Exhibit 10.1

CREDIT AGREEMENT

DATED AS OF DECEMBER 15, 2014

AMONG

CHESAPEAKE ENERGY CORPORATION,

AS THE BORROWER,

THE SEVERAL LENDERS

FROM TIME TO TIME PARTIES HERETO,

MUFG UNION BANK, N.A.,

AS ADMINISTRATIVE AGENT, CO-SYNDICATION AGENT, A SWINGLINE LENDER

AND A LETTER OF CREDIT ISSUER,

WELLS FARGO BANK, NATIONAL ASSOCIATION,

AS CO-SYNDICATION AGENT, A SWINGLINE LENDER

AND A LETTER OF CREDIT ISSUER,

AND

BANK OF AMERICA, N.A., CRÉDIT AGRICOLE CORPORATE AND INVESTMENT

BANK, AND JPMORGAN CHASE BANK, N.A.,

AS CO-DOCUMENTATION AGENTS AND LETTER OF CREDIT ISSUERS

 

 

MUFG UNION BANK, N.A. AND

WELLS FARGO SECURITIES, LLC

AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS

 

 

 

 

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Table of Contents

 

          Page  

ARTICLE I DEFINITIONS

     1    1.1    Defined Terms      1    1.2    Other Interpretive Provisions   
  35    1.3    Accounting Terms      36    1.4    Rounding      36    1.5   
References to Agreements, Laws, Etc      37    1.6    Times of Day      37   
1.7    Timing of Payment or Performance      37    1.8    Currency Equivalents
Generally      37    1.9    Classification of Loans and Borrowings      38   

ARTICLE II Amount and Terms of Credit

     38    2.1    Commitments      38    2.2    Minimum Amount of Each
Borrowing; Maximum Number of Borrowings      40    2.3    Notice of Borrowing   
  40    2.4    Disbursement of Funds      41    2.5    Repayment of Loans;
Evidence of Debt      42    2.6    Conversions and Continuations      42    2.7
   Pro Rata Borrowings      43    2.8    Interest      44    2.9    Interest
Periods      45    2.10    Increased Costs, Illegality, Etc      45    2.11   
Compensation      47    2.12    Change of Lending Office      47    2.13   
Notice of Certain Costs      48    2.14    Borrowing Base and PV-9 Determination
     48    2.15    Defaulting Lenders      52    2.16    Extension of Maturity
Date      54    2.17    Increase of Commitments      56   

ARTICLE III Letters of Credit

     57    3.1    Letters of Credit      57    3.2    Letter of Credit Requests
     58    3.3    Letter of Credit Participations      60    3.4    Agreement to
Repay Letter of Credit Drawings      62    3.5    Increased Costs      63    3.6
   New or Successor Letter of Credit Issuers      64    3.7    Role of Letter of
Credit Issuer      65    3.8    Cash Collateral      65    3.9    Applicability
of ISP and UCP      66    3.10    Conflict with Issuer Documents      66    3.11
   Letters of Credit Issued for Subsidiaries      66   

ARTICLE IV Fees; Commitments

     66    4.1    Fees      66    4.2    Termination or Reduction of Commitments
     67   

 

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ARTICLE V Payments

     68    5.1    Voluntary Prepayments      68    5.2    Mandatory Prepayments
     69    5.3    Method and Place of Payment      70    5.4    Net Payments   
  71    5.5    Computations of Interest and Fees      75    5.6    Limit on Rate
of Interest      75   

ARTICLE VI Conditions Precedent to Initial Credit Events

     76    6.1    Executed Credit Agreement      76    6.2    Secretary’s
Certificates      76    6.3    Good Standing Certificate of the Credit Parties
     76    6.4    Certain Credit Documents      76    6.5    Legal Opinions     
76    6.6    Closing Certificate      77    6.7    Fees      77    6.8   
Patriot Act      77    6.9    Historical Financial Statements      77    6.10   
Insurance      77    6.11    Solvency Certificate      77    6.12    Payoff
Letters      77    6.13    Uniform Commercial Code Searches      77   

ARTICLE VII Conditions Precedent to All Credit Events

     78    7.1    No Default; Representations and Warranties      78    7.2   
Notice of Borrowing      78   

ARTICLE VIII Representations and Warranties

     79    8.1    Corporate Status      79    8.2    Corporate Power and
Authority; Enforceability      79    8.3    No Violation      79    8.4   
Litigation      79    8.5    Margin Regulations      80    8.6    Governmental
Approvals      80    8.7    Investment Company Act      80    8.8    True and
Complete Disclosure      80    8.9    Financial Condition; Financial Statements
     80    8.10    Tax Matters      81    8.11    Compliance with ERISA      81
   8.12    Subsidiaries      81    8.13    Environmental Laws      81    8.14   
Properties      82    8.15    Solvency      82    8.16    Hedge Agreements     
82    8.17    No Default      82    8.18    Anti-Corruption Laws and Sanctions
     82    8.19    Pari Passu or Priority Status      83    8.20    No Material
Adverse Effect      83   

ARTICLE IX Affirmative Covenants

     83    9.1    Information Covenants      83   

 

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9.2

  Books, Records and Inspections      85   

9.3

  Maintenance of Insurance      86   

9.4

  Payment of Taxes      87   

9.5

  Existence      87   

9.6

  Compliance with Statutes, Regulations, Etc      87   

9.7

  [Reserved]      87   

9.8

  Maintenance of Properties      87   

9.9

  Unrestricted Subsidiaries      88   

9.10

  Additional Guarantors, Grantors and Collateral      88   

9.11

  Use of Proceeds      89   

9.12

  Further Assurances      90   

9.13

  Reserve Reports      90   

ARTICLE X Negative Covenants

     91   

10.1

  Limitation on Indebtedness      91   

10.2

  Limitation on Liens      94   

10.3

  Limitation on Fundamental Changes      97   

10.4

  Limitation on Sale of Assets      99   

10.5

  Limitation on Investments      99   

10.6

  Limitation on Restricted Payments      99   

10.7

  Limitations on Subordinated Debt Payments and Amendments      101   

10.8

  Negative Pledge Agreements      101   

10.9

  Limitation on Subsidiary Distributions      102   

10.10

  Hedge Agreements      104   

10.11

  Financial Performance Covenants      104   

10.12

  Transactions with Affiliates      105   

10.13

  Change in Business      106   

10.14

  Use of Proceeds      106   

ARTICLE XI Events of Default

     106   

11.1

  Payments      106   

11.2

  Representations, Etc      106   

11.3

  Covenants      107   

11.4

  Default Under Other Agreements      107   

11.5

  Bankruptcy, Etc      107   

11.6

  ERISA      108   

11.7

  Guarantee      108   

11.8

  Security Documents      108   

11.9

  Judgments      108   

11.10

  Change of Control      108   

ARTICLE XII The Administrative Agent

     109   

12.1

  Appointment      109   

12.2

  Delegation of Duties      110   

12.3

  Exculpatory Provisions      110   

12.4

  Reliance      111   

12.5

  Notice of Default      111   

12.6

  Non-Reliance on Administrative Agent and Other Lenders      112   

12.7

  No Other Duties, Etc      112   

12.8

  Indemnification      112   

12.9

  Agent in Its Individual Capacity      113   

 

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12.10

  Successor Agent      113   

12.11

  Withholding Tax      114   

12.12

  Security Documents and Guarantee      115   

12.13

  Right to Realize on Collateral and Enforce Guarantee      115   

12.14

  Administrative Agent May File Proofs of Claim      116   

ARTICLE XIII Miscellaneous

     116   

13.1

  Amendments, Waivers and Releases      116   

13.2

  Notices      118   

13.3

  No Waiver; Cumulative Remedies      119   

13.4

  Survival of Representations and Warranties      119   

13.5

  Payment of Expenses; Indemnification      119   

13.6

  Successors and Assigns; Participations and Assignments      121   

13.7

  Replacements of Lenders under Certain Circumstances      125   

13.8

  Adjustments; Set-off      126   

13.9

  Counterparts      127   

13.10

  Severability      127   

13.11

  Integration      127   

13.12

  GOVERNING LAW      127   

13.13

  Submission to Jurisdiction; Waivers      127   

13.14

  Acknowledgments      128   

13.15

  WAIVERS OF JURY TRIAL      129   

13.16

  Confidentiality      129   

13.17

  Release of Collateral and Guarantee Obligations      130   

13.18

  Borrowing Base Election      132   

13.19

  USA PATRIOT Act      132   

13.20

  Payments Set Aside      132   

13.21

  Reinstatement      132   

13.22

  Disposition of Proceeds      133   

 

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Schedules and Exhibits

 

Schedule 1.1(a)

   Commitments

Schedule 1.1(b)

   Swingline Subcommitments

Schedule 3.1

   Existing Credit Agreement Letters of Credit

Schedule 8.4

   Litigation

Schedule 8.12

   Subsidiaries

Schedule 10.1

   Closing Date Indebtedness

Schedule 10.2

   Closing Date Liens

Schedule 10.8

   Closing Date Negative Pledge Agreements

Schedule 10.9

   Closing Date Contractual Encumbrances

Schedule 10.12

   Closing Date Affiliate Transactions

Schedule 13.2

   Notice Addresses

Exhibit A

   Form of Notice of Borrowing

Exhibit B

   Form of Letter of Credit Request

Exhibit C

   Form of Guarantee

Exhibit D

   [Intentionally Omitted]

Exhibit E

   [Intentionally Omitted]

Exhibit F

   Form of Mortgage/Deed of Trust

Exhibit G

   Form of Closing Certificate

Exhibit H

   Form of Assignment and Acceptance

Exhibit I

   Form of Promissory Note

 

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This CREDIT AGREEMENT, dated as of December 15, 2014, is among CHESAPEAKE ENERGY
CORPORATION, an Oklahoma corporation (together with its permitted successors,
the “Borrower”), the banks, financial institutions and other lending
institutions from time to time parties as lenders hereto (each a “Lender” and,
collectively, the “Lenders”), MUFG UNION BANK, N.A., as Administrative Agent,
and each Swingline Lender and Letter of Credit Issuer from time to time party
hereto.

WHEREAS, the Borrower has requested that the Lenders extend credit to it from
time to time subject to the terms of this Agreement; and

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

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

ARTICLE I

DEFINITIONS

1.1 Defined Terms.

(a) Terms defined in the preamble have the meaning ascribed to them in the
preamble.

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

“ABR” shall mean for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Effective Rate plus  1⁄2 of 1%, (b) the rate of
interest in effect for such day as publicly announced from time to time by the
Administrative Agent as its “prime rate” and (c) the LIBOR Rate for a one-month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1.0%; provided that, for the avoidance
of doubt, for purposes of calculating the LIBOR Rate pursuant to clause
(c) above, the LIBOR Rate for any day shall be based on the rate per annum
determined by the Administrative Agent at approximately 11:00 a.m. (London time)
on such day by reference to the rate appearing on the Reuters Screen LIBOR01
Page (or any successor page or any successor service, or any substitute page or
substitute for such service, providing rate quotations comparable to the Reuters
Screen LIBOR01 Page, 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) for a period equal to one-month and
such rate shall in no event be less than zero for the purposes of this
Agreement. The “prime rate” is a rate set by the Administrative Agent based upon
various factors, including the Administrative Agent’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in the ABR due to a change in such rate announced by the
Administrative Agent, in the Federal Funds Effective Rate or in the one-month
LIBOR Rate shall take effect at the opening of business on the day specified in
the public announcement of such change.

 

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“ABR Loan” shall mean each Loan bearing interest based on the ABR.

“Additional Lender” shall have the meaning provided in Section 2.17(a).

“Adjusted Consolidated Net Tangible Assets” shall mean (without duplication), as
of the date of determination, (a) the sum of (i) discounted future net revenue
from proved oil and gas reserves of the Borrower and its Subsidiaries calculated
in accordance with SEC guidelines before any state or federal income taxes, as
estimated by petroleum engineers (which may include the Borrower’s internal
engineers) in a reserve report prepared as of the end of the Borrower’s most
recently completed fiscal year, as increased by, as of the date of
determination, the discounted future net revenue of (A) estimated proved oil and
gas reserves of the Borrower and its Subsidiaries attributable to any
acquisition consummated since the date of such year-end reserve report, and
(B) estimated proved oil and gas reserves of the Borrower and its Subsidiaries
attributable to extensions, discoveries and other additions and upward revisions
of estimates of proved oil and gas reserves due to exploration, development or
exploitation, production or other activities conducted or otherwise occurring
since the date of such year-end reserve report, which, in the case of clauses
(A) and (B), would, in accordance with standard industry practice, result in
such increases as calculated in accordance with SEC guidelines (utilizing the
prices utilized in such year-end reserve report), and decreased by, as of the
date of determination, the discounted future net revenue of (C) estimated proved
oil and gas reserves of the Borrower and its Subsidiaries produced or disposed
of since the date of such year-end reserve report and (D) reductions in the
estimated oil and gas reserves of the Borrower and its Subsidiaries since the
date of such year-end reserve report attributable to downward revisions of
estimates of proved oil and gas reserves due to exploration, development or
exploitation, production or other activities conducted or otherwise occurring
since the date of such year-end reserve report which, in the case of clauses
(C) and (D), would, in accordance with standard industry practice, result in
such decreases as calculated in accordance with SEC guidelines (utilizing the
prices utilized in such year-end reserve report); provided that, in the case of
each of the determinations made pursuant to clauses (A) through (D), such
increases and decreases may be estimated by the Borrower’s engineers, (ii) the
capitalized costs that are attributable to oil and gas properties of the
Borrower and its Subsidiaries to which no proved oil and gas reserves are
attributable, based on the Borrower’s books and records as of a date no earlier
than the date of the Borrower’s latest annual or quarterly financial statements,
(iii) the Net Working Capital on a date no earlier than the date of the
Borrower’s latest annual or quarterly financial statements and (iv) the greater
of (I) the net book value on a date no earlier than the date of the Borrower’s
latest annual or quarterly financial statements and (II) the appraised value, as
estimated by independent appraisers, of other tangible assets (including
Investments in unconsolidated Subsidiaries) of the Borrower and its
Subsidiaries, as of a date no earlier than the date of the Borrower’s latest
audited financial statements, minus (b) the sum of (i) minority interests,
(ii) any gas balancing liabilities of the Borrower and its Subsidiaries
reflected as a long-term liability in the Borrower’s latest annual or quarterly
financial statements, (iii) the discounted future net revenue, calculated in
accordance with SEC guidelines (utilizing the prices utilized in the Borrower’s
year-end reserve report), attributable to reserves which are required to be
delivered to third parties to fully satisfy the obligations of the Borrower and
its Subsidiaries with respect to VPPs on the schedules specified

 

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with respect thereto, (iv) the discounted future net revenue, calculated in
accordance with SEC guidelines, attributable to reserves subject to
Dollar-Denominated Production Payments which, based on the estimates of
production included in determining the discounted future net revenue specified
in (a) (i) above (utilizing the same prices utilized in the Borrower’s year-end
reserve report), would be necessary to fully satisfy the payment obligations of
the Borrower and its Subsidiaries with respect to Dollar-Denominated Production
Payments on the schedules specified with respect thereto and (v) the discounted
future net revenue, calculated in accordance with SEC guidelines (utilizing the
same prices utilized in the Borrower’s year-end reserve report), attributable to
reserves subject to participation interests, overriding royalty interests or
other interests of third parties, pursuant to participation, partnership, vendor
financing or other agreements then in effect, or which otherwise are required to
be delivered to third parties. If the Borrower changes its method of accounting
from the full cost method to the successful efforts method or a similar method
of accounting, Adjusted Consolidated Net Tangible Assets will continue to be
calculated as if the Borrower were still using the full cost method of
accounting. As used in this definition, “Net Working Capital” means (i) all
current assets of the Borrower and its Subsidiaries, minus (ii) all current
liabilities of the Borrower and its Subsidiaries, except current liabilities
included in Indebtedness.

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

“Administrative Agent” shall mean MUFG Union Bank, N.A., as the administrative
agent for the Lenders under this Agreement and the other Credit Documents, or
any successor administrative agent appointed in accordance with the provisions
of Section 12.10.

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

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

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

“Agent Bank” shall mean each of MUFG Union Bank, N.A., Wells Fargo Bank,
National Association, Bank of America, N.A., Crédit Agricole Corporate and
Investment Bank, and JPMorgan Chase Bank, N.A.

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

 

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

“Applicable Margin” shall mean, for any day, with respect to any ABR Loan or
LIBOR Loan, as the case may be, the rate per annum set forth in the grid below
based upon the Pricing Level in effect on such day:

 

     Applicable Rating
S&P/Moody’s    LIBOR
Loans      ABR
Loans      Commitment
Fee Rate  

Pricing Level 1

   BB/Ba2 or lower      200.0         100.0         35.0   

Pricing Level 2

   BB+/Ba1      162.5         62.5         25.0   

Pricing Level 3

   BBB-/Baa3      150.0         50.0         20.0   

Pricing Level 4

   BBB/Baa2      125.0         25.0         17.5   

Pricing Level 5

   BBB+/Baa1 or higher      112.5         12.5         15.0   

The applicable pricing level in the leftmost column in the table above (the
“Pricing Level”) will be based on the Applicable Ratings from S&P and Moody’s.
For purposes hereof, (a) if either S&P or Moody’s shall not have in effect an
Applicable Rating (other than by reason of the circumstances referred to in the
next succeeding paragraph), then the applicable Pricing Level will be based on
the single available Applicable Rating, (b) if the Applicable Ratings
established by S&P and Moody’s shall fall within different Pricing Levels, the
applicable Pricing Level shall be based on the higher of the two Applicable
Ratings unless one of the two ratings is two or more Pricing Levels lower than
the other, in which case the applicable Pricing Level shall be determined by
reference to the Pricing Level one rating lower than the higher of the two
Applicable Ratings, and (c) if the Applicable Ratings established by S&P and
Moody’s shall be changed other than as a result of a change in the rating system
of S&P or Moody’s, such change shall be effective as of the date on which it is
first announced by the applicable rating agency, irrespective of when notice of
such change shall have been furnished by the Borrower to the Administrative
Agent. Each change in the applicable rate shall apply during the period
commencing on the effective date of such change and ending on the day
immediately preceding the effective date of the next such change.

If the rating system of S&P or Moody’s shall change, or if either such rating
agency shall cease to be in the business of rating corporate debt obligations,
the Borrower and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Margin with respect to LIBOR Loans and ABR Loans and
the Commitment Fee Rate shall be determined by reference to the rating most
recently in effect prior to such change or cessation.

 

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For any day when no Applicable Rating is in effect, the Applicable Margin with
respect to LIBOR Loans and ABR Loans and the Commitment Fee Rate shall be the
rates set forth opposite Pricing Level 1.

“Applicable Rating” shall mean, for each of S&P and Moody’s, (a) the rating
assigned by such rating agency to the Borrower’s Index Debt, (b) if such rating
agency shall not have in effect a rating referred to in the preceding clause
(a), then the rating assigned by such rating agency to the Facility or (c) if
such rating agency shall not have in effect a rating referred to in either of
the preceding clause (a) or (b), the “company” or “corporate credit” rating
assigned by such rating agency to the Borrower.

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

“Approved Petroleum Engineers” shall mean any independent petroleum engineer
chosen by the Borrower and reasonably acceptable to the Administrative Agent.

“Assignment and Acceptance” shall mean an assignment and acceptance
substantially in the form of Exhibit H or such other form as may be approved by
the Administrative Agent.

“Authorized Officer” shall mean as to any Person the President, the Chief
Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the
Treasurer, the Vice President-Finance, the General Counsel, any Senior Vice
President or any Executive Vice President of such Person (or, in the case of any
limited partnership without its own officers, any of the foregoing of the
general partner of such limited partnership). Any document delivered hereunder
that is signed by an Authorized Officer shall be conclusively presumed to have
been authorized by all necessary corporate, limited liability company,
partnership and/or other action on the part of the Borrower or any other Credit
Party and such Authorized Officer shall be conclusively presumed to have acted
on behalf of such Person.

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

“Available Commitment” shall mean, at any time, (a) the Loan Limit at such time
minus (b) the Total Exposure at such time.

“Bank Price Deck” shall mean the Administrative Agent’s forward curve for each
of oil, natural gas and other Hydrocarbons, as applicable, furnished to the
Borrower by the Administrative Agent from time to time in accordance with the
terms of this Agreement.

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

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

 

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

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

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

“Borrowing” shall mean the incurrence of one Type of Loan or a Swingline Loan on
a given date (or resulting from conversions on a given date) having, in the case
of LIBOR Loans, the same Interest Period (provided that ABR Loans incurred
pursuant to Section 2.10(b) shall be considered part of any related Borrowing of
LIBOR Loans).

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

“Borrowing Base Deficiency” occurs if, at any time during a Borrowing Base
Trigger Period, the aggregate Total Exposure exceeds the Borrowing Base then in
effect. The amount of the Borrowing Base Deficiency is the amount by which Total
Exposure exceeds the Borrowing Base then in effect.

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

“Borrowing Base Required Lenders” shall mean, at any date, (a) Non-Defaulting
Lenders having or holding at least 80% of the unused Adjusted Total Commitment
at such date and the Total Exposure (excluding the Exposure of Defaulting
Lenders) at such date or (b) if the Total Commitment has been terminated,
Non-Defaulting Lenders having or holding at least 80% of the Total Exposure
(excluding the Exposure of Defaulting Lenders) at such date.

“Borrowing Base Trigger Date” shall have the meaning provided in
Section 9.10(a).

“Borrowing Base Trigger Event” shall mean the public announcement by Moody’s or
S&P that the Index Debt is rated Ba3 or lower from Moody’s or BB- or lower from
S&P or if the Index Debt is unrated by Moody’s and S&P.

“Borrowing Base Trigger Period” shall mean (a) the first Business Day following
a Borrowing Base Trigger Event until the first Business Day on which the rating
of the Index Debt is BB or higher from S&P (if then rated by S&P) and Ba2 or
higher from Moody’s (if then rated by Moody’s) or (b) the period commencing with
the date on which the Borrower elects under Section 13.18 to have the Facility
governed by a Borrowing Base and ending on any date on which the Borrower has
elected to cease to have the Facility governed by a Borrowing Base, provided
that on such date, no Borrowing Base Trigger Event is in effect.

 

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“Business Day” shall mean any day excluding Saturday, Sunday and any other day
on which banking institutions in New York City, New York are authorized by law
or other governmental actions to close, and, if such day relates to (a) any
interest rate settings as to a LIBOR Loan, (b) any fundings, disbursements,
settlements and payments in respect of any such LIBOR Loan, or (c) any other
dealings pursuant to this Agreement in respect of any such LIBOR Loan, such day
shall be a day on which dealings in deposits in Dollars are conducted by and
between banks in the London interbank eurodollar market.

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

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

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

“Cash Collateralize” shall have the meaning provided in Section 3.8(c) (and Cash
Collateral means cash that has been Cash Collateralized).

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

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

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. § 9601 et seq.

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

“Change in Law” shall mean the occurrence after the date of this Agreement of
any of the following: (a) the adoption of any law, rule, regulation or treaty,
(b) any change in any law, rule, regulation or treaty or in the interpretation,
implementation or application thereof by any Governmental Authority or
(c) compliance by any Lender or the Letter of Credit Issuer (or, for purposes of
clauses (a)(ii) or (c) of Section 2.10, by any lending office of such Lender or
by such Lender’s or the Letter of Credit Issuer’s holding company, if any) with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement;
provided that, notwithstanding anything herein to the contrary,

 

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(x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all
requests, rules, guidelines or directives thereunder or issued in connection
therewith and (y) all requests, rules, guidelines or directives promulgated by
the Bank for International Settlements, the Basel Committee on Banking
Supervision (or any successor or similar authority) or the United States or
foreign regulatory authorities, in each case pursuant to Basel III, shall be
deemed to be a “Change in “Law”, regardless of the date enacted, adopted or
issued.

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

(a) any “person” or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act, but excluding any employee benefit plan of such “person” or
“group” and their respective Subsidiaries and any Person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such
plan), shall at any time have acquired direct or indirect “beneficial ownership”
(as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) of the
outstanding common Stock of the Borrower having more than 35% of the ordinary
voting power for the election of directors of the Borrower; or

(b) occupation of a majority of the seats (other than vacant seats) on the Board
of Directors of the Borrower by persons who were neither (1) nominated by the
Board of Directors of the Borrower nor (2) appointed by directors so nominated.

“Closing Date” shall mean the date on which the conditions set forth in ARTICLE
VI and ARTICLE VII are satisfied (or waived in accordance with Section 13.1).

“Co-Documentation Agents” shall mean each of Bank of America, N.A., Credit
Agricole Corporate and Investment Bank, and JPMorgan Chase Bank, N.A., as
co-documentation agents for the Lenders under this Agreement and the other
Credit Documents.

“Co-Syndication Agents” shall mean each of MUFG Union Bank, N.A. and Wells Fargo
Bank, National Association, in their respective capacities as co-syndication
agents for the Lenders under this Agreement and the other Credit Documents.

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

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

“Collateral Coverage Ratio” shall mean as of any date of determination, the
ratio of the PV-9 of the Borrowing Base Properties to the lesser of (a) the
Borrowing Base (if any) and (b) the Commitments then in effect.

“Collateral Requirements” shall mean, during a Borrowing Base Trigger Period,
the collateral requirements set forth in Section 9.10 and in any other Security
Document sufficient to cause (a) the Borrowing Base to be at least equal to the
Total Exposure and (b) the Collateral Coverage Ratio to be at least equal to the
Minimum Collateral Coverage Ratio.

 

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“Commitment” shall mean, (a) with respect to each Lender that is a Lender on the
Closing Date, the amount set forth opposite such Lender’s name on Schedule
1.1(a) as such Lender’s “Commitment” and (b) in the case of any Lender that
becomes a Lender after the Closing Date, the amount specified as such Lender’s
“Commitment” in the Assignment and Acceptance (or other applicable document)
pursuant to which such Lender became a Lender hereunder, in each case as the
same may be changed from time to time pursuant to terms of this Agreement.

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

“Commitment Fee Rate” shall mean, for any day, with respect to the Available
Commitment on any day, the applicable rate per annum set forth next to the row
heading “Commitment Fee Rate” in the definition of “Applicable Margin”.

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

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

“Consenting Lender” shall have the meaning provided in Section 2.16(b).

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) interest expense, (c) depletion, depreciation and
amortization expense, (d) any loss on Dispositions of assets or retirement of
debt and other extraordinary or non-recurring charges or losses determined in
accordance with GAAP, (e) any other non-cash charge, non-cash expenses or
non-cash losses of any Group Member for such period (excluding any such charge,
expense or loss incurred in the ordinary course of business that constitutes an
accrual of or reserve for cash charges for any future period) including non-cash
losses or charges resulting from the requirements of SFAS 133 or 143, but cash
payments made during such period or in any future period in respect of such
non-cash charges, expenses or losses (other than any such excluded charge,
expense or loss as described above) shall be subtracted from Consolidated Net
Income in calculating Consolidated EBITDA for the period in which such payments
were made, and (f) any expense or loss in respect of a Qualifying VPP (other
than any expense or loss in respect of the marketing of production related to
any VPP Properties), minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income, (b) any
gains on Dispositions of assets or retirement of debt and other extraordinary or
non-recurring income or gains determined in accordance with GAAP, (c) any other
non-cash income or gain (excluding any items that represent the reversal of any
accrual of, or cash reserve for, anticipated cash charges in any prior period
that are described in the parenthetical to clause (e) above), including any
non-cash income or gains resulting from the requirements of SFAS 133 or 143, all
as determined on a consolidated basis in accordance with GAAP, and (d) any
income or gain in respect of a Qualifying VPP (other than any income or gain in
respect of the marketing of production related to any VPP Properties).

 

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If since the beginning of the four quarter period ending on the date for which
Consolidated EBITDA is determined, any Group Member shall have (a) made any
Investment in any Unrestricted Subsidiary, (b) made any acquisition or
Disposition of assets other than from or to another Group Member,
(c) consolidated or merged with or into any Person (other than another Group
Member), (d) disposed of the equity interests of a Group Member other than from
or to another Group Member, or (e) made any acquisition of a Person that becomes
a Group Member, then Consolidated EBITDA shall be calculated on a Pro Forma
Basis; provided that the Borrower may elect not to calculate Consolidated EBITDA
on a Pro Forma Basis with respect to any one or more Investments, acquisitions,
Dispositions, consolidations and mergers during a Test Period if the same would
not reasonably be expected to increase or decrease Consolidated EBITDA for such
Test Period by more than 5%.

“Consolidated Indebtedness” shall mean, as of any date of determination, without
duplication, the difference of (a) indebtedness of the Group Members of the type
described in clauses (a), (b), (c), (d), (e), (g) (excluding for the avoidance
of doubt Guarantee Obligations in respect to contingent obligations of the kind
referred to in clause (f)) and (h) (excluding for the avoidance of doubt
contingent obligations of the kind referred to in clause (f) secured by a Lien
on property) of the definition of Indebtedness as determined on a consolidated
basis in accordance with GAAP, minus (b) the total collected balances in
unencumbered Cash Equivalents properly reflected as assets of the Group Members
in accordance with GAAP.

“Consolidated Net Income” shall mean, for any period, the consolidated net
income (or loss) of the Group Members, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded, without
duplication, (a) the income (or loss) of any Person (other than a Group Member)
in which any Group Member has an ownership interest and any income represented
by any dividends, distributions or proceeds of redemptions of Capital Stock in
respect of any Person (other than a Group Member) in which a Group Member has an
ownership interest, except, in each case, to the extent of the amount of cash
dividends and other distributions actually paid to any Group Member during such
period, and (b) the undistributed earnings of any Group Member to the extent
that the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Credit Document) or Requirement of Law
applicable to such Group Member.

“Consolidated Total Capitalization” shall mean Consolidated Indebtedness plus
stockholders’ equity of the Group Members as determined on a consolidated basis
in accordance with GAAP; excluding, however, the stockholder’s equity of any
Group Member attributable to such Group Member’s ownership of Stock in any
Unrestricted Subsidiary; provided, however, that all calculations of
Consolidated Total Capitalization beginning with the fiscal quarter ended
December 31, 2014 shall exclude the effects of any write down of Oil and Gas
Properties which is required under Rule 4-10 (Financial Accounting and Reporting
for Oil and Gas Producing Activities Pursuant to the Federal Securities Laws and
the Energy Policy and Conservation Act of 1975) of Regulation S-X, promulgated
by SEC regulation, or by the equivalent write down required by GAAP.

 

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

“Credit Documents” shall mean this Agreement, the Guarantee, each Letter of
Credit, any promissory notes issued by the Borrower under this Agreement and
during any Borrowing Base Trigger Period, the Security Documents.

“Credit Event” shall mean and include the making (but not the conversion or
continuation) of a Loan and the issuance of a Letter of Credit.

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

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

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

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

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

“Determination Date” shall have the meaning provided in Section 2.14(d).

“Disposition” shall mean, with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms “Dispose” and “Disposed of” shall have correlative meanings.

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

 

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

“Dollar-Denominated Production Payments” shall mean production payment
obligations recorded as liabilities in accordance with GAAP, together with all
undertakings and obligations in connection therewith.

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

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

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

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

“Environmental Law” shall mean any applicable Federal, state, or local statute,
law (including common law), rule, regulation, ordinance, or code of any
Governmental Authority now or hereafter in effect and in each case as amended,
and any binding judicial or administrative interpretation thereof, including any
binding judicial or administrative order, consent decree or judgment, relating
to the protection of the environment, including ambient air, surface water,
groundwater, land surface and subsurface strata and natural resources such as
wetlands, or human health or workplace safety (to the extent relating to human
exposure to Hazardous Materials), or the release or threatened release of
Hazardous Materials.

