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Exhibit 10.1

EXECUTION VERSION

THIS RESTRUCTURING SUPPORT AND LOCK-UP AGREEMENT IS NOT AN OFFER WITH RESPECT TO
ANY SECURITIES OR A SOLICITATION OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE
MEANING OF SECTION 1125 OF THE BANKRUPTCY CODE.  ANY SUCH OFFER OR SOLICITATION
WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND/OR PROVISIONS OF THE
BANKRUPTCY CODE.  NOTHING CONTAINED IN THIS RESTRUCTURING SUPPORT AND LOCK-UP
AGREEMENT SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE OCCURRENCE OF
THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN, DEEMED BINDING ON
ANY OF THE PARTIES HERETO.
 
FIRST AMENDED AND RESTATED RESTRUCTURING SUPPORT AND LOCK-UP AGREEMENT
 
This FIRST AMENDED AND RESTATED RESTRUCTURING SUPPORT AND LOCK-UP AGREEMENT
(including all exhibits and schedules attached hereto and incorporated herein,
this “Agreement”) is made and entered into as of June 13, 2019, by and among the
following parties:1
 

  i.
Legacy Reserves Inc. (“Legacy Reserves”), a publicly-traded company organized
under the laws of the State of Delaware and its direct and indirect subsidiaries
that are parties to the Prepetition Credit Agreements (as defined below)
(collectively, the “Company” or the “Company Parties” and such Company Parties
(including, without limitation, Legacy Reserves) that file Chapter 11 Cases (as
defined below) as set forth in the Restructuring Term Sheet (as defined below),
collectively, the “Debtors”);

 

ii.
those certain lenders under that certain Credit Agreement, dated as of October
25, 2016, by and among Legacy Reserves LP, a limited partnership duly formed and
existing under the laws of the State of Delaware, the other guarantors from time
to time party thereto, Cortland Capital Market Services LLC, as administrative
agent (together with any successor administrative agent, the “Prepetition Term
Loan Agent”), and the lenders from time to time party thereto (as amended by
that certain First Amendment to Credit Agreement dated as of July 31, 2017, as
further amended by that certain Second Amendment to Credit Agreement dated as of
October 30, 2017, as further amended by that certain Third Amendment to Credit
Agreement dated as of December 31, 2017, as further amended by that certain
Fourth Amendment to Credit Agreement dated as of March 23, 2018, as further
amended by that certain Fifth Amendment to Credit Agreement dated as of
September 14, 2018, as further amended by that certain Sixth Amendment to Credit
Agreement dated as of September 20, 2018, and as further amended by that certain
Seventh Amendment to Credit Agreement dated as of March 21, 2019, the
“Prepetition Term Loan Credit Agreement”), that execute signature pages hereto
(such lenders, collectively, the “Supporting Term Lenders”); and

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1
Capitalized terms used and not otherwise defined herein shall have the meanings
set forth in the term sheet attached hereto as  Exhibit A-1 or, alternatively,
if the Noteholder Termination (as defined herein) has occurred, Exhibit A-2 (as
applicable, and as the same may be amended, supplemented, or otherwise modified
from time to time, the “Restructuring Term Sheet”), subject to Section 2 hereof.

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iii.
those certain lenders under that certain Third Amended and Restated Credit
Agreement dated as of April 1, 2014, by and among Legacy Reserves LP, as
borrower, the other guarantors from time to time party thereto, the lenders from
time to time party thereto, and Wells Fargo Bank, National Association, as
administrative agent (together with any successor administrative agent, the
“Prepetition RBL Agent” and together with the Prepetition Term Loan Agent,
collectively, the “Prepetition Agents”) (as amended, supplemented, or otherwise
modified as of the date hereof, the “Prepetition RBL Credit Agreement” and
together with the Prepetition Term Loan Credit Agreement, collectively, the
“Prepetition Credit Agreements”) (such lenders that execute signature pages
hereto, collectively, the “Supporting RBL Lenders”); and

 

iv.
those certain (a) holders of 6.625% Senior Notes due 2021 (the “2021 Notes” and
such holders thereof, the “2021 Noteholders”) issued under the Indenture dated
as of May 28, 2013 (as amended, supplemented, or otherwise modified as of the
date hereof, the “2021 Notes Indenture”), by and among Legacy Reserves LP,
Legacy Reserves Finance Corporation, the other Company Parties party thereto,
and Wilmington Trust, National Association (as successor to Wells Fargo Bank,
National Association), as indenture trustee (the “2021 Notes Trustee”), (b)
holders of 8% Convertible Notes due 2023 (the “2023 Notes” and such holders
thereof, the “2023 Noteholders”) issued under the Indenture dated as of
September 20, 2018 (as amended, supplemented, or otherwise modified as of the
date hereof, the “2023 Notes Indenture”), by and among Legacy Reserves LP,
Legacy Reserves Finance Corporation, the other Company Parties party thereto,
and Wilmington Trust, National Association, as indenture trustee (the “2023
Notes Trustee”) and (c) holders of 8% Senior Notes due 2020 (the “2020 Notes”
and such holders thereof, the “2020 Noteholders”) issued under the Indenture
dated as of December 4, 2012 (as amended, supplemented, or otherwise modified as
of the date hereof, the “2020 Notes Indenture” and together with the 2021 Notes
Indenture and the 2023 Notes Indenture, collectively, the “Prepetition Notes
Indentures”), by and among Legacy Reserves LP, Legacy Reserves Finance
Corporation, the other Company Parties party thereto, and Wilmington Trust,
National Association (as successor to Wells Fargo Bank, National Association),
as indenture trustee (the “2020 Notes Trustee”), in each case that execute
signature pages hereto (collectively, the “Supporting Noteholders” and together
with the Supporting Term Lenders and the Supporting RBL Lenders, collectively,
the “Supporting Creditors” 2 and, collectively, with (i) the Company Parties and
(ii) any transferee that becomes a Supporting Creditor pursuant to section
4.03(a), the “Parties”).

 

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2
For the purposes of this Agreement, each party agrees that the terms “Supporting
Term Lenders”, “Supporting RBL Lenders”, “Supporting Noteholders” and
“Supporting Creditors” shall not include any distinct business unit of a
Supporting Creditor other than the business unit expressly identified in such
Supporting Creditor’s signature block appended hereto (if a business unit is
specified) unless such other business unit is or becomes a party to this
Agreement.

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RECITALS
 
WHEREAS, the Company Parties, the Supporting RBL Lenders, the Supporting Term
Lenders, and GSO (in its capacity as Supporting Term Lender, Supporting
Noteholder, and Plan Sponsor) (the “Original Parties”), entered into a
Restructuring Support Agreement (the “Original RSA”), dated as of June 10, 2019;
 
WHEREAS, the Original Parties desire to amend and restate the Original RSA in
the manner set forth herein;
 
WHEREAS, the Supporting Creditors, the Prepetition Agents, and the Company have
engaged in good faith, arm’s-length negotiations regarding a restructuring
transaction (the “Restructuring”) pursuant to the terms and upon the conditions
set forth in this Agreement;
 
WHEREAS, the Debtors shall commence voluntary reorganization cases (the “Chapter
11 Cases”) under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§
101- 1532 (the “Bankruptcy Code”), in the United States Bankruptcy Court for the
Southern District of Texas (the “Bankruptcy Court”) to effect the Restructuring
through a pre-negotiated chapter 11 plan of reorganization that is consistent
with the Restructuring Term Sheet (the “Plan”);
 
WHEREAS, certain Supporting RBL Lenders or affiliates of Supporting RBL Lenders
(in their capacities as such, the “DIP Lenders”) shall provide the DIP Facility;
 
WHEREAS, subject to approval of the Plan and entry of the Final DIP Order, the
Parties have agreed to enter into the Exit Facility;
 
WHEREAS, certain Supporting Creditors or affiliates of Supporting Creditors (in
such capacity, the “Sponsor Backstop Parties”),3 have agreed, subject to the
terms and conditions of this Agreement and the Restructuring Term Sheet, to
backstop a $189.8 million equity investment in the Company pursuant to the
Sponsor Backstop Commitment Agreement as part of a confirmed Plan;
 
WHEREAS, certain Supporting Noteholders (including the Plan Sponsor, in its
capacity as Supporting Noteholder) or affiliates of Supporting Noteholders (in
such capacity, the “Noteholder Backstop Parties”), have agreed, subject to the
terms and conditions of this Agreement and the Restructuring Term Sheet, to
backstop the full amount of a $66.5 million Rights Offering by the Company
pursuant to the Noteholder Backstop Commitment Agreement as part of a confirmed
Plan;
 
WHEREAS, the Parties have agreed to certain terms with respect to the
organization and governance of the Company Parties following the effective date
of the Plan (the “Plan Effective Date”), as set forth in the Restructuring Term
Sheet; and
 

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3
For the avoidance of doubt, as used herein, the terms “Supporting Creditors” and
“Parties” includes the DIP Lenders and the Sponsor Backstop Parties in their
capacities as such.

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WHEREAS, the Company Parties have agreed to take certain actions in support of
the Restructuring on the terms and conditions set forth in this Agreement.
 
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each Party, intending to be legally bound hereby,
agrees as follows:
 
AGREEMENT
 
Section 1. Agreement Effective Date. This Agreement shall become effective and
binding upon each of the Parties at 12:00 a.m., prevailing Eastern Time, on the
date (such date, the “Agreement Effective Date”) on which: (a)(i) the Company
Parties shall have executed and delivered counterpart signature pages of this
Agreement to counsel to the Supporting Creditors; (ii) the Original Parties
holding greater than 50% of the outstanding principal amount of the Term Loan
Claims held by the Original Parties shall have executed and delivered to counsel
to the Debtors counterpart signature pages of this Agreement; (iii) the Original
Parties holding greater than 50% of the outstanding principal amount of the RBL
Claims held by the Original Parties shall have executed and delivered to counsel
to the Debtors counterpart signature pages of this Agreement; and (iv) the
holders of 54.71% of the aggregate outstanding principal amount of the 2020
Notes, the 2023 Notes, and the 2021 Notes issued under the Prepetition Notes
Indentures shall have executed and delivered to counsel to the Debtors
counterpart signature pages of this Agreement; (b) the Company Parties have
given notice to counsel to the Supporting Creditors in accordance with Section
10.09 hereof that each of the foregoing conditions set forth in this Section 1,
in each case, has been satisfied, all signature pages held by such Company
Parties as contemplated above shall have been released for attachment to the
relevant agreements, and this Agreement is declared effective as to all Parties;
(c) the Company Parties shall have paid all fees and expenses invoiced and
required to be paid pursuant to Section 9 hereof.  If the Agreement Effective
Date shall not have occurred on or before June 14, 2019, all signature pages
referred to in this Section 1 shall be returned to the Party providing the same
and this Agreement, and all documents to which such signature pages apply
(excluding, for the avoidance of doubt, the Original RSA and the Definitive
Documentation (as defined in the Original RSA)), shall have no force or
effect.4  Upon the Agreement Effective Date, this Agreement shall amend and
restate the Original RSA in its entirety.
 
Section 2. Exhibits Incorporated by Reference. Each of the exhibits attached
hereto is expressly incorporated herein and made a part of this Agreement, and
all references to this Agreement shall include such exhibits.  In the event of
any inconsistency between this Agreement (without reference to the exhibits) and
the exhibits, this Agreement (without reference to the exhibits) shall govern.

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4
For the avoidance of doubt, the obligations and rights of the Supporting
Creditors described in this Agreement shall apply to any claims or interests
acquired by such Supporting Creditors.

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Section 3. Definitive Documentation. The definitive documents and agreements
governing the Restructuring (collectively, the “Definitive Documentation”) shall
consist of: (a) the Plan (and all exhibits thereto); (b) the Confirmation Order
and pleadings in support of entry of the Confirmation Order; (c) the Disclosure
Statement and the other solicitation materials in respect of the Plan (such
materials, collectively, the “Solicitation Materials”); (d) the order of the
Bankruptcy Court approving the Disclosure Statement and the Solicitation
Materials; (e) the documentation in respect of the DIP Facility (including the
DIP Credit Agreement, the Interim DIP Order, the Final DIP Order, the motion to
approve the DIP Credit Agreement, and all other motions, briefs, affidavits,
declarations, orders, and other documents related to the DIP Credit Agreement)
(the “DIP Documentation”); (f) customary “first day” and “second day” motions
and proposed orders (the “First Day and Second Day Pleadings”); (g) the Exit
Facility and all related documents (the “Exit Facility Documentation”); (h) the
New Exit Note, if any; (i) (A) so long as the Noteholder Termination (as defined
below) shall not have occurred, the Sponsor Backstop Commitment Agreement (as
defined in Exhibit A-1 hereto) or (B) if the Noteholder Termination shall have
occurred, the Equity Backstop Commitment Agreement (as defined in Exhibit A-2
hereto); (j) so long as the Noteholder Termination (as defined below) shall not
have occurred, the Noteholder Backstop Commitment Agreement; (k) the Rights
Offering Procedures; (l) such documentation to be determined by the Plan Sponsor
and the Debtors governing the terms of the Incremental Equity Investment (if
any); (m) the Registration Rights Agreement; (n) the SHA; (o) the Management
Incentive Plan; (p) amended employment agreements for each executive officer of
the Reorganized Debtors; (q) the certificates of incorporation, limited
liability agreements, bylaws, and other organizational documents (as applicable)
of the Reorganized Debtors; and (r) all other documents that will comprise the
Plan Supplement or are otherwise related to the Plan.  The Definitive
Documentation remains subject to negotiation and completion and shall, upon
completion, contain terms, conditions, representations, warranties, and
covenants consistent with the terms of this Agreement, and shall be subject to
any consent rights set forth in this Agreement and otherwise be in form and
substance acceptable to the Debtors and the Required Supporting Term Lenders5
and reasonably acceptable to the Required Supporting Noteholders and the
Prepetition RBL Agent; provided that, except as otherwise set forth herein, the
Definitive Documentation shall be deemed acceptable to the Prepetition RBL Agent
unless the Prepetition RBL Agent delivers written notice (which may be by email)
to the contrary to the Company Parties and the Required Supporting Term Lenders
within two (2) business days of the Prepetition RBL Agent’s receipt of such
documentation; provided, further, that the Exit Facility Documentation shall be
in form and substance acceptable to the Debtors, the Required Supporting Term
Lenders and the Prepetition RBL Agent and reasonably acceptable to the Required
Supporting Noteholders, and the Exit Facility contemplated thereunder shall be
consistent in all material respects with the Exit Facility Term Sheet; provided,
further, that, by executing this Agreement, the undersigned Parties acknowledge
and agree that the form and substance of the DIP Credit Agreement, the Interim
DIP Order, and the Sponsor Backstop Commitment Agreement and the Noteholder
Backstop Commitment Agreement attached to the Restructuring Term Sheet,
respectively, as Exhibit B-1, Exhibit B-2, Exhibit E, and Exhibit G are each
acceptable to such Party (for the avoidance of doubt, any amendments or
modifications to the Noteholder Backstop Commitment Agreement shall require the
consent of the parties as set forth therein and herein); provided, further, that
the undersigned Original RSA Parties acknowledge and agree that the form and
substance of the Equity Backstop Commitment Agreement (as defined in Exhibit
A-2) is acceptable to each such Party; provided, further, that the Definitive
Documentation shall specify the price per share and the number of shares with
respect to the New Common Equity Pool in a manner acceptable to the Plan
Sponsor.
 

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5
As used herein, (a) the term “Required Supporting Term Lenders” means, at any
relevant time, the Supporting Creditors holding greater than 50.0% of the
outstanding principal amount of the Term Loan Claims held by Supporting
Creditors (b) the term “Required Supporting RBL Lenders” means, at any relevant
time, the Supporting Creditors holding greater than 50.0% of the outstanding
principal amount of the RBL Claims held by the Supporting Creditors, and (c) the
term “Required Supporting Noteholders” means, at any relevant time, the
Supporting Creditors holding greater than 50.0% of the outstanding principal
amount of the Notes Claims held by the Supporting Creditors; provided that Notes
Claims held by the Plan Sponsor may not, in the aggregate, account for more than
45% of the amounts set forth in the calculation of the Required Supporting
Noteholders.

 
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Section 4. Commitments Regarding the Restructuring .
 
4.01.       Commitment of the Supporting Creditors.
 
(a)         During the period beginning on the Agreement Effective Date and
ending on a Termination Date (as defined in Section 7.05) (such period, the
“Effective Period”), each Supporting Creditor shall (severally and not jointly),
in each of its capacities as a holder of claims against the Debtors, including,
without limitation, claims in connection with the DIP Facility (“Claims”) or
interests in the Debtors (“Interests” and together with Claims, the “Debtor
Claims/Interests”):
 
(i)          use good faith efforts to negotiate, execute and implement the
Definitive Documentation on terms consistent with this Agreement and to
implement the Restructuring;
 
(ii)        to the extent a class is permitted to vote to accept or reject the
Plan and upon receipt of the Disclosure Statement that has been approved by the
Bankruptcy Court, vote each of its Debtor Claims/Interests reflected on the
signature pages hereto to (A) accept the Plan by delivering its duly executed
and completed ballot(s) accepting the Plan on a timely basis and (B) not
withdraw, amend, or revoke (or cause to be withdrawn, amended, or revoked) its
vote with respect to the Plan, provided, however, that the votes of the
Supporting Creditors shall be immediately revoked and deemed null and void ab
initio upon termination of this Agreement other than pursuant to Section 7.04 of
this Agreement; provided, further, that nothing in this Agreement shall prevent
any Supporting Creditor from withholding, amending, or revoking its timely
consent or vote with respect to the Plan if this Agreement is terminated with
respect to such Supporting Creditor other than pursuant to Section 7.04 of this
Agreement;
 
(iii)       not (A) object to, delay, interfere, impede, or take any other
action to delay, interfere or impede, directly or indirectly, with the
Restructuring, confirmation of the Plan, or approval of the Disclosure Statement
or the Solicitation Materials (including joining in or supporting any efforts to
object to or oppose any of the foregoing) or (B) propose, file, support, or vote
for, directly or indirectly, any restructuring, workout, plan of arrangement,
alternative transaction, including a sale pursuant to section 363 of the
Bankruptcy Code, or chapter 11 plan for the Debtors other than the Restructuring
and the Plan;
 
(iv)       not object to any First Day and Second Day Pleadings consistent with
this Agreement filed by the Debtors in furtherance of the Restructuring,
including any motion seeking approval of the DIP Facility on the terms set forth
in the Restructuring Term Sheet and the DIP Credit Agreement;
 
(v)        not, nor encourage any other person or entity to, take any action,
including initiating or joining in any legal proceeding that is inconsistent
with this Agreement, or delay, impede, appeal, or take any other negative
action, directly or indirectly, that could reasonably be expected to interfere
with the approval, acceptance, confirmation, consummation, or implementation of
the Restructuring or the Plan, as applicable;
 
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(vi)        not exercise any right or remedy for the enforcement, collection, or
recovery of any obligation arising under the Prepetition Credit Agreements;
 
(vii)       not instruct (or join in any direction requesting that) the
Prepetition Agents or any agent under related loan documents to take any action,
or refrain from taking any action, that would be inconsistent with this
Agreement, the Plan, or the Restructuring; and
 
(viii)      not object to or opt out of any release included in the Solicitation
Materials or the Plan, so long as such release is consistent with the
Restructuring Term Sheet.
 
(b)        Nothing contained herein nor any vote to accept the Plan or other
acceptance of or support for the Plan shall limit (i) the rights of any
Supporting Creditor under applicable bankruptcy or insolvency law, or in any
foreclosure or similar proceeding, including appearing as a party in interest in
any matter to be adjudicated in the Chapter 11 Cases, so long as the exercise of
any such right is consistent with such Supporting Creditor’s obligations
hereunder; (ii) subject to the terms of Section 4.03 hereof, the ability of any
Supporting Creditor to purchase, sell or enter into any transactions in
connection with its Claims, subject to the terms hereof; (iii) subject to the
terms of Section 4.01(a) hereof, any right of a Supporting Creditor under (x)
the Prepetition Credit Agreements or (y) any other applicable agreement,
instrument or document that gives rise to any Claim or Interest of such
Supporting Creditor, nor shall anything contained herein be deemed to constitute
a waiver or amendment of any provision of any such agreement described in the
foregoing clauses (x) and (y); (iv) the ability of any Supporting Creditor to
consult with other Lenders or the Company; or (v) the ability of any Supporting
Creditor to enforce any right, remedy, condition, consent or approval
requirement under this Agreement or any of the Definitive Documentation.
 
4.02.      Commitment of the Company Parties.
 
(a)          During the Effective Period, the Company Parties agree to:
 
(i)          pursue the Restructuring on the terms set forth in this Agreement
and the Restructuring Term Sheet and not sign any agreement to pursue any
auction, sale process or other restructuring transaction for the Company or any
significant portion of its assets outside of the ordinary course of business;
 
(ii)         not engage in (A) any asset sale transactions (excluding sales of
hydrocarbons relating to recurring revenues in the ordinary course of business)
for which the fair market value of the gross consideration, individually or in
the aggregate, exceeds $1 million or (B) any “land swap” transactions, in each
case of the foregoing clauses (A) and (B), without the prior written consent of
the Required Supporting Term Lenders;
 
(iii)        use good faith efforts to implement the Restructuring Term Sheet
and the DIP Credit Agreement and, in each case, the transactions and other
actions contemplated hereby and thereby;
 
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(iv)        (A) support and complete the Restructuring and all transactions set
forth in this Agreement, including confirmation of the Plan and entry of the
Confirmation Order; (B) negotiate in good faith all Definitive Documentation
that is subject to negotiation as of the Agreement Effective Date; (C) execute
and deliver any other required agreements to effectuate and consummate the
Restructuring; (D) make commercially reasonable efforts to obtain required
regulatory and/or third-party approvals for the Restructuring; (E) complete the
Restructuring in a timely and expeditious manner, and as otherwise required by
this Agreement and the Definitive Documentation; (F) operate their business,
subject to the Interim DIP Order and the Final DIP Order, in the ordinary
course, taking into account the Restructuring and the commencement of the
Chapter 11 Cases; and (G) not undertake any actions materially inconsistent with
the Restructuring or the adoption and implementation of the Plan and
confirmation thereof;
 
(v)         not object to, delay, or impede, or take any other action that is
materially inconsistent with, or is intended or is likely to interfere with,
acceptance or implementation of the Restructuring;
 
(vi)        not seek to amend or modify, or file a pleading seeking authority to
amend or modify, the Definitive Documentation or any other document related to
the Prepetition Credit Agreements, DIP Facility or the Restructuring in a manner
that is materially inconsistent with this Agreement;
 
(vii)       not file any pleading that is materially inconsistent with the
Restructuring or the terms of this Agreement; and
 
(viii)     not engage in any material merger, consolidation, sale of all or
substantially all assets, dividend, incurrence of indebtedness or other similar
transaction outside of the ordinary course of business other than the
transactions contemplated herein.
 
(b)          During the Effective Period, the Company Parties or the Debtors, as
applicable, also agree to the following affirmative covenants:
 
(i)         The Debtors shall provide counsel for the Supporting Creditors at
least two (2) business days prior to the date when the Debtors intend to file
such document draft copies of all material motions and proposed orders intended
to be filed with the Bankruptcy Court, including all First Day and Second Day
Pleadings, and shall consult in good faith with such counsel regarding the form
and substance of all such material proposed filings with the Bankruptcy Court;
 
(ii)         the Chapter 11 Cases shall be commenced on or before June 18, 2019
(the “Petition Date”), subject to extension with the consent of the Required
Supporting Term Lenders, the Required Supporting Noteholders, and the RBL
Lenders holding a majority of the RBL Claims;
 
(iii)        the Debtors shall timely file a formal objection to any unresolved
motion filed with the Bankruptcy Court by a third party seeking the entry of an
order (A) directing the appointment of an examiner with expanded powers to
operate the Debtors’ businesses pursuant to section 1104 of the Bankruptcy Code
or a trustee, (B) converting the Chapter 11 Cases to cases under chapter 7 of
the Bankruptcy Code, (C) dismissing the Chapter 11 Cases, (D) modifying or
terminating the Debtors’ exclusive right to file and/or solicit acceptances of a
plan of reorganization under section 1121 of the Bankruptcy Code, or (E) any
motion for derivative standing on behalf of any Company Party’s estate to seek
any relief adverse to any Supporting Creditor;
 
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(iv)        the Debtors shall timely file a formal written response in
opposition to (or otherwise address in a manner reasonably acceptable to the
Required Supporting Term Lenders and the Prepetition RBL Agent) any objection
filed with the Bankruptcy Court by any Person with respect to entry of the
Interim DIP Order or the Final DIP Order or with respect to any adequate
protection proposed to be granted or granted to the Supporting Creditors
pursuant to any cash collateral order;
 
(v)         the Debtors shall promptly notify the Supporting Creditors in
writing of (i) any governmental or third-party complaints, litigations,
investigations, or hearings (or communications indicating that the same may be
contemplated or threatened); (ii) any matter or circumstance which they know, or
suspect is likely, to be a material impediment to the implementation or
consummation of the Restructuring; and (iii) any representation or statement
made or deemed to be made by them under this Agreement which is or proves to
have been materially incorrect or misleading in any respect when made or deemed
to be made;
 
(vi)       upon reasonable request of the Plan Sponsor, the Prepetition RBL
Agent, or the Required Supporting Noteholders, inform the advisors to such
requesting Parties as to:  (i) the material business and financial (including
liquidity) performance of the Company Parties; (ii) the status and progress of
the Restructuring, including progress in relation to the negotiations of the
Definitive Documentation; and (iii) the status of obtaining any necessary or
desirable authorizations (including any consents) from each Supporting Creditor,
any competent judicial body, governmental authority, banking, taxation,
supervisory, or regulatory body or any stock exchange;
 
(vii)      the Debtors shall promptly notify the Supporting Creditors of any
breach  (including a breach by any Company Party) of the obligations,
representations, warranties or covenants set forth in this Agreement by
furnishing written notice to the Supporting Creditors pursuant to Section 10.09
hereof within two (2) calendar days of actual knowledge of such breach.
 
To the extent of any conflict between this Agreement and any DIP Documentation,
this Section 4.02 and each other section in this Agreement shall not be deemed
to supersede or modify such DIP Documentation.
 
4.03.   Transfer of Interests and Securities.
 
(a)       During the Effective Period, (i) no Supporting Creditor shall sell,
pledge, assign, or transfer (each, a “Transfer”) any of the Debtor
Claims/Interests, unless the transferee thereof (“Transferee”) either (x) is a
Supporting Creditor, or (y) prior to such Transfer, agrees in writing for the
benefit of the other Parties to be bound by all of the terms of this Agreement
with respect to such acquired Debtor Claim/Interest by executing the joinder in
the form attached hereto as Exhibit B (the “Joinder Agreement”), and delivering
an executed copy thereof, within five (5) business days of closing of such
Transfer, to the parties set forth in Section 10.09 hereof, in which event the
transferee shall be deemed to be a Supporting Creditor under this Agreement with
respect to such transferred Debtor Claims/Interests.  Each Supporting Creditor
agrees and acknowledges that any Transfer of Debtor Claims/Interests that does
not comply with the terms and procedures set forth in this Section 4.03 shall be
deemed null and void ab initio.
 
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(b)         Notwithstanding anything herein to the contrary, (i) any Supporting
Creditor may Transfer (by purchase, sale, assignment, participation, or
otherwise) any Debtor Claims/Interests to an entity that is acting in its
capacity as a Qualified Marketmaker6without the requirement that the Qualified
Marketmaker be or become a Supporting Creditor; provided that the Qualified
Marketmaker subsequently Transfers (by purchase, sale, assignment,
participation, or otherwise) the right, title, or interest in such Debtor
Claims/Interests within thirty (30) days of its receipt thereof to a transferee
that is or becomes a Supporting Creditor by executing a Joinder Agreement; and
(ii) to the extent a Supporting Creditor, acting in its capacity as a Qualified
Marketmaker, acquires any Debtor Claims/Interests from a holder of such claim or
interest who is not a Supporting Creditor, it may transfer (by purchase, sale,
assignment, participation, or otherwise) such claim or interest without the
requirement that the transferee be or become a Supporting Creditor.  For the
avoidance of doubt, if a Qualified Marketmaker acquires a Debtor Claim/Interest
from a Supporting Creditor as an “own account” investment, it shall not be
deemed to be a Qualified Marketmaker for purposes of this Section 4.03(b).
 
(c)        This Agreement shall in no way be construed to preclude the
Supporting Creditors from acquiring additional Debtor Claims/Interests;
provided, however, such acquired Debtor Claims/Interests shall automatically and
immediately upon acquisition by a Supporting Creditor be deemed subject to the
terms of this Agreement (regardless of when or whether notice of such
acquisition is given to the Debtors).
 
(d)       To the extent the Debtors and another Party have entered into a
separate confidentiality agreement with respect to the issuance of a “cleansing
letter” or other public disclosure of information in connection with any
proposed Restructuring (each such executed agreement, a “Confidentiality
Agreement”), the terms of such Confidentiality Agreement shall continue to apply
and remain in full force and effect according to its terms.
 
4.04.       Representations and Warranties of Supporting Creditors. Each
Supporting Creditor, severally, and not jointly, represents and warrants to all
Parties that:
 
(a)        it is the beneficial owner of the face amount or unit amount, as
applicable, of the Debtor Claims/Interests, or is the nominee, investment
manager, or advisor for beneficial holders of the Debtor Claims/Interests, as
reflected, subject to Section 10.13 of this Agreement, in such Supporting
Creditor’s signature block to this Agreement (each such signature block, a
“Supporting Creditor Signature Block”), which amount each Party understands and
acknowledges is proprietary and confidential to such Supporting Creditor (such
Debtor Claims/Interests, the “Owned Debtor Claims/Interests”);

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6
For the purposes of this Section 4.03, a “Qualified Marketmaker” means an entity
that (a) holds itself out to the market as standing ready in the ordinary course
of its business to purchase from customers and sell to customers claims against
and/or interests in (as applicable) the Debtors and their affiliates (including
debt securities or other debt) or enter with customers into long and short
positions in claims against the Debtors and their affiliates (including debt
securities or other debt), in its capacity as a dealer or market maker in such
claims against the Debtors and their affiliates and (b) is in fact regularly in
the business of making a market in claims against issuers or borrowers
(including debt securities or other debt).

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(b)        it has the authority to act on behalf of, vote and consent to matters
concerning the Owned Debtor Claims/Interests (or direct such action, vote, or
consent);
 
(c)        the Owned Debtor Claims/Interests are free and clear of any pledge,
lien, security interest, charge, claim, equity, option, proxy, voting
restriction, right of first refusal, or other limitation on disposition,
transfer, or encumbrances of any kind, that would adversely affect in any way
such Supporting Creditor’s ability to perform any of its obligations under this
Agreement at the time such obligations are required to be performed; and
 
(d)        (i) it is either (A) a qualified institutional buyer as defined in
Rule 144A of the Securities Act, (B) an institutional accredited investor (as
defined in Rule 501(a)(1), (2), (3), or (7) under the Securities Act of 1933, as
amended (the “Securities Act”)), (C) a Regulation S non- U.S. person or (D) the
foreign equivalent of (A) or (B) above, and (ii) any securities of the Company
acquired by the applicable Supporting Creditor in connection with the
Restructuring will have been acquired for investment and not with a view to
distribution or resale in violation of the Securities Act.
 
Section 5. Mutual Representations, Warranties, and Covenants. Each of the
Parties, severally and not jointly represents, warrants, and covenants to each
other Party:
 
5.01.       Enforceability. It is validly existing and in good standing under
the laws of the state of its organization, and this Agreement is a legal, valid,
and binding obligation of such Party, enforceable against it in accordance with
its terms, except as enforcement may be limited by applicable laws relating to
or limiting creditors’ rights generally or by equitable principles relating to
enforceability.
 
5.02.      No Consent or Approval. Except as expressly provided in this
Agreement, the Plan, the Restructuring Term Sheet, or the Bankruptcy Code, no
consent or approval is required by any other person or entity in order for it to
effectuate the Restructuring contemplated by, and perform the respective
obligations under, this Agreement.
 
(a)         Compliance with Laws; No Conflict.  The execution, delivery, and
performance of this Agreement does not and shall not: (i) violate any provision
of law, rules, or regulations applicable to it or any of its subsidiaries in any
material respect; (ii) violate its certificate of incorporation, bylaws, or
other organizational documents or those of any of its subsidiaries; or (iii)
conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under any contractual obligation to which it is a party,
which conflict, breach, or default, would have a material adverse effect on the
Restructuring.
 
5.04.     Power and Authority. Except as expressly provided in this Agreement,
it has all requisite corporate or other power and authority to enter into,
execute, and deliver this Agreement and to effectuate the Restructuring
contemplated by, and perform its respective obligations under, this Agreement.
 
