS IN A GOOD AND
WORKMANLIKE MANNER, AND OBSERVE AND COMPLY WITH ALL OF THE TERMS AND PROVISIONS,
EXPRESS OR IMPLIED, OF ALL OIL AND GAS LEASES RELATING TO SUCH OIL AND GAS
INTERESTS SO LONG AS SUCH OIL AND GAS INTERESTS ARE CAPABLE OF PRODUCING
HYDROCARBONS AND ACCOMPANYING ELEMENTS IN PAYING QUANTITIES, EXCEPT WHERE SUCH
FAILURE TO COMPLY COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.

 

(B)           BORROWER WILL, AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO,
COMPLY IN ALL RESPECTS WITH ALL CONTRACTS AND AGREEMENTS APPLICABLE TO OR
RELATING TO ITS OIL AND GAS INTERESTS OR THE PRODUCTION AND SALE OF HYDROCARBONS
AND ACCOMPANYING ELEMENTS THEREFROM, EXCEPT TO THE EXTENT A FAILURE TO SO COMPLY
COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.

 

SECTION 6.13.         RESTRICTED SUBSIDIARIES.  IN THE EVENT ANY PERSON IS OR
BECOMES A RESTRICTED SUBSIDIARY, BORROWER WILL (A) PROMPTLY TAKE ALL SUCH ACTION
AND EXECUTE AND DELIVER, OR CAUSE TO BE EXECUTED AND DELIVERED, TO THE
ADMINISTRATIVE AGENT ALL SUCH DOCUMENTS, OPINIONS, INSTRUMENTS, AGREEMENTS, AND
CERTIFICATES SIMILAR TO THOSE DESCRIBED IN SECTION 5.01(B) AND
SECTION 5.01(C) THAT THE ADMINISTRATIVE AGENT MAY REQUEST, AND (B) PROMPTLY
CAUSE SUCH RESTRICTED SUBSIDIARY TO BECOME A PARTY TO THIS AGREEMENT AND
GUARANTEE THE OBLIGATIONS BY EXECUTING AND DELIVERING TO THE ADMINISTRATIVE
AGENT A COUNTERPART AGREEMENT IN THE FORM OF EXHIBIT C.  UPON DELIVERY OF ANY
SUCH COUNTERPART AGREEMENT TO THE ADMINISTRATIVE AGENT, NOTICE OF WHICH IS
HEREBY WAIVED BY EACH CREDIT PARTY, SUCH RESTRICTED SUBSIDIARY SHALL BE A
GUARANTOR AND SHALL BE AS FULLY A PARTY HERETO AS IF SUCH RESTRICTED SUBSIDIARY
WERE AN ORIGINAL SIGNATORY HERETO.  EACH CREDIT PARTY EXPRESSLY AGREES THAT ITS
OBLIGATIONS ARISING HEREUNDER SHALL NOT BE AFFECTED OR DIMINISHED BY THE
ADDITION OR RELEASE OF ANY OTHER CREDIT PARTY HEREUNDER.  THIS AGREEMENT SHALL
BE FULLY EFFECTIVE AS TO ANY CREDIT PARTY THAT IS OR BECOMES A PARTY HERETO
REGARDLESS OF WHETHER ANY OTHER PERSON BECOMES OR FAILS TO BECOME OR CEASES TO
BE A CREDIT PARTY

 

43

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

 

HEREUNDER.  WITH RESPECT TO EACH SUCH RESTRICTED SUBSIDIARY, THE BORROWER SHALL
PROMPTLY SEND TO THE ADMINISTRATIVE AGENT WRITTEN NOTICE SETTING FORTH WITH
RESPECT TO SUCH PERSON THE DATE ON WHICH SUCH PERSON BECAME A RESTRICTED
SUBSIDIARY OF THE BORROWER, AND SUPPLEMENT THE DATA REQUIRED TO BE SET FORTH IN
THE SCHEDULES TO THIS AGREEMENT AS A RESULT OF THE ACQUISITION OR CREATION OF
SUCH RESTRICTED SUBSIDIARY; PROVIDED THAT SUCH SUPPLEMENTAL DATA MUST BE
REASONABLY ACCEPTABLE TO THE ADMINISTRATIVE AGENT AND REQUIRED LENDERS.

 

ARTICLE VII

 

NEGATIVE COVENANTS

 

Until the principal of and interest on each Loan and all fees payable hereunder
have been paid in full, each Credit Party covenants and agrees with the Lenders
that:

 

SECTION 7.01.         INDEBTEDNESS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT
ANY OF ITS RESTRICTED SUBSIDIARIES TO, CREATE, INCUR, ASSUME OR PERMIT TO EXIST
ANY INDEBTEDNESS, EXCEPT:

 

(A)           THE OBLIGATIONS;

 

(B)           INDEBTEDNESS EXISTING ON THE DATE HEREOF AND SET FORTH IN
SCHEDULE 7.01 AND EXTENSIONS, RENEWALS AND REPLACEMENTS OF ANY SUCH INDEBTEDNESS
THAT DO NOT INCREASE THE OUTSTANDING PRINCIPAL AMOUNT THEREOF;

 

(C)           INDEBTEDNESS OF THE BORROWER TO ANY GUARANTOR AND OF ANY GUARANTOR
TO THE BORROWER OR ANY OTHER GUARANTOR; PROVIDED, THAT (I) ALL SUCH INDEBTEDNESS
SHALL BE UNSECURED AND SUBORDINATED IN RIGHT OF PAYMENT TO THE PAYMENT IN FULL
OF ALL OF THE OBLIGATIONS AS PROVIDED IN SECTION 8.06 AND (II) ALL SUCH
INDEBTEDNESS IS EVIDENCED BY PROMISSORY NOTES IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT;

 

(D)           GUARANTEES OF THE OBLIGATIONS;

 

(E)           INDEBTEDNESS OF THE BORROWER AND THE RESTRICTED SUBSIDIARIES
INCURRED TO FINANCE THE ACQUISITION, CONSTRUCTION OR IMPROVEMENT OF ANY FIXED OR
CAPITAL ASSETS, INCLUDING CAPITAL LEASE OBLIGATIONS AND ANY INDEBTEDNESS ASSUMED
IN CONNECTION WITH THE ACQUISITION OF ANY SUCH ASSETS OR SECURED BY A LIEN ON
ANY SUCH ASSETS PRIOR TO THE ACQUISITION THEREOF, AND EXTENSIONS, RENEWALS AND
REPLACEMENTS OF ANY SUCH INDEBTEDNESS THAT DO NOT INCREASE THE OUTSTANDING
PRINCIPAL AMOUNT THEREOF; PROVIDED THAT (I) SUCH INDEBTEDNESS IS INCURRED PRIOR
TO OR WITHIN 90 DAYS AFTER SUCH ACQUISITION OR THE COMPLETION OF SUCH
CONSTRUCTION OR IMPROVEMENT AND (II) THE AGGREGATE PRINCIPAL AMOUNT OF
INDEBTEDNESS PERMITTED BY THIS CLAUSE (E) SHALL NOT EXCEED $10,000,000 AT ANY
TIME OUTSTANDING;

 

(F)            INDEBTEDNESS INCURRED OR DEPOSITS MADE BY THE BORROWER AND ANY
RESTRICTED SUBSIDIARY (I) UNDER WORKER’S COMPENSATION LAWS, UNEMPLOYMENT
INSURANCE LAWS OR SIMILAR LEGISLATION, OR (II) IN CONNECTION WITH BIDS, TENDERS,
CONTRACTS (OTHER THAN FOR THE PAYMENT OF INDEBTEDNESS) OR LEASES TO WHICH SUCH
CREDIT PARTY IS A PARTY, (III) TO SECURE PUBLIC OR STATUTORY OBLIGATIONS OF SUCH
CREDIT PARTY, AND (IV) OF CASH OR U.S.

 

44

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

 

GOVERNMENT SECURITIES MADE TO SECURE THE PERFORMANCE OF STATUTORY OBLIGATIONS,
SURETY, STAY, CUSTOMS AND APPEAL BONDS TO WHICH SUCH CREDIT PARTY IS A PARTY IN
CONNECTION WITH THE OPERATION OF THE OIL AND GAS INTERESTS, IN EACH CASE IN THE
ORDINARY COURSE OF BUSINESS;

 

(G)           INDEBTEDNESS OF ANY BORROWER OR ANY RESTRICTED SUBSIDIARY UNDER
SWAP AGREEMENTS TO THE EXTENT PERMITTED UNDER SECTION 7.05;

 

(H)           INDEBTEDNESS UNDER THE REVOLVING FACILITY IN AN AGGREGATE
PRINCIPAL AMOUNT NOT EXCEEDING $1,300,000,000 AT ANY TIME OUTSTANDING; AND

 

(I)            OTHER UNSECURED INDEBTEDNESS OF THE CREDIT PARTIES IN AN
AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING $25,000,000 AT ANY TIME OUTSTANDING.

 

SECTION 7.02.         LIENS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF
ITS RESTRICTED SUBSIDIARIES TO, CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY
LIEN ON ANY PROPERTY OR ASSET NOW OWNED OR HEREAFTER ACQUIRED BY IT, OR ASSIGN
OR SELL ANY INCOME OR REVENUES (INCLUDING ACCOUNTS RECEIVABLE) OR RIGHTS IN
RESPECT OF ANY THEREOF, EXCEPT:

 

(A)           PERMITTED ENCUMBRANCES;

 

(B)           ANY LIEN ON ANY PROPERTY OR ASSET OF THE BORROWER OR ANY
RESTRICTED SUBSIDIARY EXISTING ON THE DATE HEREOF AND SET FORTH IN
SCHEDULE 7.02; PROVIDED THAT (I) SUCH LIEN SHALL NOT APPLY TO ANY OTHER PROPERTY
OR ASSET OF THE BORROWER OR ANY OTHER RESTRICTED SUBSIDIARY AND (II) SUCH LIEN
SHALL SECURE ONLY THOSE OBLIGATIONS WHICH IT SECURES ON THE DATE HEREOF AND
EXTENSIONS, RENEWALS AND REPLACEMENTS THEREOF THAT DO NOT INCREASE THE
OUTSTANDING PRINCIPAL AMOUNT THEREOF;

 

(C)           ANY LIEN EXISTING ON ANY PROPERTY OR ASSET PRIOR TO THE
ACQUISITION THEREOF BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR EXISTING ON
ANY PROPERTY OR ASSET OF ANY PERSON THAT BECOMES A RESTRICTED SUBSIDIARY AFTER
THE DATE HEREOF PRIOR TO THE TIME SUCH PERSON BECOMES A RESTRICTED SUBSIDIARY;
PROVIDED THAT (I) SUCH LIEN SECURES INDEBTEDNESS PERMITTED BY SECTION 7.01(E),
(II) SUCH LIEN IS NOT CREATED IN CONTEMPLATION OF OR IN CONNECTION WITH SUCH
ACQUISITION OR SUCH PERSON BECOMING A RESTRICTED SUBSIDIARY, AS THE CASE MAY BE,
(III) SUCH LIEN SHALL NOT APPLY TO ANY OTHER PROPERTY OR ASSETS OF THE BORROWER
OR ANY OTHER RESTRICTED SUBSIDIARY AND (IV) SUCH LIEN SHALL SECURE ONLY THOSE
OBLIGATIONS WHICH IT SECURES ON THE DATE OF SUCH ACQUISITION OR THE DATE SUCH
PERSON BECOMES A RESTRICTED SUBSIDIARY, AS THE CASE MAY BE AND EXTENSIONS,
RENEWALS AND REPLACEMENTS THEREOF THAT DO NOT INCREASE THE OUTSTANDING PRINCIPAL
AMOUNT THEREOF; AND

 

(D)           LIENS ON FIXED OR CAPITAL ASSETS ACQUIRED, CONSTRUCTED OR IMPROVED
BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY; PROVIDED THAT (I) SUCH LIENS,
SECURE INDEBTEDNESS PERMITTED BY SECTION 7.01, (II) SUCH SECURITY INTERESTS AND
THE INDEBTEDNESS SECURED THEREBY ARE INCURRED PRIOR TO OR WITHIN 90 DAYS AFTER
SUCH ACQUISITION OR THE COMPLETION OF SUCH CONSTRUCTION OR IMPROVEMENT,
(III) THE INDEBTEDNESS SECURED THEREBY DOES NOT EXCEED THE COST OF ACQUIRING,
CONSTRUCTING OR IMPROVING SUCH FIXED OR CAPITAL ASSETS AND (IV) SUCH SECURITY
INTERESTS SHALL NOT APPLY TO ANY OTHER PROPERTY OR ASSETS OF THE BORROWER OR ANY
OTHER RESTRICTED SUBSIDIARIES; AND

 

45

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

 

(E)           LIENS SECURING INDEBTEDNESS PERMITTED BY CLAUSE (H) OF
SECTION 7.01.