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

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
that together with the Borrower would be deemed to be a “single employer” within
the meaning of 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.

“Event of Default” shall have the meaning provided in Article XI.

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

“Exchange Rate” shall mean on any day with respect to any currency (other than
Dollars), the rate at which such currency may be exchanged into any other
currency (including Dollars), as set forth at approximately 11:00 a.m. (London
time) on such day on the Reuters World Currency Page for such currency. In the
event that such rate does not appear on any Reuters World Currency Page, the
Exchange Rate shall be determined by reference to such other

 

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publicly available service for displaying exchange rates as may be agreed by the
Administrative Agent and the Borrower, or, in the absence of such agreement,
such Exchange Rate shall instead be the arithmetic average of the spot rates of
exchange of the Administrative Agent in the market where its foreign currency
exchange operations in respect of such currency are then being conducted, at or
about 11:00 a.m., local time, on such date for the purchase of the relevant
currency for delivery two Business Days later.

“Excluded Subsidiary” shall mean (a) any Disregarded Entity substantially all
the assets of which consist of Stock and Stock Equivalents of Foreign Corporate
Subsidiaries or FSHCOs, (b) each Domestic Subsidiary that is prohibited by any
applicable Contractual Requirement (not entered into in contemplation of this
Agreement) or Requirement of Law from guaranteeing or granting Liens to secure
the Obligations (for so long as such restriction or any replacement or renewal
thereof is in effect) or that would require consent, approval, license or
authorization of a Governmental Authority to guarantee or grant Liens to secure
the Obligations (unless such consent, approval, license or authorization has
been received), (c) each Domestic Subsidiary that is a Subsidiary of a Foreign
Corporate Subsidiary, (d) any Foreign Corporate Subsidiary or FSHCO, (e) each
Unrestricted Subsidiary and (f) any other Domestic Subsidiary with respect to
which, (i) in the reasonable judgment of the Administrative Agent and the
Borrower, the cost or other consequences of providing a Guarantee of the
Obligations shall be excessive in view of the benefits to be obtained by the
Lenders therefrom or (ii) providing such a Guarantee would result in material
adverse tax consequences as reasonably determined by the Borrower. As of the
Closing Date, there are no Excluded Subsidiaries other than the Unrestricted
Subsidiaries set forth on Schedule 8.12.

“Excluded Taxes” shall mean, 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 any Credit Party hereunder or under any other Credit Document,
(i) Taxes imposed on or measured by its overall net income or branch profits
(however denominated, and including (for the avoidance of doubt) any backup
withholding in respect thereof under Section 3406 of the Code or any similar
provision of state, local or foreign law), and franchise (and similar) Taxes
imposed on it (in lieu of net income Taxes), in each case by a jurisdiction
(including any political subdivision thereof) as a result of such recipient
being organized in, having its principal office in, or in the case of any
Lender, having its applicable lending office in, such jurisdiction, or as a
result of any other present or former connection with such jurisdiction (other
than any such connection arising solely from this Agreement or any other Credit
Documents or any transactions contemplated thereunder), (ii) except in the case
of a Lender that is an assignee pursuant to a request by the Borrower under
Section 13.7, in the case of a Non-U.S. Lender, any United States federal
withholding Tax imposed on any payment by or on account of any obligation of any
Credit Party hereunder or under any other Credit Document that (A) is required
to be imposed on amounts payable to such Non-U.S. Lender pursuant to laws in
force at the time such Non-U.S. Lender becomes a party hereto (or designates a
new lending office), except to the extent that such Non-U.S. Lender (or its
assignor, if any) was entitled, immediately prior to the designation of a new
lending office (or assignment), to receive additional amounts or indemnification
payments from any Credit Party with respect to such withholding Tax pursuant to
Section 5.4 or (B) is attributable to such Non-U.S. Lender’s failure to comply
with Section 5.4(e) or Section 5.4(i) or (iii) any United States federal
withholding Tax imposed under FATCA.

 

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“Existing Credit Agreement” shall mean the Eighth Amended and Restated Credit
Agreement dated as of December 2, 2010, among Chesapeake Exploration, L.L.C.,
certain subsidiaries of the Borrower, as co-borrowers, MUFG Union Bank, N.A., as
administrative agent, and the other lenders party thereto, as amended,
supplemented or otherwise modified prior to the date hereof.

“Existing Maturity Date” shall have the meaning provided in Section 2.16(b).

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

“Facility” shall mean the Commitments, the Loans, the Swingline Loans and
Letters of Credit issued hereunder.

“Facility Termination” shall have the meaning provided in Section 13.17(b).

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

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

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the per annum rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, 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 date that is a Business Day,
the Federal Funds Effective Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal Funds brokers of recognized standing selected by it.

“Financial Performance Covenants” shall mean the covenants of the Borrower set
forth in Section 10.11.

“First Scheduled Redetermination Date” shall mean, with respect to the Borrowing
Base, the first June 15th occurring more than six (6) months after a Borrowing
Base Trigger Event and, with respect to PV-9, the first June 15th or
October 30th occurring more than six (6) months after a Borrowing Base Trigger
Event.

 

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

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

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

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

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

“Governmental Authority” shall mean any nation, sovereign or government, any
state, province, territory or other political subdivision thereof, and any
entity or authority exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including a central
bank or stock exchange and any supra-national bodies such as the European Union
or the European Central Bank.

“Group Members” shall mean, collectively, the Borrower and each of its
Restricted Subsidiaries.

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

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

 

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“Guarantor Release Period” shall mean any period during which no Subsidiary of
the Borrower is a guarantor with respect to the Secured Hedge Facility, any
Indenture or any Permitted Additional Debt.

“Guarantors” shall mean each Material Subsidiary (other than any Excluded
Subsidiary).

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

“Hedge Agreements” shall mean (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, fixed-price physical
delivery contracts, whether or not exchange traded, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including
any such obligations or liabilities under any Master Agreement. Notwithstanding
the foregoing, agreements or obligations entered into in the ordinary course of
business to physically buy or sell any commodity produced from the Borrower’s
and its Subsidiaries’ Oil and Gas Properties or electricity generation
facilities under an agreement that has a tenor under 90 days shall not be
considered Hedge Agreements.

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements,
after taking into account the effect of any netting agreement relating to such
Hedge Agreements, (a) for any date on or after the date such Hedge Agreement has
been closed out and termination value(s) determined in accordance therewith,
such termination value(s), and (b) for any date prior to the date referenced in
clause (a), the amount(s) determined as the mark-to-market value(s) for such
Hedge Agreement, as determined based upon one or more mid-market or other
readily available quotations provided by any recognized dealer in such Hedge
Agreement (including any Lender or any Affiliate of a Lender).

“Historical Financial Statements” shall mean (a) the audited combined balance
sheets of the Borrower and its consolidated Subsidiaries as of December 31, 2012
and December 31, 2013, and the related audited combined statements of income and
comprehensive income, statements

 

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of net investment and statements of cash flows for each of the fiscal years in
the two-year period ended December 31, 2013 and (b) the unaudited combined
balance sheet of the Borrower and its consolidated Subsidiaries as of
September 30, 2014, and the related unaudited combined statements of income and
comprehensive income and statements of cash flows for the nine-month period
ended September 30, 2014.

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

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

“Immaterial Subsidiary” shall mean any Subsidiary of the Borrower that is not an
Unrestricted Subsidiary and that as of any applicable date of determination does
not have (a) direct Indebtedness in the aggregate in excess of $10,000,000 or
(b) Guarantee Obligations in the aggregate excess of $10,000,000 or (c) assets
or annual revenues in excess of $10,000,000.

“Increasing Lender” shall have the meaning provided in Section 2.17(a).

“Incremental Agreement” shall have the meaning provided in Section 2.17(c).

“Incremental Increase” shall have the meaning provided in Section 2.17(a).

“Indebtedness” of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person’s business
and other obligations to the extent such obligations may be satisfied at such
Person’s sole discretion by the issuance of common stock of such Person),
(c) all obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations of such Person,
(f) all obligations of such Person, contingent or otherwise, as an account party
or applicant under or in respect of banker’s acceptances, letters of credit, or
similar arrangements, (g) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (f) above, (h) all
obligations of the kind referred to in clauses (a) through (f) above secured by
(or for which the holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned by such Person
(including accounts and contract rights, but excluding any Stock in joint
ventures or Unrestricted Subsidiaries to the extent the Liens on such Stock
secures Indebtedness of such joint venture or such Unrestricted Subsidiary that
is nonrecourse to any Group Member), whether or not such Person has assumed or
become liable for the payment of such obligation, provided that the amount of
Indebtedness for purposes of this clause (h) shall

 

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be an amount equal to the lesser of the unpaid amount of such Indebtedness and
the Fair Market Value of the property subject to such Lien, (i) liabilities with
respect to payments received in consideration of oil, gas, or other minerals yet
to be acquired or produced at the time of payment other than in respect of a
Qualifying VPP (including obligations under “take-or-pay” contracts to deliver
gas in return for payments already received and the undischarged balance of any
production payment (other than a Qualifying VPP) created by such Person or for
the creation of which such Person directly or indirectly received payment), and
(j) for the purposes of Sections 10.1, 10.2 and 11.4 only, all net obligations
of such Person in respect of Hedge Agreements (and any reference to the
“principal amount” of obligations, or Indebtedness, in respect of any Hedge
Agreement shall be the Hedge Termination Value at the relevant time of
determination). 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 expressly provide that such Person is
not liable therefor. Notwithstanding the foregoing, (i) any Indebtedness that
has been defeased in accordance with GAAP or defeased pursuant to the deposit of
cash or cash equivalents (in an amount sufficient to satisfy all such
obligations relating to such Indebtedness at maturity or redemption, as
applicable, and all payments of interest and premium, if any) in a trust or
account created or pledged for the sole benefit of the holders of such
Indebtedness, and subject to no other Liens, and the other applicable terms of
the instrument governing such Indebtedness, shall not constitute or be deemed
Indebtedness; provided that such defeasance has been made in a manner not
prohibited by this Agreement, (ii) for purposes of Sections 10.1 and 10.11, a
Qualifying VPP shall not be treated as Indebtedness and (iii) Indebtedness shall
not include endorsements of checks, bills of exchange and other instruments for
deposit or collection in the ordinary course of business.

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

“Indemnified Taxes” shall mean all Taxes imposed on or with respect to or
measured by, any payment by or on account of any obligation of any Credit Party
hereunder or under any other Credit Document other than (a) Excluded Taxes,
(b) Other Taxes and (c) any interest, penalties or expenses caused by the
Administrative Agent’s or Lender’s gross negligence or willful misconduct.

“Indentures” shall mean each indenture (including any supplemental indenture)
governing any outstanding senior, public, unsecured, long-term notes of the
Borrower issued prior to the Closing Date or issued from time to time after the
Closing Date as permitted under Section 10.1.

“Index Debt” shall mean the senior, unsecured, long-term indebtedness for
borrowed money of the Borrower that is not guaranteed by any other Person or
subject to any other credit enhancement.

“Ineligible Person” shall mean, on any date, (a) a natural person (or a company,
investment vehicle or trust for, or owned and operated for the primary benefit
of, a natural person), (b) a Defaulting Lender or any parent entity thereof,
(c) the Borrower or any Subsidiary or Affiliate of the Borrower or (d) any
competitor of the Borrower which has been designated by

 

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the Borrower as an “Ineligible Person” by written notice to the Administrative
Agent and the Lenders (including by posting such notice electronically) not less
than 2 Business Days prior to such date; provided that “Ineligible Person” shall
exclude any Person that the Borrower has designated as no longer being an
“Ineligible Person” by written notice delivered to the Administrative Agent from
time to time.

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

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

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

“Internal Reserve Report” shall have the meaning provided in Section 9.13(a).

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

“Investment” shall mean, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of Stock, Stock Equivalents,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person (including any “short sale” or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale), (b) the making of any deposit with, or advance, loan or other
extension of credit to, assumption of Indebtedness of, or capital contribution
to, or purchase or other acquisition of an equity participation in, any other
Person (including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person) (including any partnership or joint venture), (c) the entering into
of any guarantee of, or other contingent obligation with respect to,
Indebtedness or (d) the purchase or other acquisition (in one transaction or a
series of transactions) of (i) all or substantially all of the property and
assets or business of another Person or (ii) assets constituting a business
unit, line of business or division of such Person; provided that, in the event
that any Investment is made by the Borrower or any Restricted Subsidiary in any
Person through substantially concurrent interim transfers of any amount through
one or more other Restricted Subsidiaries, then such other substantially
concurrent interim transfers shall be disregarded for purposes of Section 10.5.

“Investment Grade Period” shall mean any period when each of Moody’s and S&P has
publically announced that the Index Debt is rated Baa3 or higher (from Moody’s)
or BBB- or higher (from S&P); provided, however, that if one of such ratings is
Ba3 (or lower) or BB- (or lower) as applicable, even if the other rating is Baa3
or BBB- or higher, as applicable, there shall not be an Investment Grade Period.

 

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“ISP” shall mean, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking
Law & Practice (or such later version thereof as may be in effect at the time of
issuance).

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

“Joint Bookrunners” shall mean MUFG Union Bank, N.A. and Wells Fargo Securities,
LLC, each in its capacity as joint bookrunner in respect of the Facility.

“Joint Lead Arrangers” shall mean MUFG Union Bank, N.A. and Wells Fargo
Securities, LLC, each in its capacity as joint lead arranger in respect of the
Facility.

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

“L/C Obligations” shall mean, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unpaid Drawings. For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any amount
may still be drawn thereunder by reason of the operation of Rule 3.14 of the
ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so
remaining available to be drawn.

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

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

“Lender” shall have the meaning provided in the preamble to this Agreement.
Unless the context otherwise requires, the term “Lenders” includes the Swingline
Lenders.

“Lender Default” shall mean (a) the refusal or failure of any Lender to make
available its portion of any incurrence of Loans or participations in Letters of
Credit or Swingline Loans, which refusal or failure is not cured within two
Business Days after the date of such refusal or failure, unless such Lender
notifies the Administrative Agent and the Borrower in writing that such failure
is the result of such Lender’s good faith determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in such writing)
has not been satisfied; (b) the failure of any Lender to pay over to the
Administrative Agent, any Letter of Credit Issuer, any Swingline Lender or any
other Lender any other amount required to be paid by it hereunder within two
Business Days of the date when due, unless the subject of a good faith dispute;
(c) a Lender has notified the Borrower or the Administrative Agent in writing
that it does not intend or expect to comply with any of its funding obligations
or has made a public statement to that effect with respect to its funding
obligations under the Facility (unless such writing or public statement

 

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relates to such Lender’s obligation to fund a Loan hereunder and states that
such position is based on such Lender’s good faith determination that a
condition precedent to funding (which condition precedent, together with any
applicable default, shall be specifically identified in such writing or public
statement) cannot be satisfied); (d) the failure, within three Business Days
after a written request by the Administrative Agent or the Borrower, by a Lender
to confirm in writing to the Administrative Agent and the Borrower that it will
comply with its obligations under the Facility (provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (d) upon receipt of such
written confirmation by the Administrative Agent and the Borrower), or (e) a
Distressed Person has admitted in writing that it is insolvent or such
Distressed Person becomes subject to a Lender-Related Distress Event.

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

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

“Letter of Credit Commitment” shall mean $1,500,000,000, as the same may be
reduced from time to time pursuant to Section 3.1, provided that no Letter of
Credit Issuer shall be obligated to issue Letters of Credit in an aggregate face
amount in excess of $300,000,000 outstanding at any time (but may, in its sole
discretion, elect to do so).

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

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

“Letter of Credit Issuer” shall mean each Agent Bank and each other Lender
appointed as a Letter of Credit Issuer pursuant to Section 3.6, including in
each case, any of their respective Affiliates or any replacement or successor
appointed pursuant to Section 3.6. References herein and in the other Credit
Documents to the Letter of Credit Issuer shall be deemed to refer to the Letter
of Credit Issuer in respect of the applicable Letter of Credit or to all Letter
of Credit Issuers, as the context requires.

 

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

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

“Leverage Ratio” shall mean, as of the last day of each fiscal quarter of the
Borrower, the ratio of (a) Consolidated Indebtedness as of the last day of such
fiscal quarter to (b) Consolidated EBITDA for the Test Period ending on the last
day of such fiscal quarter.

“LIBOR Loan” shall mean any Loan bearing interest at a rate determined by
reference to the LIBOR Rate (other than an ABR Loan bearing interest by
reference to the LIBOR Rate by virtue of clause (c) of the definition of ABR).

“LIBOR Rate” shall mean, for any Interest Period for each LIBOR Loan, the London
interbank offered rate as administered by Intercontinental Exchange Benchmark
Administration Ltd. (or any other Person that takes over the administration of
such rate for Dollars) for a period equal in length to such Interest Period as
displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such
rate (or, in the event such rate does not appear on a Reuters page or screen, on
any successor or substitute page on such screen that displays such rate, or on
the appropriate page of such other information service that publishes such rate
from time to time as selected by the Administrative Agent in its reasonable
discretion; in each case the “LIBOR Screen Rate”) at approximately 11:00 A.M.
(London time) two (2) Business Days prior to the first day of such Interest
Period; provided that, if the LIBOR Screen Rate shall be less than zero, such
rate shall be deemed to be zero for the purposes of this Agreement and provided,
further, if the LIBOR Screen Rate shall not be available at such time for such
Interest Period (an “Impacted Interest Period”) with respect to Dollars then the
LIBOR Rate shall be the Interpolated Rate, provided, that, if any Interpolated
Rate shall be less than zero, such rate shall be deemed to be zero for purposes
of this Agreement.

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

“Loan” shall mean a Loan made pursuant to Section 2.1(a)(i).

“Loan Limit” shall mean (a) at any time during a Borrowing Base Trigger Period
(other than as set forth in clause (b)), the lesser of (i) the Total Commitments
at such time and (ii) the Borrowing Base at such time (including as it may be
reduced pursuant to Section 2.14(e)) and (b) at any time during (1) an Unsecured
Period and (2) a Borrowing Base Trigger Period, prior to the effectiveness of
the Borrowing Base pursuant to Section 2.14(a) or (h) the Total Commitments at
such time.

 

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“Majority Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or
holding more than 50% of the unused Adjusted Total Commitment at such date and
the Total Exposure (excluding the Exposure of Defaulting Lenders) at such date
or (b) if the Total Commitment has been terminated, or for the purposes of
acceleration pursuant to Article XI, Non-Defaulting Lenders having or holding
more than 50% of the Total Exposure (excluding the Exposure of Defaulting
Lenders) at such date.

“Mandatory Borrowing” shall have the meaning provided in Section 2.1(c).

“Material Adverse Effect” shall mean a circumstance or condition affecting the
business, assets, operations, properties or financial condition of the Borrower
and the Subsidiaries on a consolidated basis, that would, individually or in the
aggregate, materially adversely affect (a) the ability of the Borrower and the
other Credit Parties, taken as a whole, to perform their payment obligations
under this Agreement or any of the other Credit Documents or (b) the rights and
remedies of the Administrative Agent and the Lenders under this Agreement or
under any of the other Credit Documents.

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

“Maturity Date” shall mean the fifth anniversary of the Closing Date.

“Maximum Aggregate Amount” shall mean $5,000,000,000.

“Minimum Collateral Coverage Ratio” shall mean a ratio of 1.5 to 1.0.

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

“Mortgage” shall mean a mortgage or a deed of trust, deed to secure debt, trust
deed, assignment of as-extracted collateral, fixture filing or other security
document entered into by the owner of a Mortgaged Property and the
Administrative Agent for the benefit of the Secured Parties in respect of that
Mortgaged Property, substantially in the form of Exhibit F (with such changes
thereto as may be necessary to account for local law matters) or otherwise in
such form as agreed between the Borrower and the Administrative Agent.

“Mortgaged Property” shall mean the real property and improvements thereto with
respect to which a Mortgage is required to be granted pursuant to Section 9.10;
provided that, notwithstanding any provision in any Mortgage to the contrary, in
no event shall any Building (as defined in the applicable Flood Insurance
Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood
Insurance Regulation) located on the Mortgaged Properties (as defined in the
applicable Mortgage) within an area having special flood hazards and in which
flood insurance is available under the National Flood Insurance Act of 1968 be
included in the definition of “Mortgaged Property” or “Mortgaged Properties” and
no such Building or Manufactured (Mobile) Home shall be encumbered by any
Mortgage. As used herein, “Flood Insurance Regulations” shall mean (i) the
National Flood Insurance Act of 1968 as now or

 

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hereafter in effect or any successor statute thereto, (ii) the Flood Disaster
Protection Act of 1973 as now or hereafter in effect or any successor statue
thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC
4001, et seq.), as the same may be amended or recodified from time to time, and
(iv) the Flood Insurance Reform Act of 2004 and any regulations promulgated
thereunder.

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA that is subject to Title IV of ERISA and is or was
within any of the last preceding six years contributed to by the Borrower or an
ERISA Affiliate.

“Net Debt to Capitalization Ratio” shall mean, at any time, the ratio, expressed
as a percentage, of Consolidated Indebtedness as of such date to Consolidated
Total Capitalization as of such date.

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

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

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

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

“Notice of Borrowing” shall have the meaning provided in Section 2.3(a) and, if
in writing, shall be substantially in the form of Exhibit A or such other form
as shall be approved by the Administrative Agent (acting reasonably).

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

“Obligations” shall mean all advances to, and debts, liabilities, obligations,
covenants and duties of, any Credit Party arising under any Credit Document or
otherwise with respect to any Loan, any Swingline Loan, or any Letter of Credit
(including any Unpaid Drawings), in each case, entered into with the Borrower or
any other Credit Party, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against any Credit Party or any Affiliate thereof in any
proceeding under any bankruptcy or insolvency law naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Credit Parties under the Credit Documents
include the obligation (including Guarantee Obligations) to pay principal,
interest, charges, expenses, fees, attorney costs, indemnities and other amounts
payable by any Credit Party under any Credit Document.

“Oil and Gas Properties” shall mean (a) Hydrocarbon Interests, (b) the
properties now or hereafter pooled or unitized with Hydrocarbon Interests,
(c) all presently existing or future unitization, pooling agreements and
declarations of pooled units and the units created thereby

 

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

“Other Taxes” shall mean any and all present or future stamp, registration,
documentary, intangible, recording, filing or any other excise, property or
similar taxes (including interest, fines, penalties, additions to tax and
related, reasonable, out-of-pocket expenses with regard thereto) arising from
any payment made hereunder or made under any other Credit Document or from the
execution or delivery of, registration or enforcement of, consummation or
administration of, or otherwise with respect to, this Agreement or any other
Credit Document; provided that such term shall not include any of the foregoing
Taxes (i) that result from an assignment, grant of a participation pursuant to
Section 13.6(c) or transfer or assignment to or designation of a new lending
office or other office for receiving payments under any Credit Document
(“Assignment Taxes”) to the extent such Assignment Taxes are imposed as a result
of a connection between the assignor/participating Lender and/or the
assignee/Participant and the taxing jurisdiction (other than a connection
arising solely from any Credit Documents or any transactions contemplated
thereunder), except to the extent that any such action described in this proviso
is requested or required by the Borrower, or (ii) Excluded Taxes.

“Overnight Rate” shall mean, for any day, the greater of (a) the Federal Funds
Effective Rate and (b) an overnight rate determined by the Administrative Agent
or the Letter of Credit Issuer, as the case may be, in accordance with banking
industry rules on interbank compensation.

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

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

 

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“Patriot Act” shall have the meaning provided in Section 13.19.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.

“Permitted Additional Debt” shall mean any unsecured senior, senior subordinated
or subordinated Indebtedness issued by the Borrower or a Guarantor, (a) the
terms of which do not provide for any scheduled repayment, mandatory redemption
or sinking fund obligation prior to the 91st day after the Maturity Date (other
than customary offers to purchase upon a change of control, asset sale or
casualty or condemnation event and customary acceleration rights after an event
of default), (b) if such Indebtedness is senior subordinated or subordinated
Indebtedness, the terms of such Indebtedness provide for customary subordination
of such Indebtedness to the Obligations, and (c) as to which no Subsidiary of
the Borrower (other than a Guarantor) is an obligor under such Indebtedness.

“Permitted Liens” shall mean:

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

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

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

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

 

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

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

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

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

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

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

(l) Liens created in the ordinary course of business in favor of banks and other
financial institutions over credit balances of any bank accounts of the Borrower
and the Restricted Subsidiaries held at such banks or financial institutions, as
the case may be, to facilitate the operation of cash pooling and/or interest
set-off arrangements in respect of such bank accounts in the ordinary course of
business;

(m) Liens which arise in the ordinary course of business under operating
agreements (including preferential purchase rights, consents to assignment and
other restrains on alienation), joint operating agreements, joint venture
agreements, oil and gas partnership agreements, oil and gas leases, farm-out
agreements, farm-in agreements, division orders, contracts for the sale,
transportation or exchange of oil and natural gas, unitization and pooling
declarations and agreements, area of mutual interest agreements, overriding
royalty and royalty agreements, reversionary interests, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection,

 

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repressuring and recycling agreements, salt water or other disposal agreements,
seismic or other geophysical permits or agreements, and other agreements that
are usual and customary in the oil and gas business and are for claims which are
not delinquent or that are being contested in good faith and by appropriate
proceedings for which appropriate reserves have been established to the extent
required by and in accordance with GAAP; provided that any such Lien referred to
in this clause does not in the aggregate have a Material Adverse Effect;

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

(o) Liens arising under statutory provisions of applicable law with respect to
production purchased from others; and

(p) Liens securing the Secured Hedge Facility.

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

“Permitted Refinancing Indebtedness” shall mean, with respect to any
Indebtedness (the “Refinanced Indebtedness”), any Indebtedness issued or
incurred in exchange for, or the net proceeds of which are used to modify,
extend, refinance, renew, replace or refund (collectively to “Refinance” or a
“Refinancing” or “Refinanced”), such Refinanced Indebtedness (or previous
refinancing thereof constituting Permitted Refinancing Indebtedness); provided
that (A) the principal amount (or accreted value, if applicable) of any such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Refinanced Indebtedness outstanding
immediately prior to such Refinancing except by an amount equal to the unpaid
accrued interest and premium thereon plus other amounts paid and fees and
expenses incurred in connection with such Refinancing plus an amount equal to
any existing commitment unutilized and letters of credit undrawn thereunder,
(B) if the Indebtedness being Refinanced is Indebtedness permitted by
Section 10.1(g) or 10.1(h), the direct and contingent obligors with respect to
such Permitted Refinancing Indebtedness are not changed (except that a Credit
Party may be added as an additional obligor), (C) other than with respect to a
Refinancing in respect of Indebtedness permitted pursuant to Section 10.1(f),
such Permitted Refinancing Indebtedness shall have a final maturity date equal
to or later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Refinanced Indebtedness, and (D) if the Indebtedness being Refinanced is
Indebtedness permitted by Section 10.1(g) or 10.1(h)), terms and conditions of
any such Permitted Refinancing Indebtedness, taken as a whole, are not
materially less favorable to the Lenders than the terms and conditions of the
Refinanced Indebtedness being Refinanced (including, if applicable, as to
collateral priority and subordination, but excluding as to interest rates, fees,
floors, funding discounts and redemption or prepayment premiums); provided that
a certificate of an Authorized Officer of the Borrower delivered to the
Administrative Agent at least five Business Days prior to the incurrence or
issuance of such Indebtedness, together with a

 

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reasonably detailed description of the material terms and conditions of such
Indebtedness or drafts of the documentation relating thereto, stating that the
Borrower has determined in good faith that such terms and conditions satisfy the
foregoing requirement shall be conclusive evidence that such terms and
conditions satisfy the foregoing requirement.

“Person” shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any Governmental Authority.

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

“Plan” shall mean any single-employer plan, as defined in Section 4001 of ERISA
and subject to Title IV of ERISA, that is or was within any of the preceding six
years maintained or contributed to (or to which there is or was an obligation to
contribute or to make payments to) by the Borrower or an ERISA Affiliate.

“Pricing Level” shall have the meaning provided in the definition of Applicable
Margin.

“Pro Forma Basis” shall mean, with respect to compliance with any test or
covenant or calculation of any ratio (or any component thereof) hereunder in
connection with any incurrence, Investment, acquisition, Disposition,
consolidation, merger, designation, assumption, payment or any other
transaction, a determination or calculation of such test, covenant or ratio (or
component) that is made (a) in good faith by the chief financial officer,
principal accounting officer or treasurer of the Borrower and reasonably
acceptable to the Administrative Agent, (b) as of the last day of the most
recently ended Test Period as if the relevant incurrence, Investment,
acquisition, Disposition, consolidation, merger, designation, assumption,
payment or other transaction had occurred on the first day of such Test Period,
and (c) at the option of the Borrower, giving effect to any anticipated or
proposed change in operations, revenues, expenses or other items included in the
computation of Consolidated EBITDA, provided that, in the case of this clause
(c), for any Test Period, the aggregate amount of such adjustments added back in
determining Consolidated EBITDA for such Test Period shall not exceed 5% of the
Consolidated EBITDA for such Test Period.

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

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

“Proposed PV-9” shall have the meaning provided in Section 2.14(c)(i).

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

“Proved Non-Producing Reserves” shall mean Proved Reserves that, in accordance
with Petroleum Industry Standards, are classified as “Developed Non-Producing
Reserves”.

 

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

“Proved Undeveloped Reserves” shall mean Proved Reserves that, in accordance
with Petroleum Industry Standards, are classified as “Undeveloped Reserves”.

“PV-9” shall mean, with respect to any Proved Reserves expected to be produced
from any Borrowing Base Properties, the net present value, discounted at 9% per
annum, of the future net revenues expected to accrue to the Credit Parties’
collective interests in such reserves during the remaining expected economic
lives of such reserves, calculated using the Bank Price Deck that has been
delivered to the Borrower by the Administrative Agent. The PV-9 attributable to
Proved Non-Producing Reserves and Proved Undeveloped Reserves (in the aggregate)
shall not exceed 35% of aggregate PV-9.

“PV-9 Deficiency” occurs if, at any time during a Borrowing Base Trigger Period,
the Collateral Coverage Ratio is less than the Minimum Collateral Coverage
Ratio.

“Qualifying VPP” shall mean (a) each VPP existing on the Closing Date and
(b) any VPP granted by a Group Member or Group Members (the “VPP Seller”) to the
purchaser of the VPP (the “VPP Buyer”); provided that (i) during a Borrowing
Base Trigger Period, no portion of the working or other interests in oil and gas
properties burdened by the VPP (the “VPP Properties”) constitute Collateral,
(ii) the consideration for such VPP consists only of cash or cash equivalents,
(iii) any obligation of any Group Member to purchase the VPP Buyer’s share of
production is at a fair market index price in effect from time to time (adjusted
for shrinkage and transportation costs, as applicable), (iv) any Liens securing
the VPP or any related obligations of the VPP Seller to the VPP Buyer are
limited to the VPP Seller’s retained interests in the VPP Properties and the
production therefrom and its rights, titles and interests related thereto, and
(v) no Default or Event of Default shall have occurred and be continuing at the
time of the grant of the VPP or shall result therefrom.

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

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

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

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

 

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“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

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

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the directors, officers, employees, agents and members
of such Person or such Person’s Affiliates.

“Required Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or
holding at least 66-2/3% of the unused Adjusted Total Commitment at such date
and the Total Exposure (excluding the Exposure of Defaulting Lenders) at such
date or (b) if the Total Commitment has been terminated, Non-Defaulting Lenders
having or holding at least 66-2/3% of the Total Exposure (excluding the Exposure
of Defaulting Lenders) at such date.