11

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5.05.   Governmental Consents. Except as expressly set forth herein and with
respect to the Company Parties’ performance of this Agreement (and subject to
necessary Bankruptcy Court approval and/or regulatory approvals associated with
the Restructuring), the execution, delivery and performance by it of this
Agreement does not, and shall not, require any registration or filing with
consent or approval of, or notice to, or other action to, with or by, any
federal, state, or other governmental authority or regulatory body.
 
Section 6. Acknowledgement. Notwithstanding any other provision herein, this
Agreement is not and shall not be deemed to be an offer with respect to any
securities or solicitation of votes for the acceptance of a plan of
reorganization for purposes of sections 1125 and 1126 of the Bankruptcy Code or
otherwise.  Any such offer or solicitation will be made only in compliance with
all applicable securities laws and provisions of the Bankruptcy Code.  The
Debtors will not solicit acceptances of the Plan from Supporting Creditors in
any manner inconsistent with the Bankruptcy Code or applicable bankruptcy law.
 
Section 7. Termination Events.
 
7.01.     Supporting Creditor Termination Events.
 
(a)        Supporting Term Lender Termination Events. This Agreement may be
terminated as between the Supporting Term Lenders and the other Parties by the
delivery to the Company Parties, and counsel to the other Supporting Creditors,
of a written notice in accordance with Section 10.09 hereof by the Required
Supporting Term Lenders, upon the occurrence and continuation of any of the
following events:
 
(i)          any Company Party, as applicable, materially breaches its
obligations under this Agreement and such breach has not been cured (if
susceptible to cure) within five (5) business days after the receipt by the
Company Parties of written notice of such breach;
 
(ii)        any Company Party publicly announces or informs the Supporting
Creditors of its intention to pursue one or more restructuring transactions
(including a chapter 11 plan and/or asset sale process under section 363 of the
Bankruptcy Code) that contains terms and conditions that: (A) do not provide the
Supporting Creditors with the economic recovery set forth in the Restructuring
Term Sheet or (B) are not otherwise consistent with this Agreement and the
Restructuring Term Sheet in any respect;
 
(iii)        the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by any Company Party of its
representations, warranties, or covenants set forth in this Agreement that (if
susceptible to cure), in each case, with respect to the Term Loan Claims of the
Required Supporting Term Lenders, remains uncured for a period of five (5)
business days after the receipt by the Company Parties of written notice of such
breach;
 
(iv)        the (A) occurrence of a material breach of this Agreement by any
Supporting RBL Lender that has not been cured (if susceptible to cure) within
five (5) business days after the receipt by the Company Parties and such
Supporting RBL Lender of written notice of such breach or (B) termination of
this Agreement by the Supporting RBL Lenders;
 
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(v)       the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any injunction, judgment,
decree, charge, ruling, or order enjoining, the consummation of a material
portion of the Restructuring, or materially adversely affecting the recovery of
the Supporting Creditors contemplated by this Agreement; provided, however, that
the Company Parties shall have five (5) business days after issuance of such
injunction, judgment, decree, charge, ruling, or order to obtain relief that
would allow consummation of the Restructuring that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Required Supporting Term Lenders;
 
(vi)        entry of an order by the Bankruptcy Court appointing a trustee,
receiver, or examiner with expanded powers beyond those set forth in section
1106(a)(3) and (4) of the Bankruptcy Code in any of the Chapter 11 Cases;
 
(vii)       any Company Party files any motion or pleading with the Bankruptcy
Court that is materially inconsistent with this Agreement and such motion or
pleading has not been withdrawn or is not otherwise denied by the Bankruptcy
Court within three (3) calendar days of receipt of notice by such Party that
such motion or pleading is inconsistent with this Agreement;
 
(viii)      any Company Party announces or otherwise provides notice of, without
the prior written consent of the Plan Sponsor, its intention to pursue an asset
sale outside of the ordinary course of business or any other transaction that is
not consistent with the Restructuring;
 
(ix)        the entry of a ruling or order by the Bankruptcy Court that would
prevent consummation of the Restructuring; provided, however, that the Debtors
shall have five (5) business days after the date of such ruling or order to seek
a stay of such ruling or order and shall have ten (10) calendar days after
issuance of such ruling or order to obtain relief that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Required Supporting Term Lenders;
 
(x)          the conversion or dismissal of the Chapter 11 Cases;
 
(xi)        any of the Definitive Documentation shall have been modified without
the prior written consent of the Required Supporting Term Lenders (such consent
not to be unreasonably withheld);
 
(xii)      the occurrence of any Event of Default (as defined in the DIP Credit
Agreement) under the DIP Facility unless such Event of Default (other than a
payment event of default) has been waived no later than ten (10) business days
following the occurrence thereof; provided that such waiver period shall not
restrict termination under this Section 7.01(a)(xii) if the DIP Lenders earlier
enforce or take steps to enforce remedies under the DIP Credit Agreement;
 
(xiii)      the occurrence of the Maturity Date (as defined in the DIP Credit
Agreement), or the acceleration of the obligations under the DIP Credit
Agreement;
 
(xiv)      the Bankruptcy Court enters an order in the Chapter 11 Cases
terminating, or modifying without the prior written consent of the Required
Supporting Term Lenders, the Debtors’ exclusive right to file a plan or plans of
reorganization pursuant to section 1121 of the Bankruptcy Code;
 
13

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(xv)      any Company Party executes or files with the Bankruptcy Court any
Definitive Documentation that does not conform to the Restructuring Term Sheet
or is otherwise not reasonably acceptable to the Required Supporting Term
Lenders;
 
(xvi)     the Bankruptcy Court grants relief terminating, annulling, or
modifying the automatic stay (as set forth in section 362 of the Bankruptcy
Code) that would have a material adverse effect on the Restructuring, without
the written consent of the Required Supporting Term Lenders;
 
(xvii)     either (A) any Company Party files with the Bankruptcy Court a
motion, application, or adversary proceeding (or any Company Party supports any
such motion, application, or adversary proceeding filed or commenced by any
third party (including by consent to derivative standing on behalf of any
Company Party’s estate for a third party to file such motion, application, or
adversary proceeding, except for any such consent that may be set forth in the
Interim DIP Order or the Final DIP Order)) (1) challenging the validity,
enforceability, or priority of, or seeking avoidance or subordination of, any
Term Loan Claims, Notes Claims, or any liens or other security interests
securing the Term Loan Claims or (2) asserting any other cause of action against
the Supporting Creditors or (B) the Bankruptcy Court enters an order providing
relief against any Supporting Creditor with respect to any of the foregoing
causes of action or proceedings filed by any Company Party;
 
(xviii)    the Sponsor Backstop Commitment Agreement shall have been terminated;
 
(xix)     failure by any Debtor to comply with any material terms of the Sponsor
Backstop Order (as defined below), the Disclosure Statement Order, and/or the
Confirmation Order, unless such failure has been cured within five (5) business
days of notice thereof by the Required Supporting Term Lenders;
 
(xx)       any Debtor makes a payment or other transfer outside of the ordinary
course of business, without the prior written consent of the Plan Sponsor, to
any insider of any Debtor that is inconsistent with the terms of the Debtors’
existing insider compensation plans (including retention and incentive plans);
 
(xxi)       the Chapter 11 Cases are not commenced before the Bankruptcy Court
by June 18, 2019;
 
(xxii)    an order approving the Sponsor Backstop Commitment Agreement
(including, without limitation, the payment of the fees and expenses of the Plan
Sponsor’s Professionals as an Administrative Expense) in form and substance
acceptable to the Sponsor Backstop Parties (the “Sponsor Backstop Order”) has
not been entered within forty-five (45) calendar days of the Petition Date;
 
(xxiii)    the Interim DIP Order has not been entered by the Bankruptcy Court
within five (5) calendar days of the Petition Date;
 
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(xxiv)    the Final DIP Order has not been entered by the Bankruptcy Court
within forty-five (45) calendar days of entry of the Interim DIP Order;
 
(xxv)    the Plan and Disclosure Statement have not been filed with the
Bankruptcy Court within forty-five (45) calendar days of the Petition Date;
 
(xxvi)    the Disclosure Statement Order has not been entered by the Bankruptcy
Court within ninety (90) calendar days of the Petition Date;
 
(xxvii)   an order scheduling the confirmation hearing and related discovery has
not been entered by the Bankruptcy Court within ninety (90) calendar days of the
Petition Date;
 
(xxviii)  the Confirmation Order has not been entered by the Bankruptcy Court
within sixty (60) calendar days of entry of the Disclosure Statement Order; and
 
(xxix)    the Plan Effective Date has not occurred within thirty (30) calendar
days following the date of entry of the Confirmation Order (together with the
milestones set forth in the foregoing clauses (xxi) to (xxviii), collectively,
the “Milestones”).
 
The Milestones may be extended with the prior written consent of the Required
Supporting Term Lenders.
 
(b)        Supporting RBL Lender Termination Events.  This Agreement may be
terminated as between the Supporting RBL Lenders and the other Parties by the
delivery to the Company Parties, and counsel to the other Supporting Creditors,
of a written notice in accordance with Section 10.09 hereof by the Required
Supporting RBL Lenders, upon the occurrence and continuation of any of the
following events:
 
(i)          any Company Party, as applicable, materially breaches its
obligations under this Agreement and such breach has not been cured (if
susceptible to cure) within five (5) business days after the receipt by the
Company Parties of written notice of such breach;
 
(ii)        any Company Party publicly announces or informs the Supporting
Creditors of its intention to pursue one or more restructuring transactions
(including a chapter 11 plan and/or asset sale process under section 363 of the
Bankruptcy Code) that contains terms and conditions that: (A) do not provide the
Supporting Creditors with the economic recovery set forth in the Restructuring
Term Sheet or (B) are not otherwise consistent with this Agreement and the
Restructuring Term Sheet in any respect;
 
(iii)        the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by any Company Party of its
representations, warranties, or covenants set forth in this Agreement that (if
susceptible to cure), in each case, with respect to the RBL Claims of the
Required Supporting RBL Lenders, remains uncured for a period of five (5)
business days after the receipt by the Company Parties of written notice of such
breach;
 
(iv)        the (A) occurrence of a material breach of this Agreement by any
Supporting Term Lender that has not been cured (if susceptible to cure) within
five (5) business days after the receipt by such Supporting Term Lender of
written notice of such breach or (B) termination of this Agreement by the
Supporting Term Lenders;
 
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(v)       the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any injunction, judgment,
decree, charge, ruling, or order enjoining, the consummation of a material
portion of the Restructuring, or materially adversely affecting the recovery of
the Supporting RBL Lenders contemplated by this Agreement; provided, however,
that the Company Parties shall have five (5) business days after issuance of
such injunction, judgment, decree, charge, ruling, or order to obtain relief
that would allow consummation of the Restructuring that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Prepetition RBL Agent;
 
(vi)        entry of an order by the Bankruptcy Court appointing a trustee,
receiver, or examiner with expanded powers beyond those set forth in section
1106(a)(3) and (4) of the Bankruptcy Code in any of the Chapter 11 Cases;
 
(vii)       any Company Party files any motion or pleading with the Bankruptcy
Court that is materially inconsistent with this Agreement and such motion or
pleading has not been withdrawn or is not otherwise denied by the Bankruptcy
Court within three (3) calendar days of receipt of notice by such Party that
such motion or pleading is inconsistent with this Agreement;
 
(viii)      the entry of a ruling or order by the Bankruptcy Court that would
prevent consummation of the Restructuring; provided, however, that the Debtors
shall have five (5) business days after the date of such ruling or order to seek
a stay of such ruling or order and shall have ten (10) calendar days after
issuance of such ruling or order to obtain relief that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Prepetition RBL Agent;
 
(ix)         the conversion or dismissal of the Chapter 11 Cases;
 
(x)         any of the Definitive Documentation shall have been modified without
the prior written consent (which may be via email) of the Prepetition RBL Agent
(such consent not to be unreasonably withheld);
 
(xi)       the occurrence of any Event of Default (as defined in the DIP Credit
Agreement) under the DIP Facility unless such Event of Default (other than a
payment event of default) has been waived no later than ten (10) business days
following the occurrence thereof; provided that such waiver period shall not
restrict termination under this Section 7.01(b)(iv) if the DIP Lenders earlier
enforce or take steps to enforce remedies under the DIP Credit Agreement;
 
(xii)     any Company Party executes or files with the Bankruptcy Court any
Definitive Documentation that does not conform to the Restructuring Term Sheet
or is otherwise not reasonably acceptable to the Prepetition RBL Agent;
 
(xiii)     the Bankruptcy Court grants relief terminating, annulling, or
modifying the automatic stay (as set forth in section 362 of the Bankruptcy
Code) that would have a material adverse effect on the Restructuring, without
the written consent of the Prepetition RBL Agent;
 
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(xiv)      either (A) any Company Party files with the Bankruptcy Court a
motion, application, or adversary proceeding (or any Company Party supports any
such motion, application, or adversary proceeding filed or commenced by any
third party (including by consent to derivative standing on behalf of any
Company Party’s estate for a third party to file such motion, application, or
adversary proceeding, except for any such consent that may be set forth in the
Interim DIP Order or the Final DIP Order)) (1) challenging the validity,
enforceability, or priority of, or seeking avoidance or subordination of, any
RBL Claims or any liens or other security interests securing the RBL Claims or
(2) asserting any other cause of action against the RBL Lenders or (B) the
Bankruptcy Court enters an order providing relief against any RBL Lender with
respect to any of the foregoing causes of action or proceedings filed by any
Company Party;
 
(xv)        the Sponsor Backstop Commitment Agreement shall have been
terminated;
 
(xvi)     the Sponsor Backstop Order has not been entered in accordance with the
Milestone set forth in section 7.01(a)(xxii) of this Agreement and such
Milestone has not been extended or waived by the Required Supporting Term
Lenders;
 
(xvii)     failure by any Debtor to comply with any material terms of the
Disclosure Statement Order, and/or the Confirmation Order unless such failure
has been cured within ten (10) business days of the occurrence thereof;
 
(xviii)    an order approving the Upfront Fees (as defined in the Exit Facility
Term Sheet) has not been entered within sixty (60) calendar days of the Petition
Date; and
 
(xix)       termination of this Agreement by the Supporting Term Lenders.
 
(c)        Supporting Noteholder Termination Events.  This Agreement may be
terminated as between the Supporting Noteholders and the other Parties by the
delivery to the Company Parties, and counsel to the other Supporting Creditors,
of a written notice in accordance with Section 10.09 hereof by the Required
Supporting Noteholders, and solely with respect to subsections (ii), (iv), (x),
(xii), (xiv), (xvi), and (xix) of this Section 7.01(c), by the Specified Event
Required Supporting Noteholders,7 upon the occurrence and continuation of any of
the following events:
 
(i)          any Company Party, as applicable, materially breaches its
obligations under this Agreement and such breach has not been cured (if
susceptible to cure) within five (5) business days after the receipt by the
Company Parties of written notice of such breach;
 
(ii)        any Company Party publicly announces or informs the Supporting
Creditors of its intention to pursue one or more restructuring transactions
(including a chapter 11 plan and/or asset sale process under section 363 of the
Bankruptcy Code) that contains terms and conditions that: (A) do not provide the
Supporting Creditors with the economic recovery set forth in the Restructuring
Term Sheet or (B) are not otherwise consistent with this Agreement and the
Restructuring Term Sheet in any respect;

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7 “Specified Event Required Supporting Noteholders” means, at any relevant time,
the Supporting Creditors holding greater than 50.0% of the outstanding principal
amount of the Notes Claims held by the Supporting Creditors; provided that Notes
Claims held by the Plan Sponsor may not, in the aggregate, account for more than
25% of the amounts set forth in the calculation of the Specified Event Required
Supporting Noteholders.

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(iii)        the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by any Company Party of its
representations, warranties, or covenants set forth in this Agreement that (if
susceptible to cure), in each case, with respect to the Notes Claims of the
Required Supporting Noteholders, remains uncured for a period of five (5)
business days after the receipt by the Company Parties of written notice of such
breach;
 
(iv)        the (A) occurrence of a material breach of this Agreement by any
Supporting Term Lender that has not been cured (if susceptible to cure) within
five (5) business days after the receipt by the Company Parties and such
Supporting Term Lender  of written notice of such breach or (B) termination of
this Agreement by the Supporting Term Lenders;
 
(v)       the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any injunction, judgment,
decree, charge, ruling, or order enjoining, the consummation of a material
portion of the Restructuring, or materially adversely affecting the recovery of
the Supporting Noteholders contemplated by this Agreement; provided, however,
that the Company Parties shall have five (5) business days after issuance of
such injunction, judgment, decree, charge, ruling, or order to obtain relief
that would allow consummation of the Restructuring that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Required Supporting Noteholders;
 
(vi)        entry of an order by the Bankruptcy Court appointing a trustee,
receiver, or examiner with expanded powers beyond those set forth in section
1106(a)(3) and (4) of the Bankruptcy Code in any of the Chapter 11 Cases;
 
(vii)       any Company Party files any motion or pleading with the Bankruptcy
Court that is materially inconsistent with this Agreement and such motion or
pleading has not been withdrawn or is not otherwise denied by the Bankruptcy
Court within three (3) calendar days of receipt of notice by such Party that
such motion or pleading is inconsistent with this Agreement;
 
(viii)      the entry of a ruling or order by the Bankruptcy Court that would
prevent consummation of the Restructuring; provided, however, that the Debtors
shall have five (5) business days after the date of such ruling or order to seek
a stay of such ruling or order and shall have ten (10) calendar days after
issuance of such ruling or order to obtain relief that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Required Supporting Noteholders;
 
(ix)         the conversion or dismissal of the Chapter 11 Cases;
 
(x)         any of the Definitive Documentation shall have been modified without
the prior written consent of the Specified Event Required Supporting Noteholders
(such consent not to be unreasonably withheld);
 
(xi)        the occurrence of the Maturity Date (as defined in the DIP Credit
Agreement), or the acceleration of the obligations under the DIP Credit
Agreement;
 
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(xii)      any Company Party executes or files with the Bankruptcy Court any
Definitive Documentation that does not conform to the Restructuring Term Sheet
or is otherwise not reasonably acceptable to the Specified Event Required
Supporting Noteholders;
 
(xiii)     the Bankruptcy Court grants relief terminating, annulling, or
modifying the automatic stay (as set forth in section 362 of the Bankruptcy
Code) that would have a material adverse effect on the Restructuring, without
the written consent of the Required Supporting Noteholders;
 
(xiv)       the Sponsor Backstop Commitment Agreement or the Noteholder Backstop
Commitment Agreement shall have been terminated;
 
(xv)       the Debtors shall have failed to comply with any of the Milestones to
the extent such Milestones have not been waived or extended by the Required
Supporting Term Lenders in accordance with section 7.01(a);
 
(xvi)     failure by any Debtor to comply with any material terms of the
Noteholder Backstop Order (as defined below), the Disclosure Statement Order,
and/or the Confirmation Order unless such failure has been cured within five (5)
business days of notice thereof by the Required Supporting Noteholders;
 
(xvii)      termination of this Agreement by the Supporting Term Lenders;
 
(xviii)    the Chapter 11 Cases are not commenced before the Bankruptcy Court by
June 18, 2019;
 
(xix)      an order approving the Noteholder Backstop Commitment Agreement
(including, without limitation, the payment of the fees and expenses of the
Noteholder Backstop Parties’ Professionals as an Administrative Expense) in form
and substance acceptable to the Noteholder Backstop Parties (the “Noteholder
Backstop Order”) has not been entered within forty-five (45) calendar days of
the Petition Date;
 
(xx)      the Plan and Disclosure Statement have not been filed with the
Bankruptcy Court within forty-five (45) calendar days of the Petition Date;
 
(xxi)      the Disclosure Statement Order has not been entered by the Bankruptcy
Court within ninety (90) calendar days of the Petition Date;
 
(xxii)     an order scheduling the confirmation hearing and related discovery
has not been entered by the Bankruptcy Court within ninety (90) calendar days of
the Petition Date;
 
(xxiii)    the Confirmation Order has not been entered by the Bankruptcy Court
within sixty (60) calendar days of entry of the Disclosure Statement Order; and
 
(xxiv)    the Plan Effective Date has not occurred within thirty (30) calendar
days following the date of entry of the Confirmation Order; (together with the
milestones set forth in the foregoing clauses (xix) to (xxiii), collectively,
the “Noteholder Milestones”).
 
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The Noteholder Milestones may be extended with the prior written consent of the
Required Supporting Noteholders.

(d)          Noteholder Termination.  Upon the occurrence of (i) any termination
of this Agreement by the Supporting Noteholders in accordance with Section
7.01(c), (ii) any termination of the Noteholder Backstop Commitment Agreement,
and/or (iii) a material breach of this Agreement by any Supporting Noteholder
that has not been cured (if susceptible to cure) within five (5) business days
after the receipt by the Company Parties and such Supporting Noteholder of
written notice of such breach given by the Plan Sponsor, the Plan Sponsor, by
written notice to the Company Parties delivered in accordance with Section 10.09
of this Agreement, may terminate this Agreement with respect to the Supporting
Noteholders (the “Noteholder Termination”).  Upon the occurrence of the
Noteholder Termination, the Supporting Noteholders shall cease to be Parties to
this Agreement and all references to the “Restructuring Term Sheet” in this
Agreement shall be deemed to refer to the Restructuring Term Sheet attached
hereto as Exhibit A-2.  For the avoidance of doubt, upon the occurrence of the
Noteholder Termination, the Sponsor Backstop Commitment Agreement (as defined in
Exhibit A-1 hereto) shall automatically terminate, and, for so long as this
Agreement remains in effect with respect to the Plan Sponsor, the Equity
Backstop Commitment Agreement (as defined in Exhibit A-2 hereto) shall remain in
full force and effect.  Notwithstanding the occurrence of the Noteholder
Termination, this Agreement shall remain in full force and effect with respect
to the other Parties.  Upon the Noteholder Termination, Section 7.01(a) of this
Agreement shall be automatically deemed amended and replaced in its entirely
without further notice or action of any Party in the form attached hereto as
Exhibit C.
 
7.02.       Debtors’ Termination Events. The Debtors may terminate this
Agreement as to all Parties upon five (5) business days’ prior written notice,
delivered in accordance with Section 10.09 hereof, upon the occurrence of any of
the following events: (a) the breach by any of the Supporting Creditors of any
material provision set forth in this Agreement that remains uncured for a period
of five (5) business days after the receipt by the Supporting Creditors of
notice of such breach; (b) the board of directors, board of managers, or such
similar governing body of any Debtor determines based on advice of counsel that
proceeding with any of the Restructuring would be inconsistent with the exercise
of its fiduciary duties; or (c) the issuance by any governmental authority,
including any regulatory authority or court of competent jurisdiction, of any
final, non-appealable ruling or order enjoining the consummation of a material
portion of the Restructuring; provided that, for the avoidance of doubt, a
ruling by the Bankruptcy Court that the Plan is not confirmable as a result of
terms included therein and contemplated by one or more provisions of the
Restructuring Term Sheet shall not, by itself, constitute a termination event
pursuant to this Section 7.02.
 
7.03.       Mutual Termination. This Agreement, and the obligations of all
Parties hereunder, may be terminated by mutual agreement among all of the
following: (a) the Required Supporting Term Lenders, (b) the Required Supporting
RBL Lenders, (c) the Required Supporting Noteholders, and (d) each of the
Company Parties.
 
7.04.       Termination Upon Completion of the Restructuring. This Agreement
shall terminate automatically without any further required action or notice on
the Plan Effective Date.

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7.05.        Effect of Termination.
 
(a)          No Party may terminate this Agreement if such Party failed to
perform or comply in all material respects with the terms and conditions of this
Agreement, with such failure to perform or comply causing, or resulting in, the
occurrence of one or more termination events specified herein.  The date on
which termination of this Agreement as to a Party is effective in accordance
with Sections 7.01, 7.02, 7.03, or 7.04 shall be referred to as a “Termination
Date.”

(b)         Except as set forth below, upon the occurrence of a Termination Date
as to a Party, this Agreement shall be of no further force and effect and each
Party subject to such termination shall be released from its commitments,
undertakings, and agreements under or related to this Agreement and shall have
the rights and remedies that it would have had, had it not entered into this
Agreement, and shall be entitled to take all actions, whether with respect to
the Restructuring or otherwise, that it would have been entitled to take had it
not entered into this Agreement.  Upon the occurrence of a Termination Date, any
and all consents or ballots tendered by the Parties subject to such termination
before a Termination Date shall be deemed, for all purposes, to be null and void
from the first instance and shall not be considered or otherwise used in any
manner by the Parties in connection with the Restructuring and this Agreement or
otherwise.
 
(c)        Notwithstanding anything to the contrary in this Agreement, the
foregoing shall not be construed to prohibit the Debtors or any of the
Supporting Creditors from contesting whether any such termination is in
accordance with the terms of, or to seek enforcement of any rights under this
Agreement that arose or existed before a Termination Date.  Except as expressly
provided in this Agreement, nothing herein is intended to, or does, in any
manner waive, limit, impair, or restrict (i) any right of any Debtor or the
ability of any Debtor to protect and preserve its rights (including rights under
this Agreement), remedies, and interests, including its claims against any
Supporting Creditor, and (ii) any right of any Supporting Creditor, or the
ability of any Supporting Creditor to protect and preserve its rights (including
rights under this Agreement), remedies, and interests, including its claims
against any Debtor or Supporting Creditor.
 
Section 8. Amendments. This Agreement, including, without limitation, the
Restructuring Term Sheet, may not be modified, amended, or supplemented without
prior written consent of the Company Parties, the Required Supporting Term
Lenders, the Required Supporting RBL Lenders and the Required Supporting
Noteholders; provided that, such consent of the Required Supporting RBL Lenders
and the Required Supporting Noteholders shall not be unreasonably withheld;
provided, however that, any modification, amendment or supplement that would
adversely and disproportionately affect the Noteholders relative to the Term
Lenders shall require the prior written consent of the Specified Event Required
Supporting Noteholders.
 
Section 9. Fees and Expenses. The Company Parties hereby agree to pay in cash,
in full, in accordance with their respective engagement letters, any fee letters
executed by the Company Parties, and/or the terms of the Prepetition Term Loan
Credit Agreement (and in any case within three (3) business days), all invoiced
fees and out-of-pocket expenses incurred by the Supporting Creditors prior to
the termination of this Agreement with respect to such Supporting Creditors,
including all invoiced fees and out-of-pocket expenses of (a) Latham & Watkins
LLP (“Latham”), (b) PJT Partners, Inc. (“PJT”), (c) Orrick, Herrington &
Sutcliffe LLP, (d) Porter Hedges LLP (“PH”, and together with Latham, PJT, and
PH, collectively, the “Plan Sponsor’s Professionals”), (e) one local counsel in
each jurisdiction in which any Company Party or any subsidiary thereof is
located, (f) one additional counsel for each of the Prepetition Agents to
represent each in its own capacity, in each case incurred prior to the earlier
of the Plan Effective Date and the termination of this Agreement, (g) Davis Polk
& Wardwell LLP (“Davis Polk”), (h) Houlihan Lokey, Inc. (“HL”) and (i) Rapp &
Krock, PC (“Rapp & Krock”, and together with Davis Polk and HL, the “Noteholder
Backstop Parties’ Professionals”); provided that the Company Parties shall pay
all amounts payable to the foregoing professionals pursuant to any fee letters
executed by the Company Parties as a condition to the occurrence of the
Agreement Effective Date.  The Company Parties hereby acknowledge and agree that
the fees and expenses incurred by the Supporting Creditors prior to the
termination of this Agreement are of the type that should be entitled to
treatment as administrative expense claims pursuant to sections 503(b) and
507(a)(2) of the Bankruptcy Code.
 
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Section 10. Miscellaneous.
 
10.01.     Further Assurances. Subject to the other terms of this Agreement, the
Parties agree to execute and deliver such other instruments and perform such
acts, in addition to the matters herein specified, as may be reasonably
appropriate or necessary, or as may be required by order of the Bankruptcy
Court, from time to time, to effectuate the Restructuring, as applicable.
 
10.02.     Complete Agreement. This Agreement constitutes the entire agreement
among the Parties with respect to the subject matter hereof and supersedes all
prior agreements, oral, or written, among the Parties with respect thereto.
 
10.03.     Headings. The headings of all sections of this Agreement are inserted
solely for the convenience of reference and are not a part of and are not
intended to govern, limit, or aid in the construction or interpretation of any
term or provision hereof.
 
10.04.    GOVERNING LAW; SUBMISSION TO JURISDICTION; SELECTION OF FORUM. THIS
AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.  Each Party hereto
agrees that it shall bring any action or proceeding in respect of any claim
arising out of or related to this Agreement, to the extent possible, in either
the United States District Court for the Southern District of New York or any
New York State court located in New York County (the “Chosen Courts”), and
solely in connection with claims arising under this Agreement: (a) irrevocably
submits to the exclusive jurisdiction of the Chosen Courts; (b) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts;
and (c) waives any objection that the Chosen Courts are an inconvenient forum or
do not have jurisdiction over any Party hereto; provided, however, that if the
Debtors commence the Chapter 11 Cases, then the Bankruptcy Court (or court of
proper appellate jurisdiction) shall be the exclusive jurisdiction, rather than
any Chosen Court.
 
10.05.    Trial by Jury Waiver. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
 
10.06.    Execution of Agreement. This Agreement may be executed and delivered
in any number of counterparts and by way of electronic signature and delivery,
each such counterpart, when executed and delivered, shall be deemed an original,
and all of which together shall constitute the same agreement.  Each individual
executing this Agreement on behalf of a Party has been duly authorized and
empowered to execute and deliver this Agreement on behalf of said Party.
 
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10.07.     Interpretation and Rules of Construction. This Agreement is the
product of negotiations among the Parties, and in the enforcement or
interpretation hereof, is to be interpreted in a neutral manner, and any
presumption with regard to interpretation for or against any Party by reason of
that Party having drafted or caused to be drafted this Agreement, or any portion
hereof, shall not be effective in regard to the interpretation hereof.  The
Parties were each represented by counsel during the negotiations and drafting of
this Agreement and continue to be represented by counsel.  In addition, this
Agreement shall be interpreted in accordance with section 102 of the Bankruptcy
Code.
 
10.08.     Successors and Assigns. This Agreement is intended to bind and inure
to the benefit of the Parties and their respective successors and permitted
assigns, as applicable.  There are no third-party beneficiaries under this
Agreement, and the rights or obligations of any Party under this Agreement may
not be assigned, delegated, or transferred to any other person or entity other
than as permitted herein.
 
10.09.    Notices. All notices hereunder shall be deemed given if in writing and
delivered, if sent by electronic mail, courier, or registered or certified mail
(return receipt requested) to the following addresses (or at such other
addresses as shall be specified by like notice):
 

 
(a)
if to a Company Party, to:
         
Legacy Reserves Inc.
   
303 W. Wall Street, Suite 1800
   
Midland, Texas 79701
   
Attention: Bert Ferrara
   
E-mail address: bferrara@legacyreserves.com
         
with copies (which alone shall not constitute notice) to:
         
Sidley Austin LLP
   
1000 Louisiana Street, Suite 5900
   
Houston, TX, 77002
   
Attention: Duston K. McFaul; Bojan Guzina;
   
E-mail addresses: dmcfaul@sidley.com; bguzina@sidley.com
       
(b)
if to the Supporting Term Lenders, to:
         
Latham & Watkins LLP
   
885 Third Avenue
   
New York, NY 10022
   
Attention: George A. Davis; Jonathan R. Rod; Adam J. Goldberg
   
E-mail addresses: george.davis@lw.com; jonathan.rod@lw.com; adam.goldberg@lw.com

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(c)
if to the Supporting RBL Lenders, to:
         
Orrick Herrington & Sutcliffe LLP
   
51 West 52nd Street
   
New York, NY 10019-6142
   
United States
   
Attention: Raniero D’Aversa; Laura Metzger
   
E-mail addresses: rdaversa@orrick.com; lmetzger@orrick.com
       
(d)
if to the Supporting Noteholders, to:
         
Davis Polk & Wardwell LLP
   
450 Lexington Avenue
   
New York, NY 10017
   
United States
   
Attention: Brian M. Resnick; Stephen D. Piraino; Michael P. Pera
   
E-mail addresses: brian.resnick@davispolk.com; stephen.piraino@davispolk.com;
michael.pera@davispolk.com

or such other address as may have been furnished by a Party to each of the other
Parties by notice given in accordance with the requirements set forth above.
 
Any notice given by delivery, mail, or courier shall be effective when received.
 