 

SECTION 7.03.         FUNDAMENTAL CHANGES.

 

(A)           THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, MERGE INTO OR CONSOLIDATE WITH ANY OTHER PERSON, OR PERMIT ANY
OTHER PERSON TO MERGE INTO OR CONSOLIDATE WITH IT, OR SELL, TRANSFER, LEASE OR
OTHERWISE DISPOSE OF (IN ONE TRANSACTION OR IN A SERIES OF TRANSACTIONS) ALL OR
ANY SUBSTANTIAL PART OF ITS ASSETS, OR ANY OF ITS OIL AND GAS INTERESTS
(INCLUDING ANY CONTRIBUTION OR TRANSFER OF OIL AND GAS INTERESTS IN CONNECTION
WITH THE FORMATION OF ANY JOINT VENTURE OR PARTNERSHIP WITH ANY PERSON THAT IS
NOT A RESTRICTED SUBSIDIARY) OR ANY OF THE EQUITY INTERESTS OF ANY RESTRICTED
SUBSIDIARY (IN EACH CASE, WHETHER NOW OWNED OR HEREAFTER ACQUIRED), OR LIQUIDATE
OR DISSOLVE, EXCEPT THAT, (I) THE BORROWER OR ANY RESTRICTED SUBSIDIARY MAY SELL
HYDROCARBONS PRODUCED FROM ITS OIL AND GAS INTERESTS IN THE ORDINARY COURSE OF
BUSINESS, AND IF AT THE TIME THEREOF AND IMMEDIATELY AFTER GIVING EFFECT THERETO
NO DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, (II) ANY RESTRICTED SUBSIDIARY
MAY MERGE INTO THE BORROWER IN A TRANSACTION IN WHICH THE BORROWER IS THE
SURVIVING ENTITY, (III) ANY RESTRICTED SUBSIDIARY MAY MERGE INTO ANY OTHER
RESTRICTED SUBSIDIARY IN A TRANSACTION IN WHICH THE SURVIVING ENTITY IS A
RESTRICTED SUBSIDIARY, (IV) ANY RESTRICTED SUBSIDIARY MAY SELL, TRANSFER, LEASE
OR OTHERWISE DISPOSE OF ITS ASSETS TO THE BORROWER OR TO ANOTHER RESTRICTED
SUBSIDIARY, (V) ANY RESTRICTED SUBSIDIARY MAY LIQUIDATE OR DISSOLVE IF THE
BORROWER DETERMINES IN GOOD FAITH THAT SUCH LIQUIDATION OR DISSOLUTION IS IN THE
BEST INTERESTS OF THE BORROWER AND IS NOT MATERIALLY DISADVANTAGEOUS TO THE
LENDERS, (VI) THE BORROWER OR ANY RESTRICTED SUBSIDIARY MAY SELL, TRANSFER,
LEASE OR OTHERWISE DISPOSE OF EQUIPMENT AND RELATED ITEMS IN THE ORDINARY COURSE
OF BUSINESS, THAT ARE OBSOLETE OR NO LONGER NECESSARY IN THE BUSINESS OF THE
BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES OR THAT IS BEING REPLACED BY
EQUIPMENT OF COMPARABLE VALUE AND UTILITY, AND (VII) THE BORROWER OR ANY
RESTRICTED SUBSIDIARY MAY SELL, TRANSFER, LEASE, EXCHANGE, ABANDON OR OTHERWISE
DISPOSE OF ANY OF ITS OIL AND GAS INTERESTS AND THE EQUITY INTERESTS OF ANY
RESTRICTED SUBSIDIARY; PROVIDED THAT (A) THE CONSIDERATION RECEIVED IN RESPECT
OF SUCH SALE OR OTHER DISPOSITION SHALL BE EQUAL TO OR GREATER THAN THE FAIR
MARKET VALUE OF SUCH ASSETS SUBJECT TO THE SALE OR OTHER DISPOSITION (AS
REASONABLY DETERMINED BY, IN THE CASE OF ANY SALE OR DISPOSITION OF ASSETS WITH
A VALUE EQUAL TO OR GREATER THAN $15,000,000, THE BOARD OF DIRECTORS OF THE
BORROWER AND, IF REQUESTED BY THE ADMINISTRATIVE AGENT, THE BORROWER SHALL
DELIVER A CERTIFICATE OF A RESPONSIBLE OFFICER CERTIFYING TO THAT EFFECT),
(B) 100% OF THE CONSIDERATION FOR SUCH SALE OR OTHER DISPOSITION SHALL BE IN THE
FORM OF CASH OR PERMITTED INVESTMENTS AND (C) TO THE EXTENT THAT THE AGGREGATE
NET CASH PROCEEDS FROM ALL SUCH SALES OR OTHER DISPOSITIONS SINCE THE EFFECTIVE
DATE EXCEED $10,000,000, NO LATER THAN ONE BUSINESS DAY AFTER THE RECEIPT BY
BORROWER OR ANY RESTRICTED SUBSIDIARY OF SUCH NET CASH PROCEEDS, BORROWER SHALL
PREPAY THE REVOLVING LOANS TO THE EXTENT REQUIRED TO CAUSE THE REVOLVING
COMMITMENT TO EXCEED THE REVOLVING CREDIT EXPOSURE BY AN AMOUNT EQUAL TO TEN
PERCENT (10%) OF THE REVOLVING COMMITMENT AND USE ALL OF THE REMAINING NET CASH
PROCEEDS TO PREPAY THE LOANS TO THE EXTENT PERMITTED UNDER THE REVOLVING CREDIT
AGREEMENT AS IN EFFECT ON THE EFFECTIVE DATE.

 

(B)           THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, ENGAGE TO ANY MATERIAL EXTENT IN ANY BUSINESS OTHER THAN
BUSINESSES OF THE TYPE

 

46

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

 

CONDUCTED BY THE BORROWER AND ITS RESTRICTED SUBSIDIARIES ON THE DATE OF
EXECUTION OF THIS AGREEMENT AND AFTER GIVING EFFECT TO THE TRANSACTIONS AND
BUSINESSES REASONABLY RELATED THERETO.

 

SECTION 7.04.         INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, PURCHASE, HOLD OR ACQUIRE (INCLUDING PURSUANT TO ANY MERGER
WITH ANY PERSON THAT WAS NOT A WHOLLY OWNED RESTRICTED SUBSIDIARY PRIOR TO SUCH
MERGER) ANY CAPITAL STOCK, EVIDENCES OF INDEBTEDNESS OR OTHER SECURITIES
(INCLUDING ANY OPTION, WARRANT OR OTHER RIGHT TO ACQUIRE ANY OF THE FOREGOING)
OF, MAKE OR PERMIT TO EXIST ANY LOANS OR ADVANCES TO, GUARANTEE ANY INDEBTEDNESS
OF, OR MAKE OR PERMIT TO EXIST ANY INVESTMENT OR ANY OTHER INTEREST IN, ANY
OTHER PERSON, OR PURCHASE OR OTHERWISE ACQUIRE (IN ONE TRANSACTION OR A SERIES
OF TRANSACTIONS) ANY ASSETS OF ANY OTHER PERSON CONSTITUTING A BUSINESS UNIT,
EXCEPT:

 

(A)           PERMITTED INVESTMENTS;

 

(B)           INVESTMENTS BY THE BORROWER IN THE EQUITY INTERESTS OF ANY
RESTRICTED SUBSIDIARY;

 

(C)           INVESTMENTS BY THE BORROWER OR GUARANTOR CONSISTING OF
INTERCOMPANY INDEBTEDNESS PERMITTED UNDER SECTION 7.01(C);

 

(D)           GUARANTEES CONSTITUTING INDEBTEDNESS PERMITTED BY SECTION 7.01;

 

(E)           INVESTMENTS BY THE BORROWER AND ITS RESTRICTED SUBSIDIARIES THAT
ARE (1) CUSTOMARY IN THE OIL AND GAS BUSINESS, (2) MADE IN THE ORDINARY COURSE
OF THE BORROWER’S OR SUCH RESTRICTED SUBSIDIARY’S BUSINESS, AND (3) MADE IN THE
FORM OF, OR PURSUANT TO, OIL, GAS AND MINERAL LEASES, OPERATING AGREEMENTS,
FARM-IN AGREEMENTS, FARM-OUT AGREEMENTS, DEVELOPMENT AGREEMENTS, UNITIZATION
AGREEMENTS, JOINT BIDDING AGREEMENTS, SERVICES CONTRACTS AND OTHER SIMILAR
AGREEMENTS THAT A REASONABLE AND PRUDENT OIL AND GAS INDUSTRY OWNER OR OPERATOR
WOULD FIND ACCEPTABLE (EXCLUDING, HOWEVER, ANY JOINT VENTURE OR PARTNERSHIP WITH
ANY PERSON THAT IS NOT A RESTRICTED SUBSIDIARY);

 

(F)            INVESTMENTS CONSISTING OF SWAP AGREEMENTS TO THE EXTENT PERMITTED
UNDER SECTION 7.05; AND

 

(G)           OTHER INVESTMENTS BY THE BORROWER AND THE RESTRICTED SUBSIDIARIES;
PROVIDED THAT, ON THE DATE ANY SUCH OTHER INVESTMENT IS MADE, THE AMOUNT OF SUCH
INVESTMENT, TOGETHER WITH ALL OTHER INVESTMENTS MADE PURSUANT TO THIS CLAUSE
(G) OF SECTION 7.04 (IN EACH CASE DETERMINED BASED ON THE COST OF SUCH
INVESTMENT) SINCE THE EFFECTIVE DATE, DOES NOT EXCEED IN THE AGGREGATE,
$10,000,000.

 

SECTION 7.05.         SWAP AGREEMENTS.  THE BORROWER WILL NOT, NOR WILL IT
PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, ENTER INTO OR MAINTAIN ANY SWAP
AGREEMENT, EXCEPT THE EXISTING SWAP AGREEMENTS AND SWAP AGREEMENTS ENTERED INTO
IN THE ORDINARY COURSE OF BUSINESS WITH APPROVED COUNTERPARTIES AND NOT FOR
SPECULATIVE PURPOSES TO (A) HEDGE OR MITIGATE CRUDE OIL AND NATURAL GAS PRICE
RISKS TO WHICH THE BORROWER OR ANY RESTRICTED SUBSIDIARY HAS ACTUAL EXPOSURE AND
(B) EFFECTIVELY CAP, COLLAR OR EXCHANGE INTEREST RATES (FROM FIXED TO FLOATING
RATES, FROM ONE

 

47

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

 

FLOATING RATE TO ANOTHER FLOATING RATE OR OTHERWISE) WITH RESPECT TO ANY
INTEREST-BEARING LIABILITY OR INVESTMENT OF ANY CREDIT PARTY.