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

“Reserve Report” shall mean any report, in form and substance reasonably
satisfactory to the Administrative Agent, setting forth, as of each January 1st
and July 1st (or another date in the event of certain Interim Redeterminations)
the Proved Reserves and the Proved Developed Reserves attributable to the
Borrowing Base Properties of the Borrower and the Credit Parties, together with
a projection of the rate of production and future net income, taxes, operating
expenses and Capital Expenditures with respect thereto as of such date, based
upon the most recent Bank Price Deck provided to the Borrower by the
Administrative Agent pursuant to Section 2.14(g).

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

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

“Royalty Trust” shall mean a statutory trust, business trust, limited liability
company, partnership or other form of legal entity to which the Borrower or one
or more of its Subsidiaries grants or conveys any term or perpetual overriding
royalty interests, net profits interests or other similar interests in Oil and
Gas Properties in exchange for units of beneficial interest or ownership
interests in such trust or other entity, or for cash.

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

“Sanctioned Country” shall mean, at any time, a country or territory which is
itself the subject or target of any Sanctions (at the time of this Agreement,
including, but not limited to, Cuba, Iran, North Korea, Sudan and Syria).

 

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“Sanctioned Person” shall mean, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State, or by the United Nations Security Council, the Government of Canada, the
European Union or any European Union member state, (b) any Person operating,
organized or resident in a Sanctioned Country or (c) any Person owned or
controlled by any such Person or Persons.

“Sanctions” shall mean economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the U.S. government,
including those administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State, or (b) the United
Nations Security Council, the Government of Canada, the European Union or Her
Majesty’s Treasury of the United Kingdom.

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

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

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

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

“Secured Hedge Facility” shall mean that certain Amended and Restated Facility
Agreement dated as of February 4, 2011 among the Borrower, Barclays Bank PLC, as
calculation agent, Wells Fargo Bank, National Association, as collateral agent,
and the several hedge counterparties from time to time party thereto, as in
effect on the Closing Date (together with any amendments, supplements or other
modifications thereto that are not materially adverse to the interests of the
Lenders).

“Secured Parties” shall mean, collectively, the Administrative Agent, the Letter
of Credit Issuers, each Lender and each sub-agent pursuant to Article XII
appointed by the Administrative Agent with respect to matters relating to the
Credit Documents.

“Security Documents” shall mean, during any Borrowing Base Trigger Period,
collectively, (a) the Mortgages and (b) each other security agreement or other
instrument or document executed and delivered pursuant to Section 9.10 or 9.12
or pursuant to any other such Security Documents or otherwise to secure or
perfect the security interest in any or all of the Obligations.

“SFAS” shall mean Statement of Financial Accounting Standard No. 133 or No. 143
as promulgated by the Financial Accounting Standards Board.

“Solvent” shall mean, with respect to any Person, that as of any date of
determination, that such Person is not “insolvent” as defined in the federal
Bankruptcy Code.

 

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“Specified Period” shall mean any period when each of Moody’s and S&P has
publically announced that the Index Debt is rated Baa2 or higher (from Moody’s)
and BBB or higher (from S&P).

“Specified Subsidiary” shall mean, at any date of determination any Restricted
Subsidiary (a) whose Total Assets at the last day of the Test Period ending on
the last day of the most recent fiscal period for which Section 9.1 Financials
have been delivered were equal to or greater than 15% of the Adjusted
Consolidated Net Tangible Assets of the Borrower and the Restricted Subsidiaries
at such date, or (b) whose revenues during such Test Period were equal to or
greater than 15% of the consolidated revenues of the Borrower and the Restricted
Subsidiaries for such period, in each case determined in accordance with GAAP.

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

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

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

“Subsidiary” shall mean as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of Stock or other ownership
interests having ordinary voting power (other than Stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the Board of Directors of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise expressly provided, all references herein to a
“Subsidiary” shall mean a Subsidiary of the Borrower. A Royalty Trust shall not
constitute a “Subsidiary” of the Borrower or its Subsidiaries.

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

“Swingline Commitment” shall mean, the obligation of the Swingline Lenders to
make Swingline Loans pursuant to Section 2.1 in an aggregate principal amount at
any one time outstanding not to exceed $400,000,000, provided that no Swingline
Lender shall be obligated to make Swingline Loans in an outstanding principal
amount in excess of such Swingline Lender’s Swingline Subcommitment.

“Swingline Exposure” shall mean at any time the aggregate principal amount at
such time of all outstanding Swingline Loans. The Swingline Exposure of any
Lender at any time shall equal its Commitment Percentage of the aggregate
Swingline Exposure at such time.

 

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“Swingline Lender” shall mean (a) MUFG Union Bank, N.A. and (b) Wells Fargo
Bank, National Association, in their capacities as Lenders of Swingline Loans
hereunder. References herein and in the other Credit Documents to the Swingline
Lender shall be deemed to refer to the Swingline Lender in respect of the
applicable Swingline Loan or to all the Swingline Lenders, as the context
requires.

“Swingline Loan” shall have the meaning provided in Section 2.1(b).

“Swingline Subcommitment” shall mean, with respect to any Swingline Lender, the
amount set forth opposite its name in Schedule 1.1(b).

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

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

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

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

“Total Commitment” shall mean, as of any date of determination, the aggregate
amount of the Commitments of all Lenders. The Total Commitment as of the Closing
Date is $4,000,000,000.

“Total Exposure” shall mean the sum of the Exposures of the Lenders.

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

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

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

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

 

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

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

“Unrestricted Subsidiary” shall mean any Subsidiary that is designated as an
Unrestricted Subsidiary pursuant to Section 9.9.

“Unsecured Period” shall mean any period other than a Borrowing Base Trigger
Period.

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

“U.S. Tax Compliance Certificate” shall have the meaning provided in
Section 5.4(e).

“VPP” means the sale of limited-term overriding royalty interests in natural gas
and/or oil reserves that (a) entitle the purchaser to receive scheduled
production volumes over a period of time from specific lease interests; (b) are
free and clear of all associated future production costs and capital
expenditures; (c) are nonrecourse to the seller (i.e., the purchaser’s only
recourse is to the reserves acquired); (d) transfer title of the reserves to the
purchaser; and (e) allow the seller to retain all production beyond the
specified volumes, if any, after the scheduled production volumes have been
delivered.

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

“YieldCo” means a publicly traded company formed to own operating assets
producing a predictable cash flow, expected to pay a substantial portion of
earnings in dividends.

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

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

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

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

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

 

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

(f) In the computation of periods of time from a specified date to a later
specified date, the word “from” means “from and including”; the words “to” and
“until” each mean “to but excluding”; and the word “through” means “to and
including”.

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

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

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

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

(k) The words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.

1.3 Accounting Terms. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP,
applied in a consistent manner; provided, however, that if the Borrower notifies
the Administrative Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the
Closing Date in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that all Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith. Notwithstanding anything to the contrary in this
Agreement or any other Credit Document, for purposes of calculations made
pursuant to the terms of this Agreement or any other Credit Document, GAAP will
be deemed to treat leases that would have been classified as operating leases in
accordance with GAAP as in effect on the Closing Date in a manner consistent
with the treatment of such leases under GAAP as in effect on the Closing Date,
notwithstanding any modifications or interpretive changes to GAAP that may occur
thereafter.

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

 

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be permitted under this Agreement) shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).

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

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

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

1.8 Currency Equivalents Generally.

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

 

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anything herein to the contrary, for purposes of determining the amount of any
obligation to be included in the calculation of Consolidated Indebtedness that
is denominated in a foreign currency, if such obligation is effectively subject
to an applicable cross-currency Hedge Agreement, then such calculation shall be
made with respect to such obligation on the basis of the rate(s) as provided in
such Hedge Agreement (and not on the basis of the then-current foreign exchange
rate).

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

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

ARTICLE II

AMOUNT AND TERMS OF CREDIT

2.1 Commitments.

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

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

(b) Subject to and upon the terms and conditions herein set forth, each
Swingline Lender severally agrees, at any time and from time to time on and
after the Closing Date and prior to the Maturity Date, to make a loan or loans
(each a “Swingline Loan” and,

 

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collectively, the “Swingline Loans”), to the Borrower in Dollars, which
Swingline Loans (i) shall be LIBOR Loans, (ii) shall, together with all other
outstanding Swingline Loans at such time, not exceed at any time the Swingline
Commitment, (iii) shall, together with all other outstanding Swingline Loans
made by such Swingline Lender, not exceed at any time such Swingline Lender’s
Swingline Subcommitment (notwithstanding the fact that such Swingline Loans,
when aggregated with the Exposure of the Lender acting as such Swingline Lender,
may exceed the amount of such Lender’s Commitment), (iv) shall not, after giving
effect thereto and to the application of the proceeds thereof, result at any
time in the Total Exposure at such time exceeding the Loan Limit then in effect,
and (v) may be repaid and reborrowed in accordance with the provisions hereof.
Each outstanding Swingline Loan shall be repaid in full on the earlier of (a) 5
Business Days after such Swingline Loan is initially borrowed and (b) the
Maturity Date. The Borrower shall not use the proceeds of any Swingline Loan to
refinance a Swingline Loan. Promptly upon request therefor as provided below,
each Lender shall fund to the Swingline Lenders an amount equal to the product
of such Lender’s Commitment Percentage times the amount of such Swingline Loan.
No Swingline Lender shall make any Swingline Loan after receiving a written
notice from the Borrower, the Administrative Agent or any Lender stating that an
Event of Default exists and is continuing until such time as the Swingline
Lenders shall have received written notice of (i) rescission of all such notices
from the party or parties originally delivering such notice or (ii) the waiver
of such Event of Default in accordance with the provisions of Section 13.1.

(c) On any Business Day, the Swingline Lenders may, in their sole discretion,
give notice to each Lender that all then-outstanding Swingline Loans of such
Swingline Lender shall be funded with a Borrowing of Loans, in which case Loans
constituting LIBOR Loans (each such Borrowing, a “Mandatory Borrowing”) shall be
made on the immediately succeeding Business Day by each Lender pro rata based on
each Lender’s Commitment Percentage, and the proceeds thereof shall be applied
directly to the Swingline Lenders to repay the Swingline Lenders for such
outstanding Swingline Loans. Each such Mandatory Borrowing shall have an
Interest Period equal to (i) to the extent an Interpolated Rate may be
determined with respect to such period, the number of days between (A) the
Business Day such Loans are to be funded and (B) the date such Swingline Loan
was initially to be repaid by the Borrower and (ii) in all other cases, one
week. Each Lender hereby irrevocably agrees to make such Loans upon one Business
Day notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified to it in writing
by the Swingline Lenders notwithstanding (i) that the amount of the Mandatory
Borrowing may not comply with the minimum amount for each Borrowing specified in
Section 2.2, (ii) whether any conditions specified in Article VII are then
satisfied, (iii) whether a Default or an Event of Default has occurred and is
continuing, (iv) the date of such Mandatory Borrowing, or (v) any reduction in
the Total Commitment after any such Swingline Loans were made. In the event
that, in the sole judgment of any Swingline Lender, any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including as
a result of the commencement of a proceeding under the Bankruptcy Code in
respect of the Borrower), each Lender hereby agrees that it shall forthwith
purchase, at par, from such Swingline Lender (without recourse or warranty) such
participation of the outstanding Swingline Loans as shall be necessary to cause
the Lenders to share in such Swingline Loans ratably based upon their respective
Commitment Percentages, provided that all principal and interest payable on such
Swingline Loans shall be for the account of such Swingline Lender until the date
the respective participation is purchased and, to the extent attributable to the
purchased participation, shall be payable to such Lender purchasing same from
and after such date of purchase.

 

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2.2 Minimum Amount of Each Borrowing; Maximum Number of Borrowings. The
aggregate principal amount of each Borrowing and each borrowing of Swingline
Loans shall be in a minimum amount of at least $1,000,000 and in a multiple of
$1,000,000 in excess thereof (except for any Borrowing in an aggregate amount
that is equal to the entire unused balance of aggregate Commitments), provided
that Loans made to reimburse the Letter of Credit Issuer with respect to any
Unpaid Drawing shall be made in the amounts required by Sections 3.3 or 3.4, as
applicable. More than one Borrowing may be incurred on any date; provided, that
at no time shall there be outstanding more than fourteen (14) Borrowings of
LIBOR Loans under this Agreement (for the avoidance of doubt, in addition to any
outstanding Swingline Loans).

2.3 Notice of Borrowing.

(a) Whenever the Borrower desires to incur Loans (other than Mandatory
Borrowings or borrowings to repay Unpaid Drawings), the Borrower shall give the
Administrative Agent at the Administrative Agent’s Office, (i) prior to 1:00
p.m. at least three Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Loans if such Loans are to
be initially LIBOR Loans (or prior to 1:00 p.m. two Business Days’ prior written
notice in the case of a Borrowing of Loans to be made on the Closing Date
initially as LIBOR Loans) and (ii) written notice (or telephonic notice promptly
confirmed in writing) prior to 1:00 p.m. on the date of each Borrowing of Loans
that are to be ABR Loans. Such notice (together with each notice of a Borrowing
of Swingline Loans pursuant to Section 2.3(b), a “Notice of Borrowing”) shall
specify (A) the aggregate principal amount of the Loans to be made pursuant to
such Borrowing, (B) the date of the Borrowing (which shall be a Business Day)
and (C) whether the respective Borrowing shall consist of ABR Loans and/or LIBOR
Loans and, if LIBOR Loans, the Interest Period to be initially applicable
thereto (if no Interest Period is selected, the Borrower shall be deemed to have
selected an Interest Period of one month’s duration). The Administrative Agent
shall promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing, of such Lender’s Commitment
Percentage thereof and of the other matters covered by the related Notice of
Borrowing.

(b) Whenever the Borrower desires to incur Swingline Loans hereunder, it shall
give the Administrative Agent and each Swingline Lender written notice (or
telephonic notice promptly confirmed in writing) of each borrowing of Swingline
Loans prior to 3:00 p.m. Central time on the date of such borrowing. Each such
notice shall specify (i) the aggregate principal amount of the Swingline Loans
to be made pursuant to such borrowing and (iii) the date of borrowing (which
shall be a Business Day).

(c) Mandatory Borrowings shall be made upon the notice specified in
Section 2.1(c), with the Borrower irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.

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

 

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

2.4 Disbursement of Funds.

(a) No later than 1:00 p.m. on the date specified in each Notice of Borrowing
(including Mandatory Borrowings), each Lender will make available its pro rata
portion of each Borrowing requested to be made on such date in the manner
provided below; provided that on the Closing Date, such funds shall be made
available by 10:00 a.m. or such earlier time as may be agreed among the Lenders,
the Borrower and the Administrative Agent for the purpose of consummating the
Transactions; provided further that all Swingline Loans shall be made available
in the full amount thereof by the Swingline Lenders no later than 4:30 p.m. on
the date requested.

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

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

 

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2.5 Repayment of Loans; Evidence of Debt.

(a) The Borrower hereby promises to pay to the Administrative Agent, for the
benefit of the applicable Lenders, on the Maturity Date, the then outstanding
principal amount of all Loans. The repayment of Swingline Loans shall be
governed by Section 2.1(b).

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

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

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

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

2.6 Conversions and Continuations.

(a) Subject to the penultimate sentence of this clause (a), (i) the Borrower
shall have the option on any Business Day to convert all or a portion equal to
at least $1,000,000 (and in multiples of $100,000 in excess thereof) of the
outstanding principal amount of Loans of one Type into a Borrowing or Borrowings
of another Type and (ii) the Borrower shall have the

 

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

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

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

perform any of its obligations under any of the Credit Documents shall not
release any Person from performance of its obligation under any Credit Document.

 

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2.8 Interest.

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

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

(c) The unpaid principal amount of each Swingline Loan shall bear interest from
the date of the borrowing thereof until maturity thereof (whether by
acceleration or otherwise) at a per annum rate equal to the rate for overnight
(next business day) Dollar deposits in the interbank eurodollar market as
determined by the applicable Swingline Lender plus the Applicable Margin with
respect to LIBOR Loans.

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

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

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

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

 

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2.9 Interest Periods. At the time the Borrower gives a Notice of Borrowing or
Notice of Conversion or Continuation in respect of the making of, or conversion
into or continuation as, a Borrowing of LIBOR Loans in accordance with
Section 2.6(a), the Borrower shall give the Administrative Agent written notice
(or telephonic notice promptly confirmed in writing) of the Interest Period
applicable to such Borrowing, which Interest Period shall, at the option of the
Borrower be a period of (i) one week or any other period between one week and
one month if an Interpolated Rate may be determined with respect to such other
period, (ii) one month or two, three or six months or (iii) if available to all
the Lenders making such LIBOR Loans, a 12-month or any other period requested by
the Borrower.

Notwithstanding anything to the contrary contained above:

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

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

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

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

2.10 Increased Costs, Illegality, Etc.

(a) In the event that (x) in the case of clause (i) below, the Majority Lenders
or (y) in the case of clauses (ii) and (iii) below, any Lender, shall have
reasonably determined (which determination shall, absent clearly demonstrable
error, be final and conclusive and binding upon all parties hereto):

(i) on any date for determining the LIBOR Rate for any Interest Period that
(A) deposits in the principal amounts of the Loans comprising such LIBOR
Borrowing are not generally available in the relevant market, (B) by reason of
any changes arising on or after the Closing Date affecting the interbank LIBOR
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of LIBOR Rate, or
(C) the LIBOR Rate for such Interest Period will not adequately and fairly
reflect the cost to such Lenders of making or maintaining their Loans included
in such Borrowing for such Interest Period; or

 

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(ii) that, due to a Change in Law occurring at any time or after the Closing
Date, which Change in Law shall (A) impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender, (B) subject any Lender to any Tax with respect to any
Credit Document or any LIBOR Loan made by it (other than (i) Taxes indemnifiable
under Section 5.4, or (ii) Excluded Taxes), or (C) impose on any Lender or the
London interbank market any other condition, cost or expense affecting this
Agreement or LIBOR Loans made by such Lender, which results in the cost to such
Lender of making, converting into, continuing or maintaining LIBOR Loans or
participating in Letters of Credit (in each case hereunder) increasing by an
amount which such Lender reasonably deems material or the amounts received or
receivable by such Lender hereunder with respect to the foregoing shall be
reduced; or

(iii) at any time, that the making or continuance of any LIBOR Loan has become
unlawful as a result of compliance by such Lender in good faith with any
Requirement of Law (or would conflict with any such Requirement of Law not
having the force of law even though the failure to comply therewith would not be
unlawful);

then, and in any such event, such Lenders (or the Administrative Agent, in the
case of clause (i) above) shall within a reasonable time thereafter give notice
(if by telephone, confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, LIBOR Loans shall no longer be available until
such time as the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist (which notice the Administrative Agent agrees to give at such time
when such circumstances no longer exist), and any Notice of Borrowing or Notice
of Conversion given by the Borrower with respect to LIBOR Loans that have not
yet been incurred shall be deemed rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower shall pay to such Lender, promptly (but no later
than 15 Business Days) after receipt of written demand therefor such additional
amounts as shall be required to compensate such Lender for such increased costs
or reductions in amounts receivable hereunder (it being agreed that a written
notice as to the additional amounts owed to such Lender, showing in reasonable
detail the basis for the calculation thereof, submitted to the Borrower by such
Lender shall, absent clearly demonstrable error, be final and conclusive and
binding upon all parties hereto) and (z) in the case of clause (iii) above, the
Borrower shall take one of the actions specified in Section 2.10(b) as promptly
as possible and, in any event, within the time period required by applicable
Requirements of Law.

(b) At any time that any LIBOR Loan is affected by the circumstances described
in Section 2.10(a)(ii) or (iii), the Borrower may (and in the case of a LIBOR
Loan affected pursuant to Section 2.10(a)(iii) shall) either (i) if the affected
LIBOR Loan has been requested but not yet made, cancel such Borrowing request by
giving the Administrative Agent telephonic notice (confirmed promptly in
writing) thereof on the same date that the Borrower was notified by a Lender
pursuant to Section 2.10(a)(ii) or (iii) or (ii) if the affected LIBOR Loan is
then outstanding, upon at least three Business Days’ notice to the
Administrative Agent, require the affected Lender to convert each such LIBOR
Loan into an ABR Loan; provided that if more than one Lender is affected at any
time, then all affected Lenders must be treated in the same manner pursuant to
this Section 2.10(b).

 

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(c) If, after the Closing Date, any Change in Law relating to capital adequacy
or liquidity requirements of any Lender or compliance by any Lender or its
parent with any Change in Law relating to capital adequacy or liquidity
requirements occurring after the Closing Date, has or would have the effect of
reducing the rate of return on such Lender’s or its parent’s capital or assets
as a consequence of such Lender’s commitments or obligations hereunder to a
level below that which such Lender or its parent could have achieved but for
such Change in Law (taking into consideration such Lender’s or its parent’s
policies with respect to capital adequacy or liquidity requirements), then from
time to time, promptly (but in any event no later than 15 Business Days) after
written demand by such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or its parent for such reduction, it being understood and
agreed, however, that a Lender shall not be entitled to such compensation as a
result of such Lender’s compliance with, or pursuant to any request or directive
to comply with, any applicable Requirement of Law as in effect on the Closing
Date (except as otherwise set forth in the definition of Change in Law). Each
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 2.10(c), will give prompt written notice
thereof to the Borrower, which notice shall set forth in reasonable detail the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not, subject to Section 2.13, release or diminish the
Borrower’s obligations to pay additional amounts pursuant to this
Section 2.10(c) upon receipt of such notice.

2.11 Compensation. If (a) any payment of principal of any LIBOR Loan is made by
the Borrower to or for the account of a Lender other than on the last day of the
Interest Period for such LIBOR Loan as a result of a payment or conversion
pursuant to Sections 2.5, 2.6, 2.10, 5.1, 5.2 or 13.7, as a result of
acceleration of the maturity of the Loans pursuant to Article XI or for any
other reason, (b) any Borrowing of LIBOR Loans is not made on the date specified
in a Notice of Borrowing, (c) any ABR Loan is not converted into a LIBOR Loan on
the date specified in a Notice of Conversion or Continuation, (d) any LIBOR Loan
is not continued as a LIBOR Loan on the date specified in a Notice of Conversion
or Continuation or (e) any prepayment of principal of any LIBOR Loan is not made
as a result of a withdrawn notice of prepayment pursuant to Section 5.1 or 5.2,
the Borrower shall after the Borrower’s receipt of a written request by such
Lender (which request shall set forth in reasonable detail the basis for
requesting such amount and shall be conclusive and binding in the absence of
manifest error), pay to the Administrative Agent (within 15 Business Days) for
the account of such Lender any amounts required to compensate such Lender for
any additional losses, costs or expenses that such Lender may reasonably incur
as a result of such payment, failure to convert, failure to continue or failure
to prepay, including any loss, cost or expense (excluding loss of anticipated
profits) actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such LIBOR
Loan.

2.12 Change of Lending Office. Each Lender agrees that, upon the occurrence of
any event giving rise to the operation of Section 2.10(a)(ii), 2.10(a)(iii),
2.10(c), 3.5 or 5.4 with respect to such Lender, it will, if requested by the
Borrower use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans

 

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affected by such event; provided that such designation is made on such terms
that such Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such Section. Nothing in this Section 2.12 shall
affect or postpone any of the obligations of the Borrower or the right of any
Lender provided in Section 2.10, 3.5 or 5.4.

2.13 Notice of Certain Costs. Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 2.10, 2.11, 3.5 or 5.4 is
given by any Lender, any Letter of Credit Issuer or any L/C Participant, as the
case may be, more than 180 days after such Person has knowledge (or should have
had knowledge) of the occurrence of the event giving rise to the additional
cost, reduction in amounts, loss, tax or other additional amounts described in
such Sections, such Person shall not be entitled to compensation under
Section 2.10, 2.11, 3.5 or 5.4, as the case may be, for any such amounts
incurred or accruing prior to the 181st day prior to the giving of such notice
to the Borrower; provided that if the circumstance giving rise to such claim is
retroactive, then such 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.

2.14 Borrowing Base and PV-9 Determination.

(a) Borrowing Base. During a Borrowing Base Trigger Period, the Facility shall
be subject to a Borrowing Base.

(b) Scheduled and Interim Redeterminations. During a Borrowing Base Trigger
Period, the Borrowing Base shall be redetermined annually and the PV-9 shall be
determined semi-annually in accordance with this Section 2.14 (a “Scheduled
Redetermination”) and such redetermined Borrowing Base or PV-9, as applicable,
shall become effective and applicable to the Borrower, the Administrative Agent,
the Letter of Credit Issuers and the Lenders within forty-five (45) days (or as
promptly thereafter as practicable) after the delivery of each Engineering
Report. In addition, following the First Scheduled Redetermination Date, the
Borrower may, by notifying the Administrative Agent thereof and the
Administrative Agent, acting at the direction of the Majority Lenders may, by
notifying the Borrower thereof, elect to cause the Borrowing Base or PV-9 to be
redetermined between Scheduled Redeterminations (an “Interim Redetermination”),
in each case, not more than once between Scheduled Redeterminations, in
accordance with this Section 2.14.

(c) Scheduled and Interim Redetermination Procedure.

(i) Each Scheduled Redetermination and each Interim Redetermination shall be
effectuated as follows: Upon receipt by the Administrative Agent of (A) the
Reserve Report, and (B) such other reports, data and supplemental information as
may, from time to time, be reasonably requested by, or provided by the Borrower
to, the Administrative Agent on behalf of the Required Lenders (the Reserve
Report and such other reports, data and supplemental information, including the
information provided pursuant to Section 9.13 being the “Engineering Reports”),
the Administrative Agent shall evaluate the information contained in the
Engineering Reports and shall in good faith propose a new Borrowing Base (the
“Proposed Borrowing Base”) or PV-9 (the “Proposed PV-9”) as applicable based
upon such information and such other information (including the status of title
information

 

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with respect to the Borrowing Base Properties as described in the Engineering
Reports and the existence of any other Indebtedness) as the Administrative Agent
deems appropriate in good faith in accordance with its usual and customary oil
and gas lending criteria as they exist at the particular time (provided that
notwithstanding such criteria, Proved Non-Producing Reserves and Proved
Undeveloped Reserves (in the aggregate) may have an aggregate value in the
Borrowing Base of up to 35% of the Borrowing Base).

(ii) The Administrative Agent shall notify the Borrower and the Lenders of the
Proposed Borrowing Base or the Proposed PV-9, as applicable (the “Proposed
Determination Notice”) within fifteen (15) days after the Administrative Agent
has received the required Engineering Reports.

(iii) (A) Any Proposed Borrowing Base that would increase the Borrowing Base
then in effect must be approved or deemed to have been approved by the Borrowing
Base Required Lenders, (B) any Proposed Borrowing Base that would decrease or
maintain the Borrowing Base then in effect must be approved or be deemed to have
been approved by the Required Lenders, and (C) any Proposed PV-9 must be
approved or be deemed to have been approved by the Majority Lenders, in each
case, as determined in each such Lender’s sole discretion and in good faith,
consistent with each such Lender’s usual and customary oil and gas lending
criteria as they exist at the particular time as provided in this
Section 2.14(c)(iii). Upon receipt of the Proposed Determination Notice, each
Lender shall have fifteen (15) days to agree with the Proposed Borrowing Base or
PV-9, as applicable, or disagree with the Proposed Borrowing Base or PV-9, as
applicable, by proposing an alternate Borrowing Base or PV-9, as applicable. If
at the end of such 15-day period, any Lender has not communicated its approval
or disapproval in writing to the Administrative Agent, such silence shall be
deemed to be an approval of the Proposed Borrowing Base or PV-9, as applicable.
If, at the end of such 15-day period, the Borrowing Base Required Lenders, in
the case of a Proposed Borrowing Base that would increase the Borrowing Base
then in effect, the Required Lenders, in the case of a Proposed Borrowing Base
that would decrease or maintain the Borrowing Base then in effect, or in the
case of a Proposed PV-9, the Majority Lenders have approved or deemed to have
approved, as aforesaid, then the Proposed Borrowing Base or PV-9, as the case
may be, shall become the new Borrowing Base or PV-9, as applicable, effective on
the date specified in Section 2.14(d). If, however, at the end of such 15-day
period, the Borrowing Base Required Lenders, the Required Lenders, or Majority
Lenders, as applicable, have not approved or deemed to have approved, as
aforesaid, then the Administrative Agent shall promptly thereafter poll the
Lenders to ascertain the highest (i) Borrowing Base then acceptable to the
Borrowing Base Required Lenders (in the case of any increase to the Borrowing
Base) or a number of Lenders sufficient to constitute the Required Lenders (in
any other case) and such amount shall become the new Borrowing Base, effective
on the date specified in Section 2.14(d) or (ii) PV-9 then acceptable to a
number of Lenders sufficient to constitute the Majority Lenders and such amount
shall become the new PV-9, effective on the date specified in Section 2.14(d).
It is expressly understood that the Administrative Agent and Lenders have no
obligation to designate the Borrowing Base or PV-9 at any particular amount,
except in the good faith exercise of their discretion, whether in relation to
the Total Commitment, the Maximum Aggregate Amount or otherwise.

 

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(d) Effectiveness of a Redetermined Borrowing Base and PV-9. After a
redetermined Borrowing Base or PV-9 is approved or is deemed to have been
approved by the Borrowing Base Required Lenders, the Required Lenders or the
Majority Lenders, as applicable, pursuant to Section 2.14(c)(iii), the
Administrative Agent shall promptly thereafter notify the Borrower and the
Lenders of the amount of the redetermined Borrowing Base or PV-9, as the case
may be (the “New Determination Notice”), and such amount, subject to
Section 2.14(e), shall become the new Borrowing Base or PV-9, as applicable,
effective and applicable to the Borrower, the Administrative Agent, the Letter
of Credit Issuers and the Lenders:

(i) in the case of a Scheduled Redetermination, (A) if the Administrative Agent
shall have received the Engineering Reports required to be delivered by the
Borrower pursuant to Sections 9.13(a) and (b) in a timely and complete manner,
then (x) in the case of the Borrowing Base, on June 15th, and (y) in the case of
PV-9, on June 15th and October 30th following such notice, or (B) if the
Administrative Agent shall not have received the Engineering Reports required to
be delivered by the Borrower pursuant to Sections 9.13(a) and (b) in a timely
and complete manner, then on the Business Day next succeeding delivery of such
New Determination Notice; and

(ii) in the case of an Interim Redetermination, on the Business Day next
succeeding delivery of such New Determination Notice (each a “Determination
Date”).

Subject to Section 2.14(e), such amount shall then become the Borrowing Base or
PV-9, as the case may be, until the next Scheduled Redetermination Date or the
next Interim Redetermination Date. Notwithstanding the foregoing, no Scheduled
Redetermination or Interim Redetermination shall become effective until the New
Determination Notice related thereto is received by the Borrower.

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

(f) [Reserved].

(g) Administrative Agent Data. The Administrative Agent hereby agrees to provide
an updated Bank Price Deck to the Borrower (i) promptly, and in any event within
three (3) Business Days, after the Administrative Agent’s request for an Interim
Redetermination, (ii) promptly, and in any event within three (3) Business Days,
upon any request of the Borrower, (iii) promptly, and in any event within three
(3) Business Days of the occurrence of a Borrowing Base Trigger Event, and
(iv) reasonably promptly after the Administrative Agent becoming aware of any
change to the Bank Price Deck from the version most recently delivered to the
Borrower. In addition, the Administrative Agent and the Lenders agree, upon
request, to meet with the Borrower to discuss their evaluation of the reservoir
engineering of the Oil and Gas Properties included in any Reserve Report and
their respective methodologies for valuing such properties and the other factors
considered in calculating the Borrowing Base.