10.10.     Access. Each Company Party agrees to (a) provide the Prepetition
Agents, the Supporting Creditors and their representatives with reasonable
access to inspect such Company Party’s financial records and properties provided
that such visits shall be during normal business hours (which access shall
include, for the avoidance of doubt, access, upon reasonable notice during
normal business hours, to relevant properties, books, contracts, commitments,
records, directors, officers, personnel, advisors and representatives of the
Company Parties) and (b) promptly provide such customary financial and other
information regarding the Company Parties and their respective businesses and
operations that the Supporting Creditors or their advisors may reasonably
request to the extent that (i) such information is readily available to a
Company Party, (ii) such information does not constitute trade secrets and (iii)
the provision of such information is not prohibited by law or by the legally
binding confidentiality obligations of any Company Party to a third party (other
than another Company Party); provided that the Company Parties shall use
commercially reasonable efforts to obtain the consent of any such third party to
provide such information to the Prepetition Agents, the Supporting Creditors or
their advisors on a confidential basis and use commercially reasonable efforts
to communicate, to the extent permitted, the applicable information in a way
that would not risk waiver of such privilege or violate the applicable
obligation; provided, further, that the Company Parties’ obligations under this
Section 10.10 shall be conditioned upon the applicable Prepetition Agent or
Supporting Creditor or representative agreeing to maintain the confidentiality
of such information in a manner consistent with the requirements for treatment
of confidential information set forth in Section 10.07 of the Prepetition Term
Loan Credit Agreement.  In addition, each Company Party agrees to provide the
Prepetition Agents, the Supporting Creditors and their representatives with the
reports and information delivered to the DIP Lenders and DIP Agent under the DIP
Orders contemporaneously with such delivery.
 
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10.11.      Independent Due Diligence and Decision Making. Each Supporting
Creditor hereby confirms that it is (a) a sophisticated party with respect to
the matters that are the subject of this Agreement, (b) has had the opportunity
to be represented and advised by legal counsel in connection with this Agreement
and acknowledges and agrees that it voluntarily and of its own choice and not
under coercion or duress enters into the Agreement, (c) has adequate information
concerning the matters that are the subject of this Agreement, and (d) has
independently and without reliance upon any other Party hereto, or any of their
affiliates, or any officer, employee, agent or representative thereof, and based
on such information as it has deemed appropriate, made its own analysis and
decision to enter into this Agreement, except that it has relied upon each other
Party’s express representations, warranties, and covenants in this Agreement.
 
10.12.     Waiver. If the Restructuring is not consummated, or if this Agreement
is terminated for any reason, the Parties fully reserve any and all of their
rights.
 
10.13.     Reporting of Debtor Claims/Interests. With respect to Claims related
to the Prepetition Credit Agreements (“Credit Agreement Claims”), each
Supporting Creditor Signature Block shall disclose only the aggregate principal
amount of such Supporting Creditor’s beneficially owned or managed Credit
Agreement Claims.  The Parties agree and acknowledge that the reported amount of
such Credit Agreement Claims does not necessarily reflect the full amount of
such Creditor’s Claims in respect of the Prepetition Credit Agreements
(including, without limitation, principal, accrued and unpaid interest, fees and
expenses) and any disclosure made on any Supporting Creditor Signature Block
shall be without prejudice to any subsequent assertion by or on behalf of such
Supporting Creditor of the full amount of its Claims.
 
10.14.     Automatic Stay. The Company acknowledges and agrees, and shall not
dispute, that the giving of a termination notice in accordance with Section 7
and 10.09 hereof by any of the Supporting Creditors shall not be a violation of
the automatic stay under section 362 of the Bankruptcy Code (and the Company
hereby waives, to the greatest extent possible, the applicability of such
automatic stay to the giving of such notice), and the Supporting Creditors are
hereby authorized to take any steps necessary to effectuate the termination of
this Agreement notwithstanding section 362 of the Bankruptcy Code or any other
applicable law, and no cure period contained in this Agreement shall be extended
pursuant to sections 108 or 365 of the Bankruptcy Code or any other applicable
law without the prior written consent of the Required Term Lenders and, with
respect to any cure period related to a termination event under (a) Section
7.01(b) of this Agreement, the Required Supporting RBL Lenders and (b) Section
7.01(c) of this Agreement, the Required Supporting Noteholders.
 
10.15.    Settlement Discussions; No Admission. This Agreement and the Plan are
part of a proposed settlement of matters that could otherwise be the subject of
litigation among the Parties hereto. Nothing herein shall be deemed an admission
of any kind.  Pursuant to Federal Rule of Evidence 408 and any applicable state
rules of evidence, this Agreement and all negotiations relating thereto shall
not be admissible into evidence in any proceeding other than a proceeding to
enforce the terms of this Agreement.  This Agreement shall in no event be
construed as or be deemed to be evidence of an admission or concession on the
part of any Party of any claim or fault or liability or damages whatsoever.
 
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10.16.     Several, Not Joint, Claims. The agreements, representations,
warranties, and obligations of the Parties under this Agreement are, in all
respects, several and not joint.
 
10.17.    Relationship Among Parties.  None of the Supporting Creditors shall
have any fiduciary duty, any duty of trust or confidence in any form, or other
duties or responsibilities to each other, any Supporting Creditor, any Company
Party, or any of the Company Party’s respective creditors or other stakeholders,
and there are no commitments among or between the Supporting Creditors, in each
case except as expressly set forth in this Agreement.  It is understood and
agreed that any Supporting Creditor may trade in any debt or equity securities
of any Company Parties without the consent of the Company or any Supporting
Creditor, subject to Section 4.03 of this Agreement and applicable securities
laws.  No prior history, pattern or practice of sharing confidence among or
between any of the Supporting Creditors, and/or the Company Parties shall in any
way affect or negate this understanding and agreement.  The Parties have no
agreement, arrangement or understanding with respect to acting together for the
purpose of acquiring, holding, voting or disposing of any securities of any of
the Company Parties and do not constitute a “group” within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934 or Rule 13d-5
promulgated thereunder.  For the avoidance of doubt: (1) each Supporting
Creditor is entering into this Agreement directly with the Company and not with
any other Supporting Creditor, (2) no other Supporting Creditor shall have any
right to bring any action against any other Supporting Creditor with respect
this Agreement (or any breach thereof) and (3) no Supporting Creditor shall, nor
shall any action taken by a Supporting Creditor pursuant to this Agreement, be
deemed to be acting in concert or as any group with any other Supporting
Creditor with respect to the obligations under this Agreement nor shall this
Agreement create a presumption that the Supporting Creditors are in any way
acting as a group.   All rights under this Agreement are separately granted to
each Supporting Creditor by the Company and vice versa, and the use of a single
document is for the convenience of the Company. The decision to commit to enter
into the transactions contemplated by this Agreement has been made
independently.  Nothing in this Agreement shall in any way prohibit or limit the
right and ability of any Supporting Creditor to (a) be granted a lien or other
interest in the Company’s rights under this Agreement, (b) be assigned such
rights by the Company for purposes or enforcement against any Supporting
Creditor, or (c) seek standing to bring an action derivatively or on behalf of
the Debtors in the Chapter 11 Cases, under the Plan or otherwise.
 
10.18.     Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be illegal, invalid, or unenforceable, the
remaining provisions shall remain in full force and effect if essential terms
and conditions of this Agreement for each Party remain valid, binding, and
enforceable.
 
10.19.     Specific Performance/Remedies. It is understood and agreed by the
Parties that money damages would not be a sufficient remedy for any breach of
this Agreement by any Party and each non-breaching Party shall be entitled to
seek specific performance and injunctive or other equitable relief (including
attorney’s fees and costs) as a remedy for any such breach, in addition to any
other remedy to which such non-breaching Party may be entitled, at law or
equity, without the necessity of proving the inadequacy of money damages as a
remedy, including an order of the Chosen Court or the Bankruptcy Court requiring
any Party to comply promptly with any of its obligations hereunder.  Each Party
agrees to waive any requirement for the securing or posting of a bond in
connection with such remedy.
 
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10.20.     Remedies Cumulative. All rights, powers, and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise of any right, power,
or remedy thereof by any Party shall not preclude the simultaneous or later
exercise of any other such right, power, or remedy by such Party.
 
[Remainder of page intentionally left blank.]

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first above written.
 

 
LEGACY RESERVES LP
     
By:
Legacy Reserves GP, LLC,
its general partner
     
By:

Legacy Reserves Inc.,
its sole member
     
By:
/s/ James Daniel Westcott  

James Daniel Westcott
 

Chief Executive Officer      
LEGACY RESERVES OPERATING LP
     
By:
Legacy Reserves Operating GP LLC, its general partner  
By:

Legacy Reserves LP, its sole member  
By:
Legacy Reserves GP, LLC, its general partner  
By:
Legacy Reserves Inc., its sole member      
By:

/s/ James Daniel Westcott  

James Daniel Westcott  

Chief Executive Officer      
LEGACY RESERVES OPERATING GP LLC
     
By:
Legacy Reserves LP, its sole member  
By:
Legacy Reserves GP, LLC, its general partner  
By:
Legacy Reserves Inc., its sole member      
By:
/s/ James Daniel Westcott  

James Daniel Westcott  

Chief Executive Officer

[Signature Page to Restructuring Support Agreement]
 
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LEGACY RESERVES GP, LLC
     
By:
Legacy Reserves Inc., its sole member      
By:

/s/ James Daniel Westcott  

James Daniel Westcott
 

Chief Executive Officer
     
LEGACY RESERVES SERVICES LLC
     
DEW GATHERING LLC
     
PINNACLE GAS TREATING LLC
     
LEGACY RESERVES ENERGY SERVICES LLC
     
LEGACY RESERVES INC.
     
LEGACY RESERVES FINANCE CORPORATION
     
LEGACY RESERVES MARKETING LLC
     
By:

/s/ James Daniel Westcott  

James Daniel Westcott
 

Chief Executive Officer

 
[Signature Page to Restructuring Support Agreement]

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GSO ENERGY SELECT OPPORTUNITIES FUND LP
By: GSO Energy Select Opportunities Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]
 
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GSO ENERGY PARTNERS-A LP
By: GSO Energy Partners-A Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO ENERGY PARTNERS-B LP
By: GSO Energy Partners-B Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email:  robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO ENERGY PARTNERS-C LP
By: GSO Energy Partners-C Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO ENERGY PARTNERS-C II LP
By: GSO Energy Partners-C Associates II LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO ENERGY PARTNERS-D LP
GSO Energy Partners-D Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO PALMETTO OPPORTUNISTIC INVESTMENT PARTNERS LP
By: GSO Palmetto Opportunistic Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO CSF III HOLDCO LP
By: GSO Capital Solutions Associates III LP, its general partner
By: GSO Capital Solutions Associates III (Delaware) LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO AIGUILLE DES GRAND MONTETS FUND I LP
By: GSO Aiguille des Grand Montets Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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GSO AIGUILLE DES GRAND MONTETS FUND II LP
By: GSO Aiguille des Grand Montets Associates LLC, its general partner

By:
/s/ Marisa J. Beeney
Name:
Marisa J. Beeney
Title:
Authorized Signatory

Principal Amount of Term Loan Claims as of the date hereof:

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

GSO Capital Partners LP
345 Park Avenue
New York, NY 10154
Attention: Robert Horn, GSO Legal and GSO Asset Servicing
Email: robert.horn@gsocap.com; GSOLegal@gsocap.com;
GSOAssetServicing@blackstone.com

[Signature Page to Restructuring Support Agreement]

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WELLS FARGO BANK, N.A.

By:
/s/ Brett Steele
Name:
Brett Steele
Title:
Director

 
Claim Type
 
Principal Amount*
 
RBL Claims
 
$52,497,807.56
 
Refinanced DIP Claims
 
$49,680,850.70
 
New Money DIP Loans
 
$19,872,340.28
 
*Calculated after giving effect to entry into the DIP Facility and consummation
of the final availability and $250 million of Refinanced Loans (as defined in
the DIP Credit Agreement).

Address for Notice:

1000 Louisiana Street
9th Floor
Houston, TX 77002

Attention: Brett Steele
Facsimile: 713-319-1925

[Signature Page to Restructuring Support Agreement]

 
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AG ENERGY FUNDING, LLC

By:
/s/ Todd Dittmann
Name:
Todd Dittmann
Title:
Authorized Person

 
Claim Type
 
Principal Amount*
 
RBL Claims
 
$4,110,546.16
 
Refinanced DIP Claims
 
$3,889,980.15
 
New Money DIP Loans
 
$1,555,992.06
 
*Calculated after giving effect to entry into the DIP Facility and consummation
of the final availability and $250 million of Refinanced Loans (as defined in
the DIP Credit Agreement).

Address for Notice:

245 Park Ave, 26th Floor
New York, NY 10167
Attention: Scott McMurtry
Facsimile: 713-999-4321

[Signature Page to Restructuring Support Agreement]
 
41

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Bank of America, N.A. (“Lender”), soley in respect of its GBAM Special Assets
Group (SAG) and not any other desk, unit, group, division, or affiliate of
Lender as a Supporting RBL Lender

By:
/s/ Kevin M. Behan
Name:
Kevin M. Behan
Title:
Managing Director

 
Claim Type
 
Principal Amount*
 
RBL Claims
 
$22,075,155.31
 
Refinanced DIP Claims
 
$20,890,634.15
 
New Money DIP Loans
 
$8,356,253.66
 
*Calculated after giving effect to entry into the DIP Facility and consummation
of the final availability and $250 million of Refinanced Loans (as defined in
the DIP Credit Agreement).

Address for Notice:

50 Rockefeller Plaza
NY1-050-10-02
NY, NY 2002-1605
Attention: Kevin M. Behan
Facsimile: 704-602-3609

[Signature Page to Restructuring Support Agreement]

42

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BBVA USA fka Compass Bank

By:
/s/ Rachel Festervand
Name:
Rachel Festervand
Title:
Sr. Vice President

 
Claim Type
 
Principal Amount*
 
RBL Claims
 
$42,965,789.47
 
Refinanced DIP Claims
 
$[●]
 
New Money DIP Loans
 
$[●]
 
*Calculated after giving effect to entry into the DIP Facility and consummation
of the final availability and $250 million of Refinanced Loans (as defined in
the DIP Credit Agreement).

Address for Notice:

BBVA USA
2200 Post Oak Blvd., 21st Floor
Houston, TX 77056
Attention: Rachel Festervand
Rachel.Festervand@bbva.com
Facsimile:
 
[Signature Page to Restructuring Support Agreement]
 
43

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BMO Harris Financing, Inc.

By:
/s/ Radhika Kapur

Name:
Radhika Kapur

Title:
Associate

 
Claim Type
 
Principal Amount*
 
RBL Claims
 
$12,179,396.04
 
Refinanced DIP Claims
 
$11,525,867.13
 
New Money DIP Loans
 
$4,610,346.85
 
*Calculated after giving effect to entry into the DIP Facility and consummation
of the final availability and $250 million of Refinanced Loans (as defined in
the DIP Credit Agreement).

Address for Notice:

700 Louisiana St. Suite 2100
Houston, TX 77002
Attention: Melissa Guzmann
Facsimile: 713-223-4007

[Signature Page to Restructuring Support Agreement]
 
44

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JPMORGAN CHASE BANK, N.A. (“JPMC”), solely in respect of its Commercial Banking
Corporate Client Banking & Specialized Industries business unit (“CCBSI”) and
not any other unit, group, division or affiliate of JPMC and solely in respect
of CCBSI’s Debtor Claims/Interests set forth in this Supporting Creditor
Signature Block. Notwithstanding anything to the contrary contained in this
Agreement, this Agreement shall not apply to JPMC other than with respect to the
Debtor Claims/Interests held by CCBSI set forth in this Supporting Creditor
Signature Block.*

By:
/s/ Stephanie Balette
Name:
Stephanie Balette
Title:
Authorized Officer

 
Claim Type
 
Principal Amount*
 
RBL Claims
 
$15,528,729.96
 
Refinanced DIP Claims
 
$14,695,480.58
 
New Money DIP Loans
 
$5,878,192.23
 
*Calculated after giving effect to entry into the DIP Facility and consummation
of the final availability and $250 million of Refinanced Loans (as defined in
the DIP Credit Agreement).

Address for Notice:

10 S. Dearborn
Floor L2, Suite 0010
Chicago, IL 60603
Attention: Ana Salas
Facsimile: (844) 235-1789

With a copy to:

10 S. Dearborn
Floor L2, Suite 0010
Chicago, IL 60603
Attention: Gerri King
Facsimile: (312) 325-3190.

*            Notwithstanding anything to the contrary in this Agreement, Debtor
Claims/Interests, other claims, equity interests, actions or activities of
JPMorgan Chase Bank, N.A., as a Supporting Creditor subject to this Agreement,
shall not include any Debtor Claims/Interests, other claims, equity interests,
actions or activities held or performed in a fiduciary capacity or held,
acquired or performed by any other division, business unit or trading desk of
JPMorgan Chase Bank, N.A. (other than the division, business unit or trading
desk expressly identified in this signature page), unless and until such
division, business unit or trading desk is or becomes a party to this Agreement.
 
[Signature Page to Restructuring Support Agreement]
 
45

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Royal Bank of Canada

By:
/s/ Leslie P. Vowell
Name:
Leslie P. Vowell
Title:
Attorney-in-Fact

 
Claim Type
 
Principal Amount*
 
RBL Claims
 
$22,075,155.32
 
Refinanced DIP Claims
 
$20,890,634.15
 
New Money DIP Loans
 
$8,356,253.66
 
*Calculated after giving effect to entry into the DIP Facility and consummation
of the final availability and $250 million of Refinanced Loans (as defined in
the DIP Credit Agreement).

Address for Notice:

Royal Bank of Canada
200 Vesey Street, 12th Floor
New York, New York
10281
Attention: Leslie P. Vowell
Facsimile: 212 428-2319
 
[Signature Page to Restructuring Support Agreement]
 
46

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DOUBLELINE INCOME SOLUTIONS FUND

By: 
/s/ Ronald R. Redell    
Name: Ronald R. Redell
   
Title: President

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

333 S. Grand Avenue, 18th Floor
Los Angeles, CA 90071
Attention: Global Developed Credit
Email: gdc@doubleline.com
Facsimile:

CANYON-ASP FUND, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

[Signature Page to Restructuring Support Agreement]

47

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CANYON BALANCED MASTER FUND, LTD.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

CANYON DISTRESSED OPPORTUNITY MASTER FUND II, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

[Signature Page to Restructuring Support Agreement]

48

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CANYON-SL VALUE FUND, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

THE CANYON VALUE REALIZATION MASTER FUND, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

[Signature Page to Restructuring Support Agreement]

49

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CANYON BLUE CREDIT INVESTMENT FUND L.P.

By:
Canyon Capital Advisors, LLC
its co-Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory
 

By:
Canyon Partners Real Estate LLC,
Its co-Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

CANYON-EDOF (MASTER) L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By:
/s/ Jonathan M. Kaplan
   
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

[Signature Page to Restructuring Support Agreement]

50

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CANYON-GRF MASTER FUND II, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By:
/s/ Jonathan M. Kaplan  
Name: Jonathan M. Kaplan  
Title: Authorized Signatory  

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

CANYON DISTRESSED OPPORTUNITY INVESTING FUND II, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By: 
/s/ Jonathan M. Kaplan  
Name: Jonathan M. Kaplan  
Title: Authorized Signatory  

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

[Signature Page to Restructuring Support Agreement]

51

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CANYON NZ-DOF INVESTING, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By: 
/s/ Jonathan M. Kaplan    
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

CANYON VALUE REALIZATION MAC 18 LTD.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By: 
/s/ Jonathan M. Kaplan    
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

[Signature Page to Restructuring Support Agreement]

52

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CANYON VALUE REALIZATION FUND, L.P.

By:
Canyon Capital Advisors, LLC
its Investment Advisor
       
By: 
 /s/ Jonathan M. Kaplan    
Name: Jonathan M. Kaplan
   
Title: Authorized Signatory
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

c/o Canyon Capital Advisors LLC
2000 Avenue of the Stars, 11th Floor
Los Angeles, CA 90067
Attention: Legal Department
Email: legal@canyonpartners.com; rviyer@canyonpartners.com;
rteahen@canyonpartners.com

By: JCG 2016 Holdings, LP        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title: Manager, JCG 2016 Management, LLC, as General Partner

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

[Signature Page to Restructuring Support Agreement]

53

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By: 
The John C. Goff 2010 Family Trust        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title: Trustee
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

By: John C. Goff SEP-IRA        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title:
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

[Signature Page to Restructuring Support Agreement]

54

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By: Kulik Partners, LP        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title: Manager, Kulik GP, LLC, as General Partner

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

By: Jill Goff        
By: 
/s/ Jill Goff    
Name: Jill Goff
   
Title:
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

[Signature Page to Restructuring Support Agreement]

55

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By:

Cuerno Largo Partners, LP        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title: Chief Executive Officer Goff Capital, Inc., as General Partner

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

By:

Goff Family Investments, LP        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title: Chief Executive Officer Goff Capital, Inc., as General Partner

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

[Signature Page to Restructuring Support Agreement]

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By:

The Goff Family Foundation        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title: Sole Board Member
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

GOFF FOCUSED STRATEGIES LLC, on behalf of certain funds or accounts managed by
it

By:

Goff REN Holdings, LLC or its affiliates        
By: 
/s/ John C. Goff    
Name: John C. Goff
   
Title: Chief Executive Officer, GFS REN GP, LLC, as Manager

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

500 Commerce St., Suite 700
Fort Worth, Texas 76102
Attention: Jennifer Terrell
Email: jterrell@goffcp.com
Facsimile: 817-882-8900

[Signature Page to Restructuring Support Agreement]

57

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Wilkie Colyer
     
By: 
/s/ Wilkie Colyer    
Name: Wilkie Colyer
   
Title: Individual
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

717 Texas Ave., Suite 2900
Houston, Texas 77002
Attention: Wilkie Colyer
Email: wscolyer@gmail.com
Facsimile: (713) 236-4498

MGA INSURANCE COMPANY, INC.
     
By: 
/s/ Glenn W. Anderson    
Name: Glenn W. Anderson
   
Title: President and CEO
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

3333 Lee Parkway, Suite 1200
Dallas, TX 75219
Attention: Glenn W. Anderson
Email: glenn.anderson@gainsco.com
Facsimile: 972-629-4401

[Signature Page to Restructuring Support Agreement]

58

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PINGORA PARTNERS LLC, on behalf of certain Funds or accounts managed by it

By:

 Keith B. Ohnmeis        
By: 
/s/ Keith B. Ohnmeis    
Name: Keith B. Ohnmeis
   
Title: Managing Member, Registered Investment Advisor (RIA)

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

PO Box 1250
Wilson WY 83014
Attention: Keith B. Ohnmeis
Email: kohnmeis@pingorapartners.com
Facsimile: 307-739-8686

/s/ Robert W. Stallings

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

3333 Lee Parkway, Suite 1200
Dallas, TX 75219
Attention: Robert W. Stallings
Email: Robert.stallings@gainsco.com
Facsimile: 972-629-4401

[Signature Page to Restructuring Support Agreement]

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J.H. LANE PARTNERS MASTER FUND, L.P.
     
By: 
/s/ Haskel Ginsberg    
Name: Haskel Ginsberg
   
Title: CFO
 

Principal Amount of Notes Claims as of the date hereof:

Address for Notice:

126 East 56th Street
Suite 1620
New York, NY 10022
Attention: Haskel Ginsberg
Email: hginsberg@jhlanepartners.com
Facsimile: 212-899-9796

[Signature Page to Restructuring Support Agreement]

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EXHIBIT A-1

Restructuring Term Sheet (Noteholder Settlement)

61

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THIS TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION
OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE
BANKRUPTCY CODE.  ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE
SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE.  NOTHING CONTAINED IN
THIS TERM SHEET SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE
OCCURRENCE OF THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN AND IN
THE RESTRUCTURING SUPPORT AGREEMENT, DEEMED BINDING ON ANY OF THE PARTIES
HERETO.

AMENDED RESTRUCTURING TERM SHEET

INTRODUCTION

This amended term sheet (this “Term Sheet”)1 describes the terms of a
restructuring (the “Restructuring”) of: (a) Legacy Reserves Inc., a Delaware
corporation (“Legacy Reserves”); (b) Legacy Reserves GP, LLC, a Delaware LLC;
(c) Legacy Reserves LP, a Delaware limited partnership; (d) Legacy Reserves
Finance Corporation, a Delaware corporation; (e) Legacy Reserves Operating LP, a
Delaware limited partnership; (f) Legacy Reserves Operating GP LLC, a Delaware
LLC; (g) Legacy Reserves Energy Services LLC, a Texas LLC; (h) Legacy Reserves
Services LLC, a Texas LLC; (i) Legacy Reserves Marketing LLC, a Texas LLC; (j)
Dew Gathering LLC, a Texas LLC; and (k) Pinnacle Gas Treating LLC, a Texas LLC
(the foregoing clauses (a) through (k), collectively, the “Company Parties”, and
such Company Parties that file Chapter 11 Cases (as defined below) as set forth
herein, collectively, the “Debtors”).

The Restructuring will be accomplished through the commencement of cases (the
“Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the
“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern
District of Texas (the “Bankruptcy Court”) to implement on a pre-arranged basis
the chapter 11 plan of reorganization described herein (the “Plan”).

This Term Sheet is being agreed to in connection with entry by the Debtors and
the Supporting Creditors into that certain Amended & Restated Restructuring
Support Agreement, dated as of June 13, 2019 (as may be amended, supplemented or
modified pursuant to the terms thereof, the “RSA”).  Pursuant to the RSA, the
parties thereto have agreed to support the transactions contemplated therein and
herein.

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

1

Unless otherwise indicated herein, capitalized terms used but not otherwise
defined in this Term Sheet have the meanings ascribed to such terms as set forth
in Exhibit A to this Term Sheet or the RSA, as applicable.

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OVERVIEW OF THE RESTRUCTURING
In general, the Restructuring contemplates the following, in each case subject
to the terms and conditions described more fully herein, the RSA, and the
Sponsor Backstop Commitment Agreement:

(a) The Debtors will implement the Restructuring in the Bankruptcy Court
pursuant to the Plan on the terms set forth in this Term Sheet (as supplemented
by the RSA, Sponsor Backstop Commitment Agreement, Noteholder Backstop
Commitment Agreement, DIP Documents, Exit Facility Term Sheet, MIP Term Sheet
and Governance Term Sheet).

(b) The Debtors will obtain a debtor-in-possession financing facility (the “DIP
Facility”) from certain of the RBL Lenders as set forth in the Senior Secured
Superpriority Debtor-In-Possession Credit Agreement attached hereto as Exhibit
B-1 (the “DIP Credit Agreement” and the lenders from time to time party thereto,
the “DIP Lenders”) and the proposed interim order approving the DIP Facility
attached hereto as Exhibit B-2 (the “Interim DIP Order”).  The DIP Facility
shall consist of (i) a new money revolving loan facility in the aggregate
principal amount of $100 million (“New Money DIP Claims”) and (ii) a refinancing
term loan facility in the aggregate principal amount of up to $250 million
(“Refinanced DIP Claims”).  The DIP Credit Agreement, the Interim DIP Order, the
final order approving the DIP Facility (the “Final DIP Order”, and together with
the Interim DIP Order, the “DIP Orders”), and other documents related thereto
are collectively referred to as, the “DIP Documents”.
(c) Certain funds managed or advised by GSO Capital Partners LP and its
affiliates (collectively, the “Plan Sponsor”) will agree (i)  to consent to the
DIP Facility and the use of their cash collateral to fund the Chapter 11 Cases
pursuant to the DIP Documents, (ii) to vote all of their prepetition claims
(including Term Loan Claims and Notes Claims) to accept the Plan pursuant to the
RSA, (iii) to backstop a $189.8 million equity commitment (the “Sponsor Backstop
Commitment”) pursuant to the Sponsor Backstop Commitment Agreement and to
backstop $10.2 million of a $66.5 million Rights Offering pursuant to the
Noteholder Backstop Commitment Agreement and (iv) to the extent approved by the
Plan Sponsor, the Debtors, and the Required Supporting Noteholders or otherwise
consistent with this Term Sheet, provide additional capital in the form of an
unsecured note (the “New Exit Note”) subject to documentation, terms, and
conditions to be agreed between the Plan Sponsor and the Debtors, which would be
offered to the Plan Sponsor and the Noteholders that participate in the Rights
Offering as set forth herein.

(d) The DIP Lenders will agree (i) to provide the DIP Facility and consent to
the use of their cash collateral to fund the Chapter 11 Cases pursuant to the
DIP Documents and (ii) to vote all of their RBL Claims and Refinanced DIP Claims
to accept the Plan pursuant to the RSA.

(e) The Supporting RBL Lenders will agree to provide a senior secured revolving
asset-based lending credit facility in a maximum amount of $500 million as set
forth in the exit facility term sheet annexed hereto as Exhibit D (the “Exit
Facility Term Sheet”).

(f) The Supporting Noteholders will agree to vote all of their Notes Claims to
accept the Plan pursuant to the RSA.

63

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(g) The Debtors may, at the Plan Sponsor’s option, offer an additional $125
million of New Common Stock pursuant to the Incremental Equity Investment as
described below.

(h) All Claims arising under the DIP Facility will be satisfied in full by one
or a combination of the following: (i) New Money DIP Claims shall be paid in
full in cash not later than the Effective Date, and (ii) Refinanced DIP Claims
(A) will be paid in cash and exchanged into the Exit Facility pursuant to the
Exit Facility Term Sheet, or (B) if the Exit Facility is not consummated, will
be paid in full in cash not later than the Effective Date.

(i) All RBL Claims will be satisfied in full by one or a combination of the
following: (i) distribution of claims under the credit facilities described in
the Exit Facility Term Sheet (the “Exit Facility”) in exchange for the RBL
Claims; or (ii) if the Exit Facility is not consummated, payment in full in cash
not later than the Effective Date.  For avoidance of doubt, there shall not be
any cash paid on account of the principal balance of RBL Claims pursuant to any
plan unless and until all Refinanced DIP Claims are paid in full in cash on the
Effective Date.

(j) In full and final satisfaction of all Term Loan Claims, holders thereof will
receive  their respective Pro Rata share of an amount of New Common Stock in
accordance with the percentage ownership of the New Common Equity Pool set forth
on Annex I.

(k) Holders of Notes Claims (“Noteholders”) will receive (i) their respective
Pro Rata share of an amount of New Common Stock that is in accordance with the
percentage ownership of the New Common Equity Pool set forth on Annex I and
(ii)  their respective Pro Rata share on the basis of their respective holdings
of Note Claims of Subscription Rights to participate in an equity rights
offering in an amount not to exceed $66.5 million (the “Rights Offering”)
(provided that $10.2 million of such rights shall be allocated to the Plan
Sponsor and shall not be subject to reduction for any reason and the Plan
Sponsor shall in no event receive any rights in excess of $10.2 million, and any
such amount in excess of $10.2 million shall instead be allocated to the other
Noteholders on a pro rata basis in accordance with their respective holdings of
Notes Claims), which Subscription Rights may only be exercised by Noteholders
that are “accredited investors” as defined under Rule 501 of the Securities Act,
which Rights Offering shall be backstopped in an amount equal to $66.5 million
by certain of the Supporting Noteholders on the terms set forth in the
Noteholder Backstop Commitment Agreement attached hereto as Exhibit G (including
all schedules and exhibits thereto, the “Noteholder Backstop Commitment
Agreement”).  In addition, Noteholders that subscribe to the Rights Offering
(each a “Participating Noteholder”) shall receive their respective pro rata
share (calculated as a proportion of such Noteholder’s participation in the
Rights Offering relative to other Participating Noteholders) of (x) an amount of
New Common Stock in accordance with the percentage ownership of the New Common
Equity Pool set forth on Annex I (the “Participation Premium”) less the
Non-Accredited Investor Premium (as defined below) and (y) rights to participate
in up to 49% of the New Exit Note, if any; provided that, to the extent a
Noteholder is unable to exercise its Subscription Rights because it is not an
accredited investor, it shall receive its pro rata share of the Participation
Premium as if it were a fully-subscribing Participating Noteholder so long as it
delivers a notice to counsel to the Debtors, counsel to the Plan Sponsor, and
counsel to the Noteholder Backstop Parties (as defined below) certifying that it
is not an accredited investor (the “Non-Accredited Investor Premium”).

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(l) Holders of General Unsecured Claims shall receive payment in full in cash or
such General Unsecured Claims shall be reinstated.

(m) Holders of Interests in Legacy Reserves shall receive no recovery under the
Plan, and all such Interests shall be extinguished.

This Term Sheet incorporates the rules of construction as set forth in section
102 of the Bankruptcy Code.