 

SECTION 7.06.         RESTRICTED PAYMENTS.  THE BORROWER WILL NOT, NOR WILL IT
PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, DECLARE OR MAKE, OR AGREE TO PAY
OR MAKE, DIRECTLY OR INDIRECTLY, ANY RESTRICTED PAYMENT, EXCEPT THAT (A) THE
BORROWER MAY DECLARE AND MAKE RESTRICTED PAYMENTS WITH RESPECT TO ITS EQUITY
INTERESTS PAYABLE SOLELY IN ITS EQUITY INTERESTS (OTHER THAN DISQUALIFIED
STOCK), (B) THE BORROWER MAY MAKE RESTRICTED PAYMENTS PURSUANT TO AND IN
ACCORDANCE WITH STOCK OPTION PLANS OR OTHER BENEFIT PLANS FOR MANAGEMENT OR
EMPLOYEES OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES IN AN AGGREGATE AMOUNT
NOT TO EXCEED $2,000,000 IN ANY FISCAL YEAR, AND (C) ANY RESTRICTED SUBSIDIARY
MAY MAKE RESTRICTED PAYMENTS TO THE BORROWER OR ANY GUARANTOR; PROVIDED THAT NO
DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT FROM THE MAKING OF SUCH
RESTRICTED PAYMENT.

 

SECTION 7.07.         TRANSACTIONS WITH AFFILIATES.  THE BORROWER WILL NOT, NOR
WILL IT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, SELL, LEASE OR OTHERWISE
TRANSFER ANY PROPERTY OR ASSETS TO, OR PURCHASE, LEASE OR OTHERWISE ACQUIRE ANY
PROPERTY OR ASSETS FROM, OR OTHERWISE ENGAGE IN ANY OTHER TRANSACTIONS WITH, ANY
OF ITS AFFILIATES, EXCEPT (A) IN THE ORDINARY COURSE OF BUSINESS AT PRICES AND
ON TERMS AND CONDITIONS NOT LESS FAVORABLE TO THE BORROWER OR SUCH RESTRICTED
SUBSIDIARY THAN COULD BE OBTAINED ON AN ARM’S-LENGTH BASIS FROM UNRELATED THIRD
PARTIES, (B) TRANSACTIONS BETWEEN OR AMONG THE BORROWER AND ITS RESTRICTED
SUBSIDIARIES NOT INVOLVING ANY OTHER AFFILIATE, (C) TRANSACTIONS DESCRIBED ON
SCHEDULE 7.07, AND (D) ANY RESTRICTED PAYMENT PERMITTED BY SECTION 7.06.

 

SECTION 7.08.         RESTRICTIVE AGREEMENTS.  THE BORROWER WILL NOT, NOR WILL
IT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, DIRECTLY OR INDIRECTLY, ENTER
INTO, INCUR OR PERMIT TO EXIST ANY AGREEMENT OR OTHER ARRANGEMENT THAT
PROHIBITS, RESTRICTS OR IMPOSES ANY CONDITION UPON (A) THE ABILITY OF THE
BORROWER OR ANY RESTRICTED SUBSIDIARY TO CREATE, INCUR OR PERMIT TO EXIST ANY
LIEN UPON ANY OF ITS PROPERTY OR ASSETS, OR (B) THE ABILITY OF ANY RESTRICTED
SUBSIDIARY TO PAY DIVIDENDS OR OTHER DISTRIBUTIONS WITH RESPECT TO ANY OF ITS
EQUITY INTERESTS OR TO MAKE OR REPAY LOANS OR ADVANCES TO THE BORROWER OR ANY
RESTRICTED SUBSIDIARY OR TO GUARANTEE INDEBTEDNESS OF THE BORROWER OR ANY
RESTRICTED SUBSIDIARY; PROVIDED THAT (I) THE FOREGOING SHALL NOT APPLY TO
RESTRICTIONS AND CONDITIONS IMPOSED BY LAW OR BY THIS AGREEMENT, (II) THE
FOREGOING SHALL NOT APPLY TO RESTRICTIONS AND CONDITIONS SET FORTH IN THE
REVOLVING FACILITY DOCUMENTS, (III) THE FOREGOING SHALL NOT APPLY TO
RESTRICTIONS AND CONDITIONS EXISTING ON THE DATE HEREOF IDENTIFIED ON SCHEDULE
7.08 (BUT SHALL APPLY TO ANY EXTENSION OR RENEWAL OF, OR ANY AMENDMENT OR
MODIFICATION EXPANDING THE SCOPE OF, ANY SUCH RESTRICTION OR CONDITION),
(IV) CLAUSE (A) OF THE FOREGOING SHALL NOT APPLY TO RESTRICTIONS OR CONDITIONS
IMPOSED BY ANY AGREEMENT RELATING TO SECURED INDEBTEDNESS PERMITTED BY THIS
AGREEMENT (OTHER THAN THE REVOLVING FACILITY) IF SUCH RESTRICTIONS OR CONDITIONS
APPLY ONLY TO THE PROPERTY OR ASSETS SECURING SUCH INDEBTEDNESS AND (V) CLAUSE
(A) OF THE FOREGOING SHALL NOT APPLY TO CUSTOMARY PROVISIONS IN LEASES AND OTHER
CONTRACTS RESTRICTING THE ASSIGNMENT THEREOF.

 

SECTION 7.09.         DISQUALIFIED STOCK; FISCAL YEAR.  THE BORROWER WILL NOT,
NOR WILL IT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, ISSUE ANY DISQUALIFIED
STOCK NOR WILL IT CHANGE ITS FISCAL YEAR.

 

48

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

 

SECTION 7.10.         AMENDMENTS TO ORGANIZATIONAL DOCUMENTS AND CERTAIN LIENS
AND GUARANTEES.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED
SUBSIDIARIES TO, ENTER INTO OR PERMIT ANY MATERIAL MODIFICATION OR AMENDMENT OF,
OR WAIVE ANY MATERIAL RIGHT OR OBLIGATION OF ANY PERSON UNDER ITS ORGANIZATIONAL
DOCUMENTS.  THE BORROWER WILL NOT PERMIT ANY SUBSIDIARY TO GUARANTEE ALL OR ANY
PART OF THE INDEBTEDNESS UNDER THE REVOLVING FACILITY DOCUMENTS UNLESS SUCH
SUBSIDIARY IS (OR CONCURRENTLY WITH ANY SUCH GUARANTEE BECOMES) A GUARANTOR.

 

SECTION 7.11.         FINANCIAL COVENANTS.

 

(A)           CONSOLIDATED CURRENT RATIO.  THE BORROWER WILL NOT PERMIT THE
CONSOLIDATED CURRENT RATIO AS OF THE END OF ANY FISCAL QUARTER ENDING ON OR
AFTER DECEMBER 31, 2008 AND ON OR BEFORE SEPTEMBER 30, 2009 TO BE LESS THAN 1.00
TO 1.00; PROVIDED THAT FOR PURPOSES OF DETERMINING COMPLIANCE WITH THIS SECTION
7.11(A), THE CALCULATION OF CONSOLIDATED CURRENT LIABILITIES AS OF THE END OF
ANY SUCH FISCAL QUARTER SHALL NOT INCLUDE ANY INDEBTEDNESS OF THE BORROWER UNDER
THIS AGREEMENT.

 

(B)           LEVERAGE RATIO.  THE BORROWER WILL NOT PERMIT THE RATIO,
DETERMINED AS OF THE END OF ANY FISCAL QUARTER ENDING ON OR AFTER DECEMBER 31,
2008 AND ON OR BEFORE SEPTEMBER 30, 2009, OF (A) CONSOLIDATED FUNDED
INDEBTEDNESS AS OF THE END OF SUCH FISCAL QUARTER TO (B) CONSOLIDATED EBITDAX
FOR THE TRAILING FOUR FISCAL QUARTER PERIOD ENDING ON SUCH DATE, TO BE GREATER
THAN 3.50 TO 1.00.

 

(C)           INTEREST COVERAGE RATIO.  THE BORROWER WILL NOT PERMIT THE RATIO,
DETERMINED AS OF THE END OF ANY FISCAL QUARTER ENDING ON OR AFTER DECEMBER 31,
2008 AND ON OR BEFORE SEPTEMBER 30, 2009, OF (A) CONSOLIDATED EBITDAX FOR THE
TRAILING FOUR FISCAL QUARTER PERIOD ENDING ON SUCH DATE, TO (B) CONSOLIDATED
INTEREST EXPENSE FOR SUCH FOUR FISCAL QUARTER PERIOD TO BE LESS THAN 2.50 TO
1.00.

 

SECTION 7.12.         SALE AND LEASEBACK TRANSACTIONS AND OTHER OFF-BALANCE
SHEET LIABILITIES.  THE BORROWER WILL NOT, NOR WILL IT PERMIT ANY RESTRICTED
SUBSIDIARY TO, ENTER INTO OR SUFFER TO EXIST ANY (I) SALE AND LEASEBACK
TRANSACTION OR (II) ANY OTHER TRANSACTION PURSUANT TO WHICH IT INCURS OR HAS
INCURRED OFF-BALANCE SHEET LIABILITIES, EXCEPT FOR SWAP AGREEMENTS PERMITTED
UNDER THE TERMS OF SECTION 7.05 AND ADVANCE PAYMENT CONTRACTS; PROVIDED, THAT
THE AGGREGATE AMOUNT OF ALL ADVANCE PAYMENTS RECEIVED BY ANY CREDIT PARTY THAT
HAVE NOT BEEN SATISFIED BY DELIVERY OF PRODUCTION AT ANY TIME DOES NOT EXCEED,
IN THE AGGREGATE $25,000,000.

 

ARTICLE VIII

 

GUARANTEE OF OBLIGATIONS

 

SECTION 8.01.          GUARANTEE OF PAYMENT.  EACH GUARANTOR UNCONDITIONALLY AND
IRREVOCABLY GUARANTEES TO THE ADMINISTRATIVE AGENT FOR THE BENEFIT OF THE
LENDERS, THE PUNCTUAL PAYMENT OF ALL OBLIGATIONS NOW OR WHICH MAY IN THE FUTURE
BE OWING BY THE BORROWER UNDER THE LOAN DOCUMENTS (THE “GUARANTEED
LIABILITIES”).  THIS GUARANTEE IS A GUARANTY OF PAYMENT AND NOT OF COLLECTION
ONLY.  THE ADMINISTRATIVE AGENT SHALL NOT BE REQUIRED TO EXHAUST ANY RIGHT OR
REMEDY OR TAKE ANY ACTION AGAINST THE BORROWER OR ANY OTHER PERSON OR ANY
COLLATERAL.  THE GUARANTEED

 

49

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

 

LIABILITIES INCLUDE INTEREST ACCRUING AFTER THE COMMENCEMENT OF A PROCEEDING
UNDER BANKRUPTCY, INSOLVENCY OR SIMILAR LAWS OF ANY JURISDICTION AT THE RATE OR
RATES PROVIDED IN THE LOAN DOCUMENTS, REGARDLESS OF WHETHER SUCH INTEREST IS AN
ALLOWED CLAIM.  EACH GUARANTOR AGREES THAT, AS BETWEEN THE GUARANTOR AND THE
ADMINISTRATIVE AGENT, THE GUARANTEED LIABILITIES MAY BE DECLARED TO BE DUE AND
PAYABLE FOR THE PURPOSES OF THIS GUARANTEE NOTWITHSTANDING ANY STAY, INJUNCTION
OR OTHER PROHIBITION WHICH MAY PREVENT, DELAY OR VITIATE ANY DECLARATION AS
REGARDS THE BORROWER OR ANY OTHER GUARANTOR AND THAT IN THE EVENT OF A
DECLARATION OR ATTEMPTED DECLARATION, THE GUARANTEED LIABILITIES SHALL
IMMEDIATELY BECOME DUE AND PAYABLE BY EACH GUARANTOR FOR THE PURPOSES OF THIS
GUARANTEE.