 

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(h) Unsecured Period. Notwithstanding anything in this Agreement to the
contrary, during any Unsecured Period, the provisions of Section 2.14(a) through
(g) and (i) will be deemed to be inapplicable and shall be disregarded for all
purposes. Within 45 days after the delivery of an Internal Reserve Report
delivered pursuant to Section 9.13(c), or as soon thereafter as practicable
(such date the “Initial Determination Date”), the Borrower and the
Administrative Agent shall propose, and the Borrowing Base Increase Lenders
shall approve, the PV-9 and initial Borrowing Base.

(i) Substitute Collateral. During a Borrowing Base Trigger Period, the Borrower
shall be entitled (at its own cost and expense) at any time and from time to
time to mortgage and grant to the Administrative Agent for the benefit of the
Lenders additional Collateral in substitution for any part of the then-existing
Collateral, provided that: (i) no Default then exists or would result from such
release and substitution, (ii) immediately after giving effect thereto, the
Collateral Coverage Ratio is not less than the Minimum Collateral Coverage Ratio
and (iii) for any new Collateral to be granted or pledged by the Borrower, the
Borrower shall have taken the related actions and made the deliveries required
under Section 9.12; and (iv) after giving effect to such substitution, the
Collateral being substituted would not cause the value of all substituted and
released Collateral substituted or released since the most recent Determination
Date to be in excess of 33% of the PV-9 (as of the most recent PV-9
Determination Date), as determined, in the case of any substitution of less than
or equal to 10% of the PV-9, by the Administrative Agent or as determined, in
the case of any substitution of more than 10% but less than 33% of the PV-9,
collectively by the Administrative Agent and at least one other Agent Bank. A
substitution of Collateral with a value less than 100% of the value of the
Collateral that has been released will be treated as both a release and
substitution for purposes of the calculations in this Section 2.14(i) and in
Section 2.14(j), as applicable, and the conditions and requirements in each of
such Sections shall be satisfied in respect of each such substitution. Upon
request, Collateral may be released and/or exchanged for substitute Oil and Gas
Property Collateral without the need for a new PV-9 determination, so long as
(i) the Minimum Collateral Coverage Ratio and the Collateral Requirements are
maintained, as determined as set forth herein, with respect to any new Oil and
Gas Property Collateral given in exchange for released Collateral and (ii) the
aggregate value of all released and substituted collateral since the most recent
PV-9 Determination Date is less than 33% of such PV-9.

(j) Collateral Releases. Upon written request by the Borrower to the
Administrative Agent, the Administrative Agent shall execute releases in the
form provided to it by the Borrower and acceptable to the Administrative Agent
at the cost and expense of the Borrower thereby releasing one or more properties
from the Lien of the Mortgages in accordance with the terms set forth herein and
therein, provided in each case that: (i) immediately after giving effect
thereto, the Collateral Coverage Ratio is not less than the Minimum Collateral
Coverage Ratio, (ii) no Default or Event of Default exists or would exist
immediately after giving effect to such release, and (iii) if after giving
effect to such release, the Collateral being released would not cause the value
of all released and substituted Collateral released or substituted since the
most recent PV-9 Determination Date to be in excess of 33% of the PV-9 (as of
the most recent PV-9 Determination Date), as determined, in the case of any
release or

 

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substitution of less than or equal to 10% of the PV-9, by the Administrative
Agent or as determined, in the case of any release or substitution of more than
10% but less than 33% of the PV-9, collectively by the Administrative Agent and
at least one other Agent Bank.

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

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

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

(c) If any Swingline Exposure or Letter of Credit Exposure exists at the time a
Lender becomes a Defaulting Lender, then (i) all or any part of such Swingline
Exposure and Letter of Credit Exposure of such Defaulting Lender will, subject
to the limitation in the first proviso below, automatically be reallocated
(effective on the day such Lender becomes a Defaulting Lender) among the
Non-Defaulting Lenders pro rata in accordance with their respective Commitment
Percentages; provided that (A) each Non-Defaulting Lender’s Exposure may not in
any event exceed the Commitment Percentage of the Loan Limit of such
Non-Defaulting Lender as in effect at the time of such reallocation and
(B) neither such reallocation nor any payment by a Non-Defaulting Lender
pursuant thereto will constitute a waiver or release of any claim the Borrower,
the Administrative Agent, the Letter of Credit Issuers or any other Lender may
have against such Defaulting Lender or cause such Defaulting Lender to be a
Non-Defaulting Lender, (ii) to the extent that all or any portion (the
“unreallocated portion”) of the Defaulting Lender’s Swingline Exposure or Letter
of Credit Exposure cannot, or can only partially, be so reallocated to
Non-Defaulting Lenders, whether by reason of the first proviso in
Section 2.15(c)(i) or otherwise, the Borrower shall within two Business Days
following notice by the Administrative Agent or the applicable Letter of Credit
Issuer (x) first, prepay such Swingline Exposure and (y) second, Cash
Collateralize for the benefit of the applicable Letter of Credit Issuer only the
Borrower’s obligations corresponding to such Defaulting Lender’s Letter of
Credit Exposure (after giving effect to any partial reallocation pursuant to
clause (i) above), in accordance with the procedures set forth in Section 3.8
for so long as such Letter of Credit Exposure is outstanding, (iii) if the
Borrower Cash Collateralizes any portion of such Defaulting Lender’s Letter of
Credit Exposure pursuant to this Section 2.15(c), the Borrower shall not be

 

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required to pay any fees to such Defaulting Lender pursuant to Section 4.1(b)
with respect to such Defaulting Lender’s Letter of Credit Exposure during the
period such Defaulting Lender’s Letter of Credit Exposure is Cash
Collateralized, (iv) if the Letter of Credit Exposure of the Non-Defaulting
Lenders is reallocated pursuant to this Section 2.15(c), then the Letter of
Credit Fees payable for the account of the Lenders pursuant to Section 4.1(b)
shall be adjusted in accordance with such Non-Defaulting Lenders’ Commitment
Percentages and the Borrower shall not be required to pay any Swingline or
Letter of Credit Fees to the Defaulting Lender pursuant to Section 4.1(b) with
respect to such Defaulting Lender’s Letter of Credit Exposure during the period
that such Defaulting Lender’s Letter of Credit Exposure is reallocated, or
(v) if any Defaulting Lender’s Letter of Credit Exposure is neither Cash
Collateralized nor reallocated pursuant to this Section 2.15(c), then, without
prejudice to any rights or remedies of the Letter of Credit Issuer or any Lender
hereunder, all Letter of Credit Fees payable under Section 4.1(b) with respect
to such Defaulting Lender’s Letter of Credit Exposure shall be payable to the
Letter of Credit Issuer until such Letter of Credit Exposure is Cash
Collateralized and/or reallocated;

(d) So long as any Lender is a Defaulting Lender, no Swingline Lender shall be
required to fund any Swingline Loan and no Letter of Credit Issuer will be
required to issue any new Letter of Credit or amend any outstanding Letter of
Credit to increase the Stated Amount thereof, alter the drawing terms thereunder
or extend the expiry date thereof, unless (i) in the case of any Letter of
Credit Issuer, such Letter of Credit Issuer is reasonably satisfied that any
exposure that would result from the exposure to such Defaulting Lender is
eliminated or fully covered by the Commitments of the Non-Defaulting Lenders or
by Cash Collateralization or a combination thereof in accordance with clause
(c) above or otherwise in a manner reasonably satisfactory to the Letter of
Credit Issuer, and (ii) in the case of any Swingline Lender or any Letter of
Credit Issuer, it is reasonably satisfied that participating interests in any
such newly made Swingline Loan or newly issued or increased Letter of Credit, as
applicable, shall be allocated among Non-Defaulting Lenders in a manner
consistent with Section 2.15(c) (and Defaulting Lenders shall not participate
therein); and

(e) If the Borrower, the Administrative Agent, the Swingline Lenders and each
Letter of Credit Issuer agree in writing in their discretion that a Lender that
is a Defaulting Lender is no longer a Defaulting Lender, the Administrative
Agent will so notify the parties hereto, whereupon, as of the effective date
specified in such notice and subject to any conditions set forth therein (which
may include arrangements with respect to any Cash Collateral), that Lender will,
to the extent applicable, purchase at par that portion of outstanding Loans of
the other Lenders or take such other actions as the Administrative Agent may
determine to be necessary to cause the Loans and funded and unfunded
participations in Letters of Credit and Swingline Loans to be held pro rata by
the Lenders in accordance with the Commitments (without giving effect to
Section 2.15(c)), whereupon such Lender will cease to be a Defaulting Lender;
provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while that Lender was a
Defaulting Lender; provided further that, except to the extent otherwise
expressly agreed by the affected parties, no change hereunder from Defaulting
Lender to Non-Defaulting Lender will constitute a waiver or release of any claim
of any party hereunder arising from such Lender’s having been a Defaulting
Lender.

 

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(f) Any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of that Defaulting Lender (whether
voluntary or mandatory, at maturity, pursuant to Article XI or otherwise, and
including any amounts made available to the Administrative Agent by that
Defaulting Lender pursuant to Section 13.8), shall be applied at such time or
times as may be determined by the Administrative Agent as follows: first, to the
payment of any amounts owing by that Defaulting Lender to the Administrative
Agent hereunder; second, to the payment on a pro rata basis of any amounts owing
by that Defaulting Lender to each Letter of Credit Issuer and the Swingline
Lenders hereunder; third, as the Borrower may request (so long as no Default or
Event of Default exists), to the funding of any Loan in respect of which that
Defaulting Lender has failed to fund its portion thereof as required by this
Agreement, as determined by the Administrative Agent; fourth, if so determined
by the Administrative Agent and the Borrower, to be held in a non-interest
bearing deposit account and released in order to satisfy obligations of that
Defaulting Lender to fund Loans under this Agreement; fifth, to the payment of
any amounts owing to the Lenders, the Letter of Credit Issuers or the Swingline
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Lender, such Letter of Credit Issuer or the Swingline Lenders
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; sixth, so long as no Default or Event of
Default exists, to the payment of any amounts owing to the Borrower as a result
of any judgment of a court of competent jurisdiction obtained by the Borrower
against that Defaulting Lender as a result of that Defaulting Lender’s breach of
its obligations under this Agreement; and seventh, to that Defaulting Lender or
as otherwise directed by a court of competent jurisdiction; provided that if
such payment is a payment of the principal amount of any Loans or Unpaid
Drawings, such payment shall be applied solely to pay the relevant Loans of, and
Unpaid Drawings owed to, the relevant non-Defaulting Lenders on a pro rata basis
prior to being applied in the manner set forth in this Section 2.15(f). Any
payments, prepayments or other amounts paid or payable to a Defaulting Lender
that are applied (or held) to pay amounts owed by a Defaulting Lender or to post
Cash Collateral pursuant to Section 3.8 shall be deemed paid to and redirected
by that Defaulting Lender, and each Lender irrevocably consents hereto.

2.16 Extension of Maturity Date.

(a) Not earlier than 60 days prior to, nor later than 30 days prior to, any
anniversary date of the Closing Date, the Borrower may, upon notice to the
Administrative Agent (who shall promptly notify the Lenders), request a one year
extension of the then current Maturity Date, provided, however, that the
Borrower may request only two such extensions under this Agreement. Within 15
days of delivery of such notice, each Lender shall notify the Administrative
Agent whether or not it consents to such extension (which consent may be given
or withheld in such Lender’s sole and absolute discretion). Any Lender not
responding within the above time period shall be deemed not to have consented to
such extension. The Administrative Agent shall promptly notify the Borrower and
the Lenders of the Lenders’ responses. If any Lender declines, or is deemed to
have declined, to consent to such extension (a “Declining Lender”), the Borrower
may cause any such Declining Lender to be removed or replaced as a Lender
pursuant to Section 13.7.

 

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(b) Only if Majority Lenders (calculated prior to giving effect to any removals
and/or replacements of Lenders permitted herein) (the “Consenting Lenders”) have
consented to an extension requested pursuant to this Section, the Maturity Date
shall be extended, with respect only to the Consenting Lenders and any Lender
replacing a Declining Lender pursuant to Section 13.7. If so extended, the
Maturity Date, as to the Consenting Lenders and each Lender replacing a
Declining Lender pursuant to Section 13.7, shall be extended to the date falling
one year after the existing Maturity Date (except that if such date is not a
Business Day, such Maturity Date, as so extended, shall be the next preceding
Business Day); provided, however, that the pre-existing Maturity Date shall
remain in effect with respect to any Declining Lender that is not replaced (such
Declining Lender’s “Existing Maturity Date”). The Administrative Agent and the
Borrower shall promptly confirm to the Lenders such extension, and the
Administrative Agent shall distribute an amended Schedule 1.1(a) (which shall be
deemed incorporated into this Agreement), to reflect any changes in Lenders and
their respective Commitments. If the Maturity Date is extended pursuant to this
Section 2.16 with respect to some but not all of the Lenders, then no Letter of
Credit may expire after the date that is five Business Days prior to an Existing
Maturity Date in respect of any Declining Lender if, after giving effect to such
Letter of Credit, the aggregate Commitments of the Consenting Lenders and each
Lender replacing a Declining Lender for the period following such Existing
Maturity Date would be less than the L/C Obligations following such Existing
Maturity Date (after giving effect to any Cash Collateral with respect to such
Letter of Credit or other arrangements with respect thereto satisfactory to the
applicable Letter of Credit Issuers and the Administrative Agent).

(c) As a condition precedent to such extension, the Borrower shall have provided
to the Administrative Agent the following, in form and substance reasonably
satisfactory to the Administrative Agent (i) copies of corporate resolutions
certified by the Secretary or Assistant Secretary of the Borrower, or such other
evidence as may be reasonably satisfactory to the Administrative Agent,
demonstrating that the Borrower’s incurrence of indebtedness hereunder with a
maturity date of the Maturity Date, as extended pursuant to this Section, has
been duly authorized by all necessary corporate action, (ii) a certificate,
signed by an Authorized Officer of the Borrower certifying that, before and
immediately after giving effect to such extension, (A) the representations and
warranties of the Borrower and the other Credit Parties in the Credit Documents
(other than, during a Specified Period, those set forth in Sections 8.4 and
8.20) are true and correct in all material respects (unless such representations
and warranties are already qualified by materiality or Material Adverse Effect,
in which case they are true and correct in all respects) with the same effect as
though such representations and warranties had been made on and as of the date
of such extension (except where such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects (unless such
representations and warranties are already qualified by materiality or Material
Adverse Effect, in which case they are true and correct in all respects) as of
such earlier date), and (B) no Default or Event of Default exists.

(d) The Borrower shall, on the Existing Maturity Date with respect to any
Declining Lender that has not been replaced as a Lender pursuant to Section 13.7
pay in full all Obligations owing to such Declining Lender, and such Declining
Lender’s Commitment and participation in any Letter of Credit or Swingline Loan
outstanding hereunder shall terminate on such Existing Maturity Date.

 

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2.17 Increase of Commitments.

(a) Subject to the conditions set forth in Section 2.17(b), the Borrower may,
from time to time (including in connection with any redetermination of the
Borrowing Base), increase the existing Total Commitment then in effect (any such
increase a “Incremental Increase”) by increasing the Commitment of a Lender (an
“Increasing Lender”) or by causing a Person that at such time is not a Lender to
become a Lender (an “Additional Lender”).

(b) Any Incremental Increase shall be subject to the following additional
conditions:

(i) no Incremental Increase shall be less than $25,000,000 (and increments of
$1,000,000 above that minimum) unless the Administrative Agent otherwise
consents, and no Incremental Increase shall be permitted if after the funding
thereof the Total Commitment would exceed the Maximum Aggregate Amount;

(ii) (A) no Event of Default shall have occurred and be continuing, (B) the
representations and warranties of the Borrower and the other Credit Parties in
the Credit Documents (other than, during a Specified Period, those set forth in
Sections 8.4 and 8.20) shall be true and correct in all material respects
(unless such representations and warranties are already qualified by materiality
or Material Adverse Effect, in which case they are true and correct in all
respects) with the same effect as though such representations and warranties had
been made on and as of the date of such Incremental Increase (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall have been true and correct in all
material respects (unless such representations and warranties are already
qualified by materiality or Material Adverse Effect, in which case they shall be
true and correct in all respects) as of such earlier date) and (C) the Borrower
shall be in compliance, on a Pro Forma Basis, with the Financial Performance
Covenants;

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

(iv) the Administrative Agent, the Swingline Lenders and the Letter of Credit
Issuers must consent to the addition of any Additional Lender to the extent the
consent of such Person would be required if an assignment were being made to
such proposed Additional Lender under Section 13.6(b);

(v) after giving effect to the requested Incremental Increase, the Borrower
shall not have requested more than five Incremental Increases prior to the
Termination Date;

(vi) the maturity date of any Incremental Increase shall be the same as the
Maturity Date; and

(vii) any Incremental Increase shall be on the exact same terms and pursuant to
the exact same documentation (including the Applicable Margin) applicable to
this Agreement (other than with respect to any arrangement, structuring, upfront
or other fees or discounts payable in connection with such Incremental
Increase).

 

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(c) Each Increasing Lender and Additional Lender (if any) shall execute and
deliver to the Borrower and the Administrative Agent, the Swingline Lenders and
the Letter of Credit Issuers customary documentation (any such documentation, an
“Incremental Agreement”) implementing any Incremental Increase. Upon receipt by
the Administrative Agent of one or more executed Incremental Agreements
increasing the Commitments of Lenders and/or adding Commitments from Additional
Lenders as provided in this Section 2.17, (i) the Total Commitment shall be
increased automatically on the effective date set forth in such Incremental
Agreements by the aggregate amount indicated in such Incremental Agreements
without further action by the Borrower, the Administrative Agent, any Swingline
Lender, any Letter of Credit Issuer or any Lender, (ii) Schedule 1.1(a) and the
Register shall each be amended to reflect the Incremental Increase, and the
Commitment Percentages of the Lenders shall be adjusted accordingly to reflect
the Incremental Increase, (iii) the Administrative Agent shall distribute to the
Borrower, the Administrative Agent, the Swingline Lenders, the Letter of Credit
Issuers and each Lender the revised Schedule 1.1(a), (iv) any such Additional
Lender shall be deemed to be a party in all respects to this Agreement and any
other Credit Documents to which the Lenders are a party, and (v) upon the
effective date set forth in such Incremental Agreement, the Lenders party to the
Incremental Agreement shall purchase a pro rata portion of the outstanding Loans
(including participations in L/C Obligations or Swingline Loans) of each of the
current Lenders such that each Lender (including any Additional Lender, if
applicable) shall hold its respective Commitment Percentage of the outstanding
Loans (and participation interests in participations in L/C Obligations or
Swingline Loans) as reflected in the revised Schedule 1.1(a) required by this
Section 2.17.

ARTICLE III

LETTERS OF CREDIT

3.1 Letters of Credit.

(a) Subject to and upon the terms and conditions herein set forth, at any time
and from time to time on and after the Closing Date and prior to the L/C
Maturity Date, the Letter of Credit Issuer agrees, in reliance upon the
agreements of the Lenders set forth in this Article III, to issue upon the
request of the Borrower and for the direct or indirect benefit of the Borrower
and its Restricted Subsidiaries (or, during an Investment Grade Period, its
Subsidiaries), a letter of credit or letters of credit (the “Letters of Credit”
and each, a “Letter of Credit”) in such form and with such Issuer Documents as
may be approved by the Letter of Credit Issuer in its reasonable discretion;
provided that the Borrower shall be a co-applicant of, and jointly and severally
liable with respect to, each Letter of Credit issued for the account of a
Restricted Subsidiary (or, during an Investment Grade Period, a Subsidiary);
provided further that each letter of credit outstanding on the Closing Date
under the Existing Credit Agreement and listed on Schedule 3.1 hereto shall be
deemed to be a Letter of Credit hereunder.

(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the
Stated Amount of which, when added to the Letters of Credit Outstanding at such
time, would exceed the Letter of Credit Commitment then in effect, (ii) no
Letter of Credit shall be issued the Stated Amount of which would cause the
Total Exposure at such time to exceed the Loan Limit then in effect, (iii) each
Letter of Credit shall have an expiration date occurring no later than one year
after the date of issuance or such longer period of time as may be agreed by the
applicable

 

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Letter of Credit Issuer, unless otherwise agreed upon by the Administrative
Agent and the Letter of Credit Issuer or as provided under Section 3.2(b);
provided that any Letter of Credit may provide for automatic renewal thereof for
additional periods of up to 12 months or such longer period of time as may be
agreed by the applicable Letter of Credit Issuer, subject to the provisions of
Section 3.2(b); provided, further, that in no event shall such expiration date
occur later than the L/C Maturity Date unless arrangements which are reasonably
satisfactory to the Letter of Credit Issuer to Cash Collateralize (or backstop)
such Letter of Credit have been made (provided, however, that no Lenders shall
be obligated to fund participations in respect of any Letter of Credit after the
Maturity Date), (iv) each Letter of Credit shall be denominated in Dollars,
(v) no Letter of Credit shall be issued if it would be illegal under any
applicable Requirement of Law for the beneficiary of the Letter of Credit to
have a Letter of Credit issued in its favor, (vi) no Letter of Credit shall be
issued by a Letter of Credit Issuer (provided that another Letter of Credit
Issuer, not subject to the constraints of this Section 3.1(b)(vi), may issue
such Letter of Credit) if (A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain such
Letter of Credit Issuer from issuing the Letter of Credit, or any Law applicable
to such Letter of Credit Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
such Letter of Credit Issuer shall prohibit, or request that such Letter of
Credit Issuer refrain from, the issuance of letters of credit generally or the
Letter of Credit in particular or shall impose upon such Letter of Credit Issuer
with respect to the Letter of Credit any restriction, reserve or capital
requirement (for which such Letter of Credit Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon such Letter
of Credit Issuer any unreimbursed loss, cost or expense which was not applicable
on the Closing Date and which such Letter of Credit Issuer in good faith deems
material to it or (B) the issuance of the Letter of Credit would violate one or
more policies of such Letter of Credit Issuer generally, and (vii) no Letter of
Credit shall be issued by a Letter of Credit Issuer after it has received a
written notice from any Credit Party or the Administrative Agent or the Majority
Lenders stating that a Default or Event of Default has occurred and is
continuing until such time as the Letter of Credit Issuer shall have received a
written notice (A) of rescission of such notice from the party or parties
originally delivering such notice, (B) of the waiver of such Default or Event of
Default in accordance with the provisions of Section 13.1 or (C) that such
Default or Event of Default is no longer continuing.

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

3.2 Letter of Credit Requests.

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

(b) If the Borrower so requests in any applicable Letter of Credit Request, the
applicable Letter of Credit Issuer shall issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of Credit”);
provided that any such Auto-Extension Letter of Credit must permit such Letter
of Credit Issuer to prevent any such extension at least once in each 12-month
period (commencing with the date of issuance of such Letter of Credit) by giving
prior notice to the beneficiary thereof not later than a day (the “Non-Extension
Notice Date”) in each such 12-month period to be agreed upon at the time such
Letter of Credit is issued. Unless otherwise directed by the Letter of Credit
Issuer, the Borrower shall not be required to make a specific request to such
Letter of Credit Issuer for any such extension. Once an Auto-Extension Letter of
Credit has been issued, the Lenders shall be deemed to have authorized (but may
not require) the applicable Letter of Credit Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than the L/C
Maturity Date; provided, however, that such Letter of Credit Issuer shall not
permit any such extension if (i) such Letter of Credit Issuer has determined
that it would not be permitted, or would have no obligation, at such time to
issue such Letter of Credit in its revised form (as extended) under the terms
hereof (by reason of the provisions of clause (b) of Section 3.1 or otherwise),
or (ii) it has received notice (which may be by telephone or in writing) on or
before the day that is five Business Days before the Non-Extension Notice Date
(A) from the Administrative Agent that the Majority Lenders have elected not to
permit such extension or (B) from the Administrative Agent, any Lender or the
Borrower that one or more of the applicable conditions specified in Article VII
are not then satisfied, and in each such case directing such Letter of Credit
Issuer not to permit such extension.

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

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

 

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3.3 Letter of Credit Participations.

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

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

(c) In the event that any Letter of Credit Issuer makes any payment under any
Letter of Credit issued by it and the Borrower shall not have repaid such amount
in full to the respective Letter of Credit Issuer pursuant to Section 3.4(a), or
if any reimbursement payment is required to be refunded to the Borrower, such
Letter of Credit Issuer shall promptly notify the Administrative Agent and each
L/C Participant of such failure, and each such L/C Participant shall promptly
and unconditionally pay to the Administrative Agent for the account of such
Letter of Credit Issuer, the amount of such L/C Participant’s Commitment
Percentage of such unreimbursed payment in Dollars and in immediately available
funds; provided, however, that no L/C Participant shall be obligated to pay to
the Administrative Agent for the account of such Letter of Credit Issuer its
Commitment Percentage of such unreimbursed amount arising from any wrongful
payment made by the Letter of Credit Issuer under any such Letter of Credit as a
result of acts or omissions constituting willful misconduct or gross negligence
on the part of such Letter of Credit Issuer (as determined in a final and
non-appealable judgment by a court of competent jurisdiction). Each L/C
Participant shall make available to the Administrative Agent for the account of
the Letter of Credit Issuer such L/C Participant’s Commitment Percentage of the
amount of such payment no later than 1:00 p.m. on the first Business Day after
the date notified by such Letter of Credit Issuer in immediately available
funds. If and to the extent such L/C Participant shall not have so made its
Commitment Percentage of the amount of such payment available to the
Administrative Agent for the account of the applicable Letter of Credit Issuer,
such L/C Participant agrees to pay to the Administrative Agent for the account
of such Letter of Credit Issuer, forthwith on demand, such amount, together with
interest thereon for each day from such date until the date such amount is paid
to the Administrative Agent for the account of such Letter of Credit Issuer at a
rate per annum equal to the Overnight Rate from time to time then in effect,
plus any administrative, processing or similar fees customarily charged by such
Letter of Credit Issuer in connection with the foregoing. The failure of any L/C
Participant

 

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to make available to the Administrative Agent for the account of the applicable
Letter of Credit Issuer its Commitment Percentage of any payment under any
Letter of Credit shall not relieve any other L/C Participant of its obligation
hereunder to make available to the Administrative Agent for the account of such
Letter of Credit Issuer its Commitment Percentage of any payment under such
Letter of Credit on the date required, as specified above, but no L/C
Participant shall be responsible for the failure of any other L/C Participant to
make available to the Administrative Agent such other L/C Participant’s
Commitment Percentage of any such payment.

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

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

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

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

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

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

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

 

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

3.4 Agreement to Repay Letter of Credit Drawings.

(a) The Borrower hereby agrees to reimburse each Letter of Credit Issuer by
making payment in Dollars to the Administrative Agent for the account of such
Letter of Credit Issuer in immediately available funds, for any payment or
disbursement made by such Letter of Credit Issuer under any Letter of Credit
issued by it (each such amount so paid until reimbursed, an “Unpaid Drawing”)
(i) within one Business Day of the date of such payment or disbursement if such
Letter of Credit Issuer provides notice to the Borrower of such payment or
disbursement prior to 11:00 a.m. on such next succeeding Business Day (from the
date of such payment or disbursement) or (ii) if such notice is received after
such time, on the next Business Day following the date of receipt of such notice
(such required date for reimbursement under clause (i) or (ii), as applicable,
on such Business Day (the “Reimbursement Date”)), with interest on the amount so
paid or disbursed by such Letter of Credit Issuer, from and including the date
of such payment or disbursement to but excluding the Reimbursement Date, at the
per annum rate for each day equal to the rate described in Section 2.8(a);
provided that, notwithstanding anything contained in this Agreement to the
contrary, with respect to any Letter of Credit, (i) unless the Borrower shall
have notified the Administrative Agent and the applicable Letter of Credit
Issuer prior to 11:00 a.m. on the Reimbursement Date that the Borrower intends
to reimburse such Letter of Credit Issuer for the amount of such drawing with
funds other than the proceeds of Loans, the Borrower shall be deemed to have
given a Notice of Borrowing requesting that the Lenders make Loans (which shall
be ABR Loans) on the Reimbursement Date in an amount equal to the amount of the
Unpaid Drawing, and (ii) the Administrative Agent shall promptly notify each
Lender of such drawing and the amount of its Loan to be made in respect thereof,
and each Lender shall be irrevocably obligated to make a Loan to the Borrower in
the manner deemed to have been requested in the amount of its Commitment
Percentage of the applicable Unpaid Drawing by 12:00 noon on such Reimbursement
Date by making the amount of such Loan available to the Administrative Agent.
Such Loans made in respect of such Unpaid Drawing on such Reimbursement Date
shall be made without regard to the limits of Section 2.2 and without regard to
the satisfaction of the conditions set forth in Article VII. The Administrative
Agent shall use the proceeds of such Loans solely for purpose of reimbursing the
applicable Letter of Credit Issuer for the related Unpaid Drawing (and upon the
application of the proceeds of such Loans to such Unpaid Drawing, the Borrower’s
obligations with respect to such Unpaid Drawing shall be satisfied in full and
replaced with an obligation to repay such Loans in accordance with the terms of
this Agreement). In the event that the Borrower fails to Cash Collateralize any
Letter of Credit that is outstanding on the Maturity Date (or make other
arrangements with respect thereto satisfactory to the applicable Letter of
Credit Issuer and the Administrative Agent), the full amount of the Letter of
Exposure in respect of such Letter of Credit shall be deemed to be an Unpaid
Drawing subject to the provisions of this Section 3.4 except that such Letter of
Credit Issuer shall hold the proceeds received from the Lenders as contemplated
above as Cash Collateral for such Letter of Credit to reimburse any Drawing
under

 

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such Letter of Credit and shall use such proceeds first, to reimburse itself for
any Drawings made in respect of such Letter of Credit following the L/C Maturity
Date, second, to the extent such Letter of Credit expires or is returned undrawn
while any such Cash Collateral remains, to the repayment of obligations in
respect of any Loans that have not paid at such time and third, to the Borrower
or as otherwise directed by a court of competent jurisdiction. Nothing in this
Section 3.4(a) shall affect the Borrower’s obligation to repay all outstanding
Loans when due in accordance with the terms of this Agreement.

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

3.5 Increased Costs. If, after the Closing Date, the adoption of any Change in
Law shall either (a) impose, modify or make applicable any reserve, deposit,
capital adequacy, liquidity or similar requirement against Letters of Credit
issued by any Letter of Credit Issuer, or any L/C Participant’s L/C
Participation therein, or (b) impose on any Letter of Credit Issuer or any L/C
Participant any other conditions, costs or expenses affecting its obligations
under this Agreement in respect of Letters of Credit or L/C Participations
therein or any Letter of Credit or such L/C Participant’s L/C Participation
therein, and the result of any of the foregoing is to increase the cost to such
Letter of Credit Issuer or such L/C Participant of issuing, maintaining or
participating in any Letter of Credit, as applicable, or to reduce the amount of
any sum received or receivable by such Letter of Credit Issuer or such L/C
Participant hereunder (other than (i) Taxes indemnifiable under Section 5.4, or
(ii) Excluded Taxes) in respect of Letters of Credit or L/C Participations
therein, then, promptly (and in any event no later than 15 Business Days) after
receipt of written demand to the Borrower by such Letter of Credit Issuer or
such L/C Participant, as the case may be (a copy of which notice shall be sent
by such Letter of Credit Issuer or such L/C Participant to the Administrative
Agent), the Borrower shall pay to such Letter of Credit Issuer or such L/C
Participant such additional amount or amounts as will compensate such Letter of
Credit Issuer or such L/C Participant for such increased cost or reduction, it
being understood and agreed, however, that such Letter of Credit Issuer or an
L/C Participant shall not be entitled to such compensation as a result of such
Person’s compliance with, or pursuant to any request or directive to comply
with, any such Requirement of Law as in effect on the Closing Date (except as
otherwise set forth in the definition of Change in Law). A certificate submitted
to the Borrower by the relevant Letter of Credit Issuer or an L/C Participant,
as the case may be (a copy of which certificate shall be sent by such Letter of
Credit Issuer or such L/C Participant to the Administrative Agent), setting
forth in reasonable detail the basis for the determination of such additional
amount or amounts necessary to compensate such Letter of Credit Issuer or such
L/C Participant as aforesaid shall be conclusive and binding on the Borrower
absent clearly demonstrable error.