GENERAL PROVISIONS REGARDING THE RESTRUCTURING

The Sponsor
Backstop
Commitment
The Plan Sponsor (together with any third parties designated by the Plan Sponsor
and reasonably acceptable to the Debtors, collectively, the “Sponsor Backstop
Parties”) will provide the Sponsor Backstop Commitment to purchase an amount of
New Common Stock in accordance with the percentage ownership of the New Common
Equity Pool set forth on Annex I for an amount equal to $189.8 million (the
“Sponsor Backstop Amount”), on the terms set forth in the Sponsor Backstop
Commitment Agreement attached hereto as Exhibit E (including all schedules and
exhibits thereto, the “Sponsor Backstop Commitment Agreement”).  The Sponsor
Backstop Commitment Agreement will provide for, among other things, a commitment
fee (the “Sponsor Backstop Fee”) of 6% of the $189.8 million Sponsor Backstop
Amount payable to the Sponsor Backstop Parties on the Effective Date in an
amount of New Common Stock in accordance with the percentage ownership of the
New Common Equity Pool set forth on Annex I.
The Rights Offering
Noteholders shall receive Subscription Rights pro rata on the basis of their
respective holdings of Notes Claims to participate in the Rights Offering to
purchase an amount of New Common Stock in accordance with the percentage
ownership of the New Common Equity Pool set forth on Annex I for an amount equal
to $66.5 million (the “Maximum Noteholder Subscription Amount”); provided, that
only accredited investors shall be entitled to exercise Subscription Rights;
provided, further, that $10.2 million of such rights shall be allocated to the
Plan Sponsor and shall not be subject to reduction for any reason and the Plan
Sponsor shall not receive Subscription Rights to participate in more than $10.2
million of the Rights Offering and any such amount in excess of $10.2 million
shall instead be allocated to the other Noteholders on a pro rata basis in
accordance with their respective holdings of Notes Claims.  In addition,
Participating Noteholders shall receive their respective pro rata share
(calculated as a proportion of such Noteholder’s participation in the Rights
Offering relative to other Participating Noteholders) of (x) the Participation
Premium (less the Non-Accredited Investor Premium) and (y) rights to participate
in funding up to 49% of the New Exit Note, if any; provided that, to the extent
a Noteholder is unable to exercise its Subscription Rights because it is not an
accredited investor, it shall receive the Non-Accredited Investor Premium so
long as it delivers a notice to counsel to the Debtors, counsel to the Plan
Sponsor, and counsel to the Noteholder Backstop Parties (as defined below)
certifying that it is not an accredited investor.

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The Plan Sponsor shall be entitled to participate in $10.2 million of the Rights
Offering (the “Sponsor Participation Amount”) on account of its Notes Claims and
to receive the corresponding portion of the Participation Premium.  The entirety
of the Sponsor Participation Amount shall be reserved for and allocated to the
Plan Sponsor and shall not be subject to reduction for any reason; provided that
the Plan Sponsor shall not be entitled to participate in any additional amount
of the Rights Offering in excess of the Sponsor Participation Amount.
The Noteholder
Backstop
Commitment
The Supporting Noteholders identified on Exhibit F hereto and the Plan Sponsor
(together with such other Supporting Noteholders reasonably acceptable to the
Plan Sponsor and the Debtors, collectively, the “Noteholder Backstop Parties”)
shall agree to backstop the Rights Offering in an amount equal to $66.5 million
(the “Noteholder Backstop Amount”) on the terms set forth in the Noteholder
Backstop Commitment Agreement; provided, for the avoidance of doubt, that the
Plan Sponsor shall backstop $10.2 million of the Noteholder Backstop Amount (the
“Plan Sponsor Notes Backstop Amount”) on the same terms as the other Noteholder
Backstop Parties, including with respect to the Noteholder Backstop Fee, which
the Plan Sponsor shall be entitled to receive on a pro rata basis (calculated as
a proportion of the Plan Sponsor Notes Backstop Amount relative to the
Noteholder Backstop Amount); provided, further, that the Plan Sponsor shall not
be entitled to participate in the Noteholder Backstop Amount or the Rights
Offering for an amount greater than the Sponsor Participation Amount.  The
Noteholder Backstop Commitment Agreement will provide for, among other things, a
commitment fee (the “Noteholder Backstop Fee”) of 6% of the $66.5 million
Noteholder Backstop Amount payable to the Noteholder Backstop Parties on the
Effective Date in an amount of New Common Stock in accordance with the
percentage ownership of the New Common Equity Pool set forth on Annex I.

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Incremental Equity
Investment
The Debtors may sell up to $125 million of New Common Stock (the “Incremental
Equity Investment”), including to third parties, the Plan Sponsor, and/or the
Noteholders.2  The Incremental Equity Investment shall be subject to such other
documentation, terms, and conditions (including, without limitation,
representations and warranties of the Debtors) to be agreed between the Plan
Sponsor and the Debtors; provided that New Common Stock issued under the
Incremental Equity Investment shall be offered on terms no less favorable to the
Debtors’ Estates than the terms offered to the Sponsor Backstop Parties under
the Sponsor Backstop Commitment Agreement, unless the Plan Sponsor, the Required
Supporting Noteholders, and the Debtors shall have granted their prior written
consent; provided, further, that any New Common Stock offered to the Sponsor
Backstop Parties or their affiliates through an Incremental Equity Investment
(other than any such Incremental Equity Investment offered pro rata to all
Noteholders that are accredited investors) shall be offered to the Noteholder
Backstop Parties on a pro rata basis (calculated as a proportion of such
Noteholder Backstop Party’s participation in the Noteholder Backstop Amount
relative to the aggregate amount of the Sponsor Backstop Amount plus the
Noteholder Backstop Amount (i.e., $256.3 million)).
The Term Loan Claim
Amount
The Term Loan Claims shall be deemed Allowed in the amount of approximately
$365.0 million in connection with a global settlement pursuant to the Plan. If
the Effective Date has not occurred on or prior to September 30, 2019, the
Allowed amount of the Term Loan Claim shall increase, by this negotiated
settlement, at a rate of 14.25% per annum (prorated from October 1, 2019 to the
Effective Date) in consideration of a settlement of the Term Loan Claim,
including the Applicable Premium (as defined in the Prepetition Term Loan Credit
Agreement) and accrual of post-petition accrued interest, and the allocations of
the New Common Stock provided for herein shall be adjusted accordingly as
described on Annex I. 3
DIP Financing
DIP Facility:  Prior to the Petition Date, the Debtors will obtain commitments
for the DIP Facility pursuant to the terms set forth in the DIP Documents.

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2

For the avoidance of doubt, the ownership percentages for each person and line
item set forth on Annex I shall be adjusted accordingly based on the amount of
any New Common Stock issued under the Incremental Equity Investment.

3

The Prepetition Term Loan Secured Parties reserve their respective rights to
assert claims in accordance with the Prepetition Term Loan Documents, including
the full amount of the Applicable Premium and post-petition interest, in the
event of termination of the RSA other than upon the Effective Date.

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Exit Financing
Exit Facility:  Except as otherwise provided in this section, as a condition
precedent to the Effective Date, the Debtors shall (a) enter into the Exit
Facility, a senior secured revolving reserve-based lending credit facility to be
arranged and provided by the Lenders under the Prepetition RBL Credit Agreement
in the maximum amount of $500 million, as set forth in the Exit Facility Term
Sheet, or otherwise on terms acceptable to the Debtors, the Plan Sponsor and the
Prepetition RBL Agent.  or (b) if the Exit Facility is not consummated, enter
into an alternative senior secured revolving reserve-based lending credit
facility in form and substance acceptable to the Debtors and the Plan Sponsor;
provided, for the avoidance of doubt, that, if the Exit Facility is not
consummated, the DIP Claims and RBL Claims shall be paid in full in cash on the
Effective Date.  To the extent not paid in cash, holders of RBL Claims and
Refinanced DIP Claims shall receive a distribution of commitments under the Exit
Facility (in the manner set forth in the Exit Facility Term Sheet) in exchange
for such RBL and Refinanced DIP Claims, on a Pro Rata basis.

New Exit Note:  If the Plan Sponsor, Required Supporting Noteholders and the
Debtors determine that post-emergence liquidity from the Exit Facility, the
Sponsor Backstop Commitment, the Rights Offering, and the Incremental Equity
Investment, if any, is insufficient (including to account for any potential
contingency), the Plan Sponsor may, with the prior written consent of the
Debtors and the Required Supporting Noteholders, provide the New Exit Note in an
amount and on terms to be agreed upon between the Plan Sponsor, the Required
Supporting Noteholders and the Debtors. Participating Noteholders shall be
permitted to participate in funding their pro rata share (calculated as a
proportion of such Noteholder’s participation in the Rights Offering relative to
other Participating Noteholders) of up to 49% of the aggregate amount of the New
Exit Note; provided that the consent of the Required Supporting Noteholders will
not be required if the New Exit Note is necessary to meet the conditions
precedent under the Exit Facility or an alternative exit facility, as
applicable.

The Debtors shall timely seek approval from the Bankruptcy Court to obtain
relief necessary to effectuate the Exit Facility and the New Exit Note, as
applicable.
Third Party Investor(s)
The Plan Sponsor may designate one or more third party investment partners
mutually acceptable to the Plan Sponsor and the Debtors (each a “Partner”) to
participate in the funding of the Restructuring through assignment to any such
Partner of any of the Plan Sponsor’s rights, claims or interests with respect to
the Term Loan Claims, the Notes Claims, the Sponsor Backstop Commitment, the
Noteholder Backstop Commitment, the Rights Offering, the Incremental Equity
Investment, or the New Exit Note, or through any combination of the foregoing.

The Debtors shall, without limitation to other terms and conditions to be agreed
between the Debtors, the Plan Sponsor, and any Partner in connection with such
Partner’s participation in any of the foregoing, agree to provide
representations and warranties to any such Partner in form and substance
reasonably acceptable to the Plan Sponsor and the Debtors pursuant to
documentation in form and substance reasonably acceptable to the Plan Sponsor
and the Debtors.

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TREATMENT OF CLAIMS AND INTERESTS OF THE DEBTORS UNDER THE PLAN

Class
No.
Type of Claim
Treatment
Impairment
/ Voting
Unclassified Non-Voting Claims
N/A
DIP Claims
On the Effective Date, in full satisfaction of each Allowed DIP Claim, each
holder thereof shall receive, in full satisfaction of its Claim (i) on account
of New Money DIP Claims, payment in full in cash; (ii) on account of Refinanced
DIP Claims, distribution of cash and commitments under the Exit Facility in the
manner set forth in the Exit Facility Term Sheet; and/or (iii) if the Exit
Facility is not consummated, payment in full in cash.
Entitled to vote the Refinanced DIP Claims in Class 3
N/A
Administrative
Claims
On the Effective Date, except to the extent that a holder of an Allowed
Administrative Claim and the Debtor against which such Allowed Administrative
Claim is asserted, with the prior written consent of the Plan Sponsor, agree to
less favorable treatment for such holder, each holder of an Allowed
Administrative Claim shall receive, in full satisfaction of its Claim, payment
in full in cash.
N/A
N/A
Priority Tax
Claims
Except to the extent that a holder of an Allowed Priority Tax Claim and the
Debtor against which such Allowed Priority Tax Claim is asserted, with the prior
written consent of the Plan Sponsor, agree to less favorable treatment for such
holder, each holder of an Allowed Priority Tax Claim shall receive, in full
satisfaction of its Claim, treatment in a manner consistent with section
1129(a)(9)(C) of the Bankruptcy Code.
N/A
Classified Claims and Interests of the Debtors
Class 1
Other Secured
Claims
On the Effective Date, in full satisfaction of each Allowed Other Secured Claim,
each holder thereof shall receive, at the option of the applicable Debtor, with
the prior written consent of the Plan Sponsor: (i) payment in full in cash; (ii)
the collateral securing its Allowed Other Secured Claim; (iii) Reinstatement of
its Other Secured Claim; or (iv) such other treatment rendering its Allowed
Other Secured Claim Unimpaired in accordance with section 1124 of the Bankruptcy
Code.
Unimpaired; deemed to accept.

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Class 2
Other Priority
Claims
On the Effective Date, in full satisfaction of each Allowed Other Priority
Claim, each holder thereof shall receive payment in full in cash.
Unimpaired; deemed to accept.
Class 3
RBL Claims
On the Effective Date, all RBL Claims will be satisfied in full by one of the
following: (i) distribution of their Pro Rata share of commitments under the
Exit Facility (in the manner set forth in the Exit Facility Term Sheet) in
exchange for the RBL Claims; or (ii) in the event that the Exit Facility is not
consummated, payment in full in cash.  For avoidance of doubt, there shall not
be any cash paid on account of the principal balance of RBL Claims pursuant to
any plan unless and until all Refinanced DIP Claims are paid in full in cash on
the Effective Date.
Depending on treatment under the Plan – unimpaired and deemed to accept;
impaired and entitled to vote.
Class 4
Term Loan
Claims
The Term Loan Claims shall be deemed Allowed in the amount of approximately
$365.0 million in connection with a global settlement pursuant to the Plan.4
 
On the Effective Date, in full satisfaction of each Term Loan Claim, each holder
thereof shall receive its Pro Rata share of an amount of New Common Stock in
accordance with the percentage ownership of the New Common Equity Pool set forth
on Annex I.
Impaired; entitled to vote.
Class 5
Notes Claims
The Notes Claims shall be deemed Allowed in the amount of approximately $463.0
million in connection with a global settlement pursuant to the Plan.
 
Noteholders will receive (i) their respective Pro Rata share of an amount of New
Common Stock in accordance with the percentage ownership of the New Common
Equity Pool set forth on Annex I and (ii) their respective Pro Rata share of
Subscription Rights to participate in the Rights Offering and, as applicable,
rights to participate in the New Exit Note subject to the terms and conditions
hereof.
Impaired; entitled to vote.

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4

As noted above, if the Effective Date has not occurred on or prior to September
30, 2019, the Allowed amount of the Term Loan Claim shall increase, by this
negotiated settlement, at a rate of 14.25% per annum (prorated from October 1,
2019 to the Effective Date) in consideration of a settlement of the Term Loan
Claim, including the Applicable Premium and accrual of post-petition accrued
interest.  The allocations of the New Common Stock provided for herein shall be
adjusted accordingly as described on Annex I.  In addition, the Prepetition Term
Loan Secured Parties reserve their respective rights to assert claims in
accordance with the Prepetition Term Loan Documents, including the full amount
of the Applicable Premium (as defined in the Prepetition Term Loan Credit
Agreement) and post-petition interest, in the event of termination of the RSA
other than upon the Effective Date.

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Class 6
General Unsecured Claims
Holders of General Unsecured Claims will be paid in the ordinary course of
business or receive payment in full in cash or be reinstated on the Effective
Date.
Unimpaired; deemed to accept.
Class 7
Intercompany Claims
On the Effective Date, Intercompany Claims shall be, at the option of the
Debtors, with the consent of the Plan Sponsor, either Reinstated or canceled,
released, and extinguished without any distribution.
Impaired; deemed to reject or Unimpaired; deemed to accept
Class 8
Interests in Debtors other than Legacy Reserves
On the Effective Date, Interests in the Debtors other than Legacy Reserves shall
be, at the option of the Debtors, with the consent of the Plan Sponsor, either
Reinstated or canceled, released, and extinguished without any distribution.
Impaired; deemed to reject or Unimpaired; deemed to accept
Class 9
Interests in Legacy Reserves
All Interests in Legacy Reserves will be canceled, released, and extinguished as
of the Effective Date, and will be of no further force or effect.
Impaired; deemed to reject.

GENERAL PROVISIONS REGARDING THE PLAN
Subordination
The classification and treatment of Claims under the Plan shall conform to the
respective contractual, legal, and equitable subordination rights of such
Claims, and any such rights shall be settled, compromised, and released pursuant
to the Plan.
Restructuring
Transactions
The Confirmation Order shall be deemed to authorize, among other things, all
actions as may be necessary or appropriate to effect any transaction described
in, approved by, contemplated by, or necessary to effectuate the Plan, including
the Rights Offering and the issuance of all securities, notes, instruments,
certificates, and other documents required to be issued pursuant to the
Restructuring, in each case in a manner acceptable to the Plan Sponsor
(collectively, the “Restructuring Transactions”).  On the Effective Date, the
Debtors, as applicable, shall issue all securities, notes, instruments,
certificates, and other documents required to be issued pursuant to the
Restructuring.
Cancellation of Notes,
Instruments, Certificates,
and Other Documents
On the Effective Date, except to the extent otherwise provided in this Term
Sheet or the Plan, all notes, instruments, certificates, and other documents
evidencing Claims or Interests, including credit agreements and indentures,
shall be canceled and the obligations of the Debtors and any non-Debtor
Affiliates thereunder or in any way related thereto shall be deemed satisfied in
full and discharged.

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Executory Contracts and
Unexpired Leases
The Debtors shall seek to assume or reject executory contracts and unexpired
leases with the reasonable consent of the Plan Sponsor.  The Debtors shall not
enter into any material contracts during the Chapter 11 Cases without the prior
written consent of the Plan Sponsor, not to be unreasonably withheld.  The Plan
will provide that the executory contracts and unexpired leases that are not
assumed or rejected as of the Confirmation Date (either pursuant to the Plan or
a separate motion) will be deemed assumed pursuant to section 365 of the
Bankruptcy Code.  For the avoidance of doubt, the Debtors shall obtain the Plan
Sponsor’s consent with respect to any decision to assume or reject an executory
contract or unexpired lease, including pursuant to the Plan.
Retention of Jurisdiction
The Plan will provide for the retention of jurisdiction by the Bankruptcy Court
for usual and customary matters.
Discharge of Claims and
Termination of Interests
Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise
specifically provided in the Plan, the Confirmation Order or in any contract,
instrument, or other agreement or document created pursuant to the Plan, the
distributions, rights, and treatment that are provided in the Plan shall be in
complete satisfaction, discharge, and release, effective as of the Effective
Date, of Claims (including any Intercompany Claims resolved or compromised after
the Effective Date by the Reorganized Debtors), Interests, and Causes of Action
of any nature whatsoever, including any interest accrued on Claims or Interests
from and after the Petition Date, whether known or unknown, against, liabilities
of, liens on, obligations of, rights against, and Interests in, the Debtors or
any of their assets or properties, regardless of whether any property shall have
been distributed or retained pursuant to the Plan on account of such Claims and
Interests, including demands, liabilities, and Causes of Action that arose
before the Effective Date, any liability (including withdrawal liability) to the
extent such Claims or Interests relate to services performed by employees of the
Debtors prior to the Effective Date and that arise from a termination of
employment, any contingent or non-contingent liability on account of
representations or warranties issued on or before the Effective Date, and all
debts of the kind specified in sections 502(g), 502(h), or 502(i) of the
Bankruptcy Code, in each case whether or not: (a) a Proof of Claim based upon
such debt or right is filed or deemed filed pursuant to section 501 of the
Bankruptcy Code; (b) a Claim or Interest based upon such debt, right, or
Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (c) the
holder of such a Claim or Interest has accepted the Plan. The Confirmation Order
shall be a judicial determination of the discharge of all Claims and Interests
subject to the occurrence of the Effective Date.

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Releases by the Debtors
Except as provided for in the Plan or the Confirmation Order, pursuant to
section 1123(b) of the Bankruptcy Code, for good and valuable consideration, on
and after the Effective Date, each Released Party is deemed released and
discharged by the Debtors, the Reorganized Debtors, and their Estates from any
and all Causes of Action, including any derivative claims, asserted on behalf of
the Debtors, that the Debtors, the Reorganized Debtors, or their Estates would
have been legally entitled to assert in their own right (whether individually or
collectively) or on behalf of the holder of any Claim against, or Interest in, a
Debtor or other Entity, based on or relating to, or in any manner arising from,
in whole or in part, the Debtors, the Debtors’ in- or out-of-court restructuring
efforts, intercompany transactions, the Sponsor Backstop Commitment Agreement,
the Noteholder Backstop Commitment Agreement, the Exit Facility, the New Exit
Note (if any), the Chapter 11 Cases, the formulation, preparation,
dissemination, negotiation, or filing of the RSA, the Disclosure Statement, the
DIP Facility, the Sponsor Backstop Commitment Agreement, the Noteholder Backstop
Commitment Agreement, the Plan, the Exit Facility, the New Exit Note (if any) or
any Restructuring Transaction, contract, instrument, release, or other agreement
or document created or entered into in connection with the RSA, the Disclosure
Statement, the DIP Facility, or the Plan, the Sponsor Backstop Commitment
Agreement, the Noteholder Backstop Commitment Agreement, the filing of the
Chapter 11 Cases, the pursuit of Confirmation, the pursuit of Consummation, the
administration and implementation of the Plan, including the issuance or
distribution of securities pursuant to the Plan, or the distribution of property
under the Plan or any other related agreement, or upon any other act or
omission, transaction, agreement, event, or other occurrence taking place on or
before the Effective Date.  Notwithstanding anything to the contrary in the
foregoing, the releases set forth above do not release  obligations of any party
or Entity under the Plan, or any document, instrument, or agreement executed to
implement the Plan.

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Releases by Holders of
Claims and Interests
Except as provided for in the Plan or Confirmation Order, as of the Effective
Date, each Releasing Party is deemed to have released and discharged each
Released Party from any and all Causes of Action, whether known or unknown,
including any derivative claims, asserted on behalf of the Debtors, that such
Entity would have been legally entitled to assert (whether individually or
collectively), based on or relating to, or in any manner arising from, in whole
or in part, the Debtors, the Debtors’ in- or out-of-court restructuring efforts,
intercompany transactions, the Sponsor Backstop Commitment Agreement, the
Noteholder Backstop Commitment Agreement, the Exit Facility, the New Exit Note
(if any), the Chapter 11 Cases, the formulation, preparation, dissemination,
negotiation, or filing of the RSA, the Disclosure Statement, the DIP Facility,
the Plan, the Sponsor Backstop Commitment Agreement, the Noteholder Backstop
Commitment Agreement, the Exit Facility, the New Exit Note (if any) or any
Restructuring Transaction, contract, instrument, release, or other agreement or
document created or entered into in connection with the RSA, the Disclosure
Statement, the DIP Facility, or the Plan, the filing of the Chapter 11 Cases,
the pursuit of Confirmation, the pursuit of Consummation, the administration and
implementation of the Plan, including the issuance or distribution of securities
pursuant to the Plan, or the distribution of property under the Plan or any
other related agreement, or upon any other related act or omission, transaction,
agreement, event, or other occurrence taking place on or before the Effective
Date. Notwithstanding anything to the contrary in the foregoing, the releases
set forth above do not release  obligations of any party or Entity under the
Plan, or any document, instrument, or agreement executed to implement the Plan.
Exculpation
Except as provided for in the Plan or Confirmation Order, no Exculpated Party
shall have or incur, and each Exculpated Party  is released and exculpated from
any Cause of Action for any claim  related to any act or omission in connection
with, relating to, or arising out of, the Chapter 11 Cases, the formulation,
preparation, dissemination, negotiation, or filing of the RSA and related
prepetition transactions, the Disclosure Statement, the Plan, or any
Restructuring Transaction, contract, instrument, release or other agreement or
document created or entered into in connection with the Disclosure Statement or
the Plan, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the
pursuit of Consummation, the administration and implementation of the Plan,
including the issuance of securities pursuant to the Plan, or the distribution
of property under the Plan or any other related agreement, except for claims
related to any act or omission that is determined in a final order to have
constituted actual fraud, gross negligence or willful misconduct, but in all
respects such Entities shall be entitled to reasonably rely upon the advice of
counsel with respect to their duties and responsibilities pursuant to the Plan.

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The Section 1125(e) Protected Parties have, and upon completion of the Plan
shall be deemed to have, participated in good faith and in compliance with the
applicable laws with regard to the solicitation of votes and distribution of
consideration pursuant to the Plan and, therefore, are not, and on account of
such distributions shall not be, liable at any time for the violation of any
applicable law, rule, or regulation governing the solicitation of acceptances or
rejections of the Plan or such distributions made pursuant to the Plan.  Each of
the Section 1125(e) Protected Parties shall be entitled to and granted the
protections and benefits of section 1125(e) of the Bankruptcy Code.
Injunction
Except as otherwise expressly provided in the Plan or for obligations issued or
required to be paid pursuant to the Plan or the Confirmation Order, all Entities
who have held, hold, or may hold claims or interests that have been released,
discharged, or are subject to exculpation are permanently enjoined, from and
after the Effective Date, from taking any of the following actions against, as
applicable, the Debtors, the Reorganized Debtors, the Exculpated Parties, or the
Released Parties: (a) commencing or continuing in any manner any action or other
proceeding of any kind on account of or in connection with or with respect to
any such claims or interests; (b) enforcing, attaching, collecting, or
recovering by any manner or means any judgment, award, decree, or order against
such Entities on account of or in connection with or with respect to any such
claims or interests; (c) creating, perfecting, or enforcing any encumbrance of
any kind against such Entities or the property or the estates of such Entities
on account of or in connection with or with respect to any such claims or
interests; (d) asserting any right of setoff, subrogation, or recoupment of any
kind against any obligation due from such Entities or against the property of
such Entities on account of or in connection with or with respect to any such
claims or interests unless such holder has filed a motion requesting the right
to perform such setoff on or before the Effective Date, and notwithstanding an
indication of a claim or interest or otherwise that such holder asserts, has, or
intends to preserve any right of setoff pursuant to applicable law or otherwise;
and (e) commencing or continuing in any manner any action or other proceeding of
any kind on account of or in connection with or with respect to any such claims
or interests released or settled pursuant to the Plan.
Taxes
The Plan and the Restructuring Transactions contemplated herein and therein
shall be implemented in a tax efficient manner satisfactory to the Plan Sponsor,
with prior notice to and in consultation with the Debtors.

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OTHER MATERIAL PROVISIONS REGARDING THE RESTRUCTURING
Management
Incentive Plan
On the Effective Date, the Reorganized Debtors will continue all existing
management compensation plans, and implement a new equity-based management
incentive plan (the “Management Incentive Plan”) on terms and conditions set
forth in the term sheet attached hereto as Exhibit C (the “MIP Term Sheet”) and
otherwise acceptable to the Debtors and the Plan Sponsor.  For the avoidance of
doubt, the Plan will provide for the establishment of the Management Incentive
Plan on the Effective Date in a manner acceptable to the Debtors and the Plan
Sponsor.
Employment
Obligations
Each of the Debtors’ “first day” or “second day” motions and proposed orders
relating to wages, compensation, and benefits shall be in form and substance
acceptable to the Debtors and the Plan Sponsor. Wages, compensation and benefit
programs that do not relate to insiders shall be continued after the Effective
Date, unless otherwise agreed by the Debtors and the Plan Sponsor and subject to
the satisfaction and consent of the Plan Sponsor (such consent not to be
unreasonably withheld) following receipt and analysis of satisfactory
information from the Debtors regarding such programs, which information the
Debtors shall provide as promptly as practicable.
 
The Company Parties will enter into amended and restated employment agreements
with senior executives on substantially the same terms as set forth in the
existing agreements, subject to conforming changes associated with the MIP Term
Sheet, including the Change in Control definitions referenced therein.  For the
avoidance of doubt, the reorganization of the Company will not constitute a
Change in Control under the applicable employment agreements.
Indemnification of
Prepetition
Directors,
Officers, Managers, et al.
Consistent with applicable law, all indemnification provisions currently in
place (whether in the by-laws, certificates of incorporation or formation,
limited liability company agreements, other organizational documents, board
resolutions, indemnification agreements, employment contracts, or otherwise) for
the current and former directors, officers, managers, employees, attorneys,
accountants, investment bankers, and other professionals of the Debtors, as
applicable, shall be reinstated and remain intact, irrevocable, and shall
survive the effectiveness of the Restructuring on terms no less favorable to
such current and former directors, officers, managers, employees, attorneys,
accountants, investment bankers, and other professionals of the Debtors than the
indemnification provisions in place prior to the Restructuring.
Claims of the Debtors
The Reorganized Debtors, as applicable, shall retain all rights to commence and
pursue any Causes of Action, other than any Causes of Action released by the
Debtors pursuant to the release and exculpation provisions outlined in this Term
Sheet.

Prior to Consummation, the Debtors shall not settle, compromise or discharge any
Cause of Action that is not agreed to be released pursuant to this Term Sheet
without the consent of the Plan Sponsor.

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Additional Plan
Provisions and
Documentation
The Plan shall contain other customary provisions for chapter 11 plans of this
type. The Plan and Confirmation Order and all supporting and implementing
documentation (including all briefs and other pleadings filed in support
thereof, all documents filed as part of the Plan Supplement, and the
Confirmation Order) shall be in form and substance acceptable to the Debtors and
the Plan Sponsor.
Conditions
Precedent to
Restructuring
The following shall be conditions to the Effective Date (the “Conditions
Precedent”):
(a)   the Bankruptcy Court shall have entered the Confirmation Order, which
shall be in form and substance acceptable to the Debtors and the Plan Sponsor,
shall be a Final Order, and shall:

(i)   authorize the Debtors to take all actions necessary to enter into,
implement, and consummate the contracts, instruments, releases, leases,
indentures, and other agreements or documents created in connection with the
Plan;

(ii)  decree that the provisions of the Confirmation Order and the Plan are
nonseverable and mutually dependent;

(iii)  authorize the Debtors, as applicable/necessary, to: (A) implement the
Restructuring Transactions, including the Rights Offering; (B) distribute the
New Common Stock pursuant to the exemption from registration under the
Securities Act provided by section 1145 of the Bankruptcy Code or other
exemption from such registration or pursuant to one or more registration
statements; (C) make all distributions and issuances as required under the Plan,
including cash and the New Common Stock; and (D) enter into any agreements,
transactions, and sales of property as set forth in the Plan Supplement,
including the Exit Facility, the Sponsor Backstop Commitment Agreement, the New
Exit Note (if any) and the Management Incentive Plan;

(iv)  authorize the implementation of the Plan in accordance with its terms; and

(v)  provide that, pursuant to section 1146 of the Bankruptcy Code, the
assignment or surrender of any lease or sublease, and the delivery of any deed
or other instrument or transfer order, in furtherance of, or in connection with
the Plan, including any deeds, bills of sale, or assignments executed in
connection with any disposition or transfer of assets contemplated under the
Plan, shall not be subject to any stamp, real estate transfer, mortgage
recording, or other similar tax.

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(b)   the Debtors shall have obtained all authorizations, consents, regulatory
approvals, rulings, or documents that are necessary to implement and effectuate
the Plan;

(c)   the final versions of the Definitive Documentation, the Plan Supplement
and all of the schedules, documents, and exhibits contained therein shall have
been filed in a manner consistent in all material respects with the RSA, this
Term Sheet (including all Exhibits hereto), and the Plan and shall be in form
and substance  acceptable to the Plan Sponsor;

(d)   the RSA shall remain in full force and effect;

(e)   all conditions precedent to the Exit Facility shall have been satisfied or
waived in accordance with the Exit Facility Term Sheet and definitive
documentation to be entered in connection therewith and satisfactory to the RBL
Agent and the Plan Sponsor, or (in the alternative) all DIP Claims and RBL
Claims will be paid in full in cash;

(f)   if the Exit Facility will not be consummated, all conditions precedent to
an alternative senior secured revolving reserve-based lending credit facility
acceptable to the Plan Sponsor shall have been satisfied or waived in accordance
with the definitive documentation to be entered in connection therewith;

(g)   all conditions precedent to the New Exit Note (if any) shall have been
satisfied or waived in accordance with the terms thereof;

(h)   the Bankruptcy Court shall have entered an order approving the Sponsor
Backstop Commitment Agreement and authorizing payment of obligations thereunder
as Administrative Claims;

(i)    the Bankruptcy Court shall have entered an order approving the Noteholder
Backstop Commitment Agreement and authorizing payment of obligations thereunder
as Administrative Claims;

(j)    all conditions precedent to the effectiveness of (i) the Sponsor Backstop
Commitment Agreement and (ii) the Noteholder Backstop Commitment Agreement, in
each case, shall have been satisfied or waived in accordance with the terms
thereof;

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(k)  the Debtors shall have received, or shall receive simultaneously with the
occurrence of the Effective Date, no less than $256.3 million in aggregate cash
proceeds from the Sponsor Backstop Commitment Agreement, the Noteholder Backstop
Commitment Agreement, the Rights Offering, and the Incremental Equity Investment
(if any);

(l)    all reasonable and documented professional fees and expenses of the
advisors to the Supporting Creditors payable pursuant to the RSA, the Sponsor
Backstop Commitment Agreement, the Noteholder Backstop Agreement and the DIP
Credit Agreement, the Prepetition Term Loan Agent, the Sponsor Backstop Parties,
the Noteholder Backstop Parties, the DIP Lenders, the DIP Agent, the Exit Agent,
the Exit Lenders, the RBL Agent and the RBL Lenders shall have been paid in
full; and

(m)  the Debtors shall have implemented the Restructuring Transactions,
including the Rights Offering, and all transactions contemplated by this Term
Sheet (including all releases and exculpations contemplated herein), in a manner
consistent in all respects with the RSA, this Term Sheet, and the Plan, pursuant
to documentation acceptable to the Debtors and the Plan Sponsor.