 

SECTION 8.02.         GUARANTEE ABSOLUTE.  EACH GUARANTOR GUARANTEES THAT THE
GUARANTEED LIABILITIES SHALL BE PAID STRICTLY IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.  THE LIABILITY OF EACH GUARANTOR
HEREUNDER IS ABSOLUTE AND UNCONDITIONAL IRRESPECTIVE OF:  (A) ANY CHANGE IN THE
TIME, MANNER OR PLACE OF PAYMENT OF, OR IN ANY OTHER TERM OF, ALL OR ANY OF THE
LOAN DOCUMENTS OR THE GUARANTEED LIABILITIES, OR ANY OTHER AMENDMENT OR WAIVER
OF OR ANY CONSENT TO DEPARTURE FROM ANY OF THE TERMS OF ANY LOAN DOCUMENT OR
GUARANTEED LIABILITY, INCLUDING ANY INCREASE OR DECREASE IN THE RATE OF INTEREST
THEREON; (B) ANY RELEASE OR AMENDMENT OR WAIVER OF, OR CONSENT TO DEPARTURE
FROM, ANY OTHER GUARANTY OR SUPPORT DOCUMENT, OR ANY EXCHANGE, RELEASE OR
NON-PERFECTION OF ANY COLLATERAL, FOR ALL OR ANY OF THE LOAN DOCUMENTS OR
GUARANTEED LIABILITIES; (C) ANY PRESENT OR FUTURE LAW, REGULATION OR ORDER OF
ANY JURISDICTION (WHETHER OF RIGHT OR IN FACT) OR OF ANY AGENCY THEREOF
PURPORTING TO REDUCE, AMEND, RESTRUCTURE OR OTHERWISE AFFECT ANY TERM OF ANY
LOAN DOCUMENT OR GUARANTEED LIABILITY; (D) WITHOUT BEING LIMITED BY THE
FOREGOING, ANY LACK OF VALIDITY OR ENFORCEABILITY OF ANY LOAN DOCUMENT OR
GUARANTEED LIABILITY; AND (E) ANY OTHER SETOFF, DEFENSE OR COUNTERCLAIM
WHATSOEVER (IN ANY CASE, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY)
WITH RESPECT TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY
WHICH MIGHT CONSTITUTE A LEGAL OR EQUITABLE DEFENSE AVAILABLE TO, OR DISCHARGE
OF, THE BORROWER OR A GUARANTOR.

 

SECTION 8.03.         GUARANTEE IRREVOCABLE.  THIS GUARANTEE IS A CONTINUING
GUARANTY OF THE PAYMENT OF ALL GUARANTEED LIABILITIES NOW OR HEREAFTER EXISTING
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND SHALL REMAIN IN FULL FORCE
AND EFFECT UNTIL PAYMENT IN FULL OF ALL GUARANTEED LIABILITIES AND OTHER AMOUNTS
PAYABLE HEREUNDER AND UNTIL THIS AGREEMENT IS NO LONGER IN EFFECT OR, IF
EARLIER, WHEN THE GUARANTOR HAS GIVEN THE ADMINISTRATIVE AGENT WRITTEN NOTICE
THAT THIS GUARANTEE HAS BEEN REVOKED; PROVIDED THAT ANY NOTICE UNDER THIS
SECTION SHALL NOT RELEASE THE REVOKING GUARANTOR FROM ANY GUARANTEED LIABILITY,
ABSOLUTE OR CONTINGENT, EXISTING PRIOR TO THE ADMINISTRATIVE AGENT’S ACTUAL
RECEIPT OF THE NOTICE AT ITS BRANCHES OR DEPARTMENTS RESPONSIBLE FOR THIS
AGREEMENT AND REASONABLE OPPORTUNITY TO ACT UPON SUCH NOTICE.

 

SECTION 8.04.         REINSTATEMENT.  THIS GUARANTEE SHALL CONTINUE TO BE
EFFECTIVE OR BE REINSTATED, AS THE CASE MAY BE, IF AT ANY TIME ANY PAYMENT OF
ANY OF THE GUARANTEED LIABILITIES IS RESCINDED OR MUST OTHERWISE BE RETURNED BY
ADMINISTRATIVE AGENT OR ANY LENDER ON THE INSOLVENCY, BANKRUPTCY OR
REORGANIZATION OF THE BORROWER, OR ANY OTHER CREDIT PARTY, OR OTHERWISE, ALL AS
THOUGH THE PAYMENT HAD NOT BEEN MADE.

 

SECTION 8.05.         SUBROGATION.  NO GUARANTOR SHALL EXERCISE ANY RIGHTS WHICH
IT MAY ACQUIRE BY WAY OF SUBROGATION, BY ANY PAYMENT MADE UNDER THIS GUARANTEE
OR OTHERWISE, UNTIL ALL THE GUARANTEED LIABILITIES HAVE BEEN PAID IN FULL AND
THIS AGREEMENT IS NO LONGER IN EFFECT.  IF ANY

 

50

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

 

AMOUNT IS PAID TO THE GUARANTOR ON ACCOUNT OF SUBROGATION RIGHTS UNDER THIS
GUARANTEE AT ANY TIME WHEN ALL THE GUARANTEED LIABILITIES HAVE NOT BEEN PAID IN
FULL, THE AMOUNT SHALL BE HELD IN TRUST FOR THE BENEFIT OF THE LENDERS AND SHALL
BE PROMPTLY PAID TO THE ADMINISTRATIVE AGENT TO BE CREDITED AND APPLIED TO THE
GUARANTEED LIABILITIES, WHETHER MATURED OR UNMATURED OR ABSOLUTE OR CONTINGENT,
IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT. IF ANY GUARANTOR MAKES PAYMENT
TO THE ADMINISTRATIVE AGENT OR ANY LENDER OF ALL OR ANY PART OF THE GUARANTEED
LIABILITIES AND ALL THE GUARANTEED LIABILITIES ARE PAID IN FULL AND THIS
AGREEMENT IS NO LONGER IN EFFECT, THE ADMINISTRATIVE AGENT AND THE LENDERS
SHALL, AT SUCH GUARANTOR’S REQUEST, EXECUTE AND DELIVER TO SUCH GUARANTOR
APPROPRIATE DOCUMENTS, WITHOUT RECOURSE AND WITHOUT REPRESENTATION OR WARRANTY,
NECESSARY TO EVIDENCE THE TRANSFER BY SUBROGATION TO SUCH GUARANTOR OF AN
INTEREST IN THE GUARANTEED LIABILITIES RESULTING FROM THE PAYMENT.

 

SECTION 8.06.                           SUBORDINATION. WITHOUT LIMITING THE
RIGHTS OF THE ADMINISTRATIVE AGENT AND THE LENDERS UNDER ANY OTHER AGREEMENT,
ANY LIABILITIES OWED BY THE BORROWER TO ANY GUARANTOR IN CONNECTION WITH ANY
EXTENSION OF CREDIT OR FINANCIAL ACCOMMODATION BY ANY GUARANTOR TO OR FOR THE
ACCOUNT OF THE BORROWER, INCLUDING BUT NOT LIMITED TO INTEREST ACCRUING AT THE
AGREED CONTRACT RATE AFTER THE COMMENCEMENT OF A BANKRUPTCY OR SIMILAR
PROCEEDING, ARE HEREBY SUBORDINATED TO THE GUARANTEED LIABILITIES, AND SUCH
LIABILITIES OF THE BORROWER TO SUCH GUARANTOR, IF THE ADMINISTRATIVE AGENT SO
REQUESTS, SHALL BE COLLECTED, ENFORCED AND RECEIVED BY ANY GUARANTOR AS TRUSTEE
FOR THE ADMINISTRATIVE AGENT AND SHALL BE PAID OVER TO THE ADMINISTRATIVE AGENT
ON ACCOUNT OF THE GUARANTEED LIABILITIES BUT WITHOUT REDUCING OR AFFECTING IN
ANY MANNER THE LIABILITY OF THE GUARANTOR UNDER THE OTHER PROVISIONS OF THIS
GUARANTEE.

 

SECTION 8.07.                           PAYMENTS GENERALLY. ALL PAYMENTS BY THE
GUARANTORS SHALL BE MADE IN THE MANNER, AT THE PLACE AND IN THE CURRENCY (THE
“PAYMENT CURRENCY”) REQUIRED BY THE LOAN DOCUMENTS; PROVIDED, HOWEVER, THAT (IF
THE PAYMENT CURRENCY IS OTHER THAN DOLLARS) ANY GUARANTOR MAY, AT ITS OPTION
(OR, IF FOR ANY REASON WHATSOEVER ANY GUARANTOR IS UNABLE TO EFFECT PAYMENTS IN
THE FOREGOING MANNER, SUCH GUARANTOR SHALL BE OBLIGATED TO) PAY TO THE
ADMINISTRATIVE AGENT AT ITS PRINCIPAL OFFICE THE EQUIVALENT AMOUNT IN DOLLARS
COMPUTED AT THE SELLING RATE OF THE ADMINISTRATIVE AGENT OR A SELLING RATE
CHOSEN BY THE ADMINISTRATIVE AGENT, MOST RECENTLY IN EFFECT ON OR PRIOR TO THE
DATE THE GUARANTEED LIABILITY BECOMES DUE, FOR CABLE TRANSFERS OF THE PAYMENT
CURRENCY TO THE PLACE WHERE THE GUARANTEED LIABILITY IS PAYABLE. IN ANY CASE IN
WHICH ANY GUARANTOR MAKES OR IS OBLIGATED TO MAKE PAYMENT IN DOLLARS, THE
GUARANTOR SHALL HOLD THE ADMINISTRATIVE AGENT AND THE LENDERS HARMLESS FROM ANY
LOSS INCURRED BY THE ADMINISTRATIVE AGENT OR ANY LENDER ARISING FROM ANY CHANGE
IN THE VALUE OF DOLLARS IN RELATION TO THE PAYMENT CURRENCY BETWEEN THE DATE THE
GUARANTEED LIABILITY BECOMES DUE AND THE DATE THE ADMINISTRATIVE AGENT OR SUCH
LENDER IS ACTUALLY ABLE, FOLLOWING THE CONVERSION OF THE DOLLARS PAID BY SUCH
GUARANTOR INTO THE PAYMENT CURRENCY AND REMITTANCE OF SUCH PAYMENT CURRENCY TO
THE PLACE WHERE SUCH GUARANTEED LIABILITY IS PAYABLE, TO APPLY SUCH PAYMENT
CURRENCY TO SUCH GUARANTEED LIABILITY.

 

SECTION 8.08.                           SETOFF. EACH GUARANTOR AGREES THAT, IN
ADDITION TO (AND WITHOUT LIMITATION OF) ANY RIGHT OF SETOFF, BANKER’S LIEN OR
COUNTERCLAIM THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE, THE
ADMINISTRATIVE AGENT OR SUCH LENDER SHALL BE ENTITLED, AT ITS OPTION, TO OFFSET
BALANCES (GENERAL OR SPECIAL, TIME OR DEMAND, PROVISIONAL OR FINAL) HELD BY IT
FOR THE ACCOUNT OF ANY GUARANTOR AT ANY OFFICE OF THE ADMINISTRATIVE AGENT OR
SUCH LENDER, IN DOLLARS OR IN ANY OTHER CURRENCY, AGAINST ANY AMOUNT PAYABLE BY
SUCH GUARANTOR UNDER THIS GUARANTEE

 

51

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

 

WHICH IS NOT PAID WHEN DUE (REGARDLESS OF WHETHER SUCH BALANCES ARE THEN DUE TO
SUCH GUARANTOR), IN WHICH CASE IT SHALL PROMPTLY NOTIFY SUCH GUARANTOR THEREOF;
PROVIDED THAT THE FAILURE OF THE ADMINISTRATIVE AGENT OR SUCH LENDER TO GIVE
SUCH NOTICE SHALL NOT AFFECT THE VALIDITY THEREOF.