 

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3.6 New or Successor Letter of Credit Issuers.

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

 

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

3.7 Role of Letter of Credit Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, no Letter of Credit Issuer shall
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. None of the
Letter of Credit Issuers, the Administrative Agent, any of their respective
affiliates nor any correspondent, participant or assignee of any Letter of
Credit Issuer shall be liable to any Lender for (a) any action taken or omitted
in connection herewith at the request or with the approval of the Majority
Lenders, (b) any action taken or omitted in the absence of gross negligence or
willful misconduct or (c) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided that this assumption is not intended to, and shall not,
preclude the Borrower’s pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. None of the
Letter of Credit Issuers, the Administrative Agent, any of their respective
affiliates nor any correspondent, participant or assignee of any Letter of
Credit Issuer shall be liable or responsible for any of the matters described in
Section 3.3(e); provided that anything in such Section to the contrary
notwithstanding, the Borrower may have a claim against the Letter of Credit
Issuer, and the Letter of Credit Issuer may be liable to the Borrower in
accordance with Section 3.4(b) and, to the extent, but only to the extent, of
any direct, as opposed to special, indirect, consequential, exemplary or
punitive, damages suffered by the Borrower as a result of such Letter of Credit
Issuer’s willful misconduct, bad faith or gross negligence (as determined in a
final and non-appealable judgment by a court of competent jurisdiction) or such
Letter of Credit Issuer’s willful failure to pay under any Letter of Credit
after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of
Credit. In furtherance and not in limitation of the foregoing, each Letter of
Credit Issuer may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary, and no Letter of Credit Issuer shall be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

3.8 Cash Collateral.

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

 

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

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

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

3.10 Conflict with Issuer Documents. In the event of any conflict or
inconsistency between the terms hereof and the terms of any Issuer Document, the
terms hereof shall control.

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

ARTICLE IV

FEES; COMMITMENTS

4.1 Fees.

(a) The Borrower agrees to pay to the Administrative Agent in Dollars, for the
account of each Lender (in each case pro rata according to the respective
Commitment Percentages of the Lenders), a commitment fee (the “Commitment Fee”)
for each day from the Closing Date until but excluding the Termination Date.
Each Commitment Fee shall be payable by the Borrower (i) quarterly in arrears on
the last Business Day of each March, June, September and December (for the
three-month period (or portion thereof) ended on such day for which no

 

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payment has been received) and (ii) on the Termination Date (for the period
ended on such date for which no payment has been received pursuant to clause
(i) above), and shall be computed for each day during such period at a rate per
annum equal to the Commitment Fee Rate in effect on such day on the Available
Commitment (assuming for this purpose that any Swingline Exposure does not
reduce the Available Commitment) in effect on such day.

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

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

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

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

4.2 Termination or Reduction of Commitments.

(a) Upon at least two Business Days’ prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent at the Administrative
Agent’s Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), the Borrower shall have the right, without premium or
penalty, on any day, to permanently terminate or reduce the Commitments, as
determined by the Borrower, in whole or in part; provided that (i) any such
termination or reduction shall apply ratably to reduce each Lender’s Commitment,
(b) any partial reduction pursuant to this Section 4.2 shall be in the amount of
at least $10,000,000 and in an integral multiple of $2,500,000 in excess thereof
and (c) after giving effect to such termination or reduction and to any
prepayments of Loans and to the cancellation or Cash

 

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Collateralization of Letters of Credit (or other arrangements with respect
thereto satisfactory to the applicable Letter of Credit Issuer and the
Administrative Agent) made on the date thereof in accordance with this
Agreement, the Total Exposure shall not exceed the Loan Limit.

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

(c) The Total Commitment and the Swingline Commitment shall terminate at 5:00
p.m. on the Termination Date.

ARTICLE V

PAYMENTS

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

(a) the Borrower shall give the Administrative Agent at the Administrative
Agent’s Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to make such prepayment, the amount of such prepayment,
the Type of Loans to be prepaid (or whether Swingline Loans are to be paid) and,
in the case of LIBOR Loans, the specific Borrowing(s) being prepaid, which
notice shall be given by the Borrower no later than (i) in the case of LIBOR
Loans, 1:00 p.m. three Business Days prior to the date of such prepayment,
(ii) in the case of ABR Loans, 1:00 p.m. on the date of such prepayment, and
(iii) in the case of Swingline Loans, 3:00 p.m. Central time on the date of such
prepayment, and in each case, shall promptly be transmitted by the
Administrative Agent to each of the Lenders or Swingline Lenders, as applicable;

(b) each partial prepayment of (i) LIBOR Loans shall be in a minimum amount of
$500,000 and in multiples of $100,000 in excess thereof, and (ii) any ABR Loans
shall be in a minimum amount of $500,000 and in multiples of $100,000 in excess
thereof; provided that no partial prepayment of LIBOR Loans made pursuant to a
single Borrowing shall reduce the outstanding LIBOR Loans made pursuant to such
Borrowing to an amount less than $1,000,000 for such LIBOR Loans; and

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

With respect to each prepayment of Loans elected under this Section 5.1, the
Borrower may designate (i) the Types of Loans that are to be prepaid and the
specific Borrowing(s) being repaid and (ii) the Loans to be prepaid; provided
that (A) each prepayment of any Loans made pursuant

 

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to a Borrowing shall be applied pro rata among such Loans and
(B) notwithstanding the provisions of the preceding clause (A), no prepayment of
Loans shall be applied to the Loans of any Defaulting Lender unless otherwise
agreed in writing by the Borrower. In the absence of a designation by the
Borrower under Section 5.2(d), the Administrative Agent shall, subject to the
above, make such designation in its reasonable discretion with a view, but no
obligation, to minimize breakage costs owing under Section 2.11.

5.2 Mandatory Prepayments.

(a) Repayment of Loans Following Excess Exposure. If, at any time, including as
a result of giving effect to any termination or reduction of the Commitments
pursuant to Section 4.2(a), the Total Exposure exceeds the Loan Limit, then the
Borrower shall on the same Business Day (i) prepay the Swingline Loans and,
after all Swingline Loans have been paid in full, prepay the Loans on the date
such excess has occurred in an aggregate principal amount equal to such excess
and (ii) if any excess remains after prepaying all of the Loans and Swingline
Loans as a result of any Letter of Credit Exposure, pay to the Administrative
Agent on behalf of the Letter of Credit Issuers and the L/C Participants an
amount in cash equal to such excess to be held as Cash Collateral as provided in
Section 3.8.

(b) Repayment of Loans Following Redetermination or Adjustment of Borrowing Base
or PV-9.

(i) During a Borrowing Base Trigger Period, upon any redetermination of the
Borrowing Base in accordance with Sections 2.14(b) or 2.14(e), if there exists a
Borrowing Base Deficiency, then the Borrower shall, within 30 days after its
receipt from the Administrative Agent of a notice of such Borrowing Base
Deficiency, inform the Administrative Agent of the Borrower’s election to take
one or more of the following actions: (A) within 60 days following such election
prepay the Loans and/or Swingline Loans in an aggregate principal amount
necessary to eliminate such Borrowing Base Deficiency, (B) prepay Loans in six
equal monthly installments, commencing on the 30th day following such election,
with each payment being equal to 1/6th of the aggregate principal amount
necessary to eliminate such Borrowing Base Deficiency (as such Borrowing Base
Deficiency may be reduced during such six-month period), (C) within 30 days
following such election, provide additional Collateral in the form of additional
Oil and Gas Properties not evaluated in the most recently delivered Reserve
Report or other Collateral reasonably acceptable to the Administrative Agent
having a Borrowing Base (as proposed by the Administrative Agent and approved by
the Required Lenders) sufficient, after giving effect to any other actions taken
pursuant to this Section 5.2(b)(i) to eliminate any such Borrowing Base
Deficiency, or (D) undertake a combination of clauses (A), (B) and (C); provided
that if a Borrowing Base Deficiency remains after prepaying all of the Loans and
Swingline Loans, the Borrower shall Cash Collateralize Letters of Credit in an
amount equal to such remaining Borrowing Base Deficiency as provided in
Section 3.8; provided further, that all payments required to be made pursuant to
this Section 5.2(b)(i) must be made on or prior to the Termination Date.

 

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(ii) During a Borrowing Base Trigger Period, upon any redetermination of the
PV-9 in accordance with Sections 2.14(b), if there exists a PV-9 Deficiency,
then the Borrower shall, within 30 days after its receipt from the
Administrative Agent of a notice of such PV-9 Deficiency, inform the
Administrative Agent of the Borrower’s election to take one or more of the
following actions: (A) within 30 days following such election, prepay the Loans
and/or Swingline Loans in an aggregate principal amount necessary to eliminate
such PV-9 Deficiency, (B) within 30 days following such election, provide
additional Collateral in the form of additional Oil and Gas Properties not
evaluated in the most recently delivered Reserve Report or other Collateral
reasonably acceptable to the Administrative Agent having a PV-9 (as proposed by
the Administrative Agent and approved by the Required Lenders) sufficient, after
giving effect to any other actions taken pursuant to this Section 5.2(b)(ii) to
eliminate such PV-9 Deficiency, or (C) undertake a combination of clauses (A),
and (B); provided that if a PV-9 Deficiency remains after prepaying all of the
Loans and Swingline Loans, the Borrower shall Cash Collateralize Letters of
Credit in an amount equal to such remaining PV-9 Deficiency as provided in
Section 3.8; provided further, that all payments required to be made pursuant to
this Section 5.2(b)(ii) must be made on or prior to the Termination Date.

(c) Application to Loans. With respect to each prepayment of Loans under this
Section 5.2, such prepayments shall be applied first towards the payment of
Swingline Loans, second to the payment of Loans and third if because of Letter
of Credit Exposure, a Borrowing Base Deficiency or a PV-9 Deficiency remains
after prepaying all of the Swingline Loans and Loans, to Cash Collateralize such
Letters of Credit.

(d) LIBOR Interest Periods. In lieu of making any payment pursuant to this
Section 5.2 in respect of any LIBOR Loan, other than on the last day of the
Interest Period therefor so long as no Event of Default shall have occurred and
be continuing, the Borrower at its option may deposit, on behalf of the
Borrower, with the Administrative Agent an amount equal to the amount of the
LIBOR Loan to be prepaid and such LIBOR Loan shall be repaid on the last day of
the Interest Period therefor in the required amount. Such deposit shall be held
by the Administrative Agent in a corporate time deposit account established on
terms reasonably satisfactory to the Administrative Agent, earning interest at
the then customary rate for accounts of such type. Such deposit shall constitute
Cash Collateral for the LIBOR Loans to be so prepaid; provided that the Borrower
may at any time direct that such deposit be applied to make the applicable
payment required pursuant to this Section 5.2.

5.3 Method and Place of Payment.

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

(b) For purposes of computing interest or fees, any payments under this
Agreement that are made later than 2:00 p.m. in respect of Loans or 4:00 p.m. in
respect of Swingline Loans shall be deemed to have been made on the next
succeeding Business Day in the sole discretion of the Administrative Agent.
Whenever any payment to be made hereunder shall be stated to be due on a day
that is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.

5.4 Net Payments.

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

 

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

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

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

(e) Without limiting the generality of Section 5.4(d), any Non-U.S. Lender
shall, to the extent it is legally entitled to do so, deliver to the Borrower
and the Administrative Agent (in such number of copies as shall be requested by
the Borrower or the Administrative Agent) on or prior to the date on which such
Non-U.S. Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the reasonable request of the Borrower or the Administrative
Agent), whichever of the following is applicable:

(i) in the case of a Non-U.S. Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Credit Document, executed originals of Internal Revenue
Service Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of,
U.S. federal withholding Tax

 

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pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Credit Document, Internal Revenue
Service Form W-8BEN or W-8BEN-E establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “business profits” or “other
income” article of such tax treaty;

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

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

(iv) to the extent a Non-U.S. Lender is not the beneficial owner, executed
originals of Internal Revenue Service Form W-8IMY, accompanied by Internal
Revenue Service Form W-8ECI, Internal Revenue Service Form W-8BEN or W-8BEN-E, a
U.S. Tax Compliance Certificate, Internal Revenue Service Form W-9, and/or other
certification documents from each beneficial owner, as applicable; provided that
if the Non-U.S. Lender is a partnership and one or more direct or indirect
partners of such Non-U.S. Lender are claiming the portfolio interest exemption,
such Non-U.S. Lender may provide a U.S. Tax Compliance Certificate on behalf of
each such direct and indirect partner; and

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

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

(f) If any Lender or the Administrative Agent, as applicable, determines, in its
sole discretion, that it had received and retained a refund of an Indemnified
Tax or Other Tax for which a payment has been made by the Borrower or any
Guarantor pursuant to this Agreement or any other Credit Document, which refund
in the good faith judgment of such Lender or the Administrative Agent, as the
case may be, is attributable to such payment made by the Borrower or any
Guarantor, then such Lender or the Administrative Agent, as the case may be,
shall reimburse the Borrower or such Guarantor for such amount (net of all
out-of-pocket expenses of

 

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such Lender or the Administrative Agent, as the case may be, and without
interest other than any interest received thereon from the relevant Governmental
Authority with respect to such refund) as such Lender or the Administrative
Agent, as the case may be, determines in its sole discretion to be the
proportion of the refund as will leave it, after such reimbursement, in no
better or worse position (taking into account expenses or any taxes imposed on
the refund) than it would have been in if the payment had not been required;
provided that the Borrower or such Guarantor, upon the request of such Lender or
the Administrative Agent, agrees to repay the amount paid over to the Borrower
or such Guarantor (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to such Lender or the Administrative Agent in
the event such Lender or the Administrative Agent is required to repay such
refund to such Governmental Authority. In such event, such Lender or the
Administrative Agent, as the case may be, shall, at the Borrower’s request,
provide the Borrower with a copy of any notice of assessment or other evidence
of the requirement to repay such refund received from the relevant Governmental
Authority (provided that such Lender or the Administrative Agent may delete any
information therein that it deems confidential). Each Lender and the
Administrative Agent shall claim any refund that it determines is available to
it, unless it concludes in its sole discretion that it would be adversely
affected by making such a claim. No Lender nor the Administrative Agent shall be
obliged to make available its tax returns (or any other information relating to
its taxes that it deems confidential) to any Credit Party in connection with
this clause (f) or any other provision of this Section 5.4.

(g) If the Borrower determines that a reasonable basis exists for contesting a
Tax, each Lender or the Administrative Agent, as the case may be, shall use
reasonable efforts to cooperate with the Borrower as the Borrower may reasonably
request in challenging such Tax. The Borrower shall indemnify and hold each
Lender and the Administrative Agent harmless against any out-of-pocket expenses
incurred by such Person in connection with any request made by the Borrower
pursuant to this Section 5.4(g). Nothing in this Section 5.4(g) shall obligate
any Lender or the Administrative Agent to take any action that such Person, in
its sole judgment, determines may result in a material detriment to such Person.

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

(i) If a payment made to any Lender or the Administrative Agent under this
Agreement or any other Credit Document would be subject to U.S. federal
withholding tax imposed by FATCA if such Person were to fail to comply with the
applicable reporting requirements of FATCA (including those contained in
Section 1471(b) or 1472(b) of the Code, as applicable), such Person shall
deliver to the Borrower and the Administrative Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower

 

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or the Administrative Agent such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower or the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA, to determine that such
Person has or has not complied with such Person’s obligations under FATCA or to
determine the amount, if any, to deduct and withhold from such payment. Solely
for purposes of this Section 5.4(i), “FATCA” shall include any amendments made
to FATCA after the date of this Agreement.

(j) For the avoidance of doubt, for purposes of this Section 5.4, the term
“Lender” includes any Letter of Credit Issuer and any Swingline Lender

(k) The agreements in this Section 5.4 shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable hereunder.

5.5 Computations of Interest and Fees.

(a) Except as provided in the next succeeding sentence, interest on Loans and
Swingline Loans shall be calculated on the basis of a 360-day year for the
actual days elapsed, provided that interest on ABR Loans in respect of which the
rate of interest is calculated on the basis of the Administrative Agent’s prime
rate and interest on overdue interest shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed.

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

5.6 Limit on Rate of Interest.

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

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

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

 

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

ARTICLE VI

CONDITIONS PRECEDENT TO INITIAL CREDIT EVENTS

The obligation of each Lender to advance the initial Loans, of the Swingline
Lenders to advance the initial Swingline Loans and of the Letter of Credit
Issuers to issue initial Letters of Credit hereunder, is subject to satisfaction
(or waiver in accordance with Section 13.1) of the following conditions
precedent:

6.1 Executed Credit Agreement. The Administrative Agent shall have received
(including by facsimile or other electronic means) this Agreement, executed and
delivered by a duly Authorized Officer of the Borrower, the Administrative
Agent, each Lender (including the Swingline Lenders) and each Letter of Credit
Issuer.

6.2 Secretary’s Certificates. The Administrative Agent shall have received, in
form and substance reasonably satisfactory to the Administrative Agent,
certificates of the secretary or an assistant secretary of each Credit Party
containing specimen signatures of the Persons authorized to execute Credit
Documents to which such Credit Party is a party, together with (a) a copy of the
resolutions, in form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors or a duly authorized committee thereto (or
other equivalent governing body) of such Credit Party authorizing the execution,
delivery and performance of the Credit Documents to which it is a party and
(b) true and complete copies of each of the organizational documents of such
Credit Party as of the Closing Date.

6.3 Good Standing Certificate of the Credit Parties. The Administrative Agent
shall have received a certificate of good standing (or the equivalent) from the
appropriate governing agency of each Credit Party’s jurisdiction of organization
(to the extent good standing (or the equivalent) has meaning in such
jurisdiction).

6.4 Certain Credit Documents. The Administrative Agent shall have received:

(a) the Guarantee, executed and delivered by a duly Authorized Officer of each
Person that is a Guarantor as of the Closing Date and the Guarantee shall be in
full force and effect as of the Closing Date; and

(b) a promissory note executed by the Borrower in favor of each Lender that has
requested a promissory note.

6.5 Legal Opinions. The Administrative Agent shall have received the executed
legal opinion of Baker Botts L.L.P., counsel to the Borrower in form and
substance reasonably satisfactory to the Administrative Agent and the executed
legal opinion of McAfee & Taft, a

 

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Professional Corporation, Oklahoma counsel to the Borrower in form and substance
reasonably satisfactory to the Administrative Agent. The Borrower, the other
Credit Parties and the Administrative Agent hereby instruct such counsel to
deliver such legal opinion.

6.6 Closing Certificate. The Administrative Agent shall have received a
certificate of the Borrower, dated the Closing Date, substantially in the form
of Exhibit G.

6.7 Fees. All fees required to be paid on the Closing Date pursuant to any fee
letter previously agreed in writing between the Administrative Agent, the Joint
Lead Arrangers, the Joint Bookrunners and the Borrower and reasonable
out-of-pocket expenses required to be paid on the Closing Date pursuant to any
commitment letter in respect of the Commitments as agreed in writing between the
Administrative Agent, the Joint Lead Arrangers, the Joint Bookrunners and the
Borrower, to the extent invoiced at least three Business Days prior to the
Closing Date (except as otherwise reasonably agreed by the Borrower), shall,
upon the initial Borrowings hereunder, have been, or will be substantially
simultaneously, paid.

6.8 Patriot Act. The Administrative Agent and the Joint Bookrunners shall have
received all documentation and other information about the Borrower and the
Guarantors as shall have been reasonably requested in writing by the
Administrative Agent or the Joint Bookrunners at least seven calendar days prior
to the Closing Date and as is mutually agreed to be required by U.S. regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the PATRIOT Act.

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

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

6.11 Solvency Certificate. The Administrative Agent shall have received a
solvency certificate from the chief financial officer or controller (or other
financial officer) of the Borrower, dated as of the Closing Date, setting forth
the conclusion that (after giving effect to the consummation of the
Transactions), the Borrower, on a consolidated basis with its Restricted
Subsidiaries, is Solvent.

6.12 Payoff Letters. The Administrative Agent shall have received evidence of
the termination of the Existing Credit Agreement and customary payoff letters
and releases of Liens thereunder, in each case, in form and substance
satisfactory to the Administrative Agent.

6.13 Uniform Commercial Code Searches. Appropriate Uniform Commercial Code
search results in respect of the Credit Parties, as may be reasonably requested
by the Administrative Agent, from Delaware and any other relevant jurisdiction,
reflecting no prior Liens encumbering the properties of any Credit Party, other
than those which shall be released prior to or contemporaneously with the
Closing Date and those permitted under Section 10.2.

 

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The Administrative Agent (or, at the Administrative Agent’s direction, its
counsel) shall notify the Borrower and the Lenders of the Closing Date, and such
notice shall be conclusive and binding.

ARTICLE VII

CONDITIONS PRECEDENT TO ALL CREDIT EVENTS

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

7.1 No Default; Representations and Warranties. At the time of each Credit Event
and also immediately after giving effect thereto (a) no Default or Event of
Default shall have occurred and be continuing, (b) all representations and
warranties made by any Credit Party contained herein (other than, during a
Specified Period, those set forth in Sections 8.4 and 8.20) or in the other
Credit Documents shall be, to the knowledge of an Authorized Officer of the
Borrower, true and correct in all material respects (unless such representations
and warranties are already qualified by materiality or Material Adverse Effect,
in which case they are true and correct in all respects) with the same effect as
though such representations and warranties had been made on and as of the date
of such Credit Event (except where such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall have been true and correct in all material respects (unless such
representations and warranties are already qualified by materiality or Material
Adverse Effect, in which case they are true and correct in all respects) as of
such earlier date) and (c) other than during a Specified Period, to the
knowledge of an Authorized Officer of the Borrower, no Material Adverse Effect
has occurred since December 31, 2013.

7.2 Notice of Borrowing.

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

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

The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that all
the applicable conditions specified in Section 7.1 above have been satisfied as
of that time.

 

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ARTICLE VIII

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Agreement, to make the Loans
and issue or participate in Letters of Credit and Swingline Loans as provided
for herein, the Borrower makes, on the Closing Date and on each other date as
required by this Agreement, the following representations and warranties to the
Lenders:

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

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

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

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

 

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8.5 Margin Regulations. The proceeds of the Loans, Swingline Loans or Letters of
Credit will not be used by the Borrower or any of its Subsidiaries in violation
of the provisions of Regulation T, Regulation U or Regulation X of the Board.
The Borrower is not engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying margin
stock.

8.6 Governmental Approvals. The execution, delivery and performance of each
Credit Document do not require any consent or approval of, registration or
filing with, or other action by, any Governmental Authority, except for (a) such
as have been obtained or made and are in full force and effect, (b) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(c) any reports required to be filed by the Borrower with the SEC pursuant to
the Exchange Act, (d) those that may be required from time to time in the
ordinary course of business that may be required to comply with certain
covenants contained in the Credit Documents, and (e) such consents, approvals,
registrations, filings or actions the failure of which to obtain or make would
not reasonably be expected to have a Material Adverse Effect.

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

8.8 True and Complete Disclosure.

(a) None of the written factual information and written data (taken as a whole)
furnished by or on behalf of the Borrower, any of the Subsidiaries or any of
their respective authorized representatives to the Administrative Agent, any
Joint Lead Arranger, any Joint Bookrunner and/or any Lender on or before the
Closing Date (including all such information and data contained in the Credit
Documents) for purposes of or in connection with this Agreement or any
transaction contemplated herein contained any untrue statement of any material
fact or omitted to state any material fact necessary to make such information
and data (taken as a whole) not materially misleading at such time (after giving
effect to all supplements so furnished prior to such time) in light of the
circumstances under which such information or data was furnished; it being
understood and agreed that for purposes of this Section 8.8(a), such factual
information and data shall not include pro forma financial information,
projections or estimates (including financial estimates, forecasts and other
forward-looking information) and information of a general economic or general
industry nature.

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

8.9 Financial Condition; Financial Statements.

 

 

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(a) On the Closing Date, the Historical Financial Statements present fairly in
all material respects the combined consolidated financial position of the
Borrower and the combined consolidated Subsidiaries at the dates of such
information and for the period covered thereby and have been prepared in
accordance with GAAP consistently applied except to the extent provided in the
notes thereto, if any, subject, in the case of the unaudited financial
information, to changes resulting from audit, normal year end audit adjustments
and to the absence of footnotes.

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

8.10 Tax Matters. Except where the failure of which would not be reasonably
expected to have a Material Adverse Effect, each of the Borrower and the
Restricted Subsidiaries has filed all U.S. federal income tax returns and all
other tax returns, domestic and foreign, required to be filed by it and has paid
or caused to be paid all material taxes payable by it that have become due,
other than those (i) not yet delinquent or (ii) being contested in good faith by
appropriate proceedings and as to which adequate reserves have been provided to
the extent required by and in accordance with GAAP.

8.11 Compliance with ERISA. No ERISA Event has occurred or is reasonably
expected to occur that would reasonably be expected to result in a Material
Adverse Effect. Each Plan is in compliance with applicable provisions of ERISA,
the Code and other applicable laws except to the extent failure to comply would
not reasonably be expected to result in a Material Adverse Effect.

8.12 Subsidiaries. Schedule 8.12 lists each Material Subsidiary of the Borrower
existing on the Closing Date. Each Guarantor, Material Subsidiary and
Unrestricted Subsidiary as of the Closing Date has been so designated on
Schedule 8.12.

8.13 Environmental Laws.

(a) On the Closing Date, except as would not reasonably be expected to have a
Material Adverse Effect: (i) the Borrower and each of the Restricted
Subsidiaries and all Oil and Gas Properties are in compliance with all
applicable Environmental Laws; (ii) neither the Borrower nor any Restricted
Subsidiary has received written notice of any liability under any applicable
Environmental Law; (iii) neither the Borrower nor any Restricted Subsidiary is
conducting any investigation, removal, remedial or other corrective action
pursuant to any applicable Environmental Law at any location; and (iv) there has
been no release or, to the knowledge of any Authorized Officer of the Borrower,
threatened release of any Hazardous Materials at, on or under any Oil and Gas
Properties currently owned or leased by the Borrower or any of its Restricted
Subsidiaries.

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

 

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8.14 Properties. Each Credit Party has good and defensible title to all of its
material properties and assets, free and clear of all Liens other than Liens
permitted under Section 10.2 and of all impediments to the use of such
properties and assets in such Credit Party’s business, except that no
representation or warranty is made with respect to any oil, gas or mineral
property or interest to which no proved oil or gas reserves are properly
attributed. Except for Liens permitted under Section 10.2, each Credit Party
will respectively own in the aggregate, in all material respects, the net
interests in production attributable to all material wells and units owned by
the Credit Party. The ownership of such properties shall not in the aggregate in
any material respect obligate such Credit Party to bear the costs and expenses
relating to the maintenance, development and operations of such properties in an
amount materially in excess of the working interest of such properties. Each
Credit Party has paid in all material respects all royalties payable under the
oil and gas leases to which it is operator, except those contested in accordance
with the terms of the applicable joint operating agreement or otherwise
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the Borrower
or such other Credit Party, as the case may be.

8.15 Solvency. The Borrower, on a consolidated basis with its Restricted
Subsidiaries, is Solvent.

8.16 Hedge Agreements. As of the Closing Date, the Hedge Agreements of the
Credit Parties are in compliance with Section 10.10.

8.17 No Default. On the Closing Date, no Credit Party is in default under or
with respect to any Contractual Requirement that would, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect. No
Default has occurred and is continuing or would result from the consummation of
the transactions contemplated by this Agreement or any other Credit Document.

8.18 Anti-Corruption Laws and Sanctions. The Borrower has implemented and
maintains in effect policies and procedures designed to ensure compliance by the
Borrower, its Subsidiaries and its directors, officers, employees and agents
with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its
Subsidiaries and their respective officers and employees and, to the knowledge
of the Authorized Officers of the Borrower, its directors and agents, are in
compliance with Anti-Corruption Laws and applicable Sanctions in all material
respects and are not knowingly engaged in any activity that would reasonably be
expected to result in the Borrower being designated as a Sanctioned Person. None
of (a) the Borrower, any of its Subsidiaries or, to the knowledge of the
Authorized Officers of the Borrower, any of their respective directors, officers
or employees, or (b) to the knowledge of the Authorized Officers of the
Borrower, any agent of the Borrower or any of its Subsidiaries that will act in
any capacity in connection with or benefit from the Facility, is a Sanctioned
Person. No Borrowing or Letter of Credit, use of proceeds or other Transactions
will violate Anti-Corruption Laws or applicable Sanctions.

 

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8.19 Pari Passu or Priority Status. Neither the Borrower nor any other Credit
Party has taken any action which would cause the claims of unsecured creditors
of the Borrower or of any other Credit Party, as the case may be (other than
claims of such creditors to the extent that they are statutorily preferred or
Permitted Liens), to have priority over the claims of the Administrative Agent
and the Secured Parties against the Borrower and such other Credit Party under
this Agreement or the other Credit Documents.

8.20 No Material Adverse Effect. No Material Adverse Effect has occurred since
December 31, 2013.

ARTICLE IX

AFFIRMATIVE COVENANTS

The Borrower hereby covenants and agrees with the Lenders from and after the
Closing Date until Facility Termination, as follows:

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

(a) Annual Financial Statements. As soon as available and in any event within
five (5) Business Days after the date on which such financial statements are
required to be filed with the SEC (after giving effect to any permitted
extensions) (or, if such financial statements are not required to be filed with
the SEC, on or before the date that is 95 days after the end of each such fiscal
year), the audited consolidated balance sheet of the Borrower and the
Subsidiaries as at the end of such fiscal year and the related consolidated
statements of operations, shareholders’ equity and cash flows for such fiscal
year, setting forth comparative consolidated figures for the preceding fiscal
years (and, if more than 10% of Adjusted Consolidated Net Tangible Assets for
such fiscal year is attributable to Unrestricted Subsidiaries, a reasonably
detailed reconciliation, reflecting such financial information for the Borrower
and the Restricted Subsidiaries, on the one hand, and the Borrower and the
Subsidiaries, on the other hand, for such fiscal year), all in reasonable detail
and prepared in accordance with GAAP and, except with respect to such
reconciliation, certified by independent certified public accountants of
recognized national standing whose opinion shall not be materially qualified
with a “going concern” or like qualification or exception (other than with
respect to, or resulting from, (i) the occurrence of the Maturity Date within
one year from the date such opinion is delivered or (ii) any potential inability
to satisfy the Financial Performance Covenants on a future date or in a future
period).