Waiver of
Conditions
Precedent to the
Effective Date
The Debtors, with the prior written consent of the Plan Sponsor, may waive any
one or more of the Conditions Precedent to the Effective Date; provided that the
waiver of the Conditions Precedent set forth in (c), (d), (g), (i), (j), (k),
(l) and (m) in the definition of Conditions Precedent shall require the consent
of the Required Noteholder Backstop Parties (such consent not to be unreasonably
withheld).
Governance
The Plan shall provide for the post-Effective Date governance terms as described
on Exhibit H hereto (the “Governance Term Sheet”).
 
Unless otherwise directed by the Plan Sponsor, the Debtors agree that Legacy
Reserves will remain a public reporting company with the Securities and Exchange
Commission during the pendency of the Chapter 11 Cases.
Plan Settlement;
Rights Reserved
The total enterprise value of the Debtors for purposes of pricing the New Common
Stock issued pursuant to the Sponsor Backstop Commitment Agreement, the Rights
Offering, the Noteholder Backstop Commitment Agreement and the Incremental
Equity Investment, is a component of a global settlement among the Debtors, the
Plan Sponsor, and the other parties to the RSA.  The Debtors, the Plan Sponsor,
and the other parties to the RSA reserve their respective rights with respect to
valuation of the Debtors and the assets of the Debtors’ estates in the event of
termination of the RSA other than upon consummation of the transactions
contemplated therein and herein as of the Effective Date.

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Exhibit A

Definitions

Term
Definition
Administrative Claim
A Claim for costs and expenses of administration of the Chapter 11 Cases
pursuant to sections 503(b), 507(a)(2), 507(b), or 1114(e)(2) of the Bankruptcy
Code, including: (a) the actual and necessary costs and expenses incurred on or
after the Petition Date until and including the Effective Date of preserving the
Estates and operating the Debtors’ businesses; (b) Allowed Professional Claims;
and (c) all fees and charges assessed against the Estates pursuant to section
1930 of chapter 123 of title 28 of the United States Code.

Affiliate
As defined in section 101(2) of the Bankruptcy Code.

Allowed
As to a Claim or an Interest, a Claim or an Interest allowed under the Plan,
under the Bankruptcy Code, or by a final order, as applicable. For the avoidance
of doubt, (a) there is no requirement to file a Proof of Claim (or move the
Bankruptcy Court for allowance) to be an Allowed Claim under the Plan, and (b)
the Debtors may affirmatively determine to deem Unimpaired Claims Allowed to the
same extent such Claims would be allowed under applicable nonbankruptcy law.

Bankruptcy Code
As defined in the Introduction.

Bankruptcy Court
As defined in the Introduction.

Cause of Action
Any claims, interests, damages, remedies, causes of action, demands, rights,
actions, suits, obligations, liabilities, accounts, defenses, offsets, powers,
privileges, licenses, liens, indemnities, guaranties, and franchises of any kind
or character whatsoever, whether known or unknown, foreseen or unforeseen,
existing or hereinafter arising, contingent or non-contingent, liquidated or
unliquidated, secured or unsecured, assertable, directly or derivatively,
matured or unmatured, suspected or unsuspected, in contract, tort, law, equity,
or otherwise. Causes of Action also include: (a) all rights of setoff,
counterclaim, or recoupment and claims under contracts or for breaches of duties
imposed by law; (b) the right to object to or otherwise contest Claims or
Interests; (c) claims pursuant to sections 362, 510, 542, 543, 544 through 550,
or 553 of the Bankruptcy Code; and (d) such claims and defenses as fraud,
mistake, duress, and usury, and any other defenses set forth in section 558 of
the Bankruptcy Code.

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Term Definition
Change in Control
As defined in the MIP Term Sheet.

Chapter 11 Cases
As defined in the Introduction.

Claim
Any claim, as defined in section 101(5) of the Bankruptcy Code, against any of
the Debtors.

Class
A category of holders of Claims or Interests pursuant to section 1122(a) of the
Bankruptcy Code.

Company Parties
As defined in the Introduction.

Conditions Precedent
As defined in the Term Sheet.

Confirmation
Entry of the Confirmation Order on the docket of the Chapter 11 Cases.

Confirmation Date
The date on which the Bankruptcy Court enters the Confirmation Order on the
docket of the Chapter 11 Cases within the meaning of Bankruptcy Rules 5003 and
9021

Confirmation Hearing
The hearing(s) before the Bankruptcy Court under section 1128 of the Bankruptcy
Code at which the Debtors seek entry of the Confirmation Order.

Confirmation Order
The order of the Bankruptcy Court confirming the Plan under section 1129 of the
Bankruptcy Code, which order shall be in form and substance acceptable to the
Debtors and the Plan Sponsor.

Consummation
The occurrence of the Effective Date.

Debtors
As defined in the Term Sheet.

DIP Agent
That certain administrative agent under the DIP Credit Agreement.

DIP Claim
Any Claim held by the DIP Lenders or the DIP Agent arising under or related to
the DIP Credit Agreement or the DIP Orders, including any and all fees, interest
paid in kind, and accrued but unpaid interest and fees arising under the DIP
Credit Agreement.

DIP Documents
As defined in the Term Sheet.

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Term Definition
DIP Facility
As defined in the Term Sheet.

DIP Lenders
As defined in the Term Sheet.

DIP Credit Agreement
As defined in the Term Sheet.

DIP Orders
As defined in the Term Sheet.

Disclosure Statement
The disclosure statement for the Plan, including all exhibits and schedules
thereto, which shall be in form and substance acceptable to the Debtors and the
Plan Sponsor.

Effective Date
The date that is the first Business Day after the Confirmation Date on which all
Conditions Precedent have been satisfied or waived in accordance with the Plan.

Entity
As defined in section 101(15) of the Bankruptcy Code.

Estate
The estate of any Debtor created under sections 301 and 541 of the Bankruptcy
Code upon the commencement of the applicable Debtor’s Chapter 11 Case.

Exculpated Parties
Collectively, and in each case, in its capacity as such: (a) the Debtors, (b)
Reorganized Debtors; (c) any official committees appointed in the Chapter 11
Cases and each of their respective members; (c) such Released Parties that are
fiduciaries to the Debtors’ Estates; and (d) with respect to each of the
foregoing, such Entity and its  current and former affiliates, and such Entity’s
and its current and former affiliates’ current and former equity holders,
subsidiaries, officers, directors, managers, principals, members, employees,
agents, advisors, advisory board members, financial advisors, partners,
attorneys, accountants, investment bankers, consultants, representatives, and
other professionals, each in their capacity as such.

Exit Agent
The administrative agent appointed under the Exit Facility.

Exit Facility
As defined in the Term Sheet.

Exit Facility Term Sheet
As defined in the Term Sheet.

Exit Lenders
The lenders under the Exit Facility.

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Term Definition
Final Order
As applicable, an order or judgment of the Bankruptcy Court or other court of
competent jurisdiction with respect to the relevant subject matter that has not
been reversed, stayed, modified, or amended, and as to which the time to appeal
or seek certiorari has expired and no appeal or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari that has been or may be filed has been resolved by the highest court
to which the order or judgment could be appealed or from which certiorari could
be sought or the new trial, reargument, or rehearing shall have been denied,
resulted in no modification of such order, or has otherwise been dismissed with
prejudice.

General Unsecured
Claims
Any Claim other than an Administrative Claim, a Professional Claim, a Secured
Tax Claim, an Other Secured Claim, a Priority Tax Claim, an Other Priority
Claim, an RBL Claim, a Term Loan Claim, a Notes Claim, or an Intercompany Claim.

Governance Term Sheet
As defined in the Term Sheet.

Governmental Unit
As defined in section 101(27) of the Bankruptcy Code

GSO
Funds managed or advised by GSO Capital Partners LP.

Impaired
With respect to any Class of Claims or Interests, a Class of Claims or Interests
that is impaired within the meaning of section 1124 of the Bankruptcy Code.

Incremental Equity
Investment
As defined in the Term Sheet.

Intercompany Claim
A Claim held by a Debtor or an Affiliate against a Debtor or an Affiliate.

Intercompany Interest
An Interest held by a Debtor or an Affiliate of a Debtor.

Interest
Any Equity Security (as defined in section 101(16) of the Bankruptcy Code) in
any Debtor and any other rights, options, warrants, stock appreciation rights,
phantom stock rights, restricted stock units, redemption rights, repurchase
rights, convertible, exercisable or exchangeable securities or other agreements,
arrangements or commitments of any character relating to, or whose value is
related to, any such interest or other ownership interest in any Debtor.

Legacy Reserves
As defined in the Introduction.

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Term Definition
Management Incentive
Plan

As defined in the Term Sheet.
Maximum Noteholder
Subscription Amount

As defined in the Term Sheet.
New Board

As defined in the Term Sheet.
New Common
Equity Pool

100% of the New Common Stock issued and outstanding on the Effective Date to be
distributed in accordance with the Plan, subject to dilution on account of the
Management Incentive Plan.
New Common Stock
The common stock of Reorganized Legacy Reserves.

New Exit Note
As defined in the Term Sheet.

Non-Accredited Investor
Premium

As defined in the Term Sheet.

Noteholders
As defined in the Term Sheet.

Noteholder Backstop
Amount

As defined in the Term Sheet.

Noteholder Backstop Fee
As defined in the Term Sheet.

Noteholder Backstop
Parties

As defined in the Term Sheet.

Notes Claim
Any Claim arising under, derived from, or based upon the Prepetition Notes
Indentures.

Other Priority Claim
Any Claim other than an Administrative Claim or a Priority Tax Claim entitled to
priority in right of payment under section 507(a) of the Bankruptcy Code.

Other Secured Claim
Any Secured Claim, including any Secured Tax Claim, other than an RBL Claim, a
Term Loan Claim or a DIP Claim. For the avoidance of doubt, Other Secured Claims
includes any Claim arising under, derived from, or based upon any letter of
credit issued in favor of one or more Debtors, the reimbursement obligation for
which is either secured by a Lien on collateral or is subject to a valid right
of setoff pursuant to section 553 of the Bankruptcy Code.

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Term Definition
Participating Noteholder
As defined in the Term Sheet.

Participation Premium
As defined in the Term Sheet.

Petition Date
The date on which the Chapter 11 Cases were commenced.

Plan
As defined in the Term Sheet.

Plan Sponsor
As defined in the Term Sheet.

Plan Sponsor Notes
Backstop Amount

As defined in the Term Sheet.

Plan Supplement
Any compilation of documents and forms of documents, agreements, schedules, and
exhibits to the Plan, which shall be filed by the Debtors no later than ten (10)
days before the Confirmation Hearing or such later date as may be approved by
the Bankruptcy Court on notice to parties in interest, and additional documents
filed with the Bankruptcy Court prior to the Effective Date as amendments to the
Plan Supplement, each of which shall be consistent in all respects with, and
shall otherwise contain, the terms and conditions set forth in the RSA and Term
Sheet, where applicable, and shall be in form and substance acceptable to the
Debtors and the Plan Sponsor.

Prepetition Intercreditor
Agreement
That certain Intercreditor Agreement dated as of October 25, 2016, by and among
the Company Parties, Wells Fargo Bank, National Association, as original
priority lien agent, and Cortland Capital Market Services LLC, as original
junior lien agent.

Prepetition Notes
Indentures

As defined in the RSA.

Prepetition RBL Agent
As defined in the RSA.

Prepetition RBL Credit
Agreement

As defined in the RSA.

Prepetition Term Loan
Agent
Cortland Capital Market Services LLC, in its capacity as administrative agent
pursuant to the Prepetition Term Loan Documents, its successors, assigns, or any
replacement agent appointed pursuant to the terms of the Prepetition Term Loan
Credit Agreement.

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Term Definition
Prepetition Term Loan
Credit Agreement
That certain Term Loan Credit Agreement, dated as of October 25, 2016, by and
among the Company Parties, as borrowers and/or guarantors, Cortland Capital
Market Services LLC, as Prepetition Term Loan Agent, and the lenders and other
parties party thereto (as amended, restated, amended & restated, supplemented or
otherwise modified as of the date hereof).

Prepetition Term Loan Documents
Collectively, the Prepetition Term Loan Credit Agreement, each other Term Loan
Document (as defined in the Prepetition Term Loan Credit Agreement), and all
other agreements, documents, and instruments delivered or entered into in
connection therewith (including any guarantee agreements, pledge and collateral
agreements, intercreditor agreements, and other security documents).

Priority Tax Claims
Any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of
the Bankruptcy Code.

Pro Rata
The proportion that an Allowed Claim or an Allowed Interest in a particular
Class bears to the aggregate amount of Allowed Claims or Allowed Interests in
that Class.

Professional Claim
A Claim by a professional seeking an award by the Bankruptcy Court of
compensation for services rendered or reimbursement of expenses incurred through
and including the Confirmation Date under sections 330, 331, 503(b)(2),
503(b)(3), 503(b)(4), or 503(b)(5) of the Bankruptcy Code.

Proof of Claim
A proof of Claim filed against any of the Debtors in the Chapter 11 Cases by the
applicable Bar Date.

RBL Claim
Any Claim arising under, derived from, or based upon the Prepetition RBL Credit
Agreement.

RBL Lenders
The lenders under the Prepetition RBL Credit Agreement.

Refinanced DIP Claims
As defined in the Term Sheet.

Reinstated
With respect to Claims and Interests, that the Claim or Interest shall be
rendered unimpaired in accordance with section 1124 of the Bankruptcy Code.

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Term Definition
Released Parties
Collectively, and in each case, in its capacity as such: (a) the Debtors; (b)
the Reorganized Debtors; (c) the Plan Sponsor; (d) the Supporting Creditors; (e)
the Sponsor Backstop Parties; (f) the Prepetition Term Loan Agent; (g) the DIP
Lenders; (h) the DIP Agent; (i) the Exit Lenders; (j) the Exit Agent; and (k)
with respect to each  of the foregoing entities in clauses (a) through (k), such
Entity’s current and former affiliates and subsidiaries, and such Entities’ and
their current and former affiliates’ and subsidiaries’ current and former
directors, managers, officers, equity holders (regardless of whether such
interests are held directly or indirectly), predecessors, successors, and
assigns, subsidiaries, and each of their respective current and former equity
holders (regardless of whether such interests are held directly or indirectly),
officers, directors, managers, principals, members, employees, agents, advisors,
advisory board members, financial advisors, partners, attorneys, accountants,
investment bankers, consultants, representatives, and other professionals.

Releasing Parties
Collectively, (a) the Debtors; (b) the Reorganized Debtors; (c) the Plan
Sponsor, (d) the Supporting Creditors; (e) the Sponsor Backstop Parties; (f) the
Prepetition Term Loan Agent; (g) the DIP Lenders; (h) the DIP Agent; (i) the
Exit Lenders; (j) the Exit Agent; (k) all holders of Claims or Interests who
either (1) vote to accept or (2)  do not opt out of granting the releases set
forth in Article [●] of the Plan by returning the opt-out election form to be
included with the ballot or notice of non-voting status; and (l) with respect to
each of the foregoing entities in clauses (a) through (k), such Entity’s its
current and former affiliates and subsidiaries, and such Entities’ and their
current and former affiliates’ and subsidiaries’ current and former directors,
managers, officers, equity holders (regardless of whether such interests are
held directly or indirectly), predecessors, successors, and assigns,
subsidiaries, and each of their respective current and former equity holders
(regardless of whether such interests are held directly or indirectly),
officers, directors, managers, principals, members, employees, agents, advisors,
advisory board members, financial advisors, partners, attorneys, accountants,
investment bankers, consultants, representatives, and other professionals, each
in their capacity as such .

Reorganized Debtors
A Debtor, or any successor or assign thereto, by merger, consolidation, or
otherwise, on and after the Effective Date.

Reorganized Legacy
Reserves
Legacy Reserves, or any successor or assign, by merger, consolidation, or
otherwise, on or after the Effective Date.

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Term Definition
Required Noteholder
Backstop Parties

Means the “Required Backstop Parties,” as such term is defined in the Noteholder
Backstop Commitment Agreement.

Required Supporting
Noteholders

As defined in the RSA.

Restructuring
As defined in the Introduction.

Restructuring
Transactions

As defined in the Term Sheet.

Rights Offering
As defined in the Term Sheet.

Rights Offering Shares
The shares of New Common Stock distributed pursuant to and in accordance with
the Rights Offering.

RSA
As defined in the Term Sheet.

SEC
The Securities and Exchange Commission.

Secured
When referring to a Claim: (a) secured by a Lien on collateral to the extent of
the value of such collateral, as determined in accordance with section 506(a) of
the Bankruptcy Code or (b) subject to a valid right of setoff pursuant to
section 553 of the Bankruptcy Code.

Secured Tax Claim
Any Secured Claim that, absent its Secured status, would be entitled to priority
in right of payment under section 507(a)(8) of the Bankruptcy Code (determined
irrespective of time limitations), including any related Secured Claim for
penalties.

Securities Act
The Securities Act of 1933, as amended, 15 U.S.C. §§ 77a-77aa, or any similar
federal, state, or local law.

Section 1125(e) Protected
Parties

The Exculpated Parties and such Released Parties that are fiduciaries other than
to the Debtors’ Estates.

SHA
As defined in the Governance Term Sheet.

Sponsor Backstop
Amount

As defined in the Term Sheet.

Sponsor Backstop
Commitment
As defined in the Term Sheet.

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Term Definition
Sponsor Backstop
Commitment Agreement

As defined in the Term Sheet.

Sponsor Backstop Fee
As defined in the Term Sheet.

Sponsor Backstop
Parties

As defined in the Term Sheet.

Subscription Rights
The rights to purchase Rights Offering Shares pursuant to the Rights Offering.

Supporting Creditors
As defined in the RSA.

Supporting Noteholders
As defined in the RSA.

Term Loan Claim
Any Claim arising under, derived from, or based upon the Prepetition Term Loan
Credit Agreement, including any and all fees, interest paid in kind, and accrued
but unpaid interest and fees arising under the Prepetition Term Loan Credit
Agreement.

Term Loan Secured Parties
Cortland Capital Market Services LLC, as Prepetition Term Loan Agent, and the
lenders under the Prepetition Term Loan Credit Agreement.

Term Sheet
As defined in the Introduction.

Unimpaired
With respect to a Class of Claims or Interests, a Class of Claims or Interests
that is not Impaired.

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Exhibit B-1

DIP Credit Agreement

90

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SENIOR SECURED SUPERPRIORITY
DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
 
DATED AS OF JUNE [●], 2019
 
AMONG
 
LEGACY RESERVES LP,
as a debtor and debtor-in-possession,
as Borrower,
 
the other LOAN PARTIES party hereto,
as debtors and debtors-in-possession,
as Guarantors,
 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Collateral Agent,
 
AND
 
THE LENDERS PARTY HERETO
 

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Sole Lead Arranger and Bookrunner
Wells Fargo Bank, National Association
 

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TABLE OF CONTENTS

 
Page
   
ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS
99

     
Section 1.01
Terms Defined Above
99

 
Section 1.02
Certain Defined Terms
100

 
Section 1.03
Types of Loans and Borrowings
128

 
Section 1.04
Terms Generally
128

 
Section 1.05
Accounting Terms and Determinations; GAAP
129

 
Section 1.06
[Reserved]
129

 
Section 1.07
Divisions
129

       
ARTICLE II THE CREDITS
129

     
Section 2.01
Commitments
129

 
Section 2.02
Loans and Borrowings
130

 
Section 2.03
Requests for Borrowings
131

 
Section 2.04
Interest Elections
132

 
Section 2.05
Funding of Borrowings
133

 
Section 2.06
Termination and Reduction of Aggregate Commitments
134

 
Section 2.07
[Reserved]
134

 
Section 2.08
Letters of Credit
134

 
Section 2.09
Collateral; Guarantees
139

       
ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
141

     
Section 3.01
Repayment of Loans
141

 
Section 3.02
Interest
141

 
Section 3.03
Alternate Rate of Interest
142

 
Section 3.04
Prepayments
143

 
Section 3.05
Fees
144

       
ARTICLE IV PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS.
145

     
Section 4.01
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
145

 
Section 4.02
Presumption of Payment by the Borrower
146

 
Section 4.03
Payments and Deductions by the Agent; Defaulting Lenders
146

       
ARTICLE V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
149

     
Section 5.01
Increased Costs
149

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 5.02
Break Funding Payments
150

 
Section 5.03
Taxes
151

 
Section 5.04
Designation of Different Lending Office
154

 
Section 5.05
Illegality
154

       
ARTICLE VI CONDITIONS PRECEDENT
155

     
Section 6.01
Interim Facility Effective Date
155

 
Section 6.02
Final Facility Effective Date
157

 
Section 6.03
Conditions Precedent to Each Borrowing
158

       
ARTICLE VII REPRESENTATIONS AND WARRANTIES
160

     
Section 7.01
Organization; Powers
160

 
Section 7.02
Authority; Enforceability
160

 
Section 7.03
Approvals; No Conflicts
161

 
Section 7.04
Financial Position; No Material Adverse Change
161

 
Section 7.05
Litigation
161

 
Section 7.06
Environmental Matters
162

 
Section 7.07
Compliance with the Laws and Agreements; No Defaults
163

 
Section 7.08
Investment Company Act
163

 
Section 7.09
Taxes
163

 
Section 7.10
ERISA
163

 
Section 7.11
Disclosure; No Material Misstatements
164

 
Section 7.12
Insurance
165

 
Section 7.13
Restriction on Liens
165

 
Section 7.14
Subsidiaries
165

 
Section 7.15
Location of Business and Offices
165

 
Section 7.16
Properties; Titles, Etc.
166

 
Section 7.17
Maintenance of Properties
167

 
Section 7.18
Gas Imbalances, Prepayments
167

 
Section 7.19
Marketing of Production
167

 
Section 7.20
Swap Agreements
167

 
Section 7.21
Use of Loans and Letters of Credit
168

 
Section 7.22
[Reserved]
168

 
Section 7.23
USA PATRIOT; AML Laws; Anti-Corruption Laws and Sanctions
168

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 7.24
International Operations
168

 
Section 7.25
Accounts
168

 
Section 7.26
[Reserved]
168

 
Section 7.27
[Reserved]
168

 
Section 7.28
DIP Orders
168

 
Section 7.29
Budget
168

 
Section 7.30
Representations and Warranties of the Parent Guarantors
168

       
ARTICLE VIII AFFIRMATIVE COVENANTS
169

     
Section 8.01
Financial Statements; Other Information
169

 
Section 8.02
Notices of Material Events
172

 
Section 8.03
Existence; Conduct of Business
173

 
Section 8.04
Payment of Obligations
173

 
Section 8.05
Performance of Obligations under Loan Documents
174

 
Section 8.06
Operation and Maintenance of Properties
174
 
Section 8.07
Insurance
174

 
Section 8.08
Books and Records; Inspection Rights
175

 
Section 8.09
Compliance with Laws
175

 
Section 8.10
Environmental Matters
175

 
Section 8.11
Further Assurances
176

 
Section 8.12
Reserve Reports
177

 
Section 8.13
Title Information
177

 
Section 8.14
Additional Collateral; Additional Guarantors
178

 
Section 8.15
ERISA Compliance
178

 
Section 8.16
[Reserved]
179

 
Section 8.17
[Reserved]
179

 
Section 8.18
Use of Proceeds
179

 
Section 8.19
[Reserved]
179

 
Section 8.20
[Reserved]
179

 
Section 8.21
Affirmative Covenants of the Parent Guarantors
179

 
Section 8.22
[Reserved]
179

 
Section 8.23
Delivery of Proposed DIP Orders
179

 
Section 8.24
Cash Management
180

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TABLE OF CONTENTS
(Continued)

 
Page
   
ARTICLE IX NEGATIVE COVENANTS
180

     
Section 9.01
Financial Covenants
180

 
Section 9.02
Debt
180

 
Section 9.03
Liens
181

 
Section 9.04
Dividends, Distributions and Redemptions
182

 
Section 9.05
Investments, Loans and Advances
182

 
Section 9.06
Nature of Business
183

 
Section 9.07
[Reserved]
183
 
Section 9.08
Proceeds of Loans; OFAC
184
 
Section 9.09
ERISA Compliance
184
 
Section 9.10
Sale or Discount of Receivables
185
 
Section 9.11
Mergers, Divisions, Etc.
185
 
Section 9.12
Sale of Properties
185
 
Section 9.13
Environmental Matters
186
 
Section 9.14
Transactions with Affiliates
186
 
Section 9.15
Subsidiaries
186
 
Section 9.16
Negative Pledge Agreements; Dividend Restrictions
186
 
Section 9.17
Gas Imbalances, Take-or-Pay or Other Prepayments
186
 
Section 9.18
Swap Agreements
187
 
Section 9.19
Marketing Activities
187
 
Section 9.20
Accounting Changes
187
 
Section 9.21
New Accounts
187
 
Section 9.22
Volumetric Production Payment
188
 
Section 9.23
Passive Holding Company Status of Parent Guarantors
188
 
Section 9.24
Negative Covenants of the Parent Guarantors
188
 
Section 9.25
Key Employee Plans
188
 
Section 9.26
[Reserved]
188
 
Section 9.27
Superpriority Claims
188
 
Section 9.28
Bankruptcy Orders

     

ARTICLE X EVENTS OF DEFAULT; REMEDIES
189
 
 
Section 10.01
Events of Default
189
 
Section 10.02
Remedies
192

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 10.03
Disposition of Proceeds
193
     

ARTICLE XI THE AGENTS
194
 
 
Section 11.01
Appointment; Powers
194
 
Section 11.02
Duties and Obligations of Agent
194
 
Section 11.03
Action by Agent
195
 
Section 11.04
Reliance by Agent
195
 
Section 11.05
Subagents
195
 
Section 11.06
Resignation or Removal of Agent
196
 
Section 11.07
Agent and Lenders
196
 
Section 11.08
No Reliance
196
 
Section 11.09
Agent May File Proofs of Claim
197
 
Section 11.10
Authority of Agent to Release Collateral and Liens
197
 
Section 11.11
Secured Cash Management Agreements
198
 
Section 11.12
The Arranger
198
     

ARTICLE XII MISCELLANEOUS
198
 
 
Section 12.01
Notices
198
 
Section 12.02
Waivers; Amendments
199
 
Section 12.03
Expenses, Indemnity; Damage Waiver
201  
Section 12.04
Successors and Assigns
204
 
Section 12.05
Survival; Revival; Reinstatement
207
 
Section 12.06
Counterparts; Integration; Effectiveness
207
 
Section 12.07
Severability
208
 
Section 12.08
Right of Setoff
208
 
Section 12.09
GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS
208
 
Section 12.10
Headings
210
 
Section 12.11
Confidentiality
210
 
Section 12.12
Interest Rate Limitation
211
 
Section 12.13
EXCULPATION PROVISIONS
211
 
Section 12.14
Collateral Matters; Secured Swap Agreements; Secured Cash Management Agreements
212
 
Section 12.15
No Third Party Beneficiaries
212

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 12.16
USA PATRIOT Act Notice
212
 
Section 12.17
Non-Fiduciary Status
213
 
Section 12.18
Cashless Settlement
213
 
Section 12.19
Joinder of Subsidiaries
213
 
Section 12.20
[Reserved]
213
 
Section 12.21
[Reserved]
213
 
Section 12.22
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
213
 
Section 12.23
Acknowledgement Regarding Any Supported QFCs
214
     

ARTICLE XIII LOAN GUARANTEE
215
 
 
Section 13.01
Guarantee
215
 
Section 13.02
Guarantee of Payment
216
 
Section 13.03
No Discharge or Diminishment of Loan Guarantee
216
 
Section 13.04
Defenses Waived
217
 
Section 13.05
Rights of Subrogation
217
 
Section 13.06
Reinstatement; Stay of Acceleration
217
 
Section 13.07
Information
217
 
Section 13.08
Taxes
218
 
Section 13.09
Maximum Liability
218
 
Section 13.10
Contribution
218
 
Section 13.11
Representations and Warranties
219
 
Section 13.12
Subordination of Indebtedness
219  
Section 13.13
Other Terms
221

Annex I
Refinanced Loan Amounts
Annex II
New Money Loan Commitments
   
Exhibit A
Form of Note
Exhibit B
Form of Borrowing Request
Exhibit C
Form of Compliance Certificate
Exhibit D
Form of Assignment and Assumption
Exhibit E
Interim Order
Exhibit F-1-4
Form of U.S. Tax Compliance Certificates
Exhibit G
Initial Budget

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TABLE OF CONTENTS
(Continued)

 
Page
   
Schedule 1.01
Existing Letters of Credit
Schedule 7.05
Litigation
Schedule 7.14
Subsidiaries
Schedule 7.15
Location of Businesses
Schedule 7.18
Gas Imbalances
Schedule 7.19
Marketing Contracts
Schedule 7.20
Swap Agreements
Schedule 7.25
Accounts
Schedule 9.02(e)
Existing Debt
Schedule 9.02(f)
Debt Related to Oil and Gas Operations
Schedule 9.03(d)
Liens on Property
Schedule 9.05(a)
Investments
Schedule 13.11
Guarantor Corporate Information

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This SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as
of June [●], 2019 (this “Agreement”), is among Legacy Reserves LP, as a debtor
and debtor-in-possession, a limited partnership duly formed and existing under
the laws of the State of Delaware (the “Borrower”), the other Loan Parties party
hereto, each of the Lenders from time to time party hereto, and WELLS FARGO
BANK, NATIONAL ASSOCIATION (in its individual capacity, “Wells Fargo”), as
administrative agent and collateral agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Agent”) and as Issuing Bank
under and as defined herein.
 
R E C I T A L S
 
A.        On June [●], 2019 (the “Petition Date”), the Borrower and the
Guarantors (in such capacity, each a “Debtor” and collectively, the “Debtors”)
filed voluntary petitions for relief under Chapter 11 of Title 11 of the United
States Code (the “Bankruptcy Code”) in the Bankruptcy Court;
 
B.         The Borrower has requested that the Lenders provide the Borrower with
a debtor-in-possession, superpriority, senior secured revolving loan credit
facility in an aggregate principal amount of up to $350,000,000 (the “DIP
Facility”) in Commitments and Loans from the Lenders, which shall consist of (x)
a new money revolving loan facility in the aggregate principal amount of up to
$100,000,000, which shall include a sub-facility of up to $1,000,000 for the
issuance of Letters of Credit (together the “New Money Facility”) and (y) an
$87,500,000 term loan upon entry of the Interim Order and a $162,500,000 term
loan upon entry of the Final Order, for a total of $250,000,000, to roll up the
Existing Loans under the Existing Credit Agreement (the “Refinancing Facility”),
in each case to be afforded the liens and priority set forth in the DIP Orders
and as set forth in the other Loan Documents and to be used during the
Bankruptcy Cases for the purposes set forth in Section 7.21, and which New Money
Facility shall be available for borrowings and other extensions of credit as of
the Interim Facility Effective Date, subject in all respects to the terms set
out herein and in the other Loan Documents; and
 
C.         By execution and delivery of this Agreement and the other Loan
Documents and entry of the applicable DIP Order, the Guarantors, as applicable,
agree to guarantee the Obligations, and the Borrower and each Guarantor agrees
to secure all of the Obligations by granting to the Agent, for the benefit of
the Secured Parties, a lien and security interest in respect of, and on,
substantially all of each Debtor’s respective assets, on and subject to the
terms and priorities set forth in the DIP Orders and the other Loan Documents.
 
In consideration of the mutual covenants and agreements herein contained and of
the loans, extensions of credit and commitments hereinafter referred to, the
parties hereto agree as follows:
 
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
 
Section 1.01         Terms Defined Above.  As used in this Agreement, each term
defined above has the meaning indicated above.
 
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Section 1.02        Certain Defined Terms.  Unless otherwise defined in this
Agreement, as used in this Agreement, the following terms have the meanings
specified below:
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
“Adequate Protection Liens” has the meaning assigned such term in the DIP
Orders.
 
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Agent.
 
“Affected Loans” has the meaning assigned such term in Section 5.05.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Aggregate Commitments” at any time, means the sum of the aggregate amount of
the Commitments of all of the New Money Lenders at such time, as the same may be
reduced or terminated pursuant to Section 2.06.
 
“Alternate Base Rate” means, for any day, a rate per annum equal to the highest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the LIBO Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, in the context of
this definition of Alternate Base Rate and for the avoidance of doubt, the LIBO
Rate for any day shall be based on the rate as quoted at approximately 11:00
a.m. London time on such day to the Agent’s London office for dollar deposits of
$5,000,000 having a one-month maturity.  Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBO
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.
 
“AML Laws” means all laws, rules, and regulations of any jurisdiction applicable
to any Lender or any Debtor from time to time concerning or relating to
anti-money laundering.
 
“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to any Debtor from time to time concerning or relating
to bribery or corruption.
 
“Applicable Margin” means, for any day, (a) with respect to any Refinanced Loan
(which shall be an ABR Loan), 3.50% per annum and (b) with respect to any New
Money Loan (i) that is a Eurodollar Loan, 5.25% per annum and (ii) that is an
ABR Loan, 4.25% per annum.
 