 

SECTION 8.09.                           FORMALITIES. EACH GUARANTOR WAIVES
PRESENTMENT, NOTICE OF DISHONOR, PROTEST, NOTICE OF ACCEPTANCE OF THIS GUARANTEE
OR INCURRENCE OF ANY GUARANTEED LIABILITY AND ANY OTHER FORMALITY WITH RESPECT
TO ANY OF THE GUARANTEED LIABILITIES OR THIS GUARANTEE.

 

SECTION 8.10.                           LIMITATIONS ON GUARANTEE. THE PROVISIONS
OF THE GUARANTEE UNDER THIS ARTICLE VIII ARE SEVERABLE, AND IN ANY ACTION OR
PROCEEDING INVOLVING ANY STATE CORPORATE LAW, OR ANY STATE, FEDERAL OR FOREIGN
BANKRUPTCY, INSOLVENCY, REORGANIZATION OR OTHER LAW AFFECTING THE RIGHTS OF
CREDITORS GENERALLY, IF THE OBLIGATIONS OF ANY GUARANTOR UNDER THIS GUARANTEE
WOULD OTHERWISE BE HELD OR DETERMINED TO BE AVOIDABLE, INVALID OR UNENFORCEABLE
ON ACCOUNT OF THE AMOUNT OF SUCH GUARANTOR’S LIABILITY UNDER THIS GUARANTEE,
THEN, NOTWITHSTANDING ANY OTHER PROVISION OF THIS GUARANTEE TO THE CONTRARY, THE
AMOUNT OF SUCH LIABILITY SHALL, WITHOUT ANY FURTHER ACTION BY THE GUARANTORS,
THE ADMINISTRATIVE AGENT OR ANY LENDER, BE AUTOMATICALLY LIMITED AND REDUCED TO
THE HIGHEST AMOUNT THAT IS VALID AND ENFORCEABLE AS DETERMINED IN SUCH ACTION OR
PROCEEDING (SUCH HIGHEST AMOUNT DETERMINED HEREUNDER BEING THE RELEVANT
GUARANTOR’S “MAXIMUM LIABILITY”). THIS SECTION 8.10 WITH RESPECT TO THE MAXIMUM
LIABILITY OF THE GUARANTORS IS INTENDED SOLELY TO PRESERVE THE RIGHTS OF THE
ADMINISTRATIVE AGENT AND LENDERS HEREUNDER TO THE MAXIMUM EXTENT NOT SUBJECT TO
AVOIDANCE UNDER APPLICABLE LAW, AND NO GUARANTOR NOR ANY OTHER PERSON SHALL HAVE
ANY RIGHT OR CLAIM UNDER THIS SECTION 8.10 WITH RESPECT TO THE MAXIMUM
LIABILITY, EXCEPT TO THE EXTENT NECESSARY SO THAT NONE OF THE OBLIGATIONS OF ANY
GUARANTOR HEREUNDER SHALL BE RENDERED VOIDABLE UNDER APPLICABLE LAW.

 

ARTICLE IX

 

EVENTS OF DEFAULT

 

If any of the following events (“Events of Default”) shall occur:

 

(A)                                  THE BORROWER SHALL FAIL TO PAY ANY
PRINCIPAL OF ANY LOAN WHEN AND AS THE SAME SHALL BECOME DUE AND PAYABLE, WHETHER
AT THE DUE DATE THEREOF OR AT A DATE FIXED FOR PREPAYMENT THEREOF 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
CLAUSE (A) OF THIS ARTICLE) PAYABLE UNDER THIS AGREEMENT, WHEN AND AS THE SAME
SHALL BECOME DUE AND PAYABLE, AND SUCH FAILURE SHALL CONTINUE UNREMEDIED FOR A
PERIOD OF THREE (3) DAYS;

 

(C)                                  ANY REPRESENTATION OR WARRANTY MADE OR
DEEMED MADE BY OR ON BEHALF OF THE BORROWER OR ANY RESTRICTED SUBSIDIARY IN OR
IN CONNECTION WITH THIS AGREEMENT OR ANY AMENDMENT OR MODIFICATION HEREOF OR
WAIVER HEREUNDER, OR IN ANY REPORT, CERTIFICATE, FINANCIAL STATEMENT OR OTHER
DOCUMENT FURNISHED PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY
AMENDMENT OR MODIFICATION HEREOF OR WAIVER HEREUNDER OR IN ANY LOAN DOCUMENT
FURNISHED PURSUANT TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY AMENDMENT

 

52

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

 

OR MODIFICATION THEREOF OR WAIVER HEREUNDER, SHALL PROVE TO HAVE BEEN INCORRECT
IN ANY MATERIAL RESPECT WHEN MADE OR DEEMED MADE;

 

(D)                                 THE BORROWER OR ANY RESTRICTED SUBSIDIARY
SHALL FAIL TO OBSERVE OR PERFORM ANY COVENANT, CONDITION OR AGREEMENT CONTAINED
IN SECTION 2.10, SECTION 6.01, SECTION 6.02, SECTION 6.03 (WITH RESPECT TO THE
BORROWER OR ANY RESTRICTED SUBSIDIARY’S EXISTENCE), SECTION 6.05 (WITH RESPECT
TO INSURANCE), SECTION 6.08, OR IN ARTICLE VII;

 

(E)                                  THE BORROWER OR ANY RESTRICTED SUBSIDIARY
SHALL FAIL TO OBSERVE OR PERFORM ANY COVENANT, CONDITION OR AGREEMENT CONTAINED
IN THIS AGREEMENT (OTHER THAN THOSE SPECIFIED IN CLAUSE (A), (B) OR (D) OF THIS
ARTICLE) OR ANY LOAN DOCUMENT, AND SUCH FAILURE SHALL CONTINUE UNREMEDIED FOR A
PERIOD OF THIRTY (30) DAYS AFTER NOTICE THEREOF FROM THE ADMINISTRATIVE AGENT TO
THE BORROWER (WHICH NOTICE WILL BE GIVEN AT THE REQUEST OF ANY LENDER);

 

(F)                                    THE BORROWER OR ANY RESTRICTED SUBSIDIARY
SHALL FAIL TO MAKE ANY PAYMENT (WHETHER OF PRINCIPAL OR INTEREST AND REGARDLESS
OF AMOUNT) IN RESPECT OF ANY MATERIAL INDEBTEDNESS, WHEN AND AS THE SAME SHALL
BECOME DUE AND PAYABLE;

 

(G)                                 ANY EVENT OR CONDITION OCCURS THAT RESULTS
IN ANY MATERIAL INDEBTEDNESS BECOMING DUE PRIOR TO ITS SCHEDULED MATURITY;
PROVIDED THAT THIS CLAUSE (G) SHALL NOT APPLY TO SECURED INDEBTEDNESS THAT
BECOMES DUE AS A RESULT OF THE VOLUNTARY SALE OR TRANSFER OF THE PROPERTY OR
ASSETS SECURING SUCH INDEBTEDNESS;

 

(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 BORROWER OR ANY 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 BORROWER OR ANY
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 BORROWER OR ANY 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 CLAUSE (H) OF THIS
ARTICLE, (III) APPLY FOR OR CONSENT TO THE APPOINTMENT OF A RECEIVER, TRUSTEE,
CUSTODIAN, SEQUESTRATOR, CONSERVATOR OR SIMILAR OFFICIAL FOR THE BORROWER OR ANY
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;

 

53

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

 

(J)                                     THE BORROWER OR ANY 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 $50,000,000 SHALL BE RENDERED AGAINST
THE BORROWER OR ANY RESTRICTED SUBSIDIARY OR ANY COMBINATION THEREOF AND THE
SAME SHALL REMAIN UNDISCHARGED FOR A PERIOD OF THIRTY (30) CONSECUTIVE DAYS
DURING WHICH EXECUTION SHALL NOT BE EFFECTIVELY STAYED, OR ANY ACTION SHALL BE
LEGALLY TAKEN BY A JUDGMENT CREDITOR TO ATTACH OR LEVY UPON ANY ASSETS OF THE
BORROWER OR ANY RESTRICTED SUBSIDIARY TO ENFORCE ANY SUCH JUDGMENT;

 

(L)                                     AN ERISA EVENT SHALL HAVE OCCURRED THAT,
IN THE OPINION OF THE REQUIRED LENDERS, WHEN TAKEN TOGETHER WITH ALL OTHER ERISA
EVENTS THAT HAVE OCCURRED, COULD REASONABLY BE EXPECTED TO RESULT IN A MATERIAL
ADVERSE EFFECT;

 

(M)                               THE DELIVERY BY ANY GUARANTOR TO THE
ADMINISTRATIVE AGENT OF WRITTEN NOTICE THAT ITS GUARANTEE UNDER ARTICLE VIII HAS
BEEN REVOKED OR IS OTHERWISE DECLARED INVALID OR UNENFORCEABLE;

 

(N)                                 A CHANGE OF CONTROL SHALL OCCUR;

 

then, and in every such event (other than an event with respect to the Borrower
or any Restricted Subsidiary described in clause (h) or (i) of this Article),
and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by
notice to the Borrower, declare 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 accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, 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.

 

ARTICLE X

 

THE ADMINISTRATIVE AGENT

 

Each of the Lenders 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, together with such actions and powers as are reasonably incidental
thereto.

 

The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from,

 

54

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

 

lend money to and generally engage in any kind of business with any Credit Party
or other Affiliate thereof as if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. 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,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02), 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 information relating to any Credit Party
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 not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 11.02) or in the absence of its own gross negligence or willful
misconduct. 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 the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
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. 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 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
paragraphs 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.

 

55

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

 

Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders appoint a successor
Administrative Agent which shall be a bank with an office in Chicago, Illinois
or New York, New York, or an Affiliate of any such bank. 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 between the Borrower
and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 11.03 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.

 

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative 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. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative 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 related agreement or any
document furnished hereunder or thereunder.

 

ARTICLE XI

 

MISCELLANEOUS

 

SECTION 11.01.                     NOTICES.

 

(A)                                  EXCEPT IN THE CASE OF NOTICES AND OTHER
COMMUNICATIONS EXPRESSLY PERMITTED TO BE GIVEN BY TELEPHONE (AND SUBJECT TO
PARAGRAPH (B) BELOW), ALL NOTICES AND OTHER COMMUNICATIONS PROVIDED FOR HEREIN
SHALL BE IN WRITING AND SHALL BE DELIVERED BY HAND OR OVERNIGHT COURIER SERVICE,
MAILED BY CERTIFIED OR REGISTERED MAIL OR SENT BY TELECOPY, AS FOLLOWS:

 

(I)                                     IF TO THE BORROWER, TO EXCO OPERATING
COMPANY, LP, C/O EXCO RESOURCES, INC., 12377 MERIT DRIVE, SUITE 1700, DALLAS,
TEXAS 75251, ATTENTION: DOUGLAS H. MILLER, CHIEF EXECUTIVE OFFICER AND
ATTENTION: J. DOUGLAS RAMSEY, CHIEF FINANCIAL OFFICER, TELECOPY NO. (214)
368-2087;

 

(II)                                  IF TO THE ADMINISTRATIVE AGENT TO JPMORGAN
CHASE BANK, N.A., JPMORGAN LOAN SERVICES, 21 SOUTH CLARK ST., 19TH FLOOR,
CHICAGO, ILLINOIS

 

56

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

 

60603-2003, TELECOPY NO.: (312) 385-7096, ATTENTION: CLAUDIA KECH, WITH A COPY
TO JPMORGAN CHASE BANK, N.A., 2200 ROSS AVENUE, 3RD FLOOR, TX1-2448, DALLAS,
TEXAS 75201, TELECOPY NO. (214) 965-3280, ATTENTION: WM. MARK CRANMER, SENIOR
VICE PRESIDENT; AND

 

(III)                               IF TO ANY OTHER LENDER, TO IT AT ITS ADDRESS
(OR TELECOPY NUMBER) SET FORTH IN ITS ADMINISTRATIVE QUESTIONNAIRE.