(b) Quarterly Financial Statements. As soon as available and in any event within
five (5) Business Days after the date on which such financial statements are
required to be filed with the SEC (after giving effect to any permitted
extensions) with respect to each of the first three quarterly accounting periods
in each fiscal year of the Borrower (or, if such financial statements are not
required to be filed with the SEC, on or before the date that is 60 days after
the end of each such quarterly accounting period), the consolidated balance
sheet of the Borrower and the Subsidiaries as at the end of such quarterly
period and the related consolidated statements of operations, shareholders’
equity and cash flows for such quarterly accounting

 

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period and for the elapsed portion of the fiscal year ended with the last day of
such quarterly period, and setting forth comparative consolidated figures for
the related periods in the prior fiscal year or, in the case of such
consolidated balance sheet, for the last day of the prior fiscal year (and, if
more than 10% of Adjusted Consolidated Net Tangible Assets for such quarterly
accounting period is attributable to Unrestricted Subsidiaries, a reasonably
detailed reconciliation, reflecting such financial information for the Borrower
and the Restricted Subsidiaries, on the one hand, and the Borrower and the
Subsidiaries, on the other hand, for such quarterly accounting period), all of
which shall be certified by an Authorized Officer of the Borrower as fairly
presenting in all material respects the financial condition, results of
operations, shareholders’ equity and cash flows, of the Borrower and its
consolidated Subsidiaries (or, in the case of such reconciliation, the Borrower
and its Restricted Subsidiaries) in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments and the absence of
footnotes.

(c) Other Information. (i) Promptly upon filing thereof, copies of any filings
(including on Form 10-K, 10-Q or 8-K) with, and reports to, the SEC or any
analogous Governmental Authority in any relevant jurisdiction by the Borrower or
any of the Subsidiaries (other than amendments to any registration statement,
exhibits to any registration statement and, if applicable, any registration
statements on Form S-8), (ii) copies of all financial statements, proxy
statements, notices and reports that the Borrower or any of the Subsidiaries
shall send to the holders of any publicly issued debt of the Borrower and/or any
of the Subsidiaries, in each case in their capacity as such holders, lenders or
agents (in each case to the extent not theretofore delivered to the
Administrative Agent pursuant to this Agreement) and (iii) with reasonable
promptness, but subject to the limitations set forth in the last sentences of
Section 9.2(a) and Section 13.16, such other information (financial or
otherwise) as the Administrative Agent on its own behalf or on behalf of any
Lender (acting through the Administrative Agent) may reasonably request in
writing from time to time.

Documents required to be delivered pursuant to Sections 9.1(a), (b) and (c) may
be delivered electronically and, if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the website
address listed on Schedule 13.2, (ii) on which such documents are transmitted by
electronic mail to the Administrative Agent or (iii) on which such documents are
filed of record with the SEC. Each Lender shall be solely responsible for timely
accessing posted documents or requesting delivery of such documents from the
Administrative Agent and maintaining its copies of such documents.

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

 

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

(f) Environmental Matters. Promptly after an Authorized Officer of the Borrower
obtains written notice from any Governmental Authority of any one or more of the
following environmental matters, unless such environmental matters would not,
individually, or when aggregated with all other such matters, be reasonably
expected to result in a Material Adverse Effect, notice of:

(i) any condition or occurrence on any Oil and Gas Properties of any Credit
Party that would reasonably be expected to result in noncompliance by any Credit
Party with any applicable Environmental Law;

(ii) any condition or occurrence on any Oil and Gas Properties that would
reasonably be anticipated to cause such Oil and Gas Properties to be subject to
any restrictions on the ownership, occupancy, use or transferability of such Oil
and Gas Properties under any Environmental Law; and

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

All such notices delivered under this Section 9.1(f) shall describe in
reasonable detail the nature of the claim, investigation, condition, occurrence
or removal or remedial action and the response thereto.

9.2 Books, Records and Inspections.

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

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

9.3 Maintenance of Insurance.

(a) The Borrower will, and will cause each Restricted Subsidiary to, at all
times maintain in full force and effect, pursuant to self-insurance arrangements
or with insurance companies that the Borrower believes (in the good faith
judgment of the management of the Borrower) are financially sound and
responsible at the time the relevant coverage is placed or renewed, insurance in
at least such amounts (after giving effect to any self-insurance which the
Borrower believes (in the good faith judgment of management of the Borrower) is
reasonable and prudent in light of the size and nature of its business) and
against at least such risks (and with such risk retentions) as the Borrower
believes (in the good faith judgment of management of the Borrower) is
reasonable and prudent in light of the size and nature of its business; and will
furnish to the Administrative Agent, upon written request from the
Administrative Agent, information presented in reasonable detail as to the
insurance so carried.

(b) During any Borrowing Base Trigger Period (and only during any Borrowing Base
Trigger Period), the Secured Parties shall be the additional insureds on any
such liability insurance as their interests may appear and, if property
insurance is obtained, the Administrative Agent shall be the additional loss
payee under any such property insurance; provided that, so long as no Event of
Default has occurred and is then continuing, the Secured Parties will provide
any proceeds of such property insurance to the Borrower to the extent that the
Borrower undertakes to apply such proceeds to the reconstruction, replacement or
repair of the property insured thereby. During any Borrowing Base Trigger Period
(and only during any

 

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Borrowing Base Trigger Period), the Borrower shall use commercially reasonable
efforts to ensure that all policies of insurance required by the terms of this
Agreement or any Security Document shall provide that each insurer shall
endeavor to give at least 30 days’ prior written notice to the Administrative
Agent of any cancellation of such insurance (or at least 10 days’ prior written
notice in the case of cancellation of such insurance due to non-payment of
premiums).

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

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

9.6 Compliance with Statutes, Regulations, Etc. The Borrower will, and will
cause each Restricted Subsidiary to, comply with all Requirements of Law
applicable to it or its property, including all governmental approvals or
authorizations required to conduct its business, and to maintain all such
governmental approvals or authorizations in full force and effect, in each case
except where the failure to do so would not reasonably be expected to have a
Material Adverse Effect. The Borrower will maintain in effect and enforce
policies and procedures designed to ensure compliance by the Borrower, its
Subsidiaries and their respective directors, officers, employees and agents with
Anti-Corruption Laws and applicable Sanctions.

9.7 [Reserved].

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

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

 

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

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

9.9 Unrestricted Subsidiaries.

(a) Unless designated as an Unrestricted Subsidiary as of the date hereof on
Schedule 8.12 or thereafter in compliance with Section 9.9(b), any Person that
is or becomes a Subsidiary of the Borrower shall be a Restricted Subsidiary.

(b) The Borrower may designate by written notification thereof to the
Administrative Agent, any Subsidiary of the Borrower, including a newly formed
or newly acquired Subsidiary, as an Unrestricted Subsidiary if immediately after
giving effect to such designation, (i) no Event of Default or, during a
Borrowing Base Trigger Period, Borrowing Base Deficiency or PV-9 Deficiency
shall have occurred and be continuing, (ii) the Borrower shall be in compliance
with the Financial Performance Covenants on a Pro Forma Basis, (iii) such
Unrestricted Subsidiary will be in compliance with Section 9.9(d), (iv) the
Borrower shall be in compliance with Section 10.5, and (v) such Unrestricted
Subsidiary is not a “restricted subsidiary” under, or guarantor of, the Secured
Hedge Facility, the Indentures or any Permitted Additional Debt.

(c) The Borrower may designate an Unrestricted Subsidiary to be a Restricted
Subsidiary if immediately after giving effect to such designation, (i) the
representations and warranties of each Credit Party contained in each of the
Credit Documents are true and correct in all material respects on and as of such
date of the designation (or, if stated to have been made expressly as of an
earlier date, were true and correct in all material respects as of such earlier
date), (ii) no Event of Default would be continuing, and (iii) to the extent
such Subsidiary has outstanding Indebtedness on the date of such designation,
the Borrower shall be in compliance with the Financial Performance Covenants on
a Pro Forma Basis.

(d) No Unrestricted Subsidiary will be the owner or holder of Stock of any Group
Member.

9.10 Additional Guarantors, Grantors and Collateral.

(a) Subject to any applicable limitations set forth in the Credit Documents,
upon the occurrence and during the continuation of a Borrowing Base Trigger
Period, as soon as practicable using commercially reasonable efforts (and
executing and delivering each Security Document as it may become available), but
in any event within one hundred and twenty (120)

 

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days (or such longer period as both the Administrative Agent and one other Agent
Bank shall agree) of the first day of such Borrowing Base Trigger Period (the
“Borrowing Base Trigger Date”), the Borrower will execute or will cause to be
executed such Mortgages that may be necessary such that after giving effect
thereto the Borrower will meet the Collateral Requirements.

(b) Subject to any applicable limitations set forth in the Credit Documents and
except during any Guarantor Release Period, the Borrower will cause (i) any
direct or indirect Material Subsidiary (other than any Excluded Subsidiary)
formed or otherwise purchased or acquired after the Closing Date and (ii) any
direct or indirect Material Subsidiary of the Borrower that ceases to be an
Excluded Subsidiary, in each case within 60 days from the date of such
formation, acquisition or cessation, as applicable (or such longer period as the
Administrative Agent may agree in its reasonable discretion) to execute a
supplement to the Guarantee and become a Guarantor. During any Guarantor Release
Period, no Subsidiary shall be required to become a Guarantor hereunder;
provided, however, that the Borrower may add any Subsidiary as a Guarantor in
its sole discretion (including for the purpose of incurring Indebtedness under
Section 10.1(u)).

(c) During a Borrowing Base Trigger Period, subject to any applicable
limitations set forth in the Credit Documents, the Borrower will deliver to the
Administrative Agent for filing, registration or recording all documents and
instruments, including Uniform Commercial Code or other applicable personal
property and financing statements, reasonably requested by the Administrative
Agent to be filed, registered or recorded to create or continue, as applicable,
the Liens intended to be created by any Security Document and perfect such Liens
to the extent required by, and with the priority required by, such Security
Document to the Administrative Agent and none of the Collateral shall be subject
to any other pledges, security interests or mortgages, except for Liens
permitted under Section 10.2. Notwithstanding the foregoing, Borrower will not
be required to take any action to perfect a Lien on any of its or the
Subsidiaries’ personal property unless perfection may be accomplished by the
filing of a Uniform Commercial Code financing statement in Borrower’s or a
Subsidiary’s respective jurisdiction of formation or in the case of as-extracted
collateral and goods that are or are to become fixtures or collateral in
connection with a Mortgage, the filing of a financing statement filed as a
fixture filing or as a financing statement covering such property in the county
in which such collateral or fixtures are located.

9.11 Use of Proceeds.

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

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

 

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

9.12 Further Assurances. During a Borrowing Base Trigger Period:

(a) Subject to the applicable limitations set forth in Section 9.10 and the
Security Documents, the Borrower will, and will cause each other Credit Party
to, execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions (including the filing and
recording of financing statements, fixture, filings, assignments of as-extracted
collateral, mortgages, deeds of trust and other documents) that may be required
under any applicable Requirements of Law, or that the Administrative Agent or
the Majority Lenders may reasonably request, in order to grant, preserve,
protect and perfect the validity and priority of the security interests created
or intended to be created by the applicable Security Documents, all at the
expense of the Borrower and the Restricted Subsidiaries.

(b) Notwithstanding anything herein to the contrary, if the Administrative Agent
and the Borrower reasonably determine in writing that the cost of creating or
perfecting any Lien on any property is excessive in relation to the benefits
afforded to the Lenders thereby, then such property may be excluded from the
Collateral for all purposes of the Credit Documents.

9.13 Reserve Reports.

(a) During a Borrowing Base Trigger Period, on or before May 1st and
September 15th of each year, the Borrower shall furnish to the Administrative
Agent a Reserve Report evaluating, in the case of each May 1st Reserve Report as
of the immediately preceding January 1st and in the case of each September 15th
Reserve Report as of the immediately preceding July 1st, the Proved Reserves of
the Borrower and the Credit Parties located within the geographic boundaries of
the United States of America (or the Outer Continental Shelf adjacent to the
United States of America) that the Borrower desires to have included in any
calculation of the Borrowing Base; provided that the first such Reserve Report
required to be delivered under this Section 9.13(a) will evaluate such Proved
Reserves as of the first January 1st or July 1st to occur after the Initial
Determination Date. Each May 1st Reserve Report will be prepared by an Approved
Petroleum Engineer with respect to at least 50% of the aggregate volumes of the
Borrowing Base Properties. Each September 15th Reserve Report will be prepared
by or under the supervision of the Borrower’s chief engineer, certified by an
Authorized Officer of the Borrower as to the accuracy and completeness thereof
(each an “Internal Reserve Report”).

 

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(b) In the event of an Interim Redetermination, the Borrower shall furnish to
the Administrative Agent a Reserve Report prepared by one or more Approved
Petroleum Engineers or by or under the supervision of the chief engineer of the
Borrower or by the Borrower. For any Interim Redetermination pursuant to
Section 2.14(b), the Borrower shall provide such Reserve Report as soon as
possible, but in any event no later than sixty (60) days following the receipt
of a request for an Interim Redetermination with an “as of” date as of the most
recent month ending prior to the request.

(c) Upon a Borrowing Base Trigger Event, promptly upon the Borrower’s receipt of
the Bank Price Deck, but in any event no later than sixty (60) days following
the receipt of such Bank Price Deck, the Borrower shall prepare and furnish to
the Administrative Agent an Internal Reserve Report using the most recent
quarter-end data available to the Borrower and covering, among other properties,
the Oil and Gas Properties proposed to be the Borrowing Base Properties (but
with a stand-alone report covering only the Borrowing Base Properties to the
extent other properties are included in such Internal Reserve Report).

(d) During a Borrowing Base Trigger Period, on or before the date of delivery to
the Administrative Agent of each Reserve Report required by Section 9.13(a), the
Borrower will use commercially reasonable efforts to deliver, if requested by
the Administrative Agent, title information consistent with usual and customary
standards for the geographic regions in which the Borrowing Base Properties are
located, taking into account the size, scope and number of leases and wells of
the Borrower and its Restricted Subsidiaries, provided that with respect to any
Oil and Gas Properties for which title information reasonably acceptable to the
Administrative Agent was provided prior to the Closing Date, the Borrower shall
be under no obligation to provide additional title information during a
Borrowing Base Trigger Period.

ARTICLE X

NEGATIVE COVENANTS

The Borrower hereby covenants and agrees with the Lenders from and after the
Closing Date until Facility Termination, as follows:

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

(a) Indebtedness arising under the Credit Documents;

(b) Intercompany loans and advances made by the Borrower to any Restricted
Subsidiary or made by any Restricted Subsidiary to the Borrower or its
Restricted Subsidiaries so long as, during a Guaranty Release Period and
reasonably promptly after request by the Administrative Agent, such Indebtedness
is subject to subordination terms acceptable to the Administrative Agent, to the
extent permitted by Requirements of Law and not giving rise to material adverse
tax consequences;

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

 

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(d) subject to compliance with Section 10.5, Guarantee Obligations of
(i) Restricted Subsidiaries in respect of Indebtedness of the Borrower or other
Restricted Subsidiaries that is permitted to be incurred under this Agreement
(except that a Restricted Subsidiary that is not a Credit Party may not, by
virtue of this Section 10.1(d) guarantee Indebtedness that such Restricted
Subsidiary could not otherwise incur under this Section 10.1) and (ii) the
Borrower in respect of Indebtedness of Restricted Subsidiaries that is permitted
to be incurred under this Agreement; provided that (A) if the Indebtedness being
guaranteed under this Section 10.1(d) is subordinated to the Obligations, such
Guarantee Obligations shall be subordinated to the Guarantee of the Obligations
on terms at least as favorable to the Lenders as those contained in the
subordination of such Indebtedness and (B) no guarantee by any Restricted
Subsidiary of any Permitted Additional Debt (or Indebtedness under clause
(g) below) shall be permitted unless such Restricted Subsidiary shall have also
provided a guarantee of the Obligations substantially on the terms set forth in
the Guarantee;

(e) Guarantee Obligations incurred in the ordinary course of business in respect
of obligations of (or to) suppliers, customers, franchisees, lessors, licensees
or sublicensees;

(f) (i) Indebtedness (including Indebtedness arising under Capital Leases)
incurred within 270 days of, or assumed in connection with, the acquisition,
construction, lease, repair, replacement, expansion or improvement of fixed or
capital assets to finance the acquisition, construction, lease, repair,
replacement expansion, or improvement of such fixed or capital assets,
(ii) Indebtedness arising under Capital Leases, other than (A) Capital Leases in
effect on the Closing Date and (B) Capital Leases entered into pursuant to
subclause (i) above (provided that, in the case of each of the foregoing
subclauses (i) and (ii), the Borrower shall be in compliance on a Pro Forma
Basis with the Financial Performance Covenants); and (iii) any Permitted
Refinancing Indebtedness issued or incurred to Refinance any such Indebtedness;

(g) Indebtedness outstanding on the Closing Date listed on Schedule 10.1 and any
Permitted Refinancing Indebtedness issued or incurred to Refinance such
Indebtedness;

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

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

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

 

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(C) the Borrower shall be in compliance on a Pro Forma Basis with the Financial
Performance Covenants; and

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

(i) [Reserved].

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

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

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

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

(n) Indebtedness arising from agreements of the Borrower or any Restricted
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations (including earn-outs), in each case entered into in
connection with any acquisition or Disposition permitted hereunder;

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

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

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

 

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

(s) [Reserved];

(t) Indebtedness under Hedge Agreements permitted by Section 10.10;

(u) Indebtedness of any Restricted Subsidiary that is not a party to a Guarantee
at the time such Indebtedness is incurred; provided that the aggregate principal
amount of Indebtedness outstanding at any time pursuant to this clause (u) shall
not at the time of incurrence thereof and after giving pro forma effect thereto
and the use of proceeds thereof, exceed 15% of Adjusted Consolidated Net
Tangible Assets of the Borrower (measured as of the date such Indebtedness is
incurred based upon the financial statements most recently available prior to
such date);

(v) (i) other Indebtedness incurred during an Unsecured Period, provided that
immediately after giving effect to the incurrence of any such Indebtedness,
(A) no Default or Event of Default has occurred and is continuing or would
result therefrom and (B) the Borrower shall be in compliance on a Pro Forma
Basis with the Financial Performance Covenants, and (ii) any Permitted
Refinancing Indebtedness issued or incurred to Refinance such Indebtedness;

(w) (i) during a Borrowing Base Trigger Period, (A) Indebtedness in respect of
Permitted Additional Debt and (B) other Indebtedness in an outstanding principal
amount not to exceed $750,000,000 (in the aggregate with all Indebtedness
outstanding under this subclause (B)), provided that, in each case, immediately
after giving effect to the incurrence of any such Indebtedness, (x) no Default
or Event of Default has occurred and is continuing or would result therefrom and
(y) the Borrower shall be in compliance on a Pro Forma Basis with the Financial
Performance Covenants, and (ii) any Permitted Refinancing Indebtedness issued or
incurred to Refinance such Indebtedness; and

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

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

(a) Liens arising under the Credit Documents to secure the Obligations
(including Liens contemplated by Section 3.8);

(b) Permitted Liens;

(c) Liens (including liens arising under Capital Leases to secure Capital Lease
Obligations) securing Indebtedness permitted pursuant to Section 10.1(f);
provided that such Liens attach concurrently with or within 270 days after the
acquisition, lease, repair,

 

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replacement, construction, expansion or improvement (as applicable) being
financed with such Indebtedness, (ii) other than the property financed by such
Indebtedness, such Liens do not at any time encumber any property, except for
replacements thereof and accessions and additions to such property and the
proceeds and the products thereof and customary security deposits and (iii) with
respect to Capital Leases, such Liens do not at any time extend to or cover any
assets (except for accessions and additions to such assets, replacements and
products thereof and customary security deposits) other than the assets subject
to such Capital Leases; provided that individual financings of equipment
provided by one lender may be cross collateralized to other financings of
equipment provided by such lender;

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

(e) (i) the modification, replacement, extension or renewal of any Lien
permitted by clauses (a), (b), (c), (d), (f), (i), and (s) of this Section 10.2
upon or in the same assets theretofore subject to such Lien or upon or in
after-acquired property that is (A) affixed or incorporated into the property
covered by such Lien, (B) in the case of Liens permitted by clause (f), subject
to a Lien securing Indebtedness permitted under Section 10.1, the terms of which
Indebtedness require or include a pledge of after-acquired property (it being
understood that such requirement shall not be permitted to apply to any property
to which such requirement would not have applied but for such acquisition) and
(C) the proceeds and products thereof or (ii) during a Borrowing Base Trigger
Period, Liens securing Indebtedness incurred in replacement, extension or
renewal (without increase in the amount or change in any direct or contingent
obligor except to the extent otherwise permitted hereunder) of secured
Indebtedness, to the extent the replacement, extension or renewal of the
Indebtedness secured thereby is permitted by Section 10.1;

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

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

 

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

(i) (i) Liens on cash advances in favor of the seller of any property to be
acquired in an transaction permitted by this Agreement to be applied against the
purchase price for such property, and (ii) Liens consisting of an agreement to
Dispose of any property in a transaction permitted by this Agreement;

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

(k) Liens deemed to exist in connection with Investments in repurchase
agreements permitted hereunder;

(l) Liens encumbering reasonable customary initial deposits and margin deposits
and similar Liens attaching to brokerage accounts incurred in the ordinary
course of business;

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

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

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

(p) Liens in respect of any Qualifying VPP;

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

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

 

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(s) Liens on Stock in a joint venture that does not constitute a Restricted
Subsidiary securing obligations of such joint venture so long as the assets of
such joint venture do not constitute Collateral;

(t) Liens securing any Indebtedness permitted by Section 10.1(j);

(u) Liens arising pursuant to Section 107(l) of CERCLA, or other Environmental
Law, unless such Lien (i) by action of the lienholder, or by operation of law,
takes priority over any Liens arising under the Credit Documents on the property
upon which it is a Lien, and (ii) relates to a liability of the Borrower or any
Restricted Subsidiary that is reasonably likely to exceed $30,000,000;

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

(w) additional Liens so long as the aggregate principal amount of the
obligations secured thereby at the time of the incurrence thereof and after
giving pro forma effect thereto and the use of proceeds thereof, does not exceed
(i) during an Investment Grade Period, 15% of Adjusted Consolidated Net Tangible
Assets, and (ii) at any other time, 3.50% of Adjusted Consolidated Net Tangible
Assets (measured, in each case, as of the date such Lien or the obligations
secured is incurred based upon the financial statements most recently available
prior to such date); provided that for purposes of determining the amount
secured by Liens under this Section 10.2(w), such amount shall be the lesser of
the outstanding amount of the secured obligations or the Fair Market Value of
the property subject to such Lien.

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

(a) the Borrower may merge, consolidate or amalgamate with any Person (including
any Subsidiary), provided that (i) the Borrower shall be the surviving,
continuing or resulting entity or, if the foregoing is not the case, the
surviving, continuing, or resulting entity shall be an entity organized or
existing under the laws of the United States, any state thereof, the District of
Columbia or any territory thereof (the Borrower or such Person, as the case may
be, being herein referred to as the “Successor Borrower”), (ii) the Successor
Borrower (if other than the Borrower) shall expressly assume all the obligations
of the Borrower under this Agreement and the other Credit Documents pursuant to
a supplement hereto or thereto in form reasonably satisfactory to the
Administrative Agent, (iii) no Borrowing Base Deficiency (during a Borrowing
Base Trigger Period), Default or Event of Default has occurred and is continuing
at the date of such merger, amalgamation, consolidation or would result from
such consummation of such merger, amalgamation, consolidation, and (iv) if such
merger, amalgamation, consolidation involves the Borrower and a Person that,
prior to the consummation of such merger, amalgamation, consolidation, is not a
Subsidiary of the Borrower (A) the Successor Borrower shall be in compliance, on
a Pro Forma Basis with the Financial Performance Covenants, (B) each Guarantor,
unless it is the other party to such merger, amalgamation, consolidation (or
unless the Successor Borrower is the Borrower) shall have confirmed in a

 

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writing in form and substance acceptable to the Administrative Agent that its
Guarantee shall apply to the Successor Borrower’s obligations under this
Agreement (and, during a Borrowing Base Trigger Period, shall have confirmed
that its obligations under the Security Documents shall apply to the Successor
Borrower’s obligations under this Agreement), (C) each mortgagor of a Mortgaged
Property, unless it is the other party to such merger or consolidation or unless
the Successor Borrower is the Borrower, shall have by an amendment to or
restatement of the applicable Mortgage confirmed that its obligations thereunder
shall apply to the Successor Borrower’s obligations under this Agreement, and
(D) if reasonably requested by the Administrative Agent, an opinion of counsel
shall be required to be provided to the effect that such merger, amalgamation,
consolidation does not violate this Agreement or any other Credit Document;
provided, further, that if the foregoing are satisfied, the Successor Borrower
(if other than the Borrower) will succeed to, and be substituted for, the
Borrower under this Agreement;

(b) any Guarantor may merge, amalgamate or consolidate with (i) any Credit Party
(provided that if the Borrower is involved in the case of any such merger,
amalgamation or consolidation, the provisions of clause (a) above shall govern)
or (ii) any other Person (including any other Subsidiary of the Borrower);
provided that (A) in the case of any merger, amalgamation or consolidation
involving one or more Restricted Subsidiaries, (1) a Restricted Subsidiary shall
be the continuing or surviving Person or (2) the Borrower shall take all steps
necessary to cause the Person formed by or surviving any such merger,
amalgamation or consolidation (if other than a Restricted Subsidiary) to become
a Restricted Subsidiary, (B) in the case of any merger, amalgamation or
consolidation involving one or more Guarantors, a Guarantor shall be the
continuing or surviving Person or the Person formed by or surviving any such
merger, amalgamation or consolidation (if other than a Guarantor) shall execute
a supplement to the Guarantee and any applicable Mortgage, each in form and
substance reasonably satisfactory to the Administrative Agent in order for the
surviving Person to become a Guarantor and pledgor, mortgagor and grantor of
Collateral for the benefit of the Secured Parties, (C) no Borrowing Base
Deficiency (during a Borrowing Base Trigger Period), Default or Event of Default
has occurred and is continuing on the date of such merger, amalgamation or
consolidation or would result from the consummation of such merger, amalgamation
or consolidation, and (D) if such merger, amalgamation or consolidation involves
a Subsidiary and a Person that, prior to the consummation of such merger,
amalgamation or consolidation, is not a Restricted Subsidiary of the Borrower,
the Borrower shall be in compliance, on a Pro Forma Basis with the Financial
Performance Covenants;

(c) any Restricted Subsidiary that is not a Guarantor may merge, amalgamate or
consolidate with, or Dispose of all or substantially all of its assets to, the
Borrower or any other Restricted Subsidiary (provided that if the Borrower is
involved in the case of any such merger, amalgamation or consolidation, the
provisions of clause (a) above shall govern);

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

 

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

10.4 Limitation on Sale of Assets. During a Borrowing Base Trigger Period, the
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
make any Disposition of Borrowing Base Properties, unless (i) no Default or
Event of Default has occurred and is continuing or would result therefrom (after
giving effect to any Mortgage executed and delivered to the Administrative Agent
substantially concurrently with such Disposition), (ii) the Borrower shall be in
compliance with the Financial Performance Covenants on a Pro Forma Basis and
(iii) immediately after giving effect to such Disposition (and to any Mortgage
executed and delivered to the Administrative Agent substantially concurrently
with such Disposition), no PV-9 Deficiency shall exist.

10.5 Limitation on Investments. The Borrower will not, and will not permit any
of its Restricted Subsidiaries to, make or hold Investments in Unrestricted
Subsidiaries (in each case valued at Fair Market Value (determined by the
Borrower acting in good faith)) unless (i) no Default or Event of Default has
occurred and is continuing or would result therefrom, (ii) the Borrower shall be
in compliance with the Financial Performance Covenants on a Pro Forma Basis and
(iii) during a Borrowing Base Trigger Period, immediately after giving effect to
such Investment, no PV-9 Deficiency shall exist.

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

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

(b) the Borrower may (i) redeem, acquire, retire or repurchase shares of its
Stock or Stock Equivalents held by any present or former officer, manager,
consultant, director or employee (or their respective Affiliates, estates,
spouses, former spouses, successors,

 

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executors, administrators, heirs, legatees, distributees or immediate family
members) of the Borrower and its Subsidiaries, upon the death, disability,
retirement or termination of employment of any such Person or otherwise in
accordance with any equity option or equity appreciation rights plan, any
management, director and/or employee equity ownership, benefit or incentive plan
or agreement, equity subscription plan, employment termination agreement or any
other employment agreements or equity holders’ agreement; provided that,
non-discretionary repurchases, acquisitions, retirements or redemptions pursuant
to the terms of any equity option or equity appreciation rights plan, any
management, director and/or employee equity ownership, benefit or incentive plan
or agreement, equity subscription plan, employment termination agreement or any
other employment agreements or equity holders’ agreement, the aggregate amount
of all cash paid in respect of all such shares of Stock or Stock Equivalents so
redeemed, acquired, retired or repurchased in any calendar year does not exceed
the $50,000,000; and (ii) pay Restricted Payments in an amount equal to
withholding or similar Taxes payable or expected to be payable by any present or
former employee, director, manager or consultant (or their respective
Affiliates, estates or immediate family members) and any repurchases of Stock or
Stock Equivalents in consideration of such payments including deemed repurchases
in connection with the exercise of stock options so long as the amount of such
payments does not exceed $25,000,000 in the aggregate;

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

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

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

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

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

(h) if no Event of Default shall have occurred and be continuing or would result
therefrom and after giving effect to the making of any such Restricted Payment,
the Borrower shall be in compliance on a Pro Forma Basis with the Financial
Performance Covenants, then the Borrower may declare and pay Restricted Payments
in cash or other property;

 

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(i) Restricted Subsidiaries may make Restricted Payments (i) to the Borrower or
any other Restricted Subsidiary and (ii) ratably to all holders of its
outstanding Stock and Stock Equivalents; and

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

10.7 Limitations on Subordinated Debt Payments and Amendments.

(a) The Borrower will not, and will not permit any Restricted Subsidiary to,
optionally prepay, repurchase or redeem or otherwise defease any Permitted
Additional Debt comprised of senior subordinated or subordinated Indebtedness
(it being understood that payments of regularly scheduled cash interest in
respect of, and payment of principal on the scheduled maturity date of such
Permitted Additional Debt shall be permitted); provided, however, that the
Borrower or any Restricted Subsidiary may optionally prepay, repurchase, redeem
or defease any such Permitted Additional Debt (i) with the proceeds of any
Permitted Refinancing Indebtedness, (ii) by converting or exchanging such
Permitted Additional Debt to Stock (other than Disqualified Stock) of the
Borrower, or (iii) so long as (A) no Event of Default has occurred and is
continuing or would result therefrom and (B) (1) during a Borrowing Base Trigger
Period, the Available Commitment is not less than 10% of the then effective Loan
Limit (after giving effect to such prepayment, repurchase, redemption or
defeasance) and (2) during an Unsecured Period, the Borrower is in compliance on
a Pro Forma Basis with the Financial Performance Covenants; and

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

10.8 Negative Pledge Agreements. The Borrower will not, and will not permit any
of the Restricted Subsidiaries to, enter into or permit to exist any Contractual
Requirement (other than this Agreement or any other Credit Document or any
documentation in respect of (a) secured Indebtedness otherwise permitted
hereunder or (b) the Credit Parties’ Oil and Gas Properties to the extent that
the property covered thereby is not required to be pledged as Collateral
pursuant to the definition of “Collateral Requirements”) that limits the ability
of the Borrower or any Guarantor to create, incur, assume or suffer to exist
Liens on property of such Person for the benefit of the Secured Parties with
respect to the Obligations or under the Credit Documents; provided that the
foregoing shall not apply to Contractual Requirements that (i)(x) exist on the
Closing Date and (to the extent not otherwise permitted by this Section 10.8)
are listed on Schedule 10.8 and (y) to the extent Contractual Requirements
permitted by clause (x) are set forth in an agreement evidencing Indebtedness or
other obligations, are set forth in any agreement evidencing any Permitted
Refinancing Indebtedness incurred to Refinance such Indebtedness or obligation
so long as such Permitted Refinancing Indebtedness does not expand the scope of
such restriction in such Contractual Requirement, (ii) are binding on a
Restricted

 

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Subsidiary at the time such Restricted Subsidiary first becomes a Restricted
Subsidiary of the Borrower (or are binding on property at the time such property
first becomes property of the Borrower or a Restricted Subsidiary), so long as
such Contractual Requirements were not entered into solely in contemplation of
such Person becoming a Restricted Subsidiary of the Borrower (or such property
becomes property of the Borrower or a Restricted Subsidiary), (iii) represent
Indebtedness of a Restricted Subsidiary of the Borrower that is not a Guarantor
to the extent such Indebtedness is permitted by Section 10.1 so long as such
Contractual Requirement applies only to such Subsidiary, (iv) arise pursuant to
agreements entered into with respect to any Disposition permitted hereunder and
are applicable solely to assets which are the subject of such Disposition,
(v) are customary provisions in joint venture agreements or agreements governing
property held with a common owner and other similar agreements or arrangements
relating solely to such joint venture or property or otherwise arise in
(A) agreements which restrict the Disposition or distribution of assets or
property in oil and gas leases, joint operating agreements, joint exploration
and/or development agreements, participation agreements or (B) any production
sharing contract or similar instrument on which a Lien cannot be granted without
the consent of a third party and, in each case, other similar agreements entered
into in the ordinary course of the oil and gas exploration and development
business, (vi) are negative pledges and restrictions on Liens in favor of any
holder of Indebtedness permitted under Section 10.1, but solely to the extent
any negative pledge relates to the property financed by or the subject of such
Indebtedness, (vii) are customary restrictions on leases, subleases, licenses or
asset sale agreements otherwise permitted hereby so long as such restrictions
relate to the assets subject thereto, (viii) comprise restrictions imposed by
any agreement relating to secured Indebtedness permitted pursuant to
Section 10.1 to the extent that such restrictions apply only to the property or
assets securing such Indebtedness, (ix) are customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of the
Borrower or any Subsidiary or in leases prohibiting Liens on retained property
rights of the lessor in connection with operations of the lessee conducted on
the leased property, (x) are customary provisions restricting assignment of any
agreement entered into in the ordinary course of business, (xi) restrict the use
of cash or other deposits imposed by customers or suppliers under contracts
entered into in the ordinary course of business, (xii) are imposed by any
Requirement of Law, (xiii) exist under any documentation governing any Permitted
Refinancing Indebtedness incurred to Refinance any Indebtedness but only to the
extent such Contractual Requirement was contained in the document evidencing the
Indebtedness being refinanced, (xiv) are customary net worth provisions
contained in real property leases entered into by Subsidiaries of the Borrower,
so long as the Borrower has determined in good faith that such net worth
provisions would not reasonably be expected to impair the ability of the
Borrower and its Subsidiaries to meet their ongoing obligations, (xv) relate to
property, an interest in which has been granted or conveyed to a Royalty Trust,
YieldCo or a master limited partnership or which is subject to a term net
profits interest, and (xvi) are restrictions regarding licenses or sublicenses
by the Borrower and its Restricted Subsidiaries of intellectual property in the
ordinary course of business (in which case such restriction shall relate only to
such intellectual property)(clauses (i) through (xvi), collectively, “Permitted
Restrictions”).