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“Applicable Percentage” means, with respect to any New Money Lender, the
percentage of the Aggregate Commitments represented by such Lender’s Commitment
at such time; provided that, at any time a Defaulting Lender shall exist,
“Applicable Percentage” shall mean the percentage of the Aggregate Commitments
(disregarding any Defaulting Lenders’ Commitment at such time, but subject to
Section 4.03) represented by such Lender’s Commitment.  If the Aggregate
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Aggregate Commitments most recently in effect giving
effect to any assignments.
 
“Approved Counterparty” means (a) any Lender or any Affiliate of a Lender and
(b) any other Person (or any credit support provider of such Person) whose
issuer rating or whose long term senior unsecured debt rating is BBB-/Baa3 by
S&P or Moody’s (or their equivalent) or higher.
 
“Approved Plan of Reorganization” means the “Plan” as defined in the DIP Order.
 
“Arranger” means Wells Fargo, in its capacity as sole lead arranger and sole
bookrunner hereunder.
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 12.04(b)), and accepted by the Agent, in the form of Exhibit D or any
other form approved by the Agent.
 
“Availability Period” means the period from the Interim Facility Effective Date,
to, but excluding, the Termination Date.
 
“Available Commitments” means (a) during the Interim Period, the Interim
Facility Cap and (b) during the Final Period, the Aggregate Commitments.
 
“Available Funds” means, as of any date of determination, the amount by which
the Available Commitments on such date exceed the total Revolving Credit
Exposure of all Lenders on such date.
 
“Avoidance Actions” means all claims and causes of action under sections 502(d),
544, 545, 547, 548, 549 and 550 of the Bankruptcy Code.
 
“Avoidance Action Proceeds” means any and all proceeds of any Avoidance Action.
 
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.
 
“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.
 
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“Bankruptcy Cases” means the cases of the Debtors filed under Chapter 11 of the
Bankruptcy Code in the Bankruptcy Court from and after the Petition Date
including any and all proceedings arising in or related to such cases.
 
“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of Texas.
 
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Securities Exchange Act, except that in calculating the
beneficial ownership of any particular “person” (as that term is used in Section
13(d)(3) of the Securities Exchange Act), such “person” will be deemed to have
beneficial ownership of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition.  The terms “Beneficially Owns” and “Beneficially Owned” have
correlative meanings.
 
“Beneficial Ownership Certification” shall mean a certification regarding
beneficial ownership as required by the Beneficial Ownership Regulation.
 
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
 
“Binger” means Binger Operations, LLC, an Oklahoma limited liability company.
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.
 
“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
 
“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03 and substantially in the form of Exhibit B.
 
“Budget” means a thirteen-week rolling operating budget and cash flow forecast,
in form and substance reasonably acceptable to the Agent.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or
required by law to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
dealings in dollar deposits are carried out in the London interbank market.
 
“Capital Expenditure Budget” means a budget setting forth the projected capital
expenditures of the Loan Parties for the calendar year 2019, in form and
substance reasonably acceptable to the Agent.
 
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“Capital Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder.
 
“Carve-Out” has the meaning assigned to such term in the DIP Order.
 
“Cash Collateralize” means, in respect of any obligation, the provision, and
pledge (as a security interest with the priority set forth in the DIP Order) of,
cash collateral in dollars, at a location and pursuant to documentation in form
and substance satisfactory to the Agent and the Issuing Bank (and “Cash
Collateralization” has a corresponding meaning).
 
“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management services.
 
“Cash Management Order” means one or more orders of the Bankruptcy Court,
including any interim and/or final orders, entered in the Bankruptcy Cases,
together with all extensions, modifications and amendments thereto, in form and
substance reasonably satisfactory to the Agent, which, among other matters,
authorizes the Borrower and the Guarantors to maintain their existing cash
management system.
 
“Cash Receipts” means all cash received by or on behalf of any Debtor, including
without limitation:  (a) amounts payable under or in connection with any Oil and
Gas Properties; (b) cash representing operating revenue earned or to be earned
by any Debtor; (c) proceeds from Loans; and (d) any other cash received by or on
behalf of any Debtor from whatever source (including amounts received in respect
of the liquidation of any Swap Agreement and amounts received in respect of any
disposition of Property).
 
“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of any Debtor having a fair market value in
excess of $250,000 in the aggregate for any calendar year.
 
“Change in Control” means (a) the Parent ceases to (i) be the Beneficial Owner
of 100% of the Equity Interests of Legacy GP, (ii) Control Legacy GP or (iii) be
the Beneficial Owner of 100% of the limited partner Equity Interests in the
Borrower; (b) Legacy GP ceases to be the sole general partner of the Borrower;
(c) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or greater than 50% of the properties or assets
(determined by reference to fair market value of such properties and assets at
the time of such sale, lease, transfer, conveyance or other disposition) of the
Debtors taken as a whole, to any “person” (as that term is used in Section
13(d)(3) of the Securities Exchange Act); or (d) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any “person” (as that term is used in Section 13(d)(3)
of the Securities Exchange Act) becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Equity Interests of the Parent, measured by
voting power rather than number of shares, units or the like.
 
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“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 5.01(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement; provided
that notwithstanding anything herein to the contrary (i) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith, or in implementation
thereof and (ii) all requests, rules, guidelines or directives concerning
capital adequacy promulgated by the Bank for International Settlements, the
Basel Committee on Banking Regulations and Supervisory Practices (or any
successor similar authority) or the United States financial regulatory
authorities, in each case pursuant to Basel III, shall be deemed to be a “Change
in Law”, regardless of the date enacted, adopted, promulgated, issued or
implemented.
 
“Chapter 11 Milestones” shall have the meaning assigned to such term in the DIP
Orders.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.
 
“Collateral” means all assets and Property of any kind (including all assets
pledged under, and the “Collateral” as defined in, the Existing Security
Instruments) that is subject to a Lien in favor of the Agent to secure the
Obligations or which under the terms of any Loan Document is purported to be
subject to such Lien, which includes, for the avoidance of doubt, all existing
(whether pre- or post-petition) and after-acquired, tangible and intangible,
personal and real property and assets of each of the Loan Parties and any
proceeds thereof and, subject to approval by the Bankruptcy Court pursuant to
the Final Order, any Avoidance Action Proceeds; provided that the Collateral
shall not include the Excluded Assets; provided, further that notwithstanding
anything in this Agreement or any other Loan Document to the contrary, the
Collateral does not include any Building or Manufactured (Mobile) Home (each as
defined in the applicable Flood Insurance Regulations) and no Building or
Manufactured (Mobile) Home will be encumbered by any Loan Document unless and
until the Lenders are given 30 days’ prior written notice thereof and each
Lender confirms within such 30 day period to the Agent that its flood due
diligence has been completed and flood insurance compliances has been confirmed
(including the receipt of evidence of any required flood insurance);
provided, further however, that any Building or Manufactured (Mobile) Home
located at 1760 Anderson County Road 2608, Tennessee Colony, Anderson County,
Texas 75681-0000 shall be included as “Collateral” hereunder.
 
“Commitment” means, with respect to each Lender, the commitment of such Lender
to make New Money Loans and to acquire participations in Letters of Credit
hereunder in an aggregate principal amount at any one time outstanding not to
exceed the amounts set forth opposite such Lender’s name as its “Commitment” on
Annex II (as such Annex II may be amended or modified from time to time in
connection with any reduction or modification to any Commitment or to the
Aggregate Commitments pursuant to this Agreement), expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Credit
Exposure hereunder, as such Commitment may be (a) modified from time to time
pursuant to Section 2.06 and (b) modified from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.04(b).
 
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“Commitment Fee Rate” means 1.00% per annum.
 
“Committee” means the statutory official committee of unsecured creditors
appointed in the Bankruptcy Cases.
 
“Commodity Account” has the meaning assigned to such term in the UCC.
 
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute, and any
regulations promulgated thereunder.
 
“Confirmation Order” means an order, in form and substance reasonably
satisfactory to the Agent, confirming the Approved Plan of Reorganization.
 
“Consolidated Subsidiaries” means, (a) with respect to the Borrower, each
Subsidiary of the Borrower (whether now existing or hereafter created or
acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of the Borrower in accordance with
GAAP and (b) with respect to the Parent, each Subsidiary of the Parent (whether
now existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of the
Parent in accordance with GAAP.
 
“Continuing Directors” means, as of any date of determination, any member of the
board of directors of the Parent who (a) was a member of such board of directors
on the Petition Date or (b) was nominated for election or elected to such board
of directors with the approval of a majority of the Continuing Directors who
were members of such board of directors at the time of such nomination or
election.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.  For the
purposes of this definition, and without limiting the generality of the
foregoing, any Person that owns directly or indirectly ten percent (10%) or more
of the Equity Interests having ordinary voting power for the election of the
directors or other governing body of a Person will be deemed to “control” such
other Person.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Debt” means, for any Person, the sum of the following (without duplication): 
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable, accrued expenses, liabilities or other obligations of such
Person, in each such case to pay the deferred purchase price of Property or
services; (d) all obligations under Capital Leases; (e) all obligations under
Synthetic Leases; (f) all Debt (as defined in the other clauses of this
definition) of others secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) a Lien on any
Property of such Person, whether or not such Debt is assumed by such Person; (g)
all Debt (as defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the Debt (howsoever such assurance shall be made) to the extent
of the lesser of the amount of such Debt and the maximum stated amount of such
guarantee or assurance against loss; (h) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or covenants
of any other Person or to purchase the Debt or Property of any other Person; (i)
obligations to deliver commodities, goods or services, including, without
limitation, Hydrocarbons, in consideration of one or more advance payments,
other than gas balancing arrangements in the ordinary course of business; (j)
obligations to pay for goods or services whether or not such goods or services
are actually received or utilized by such Person; (k) any Debt of a partnership
for which such Person is liable either by agreement, by operation of law or by a
Governmental Requirement but only to the extent of such liability; (l)
Disqualified Capital Stock; and (m) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly
or indirectly received payment.  The Debt of any Person shall include all
obligations of such Person of the character described above to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is not included as a liability of such Person under GAAP.
 
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“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.
 
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
 
“Defaulting Lender” means any Lender, as determined by the Agent, that has (a)
failed to fund any portion of its Loans or participations in Letters of Credit
within three (3) Business Days of the date required to be funded by it
hereunder, (b) notified the Borrower, the Agent, the Issuing Bank or any Lender
in writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement or under
other agreements in which it commits to extend credit, (c) failed, within three
(3) Business Days after request by the Agent or the Borrower, to confirm that it
will comply with the terms of this Agreement relating to its obligations to fund
prospective Loans and participations in then outstanding Letters of Credit, (d)
otherwise failed to pay over to the Agent or any other Lender any other amount
required to be paid by it hereunder within three (3) Business Days of the date
when due, unless the subject of a good faith dispute, (e) or has a direct or
indirect parent company that has become the subject of a Bail-In Action, or (f)
(i) become or is insolvent or has a parent company that has become or is
insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding,
or has had a receiver, conservator, trustee or custodian appointed for it, or
has taken any action in furtherance of, or indicating its consent to, approval
of or acquiescence in any such proceeding or appointment or has a parent company
that has become the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment; provided that a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority so long as such ownership interest does not
result in or provide such Lender with immunity from the jurisdiction of courts
within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender.  Any determination by the Agent that a Lender is a Defaulting
Lender under any one or more of clauses (a) through (f) above shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to
be a Defaulting Lender (subject to Section 4.03(f)) upon delivery of written
notice of such determination to the Borrower, the Issuing Bank and the Lenders.
 
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“Deposit Account” has the meaning assigned to such term in the UCC.
 
“Dew Gathering LLC” means Dew Gathering LLC, a Texas limited liability company
and a Wholly-Owned Subsidiary of the Borrower.
 
“DIP Order” means the Interim Order and the Final Order, as applicable.
 
“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible or exchangeable for Debt or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is one year after the earlier
of (a) the Maturity Date and (b) the date on which there are no Loans, LC
Exposure or other obligations hereunder outstanding and all of the Commitments
are terminated.
 
“dollars” or “$” refers to lawful money of the United States of America.
 
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.
 
“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.
 
“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.
 
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“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.
 
“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety the environment or the preservation or reclamation of
natural resources, in effect in any and all jurisdictions in which any Debtor is
conducting or at any time has conducted business, or where any Property of any
Debtor is located, including without limitation, the Oil Pollution Act of 1990
(“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendments
and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and other environmental conservation or
protection Governmental Requirements.  The term “oil” shall have the meaning
specified in OPA, the terms “hazardous substance” and “release” (or “threatened
release”) have the meanings specified in CERCLA, the terms “solid waste” and
“disposal” (or “disposed”) have the meanings specified in RCRA and the term “oil
and gas waste” shall have the meaning specified in Section 91.1011 of the Texas
Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the
event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment and (b) to the extent the
laws of the state or other jurisdiction in which any Property of any Debtor is
located establish a meaning for “oil,” “hazardous substance,” “release,” “solid
waste,” “disposal” or “oil and gas waste” which is broader than that specified
in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning shall
apply.
 
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest (other than, prior to conversion into common Equity Interests,
the Existing Convertible Senior Notes).
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.
 
“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with any Debtor would be deemed to be a “single employer” within
the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o)
of section 414 of the Code.
 
“ERISA Event” means (a) a “Reportable Event” described in section 4043 of ERISA
and the regulations issued thereunder, (b) the withdrawal of any Debtor or any
ERISA Affiliate from a Plan during a plan year in which it was a “substantial
employer” as defined in section 4001(a)(2) of ERISA, (c) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability
pursuant to Section 4202 of ERISA or (f) any other event or condition which
might constitute grounds under section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.
 
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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
 
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.
 
“Event of Default” has the meaning assigned such term in Section 10.01.
 
“Excepted Liens” means (a) Liens for Taxes, assessments or other governmental
charges or levies (i) which are not delinquent; (ii) the nonpayment of which is
permitted or required by the Bankruptcy Code; or (iii) which are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (b) Liens in connection with workers’
compensation, unemployment insurance or other social security, old age pension
or public liability obligations which are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (c) statutory landlord’s liens,
operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’,
suppliers’, workers’, materialmen’s, construction or other like Liens arising by
operation of law in the ordinary course of business or incident to the
exploration, development, operation and maintenance of Oil and Gas Properties
each of which is in respect of obligations that are not delinquent or which are
being contested in good faith by appropriate action and for which the Parent or
any other Debtor, as applicable, maintains adequate reserves in accordance with
GAAP; (d) contractual Liens which arise in the ordinary course of business of
the Debtors under operating agreements, joint venture agreements, oil and gas
partnership agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the oil and gas business and are for claims which are not
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP,
provided that any such Lien referred to in this clause does not materially
impair the use of the Property covered by such Lien for the purposes for which
such Property is held by any Debtor or materially impair the value of such
Property subject thereto; (e) Liens arising solely by virtue of any statutory or
common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies and burdening only deposit accounts or other funds
maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account or is subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the Board and no such deposit account is intended by any Debtor
to provide collateral to the depository institution; (f) easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any Property of any Debtor for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines for the removal of
gas, oil, coal or other minerals or timber, and other like purposes, or for the
joint or common use of real estate, rights of way, facilities and equipment, in
each case, incurred in the ordinary course of business, which do not secure any
Debt or other monetary obligations and which do not materially impair the use of
such Property for the purposes of which such Property is held by any Debtor or
materially impair the value of such Property subject thereto; (g) Liens on cash
or securities pledged to secure performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business and to
the extent the Debt in respect thereof is permitted by Section 9.02(f); and (h)
judgment and attachment Liens not giving rise to an Event of Default, provided
that any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the period
within which such proceeding may be initiated shall not have expired and no
action to enforce such Lien has been commenced; provided that (i) all such Liens
described in clauses (a) through (e) shall remain “Excepted Liens” only for so
long as no action to enforce such Lien has been commenced (except any such
action that is subject to the automatic stay of Section 362 of the Bankruptcy
Code or as otherwise permitted by a final order of the Bankruptcy Court) and no
intention to subordinate the Liens granted in favor of the Agent and/or the
other Secured Parties is to be hereby implied or expressed by, or as a result
of, the permitted existence of such Excepted Liens; and (ii) the term “Excepted
Liens” shall not include any Lien securing Debt for borrowed money other than
the Obligations.
 
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“Excluded Accounts” means (i) segregated Deposit Accounts, the balance of which
consists exclusively of funds set aside in connection with the payment of tax
obligations, payroll and employee benefits, medical, dental and employee
benefits claims to employees of the Debtors, (ii) zero balance accounts, (iii)
fiduciary accounts the balance of which consists exclusively of amounts held in
trust for unaffiliated third parties in respect of such third parties’ ratable
share of the revenues of Oil and Gas Properties, (iv) escrow accounts the
balance of which consists exclusively of purchase price deposits held in escrow
pursuant to a binding and enforceable purchase and sale agreement with an
unaffiliated third party containing customary provisions regarding the payment
and refunding of such deposits, (v) accounts containing cash collateral
permitted under clause (g) of the definition of “Excepted Liens” and (vi) the
Adequate Assurance Account and Wyoming Escheat Account (each as defined in the
motion approving the Cash Management Order).
 
“Excluded Assets” means (a) Avoidance Actions; (b) the Excepted Liens; (c) the
Excluded Accounts, (d) subject to entry of the Final Order, any amounts
surcharged pursuant to section 506(c) of the Bankruptcy Code; and (e) proceeds
of any of the foregoing, but only to the extent such proceeds would otherwise
independently constitute “Excluded Assets” under clauses (a)-(d); provided that
“Excluded Assets” shall not include any Avoidance Actions Proceeds.
 
“Excluded Swap Obligations” means, with respect to the Borrower or any
Guarantor, (a) as it relates to all or a portion of any guarantee of the
Borrower or such Guarantor, any Secured Swap Obligation if, and to the extent
that, such Secured Swap Obligation (or any guarantee in respect thereof) is or
becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of the Borrower’s or such
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the guarantee of the Borrower or such Guarantor becomes
effective with respect to such Secured Swap Obligation, or (b) as it relates to
all or a portion of the grant by the Borrower or such Guarantor of a security
interest, any Secured Swap Obligation if, and to the extent that, such Secured
Swap Obligation (or such security interest in respect thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of the Borrower’s or such Guarantor’s
failure for any reason to constitute an “eligible contract participant” as
defined in the Commodity Exchange Act and the regulations thereunder at the time
the security interest of the Borrower or such Guarantor becomes effective with
respect to such Secured Swap Obligation.  If a Secured Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Secured Swap Obligation that is attributable
to swaps for which such guarantee or security interest is or becomes illegal.
 
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“Excluded Taxes” means, with respect to the Agent, any Lender, any Issuing Bank
or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or any Guarantor hereunder or under any other Loan
Document, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America or such other jurisdiction under the laws
of which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower or any
Guarantor is located, (c) in the case of a Foreign Lender any U.S. withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Lender’s failure to comply with
Section 5.03(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts with respect to such withholding tax
pursuant to Section 5.03, and (d) any United States withholding Tax that is
imposed under FATCA.
 
“Existing Agent” means Wells Fargo, in its capacity as administrative agent
under the Existing Credit Agreement.
 
“Existing Convertible Senior Notes” means “Convertible Senior Notes” as defined
in the Existing Credit Agreement.
 
“Existing Credit Agreement” means the Third Amended and Restated Credit
Agreement, dated as of April 1, 2014, among the Borrower, the Guarantors (as
defined therein), the Existing Agent, and the Existing Lenders, as amended by
the First Amendment to Third Amended and Restated Credit Agreement, dated as of
April 17, 2014, the Second Amendment to Third Amended and Restated Credit
Agreement, dated as of May 22, 2014, the Third Amendment to Third Amended and
Restated Credit Agreement, dated as of December 29, 2014, the Fourth Amendment
to Third Amended and Restated Credit Agreement, dated as of February 23, 2015,
the Fifth Amendment to Third Amended and Restated Credit Agreement, dated as of
August 5, 2015, the Sixth Amendment to Third Amended and Restated Credit
Agreement, dated as of November 13, 2015, the Seventh Amendment to Third Amended
and Restated Credit Agreement, dated as of February 19, 2016, the Eighth
Amendment to Third Amended and Restated Credit Agreement, dated as of October
25, 2016, the Ninth Amendment to Third Amended and Restated Credit Agreement,
dated as of March 23, 2018, the Tenth Amendment to Third Amended and Restated
Credit Agreement, dated as of September 14, 2018, the Eleventh Amendment to
Third Amended and Restated Credit Agreement, dated as of September 20, 2018, and
the Twelfth Amendment to Third Amended and Restated Credit Agreement, dated as
of March 21, 2019.
 
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“Existing Guaranty Agreement” means the “Guaranty Agreement” as defined in the
Existing Credit Agreement.
 
“Existing Intercreditor Agreement” means that certain Intercreditor Agreement,
dated as of October 25, 2016, between the Existing Agent, as administrative
agent for the Priority Lien Secured Parties (as defined therein), and the
Existing Second Lien Agent, as administrative agent for the Junior Lien Secured
Parties (as defined therein), and acknowledged and agreed by the Borrower and
the Guarantors (as defined in the Existing Credit Agreement), as the same may
from time to time be amended, amended and restated, supplemented or otherwise
modified in accordance with the terms thereof.
 
“Existing Lenders” means the lenders party to the Existing Credit Agreement.
 
“Existing Letters of Credit” means the letters of credit issued and outstanding
as of the date hereof under the Existing Credit Agreement and set forth on
Schedule 1.01.
 
“Existing Loans” means the “Loans” as defined in the Existing Credit Agreement.
 
“Existing Loan Documents” means the “Loan Documents” as defined in the Existing
Credit Agreement.
 
“Existing Obligations” means the “Indebtedness” as defined in the Existing
Credit Agreement.
 
“Existing Second Lien Agent” means Cortland Capital Market Services LLC, a
Delaware limited liability company, together with its successors and assigns in
such capacity under the Existing Second Lien Loan Documents.
 
“Existing Second Lien Credit Agreement” means that certain Term Loan Credit
Agreement, dated as of October 25, 2016, among the Borrower, as borrower, each
of the lenders from time to time party thereto, and the Existing Second Lien
Agent, as in effect on the Petition Date.
 
“Existing Second Lien Loan Documents” means the Existing Second Lien Credit
Agreement and each other “Term Loan Document” as defined in the Existing Second
Lien Credit Agreement, and any other loan documents entered into in connection
therewith, including, without limitation, the Existing Intercreditor Agreement,
any promissory notes, mortgages, deeds of trust, security agreements and
instruments, guarantees, collateral or credit support documents, and any other
agreements, instruments consents or certificates executed by any Debtor in
connection with, or as security for the payment or performance of, any Existing
Second Lien Loans, in each case, as in effect on the Petition Date.
 
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“Existing Second Lien Loans” means the “Loans” as defined in the Existing Second
Lien Credit Agreement, which Debt is intended to be secured on a junior basis by
any collateral securing the Existing Loans.
 
“Existing Security Agreement” means the “Security Agreement” as defined in the
Existing Credit Agreement.
 
“Existing Security Instruments” means the “Security Instruments” as defined in
the Existing Credit Agreement.
 
“Existing Senior Indentures” means the “Senior Indentures” as defined in the
Existing Credit Agreement.
 
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.
 
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it; provided that, if the Federal Funds Effective Rate shall be less
than zero, such rate shall be deemed to be zero for purposes of this Agreement.
 
“Fee Letter” means that certain letter agreement dated as of June [__], 2019
from Wells Fargo and acknowledged and agreed to by the Borrower.
 
“Final Facility Effective Date” has the meaning assigned to such term in Section
6.02.
 
“Final Order” shall have the meaning assigned to such term in the Interim Order.
 
“Final Period” means the period from and including the Final Facility Effective
Date to but excluding the Termination Date.
 
“Final Refinanced Loan Amount” means, as to each Refinancing Lender, the amount
set forth opposite such Refinancing Lender’s name on Annex I under the caption
“Final Refinanced Loan Amount”.
 
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“Final Refinanced Loans” has the meaning specified therefor in Section 2.01(b).
 
“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of such Person.  Unless
otherwise specified, all references to a Financial Officer shall mean a
Financial Officer of the Borrower.
 
“Financial Statements” means the financial statement or statements of the
Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a).
 
“Flood Insurance Regulations” shall mean (i) the National Flood Insurance Act of
1968 as now or 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 statute 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.
 
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located.  For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
 
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
 
“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government over any
Debtor, any Properties of a Debtor, any Agent, any Issuing Bank or any Lender.
 
“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereinafter in effect, including, without limitation,
Environmental Laws, Flood Insurance Regulations, energy regulations and
occupational, safety and health standards or controls, of any Governmental
Authority.
 
“Guaranteed Obligations” has the meaning set forth in Section 13.01.
 
“Guarantor Claims” has the meaning set forth in Section 13.12.
 
“Guarantors” means (a) Legacy Reserves Operating LP, (b) Legacy Reserves
Operating GP LLC, (c) Legacy Reserves Energy Services LLC, (d) Dew Gathering
LLC, (e) Pinnacle Gas Treating LLC, (f) the Parent Guarantors, (g) Legacy
Reserves Finance Corporation, (h) Legacy Reserves Services LLC, (i) Legacy
Reserves Marketing LLC and (j) each Material Domestic Subsidiary formed or
acquired during the term of this Agreement or any Domestic Subsidiary that is a
party to this Agreement and/or guarantees the Obligations pursuant to Section
8.14.
 
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“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations under
laws applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws
allow as of the date hereof.
 
“Hydrocarbon Interests” means all rights, titles, interests and estates 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” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
products refined or separated therefrom.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 
“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.04.
 
“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one month thereafter; provided
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
(b) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period and (c) no Interest Period may have a term which would extend
beyond the Termination Date. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest
Period.  For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
 
“Interim Period” means the period commencing on the Interim Facility Effective
Date and ending on (but excluding) the earlier to occur of (i) the Final
Facility Effective Date and (ii) the Maturity Date.
 
“Interim Facility Cap” means, as of any date of determination, $35,000,000;
provided that, if as of any such date of determination during the Interim
Period, the Aggregate Commitments are less than $35,000,000, the “Interim
Facility Cap” in effect on such date shall equal the amount of the Aggregate
Commitments in effect on such date.
 
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“Interim Facility Effective Date” has the meaning specified therefor in Section
6.01 .
 
“Interim Order” means the interim order of the Bankruptcy Court approving the
DIP Facility on an interim basis and entered by the Bankruptcy Court in the form
of Exhibit E, as the same may be amended, modified or supplemented from time to
time with the express written joinder or consent of the Agent, the Majority
Lenders and the Borrower.
 
“Interim Refinanced Loan Amount” means, as to each Refinancing Lender, the
amount set forth opposite such Refinancing Lender’s name on Annex I under the
caption “Interim Refinanced Loan Amounts”.
 
“Interim Refinanced Loans” has the meaning specified therefor in Section
2.01(b).
 
“Investment” means, for any Person:  (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition (including, without
limitation, any “short sale” or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit with, or advance, loan or capital contribution to,
assumption of Debt of, purchase or other acquisition of any other Debt or equity
participation or interest in, or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding ninety (90) days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business);
(c) the purchase or acquisition (in one or a series of transactions) of Property
of another Person that constitutes a business unit; or (d) the entering into of
any guarantee of, or other contingent obligation (including the deposit of any
Equity Interests to be sold) with respect to, Debt or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person.
 
“Issuing Bank” means (i) as to the Existing Letters of Credit, the issuing
lender thereof on the Petition Date and (ii) Wells Fargo, in its capacity as an
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.08(i).  Any Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank, in which case the term “Issuing Bank” shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
 
“LC Commitment” means, at any time, One Million dollars ($1,000,000).
 
“LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter
of Credit issued by such Issuing Bank.
 
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure of any New Money Lender at any time
shall be its Applicable Percentage of the total LC Exposure at such time.
 
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“Legacy GP” means Legacy Reserves GP, LLC, a Delaware limited liability company.
 
“Legacy Reserves Energy Services LLC” means Legacy Reserves Energy Services LLC,
a Texas limited liability company and a Wholly-Owned Subsidiary of the Borrower.
 
“Legacy Reserves Operating GP LLC” means Legacy Reserves Operating GP LLC, a
Delaware limited liability company, the general partner of Legacy Reserves
Operating LP and a Wholly-Owned Subsidiary of the Borrower.
 
“Legacy Reserves Operating LP” means Legacy Reserves Operating LP, a Delaware
limited partnership and a Wholly-Owned Subsidiary of the Borrower.
 
“Legacy Reserves Services LLC” means Legacy Reserves Services LLC, a Texas
limited liability company and a Wholly-Owned Subsidiary of the Borrower.
 
“Lenders” means, collectively, the New Money Lenders and the Refinancing
Lenders.
 
“Letter of Credit” means the Existing Letters of Credit and any letter of credit
issued pursuant to this Agreement.
 
“Letter of Credit Agreements” means all letter of credit applications and other
agreements (including any amendments, modifications or supplements thereto)
submitted by the Borrower, or entered into by the Borrower, with any Issuing
Bank relating to any Letter of Credit issued by such Issuing Bank.
 
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate per annum determined by the Agent to be the offered rate which
appears on the page of the Reuters Screen which displays the London interbank
offered rate administered by ICE Benchmark Administration Limited (such page
currently being the LIBOR01 page) (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such Service,
as determined by the Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that
such rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate (rounded upwards, if necessary, to the next 1/100th of 1%) at which dollar
deposits of an amount comparable to such Eurodollar Borrowing and for a maturity
comparable to such Interest Period are offered to the principal London office of
the Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period; provided that, if the LIBO Rate shall be
less than zero, such rate shall be deemed to be zero for the purposes of this
Agreement.
 
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“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of Oil
and Gas Properties.  The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations.  For the
purposes of this Agreement, the Debtors shall be deemed to be the owner of any
Property which they have acquired or hold subject to a conditional sale
agreement, or leases under a financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
in a transaction intended to create a financing.
 
“Loan Documents” means this Agreement, the Notes, the Letter of Credit
Agreements, the Letters of Credit, the Security Instruments, the Fee Letter and
all other agreements, instruments, consents and certificates heretofore and
hereafter executed and delivered by the Borrower, any other Loan Party and any
of their respective Affiliates in connection with this Agreement.
 
“Loan Guarantee” means Article XIII of this Agreement.
 
“Loan Parties” means collectively, the Borrower and each Guarantor.
 
“Loans” means, individually, any New Money Loan or Refinanced Loan made by any
Lender pursuant to this Agreement, and collectively, to New Money Loans and
Refinanced Loans made by the Lenders to the Borrower.
 
“Majority Lenders” means, at any time, Lenders having Loans, LC Exposure and
unused Commitments representing more than 50% of the sum of all Loans
outstanding, LC Exposure and unused Commitments at such time (without regard to
any sale by a Lender of a participation in any Loan under Section 12.04(c));
provided that Loans, LC Exposure and unused Commitment of any Defaulting Lender
at such time shall be disregarded for purposes of making a determination of
Majority Lenders.
 
“Maximum Liability” has the meaning set forth in Section 13.09.
 
“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, operations, Property, liabilities (actual or
contingent)  or condition (financial or otherwise) of the Borrower and its
Guarantors, taken as a whole, other than any change, event or occurrence,
arising individually or in the aggregate, from events that could reasonably be
expected to result from the filing or commencement of the Bankruptcy Cases or
the announcement of the filing or commencement of the Bankruptcy Cases, (b) the
ability of any Debtor to perform any of its obligations under any Loan Document
to which it is a party (including, without limitation, payment and performance
of the Obligations), (c) the validity or enforceability of any Loan Document or
the Obligations or (d) the rights and remedies of, or benefits available to, the
Agent, any other Agent, the Issuing Bank or any Lender under any Loan Document.
 
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“Material Domestic Subsidiary” means, as of any date, any Domestic Subsidiary
that (a) is a Wholly-Owned Subsidiary and (b) together with its Subsidiaries,
owns Property having a fair market value of $2,000,000 or more; provided that,
notwithstanding the foregoing, each Domestic Subsidiary that owns any natural
gas pipelines or any other gathering systems or pipelines or midstream assets
shall be a Material Domestic Subsidiary.
 
“Material Indebtedness” means Debt (other than the Loans, Letters of Credit and
the Loan Guarantee), or obligations in respect of one or more Swap Agreements,
of any one or more of the Debtors in an aggregate principal amount exceeding
$1,000,000.  For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any of its Subsidiaries in respect
of any Swap Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such time.
 
“Material Permian Acreage” means Oil and Gas Properties owned by any Debtor in
Martin, Reeves, Winkler, Midland, Pecos, Howard, Glasscock, Reagan, Upton,
Irion, Crockett, Loving and Andrews Counties, Texas and Lea County, New Mexico
except for any such Oil and Gas Property that the Agent expressly agrees in
writing is not Material Permian Acreage.
 