 

(B)                                 NOTICES AND OTHER COMMUNICATIONS TO THE
LENDERS HEREUNDER MAY BE DELIVERED OR FURNISHED BY ELECTRONIC COMMUNICATIONS
PURSUANT TO PROCEDURES APPROVED BY THE ADMINISTRATIVE AGENT; PROVIDED THAT THE
FOREGOING SHALL NOT APPLY TO NOTICES PURSUANT TO ARTICLE II UNLESS OTHERWISE
AGREED BY THE ADMINISTRATIVE AGENT AND THE APPLICABLE LENDER. THE ADMINISTRATIVE
AGENT OR THE BORROWER MAY, IN THEIR DISCRETION, AGREE TO ACCEPT NOTICES AND
OTHER COMMUNICATIONS TO IT HEREUNDER BY ELECTRONIC COMMUNICATIONS PURSUANT TO
PROCEDURES APPROVED BY IT; PROVIDED THAT APPROVAL OF SUCH PROCEDURES MAY BE
LIMITED TO PARTICULAR NOTICES OR COMMUNICATIONS.

 

(C)                                  ANY PARTY HERETO MAY CHANGE ITS ADDRESS OR
TELECOPY 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 11.02.                     WAIVERS; AMENDMENTS.

 

(A)                                  NO FAILURE OR DELAY BY THE ADMINISTRATIVE
AGENT OR ANY LENDER IN EXERCISING ANY RIGHT OR POWER HEREUNDER SHALL OPERATE AS
A WAIVER THEREOF, NOR SHALL ANY SINGLE OR PARTIAL EXERCISE OF ANY SUCH RIGHT OR
POWER, OR ANY ABANDONMENT OR DISCONTINUANCE OF STEPS TO ENFORCE SUCH A RIGHT OR
POWER, PRECLUDE ANY OTHER OR FURTHER EXERCISE THEREOF OR THE EXERCISE OF ANY
OTHER RIGHT OR POWER. THE RIGHTS AND REMEDIES OF THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREUNDER ARE CUMULATIVE AND ARE NOT EXCLUSIVE OF ANY RIGHTS OR
REMEDIES THAT THEY WOULD OTHERWISE HAVE. NO WAIVER OF ANY PROVISION OF THIS
AGREEMENT OR CONSENT TO ANY DEPARTURE BY THE BORROWER THEREFROM SHALL IN ANY
EVENT BE EFFECTIVE UNLESS THE SAME SHALL BE PERMITTED BY PARAGRAPH (B) OF THIS
SECTION, 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 SHALL NOT BE CONSTRUED AS A WAIVER OF ANY
DEFAULT, REGARDLESS OF WHETHER THE ADMINISTRATIVE AGENT OR ANY LENDER MAY HAVE
HAD NOTICE OR KNOWLEDGE OF SUCH DEFAULT AT THE TIME.

 

(B)                                 NEITHER THIS AGREEMENT NOR ANY PROVISION
HEREOF MAY BE WAIVED, AMENDED OR MODIFIED EXCEPT PURSUANT TO AN AGREEMENT OR
AGREEMENTS IN WRITING ENTERED INTO BY THE CREDIT PARTIES AND THE REQUIRED
LENDERS OR BY THE CREDIT PARTIES AND THE ADMINISTRATIVE AGENT WITH THE CONSENT
OF THE REQUIRED LENDERS; PROVIDED THAT NO SUCH AGREEMENT SHALL (1) INCREASE THE
COMMITMENT OF ANY LENDER WITHOUT THE WRITTEN CONSENT OF SUCH LENDER, (2) REDUCE
THE PRINCIPAL AMOUNT OF ANY LOAN OR REDUCE THE RATE OF INTEREST THEREON, OR
REDUCE ANY FEES PAYABLE HEREUNDER, WITHOUT THE WRITTEN CONSENT OF EACH LENDER
AFFECTED THEREBY, (3) POSTPONE THE SCHEDULED DATE OF PAYMENT OF THE PRINCIPAL
AMOUNT OF ANY LOAN

 

57

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

 

OR ANY INTEREST THEREON, OR ANY FEES PAYABLE HEREUNDER, OR REDUCE THE AMOUNT OF,
WAIVE OR EXCUSE ANY SUCH PAYMENT, OR POSTPONE THE MATURITY DATE, WITHOUT THE
WRITTEN CONSENT OF EACH LENDER AFFECTED THEREBY, (4) CHANGE SECTION 2.17(B) OR
SECTION 2.17(C) IN A MANNER THAT WOULD ALTER THE PRO RATA SHARING OF PAYMENTS
REQUIRED THEREBY, WITHOUT THE WRITTEN CONSENT OF EACH LENDER, (5) RELEASE ANY
CREDIT PARTY FROM ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS, EXCEPT IN CONNECTION
WITH ANY SALES, TRANSFERS, LEASES OR OTHER DISPOSITIONS PERMITTED IN
SECTION 7.03, OR (6) CHANGE ANY OF THE PROVISIONS OF THIS SECTION OR THE
DEFINITION OF “REQUIRED LENDERS” OR ANY OTHER PROVISION HEREOF SPECIFYING THE
NUMBER OR PERCENTAGE OF LENDERS REQUIRED TO WAIVE, AMEND OR MODIFY ANY RIGHTS
HEREUNDER OR MAKE ANY DETERMINATION OR GRANT ANY CONSENT HEREUNDER, WITHOUT THE
WRITTEN CONSENT OF EACH LENDER; PROVIDED FURTHER THAT NO SUCH AGREEMENT SHALL
AMEND, MODIFY OR OTHERWISE AFFECT THE RIGHTS OR DUTIES OF THE ADMINISTRATIVE
AGENT HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT.

 

SECTION 11.03.                     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 THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF COUNSEL FOR THE
ADMINISTRATIVE AGENT, IN CONNECTION WITH THE SYNDICATION OF THE CREDIT
FACILITIES PROVIDED FOR HEREIN, THE PREPARATION AND ADMINISTRATION OF THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS OR ANY AMENDMENTS, MODIFICATIONS OR
WAIVERS OF THE PROVISIONS HEREOF (WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY SHALL BE CONSUMMATED) AND (II) ALL OUT-OF-POCKET EXPENSES
INCURRED BY THE ADMINISTRATIVE AGENT OR ANY LENDER, INCLUDING THE FEES, CHARGES
AND DISBURSEMENTS OF ANY COUNSEL FOR THE ADMINISTRATIVE AGENT OR ANY LENDER, IN
CONNECTION WITH THE ENFORCEMENT OR PROTECTION OF ITS RIGHTS IN CONNECTION WITH
THE LOAN DOCUMENTS, INCLUDING ITS RIGHTS UNDER THIS SECTION, OR IN CONNECTION
WITH THE LOANS MADE HEREUNDER, INCLUDING ALL SUCH OUT-OF-POCKET EXPENSES
INCURRED DURING ANY WORKOUT, RESTRUCTURING OR NEGOTIATIONS IN RESPECT OF SUCH
LOANS.

 

(B)                                 THE CREDIT PARTIES SHALL INDEMNIFY THE
ADMINISTRATIVE AGENT AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE
FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND
HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES,
PENALTIES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE 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 AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE
OBLIGATIONS HEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS OR ANY OTHER
TRANSACTIONS CONTEMPLATED HEREBY, (II) ANY LOAN OR THE USE OF THE PROCEEDS
THEREFROM, (III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS
MATERIALS ON OR FROM ANY PROPERTY OWNED OR

 

58

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

 

OPERATED BY THE BORROWER OR ANY SUBSIDIARY, OR ANY ENVIRONMENTAL LIABILITY
RELATED IN ANY WAY TO THE BORROWER OR ANY SUBSIDIARY, OR (IV) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A
COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

 

(C)                                  TO THE EXTENT THAT ANY CREDIT PARTY FAILS
TO PAY ANY AMOUNT REQUIRED TO BE PAID BY IT TO THE ADMINISTRATIVE AGENT UNDER
PARAGRAPH (A) OR (B) OF THIS SECTION, EACH LENDER SEVERALLY AGREES TO PAY TO THE
ADMINISTRATIVE AGENT, SUCH LENDER’S APPLICABLE PERCENTAGE (IN EACH CASE,
DETERMINED AS OF THE TIME THAT THE APPLICABLE UNREIMBURSED EXPENSE OR INDEMNITY
PAYMENT IS SOUGHT) OF SUCH UNPAID AMOUNT; PROVIDED THAT THE UNREIMBURSED EXPENSE
OR INDEMNIFIED LOSS, CLAIM, DAMAGE, LIABILITY OR RELATED EXPENSE, AS THE CASE
MAY BE, WAS INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ITS
CAPACITY AS SUCH.

 

(D)                                 TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, THE CREDIT PARTIES SHALL NOT ASSERT, AND HEREBY WAIVE, ANY CLAIM
AGAINST ANY INDEMNITEE, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES)
ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT OR ANY
AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE TRANSACTIONS, ANY LOAN OR THE
USE OF THE PROCEEDS THEREOF.

 

(E)                                  ALL AMOUNTS DUE UNDER THIS SECTION SHALL BE
PAYABLE NOT LATER THAN TEN (10) DAYS AFTER WRITTEN DEMAND THEREFOR.

 

SECTION 11.04.                     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, EXCEPT THAT (I) NO CREDIT PARTY MAY
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 SUCH CREDIT PARTY 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. NOTHING IN THIS AGREEMENT,
EXPRESSED OR IMPLIED, SHALL BE CONSTRUED TO CONFER UPON ANY PERSON (OTHER THAN
THE PARTIES HERETO, THEIR RESPECTIVE SUCCESSORS AND ASSIGNS PERMITTED HEREBY,
PARTICIPANTS (TO THE EXTENT PROVIDED IN PARAGRAPH (C) OF THIS SECTION) AND, TO
THE EXTENT EXPRESSLY CONTEMPLATED

 

59

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

 

HEREBY, THE RELATED PARTIES OF EACH OF THE ADMINISTRATIVE AGENT AND THE LENDERS)
ANY LEGAL OR EQUITABLE RIGHT, REMEDY OR CLAIM UNDER OR BY REASON OF THIS
AGREEMENT.

 

(B)

 

(I)                                     SUBJECT TO THE CONDITIONS SET FORTH IN
PARAGRAPH (B)(II) BELOW, 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 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 FOR AN ASSIGNMENT TO A LENDER, AN AFFILIATE OF A
LENDER, A FEDERAL RESERVE BANK, AN APPROVED FUND OR, IF AN EVENT OF DEFAULT HAS
OCCURRED AND IS CONTINUING, ANY OTHER ASSIGNEE; AND

 

(B)                                THE ADMINISTRATIVE AGENT, PROVIDED THAT NO
CONSENT OF THE ADMINISTRATIVE AGENT SHALL BE REQUIRED FOR AN ASSIGNMENT TO A
LENDER, AN AFFILIATE OF A LENDER OR AN APPROVED FUND.

 

(II)                                  ASSIGNMENTS SHALL BE SUBJECT TO THE
FOLLOWING ADDITIONAL CONDITIONS:

 

(A)                              EXCEPT IN THE CASE OF AN ASSIGNMENT TO A
LENDER, AN AFFILIATE OF A LENDER, AN APPROVED FUND OR AN ASSIGNMENT OF THE
ENTIRE REMAINING AMOUNT OF THE ASSIGNING LENDER’S LOANS, THE AMOUNT OF THE LOANS
OF THE ASSIGNING LENDER SUBJECT TO EACH SUCH ASSIGNMENT (DETERMINED AS OF THE
DATE THE ASSIGNMENT AND ASSUMPTION WITH RESPECT TO SUCH ASSIGNMENT IS DELIVERED
TO THE ADMINISTRATIVE AGENT) SHALL NOT BE LESS THAN $1,000,000 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 PARTIAL ASSIGNMENT SHALL BE MADE AS AN
ASSIGNMENT OF A PROPORTIONATE PART OF ALL THE ASSIGNING LENDER’S RIGHTS AND
OBLIGATIONS IN RESPECT OF SUCH LENDER’S LOANS UNDER THIS AGREEMENT;

 

(C)                                THE PARTIES TO EACH ASSIGNMENT SHALL EXECUTE
AND DELIVER TO THE ADMINISTRATIVE AGENT AN ASSIGNMENT AND ASSUMPTION, TOGETHER
WITH A PROCESSING AND RECORDATION FEE OF $3,500; AND

 

(D)                               THE ASSIGNEE, IF IT SHALL NOT BE A LENDER,
SHALL DELIVER TO THE ADMINISTRATIVE AGENT AN ADMINISTRATIVE QUESTIONNAIRE.