10.9 Limitation on Subsidiary Distributions. The Borrower will not, and will not
permit any of its Restricted Subsidiaries that are not Guarantors to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or consensual restriction on the ability of any such
Restricted Subsidiary to pay dividends or make

 

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any other distributions to the Borrower or any Restricted Subsidiary on its
Stock or with respect to any other interest or participation in, or measured by,
its profits or transfer any property to the Borrower or any Restricted
Subsidiary except (in each case) for such encumbrances or restrictions existing
under or by reason of:

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

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

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

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

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

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

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

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

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

 

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

(k) provisions contained in agreements which prohibit the transfer of all or
substantially all of the assets of the obligor thereunder unless the transferee
shall assume the obligations of the obligor under such agreement;

(l) Permitted Restrictions; and

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

10.10 Hedge Agreements. The Borrower will not, and will not permit any
Restricted Subsidiary to, enter into any Hedge Agreements with any Person other
than (a) Hedge Agreements not for speculative purposes entered into to hedge or
mitigate risks to which the Borrower or any Restricted Subsidiary has or may
have exposure (including with respect to commodity prices), (b) Hedge Agreements
not for speculative purposes entered into in order to effectively cap, collar or
exchange interest rates (from fixed to floating rates, from one floating rate to
another floating rate or otherwise) with respect to any interest-bearing
liability or investment of the Borrower or any Restricted Subsidiary and
(c) other Hedge Agreements not for speculative purposes permitted under the risk
management policies approved by the Borrower’s Board of Directors from time to
time.

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

10.11 Financial Performance Covenants. Commencing with the fiscal quarter ending
December 31, 2014:

(a) Leverage Ratio. Other than during an Investment Grade Period, the Borrower
will not permit its Leverage Ratio to exceed 4.00:1.00.

 

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(b) Net Debt to Capitalization Ratio. The Borrower will not permit its Net Debt
to Capitalization Ratio to be greater than 65% as of the last day of each fiscal
quarter.

10.12 Transactions with Affiliates. The Borrower will not, and will not permit
any of the Restricted Subsidiaries to conduct, any material transaction with any
of its Affiliates (other than the Borrower and the Restricted Subsidiaries or
any entity that becomes a Restricted Subsidiary as a result of such
transaction), unless the terms of such transaction (taken as a whole) are
substantially at least as favorable to the Borrower or such Restricted
Subsidiary as it would obtain at the time in a comparable arm’s-length
transaction (which includes, for the avoidance of doubt, any transaction
consummated for Fair Market Value) with a Person that is not an Affiliate (or,
if no comparable transaction is available with which to compare such
transaction, such transaction is otherwise fair to the Borrower or the relevant
Restricted Subsidiary as determined by an Authorized Officer of the Borrower in
good faith); provided that the foregoing restrictions shall not apply to:

(a) the payment of Transaction Expenses,

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

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

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

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

(f) Restricted Payments, redemptions, repurchases and other actions permitted
under Section 10.6 or Section 10.7,

 

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

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

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

(j) customary agreements and arrangements with Royalty Trusts, YieldCos, and
master limited partnerships that comply with the affiliate transaction
provisions of such Royalty Trust, YieldCo or master limited partnership
agreement.

10.13 Change in Business. The Borrower and its Restricted Subsidiaries, taken as
a whole, will not fundamentally and substantively alter the character of their
business, taken as a whole, from the business conducted by the Borrower and its
Restricted Subsidiaries on the date hereof and other business activities
incidental or reasonably related thereto.

10.14 Use of Proceeds. The Borrower will not, and will not permit any of its
Subsidiaries to, use the proceeds of any Loans, Swingline Loans or Letter of
Credit in violation of the provisions of Regulation T, Regulation U or
Regulation X of the Board.

ARTICLE XI

EVENTS OF DEFAULT

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

11.1 Payments. The Borrower shall (i) default in the payment when due of any
principal of the Loans or (ii) default in the payment when due of any interest
on the Loans or any Unpaid Drawings, fees or of any other amounts owing
hereunder or under any other Credit Document and such default shall continue for
five or more days.

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

 

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11.3 Covenants. Any Credit Party shall:

(a) default in the due performance or observance by it of any term, covenant or
agreement contained in Section 9.1(e)(i), 9.5 (solely with respect to the
Borrower), 9.11(c) or Article X; or

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

11.4 Default Under Other Agreements. (i) The Borrower or any of the Restricted
Subsidiaries shall default in any payment with respect to any Indebtedness
(other than Indebtedness described in Section 11.1) or any Indebtedness in
respect of any Hedge Agreement in excess of $125,000,000, beyond the grace
period, if any, provided in the instrument or agreement under which such
Indebtedness was created or (ii) any such Indebtedness shall be declared to be
due and payable, or shall be required to be prepaid, defeased or redeemed prior
to the stated maturity thereof, other than (A) as a result of a regularly
scheduled required prepayment or as a mandatory prepayment, (B) in the case of
any Indebtedness in respect of any Hedge Agreement, as a result of termination
event or equivalent event under such Hedge Agreement and (C) secured
Indebtedness that becomes due as a result of a Disposition (including as a
result of Casualty Event) of the property or assets securing such Indebtedness
permitted under this Agreement).

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

 

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11.6 ERISA.

(a) Any Plan shall fail to satisfy the minimum funding standard required for any
plan year or part thereof or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code; any Plan
or Multiemployer Plan is or shall have been terminated or is the subject of
termination proceedings under ERISA (including the giving of written notice
thereof); an event shall have occurred or a condition shall exist in either case
entitling the PBGC to terminate any Plan or to appoint a trustee to administer
any Plan (including the giving of written notice thereof); the Borrower or any
ERISA Affiliate has incurred or is likely to incur a liability to or on account
of a Plan or a Multiemployer Plan under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201 or 4204 or of ERISA or Section 4971 or 4975 of the Code
(including the giving of written notice thereof);

(b) there results from any event or events set forth in clause (a) of this
Section 11.6 the imposition of a lien, the granting of a security interest, or a
liability; and

(c) such lien, security interest or liability would be reasonably likely to have
a Material Adverse Effect.

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

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

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

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

Then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent may and, upon the written
request of the Majority Lenders, shall, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against the Borrower or
any other Credit Party, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in Section 11.5 shall
occur with respect to the Borrower, the result that would occur upon the giving
of written notice by the

 

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

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

(i) first, to payment or reimbursement of that portion of the Obligations
constituting fees, expenses and indemnities payable to the Administrative Agent
in each Person’s capacity as such;

(ii) second, to the Secured Parties, an amount equal to all Obligations due and
owing to them on the date of distribution and, if such moneys shall be
insufficient to pay such amounts in full, then ratably (without priority of any
one over any other) to such Secured Parties in proportion to the unpaid amount
thereof; and

(iii) third, pro rata to any other Obligations then due and owing; and

(iv) fourth, any surplus then remaining, after all of the Obligations then due
shall have been paid in full in cash, shall be paid to the Borrower or its
successors or assigns or to whomever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may award.

ARTICLE XII

THE ADMINISTRATIVE AGENT

12.1 Appointment.

(a) Each Lender (which, for the purposes of this Article XII includes each
Letter of Credit Issuer and each Swingline Lender) hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Credit Documents and irrevocably authorizes the
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action on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto. The provisions of this Article XII (other than
Section 12.1(b) with respect to the Joint Lead Arrangers, the Joint Bookrunners,
the Syndication Agent and the Co-Documentation Agents and Sections 12.10, 12.12
and 12.13(a) with respect to the Borrower) are solely for the benefit of the
Administrative Agent and the Lenders, and the Borrower shall not have rights as
third party beneficiary of any such provision. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein or
in the other Credit Documents, or any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Credit Document or
otherwise exist against the Administrative Agent.

(b) Each of the Syndication Agent, the Co-Documentation Agents, the Joint Lead
Arrangers and the Joint Bookrunners, each in its capacity as such, shall not
have any obligations, duties or responsibilities under this Agreement, other
than with respect to actions taken as an Agent Bank under Section 2.14, but
shall be entitled to all benefits of this Article XII.

12.2 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement and the other Credit Documents by or through agents,
sub-agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents,
sub-agents or attorneys-in-fact selected by it in the absence of gross
negligence or willful misconduct (as determined in the final judgment of a court
of competent jurisdiction).

12.3 Exculpatory Provisions. Neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Credit Document (except
for its or such Person’s own gross negligence or willful misconduct, as
determined in the final judgment of a court of competent jurisdiction, in
connection with its duties expressly set forth herein or in any other Credit
Document (IT BEING THE INTENTION OF THE PARTIES HERETO THAT THE ADMINISTRATIVE
AGENT AND ANY RELATED PARTIES SHALL, IN ALL CASES, BE INDEMNIFIED FOR ITS
ORDINARY, COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE)) or (b) responsible in
any manner to any of the Lenders or any participant for any recitals,
statements, representations or warranties made by any of the Borrower, any other
Credit Party or any officer thereof contained in this Agreement or any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or any other Credit Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or any other Credit Document, or the perfection or priority of
any Lien or security interest created or purported to be created under the
Security Documents, or for any failure of the Borrower or any other Credit Party
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
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performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Affiliate thereof. The Administrative Agent
shall not be under any obligation to any Lender, any Swingline Lender or any
Letter of Credit Issuer to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party.

12.4 Reliance. The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or instruction believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including counsel to the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the Lender specified in the Register
with respect to any amount owing hereunder as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Credit Document unless it shall first receive such advice or
concurrence of the Majority Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Credit
Documents in accordance with a request of the Majority Lenders, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans; provided that the
Administrative Agent shall not be required to take any action that, in its
opinion or in the opinion of its counsel, may expose it to liability or that is
contrary to any Credit Document or applicable Requirements of Law. For purposes
of determining compliance with the conditions specified in Article VI and
Article VII on the Closing Date, each Lender that has signed this Agreement
shall be deemed to have consented to, approved or accepted or to be satisfied
with, each document or other matter required thereunder to be consented to or
approved by or acceptable or satisfactory to a Lender unless the Administrative
Agent shall have received notice from such Lender prior to the proposed Closing
Date specifying its objection thereto.

12.5 Notice of Default. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default”. In the
event that the Administrative Agent receives such a notice, it shall give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Majority Lenders in accordance with the terms hereof; provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

 

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12.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower or any other Credit Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender, any
Swingline Lender or any Letter of Credit Issuer. Each Lender, each Swingline
Lender and each Letter of Credit Issuer acknowledges to the Administrative Agent
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 appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and each other Credit Party and made its own decision to make its
credit extensions hereunder and 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 deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Credit Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and any other
Credit Party. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, assets,
operations, properties, financial condition, prospects or creditworthiness of
the Borrower or any other Credit Party that may come into the possession of the
Administrative Agent any of their respective officers, directors, employees,
agents, attorneys-in-fact or Affiliates.

12.7 No Other Duties, Etc. Anything herein to the contrary notwithstanding, none
of the Joint Bookrunners, Joint Lead Arrangers, Co-Syndication Agents or
Co-Documentation Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Credit
Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or a Letter of Credit Issuer hereunder.

12.8 Indemnification. The Lenders agree to indemnify the Administrative Agent in
its capacity as such (to the extent not reimbursed by the Credit Parties and
without limiting the obligation of the Credit Parties to do so), ratably
according to their respective portions of the Commitments or Loans, as
applicable, outstanding in effect on the date on which indemnification is sought
(or, if indemnification is sought after the date upon which the Commitments
shall have terminated and the Loans shall have been paid in full, ratably in
accordance with their respective portions of the Total Exposure in effect
immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever that may at any time occur
(including at any time following the payment of the Loans) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Commitments, this Agreement, any of the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
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any of the foregoing; provided that no Lender shall be liable to the
Administrative Agent for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent’s gross
negligence, bad faith or willful misconduct as determined by a final judgment of
a court of competent jurisdiction (IT BEING THE INTENTION OF THE PARTIES HERETO
THAT THE ADMINISTRATIVE AGENT AND ANY RELATED PARTIES SHALL, IN ALL CASES, BE
INDEMNIFIED FOR ITS ORDINARY, COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE);
provided, further, that no action taken in accordance with the directions of the
Majority Lenders (or such other number or percentage of the Lenders as shall be
required by the Credit Documents) shall be deemed to constitute gross
negligence, bad faith or willful misconduct for purposes of this Section 12.8.
In the case of any investigation, litigation or proceeding giving rise to any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
occur (including at any time following the payment of the Loans), this
Section 12.8 applies whether any such investigation, litigation or proceeding is
brought by any Lender or any other Person. Without limitation of the foregoing,
each Lender shall reimburse the Administrative Agent upon demand for its ratable
share of any costs or out-of-pocket expenses (including attorneys’ fees)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice rendered in respect of rights or responsibilities under, this Agreement,
any other Credit Document, or any document contemplated by or referred to
herein, to the extent that the Administrative Agent is not reimbursed for such
expenses by or on behalf of the Borrower; provided that such reimbursement by
the Lenders shall not affect the Borrower’s continuing reimbursement obligations
with respect thereto. If any indemnity furnished to the Administrative Agent for
any purpose shall, in the opinion of the Administrative Agent, be insufficient
or become impaired, the Administrative Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided, in no event shall this sentence
require any Lender to indemnify the Administrative Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement in excess of such Lender’s pro rata portion thereof; and provided
further, this sentence shall not be deemed to require any Lender to indemnify
the Administrative Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement resulting from
the Administrative Agent gross negligence, bad faith or willful misconduct. The
agreements in this Section 12.8 shall survive the payment of the Loans and all
other amounts payable hereunder.

12.9 Agent in Its Individual Capacity. The Administrative Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and any other Credit Party as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Credit Documents. With respect to the Loans made by it, the Administrative
Agent shall have the same rights and powers under this Agreement and the other
Credit Documents as any Lender and may exercise the same as though it were not
the Administrative Agent, and the terms “Lender” and “Lenders” shall include the
Administrative Agent in its individual capacity.

12.10 Successor Agent. The Administrative Agent may at any time give notice of
its resignation to the Lenders, the Swingline Lenders, the Letter of Credit
Issuers and the Borrower.

 

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If the Administrative Agent and/or any Swingline Lender becomes a Defaulting
Lender, then such Administrative Agent or Swingline Lender may be removed as the
Administrative Agent or Swingline Lender, as the case may be, at the reasonable
request of the Borrower and the Majority Lenders. Upon receipt of any such
notice of resignation or removal, as the case may be, the Majority Lenders shall
have the right, subject to the consent of the Borrower (not to be unreasonably
withheld or delayed) so long as no Event of Default under Section 11.1 or 11.5
is continuing, to appoint a successor, which shall be a bank with an office in
the United States, or an Affiliate of any such bank with an office in the United
States but shall not, in any case, be a Defaulting Lender or an Affiliate of a
Defaulting Lender. If, in the case of the resignation of the Administrative
Agent, no such successor shall have been so appointed by the Majority Lenders
and shall have accepted such appointment within 30 days after the Administrative
Agent gives notice of its resignation, then the Administrative Agent may on
behalf of the Lenders, the Swingline Lenders and the Letter of Credit Issuers,
appoint a successor Administrative Agent meeting the qualifications set forth
above. Upon the acceptance of a successor’s appointment as the Administrative
Agent hereunder, and upon the execution and filing or recording of such
financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Majority Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Security Documents (if any), such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Credit Documents (if not already discharged therefrom as
provided above in this Section). The fees payable by the Borrower (following the
effectiveness of such appointment) to the successor Administrative Agent shall
be the same as those payable to its predecessor unless otherwise agreed between
the Borrower and such successor. After the retiring Administrative Agent’s
resignation hereunder and under the other Credit Documents, the provisions of
this Article XII (including Section 12.8) and Section 13.5 shall continue in
effect for the benefit of such retiring Administrative Agent, its sub agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while the retiring Administrative Agent was acting as
the Administrative Agent.

Any resignation of any Person as Administrative Agent pursuant to this Section
shall also constitute its resignation as Letter of Credit Issuer and Swingline
Lender (in each case if applicable). Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, (a) such successor shall succeed
to and become vested with all of the rights, powers, privileges and duties of
the retiring Letter of Credit Issuer and the retiring Swingline Lender, (b) the
retiring Letter of Credit Issuer and retiring Swingline Lender shall be
discharged from all of their respective duties and obligations hereunder or
under the other Credit Documents, and (c) the successor Letter of Credit Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the retiring Letter of Credit Issuer to effectively assume the
obligations of the retiring Letter of Credit Issuer with respect to such Letters
of Credit.

12.11 Withholding Tax. To the extent required by any applicable Requirement of
Law, the Administrative Agent may withhold from any payment to any Lender an
amount equivalent to any applicable withholding tax. If the Internal Revenue
Service or any authority of the United States or other jurisdiction asserts a
claim that the Administrative Agent did not properly

 

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withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstances
that rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason), such Lender shall indemnify the Administrative Agent
(to the extent that the Administrative Agent has not already been reimbursed by
any applicable Credit Party and without limiting the obligation of any
applicable Credit Party to do so) fully for all amounts paid, directly or
indirectly, by the Administrative Agent as Tax or otherwise, including
penalties, additions to Tax and interest, together with all expenses incurred,
including legal expenses, allocated staff costs and any out of pocket expenses.
Each Lender hereby authorizes the Administrative Agent to set off and apply any
and all amounts at any time owing to such Lender under this Agreement or any
other Credit Document against any amount due to the Administrative Agent under
this Section 12.11. For the avoidance of doubt, for purposes of this
Section 12.11, the term “Lender” includes any Letter of Credit Issuer and any
Swingline Lender.

12.12 Security Documents and Guarantee. Each Secured Party hereby further
authorizes the Administrative Agent, on behalf of and for the benefit of Secured
Parties, to be the agent for and representative of the Secured Parties with
respect to the Collateral and the Security Documents. Subject to Section 13.1,
without further written consent or authorization from any Secured Party, the
Administrative Agent may (a) execute any documents or instruments necessary in
connection with a Disposition of assets permitted by this Agreement, (b) release
any Lien encumbering any item of Collateral that is the subject of such
Disposition of assets or with respect to which Majority Lenders (or such other
Lenders as may be required to give such consent under Section 13.1) have
otherwise consented or (c) release any Guarantor from the Guarantee with respect
to which Majority Lenders (or such other Lenders as may be required to give such
consent under Section 13.1) have otherwise consented (and, in the case of any
automatic release of a Guarantor in accordance with Section 13.17, execute any
documents or instruments that may be necessary or advisable to evidence such
release).

12.13 Right to Realize on Collateral and Enforce Guarantee. Anything contained
in any of the Credit Documents to the contrary notwithstanding, the Borrower,
the Administrative Agent and each Secured Party hereby agree that (a) no Secured
Party shall have any right individually to realize upon any of the Collateral or
to enforce the Guarantee; it being understood and agreed that all powers, rights
and remedies hereunder may be exercised solely by the Administrative Agent, on
behalf of the Secured Parties in accordance with the terms hereof and all
powers, rights and remedies under the Security Documents and the Guarantee may
be exercised solely by the Administrative Agent, and (b) in the event of a
foreclosure by the Administrative Agent on any of the Collateral pursuant to a
public or private sale or other disposition, the Administrative Agent or any
Lender may be the purchaser or licensor of any or all of such Collateral at any
such sale or other disposition and the Administrative Agent, as agent for and
representative of the Secured Parties (but not any Lender or Lenders in its or
their respective individual capacities unless Majority Lenders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by the
Administrative Agent at such sale or other disposition.

 

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12.14 Administrative Agent May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding, constituting
an Event of Default under Section 11.5, the Administrative Agent (irrespective
of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest
owing and unpaid in respect of the Loans and all other Obligations that are
owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel, to the extent due under Section 13.5) allowed in
such judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, to the extent due under
Section 13.5.

Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Indebtedness or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.

ARTICLE XIII

MISCELLANEOUS

13.1 Amendments, Waivers and Releases. Except as expressly set forth in this
Agreement or in the applicable Credit Document, neither this Agreement nor any
other Credit Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section 13.1. The Majority Lenders may, or, with the written consent of the
Majority Lenders, the Administrative Agent shall, from time to time, (a) enter
into with the relevant Credit Party or Credit Parties written amendments,
supplements or modifications hereto and to the other Credit Documents or
(b) waive in writing, on such terms and conditions as the Majority Lenders or
the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Credit Documents or any
Default or Event of Default and its consequences; provided, however, that each
such waiver and each such amendment, supplement or modification shall be
effective only in the specific instance and for the specific purpose for which
given; provided, further, that no such waiver and no such amendment, supplement
or modification shall:

 

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(i) forgive or reduce any portion of any Loan or reduce the stated rate (it
being understood that only the consent of the Majority Lenders shall be
necessary to waive any obligation of the Borrower to pay interest at the Default
Rate or amend Section 2.8(d)), or forgive any portion, or extend the date for
the payment, of any interest or fee payable hereunder (other than as a result of
waiving the applicability of any post-default increase in interest rates), or
extend the final expiration date of any Lender’s Commitment (other than in
accordance with Section 2.16) or increase the amount of the Commitment of any
Lender (except in accordance with Section 2.17), or make any Loan, interest, fee
or other amount payable in any currency other than Dollars, in each case without
the written consent of each Lender directly and adversely affected thereby;

(ii) amend, modify or waive any provision of this Section 13.1, or amend or
modify any of the provisions of Section 5.3 or Section 13.8(a) to the extent it
would alter the ratable allocation of payments thereunder, or reduce the
percentages specified in the definitions of the terms “Majority Lenders”,
“Required Lenders” or “Borrowing Base Required Lenders”, consent to the
assignment or transfer by the Borrower of its rights and obligations under any
Credit Document to which it is a party (except as permitted pursuant to
Section 10.3) or alter the order of application set forth in the final paragraph
of Article XI or modify any definition used in such final paragraph if the
effect thereof would be to alter the order of payment specified therein, in each
case without the written consent of each Lender directly and adversely affected
thereby;

(iii) amend, modify or waive any provision of Article XII without the written
consent of the then-current Administrative Agent, as applicable, or any other
former Administrative Agent to whom Article XII then applies in a manner that
directly and adversely affects such Person,

(iv) amend, modify or waive any provision of Article III with respect to any
Letter of Credit without the written consent of each Letter of Credit Issuer to
whom Article III then applies in a manner that directly and adversely affects
such Person;

(v) amend, modify or waive any provisions hereof relating to Swingline Loans
without the written consent of each Swingline Lender;

(vi) release all or substantially all of the value of the Guarantee (except as
expressly permitted by the Guarantee or this Agreement) without the prior
written consent of each Lender;

(vii) during a Borrowing Base Trigger Period, release all or substantially all
of the Collateral under the Security Documents (except as expressly permitted by
the Security Documents or this Agreement, including upon the termination of any
Borrowing Base Trigger Period) without the prior written consent of each Lender;

 

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(viii) amend Section 2.9 so as to permit Interest Period intervals greater than
six months without regard to availability to Lenders, without the written
consent of each Lender directly and adversely affected thereby;

(ix) during a Borrowing Base Trigger Period, increase the Borrowing Base without
the written consent of the Borrowing Base Required Lenders, decrease or maintain
the Borrowing Base without the written consent of the Required Lenders or
otherwise modify Section 2.14(b), (c), (d) or 2.14(f) without the written
consent of Borrowing Base Required Lenders; provided that a Scheduled
Redetermination may be postponed by the Required Lenders;

(x) affect the rights or duties of, or any fees or other amounts payable to the
Administrative Agent under this Agreement or any other Credit Document without
the prior written consent of the Administrative Agent;

(xi) amend, modify or waive any provision of Article VII without the written
consent of each Lender;

provided, further, that any provision of this Agreement or any other Credit
Document may be amended by an agreement in writing entered into by the Borrower
and the Administrative Agent to cure any ambiguity, omission, defect or
inconsistency so long as, in each case, the Lenders shall have received at least
five Business Days’ prior written notice thereof and the Administrative Agent
shall not have received, within five Business Days of the date of such notice to
the Lenders, a written notice from the Majority Lenders stating that the
Majority Lenders object to such amendment. Any such waiver and any such
amendment, supplement or modification shall apply equally to each of the
affected Lenders and shall be binding upon the Borrower, such Lenders, the
Administrative Agent and all future holders of the affected Loans. In the case
of any waiver, the Borrower, the Lenders and the Administrative Agent shall be
restored to their former positions and rights hereunder and under the other
Credit Documents, and any Default or Event of Default waived shall be deemed to
be cured and not continuing; it being understood that no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon. In connection with the foregoing provisions, the
Administrative Agent may, but shall have no obligations to, with the concurrence
of any Lender, execute amendments, modifications, waivers or consents on behalf
of such Lender.

13.2 Notices. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder or under any other Credit Document shall
be in writing (including by facsimile or email transmission). All such written
notices shall be mailed, faxed or delivered to the applicable address, facsimile
number or electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:

(a) if to the Borrower, the Administrative Agent, any Swingline Lender or any
Letter of Credit Issuer, to the address, facsimile number, electronic mail
address or telephone number specified for such Person on Schedule 13.2 or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the other parties;
and

 

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(b) if to any other Lender, to the address, facsimile number, electronic mail
address or telephone number specified in its Administrative Questionnaire or to
such other address, facsimile number, electronic mail address or telephone
number as shall be designated by such party in a notice to the Borrower, the
Administrative Agent, the Swingline Lenders and the Letter of Credit Issuers.

All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii)(A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, three Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail, when delivered; provided that notices and other communications to the
Administrative Agent or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and
5.1 shall not be effective until received.

13.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Credit Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by
Requirements of Law.

13.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Credit Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.

13.5 Payment of Expenses; Indemnification. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and each Joint Lead Arranger for all of their
reasonable and documented out-of-pocket costs and expenses (with respect to
attorney costs, limited to reasonable fees, disbursements and other charges of
one primary outside counsel to the Administrative Agent and the Joint Lead
Arrangers (which is Simpson Thacher & Bartlett LLP as of the Closing Date) and
one outside counsel in each appropriate local jurisdiction) incurred in
connection with the preparation and execution and delivery of, and any
amendment, waiver, supplement or modification to, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, (b) to pay or reimburse the Administrative
Agent, and each Lender for all its reasonable and documented out-of-pocket costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Credit Documents and any such other
documents (with respect to attorney costs, limited to the reasonable and
documented fees, disbursements and other charges of one primary outside counsel
for all such Persons, taken as a whole, and, if necessary, of a single firm of
local outside counsel in each material jurisdiction for all Persons, taken as a
whole (unless there is an actual or perceived conflict of interest in which case
each such Person with such conflict may retain its own outside counsel)), (c) to
pay, indemnify, and hold harmless each Lender, Letter of Credit Issuer and the
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filing fees, and (d) to pay, indemnify, and hold harmless each Lender, Letter of
Credit Issuer, each Joint Lead Arranger and the Administrative Agent and their
respective Related Parties from and against any and all other liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever,
whether or not such proceedings are brought by the Borrower, any of its Related
Parties or any other third Person (with respect to attorney costs, limited to
the reasonable and documented fees, disbursements and other charges of one
primary outside counsel for all such Persons, taken as a whole, and, if
necessary, of a single firm of local outside counsel in each appropriate
jurisdiction for all such Persons, taken as a whole (unless there is an actual
or perceived conflict of interest in which case each such Person may retain its
own outside counsel), with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Credit Documents and
any such other documents, including any of the foregoing relating to the
violation of, noncompliance with or liability under, any applicable
Environmental Law (other than by such indemnified person or any of its Related
Parties (other than any trustee or advisor)) or to any actual or alleged
presence, release or threatened release of Hazardous Materials involving or
attributable to the operations of the Borrower, any of its Subsidiaries or any
of the Oil and Gas Properties (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”); provided that the Borrower shall
have no obligation hereunder to the Administrative Agent, any Letter of Credit
Issuer or any Lender or any of their respective Related Parties with respect to
Indemnified Liabilities to the extent it has been determined by a final
non-appealable judgment of a court of competent jurisdiction to have resulted
from (i) the gross negligence, bad faith or willful misconduct of the party to
be indemnified or any of its Related Parties (IT BEING THE INTENTION OF THE
PARTIES HERETO THAT EACH LENDER, LETTER OF CREDIT ISSUER AND THE ADMINISTRATIVE
AGENT AND THEIR RESPECTIVE RELATED PARTIES SHALL, IN ALL CASES, BE INDEMNIFIED
FOR ITS ORDINARY COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE), (ii) any
material breach of any Credit Document by the party to be indemnified or
(iii) disputes, claims, demands, actions, judgments or suits not arising from
any act or omission by the Borrower or its Affiliates, brought by an indemnified
Person against any other indemnified Person (other than disputes, claims,
demands, actions, judgments or suits involving claims against the Administrative
Agent or a Joint Lead Arranger in its capacity as such). NO PERSON ENTITLED TO
INDEMNIFICATION UNDER CLAUSE (D) OF THIS SECTION 13.5 SHALL BE LIABLE FOR ANY
DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR
OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR
OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE
TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS USED BY
THE ADMINISTRATIVE AGENT IS PROVIDED “AS IS” AND “AS AVAILABLE.” NONE OF THE
ADMINISTRATIVE AGENT OR ANY OF ITS RELATED PARTIES WARRANTS THE ADEQUACY OF SUCH
TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS AND
EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF
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FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ADMINISTRATIVE AGENT OR
ANY OF ITS RELATED PARTIES IN CONNECTION WITH ANY COMMUNICATIONS OR ANY
TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS. No
Person entitled to indemnification under clause (d) of this Section 13.5, nor
the Borrower or any of its Subsidiaries, shall have any liability for any
special, punitive, indirect, exemplary or consequential damages (including any
loss of profits, business or anticipated savings) relating to this Agreement or
any other Credit Document or arising out of its activities in connection
herewith or therewith (whether before or after the Closing Date); provided that
the foregoing shall not negate the Borrower’s obligations with respect to
Indemnified Liabilities. All amounts payable under this Section 13.5 shall be
paid within 15 Business Days of receipt by the Borrower of an invoice relating
thereto setting forth such expense in reasonable detail. The agreements in this
Section 13.5 shall survive repayment of the Loans and all other amounts payable
hereunder. This Section 13.5 shall not apply with respect to any claims for
Taxes which shall be governed exclusively by Section 5.4 and, to the extent set
forth therein, Sections 2.10 and 3.5. For the avoidance of doubt, the Borrower
shall not be obligated under this Section 13.5 with respect to any allocated
costs of in-house counsel.