“Maturity Date” means the earliest of (a) the Scheduled Maturity Date; (b) the
effective date of an Approved Plan of Reorganization; (c) the closing of a sale
of substantially all of the equity or assets of the Debtors (unless consummated
pursuant to an Approved Plan of Reorganization); and (d) the termination of the
DIP Facility during the continuation of an Event of Default, or termination
under this Agreement or the applicable DIP Order.
 
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.
 
“Mortgaged Property” means, as of any date of determination, any Property owned
by the Borrower or any Guarantor, which is subject to a Lien and security
interest in favor of the Agent (or its designee pursuant to any mortgage and/or
any other Loan Document) and existing under the terms of the Existing Security
Instruments to secure the Existing Obligations.
 
“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
section 3(37) or 4001 (a)(3) of ERISA.
 
“Net Cash Proceeds” means (a) in connection with any issuance or sale of Equity
Interests or Debt securities or instruments or the incurrence of loans, the cash
proceeds received from such issuance or incurrence, net of attorneys’ fees,
investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith or (b) with respect to any disposition, the cash proceeds
(including, without limitation, cash or cash equivalents subsequently received
in respect of noncash consideration initially received), net of (i) direct
selling expenses (including reasonable broker’s fees or commissions, legal,
accounting and investment banking fees and expenses, title insurance premiums,
survey costs, transfer and similar taxes and the Borrower’s good faith estimate
of income taxes paid or payable in connection with such sale), (ii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under
any indemnification obligations or purchase price adjustment associated with
such disposition (provided that, to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net Cash
Proceeds), (iii) amounts paid in respect of the termination of Swap Agreements
in respect of notional volumes or amounts corresponding to the property subject
of such disposition or any Debt being repaid under clause (iv), (iv) the
principal amount, premium or penalty, if any, interest and other amounts on any
Debt permitted hereunder that is secured by a Lien permitted hereunder (other
than any Lien pursuant to a Security Instrument) on the asset disposed of in
such disposition and required to be repaid with such proceeds (other than any
such Debt assumed by the purchaser of such asset) and (v) the principal amount
(together with interest and other amounts paid thereon) of any Borrowings that
are repaid with such proceeds in order to reduce or eliminate any Revolving
Credit Exposure in excess of the then-effective Available Commitments (and if
the Revolving Credit Exposure exceeds the then-effective Available Commitments
after prepaying all of the Borrowings as a result of any LC Exposure, any cash
collateral paid with such proceeds in order to reduce or eliminate any Revolving
Credit Exposure in excess of the then-effective Available Commitments).

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“New Money Lenders” means the Persons listed on Annex II and any Person that
becomes a party hereto pursuant to an Assignment and Assumption (other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption) with respect to a New Money Loan or a Commitment and, as the context
requires, includes any Issuing Bank and, in each case, includes their respective
successors and permitted assigns.
 
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.
 
“Non-Paying Guarantor” has the meaning set forth in Section 13.10.
 
“Notes” means the promissory notes of the Borrower described in Section 2.02(d)
and being substantially in the form of Exhibit A, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.
 
“Obligated Party” has the meaning set forth in Section 13.10.
 
“Obligations” means any and all amounts owing or to be owing by the Borrower or
any other Debtor (including without limitation, all debts, liabilities,
obligations, covenants and duties of each such Person, 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 Debtor of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, including:  (a) to the Agent, the Issuing Bank, any Lender or
any other Secured Party under, or in connection with, any Loan Document; (b) all
Secured Swap Obligations; (c) all Secured Cash Management Obligations; and (d)
all renewals, extensions and/or rearrangements of any of the above; provided
that, notwithstanding anything to the contrary herein or in any Loan Document,
“Obligations” shall not include, with respect to any Debtor, any Excluded Swap
Obligations of such Debtor.
 
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“OFAC” means the U.S. Department of the Treasury Office of Foreign Assets
Control.
 
“Oil and Gas Properties” means (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 (including without limitation 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 hereinafter 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,
buildings, structures, separators, liquid extraction, treating and processing
facilities, compressors, pumps, pumping units, field gathering systems, tanks
and tank batteries, fixtures, valves, fittings, machinery and parts, engines,
boilers, meters, apparatus, equipment, appliances, tools, implements, cables,
wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements
and servitudes together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing.  Unless otherwise
indicated herein, each reference to the term “Oil and Gas Properties” shall mean
Oil and Gas Properties of any one or more Debtors, as the context requires.
 
“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or Property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement and any other Loan Document.
 
“Parent” means Legacy Reserves Inc., a Delaware corporation.
 
“Parent Guarantors” means, collectively, the Parent and Legacy GP.
 
“Participant” has the meaning set forth in Section 12.04(c)(i).
 
“Participant Register” has the meaning set forth in Section 12.04(c)(ii).
 
“Paying Guarantor” has the meaning set forth in Section 13.10.
 
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
 
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“Permitted Convertible Note Cash Payments” means (a) any payment in cash of a
conversion incentive in an amount not to exceed one year’s interest that would
otherwise be payable pursuant to and in accordance with the Existing Senior
Indenture governing the Existing Convertible Senior Notes in connection with the
early cashless conversion of such Existing Convertible Senior Notes into common
Equity Interests and (b) any cash payment in lieu of the issuance of fractional
shares pursuant to and in accordance with the Existing Senior Indenture
governing the Existing Convertible Senior Notes in connection with the cashless
conversion of the Existing Convertible Senior Notes into common Equity
Interests.
 
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Pinnacle Gas Treating LLC” means Pinnacle Gas Treating LLC, a Texas limited
liability company and a Wholly-Owned Subsidiary of the Borrower.
 
“Plan” means any employee pension benefit plan, as defined in section 3(2) of
ERISA, which (a) is currently or hereafter sponsored, maintained or contributed
to by any Debtor or an ERISA Affiliate or (b) was at any time during the six
calendar years preceding the date hereof, sponsored, maintained or contributed
to by any Debtor or an ERISA Affiliate.
 
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Wells Fargo as its prime rate in effect at its principal office in
New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.  Such
rate is set by Wells Fargo as a general reference rate of interest, taking into
account such factors as Wells Fargo may deem appropriate; it being understood
that many of Wells Fargo’s commercial or other loans are priced in relation to
such rate, that it is not necessarily the lowest or best rate actually charged
to any customer and that Wells Fargo may make various commercial or other loans
at rates of interest having no relationship to such rate.
 
“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.
 
“Proposed Plan” has the meaning set forth in Section 12.02(c).
 
“Proved Developed Producing Properties” means Oil and Gas Properties which are
categorized as “Proved Reserves” that are both “Developed” and “Producing”, as
such terms are defined in the Definitions for Oil and Gas Reserves as
promulgated by the Society of Petroleum Engineers (or any generally recognized
successor) as in effect at the time in question.
 
“Redemption” means with respect to any Debt (including, without limitation, the
Existing Convertible Senior Notes), the repurchase, redemption, prepayment,
repayment or defeasance or any other acquisition or retirement for value (or the
segregation of funds with respect to any of the foregoing) of any such Debt, but
excluding, for the avoidance of doubt, the cashless conversion of the Existing
Convertible Senior Notes into common Equity Interests in accordance with the
terms of the Existing Senior Indenture governing the Existing Convertible Senior
Notes.  For the avoidance of doubt, the cash settlement or any other payment in
cash of any conversion obligation under the Existing Convertible Senior Notes
(whether pursuant to Section 11.02(b) of the Existing Senior Indenture governing
the Existing Convertible Notes or otherwise, but excluding any Permitted
Convertible Note Cash Payments) shall constitute a Redemption of the Existing
Convertible Senior Notes.  “Redeem” has the correlative meaning thereto.
 
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“Refinanced Loan Amount” means, as to each Refinancing Lender, the sum of the
Interim Refinanced Loan Amount and Final Refinanced Loan Amount, as set forth
opposite such Refinancing Lender’s name on Annex I under the caption “Refinanced
Loan Amount”.
 
“Refinancing Lenders” means the Persons listed on Annex I (as updated by the
Agent from time to time on or prior to the Final Facility Effective Date in
accordance Section 2.01(b)) and any Person that becomes a party hereto pursuant
to an Assignment and Assumption (other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption) with respect to a
Refinanced Loan and includes their respective successors and permitted assigns.
 
“Register” has the meaning assigned such term in Section 12.04(b)(iv).
 
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and such
Person’s Affiliates.
 
“Remedial Work” has the meaning assigned such term in Section 8.10(a).
 
“Reporting Date” shall have the meaning assigned to such term in Section
8.01(t)(ii).
 
“Required Lenders” means, Lenders having Loans, LC Exposure and unused
Commitments representing at least sixty-six and two-thirds percent (66-2/3%) of
the sum of all Loans outstanding, LC Exposure and unused Commitments at such
time (without regard to any sale by a Lender of a participation in any Loan
under Section 12.04(c)); provided that Loans, LC Exposure and unused Commitment
of any Defaulting Lender at such time shall be disregarded for purposes of
making a determination of Required Lenders.
 
“Required Refinanced Lenders” has the meaning set forth in Section 12.02(c).
 
“Reserve Report” means a report, in form and substance reasonably satisfactory
to the Agent, setting forth, as of each January 1st or July 1st, the oil and gas
reserves attributable to the Oil and Gas Properties of the Debtors, 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 economic assumptions consistent with the Agent’s lending
requirements at the time.
 
“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such Person.  Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.
 
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“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in any
Debtor, or any payment (whether in cash, securities or other Property),
including any sinking fund or similar deposit, on account of the purchase,
Redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in such Debtor or any option, warrant or other right to acquire
any such Equity Interests in such Debtor.
 
“Revolving Credit Exposure” means, with respect to any New Money Lender at any
time, the sum of the outstanding principal amount of such New Money Lender’s New
Money Loans and its LC Exposure at such time.
 
“Sanctioned Country” means, at any time, a country or territory which is itself,
or whose government is, the subject or target of any Sanctions broadly
restricting or prohibiting dealing with such country, territory or government
(at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and
Syria).
 
“Sanctioned Person” means, at any time, any Person with whom dealings are
restricted or prohibited under Sanctions, including (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the United States
(including by the Office of Foreign Assets Control of the U.S. Department of the
Treasury, the U.S. Department of State, or the U.S. Department of Commerce), or
by the United Nations Security Council, the European Union or any EU member
state, or Her Majesty’s Treasury, (b) any Person located, operating, organized
or resident in a Sanctioned Country or (c) any Person directly or indirectly
owned or controlled by any such Person or Persons.
 
“Sanctions” means economic or financial sanctions or trade embargoes or
restricted measures 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 European Union or Her
Majesty’s Treasury of the United Kingdom.
 
“Scheduled Maturity Date” means the date that is the eight (8) month anniversary
of the Petition Date.
 
“Secured Cash Management Agreement” means a Cash Management Agreement between
(a) any Debtor and (b) a Secured Cash Management Provider.
 
“Secured Cash Management Obligations” means any and all amounts and other
obligations owing by any Debtor to any Secured Cash Management Provider under
any Secured Cash Management Agreement.
 
“Secured Cash Management Provider” means a Lender, an Affiliate of a Lender, the
Agent or an Affiliate of the Agent; provided that, so long as any Lender is a
Defaulting Lender, such Lender will not be a Secured Cash Management Provider
with respect to any Cash Management Agreement entered into while such Lender was
a Defaulting Lender.
 
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“Secured Obligations” means all Obligations, together with all (a) Secured Cash
Management Obligations and (b) Secured Swap Obligations owing to one or more
Lenders or their respective Affiliates.
 
“Secured Parties” means the Lenders, the Issuing Bank, any Secured Swap Party,
any Secured Cash Management Provider and any other Person holding Obligations
secured by the Liens granted under any Loan Document, including pursuant to the
DIP Orders.
 
“Secured Swap Agreement” means any Swap Agreement between any Debtor and any
Person that is entered into prior to the time, or during the time, that such
Person was, a Lender or an Affiliate of a Lender (including any such Swap
Agreement in existence prior to the date hereof), even if such Person
subsequently ceases to be a Lender (or an Affiliate of a Lender) for any reason
(any such Person, a “Secured Swap Party”); provided that, for the avoidance of
doubt, the term “Secured Swap Agreement” shall not include any Swap Agreement or
transactions under any Swap Agreement entered into after the time that such
Secured Swap Party ceases to be a Lender or an Affiliate of a Lender.
 
“Secured Swap Obligations” means all amounts and other obligations owing to any
Secured Swap Party under any Secured Swap Agreement (other than Excluded Swap
Obligations).
 
“Secured Swap Party” has the meaning assigned to such term in the definition of
Secured Swap Agreement.
 
“Securities Account” has the meaning assigned to such term in the UCC.
 
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and any regulations promulgated
thereunder.
 
“Security Instruments” means, collectively, each security agreement, the DIP
Orders, the Loan Guarantee, mortgages, deeds of trust and any and all other
agreements, instruments, consents or certificates now or hereafter executed and
delivered by the Borrower or any other Person (other than Secured Cash
Management Agreements, Secured Swap Agreements or participation or similar
agreements between any Lender and any other lender or creditor with respect to
any Obligations pursuant to this Agreement) in connection with, or as security
for the payment or performance of the Obligations, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.
 
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.
 
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject with respect to the
Adjusted LIBO Rate for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such Regulation D. 
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation.  The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
 
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“Subsidiary” means, with respect to any Person (the “parent”), (a) any other
Person (i) of which at least a majority of the outstanding Equity Interests is
at the time directly or indirectly owned by the parent or one or more of its
Subsidiaries or by the parent and one or more of its Subsidiaries or (ii) of
which at least a majority of the outstanding Equity Interests having by the
terms thereof ordinary voting power to elect a majority of the board of
directors, manager or other governing body of such Person (irrespective of
whether or not at the time Equity Interests of any other class or classes of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the parent or one or more of its Subsidiaries or by the parent and one or more
of its Subsidiaries and (b) any partnership of which the parent or any of its
Subsidiaries is a general partner; provided that, for the avoidance of doubt,
the term “Subsidiary” shall exclude Binger.  Unless otherwise indicated herein,
each reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower.
 
“Subsidiary Guarantor” means any Subsidiary of the Borrower that is a Guarantor.
 
“Superpriority Claim” means a superpriority administrative expense claim
pursuant to section 364(c)(1) of the Bankruptcy Code against a Debtor in any of
the Bankruptcy Cases having priority over any or all administrative expense
claims, adequate protection and other diminution claims, priority and other
unsecured claims, and all other claims against a Debtor or its estate, including
claims of the kind specified in, or otherwise arising or ordered under, any
sections of the Bankruptcy Code (including, without limitation, sections 105(a),
326, 328, 330, 331, 503(a), 503(b), 506(c), 507, 546, 552(b), 726, 1113 and/or
1114 thereof), whether or not such claim or expenses may become secured by a
judgment Lien or other non-consensual Lien, levy or attachment.
 
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement, whether exchange
traded, “over-the-counter” or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of any Debtor shall be a Swap
Agreement.
 
“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S. federal income taxes, if
the lessee in respect thereof is obligated to either purchase for an amount in
excess of, or pay upon early termination an amount in excess of, 80% of the
residual value of the Property subject to such operating lease upon expiration
or early termination of such lease.
 
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“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges, assessments, fees or withholdings (including backup
withholding) imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.
 
“Termination Date” means the earliest to occur of: (a) the Maturity Date; (b)
the date of the payment in full, in cash, of all Obligations (and the
termination of all Commitments and the LC Commitment in accordance with the
terms hereof); and (c) the date of termination of the Commitments (including the
LC Commitment) and/or the acceleration of all of the Obligations under this
Agreement and the other Loan Documents following the occurrence and continuance
of an Event of Default in accordance with Section 10.02.
 
“Total Proved Reserves” means Oil and Gas Properties which are categorized as
“Proved Reserves”, as such term is defined in the Definitions for Oil and Gas
Reserves as promulgated by the Society of Petroleum Engineers (or any generally
recognized successor) as in effect at the time in question.
 
“Transactions” means, with respect to (a) the Borrower, the execution, delivery
and performance by the Borrower of this Agreement, and each other Loan Document
to which it is a party, borrowing of Loans, the use of the proceeds thereof and
the issuance of Letters of Credit hereunder, and the grant of Liens by the
Borrower on Mortgaged Properties and other Properties pursuant to the Security
Instruments and (b) any Guarantor, the execution, delivery and performance by
such Guarantor of each Loan Document to which it is a party, the guaranteeing of
the Obligations and the other obligations under the Loan Guarantee by such
Guarantor and such Guarantor’s grant of the security interests and provision of
collateral under the Security Instruments, and the grant of Liens by such
Guarantor on Mortgaged Properties and other Properties pursuant to the Security
Instruments.
 
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.
 
“UCC” means the Uniform Commercial Code as in effect in the State of Texas.
 
“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.
 
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. 107-56), as amended.
 
“Variance Testing Date” shall have the meaning assigned to such term in Section
8.01(t)(iii).
 
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“Variance Testing Period” shall have the meaning assigned to such term in
Section 8.01(t)(iii).
 
“Volumetric Production Payments” means sales of Hydrocarbons in place that
require the Borrower or any Guarantor to deliver Hydrocarbons at some future
time without receipt by such Borrower or Guarantor at such future time of full
payment therefor.
 
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.
 
“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower or one or
more of the Wholly-Owned Subsidiaries or are owned by the Borrower and one or
more of the Wholly-Owned Subsidiaries.
 
Section 1.03        Types of Loans and Borrowings.  For purposes of this
Agreement, Loans and Borrowings, respectively, may be classified and referred to
by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).
 
Section 1.04       Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth in the
Loan Documents herein), (b) any reference herein to any law shall be construed
as referring to such law as amended, modified, codified or reenacted, in whole
or in part, and in effect from time to time, (c) any reference herein to any
Person shall be construed to include such Person’s successors and assigns
(subject to the restrictions contained in the Loan Documents herein), (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) with respect to the determination of any time period, the
word “from” means “from and including” and the word “to” means “to and
including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Annexes, Exhibits and Schedules to, this Agreement.  No provision of this
Agreement or any other Loan Document shall be interpreted or construed against
any Person solely because such Person or its legal representative drafted such
provision.
 
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Section 1.05       Accounting Terms and Determinations; GAAP.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent with the
Financial Statements except for changes in which the Borrower’s independent
certified public accountants concur and which are disclosed to Agent on the next
date on which financial statements are required to be delivered to the Lenders
pursuant to Section 8.01(a); provided that, unless the Borrower and the Majority
Lenders shall otherwise agree in writing, no such change shall modify or affect
the manner in which compliance with the covenants contained herein is computed
such that all such computations shall be conducted utilizing financial
information presented consistently with prior periods.
 
Section 1.06         [Reserved].
 
Section 1.07         Divisions.  For all purposes under the Loan Documents, in
connection with any division or plan of division under Delaware law (or any
comparable event under a different jurisdiction’s laws):  (a) if any asset,
right, obligation or liability of any Person becomes the asset, right,
obligation or liability of a different Person, then it shall be deemed to have
been transferred from the original Person to the subsequent Person, and (b) if
any new Person comes into existence, such new Person shall be deemed to have
been organized on the first date of its existence by the holders of its Equity
Interests at such time.
 
ARTICLE II
THE CREDITS
 
Section 2.01         Commitments.
 
(a)         Subject to the applicable terms and conditions and relying upon the
representations and warranties herein set forth, each New Money Lender agrees to
make new money loans (the “New Money Loans”) to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in: (i) such Lender’s Revolving Credit Exposure exceeding such Lender’s
Commitment, (ii) during the Interim Period, such Lender’s Revolving Credit
Exposure exceeding its Applicable Percentage of the Interim Facility Cap, or
(iii) the total Revolving Credit Exposure of all New Money Lenders exceeding the
then-effective Available Commitments.  Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may borrow, repay and
reborrow the New Money Loans.
 
(b)         On the (i) Interim Facility Effective Date, each Refinancing Lender
shall become entitled to roll up an aggregate principal amount of Existing Loans
held by such Lender equal to such Refinancing Lender’s Interim Refinanced Loan
Amount as set forth opposite such Refinancing Lender’s name on Annex I under
“Interim Refinanced Loan Amount” into roll-up loans hereunder (the “Interim
Refinanced Loans”) and (ii) Final Facility Effective Date, each Refinancing
Lender shall become entitled to roll up an aggregate principal amount of
Existing Loans held by such Lender equal to such Refinancing Lender’s Final
Refinanced Loan Amount as set forth opposite such Refinancing Lender’s name on
Annex I under “Final Refinanced Loan Amount” into roll-up loans hereunder (the
“Final Refinanced Loans” and, together with the Interim Refinanced Loans,
collectively the “Refinanced Loans”).  Subject to the terms and conditions set
forth herein and without any further action by any party to this Agreement, each
Refinancing Lender’s (i) Interim Refinanced Loans shall, from and after the
Interim Facility Effective Date, and (ii) Final Refinanced Loans shall, from and
after the Final Facility Effective Date, be designated as Refinanced Loans and
administered hereunder.  Such designation is not intended to and shall not
constitute a payment on account of or a novation of the applicable Existing
Loans, which shall continue to be outstanding under the Existing Credit
Agreement and administered under this Agreement as Refinanced Loans.  As a
consequence of such designation, and solely to enable the Refinanced Loans to be
administered hereunder, effective with such designation, each Refinanced Loan
that is the subject of such designation shall from and after such designation
constitute a Refinanced Loan hereunder; provided that, for the avoidance of
doubt, until any Existing Loan has been designated as a Refinanced Loan
hereunder and approved by the applicable DIP Order, the Refinanced Loans shall
continue to be guaranteed by the Guarantors under the Existing Guaranty
Agreement and secured by and entitled to the benefits of all Liens and security
interests created and arising under the Existing Security Instruments, which
Liens and security interests shall remain in full force and effect on a
continuous basis, unimpaired, uninterrupted and undischarged, and having the
same perfected status and priority.  Each such designation shall be applied on a
pro rata basis to the Existing Loans held by such Refinancing Lender under the
Existing Credit Agreement to the extent rolled up under this Agreement as set
forth on Annex I.  For the avoidance of doubt, each Refinancing Lender
acknowledges and agrees that, by accepting the benefits of this Agreement, on
the Interim Facility Effective Date and Final Facility Effective Date, as
applicable, each Existing Lender rolling up loans under this Agreement shall
become a party to this Agreement as a Refinancing Lender hereunder by executing
and delivering a counterpart to this Agreement.  Amounts rolled up under this
Section 2.01(b) and repaid or prepaid may not be reborrowed.  The Agent shall
update Annex I on each of the Interim Facility Effective Date and the Final
Facility Effective Date to reflect each Refinancing Lender’s Refinanced Loan
Amount (which Refinanced Loan Amount listed on Annex I shall be conclusive
absent manifest error) and deliver such updated Annex I to the Borrower and the
Refinancing Lenders, whereupon such updated Annex I shall constitute Annex I for
all purposes hereunder.  Notwithstanding anything to the contrary herein, the
Refinanced Loans shall be ABR Loans and shall bear interest at the Alternate
Base Rate plus the Applicable Margin.
 
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Section 2.02         Loans and Borrowings.
 
(a)          Borrowings; Several Obligations.  Each New Money Loan shall be made
as part of a Borrowing consisting of New Money Loans made by the New Money
Lenders ratably in accordance with their respective Commitments.  The failure of
any Lender to make any New Money Loan required to be made by it shall not
relieve any other New Money Lender of its obligations hereunder; provided that
the Commitments are several and no New Money Lender shall be responsible for any
other Lender’s failure to make Loans as required hereunder.
 
(b)         Types of Loans.  Subject to Section 3.03, each Borrowing of New
Money Loans shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith.  Each New Money Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such New Money Lender to make such New Money Loan; provided that
any exercise of such option shall not affect the obligation of the Borrower to
repay such New Money Loan in accordance with the terms of this Agreement.
 
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(c)         Minimum Amounts; Limitation on Number of Borrowings.  At the
commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000; provided that any Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.08(e).  Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of eight (8) Eurodollar Borrowings outstanding. 
Notwithstanding any other provision of this Agreement, the Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.
 
(d)         Loans, Obligations and Notes.  The Obligations and credit extensions
made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and by the Agent in the ordinary course of business. 
The accounts or records maintained by the Agent and each Lender shall be
conclusive absent manifest error of the amount of the credit extensions made by
such Lender to the Borrower and the interest and payments thereon. In the event
of any conflict between the accounts and records maintained by any Lender and
the accounts and records of the Agent in respect of such matters, the accounts
and records of the Agent shall control in the absence of manifest error.  Upon
the request of any Lender made through the Agent, the Borrower shall execute and
deliver to such Lender (through the Agent) a Note, which shall evidence such
Lender’s Loans in addition to such accounts or records.  Each Lender may attach
schedules to its Note and endorse the date, Type (if applicable), and amount and
maturity of its Loans and payments made with respect thereto.  Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the Obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations.
 
Section 2.03         Requests for Borrowings.  To request a Borrowing of New
Money Loans, the Borrower shall notify the Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Houston
time, three (3) Business Days before the date of the proposed Borrowing or (b)
in the case of an ABR Borrowing, not later than 12:00 pm noon, Houston time, on
the Business Day prior to the proposed Borrowing; provided that no such notice
shall be required for any deemed request of a Eurodollar Borrowing to finance
the reimbursement of an LC Disbursement as provided in Section 2.08(e).  Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Agent of a written Borrowing
Request in a form approved by the Agent substantially in the form of Exhibit B
and signed by the Borrower.  Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
 
(a)          the aggregate amount of the requested Borrowing;
 
(b)          the date of such Borrowing, which shall be a Business Day;
 
(c)          whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
 
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(d)          in the case of a Eurodollar Borrowing, the Interest Period to be
applicable thereto, which shall be a period of one month;
 
(e)          the amount of (i) the then-effective Aggregate Commitments, (ii)
the amount of Available Funds and the then-effective Available Commitments, (C)
the current total Revolving Credit Exposures (without regard to the requested
Borrowing) and (D) the pro forma total Revolving Credit Exposures (giving effect
to the requested Borrowing);
 
(f)          the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.05;
 
Each Borrowing Request shall constitute a representation that (a) the amount of
the requested Borrowing shall not cause the total Revolving Credit Exposures to
exceed the total Available Commitments.  Promptly following receipt of a
Borrowing Request in accordance with this Section 2.03, the Agent shall advise
each Lender of the details thereof and of the amount of such Lender’s Loan to be
made as part of the requested Borrowing.
 
Section 2.04         Interest Elections.
 
(a)          Conversion and Continuance.  Except as provided in Section 2.08,
each Borrowing of New Money Loans initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period of one month.  Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing as provided in this Section 2.04.  The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
New Money Loans comprising such Borrowing, and the New Money Loans comprising
each such portion shall be considered a separate Borrowing.
 
(b)          Interest Election Requests.  To make an election pursuant to this
Section 2.04, the Borrower shall notify the Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election.  Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Agent of a written Interest Election Request in a
form approved by the Agent and signed by the Borrower.
 
(c)          Information in Interest Election Requests.  Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.02:
 
(i)          the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to Section 2.04(c)(iii) and
(iv) shall be specified for each resulting Borrowing);
 
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(ii)         the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
 
(iii)        whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
 
(iv)       if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which, in
all cases, whether or not so indicated in such Interest Election Request, shall
be a period of one month.
 
If any such Interest Election Request does not specify a Type, then the Borrower
shall be deemed to have selected a Eurodollar Borrowing with an initial Interest
Period of one month.
 
(d)          Notice to New Money Lenders by the Agent.  Promptly following
receipt of an Interest Election Request, the Agent shall advise each New Money
Lender of the details thereof and of such Lender’s portion of each resulting
Borrowing.
 
(e)         Effect of Failure to Deliver Timely Interest Election Request and
Events of Default.  If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be continued as
a Eurodollar Loan having an Interest Period of one month.  Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is
continuing:  (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing (and any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
 
Section 2.05         Funding of Borrowings.
 
(a)          Funding by Lenders.  Each Lender shall make each New Money Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., Houston time, to the account of the
Agent most recently designated by it for such purpose by notice to the Lenders. 
The Agent will make such New Money Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
and designated by the Borrower in the applicable Borrowing Request; provided
that Eurodollar Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.08(e) shall be remitted by the Agent to the Issuing Bank
that made such LC Disbursement.  Nothing herein shall be deemed to obligate any
Lender to obtain the funds for its New Money Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for its New Money Loan in any particular place or manner.
 
(b)          Presumption of Funding by the Lenders.  Unless the Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Agent such Lender’s share of such
Borrowing, the Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.05(a) and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Agent, then the applicable Lender and the Borrower severally
agree to pay to the Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the Agent, at
(i) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of a
payment to be made by the Borrower, the interest rate applicable to ABR Loans. 
If such Lender pays such amount to the Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.
 
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Section 2.06         Termination and Reduction of Aggregate Commitments.
 
(a)          Scheduled Termination of Commitments.  Unless previously
terminated, the Commitments shall terminate on the Maturity Date.  If at any
time the Aggregate Commitments is terminated or reduced to zero, then the
Commitments shall terminate on the effective date of such termination or
reduction.
 
(b)          Optional Termination and Reduction of Aggregate Credit Amounts.
 
(i)         The Borrower may at any time terminate, or from time to time reduce,
the Aggregate Commitments; provided that (A) each reduction of the Aggregate
Commitments shall be in an amount that is an integral multiple of $500,000 and
not less than $1,000,000, and (B) the Borrower shall not terminate or reduce the
Aggregate Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 3.04(c), the total Revolving Credit
Exposures would exceed the Available Commitments.
 
(ii)        The Borrower shall notify the Agent of any election to terminate or
reduce the Aggregate Commitments under Section 2.06(b)(i) at least three (3)
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly following
receipt of any notice, the Agent shall advise the Lenders of the contents
thereof.  Each notice delivered by the Borrower pursuant to this Section
2.06(b)(ii) shall be irrevocable.  Any termination or reduction of the Aggregate
Commitments shall be permanent and may not be reinstated.  Each reduction of the
Aggregate Commitments shall be made ratably among the Lenders in accordance with
each Lender’s Applicable Percentage.
 
Section 2.07         [Reserved].
 
Section 2.08         Letters of Credit.
 
(a)         General.  On the Interim Facility Effective Date, the Existing
Letters of Credit shall be deemed to have been issued under the New Money
Facility pursuant to, and shall constitute Letters of Credit for all purposes
under, this Agreement.  Subject to the terms and conditions set forth herein,
the Borrower may on and after the Interim Facility Effective Date request any
Issuing Bank to issue Letters of Credit for its own account or for the account
of any Debtor, in a form reasonably acceptable to the Agent and such Issuing
Bank, at any time and from time to time during the Availability Period; provided
that the Borrower may not request the issuance, amendment, renewal or extension
of Letters of Credit hereunder if after giving effect to such issuance,
amendment, renewal or extension the aggregate Revolving Credit Exposures would
exceed the Available Commitments.  In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
 
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(b)         Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.  To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
deliver as permitted by Section 12.01(a) (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to any Issuing Bank and the Agent (not less than five (5) Business Days in
advance of the requested date of issuance, amendment, renewal or extension) a
notice:
 
(i)        requesting the issuance of a Letter of Credit or identifying the
Letter of Credit issued by such Issuing Bank to be amended, renewed or extended;
 
(ii)         specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day);
 
(iii)        specifying the date on which such Letter of Credit is to expire
(which shall comply with Section 2.08(c));
 
(iv)        specifying the amount of such Letter of Credit;
 
(v)        specifying the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit; and
 
(vi)       specifying the current total Revolving Credit Exposures (without
regard to the requested Letter of Credit or the requested amendment, renewal or
extension of an outstanding Letter of Credit) and the pro forma total Revolving
Credit Exposures (giving effect to the requested Letter of Credit or the
requested amendment, renewal or extension of an outstanding Letter of Credit).
 
Each notice shall constitute a representation that after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, (A) the LC
Exposure shall not exceed the LC Commitment and (B) the total Revolving Credit
Exposures shall not exceed the then-effective Available Commitments.
 
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If requested by any Issuing Bank, the Borrower also shall submit a letter of
credit application on such Issuing Bank’s standard form in connection with any
request for a Letter of Credit.
 
(c)         Expiration Date.  Each Letter of Credit shall expire at or prior to
the close of business no later than ten (10) days prior to the Scheduled
Maturity Date.
 