 

For the purposes of this Section 11.04(b), the term “Approved Fund” has the
following meaning:

 

60

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

 

“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.

 

(III)          SUBJECT TO ACCEPTANCE AND RECORDING THEREOF PURSUANT TO
PARAGRAPH (B)(IV) OF THIS SECTION, 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 2.14, SECTION 2.15, SECTION 2.16 AND SECTION 11.03).  ANY
ASSIGNMENT OR TRANSFER BY A LENDER OF RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT
THAT DOES NOT COMPLY WITH THIS SECTION 11.04 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 PARAGRAPH (C) OF THIS SECTION EXCEPT THAT ANY
ATTEMPTED ASSIGNMENT OR TRANSFER BY ANY LENDER THAT DOES NOT COMPLY WITH CLAUSE
(C) OF SECTION 11.04(B)(II) SHALL BE NULL AND VOID.

 

(IV)          THE ADMINISTRATIVE AGENT, ACTING FOR THIS PURPOSE AS AN 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 PRINCIPAL AMOUNT OF THE LOANS 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 CREDIT PARTIES, THE
ADMINISTRATIVE AGENT AND THE LENDERS MAY TREAT EACH PERSON WHOSE NAME IS
RECORDED IN THE REGISTER PURSUANT TO THE TERMS HEREOF AS A LENDER HEREUNDER FOR
ALL PURPOSES OF THIS AGREEMENT, NOTWITHSTANDING NOTICE TO THE CONTRARY.  THE
REGISTER SHALL BE AVAILABLE FOR INSPECTION BY THE CREDIT PARTIES AND ANY LENDER,
AT ANY REASONABLE TIME AND FROM TIME TO TIME UPON REASONABLE PRIOR NOTICE.

 

(V)           UPON ITS RECEIPT OF A DULY COMPLETED ASSIGNMENT AND ASSUMPTION
EXECUTED BY AN ASSIGNING LENDER AND AN ASSIGNEE, THE ASSIGNEE’S COMPLETED
ADMINISTRATIVE QUESTIONNAIRE (UNLESS THE ASSIGNEE SHALL ALREADY BE A LENDER
HEREUNDER), THE PROCESSING AND RECORDATION FEE REFERRED TO IN PARAGRAPH (B) OF
THIS SECTION, AND ANY WRITTEN CONSENT TO SUCH ASSIGNMENT REQUIRED BY PARAGRAPH
(B) OF THIS SECTION, THE ADMINISTRATIVE AGENT SHALL ACCEPT SUCH ASSIGNMENT AND
ASSUMPTION AND RECORD THE INFORMATION CONTAINED THEREIN IN THE REGISTER;
PROVIDED THAT IF EITHER THE ASSIGNING LENDER OR THE ASSIGNEE SHALL HAVE FAILED
TO MAKE ANY PAYMENT REQUIRED TO BE MADE BY IT PURSUANT TO SECTION 2.06,
SECTION 2.17(D) OR SECTION 11.03(C), THE ADMINISTRATIVE AGENT SHALL HAVE NO
OBLIGATION TO ACCEPT SUCH ASSIGNMENT AND ASSUMPTION AND RECORD THE INFORMATION
THEREIN IN THE

 

61

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

 

REGISTER UNLESS AND UNTIL SUCH PAYMENT SHALL HAVE BEEN MADE IN FULL, TOGETHER
WITH ALL ACCRUED INTEREST THEREON.  NO ASSIGNMENT SHALL BE EFFECTIVE FOR
PURPOSES OF THIS AGREEMENT UNLESS IT HAS BEEN RECORDED IN THE REGISTER AS
PROVIDED IN THIS PARAGRAPH.

 

(C)

 

(I)            ANY LENDER MAY, WITHOUT THE CONSENT OF THE BORROWER OR THE
ADMINISTRATIVE AGENT, SELL PARTICIPATIONS TO ONE OR MORE BANKS OR OTHER ENTITIES
(A “PARTICIPANT”) IN ALL OR A PORTION OF SUCH LENDER’S RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT (INCLUDING ALL OR A PORTION OF THE LOANS OWING TO IT);
PROVIDED THAT (A) SUCH LENDER’S OBLIGATIONS UNDER THIS AGREEMENT SHALL REMAIN
UNCHANGED, (B) SUCH LENDER SHALL REMAIN SOLELY RESPONSIBLE TO THE OTHER PARTIES
HERETO FOR THE PERFORMANCE OF SUCH OBLIGATIONS AND (C) THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE OTHER LENDERS SHALL CONTINUE TO DEAL SOLELY AND
DIRECTLY WITH SUCH LENDER IN CONNECTION WITH SUCH LENDER’S RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT.  ANY AGREEMENT OR INSTRUMENT PURSUANT TO WHICH
A LENDER SELLS SUCH A PARTICIPATION SHALL PROVIDE THAT SUCH LENDER SHALL RETAIN
THE SOLE RIGHT TO ENFORCE THIS AGREEMENT AND TO APPROVE ANY AMENDMENT,
MODIFICATION OR WAIVER OF ANY PROVISION OF THIS AGREEMENT; 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 11.02(B) THAT AFFECTS SUCH
PARTICIPANT.  SUBJECT TO PARAGRAPH (C)(II) OF THIS SECTION, THE BORROWER AGREES
THAT EACH PARTICIPANT SHALL BE ENTITLED TO THE BENEFITS OF SECTION 2.14,
SECTION 2.15 AND SECTION 2.16 TO THE SAME EXTENT AS IF IT WERE A LENDER AND HAD
ACQUIRED ITS INTEREST BY ASSIGNMENT PURSUANT TO PARAGRAPH (B) OF THIS SECTION. 
TO THE EXTENT PERMITTED BY LAW, EACH PARTICIPANT ALSO SHALL BE ENTITLED TO THE
BENEFITS OF SECTION 11.08 AS THOUGH IT WERE A LENDER, PROVIDED SUCH PARTICIPANT
AGREES TO BE SUBJECT TO SECTION 2.17(C) AS THOUGH IT WERE A LENDER.

 

(II)           A PARTICIPANT SHALL NOT BE ENTITLED TO RECEIVE ANY GREATER
PAYMENT UNDER SECTION 2.14 OR SECTION 2.16 THAN THE APPLICABLE LENDER WOULD HAVE
BEEN ENTITLED TO RECEIVE WITH RESPECT TO THE PARTICIPATION SOLD TO SUCH
PARTICIPANT, UNLESS THE SALE OF THE PARTICIPATION TO SUCH PARTICIPANT IS MADE
WITH THE PRIOR WRITTEN CONSENT OF THE BORROWER.  A PARTICIPANT THAT WOULD BE A
FOREIGN LENDER IF IT WERE A LENDER SHALL NOT BE ENTITLED TO THE BENEFITS OF
SECTION 2.16 UNLESS THE BORROWER IS NOTIFIED OF THE PARTICIPATION SOLD TO SUCH
PARTICIPANT AND SUCH PARTICIPANT AGREES, FOR THE BENEFIT OF THE BORROWER, TO
COMPLY WITH SECTION 2.16(E) AS THOUGH IT WERE A LENDER.

 

(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, AND THIS SECTION 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.

 

62

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

 

SECTION 11.05.       SURVIVAL.  ALL COVENANTS, AGREEMENTS, REPRESENTATIONS AND
WARRANTIES MADE BY THE CREDIT PARTIES HEREIN AND IN THE CERTIFICATES OR OTHER
INSTRUMENTS DELIVERED IN CONNECTION WITH OR PURSUANT TO THIS AGREEMENT 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, REGARDLESS OF ANY INVESTIGATION MADE BY ANY SUCH OTHER PARTY OR ON ITS
BEHALF AND NOTWITHSTANDING THAT THE ADMINISTRATIVE AGENT 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.  THE PROVISIONS OF SECTION 2.14, SECTION 2.15, SECTION 2.16 AND
SECTION 11.03 AND ARTICLE X SHALL SURVIVE AND REMAIN IN FULL FORCE AND EFFECT
REGARDLESS OF THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY, THE
REPAYMENT OF THE LOANS OR THE TERMINATION OF THIS AGREEMENT OR ANY PROVISION
HEREOF.

 

SECTION 11.06.       COUNTERPARTS; INTEGRATION; EFFECTIVENESS.  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.  THIS AGREEMENT 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 SUPERSEDE ANY AND ALL PREVIOUS AGREEMENTS AND UNDERSTANDINGS,
ORAL OR WRITTEN, RELATING TO THE SUBJECT MATTER HEREOF.  THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.  EXCEPT AS PROVIDED IN SECTION 5.01, 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 TELECOPY SHALL BE EFFECTIVE
AS DELIVERY OF A MANUALLY EXECUTED COUNTERPART OF THIS AGREEMENT.

 

SECTION 11.07.       SEVERABILITY.  ANY PROVISION OF THIS AGREEMENT 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; AND THE INVALIDITY OF A PARTICULAR PROVISION IN
A PARTICULAR JURISDICTION SHALL NOT INVALIDATE SUCH PROVISION IN ANY OTHER
JURISDICTION.

 

SECTION 11.08.       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 AT ANY TIME
OWING BY SUCH LENDER OR AFFILIATE TO OR FOR THE CREDIT OR THE ACCOUNT OF THE
BORROWER AGAINST ANY OF AND ALL THE OBLIGATIONS OF ANY CREDIT PARTY NOW OR
HEREAFTER EXISTING UNDER THIS AGREEMENT HELD BY SUCH LENDER, IRRESPECTIVE OF
WHETHER OR NOT SUCH LENDER SHALL HAVE MADE ANY DEMAND UNDER THIS AGREEMENT AND
ALTHOUGH SUCH OBLIGATIONS MAY BE UNMATURED.  THE RIGHTS OF EACH

 

63

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

 

LENDER UNDER THIS SECTION AND SECTION 8.08 ARE IN ADDITION TO OTHER RIGHTS AND
REMEDIES (INCLUDING OTHER RIGHTS OF SETOFF) WHICH SUCH LENDER MAY HAVE.

 

SECTION 11.09.       GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

 

(A)           THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.

 

(B)           EACH CREDIT PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS,
FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED
STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR,
TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING
ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY CREDIT PARTY OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(C)           EACH CREDIT PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO
IN PARAGRAPH (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

 

(D)           EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.01.  NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.