13.6 Successors and Assigns; Participations and Assignments.

(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Letter of Credit Issuer that
issues any Letter of Credit and any Affiliate of any Lender that makes a Loan),
except that (i) except as expressly permitted by Section 10.3, the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
(and any attempted assignment or transfer by the Borrower without such consent
shall be null and void) and (ii) no Lender may assign or otherwise transfer its
rights or obligations hereunder except in accordance with this Section 13.6.
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby (including any Affiliate of the Letter of Credit Issuer
that issues any Letter of Credit and any Affiliate of any Lender that makes a
Loan), Participants (to the extent provided in Section 13.6(c)) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Letter of Credit Issuer and the Lenders and each other
Person entitled to indemnification under Section 13.5) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

(b) (i) Subject to the conditions set forth in clause (b)(ii) below, any Lender
may at any time assign to one or more assignees (other than (A) a Person other
than a bank, investment bank, insurance company, mutual fund or other
institutional lender, as such terms are used in the Indentures, or (B) an
Ineligible Person) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitments and the Loans
(including participations in L/C Obligations or Swingline Loans) at the time
owing to it) with the prior written consent (such consent not be unreasonably
withheld or delayed; it being understood that, notwithstanding the foregoing
clause, the Borrower shall have the right to withhold or delay its consent to
any assignment (x) if, in order for such assignment to comply with applicable
Requirements of Law, the Borrower would be required to obtain the consent of, or
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filing or registration with, any Governmental Authority or (y) with respect to
an assignment of Commitments to an entity other than a commercial bank or other
financial institution customarily engaged in the business of making loans in the
oil and gas industry) of:

(A) the Borrower; provided that no consent of the Borrower shall be required for
an assignment (1) to a Lender, an Affiliate of a Lender or an Approved Fund or
(2) if an Event of Default under Section 11.1 or Section 11.5 has occurred and
is continuing; and provided, further, that if the Borrower’s has not responded
within ten (10) Business Days after the delivery of any written request for a
consent, such consent shall be deemed to have been given; and

(B) the Administrative Agent, each Swingline Lender and each Letter of Credit
Issuer; provided that no consent of the Administrative Agent, a Swingline Lender
or a Letter of Credit Issuer shall be required for assignments in respect of the
Facility if such assignment is to a Person that is a Lender, an Affiliate of a
Lender or an Approved Fund with respect to a Lender.

(ii) Assignments shall be subject to the following additional conditions:

(A) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans, (1) the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $25,000,000 (or,
in the case of an assignment to an existing Lender, $10,000,000) and increments
of $5,000,000 in excess thereof and (2) after giving effect to such assignment,
the amount of the remaining Commitment or Loans of the assigning Lender
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$15,000,000, in each case unless each of the Borrower, each Letter of Credit
Issuer, each Swingline Lender and the Administrative Agent otherwise consents
(which consents shall not be unreasonably withheld or delayed); provided that no
such consent of the Borrower shall be required if an Event of Default under
Section 11.1 or Section 11.5 has occurred and is continuing; provided, further,
that contemporaneous assignments to a single assignee made by Affiliates of
Lenders and related Approved Funds shall be aggregated for purposes of meeting
the minimum assignment amount requirements stated above;

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee in the amount of $3,500; provided that the Administrative
Agent may, in its sole discretion, elect to waive such processing and
recordation fee in the case of any assignment; and

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

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(iii) Subject to acceptance and recording thereof pursuant to
Section 13.6(b)(iv), from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, 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 Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.10, 2.11, 3.5, 5.4 and 13.5). Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this Section 13.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section 13.6(c).

(iv) The Administrative Agent, acting for this purpose as a non-fiduciary agent
of the Borrower, shall maintain at the Administrative Agent’s Office a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount (and stated interest amounts) of the Loans and L/C
Obligations and any payment made by the Letter of Credit Issuers under any
Letter of Credit owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”). Further, the Register shall contain the name and address
of the Administrative Agent, the Lenders and the lending office through which
each such Person acts under this Agreement. The entries in the Register shall be
conclusive absent manifest error, and the Borrower, the Administrative Agent,
the Letter of Credit Issuers and the Lenders shall treat each Person whose name
is recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower, the Letter of Credit
Issuers the Swingline Lenders and, solely with respect to itself, each other
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

(v) Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in Section 13.6(b) (unless waived)
and any written consent to such assignment required by Section 13.6(b), the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register.

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative
Agent, any Swingline Lender or any Letter of Credit Issuer, sell participations
to one or more banks or other entities other than an Ineligible Person (each, a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Commitments and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Administrative Agent, the Letter of Credit Issuer and the other
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solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement or any other Credit
Document; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in clauses (i) or (ii) of the proviso to
Section 13.1 that affects such Participant, provided that the Participant shall
have no right to consent to any modification to the percentages specified in the
definitions of the terms “Majority Lenders”, “Majority Lenders”, “Required
Lenders” or “Borrowing Base Required Lenders”. Subject to Section 13.6(c)(ii),
the Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.10, 2.11, 3.5 and 5.4 to the same extent as if it were a Lender
(subject to the limitations and requirements of those Sections as though it were
a Lender and had acquired its interest by assignment pursuant to
Section 13.6(b), including the requirements of clause (e), (f) and (i) of
Section 5.4). To the extent permitted by Requirements of Law, each Participant
also shall be entitled to the benefits of Section 13.8(b) as though it were a
Lender; provided such Participant agrees to be subject to Section 13.8(a) as
though it were a Lender.

(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.10, 2.11, 3.5 or 5.4 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower’s prior written consent (which consent shall not be unreasonably
withheld); provided that the Participant shall be subject to the provisions in
Section 2.12 as if it were an assignee under clauses (a) and (b) of this
Section 13.6. Each Lender that sells a participation shall, acting solely for
this purpose as a non-fiduciary agent of the Borrower, maintain a register on
which it enters the name and address of each participant and the principal
amounts (and related interest amounts) of each participant’s interest in the
Loans or other obligations under this Agreement (the “Participant Register”).
The entries in the Participant Register shall be conclusive, absent manifest
error, and such Lender shall treat each Person whose name is recorded in the
Participant Register as the owner of such participation for all purposes of this
Agreement notwithstanding any notice to the contrary. No Lender shall have any
obligation to disclose all or any portion of the Participant Register to any
Person (including the identity of any Participant or any information relating to
a Participant’s interest in any commitments, loans, letters of credit or its
other obligations under any Credit Document) except to the extent that such
disclosure is necessary to establish that such commitment, loan, letter of
credit or other obligation is in registered form under Section 5f.103-1(c) of
the United States Treasury Regulations.

(d) Any Lender may, without the consent of the Borrower, the Administrative
Agent, the Letter of Credit Issuers or the Swingline Lenders 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 to a Federal Reserve Bank or any
central bank having jurisdiction over such Lender, and this Section 13.6 shall
not apply to any such pledge or assignment of a security interest; provided that
no such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.

 

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(e) Subject to Section 13.16, the Borrower authorizes each Lender to disclose to
any Participant, secured creditor of such Lender or assignee (each, a
“Transferee”) and any prospective Transferee any and all financial information
in such Lender’s possession concerning the Borrower and its Affiliates that has
been delivered to such Lender by or on behalf of the Borrower and its Affiliates
pursuant to this Agreement or that has been delivered to such Lender by or on
behalf of the Borrower and its Affiliates in connection with such Lender’s
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement.

(f) The words “execution,” “signed,” “signature,” and words of like import in
any Assignment and Acceptance shall be deemed to include electronic signatures
or the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the extent and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

13.7 Replacements of Lenders under Certain Circumstances.

(a) The Borrower shall be permitted to replace any Lender that (i) requests
reimbursement for amounts owing pursuant to Section 2.10, 3.5 or 5.4, (ii) is
affected in the manner described in Section 2.10(a)(iii) and as a result thereof
any of the actions described in such Section is required to be taken,
(iii) becomes a Defaulting Lender (iv) becomes a Declining Lender, (v) does not
consent to any waiver or amendment desired by the Borrower requiring the consent
of all Lenders, the Required Lenders or all Lenders directly affected thereby
(so long as the Majority Lenders have consented thereto), (vi) does not consent
to a proposed Borrowing Base pursuant to Section 2.14 (so long as the Majority
Lenders, or in the case of any increase in the Borrowing Base, the Borrowing
Base Required Lenders, have consented thereto) or (vii) has failed to fund
Loans, participations in Letters of Credit or Swingline Loans or has made a
notification or public statement that it does not intend or expect to comply
with its funding obligations hereunder, in each case as a result of its
determination that a condition precedent to funding has not or cannot be
satisfied pursuant to the definition of “Lender Default”, in each case, with a
replacement bank, lending institution or other financial institution; provided
that (A) such replacement does not conflict with any Requirement of Law, (B) no
Event of Default under Section 11.1 or 11.5 shall have occurred and be
continuing at the time of such replacement, (C) the replacement bank or
institution shall purchase, at par, all Loans and the Borrower shall pay all
other amounts (other than any disputed amounts), pursuant to Section 2.10, 3.5
or 5.4, as the case may be owing to such replaced Lender prior to the date of
replacement, (D) the replacement bank or institution shall be subject to the
consent of the Administrative Agent, the Swingline Lenders and the Letter of
Credit Issuers (to the extent the consent of such Person would be required if an
assignment were being made to such replacement bank or institution under
Section 13.6(b)), (E) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 13.6(b) (provided that
the Borrower shall be obligated to pay the registration and processing fee
referred to therein), and (F) any such replacement shall not be deemed to be a
waiver of any rights that the Borrower, the Administrative Agent or any other
Lender shall have against the replaced Lender.

 

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(b) Notwithstanding anything herein to the contrary, each party hereto agrees
that any assignment pursuant to the terms of this Section 13.7 may be effected
pursuant to an Assignment and Acceptance executed by the Borrower, the
Administrative Agent and the assignee and that the Lender making such assignment
need not be a party thereto.

13.8 Adjustments; Set-off.

(a) If any Lender (a “Benefited Lender”) shall at any time receive any payment
in respect of any principal of or interest on all or part of the Loans made by
it, or the participations in Letters of Credit held by it, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 11.5, or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of such other Lender’s Loans,
or interest thereon, such Benefited Lender shall (i) notify the Administrative
Agent of such fact, and (ii) purchase for cash at face value from the other
Lenders a participating interest in such portion of each such other Lender’s
Loans, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably in accordance with the aggregate principal of and accrued
interest on their respective Loans and other amounts owing them; provided,
however, that, (A) if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest and (B) the provisions of this paragraph shall
not be construed to apply to (1) any payment made by the Borrower or any other
Credit Party pursuant to and in accordance with the express terms of this
Agreement and the other Credit Documents, (2) any payment obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its
Loans, Commitments or participations in Drawings to any assignee or participant
or (3) any disproportionate payment obtained by a Lender as a result of the
extension by Lenders of the maturity date or expiration date of some but not all
Loans or Commitments or any increase in the Applicable Margin in respect of
Loans or Commitments of Lenders that have consented to any such extension. Each
Credit Party consents to the foregoing and agrees, to the extent it may
effectively do so under Requirements of Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Credit Party rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Credit
Party in the amount of such participation.

(b) After the occurrence and during the continuance of an Event of Default, in
addition to any rights and remedies of the Lenders provided by Requirements of
Law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable Requirements of Law, upon any amount becoming due and payable by the
Borrower hereunder or under any Credit Document (whether at the stated maturity,
by acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower (and the Credit Parties, if

 

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applicable) and the Administrative Agent after any such set-off and application
made by such Lender; provided that the failure to give such notice shall not
affect the validity of such set-off and application.

13.9 Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts (including by facsimile
or other electronic transmission, i.e. a “pdf” or a “tif”), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.

13.10 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

13.11 Integration. This Agreement and the other Credit Documents represent the
agreement of the Borrower, the Guarantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Borrower, the
Guarantors, the Administrative Agent nor any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Credit
Documents.

13.12 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

13.13 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably
and unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Credit Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to
the nonexclusive general jurisdiction of the courts of the State of New York,
County of New York, the courts of the United States of America for the Southern
District of New York and appellate courts from any thereof;

(b) consents that any such action or proceeding shall be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person at its
address set forth on Schedule 13.2 at such other address of which the
Administrative Agent shall have been notified pursuant to Section 13.2;

 

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(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by Requirements of Law or shall limit the
right to sue in any other jurisdiction;

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section 13.13 any special, exemplary, punitive or consequential damages; and

(f) agrees that a final judgment in any action or proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.

13.14 Acknowledgments. The Borrower hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Credit Documents;

(b) (i) the credit facilities provided for hereunder and any related arranging
or other services in connection therewith (including in connection with any
amendment, waiver or other modification hereof or of any other Credit Document)
are an arm’s-length commercial transaction between the Borrower and the other
Credit Parties, on the one hand, and the Administrative Agent and the Lenders,
on the other hand, and the Borrower and the other Credit Parties are capable of
evaluating and understanding and understand and accept the terms, risks and
conditions of the transactions contemplated hereby and by the other Credit
Documents (including any amendment, waiver or other modification hereof or
thereof); (ii) in connection with the process leading to such transaction, each
of the Administrative Agent and the Lenders is and has been acting solely as a
principal and is not the financial advisor, agent or fiduciary for any of the
Borrower, any other Credit Parties or any of their respective Affiliates, equity
holders, creditors or employees or any other Person; (iii) neither the
Administrative Agent, any Joint Bookrunner, any Joint Lead Arranger, nor any
Lender has assumed or will assume an advisory, agency or fiduciary
responsibility in favor of the Borrower or any other Credit Party with respect
to any of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof or
of any other Credit Document (irrespective of whether the Administrative Agent,
any Joint Bookrunner, any Joint Lead Arranger or any Lender has advised or is
currently advising any of the Borrower, the other Credit Parties or their
respective Affiliates on other matters) and none of the Administrative Agent,
any Joint Bookrunner, any Joint Lead Arranger or any Lender has any obligation
to any of the Borrower, the other Credit Parties or their respective Affiliates
with respect to the transactions contemplated hereby, in each case, except those
obligations expressly set forth herein and in the other Credit Documents;
(iv) the Borrower, the other Credit Parties and their respective Affiliates will
not assert any claim based on alleged breach of fiduciary duty; (v) the
Administrative Agent and its Affiliates and each Lender and its Affiliates may
be engaged in a broad range of transactions that involve interests that differ
from those of the Borrower and its respective Affiliates, and none of the
Administrative Agent or any Lender has any obligation to disclose any of such
interests by virtue of any advisory, agency or fiduciary relationship; and
(vi) neither the Administrative Agent nor any Lender has provided and none will
provide any legal, accounting, regulatory or tax advice with respect to any of
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(including any amendment, waiver or other modification hereof or of any other
Credit Document) and the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate. The
Borrower hereby waives and releases, to the fullest extent permitted by law, any
claims that it may have against the Administrative Agent with respect to any
breach or alleged breach of agency or fiduciary duty; and

(c) no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Borrower, on the one hand, and any Lender, on the other
hand.

13.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, EACH LETTER
OF CREDIT ISSUER AND EACH LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

13.16 Confidentiality. The Administrative Agent, each other Agent Bank, each
Letter of Credit Issuer, each Swingline Lender and each other Lender shall hold
all information furnished by or on behalf of the Borrower or any of its
Subsidiaries other than any such information that is available to such Person on
a nonconfidential basis prior to disclosure by the Borrower or any such
Subsidiary (“Confidential Information”), confidential in accordance with its
customary procedure for handling confidential information of this nature and in
any event may make disclosure (a) to such Person’s Affiliates and the directors,
officers, employees, attorneys, professional advisors, independent auditors,
trustees and agents of such Person or such Person’s Affiliates, in each case who
need to know such information in connection with the administration of the
Credit Documents (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Confidential
Information, are instructed to keep such Confidential Information confidential
and agree to keep such Confidential Information confidential on the same terms
as provided herein), (b) as required or requested by any Governmental Authority,
self-regulatory agency or representative thereof purporting (on a reasonable
basis, as determined by such Person) to have jurisdiction over such Person or
pursuant to legal process or applicable Requirements of Law, (c) to any other
party hereto, (d) in connection with the exercise of any remedies hereunder or
under any other Credit Document or any action or proceeding relating to this
Agreement or any other Credit Document or the enforcement of rights hereunder or
thereunder, (e) subject to an agreement containing provisions substantially the
same as those of this Section 13.16, to (x) any assignee of or Participant in,
or any prospective assignee of or Participant in, any of its rights and
obligations under this Agreement, or (y) any actual or prospective party (or its
Related Parties) to any swap, derivative or other transaction under which
payments are to be made by reference to the Borrower and its obligations, this
Agreement or payments hereunder or to any credit insurance provider related to
the Borrower and its Obligations, (f) with the consent of the Borrower, and
(g) to the extent such Confidential Information (x) becomes publicly available
other than as a result of a breach of this Section, or (y) becomes available to
the Administrative Agent, any Lender, any Swingline Lender, any Letter of Credit
Issuer, any Agent or any of their respective Affiliates on a nonconfidential
basis from a source other than the Borrower or any Subsidiary thereof (unless
the Administrative Agent, such Swingline Lender, such Lender, such Letter of
Credit Issuer, such Agent or such Affiliate has actual knowledge that such
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obligation of confidence to the Borrower or any Subsidiary thereof with respect
to such Confidential Information); provided that unless specifically prohibited
by applicable Requirements of Law, each Lender, the Administrative Agent, each
Swingline Lender, each Letter of Credit Issuer and each other Agent Bank shall
notify the Borrower (without any liability for a failure to so notify the
Borrower) of any request made to such Person for Confidential Information by any
Governmental Authority, self-regulatory agency or representative thereof or
pursuant to legal process or applicable Requirements of Law (other than any such
request in connection with an examination of the financial condition of such
Lender by such governmental agency) prior to disclosure of such Confidential
Information; provided further that in no event shall any Lender, the
Administrative Agent, any Swingline Lender, any Letter of Credit Issuer or any
other Agent be obligated or required to return any materials furnished by the
Borrower or any Subsidiary; provided further that, at any time after the
Borrower has filed this Agreement with the SEC, the Administrative Agent and the
Lenders may disclose the existence of this Agreement and information about the
terms of this Agreement to market data collectors, similar service providers to
the lending industry and service providers to the Agents and the Lenders in
connection with the administration of this Agreement, the other Loan Documents,
and the Commitments.

13.17 Release of Collateral and Guarantee Obligations; Disavowal of Liens.

(a) The Secured Parties hereby irrevocably agree that the Liens granted to the
Administrative Agent by the Credit Parties on any Collateral shall be
automatically released (i) in full, as set forth in clauses (b) or (c) below,
(ii) upon the Disposition of such Collateral (including as part of or in
connection with any other Disposition permitted hereunder) to any Person other
than another Credit Party, to the extent such Disposition is made in compliance
with the terms of this Agreement (and the Administrative Agent may rely
conclusively on a certificate to that effect provided to it by any Credit Party
upon its reasonable request without further inquiry), (iii) to the extent such
Collateral is comprised of property leased to a Credit Party, upon termination
or expiration of such lease, (iv) if the release of such Lien is approved,
authorized or ratified in writing by the Majority Lenders (or such other
percentage of the Lenders whose consent may be required in accordance with
Section 13.1), (v) to the extent the property constituting such Collateral is
owned by any Guarantor, upon the release of such Guarantor from its obligations
under the Guarantee and (vi) as required by the Administrative Agent to effect
any Disposition of Collateral in connection with any exercise of remedies of the
Administrative Agent pursuant to the Security Documents. Any such release shall
not in any manner discharge, affect, or impair the Obligations or any Liens
(other than those being released) upon (or obligations (other than those being
released) of the Credit Parties in respect of) all interests retained by the
Credit Parties, including the proceeds of any Disposition, all of which shall
continue to constitute part of the Collateral to the extent required by the
applicable Credit Documents, except to the extent otherwise released in
accordance with the provisions of the Credit Documents. Additionally, the
Secured Parties hereby irrevocably agree that any Guarantor shall be
automatically released from the Guarantee in respect of the Facility upon
(i) consummation of any transaction permitted hereunder resulting in such
Guarantor becoming an Excluded Subsidiary (including an Unrestricted
Subsidiary), (ii) consummation of any transaction permitted hereunder resulting
in such Guarantor no longer being a Subsidiary of the Borrower or (iii) such
Guarantor no longer being a guarantor under the Secured Hedge Facility or any
Indenture. Further, the Administrative Agent shall release any Guarantor from
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Guarantee (i) if such Guarantor became a Guarantor pursuant to Section 10.1(u)
and the guarantee provided by such Guarantor is no longer required to be in
compliance after giving effect to such release, with Section 10.1 or (ii) if
such Guarantor ceases to be a Material Subsidiary, in each case, promptly upon
the Borrower delivering a request for such release to the Administrative Agent.
The Secured Parties hereby authorize the Administrative Agent to (all without
the further consent or joinder of any Secured Party), and the Administrative
Agent shall, execute and deliver any instruments, documents, and agreements
necessary or desirable to effect, evidence and/or confirm the release of any
Guarantor or Collateral pursuant to the foregoing provisions of this paragraph.
Upon any such release, any representation, warranty or covenant contained in any
Credit Document relating to any such Collateral or Guarantor shall no longer be
deemed to be repeated.

(b) Notwithstanding anything to the contrary contained herein or any other
Credit Document, when all Obligations (other than indemnification and other
contingent obligations for which no claim has been asserted at the relevant time
of determination) have been paid in full, all Commitments have terminated or
expired and no Letter of Credit shall be outstanding that is not Cash
Collateralized or otherwise back-stopped pursuant arrangements satisfactory to
the applicable Letter of Credit Issuer and the Administrative Agent (such time,
“Facility Termination”), all security interests and Liens in all Collateral and
all obligations under all the Credit Documents shall be automatically released
and discharged, and the Administrative Agent shall (without notice to, or vote
or consent of, any Secured Party) take such actions as shall be required,
advisable or reasonably requested by the Borrower to evidence or otherwise more
fully effect the foregoing, provided, however, that such Obligations shall be
reinstated if after such release any portion of any payment in respect of the
Obligations guaranteed thereby shall be rescinded or must otherwise be restored
or returned upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payment had not been made.

(c) Notwithstanding anything to the contrary contained herein or any other
Credit Document, upon the Borrower’s election to enter into an Unsecured Period
pursuant to Section 13.18(b) and delivery of the written notice contemplated
therein, all security interests and Liens in all Collateral and all obligations
of the Credit Parties under the Security Documents shall be automatically
released and discharged, and the Administrative Agent shall (without notice to,
or vote or consent of, any Secured Party) take such actions as shall be
required, advisable or reasonably requested by the Borrower to evidence or
otherwise more fully effect such release and discharge.

(d) If any Lender determines, acting reasonably, that any applicable law has
made it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for such Lender to hold or benefit from a Lien over real property
pursuant to any law of the United States or any State thereof, such Lender may
notify the Administrative Agent and disclaim any benefit of such security
interest to the extent of such illegality; provided, that such determination or
disclaimer shall not invalidate or render unenforceable such Lien for the
benefit of any other Lender.

 

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13.18 Borrowing Base Election.

(a) At any time that is not a Borrowing Base Trigger Period, the Borrower may
provide written notice to the Administrative Agent of its election to enter into
a Borrowing Base Trigger Period. A Borrowing Base Trigger Period will commence
upon the Administrative Agent’s receipt of such notice.

(b) At any time during a Borrowing Base Trigger Period, as long as no Borrowing
Base Trigger Event has occurred and is continuing, the Borrower may provide
notice to the Administrative Agent of its election to exit such Borrowing Base
Trigger Period and enter into an Unsecured Period together with a certificate of
an Authorized Officer of the Borrower confirming that (A) no Event of Default
exists and (B) no Borrowing Base Trigger Event has occurred and is continuing.

13.19 USA PATRIOT Act. The Administrative Agent and each Lender hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is
required to obtain, verify and record information that identifies each Credit
Party, which information includes the name and address of each Credit Party and
other information that will allow the Administrative Agent and such Lender to
identify each Credit Party in accordance with the Patriot Act.

13.20 Payments Set Aside. To the extent that any payment made by or on behalf of
the Borrower is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of setoff, and such
payment or the proceeds of such setoff or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding or otherwise, then (a) to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
severally agrees to pay to the Administrative Agent upon demand its applicable
share of any amount so recovered from or repaid by the Administrative Agent,
plus interest thereon from the date of such demand to the date such payment is
made at a rate per annum equal to the applicable Overnight Rate from time to
time in effect.

13.21 Reinstatement. This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
any of the monetary Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any other Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

 

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13.22 Disposition of Proceeds. If executed and delivered, any Security Document
may contain an assignment by the applicable Credit Party unto and in favor of
the Administrative Agent for the benefit of the Secured Parties of all of such
Credit Party’s interest in and to its as-extracted collateral in the form of
production and all proceeds attributable thereto which may be produced from or
allocated to the Collateral covered thereby. If executed and delivered, the
Security Documents may further provide in general for the application of such
proceeds to the satisfaction of the Obligations described therein and secured
thereby. Notwithstanding the assignment contained in such Security Documents,
unless an Event of Default is continuing during a Borrowing Base Trigger Period,
(a) the Administrative Agent and the Secured Parties agree that they will
neither notify the purchaser or purchasers of such production nor take any other
action to cause such proceeds to be remitted to the Administrative Agent or any
other Secured Party, and all such proceeds shall be permitted to be paid to the
Borrower and its Subsidiaries, and (b) the Secured Parties hereby authorize the
Administrative Agent to take such actions as may be necessary to cause such
proceeds to be paid to the Borrower and/or such Subsidiaries.

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Agreement to be duly executed and delivered as of the date first above written.

 

CHESAPEAKE ENERGY
CORPORATION, as the Borrower By:   /s/ Elliot J. Chambers Name:   Elliot J.
Chambers Title:   Vice President and Treasurer

 

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MUFG UNION BANK, N.A., as

Administrative Agent, Co-Syndication Agent, Letter of Credit Issuer, Swingline
Lender and Lender

By:   /s/ Carl Stutzman Name:   Carl Stutzman Title:   Managing Director

 

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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as Lender By:   /s/ Carl Stutzman Name:
  Carl Stutzman Title:   Managing Director

 

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WELLS FARGO BANK NATIONAL ASSOCIATION, as Co-Syndication Agent, Letter of Credit
Issuer, Swingline Lender and Lender By:   /s/ Michael A. Tribolet Name:  
Michael A. Tribolet Title:   Managing Director

 

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CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, as Documentation Agent, Letter of
Credit Issuer and Lender By:   /s/ Dennis R Petito Name:   Dennis R. Petio
Title:   Managing Director By:   /s/ Michael D. Willis Name:   Michael D. Willis
Title:   Managing Director

 

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BANK OF AMERICA, N.A., as Co-Documentation Agent, Letter of Credit Issuer and
Lender By:   /s/ Ronald E. McKaig Name:   Ronald E. McKaig Title:   Managing
Director

 

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JPMORGAN CHASE BANK, N.A., as Co-Documentation Agent, Letter of Credit Issuer
and Lender By:   /s/ Debra Hrelja Name:   Debra Hrelja Title:   Vice President

 

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CITIBANK, N.A., as Lender By:   /s/ Eamon Baqui Name:   Eamon Baqui Title:  
Vice President

 

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DEUTSCHE BANK AG NEW YORK BRANCH, as Lender By:   /s/ Kirk L. Tashjian Name:  
Kirk L. Tashjian Title:   Vice President By:   /s/ Peter Cucchiara Name:   Peter
Cucchiara Title:   Vice President

 

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DNB CAPITAL LLC, as Lender By:   /s/ Joe Hykle Name:   Joe Hykle Title:   Senior
Vice President By:   /s/ Andrea Ozbolt Name:   Andrea Ozbolt Title:   First Vice
President

 

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GOLDMAN SACHS BANK USA, as Lender By:   /s/ Rebecca Kratz Name:   Rebecca Kratz
Title:   Authorized Signatory

 

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MORGAN STANLEY BANK, N.A., as Lender By:   /s/ Michael King Name:   Michael King
Title:   Authorized Signatory

 

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BARCLAYS BANK PLC, as Lender By:   /s/ Ronnie Glenn Name:   Ronnie Glen Title:  
Vice President

 

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EXPORT DEVELOPMENT CANADA, as Lender By:   /s/ Christiane de Billy Name:  
Christiane de Billy Title:   Senior Financing Manager By:   /s/ Ladislau Papara
Name:   Ladislau Papara Title:   Financing Manager

 

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NATIXIS, NEW YORK BRANCH, as Lender By:   /s/ Louis P. Laville, III Name:  
Louis P. Laville, III Title:   Managing Director By:   /s/ Mary Lou Allen Name:
  Mary Lou Allen Title:   Director

 

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MIZUHO BANK, LTD., as Lender By:   /s/ Leon Mo Name:   Leon Mo Title:  
Authorized Signatory

 

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BNP Paribas, as Lender By:   /s/ Sriram Chandraskekaran Name:   Siram
CHANDRASKEKARAN Title:   Director By:   /s/ Julien Pecoud-Bouvet Name:   Julien
PECOUD-BOUVET Title:   Vice President

 

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COMPASS BANK, as Lender By:   /s/ Kathleen J. Bowen Name:   Kathleen J. Bowen
Title:   Senior Vice President

 

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CEC Credit Agreement

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THE BANK OF NOVA SCOTIA, as Lender By:   /s/ Alan Dawson Name:   Alan Dawson
Title:   Director

 

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CEC Credit Agreement

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U.S. BANK NATIONAL ASSOCIATION, as Lender By:   /s/ Bruce E. Hernandez Name:  
Bruce E. Hernandez Title:   Senior Vice President

 

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CEC Credit Agreement