 

SECTION 11.10.       WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT

 

64

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

 

IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

 

SECTION 11.11.       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 11.12.       CONFIDENTIALITY.  EACH OF THE ADMINISTRATIVE AGENT 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 OR ANY SELF-REGULATORY AUTHORITY OR AGENCY
POSSESSING INVESTIGATIVE POWERS AND THE ABILITY TO SANCTION MEMBERS FOR
NON-COMPLIANCE, (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, (E) IN CONNECTION WITH THE EXERCISE OF ANY REMEDIES HEREUNDER OR ANY
SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE ENFORCEMENT OF
RIGHTS HEREUNDER, (F) SUBJECT TO AN AGREEMENT CONTAINING PROVISIONS
SUBSTANTIALLY THE SAME AS, OR OTHERWISE CONSISTENT WITH, THOSE OF THIS SECTION,
TO (I) ANY ASSIGNEE OF OR PARTICIPANT IN, OR ANY PROSPECTIVE ASSIGNEE OF OR
PARTICIPANT IN, ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT OR (II) 
ANY ACTUAL OR PROSPECTIVE COUNTERPARTY (OR ITS ADVISORS) TO ANY SWAP OR
DERIVATIVE TRANSACTION RELATING TO THE CREDIT PARTIES AND THEIR 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 OR (II) BECOMES AVAILABLE TO THE ADMINISTRATIVE AGENT OR ANY LENDER ON A
NONCONFIDENTIAL BASIS FROM A SOURCE OTHER THAN A CREDIT PARTY.  FOR THE PURPOSES
OF THIS SECTION, “INFORMATION” MEANS ALL INFORMATION RECEIVED FROM ANY CREDIT
PARTY RELATING TO ANY CREDIT PARTY OR ITS BUSINESS, OTHER THAN ANY SUCH
INFORMATION THAT IS AVAILABLE TO THE ADMINISTRATIVE AGENT OR ANY LENDER ON A
NONCONFIDENTIAL BASIS PRIOR TO DISCLOSURE BY ANY CREDIT PARTY; PROVIDED THAT, IN
THE CASE OF INFORMATION RECEIVED FROM ANY CREDIT PARTY AFTER THE DATE HEREOF,
SUCH INFORMATION IS CLEARLY IDENTIFIED AT THE TIME OF DELIVERY AS CONFIDENTIAL. 
ANY PERSON REQUIRED TO MAINTAIN THE CONFIDENTIALITY OF INFORMATION AS PROVIDED
IN THIS SECTION SHALL BE CONSIDERED TO HAVE COMPLIED WITH ITS OBLIGATION TO DO
SO IF SUCH PERSON HAS EXERCISED THE SAME DEGREE OF CARE TO MAINTAIN THE
CONFIDENTIALITY OF SUCH INFORMATION AS SUCH PERSON WOULD ACCORD TO ITS OWN
CONFIDENTIAL INFORMATION.

 

SECTION 11.13.       INTEREST RATE LIMITATION.  NOTWITHSTANDING ANYTHING HEREIN
TO THE CONTRARY, IF AT ANY TIME THE INTEREST RATE APPLICABLE TO ANY LOAN,
TOGETHER WITH ALL FEES, CHARGES AND OTHER AMOUNTS WHICH ARE TREATED AS INTEREST
ON SUCH LOAN UNDER APPLICABLE LAW (COLLECTIVELY THE “CHARGES”), SHALL EXCEED THE
MAXIMUM LAWFUL RATE (THE “MAXIMUM RATE”) WHICH MAY BE

 

65

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

 

CONTRACTED FOR, CHARGED, TAKEN, RECEIVED OR RESERVED BY THE LENDER HOLDING SUCH
LOAN IN ACCORDANCE WITH APPLICABLE LAW, THE RATE OF INTEREST PAYABLE IN RESPECT
OF SUCH LOAN HEREUNDER, TOGETHER WITH ALL CHARGES PAYABLE IN RESPECT THEREOF,
SHALL BE LIMITED TO THE MAXIMUM RATE AND, TO THE EXTENT LAWFUL, THE INTEREST AND
CHARGES THAT WOULD HAVE BEEN PAYABLE IN RESPECT OF SUCH LOAN BUT WERE NOT
PAYABLE AS A RESULT OF THE OPERATION OF THIS SECTION SHALL BE CUMULATED AND THE
INTEREST AND CHARGES PAYABLE TO SUCH LENDER IN RESPECT OF OTHER LOANS OR PERIODS
SHALL BE INCREASED (BUT NOT ABOVE THE MAXIMUM RATE THEREFOR) UNTIL SUCH
CUMULATED AMOUNT, TOGETHER WITH INTEREST THEREON AT THE FEDERAL FUNDS EFFECTIVE
RATE TO THE DATE OF REPAYMENT, SHALL HAVE BEEN RECEIVED BY SUCH LENDER.  CHAPTER
346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT ACCOUNTS
(FORMERLY TEX. REV. CIV. STAT. ANN. ART. 5069, CH. 15)) SHALL NOT APPLY TO THIS
AGREEMENT OR TO ANY LOAN, NOR SHALL THIS AGREEMENT OR ANY LOAN BE GOVERNED BY OR
BE SUBJECT TO THE PROVISIONS OF SUCH CHAPTER 346 IN ANY MANNER WHATSOEVER.

 

SECTION 11.14.       USA PATRIOT ACT.  EACH LENDER THAT IS SUBJECT TO THE
REQUIREMENTS OF THE USA PATRIOT ACT (TITLE III OF PUB. L. 107-56 (SIGNED INTO
LAW OCTOBER 26, 2001)) (THE “ACT”) HEREBY NOTIFIES EACH CREDIT PARTY THAT
PURSUANT TO THE REQUIREMENTS OF THE ACT, IT IS REQUIRED TO OBTAIN, VERIFY AND
RECORD INFORMATION THAT IDENTIFIES EACH CREDIT PARTY, WHICH INFORMATION INCLUDES
THE NAME AND ADDRESS OF EACH CREDIT PARTY AND OTHER INFORMATION THAT WILL ALLOW
SUCH LENDER TO IDENTIFY EACH CREDIT PARTY IN ACCORDANCE WITH THE ACT.  THE
BORROWER SHALL, UPON THE REQUEST OF THE ADMINISTRATIVE AGENT OR ANY LENDER,
PROVIDE ALL DOCUMENTATION AND OTHER INFORMATION THAT THE ADMINISTRATIVE AGENT OR
SUCH LENDER REASONABLY REQUIRES TO COMPLY WITH ITS ONGOING OBLIGATIONS UNDER
APPLICABLE “KNOW YOUR CUSTOMER” AND ANTI-MONEY LAUNDERING RULES AND REGULATIONS,
INCLUDING THE ACT.

 

66

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

 

 

BORROWER:

 

 

 

EXCO OPERATING COMPANY, LP

 

(formerly known as EXCO Partners Operating

 

Partnership, LP)

 

 

By:

EXCO Partners OLP GP, LLC

 

 

its sole general partner

 

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

Name:

J. Douglas Ramsey, Ph.D.

 

Title:

Vice President and Chief Financial
Officer

 

 

 

GUARANTORS:

 

 

 

 

 

 

 

GARRISON GATHERING, LLC

 

VAUGHAN DE, LLC

 

VAUGHAN HOLDING COMPANY, L.L.C.

 

VERNON GATHERING, LLC

 

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

Name:

J. Douglas Ramsey, Ph.D.

 

Title:

Vice President and Chief Financial Officer

 

 

for each of the Credit Parties listed above

 

 

 

TALCO MIDSTREAM ASSETS, LTD.

 

 

 

 

By:

VAUGHAN HOLDING COMPANY, L.L.C.

 

 

its General Partner

 

 

 

 

 

 

 

By:

/s/ J. Douglas Ramsey

 

Name:

J. Douglas Ramsey, Ph.D.

 

Title:

Vice President and Chief Financial
Officer

 

SIGNATURE PAGE

 

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

 

 

TGG PIPELINE, LTD.

 

 

 

By:

VAUGHAN HOLDING COMPANY, L.L.C.,

 

 

its General Partner

 

 

 

By:

/s/ J. Douglas Ramsey

 

Name:

J. Douglas Ramsey, Ph.D.

 

Title:

Vice President and Chief Financial

 

 

Officer

 

 

 

EXCO PRODUCTION COMPANY, LP
(formerly known as Winchester Production
Company, Ltd.)

 

 

By:

VAUGHAN DE, LLC,

 

 

its General Partner

 

 

 

By:

/s/ J. Douglas Ramsey

 

Name:

J. Douglas Ramsey, Ph.D.

 

Title:

Vice President and Chief Financial

 

 

Officer

 

SIGNATURE PAGE

 

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

 

 

JPMORGAN CHASE BANK, N.A.,

 

as Administrative Agent and as a Lender,

 

 

 

 

 

By:

/s/ Wm. Mark Cranmer

 

Name:

Wm. Mark Cranmer

 

Title:

Senior Vice President

 

SIGNATURE PAGE

 

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

 

 

EAST TEXAS SHALE TRUST,

 

as a Lender,

 

 

 

By:

Wilmington Trust Company,

 

 

not in its individual capacity, but solely as

 

 

owner trustee under the Trust Agreement

 

 

dated July 15, 2008

 

 

 

By:

/s/ Joseph B. Feil

 

Name:

Joseph B. Feil

 

Title:

Vice President

 

SIGNATURE PAGE

 

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

 

 

JPM MEZZANINE CAPITAL, LLC,

 

as a Lender,

 

 

 

 

 

By:

/s/ Elizabeth Caswallader

 

Name:

Elizabeth Caswallader

 

Title:

Managing Director

 

SIGNATURE PAGE

 

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

 

 

GREENLIGHT CAPITAL, L.P.

 

as a Lender,

 

 

 

 

By:

Greenlight Capital, LLC, its General Partner

 

 

 

 

 

 

 

 

By:

/s/ Harry Brandler

 

 

Name:

Harry Brandler

 

 

Title:

CFO

 

SIGNATURE PAGE

 

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

 

 

GREENLIGHT CAPITAL QUALIFIED, L.P.

 

as a Lender,

 

 

 

 

By:

Greenlight Capital, LLC, its General Partner

 

 

 

 

 

 

 

 

By:

/s/ Harry Brandler

 

 

Name:

Harry Brandler

 

 

Title:

CFO

 

SIGNATURE PAGE

 

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

 

 

GREENLIGHT CAPITAL OFFSHORE, LTD.

 

as a Lender,

 

 

 

 

By:

Greenlight Capital, Inc., its Investment Manager

 

 

 

 

 

 

 

 

By:

/s/ Harry Brandler

 

 

Name:

Harry Brandler

 

 

Title:

CFO

 

SIGNATURE PAGE

 

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

 

 

GREENLIGHT REINSURANCE, LTD.

 

as a Lender,

 

 

 

 

By:

DME Advisors, LP, its Investment Manager

 

 

 

 

 

 

 

 

By:

/s/ Harry Brandler

 

 

Name:

Harry Brandler

 

 

Title:

CFO

 

SIGNATURE PAGE

 

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

 

 

CALYON NEW YORK BRANCH,

 

as a Lender,

 

 

 

 

 

 

 

By:

/s/ Michael D. Willis

 

Name:

Michael D. Willis

 

Title:

Managing Director

 

SIGNATURE PAGE

 

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

 

 

WELLS FARGO ENERGY CAPITAL, INC.,

 

as a Lender,

 

 

 

 

 

 

 

By:

/s/ Zach Johnson

 

Name:

Zach Johnson

 

Title:

Senior Vice President

 

SIGNATURE PAGE

 

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

 

 

BNP PARIBAS,

 

as a Lender,

 

 

 

 

 

 

 

By:

/s/ Juan Carlos Sandoval

 

Name:

Juan Carlos Sandoval

 

Title:

Vice President

 

 

 

 

 

 

 

By:

/s/ Edward Pak

 

Name:

Edward Pak

 

Title:

Vice President

 

SIGNATURE PAGE

 

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

 

 

SUMITOMO MITSUI BANKING CORPORATION,

 

as a Lender,

 

 

 

 

 

 

 

By:

/s/ William M. Ginn

 

Name:

William M. Ginn

 

Title:

General Manager

 

SIGNATURE PAGE

 

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

 

 

NATIXIS,

 

as a Lender,

 

 

 

 

 

 

 

By:

/s/ Liana Tchernysheva

 

Name:

Liana Tchernysheva

 

Title:

Director

 

 

 

 

 

 

 

By:

/s/ Timothy L. Polvado

 

Name:

Timothy L. Polvado

 

Title:

Senior Managing Director

 

SIGNATURE PAGE

 

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