(d)         Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank that issues such Letter of Credit
or the New Money Lenders, each Issuing Bank that issues a Letter of Credit
hereunder hereby grants to each New Money Lender, and each New Money Lender
hereby acquires from such Issuing Bank, a participation in such Letter of Credit
equal to such New Money Lender’s Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit.  In consideration and in
furtherance of the foregoing, each New Money Lender hereby absolutely and
unconditionally agrees to pay to the Agent, for the account of any Issuing Bank
that issues a Letter of Credit hereunder, such New Money Lender’s Applicable
Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed
by the Borrower on the date due as provided in Section 2.08(e), or of any
reimbursement payment required to be refunded to the Borrower for any reason. 
Each New Money Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 2.08(d) in respect of Letters of Credit
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default, aggregate Revolving
Credit Exposures exceeding the Available Commitments or reduction or termination
of the Aggregate Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
 
(e)         Reimbursement.  If any Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit issued by such Issuing Bank, the Borrower shall
reimburse such LC Disbursement by paying to the Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., Houston time, on the third day after such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 9:00 a.m., Houston time, on such date, or, if such notice
has not been received by the Borrower prior to such time on such date, then not
later than 1:00 p.m., Houston time, on (i) the third day after the Borrower
receives such notice, if such notice is received prior to 9:00 a.m., Houston
time, on the day of receipt, or (ii) the Business Day immediately following the
third day after the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that if such LC
Disbursement is less than or equal to $1,000,000, the Borrower shall, subject to
the conditions to Borrowing set forth herein, be deemed to have requested, and
the Borrower does hereby request under such circumstances, that such payment be
financed with a Eurodollar Borrowing with an Interest Period of one month in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting Eurodollar
Borrowing.  If the Borrower fails to make such payment when due, the Agent shall
notify each New Money Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such New Money Lender’s Applicable
Percentage thereof.  Promptly following receipt of such notice, each New Money
Lender shall pay to the Agent its Applicable Percentage of the payment then due
from the Borrower, in the same manner as provided in Section 2.05 with respect
to New Money Loans made by such New Money Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the Agent
shall promptly pay to the Issuing Bank that issued such Letter of Credit the
amounts so received by it from the New Money Lenders.  Promptly following
receipt by the Agent of any payment from the Borrower pursuant to this Section
2.08(e), the Agent shall distribute such payment to the Issuing Bank that issued
such Letter of Credit or, to the extent that New Money Lenders have made
payments pursuant to this Section 2.08(e) to reimburse such Issuing Bank, then
to such New Money Lenders and such Issuing Bank as their interests may appear. 
Any payment made by a New Money Lender pursuant to this Section 2.08(e) to
reimburse any Issuing Bank for any LC Disbursement (other than the funding of
Eurodollar Loans as contemplated above) shall not constitute a New Money Loan
and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.  Any LC Disbursement not reimbursed by the Borrower or funded as a
New Money Loan prior to 1:00 p.m., Houston time on the date such Disbursement is
made, shall bear interest for each such day such Disbursement is outstanding at
rate per annum then applicable to Eurodollar Loans.
 
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(f)        Obligations Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by any Issuing Bank under a
Letter of Credit issued by such Issuing Bank against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit or
any Letter of Credit Agreement, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.08(f), constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder.  Neither the Agent, the New Money Lenders nor any Issuing Bank, nor
any of their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of any Issuing Bank; provided that the foregoing shall not be
construed to excuse any Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of any Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised all
requisite care in each such determination.  In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank that issued such Letter
of Credit may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment upon
such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.
 
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(g)          Disbursement Procedures.  Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit issued by such Issuing Bank.  Such
Issuing Bank shall promptly notify the Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse such Issuing Bank and the New Money Lenders with respect
to any such LC Disbursement.
 
(h)        Interim Interest.  If any Issuing Bank shall make any LC
Disbursement, then, until the Borrower shall have reimbursed such Issuing Bank
for such LC Disbursement (either with its own funds or a Borrowing under Section
2.08(e)), the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to Eurodollar Loans.  Interest accrued pursuant to this Section
2.08(h) shall be for the account of such Issuing Bank, except that interest
accrued on and after the date of payment by any New Money Lender pursuant to
Section 2.08(e) to reimburse such Issuing Bank shall be for the account of such
Lender to the extent of such payment.
 
(i)         Replacement of an Issuing Bank.  Any Issuing Bank may be replaced or
resign at any time by written agreement among the Borrower, the Agent, such
resigning or replaced Issuing Bank and, in the case of a replacement, the
successor Issuing Bank.  The Agent shall notify the New Money Lenders of any
such resignation or replacement of an Issuing Bank.  At the time any such
resignation or replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the resigning or replaced Issuing Bank
pursuant to Section 3.05(b).  In the case of the replacement of an Issuing Bank,
from and after the effective date of such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the replaced Issuing Bank
under this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to “Issuing Bank” shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require.  After the resignation or
replacement of an Issuing Bank hereunder, the resigning or replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement 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.
 
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(j)          Cash Collateralization.  If (i) any Event of Default shall occur
and be continuing and the Borrower receives notice from the Agent or the
Majority Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(j), (ii) the Borrower is required to pay to the Agent the excess
attributable to an LC Exposure in connection with any prepayment pursuant to
Section 3.04(c), or (iii) the Borrower is required to Cash Collateralize a
Defaulting Lender’s LC Exposure pursuant to Section 4.03(c)(iii)(B), then the
Borrower shall pledge and deposit with or deliver to the Agent (as a first
priority, perfected security interest), for the benefit of the Issuing Bank, at
a location and pursuant to documentation in form and substance satisfactory to
the Agent, an amount in cash in dollars equal to such LC Exposure or excess
attributable to such LC Exposure, as the case may be, as of such date plus any
accrued and unpaid interest thereon.  The Borrower hereby grants to the Agent,
for the benefit of each Issuing Bank and the New Money Lenders, an exclusive
first priority and continuing perfected security interest in and Lien on such
account and all cash, checks, drafts, certificates and instruments, if any, from
time to time deposited or held in such account, all deposits or wire transfers
made thereto, any and all investments purchased with funds deposited in such
account, all interest, dividends, cash, instruments, financial assets and other
Property from time to time received, receivable or otherwise payable in respect
of, or in exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor.  The Borrower’s obligation to deposit amounts
pursuant to this Section 2.08(j) shall be absolute and unconditional, without
regard to whether any beneficiary of any such Letter of Credit has attempted to
draw down all or a portion of such amount under the terms of a Letter of Credit,
and, to the fullest extent permitted by applicable law, shall not be subject to
any defense or be affected by a right of set-off, counterclaim or recoupment
which any Debtor may now or hereafter have against any such beneficiary, any
Issuing Bank, the Agent, the New Money Lenders or any other Person for any
reason whatsoever.  Such deposit shall be held as collateral securing the
payment and performance of the Borrower’s and any Guarantor’s obligations under
this Agreement and the other Loan Documents.  The Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account; provided that investments of funds in such account in investments
permitted by Section 9.05(d) or Section 9.05(f) may be made at the option of the
Borrower at its direction, risk and expense.  Interest or profits, if any, on
such investments shall accumulate in such account.  Moneys in such account shall
be applied by the Agent to reimburse, on a pro rata basis, each Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated, be applied to satisfy other obligations of the Borrower
and the Guarantors, if any, under this Agreement or the other Loan Documents. 
If the Borrower is required to provide an amount of cash collateral hereunder as
a result of the occurrence of an Event of Default or pursuant to Section
4.03(c)(iii)(B) as a result of a Defaulting Lender, and the Borrower is not
otherwise required to pay to the Agent the excess attributable to an LC Exposure
in connection with any prepayment pursuant to Section 3.04(c), then such amount
(to the extent not applied as aforesaid) shall be returned to the Borrower
within three (3) Business Days after all Events of Default have been cured or
waived or the events giving rise to such Cash Collateralization pursuant to
Section 4.03(c)(iii)(B) have been satisfied or resolved.
 
Section 2.09         Collateral; Guarantees.
 
(a)          Priority and Liens. The parties hereto acknowledge and agree that,
upon entry of the DIP Orders and the delivery and execution of this Agreement,
the Obligations shall at all times be secured and perfected pursuant to, and
have the superpriority claims and liens as set forth in, the DIP Orders and
herein.
 
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(b)          Payment of Obligations. On the Termination Date, the Lenders shall
be entitled to immediate payment of all Obligations without further application
to, or order of, the Bankruptcy Court.
 
(c)          No Discharge; Survival of Claims. Each Debtor agrees that (a) any
Confirmation Order entered in the Bankruptcy Cases shall not discharge or
otherwise affect in any way any of the Obligations, other than after the payment
in full in cash to the Secured Parties of all Obligations (and the Cash
Collateralization of all outstanding Letters of Credit in amount and subject to
documentation satisfactory to the Issuing Bank) and termination of the
Commitments on or before the effective date of an Approved Plan of
Reorganization and (b) to the extent the Obligations are not satisfied in full,
(i) the Obligations shall not be discharged by the entry of a Confirmation Order
(and each Loan Party, pursuant to Section 1141(d)(4) of the Bankruptcy Code,
hereby waives any such discharge) and (ii) the Superpriority Claim granted to
the Agent, the Lenders, the Secured Swap Parties and the Secured Cash Management
Providers pursuant to the DIP Order and the Liens granted to the Agent pursuant
to the DIP Order shall not be affected in any manner by the entry of a
Confirmation Order.
 
(d)       Perfection and Protection of Security Interests and Liens. The Loan
Parties will from time to time deliver to the Agent all financing statements,
amendments, assignments and continuation statements, extension agreements and
other documents, properly completed and executed (and acknowledged when
required) by each Loan Party, as applicable, in form and substance satisfactory
to the Agent, in each case, which the Agent requests for the purpose of
perfecting, confirming, or protecting its lien and security interest in
Collateral for the purpose of securing the Obligations.
 
(e)         Offset. Subject to the terms and conditions set forth in the
applicable DIP Order, to secure the payment and performance of the Obligations,
each Debtor hereby grants the Agent and each Lender a security interest, lien,
and right of offset, each of which shall be in addition to all other interests,
liens, and rights of the Agent at common law, under this Agreement and the other
Loan Documents, or otherwise, and each of which shall be upon and against (i)
any and all monies, securities or other property (and the proceeds therefrom) of
the Debtors now or hereafter held or received by or in transit to the Agent or
any Lender from or for the account of any Debtor, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, any and all deposits
(general or special, time or demand, provisional or final) of any Debtor with
the Agent or any Lender, and (ii) any other credits and claims of any Debtor at
any time existing against the Agent or any Lender, including claims under
certificates of deposit. During the existence of any Event of Default, the Agent
or any Lender is hereby authorized to foreclose upon, offset, appropriate, and
apply, at any time and from time to time, without notice to any Debtor, any and
all items hereinabove referred to against the Obligations then due and payable.
 
(f)        The direct or indirect value of the consideration received and to be
received by such Guarantor in connection herewith is reasonably worth at least
as much as the liability and obligations of each Guarantor hereunder and under
the other Loan Documents, and the incurrence of such liability and obligations
in return for such consideration may reasonably be expected to benefit each
Guarantor, directly or indirectly.
 
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(g)         The Bankruptcy Cases were commenced on the Petition Date in
accordance with applicable law and proper notice thereof and the proper notice
for (i) the motions seeking approval of the Loan Documents and the DIP Facility
and (ii) the hearings for the approval of the Interim Order and the Final Order
were given in each case. The Borrower has given, on a timely basis as specified
in the Interim Order, all notices required to be given on or prior to the date
of this representation to all parties specified in the Interim Order.
 
(h)          All Obligations of the Debtors to the Lenders under the Loan
Documents, including all Loans made under the DIP Facility, shall, subject to
the Carve-Out, at all times:
 
(i)       pursuant to Bankruptcy Code section 364(c)(1), be entitled to joint
and several Superpriority Claim status in the Bankruptcy Case, which claims in
respect of the New Money Facility and the Refinancing Facility shall be pari
passu and shall be senior in priority and payment to the obligations under the
Existing Credit Agreement;
 
(ii)        pursuant to Bankruptcy Code section 364(c)(2), be secured by a
perfected first priority Lien on the Collateral to the extent that such
Collateral is not subject to valid, perfected and non-avoidable liens as of the
Petition Date or liens that were in existence immediately prior to the Petition
Date that are perfected as permitted by Section 546(b) of the Bankruptcy Code;
 
(iii)        pursuant to Bankruptcy Code section 364(c)(3), be secured by a
perfected junior lien on all assets of the Loan Parties, to the extent that such
assets are subject to a valid, perfected and non-avoidable Liens as of the
Petition Date or liens that were in existence immediately prior to the Petition
Date that are perfected as permitted by Section 546(b) of the Bankruptcy Code;
and
 
(iv)       pursuant to Bankruptcy Code section 364(d), be secured by a perfected
superpriority priming Lien on all Collateral to the extent that such Collateral
is subject to valid, perfected and non-avoidable liens in favor of third parties
as of the commencement of the Bankruptcy Case, including, all accounts
receivable, inventory, real and personal property, plant and equipment of the
Loan Parties that secure the obligations of the Loan Parties under the Existing
Credit Agreement and the Existing Second Lien Credit Agreement.
 
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
 
Section 3.01        Repayment of Loans.  The Borrower hereby unconditionally
promises to pay to the Agent for the account of each Lender the then unpaid
principal amount of each Loan on the Termination Date.
 
Section 3.02         Interest.
 
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(a)         ABR Loans.  Each ABR Loan comprising an ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Margin, but in no event
to exceed the Highest Lawful Rate.
 
(b)         Eurodollar Loans.  Each Eurodollar Loan comprising a Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Eurodollar Loan plus the Applicable Margin, but in no event
to exceed the Highest Lawful Rate.
 
(c)          Post-Default Rate.  Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing, or if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower or any Guarantor
hereunder or under any other Loan Document is not paid when due, whether at
stated maturity, upon acceleration or otherwise, then all New Money Loans
outstanding, shall bear interest, after as well as before judgment, at the
Alternate Base Rate or the Adjusted LIBO Rate, as applicable, plus the
Applicable Margin, plus two percent (2%), but in no event to exceed the Highest
Lawful Rate.
 
(d)        Interest Payment Dates.  Accrued interest on each Loan shall be
payable in arrears on, with respect to any ABR Loan or Eurodollar Loan, the last
Business Day of each calendar month and on the Termination Date; provided that
(A) interest accrued pursuant to Section 3.02(c) shall be payable on demand, (B)
in the event of any repayment or prepayment of any Loan (other than an optional
prepayment of an ABR Loan prior to the Termination Date), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, and (C) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
 
(e)         Interest Rate Computations.  All interest hereunder shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), except that interest
computed by reference to the Alternate Base Rate shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable Alternate Base Rate or Adjusted LIBO
Rate shall be determined by the Agent, and such determination shall be
conclusive absent manifest error, and be binding upon the parties hereto.
 
Section 3.03         Alternate Rate of Interest.  If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
 
(a)          the Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or
 
(b)          the Agent is advised by the Majority Lenders that the Adjusted LIBO
Rate or LIBO Rate, as applicable, for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
 
then the Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
 
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Section 3.04         Prepayments.
 
(a)          Optional Prepayments.  The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with Section 3.04(b) and payment of applicable
breakage costs, if any, under Section 5.02. Notwithstanding the foregoing, no
voluntary prepayment of Refinanced Loans may be made until all New Money Loans
and all other Obligations in respect thereof have been paid in full in cash and
all Commitments have been terminated.
 
(b)         Notice and Terms of Optional Prepayment.  The Borrower shall notify
the Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i)
in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon,
Houston time, three (3) Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Borrowing, not later than 12:00 noon, Houston
time, one (1) Business Day before the date of prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid.  Promptly following
receipt of any such notice relating to a Borrowing, the Agent shall advise the
Lenders of the contents thereof.  Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of an advance of a Borrowing
of the same Type as provided in Section 2.02(c).  Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing. 
Prepayments shall be accompanied by accrued interest to the extent required by
Section 3.02 and any payments to the extent required by Section 5.02.
 
(c)          Mandatory Prepayments.
 
(i)          If, after giving effect to any termination or reduction of the
Aggregate Commitments pursuant to Section 2.06(b), or for any other reason, the
total Revolving Credit Exposures exceeds the total Available Commitments, then
the Borrower shall (A) prepay the New Money Loans, to be applied ratably to each
New Money Lender, on the date of such termination or reduction in an aggregate
principal amount equal to such excess, and (B) if any excess remains after
prepaying all of the Borrowings as a result of an LC Exposure, Cash
Collateralize such excess as provided in Section 2.08(j).
 
(ii)         Subject to the payment priorities set forth in the DIP Orders, if
the Debtors (A) sell any Property outside of the ordinary course of business
pursuant to Section 9.12(d) or otherwise sell any Property outside of the
ordinary course of business as not otherwise permitted by this Agreement or (B)
receive any insurance proceeds or condemnation proceeds, in each case, including
when an Event of Default exists, then the Borrower shall prepay the Refinanced
Loans (ratably to each Refinancing Lender) in an aggregate amount equal to the
lesser of (x) 100% of Net Cash Proceeds received from such sale or proceeds and
(y) the aggregate principal amount of Refinanced Loans then outstanding.  The
Borrower shall be obligated to make such prepayment and/or Cash Collateralize
such excess on the date it or any Subsidiary receives cash proceeds; provided
that all payments required to be made pursuant to this Section 3.04(c)(ii) must
be made on or prior to the Termination Date.  Each prepayment pursuant to this
Section 3.04(c)(ii) shall be applied ratably to the Refinanced Loans. 
Prepayments pursuant to this Section 3.04(c)(ii) shall be accompanied by accrued
interest to the extent any interest under such Loans being repaid remains
unpaid.
 
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(d)          No Premium or Penalty.  Prepayments permitted or required under
this Section 3.04 shall be without premium or penalty, except as required under
Section 5.02.
 
(e)          No Effect on Secured Swap Agreements and Secured Cash Management
Agreements.  Prepayments permitted or required under this Section 3.04 shall not
affect the Borrower’s obligation to continue making payments under any Secured
Swap Agreement or Secured Cash Management Agreement, as applicable, each of
which shall remain in full force and effect notwithstanding such prepayment,
subject to the terms of such Secured Swap Agreement or Secured Cash Management
Agreement, as applicable.
 
Section 3.05          Fees.
 
(a)          Commitment Fees.  The Borrower agrees to pay to the Agent for the
account of each New Money Lender (subject to Section 4.03(c)(i) and in
accordance with each such Lender’s Applicable Percentage) a commitment fee,
which shall accrue at the Commitment Fee Rate on the average daily amount of the
unused amount of the Commitment of such New Money Lender during the period from
and including the Interim Facility Effective Date to but excluding the
Termination Date, provided, that, during the Interim Period, the commitment fee
shall be calculated based on the Interim Facility Cap.  Accrued commitment fees
shall be payable monthly in arrears on the last day of each calendar month and
on the Termination Date, commencing on the first such date to occur after the
date hereof. All commitment fees shall be computed on the basis of a year of 360
days, unless such computation would exceed the Highest Lawful Rate, in which
case such commitment fees shall be computed on the basis of a year of 365 days
(or 366 days in a leap year), and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
 
(b)          Letter of Credit Fees.  The Borrower agrees to pay (i) to the Agent
for the account of each Lender (subject to Section 4.03(c)(iii)) a participation
fee with respect to its participations in Letters of Credit, which shall accrue
at the same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding
the later of the date on which such Lender’s Commitment terminates and the date
on which such Lender ceases to have any LC Exposure, (ii) to each Issuing Bank a
fronting fee equal to 0.50% per annum on the face amount of each Letter of
Credit issued by such Issuing Bank hereunder, provided that in no event shall
such fee be less than $500 and (iii) to each Issuing Bank, for its own account,
its standard fees with respect to the amendment, renewal or extension of any
Letter of Credit issued by such Issuing Bank or processing of drawings
thereunder.  Participation fees and fronting fees accrued shall be payable in
arrears on the last Business Day of each calendar month, commencing on the first
such date to occur after the date of this Agreement; provided that all such fees
shall be payable on the Termination Date and any such fees accruing after the
Termination Date shall be payable on demand.  Any other fees payable to an
Issuing Bank pursuant to this Section 3.05(b) shall be payable within ten (10)
days after demand.  All participation fees and fronting fees shall be computed
on the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case such fees shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
 
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(c)        Agent Fees.  The Borrower agrees to pay to the Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Agent.
 
(d)          Up-Front Fees.  The Borrower agrees to pay to the Agent, for the
ratable benefit of each New Money Lender, an up-front fee (the “Up-Front Fee”)
on the Aggregate Commitments of New Money Loans, which shall be earned and due
and payable in the following manner: (i) on the Interim Facility Effective Date,
in an amount equal to 1.75% of the Interim Facility Cap, and (ii) on the Final
Facility Effective Date, in an amount equal to (1) 1.75% of (2) the Aggregate
Commitments less the Interim Facility Cap.
 
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS.
 
Section 4.01         Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
 
(a)         Payments by the Borrower.  The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 5.01,
Section 5.02, Section 5.03 or otherwise) prior to 1:00 p.m., Houston time, on
the date when due, in immediately available funds, without defense, deduction,
recoupment, set-off or counterclaim.  Fees, once paid, shall be fully earned and
shall not be refundable under any circumstances.  Any amounts received after
such time on any date may, in the discretion of the Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the Agent at its offices
specified in Section 12.01, except payments to be made directly to an Issuing
Bank as expressly provided herein and except that payments pursuant to Section
5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly to the
Persons entitled thereto.  The Agent shall distribute any such payments received
by it for the account of any other Person to the appropriate recipient promptly
following receipt thereof.  If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension.  All
payments hereunder shall be made in dollars.
 
(b)          Application of Insufficient Payments.  If at any time insufficient
funds are received by and available to the Agent to pay fully all amounts of
principal, unreimbursed LC Disbursements, interest and fees then due hereunder,
such funds shall be applied (i) first, towards payment of interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
 
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(c)        Sharing of Payments by Lenders.  If any Lender shall, by exercising
any right of set-off or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this Section 4.01(c) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 4.01(c) shall apply).  The Borrower consents to the foregoing
and agrees, to the extent it may effectively do so under applicable law, that
any Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
 
Section 4.02        Presumption of Payment by the Borrower.  Unless the Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Agent for the account of the Lenders or any Issuing Bank
that the Borrower will not make such payment, the Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or such Issuing Bank,
as the case may be, the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or such Issuing Bank, as the
case may be, severally agrees to repay to the Agent forthwith on demand the
amount so distributed to such Lender or such Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Agent in accordance with banking
industry rules on interbank compensation.
 
Section 4.03         Payments and Deductions by the Agent; Defaulting Lenders.
 
(a)         Certain Deductions by the Agent.  If any Lender shall fail to make
any payment required to be made by it pursuant to Section 2.05(a), Section
2.05(b), Section 2.08(d), Section 2.08(e) or Section 4.02 then the Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Agent for the account of such Lender to
satisfy such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.
 
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(b)          Payments and Deductions to Defaulting Lenders.
 
(i)         The Borrower shall have the right, to the extent permitted by
applicable law, to setoff any amounts owed to it by any Defaulting Lender or any
of such Defaulting Lender’s Affiliates in respect of deposit liabilities against
amounts due by the Borrower or any Guarantor to such Defaulting Lender or its
Affiliates under this Agreement, provided that the amount of such set-off shall
not exceed the amount of such Defaulting Lender’s Revolving Credit Exposures and
interest.  Further, if any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.05(a), Section 2.08(d), Section 2.08(e) or
Section 4.02 then the Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid in cash.
 
(ii)       If a Defaulting Lender (or a Lender who would be a Defaulting Lender
but for the expiration of the relevant grace period) as a result of the exercise
of a set-off shall have received a payment in respect of its Revolving Credit
Exposure which results in its Revolving Credit Exposure being less than its
Applicable Percentage of the aggregate Revolving Credit Exposures, then no
payments will be made to such Defaulting Lender until such time as all amounts
due and owing to the Lenders have been equalized in accordance with each of the
Lenders respective pro rata share of the Obligations.  Further, if at any time
prior to the acceleration or maturity of the Loans, the Agent shall receive any
payment in respect of principal of a Loan or a reimbursement of an LC
Disbursement while one or more Defaulting Lenders shall be party to this
Agreement, the Agent shall apply such payment first to the Borrowing(s) for
which such Defaulting Lender(s) shall have failed to fund its pro rata share
until such time as such Borrowing(s) are paid in full or each Lender (including
each Defaulting Lender) is owed its Applicable Percentage of all Loans then
outstanding.  After acceleration or maturity of the Loans, subject to the first
sentence of this Section 4.03(b), all principal will be paid ratably as provided
in Section 10.02(c).
 
(c)        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:
 
(i)         Fees shall cease to accrue on the unfunded portion of the Commitment
of such Defaulting Lender pursuant to Section 3.05.
 
(ii)        The Commitment and the Revolving Credit Exposure of such Defaulting
Lender shall not be included in determining whether all Lenders, the Majority
Lenders or the Required Lenders, as applicable, have taken or may take any
action hereunder (including any consent to any amendment or waiver pursuant to
Section 12.02); provided that any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender which affects such Defaulting
Lender differently than other affected Lenders shall require the consent of such
Defaulting Lender.
 
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(iii)        if any LC Exposure exists at the time a Lender becomes a Defaulting
Lender then:
 
(A)         all or any part of the LC Exposure of such Defaulting Lender shall
be reallocated among the Non-Defaulting Lenders in accordance with their
respective Applicable Percentages (for the purposes of such reallocation the
Defaulting Lender’s Commitment shall be disregarded in determining the
Non-Defaulting Lender’s Applicable Percentage) but only to the extent (1) the
sum of all Non-Defaulting Lenders’ Revolving Credit Exposures plus such
Defaulting Lender’s LC Exposure does not exceed the total of all Non-Defaulting
Lenders’ Commitments, (2) the conditions set forth in Section 6.03 are satisfied
at such time and (3) the sum of each Non-Defaulting Lender’s Revolving Credit
Exposure plus its reallocated share of such Defaulting Lender’s LC Exposure does
not exceed such Non-Defaulting Lender’s Commitment; provided that, subject to
Section 12.22, no reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation;
 
(B)       if the reallocation described in Section 4.03(c)(iii)(A) cannot, or
can only partially, be effected, then the Borrower shall within one Business Day
following notice by the Agent Cash Collateralize for the benefit of the Issuing
Bank only the Borrower’s obligations corresponding to such Defaulting Lender’s
LC Exposure (after giving effect to any partial reallocation pursuant to Section
4.03(c)(iii)(A)) in accordance with the procedures set forth in Section 2.08(j)
for so long as such LC Exposure is outstanding and the relevant Defaulting
Lender remains a Defaulting Lender;
 
(C)          if the Borrower Cash Collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to Section 4.03(c)(iii)(B), then the Borrower
shall not be required to pay any fees to such Defaulting Lender pursuant to
Section 3.05(b) with respect to such Defaulting Lender’s LC Exposure during the
period such Defaulting Lender’s LC Exposure is Cash Collateralized;
 
(D)         if the LC Exposure of the Non-Defaulting Lenders is reallocated
pursuant to Section 4.03(c)(iii)(A), then the fees payable to the Lenders
pursuant to Section 3.05(a) and Section 3.05(b) shall be adjusted in accordance
with such Non-Defaulting Lenders’ Applicable Percentages; or
 
(E)         if all or any portion of such Defaulting Lender’s LC Exposure is
neither Cash Collateralized nor reallocated pursuant to Section 4.03(c)(iii)(A)
or Section 4.03(c)(iii)(B), then, without prejudice to any rights or remedies of
the Issuing Bank or any Lender hereunder, all commitment fees that otherwise
would have been payable to such Defaulting Lender (solely with respect to the
portion of such Defaulting Lender’s Commitment that was utilized by such LC
Exposure) and letter of credit fees payable under Section 3.05(b) with respect
to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank
until such LC Exposure is Cash Collateralized and/or reallocated.
 
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(d)         So long as any Lender is a Defaulting Lender, the Issuing Bank shall
not be required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
LC Exposure will be 100% covered by the Commitments of the Non-Defaulting
Lenders and/or cash collateral will be provided by the Borrower in accordance
with Section 4.03(c)(iii)(B), and participating interests in any such newly
issued or increased Letter of Credit shall be allocated among Non-Defaulting
Lenders in a manner consistent with Section 4.03(c)(iii)(A) (and Defaulting
Lenders shall not participate therein).
 
(e)         If the Issuing Bank has a good faith belief that any Lender has
defaulted in fulfilling its obligations under one or more other agreements in
which such Lender commits to extend credit, the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless the Issuing
Bank shall have entered into arrangements with the Borrower or such Lender,
satisfactory to the Issuing Bank, as the case may be, to defease any risk to it
in respect of such Lender hereunder.
 
(f)          In the event that the Agent, the Borrower and the Issuing Bank each
agrees that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall
be readjusted to reflect the inclusion of such Lender’s Commitment and on such
date such Lender shall purchase at par such of the Loans and/or participations
in Letters of Credit of the other Lenders as the Agent shall determine may be
necessary in order for such Lender to hold such Loans and/or participations in
Letters of Credit in accordance with its Applicable Percentage.
 
ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
 
Section 5.01         Increased Costs.
 
(a)          Eurodollar Changes in Law.  If any Change in Law shall:
 
(i)          impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate);
 
(ii)        subject any Lender or other recipient of any payment under this
Agreement or under any other Loan Document to any Taxes (other than (A)
Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal, letters
of credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or
 
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(iii)       impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
 
(b)        Capital Requirements or Liquidity.  If any Lender or any Issuing Bank
determines that any Change in Law regarding capital requirements or liquidity
has or would have the effect of reducing the rate of return on such Lender’s or
such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing
Bank’s holding company, if any, as a consequence of this Agreement or the Loans
made by, or participations in Letters of Credit held by, such Lender, or the
Letters of Credit issued by such Issuing Bank, to a level below that which such
Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or such Issuing Bank’s policies and the policies of
such Lender’s or such Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or such
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or such Issuing Bank or such Lender’s or such Issuing
Bank’s holding company for any such reduction suffered.
 
(c)         Certificates.  A certificate of a Lender or any Issuing Bank setting
forth in reasonable detail the basis of its request and the amount or amounts
necessary to compensate such Lender or such Issuing Bank or its holding company,
as the case may be, as specified in Section 5.01(a) or (b) shall be delivered to
the Borrower and shall be conclusive absent manifest error.  The Borrower shall
pay such Lender or such Issuing Bank, as the case may be, the amount shown as
due on any such certificate within ten (10) days after receipt thereof.
 
(d)        Effect of Failure or Delay in Requesting Compensation.  Failure or
delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s or
such Issuing Bank’s right to demand such compensation, provided that no Lender
may make any such demand more than 180 days after the Termination Date, nor for
any amount which has accrued more than 270 days prior to such Lender or Issuing
Bank delivering the certificate required in Section 5.01(c).
 
Section 5.02         Break Funding Payments.  In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan into an ABR Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event.  In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market.
 
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A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrower and shall be conclusive absent manifest error.  The Borrower shall pay
such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.
 
Section 5.03         Taxes.
 
(a)          Payments Free of Taxes.  Any and all payments by or on account of
any obligation of the Borrower or any Guarantor under any Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower or any Guarantor shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5.03(a)), the Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower or such Guarantor shall make such
deductions and (iii) the Borrower or such Guarantor shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
 
(b)         Payment of Other Taxes by the Borrower.  The Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.
 
(c)          Indemnification by the Borrower.  The Borrower shall indemnify the
Agent, each Lender and each Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Agent, such Lender or such Issuing Bank, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.03) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate of
the Agent, a Lender or an Issuing Bank as to the basis of such Indemnified Taxes
and Other Taxes and the amount of such payment or liability under this Section
5.03 shall be delivered to the Borrower and shall be conclusive absent manifest
error.
 
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(d)        Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a
Governmental Authority, the Borrower shall deliver to the Agent the original or
a certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Agent.
 
(e)        Status of Lenders.  Any Lender that is entitled to an exemption from
or reduction of withholding Tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
 
Without limiting the generality of the foregoing, in the event that the Borrower
is a U.S. Person,
 
(i)         any Lender that is a U.S. Person shall deliver to the Borrower and
the Agent on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the reasonable request of
the Borrower or the Agent), executed originals of IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding tax;
 
(ii)       any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), whichever of the following is
applicable:
 
(A)         in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
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;
 
(B)          executed originals of IRS Form W-8ECI;
 
(C)        in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit F-1 to the effect that such
Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)
executed originals of IRS Form W-8BEN; or
 
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(D)      to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or
Exhibit F-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on
behalf of each such direct and indirect partner;
 
(iii)      any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), executed originals of any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in U.S. federal withholding Tax, duly completed, together with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrower or the Agent to determine the withholding or deduction
required to be made; and
 
(iv)        if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender 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
Lender shall deliver to the Borrower and the Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the 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 Agent as may be
necessary for the Borrower and the Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment.  Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.
 
Each of the Lenders, the Agent and the Issuing Bank agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate
in any respect, it shall update such form or certification or promptly notify
the Borrower (and, in the case of the Lenders, the Agent) in writing of its
legal inability to do so.
 
(f)         Refunds. If any party determines, in its sole discretion exercised
in good faith, that it has received a refund of any Taxes as to which it has
been indemnified pursuant to this Section 5.03 (including by the payment of
additional amounts pursuant to this Section 5.03), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this clause (f) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority.  Notwithstanding anything to the contrary
in this clause (f), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this clause (f) the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid.  This clause (f) shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.
 
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(g)         Indemnification by the Lenders.  Each Lender shall severally
indemnify the Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower has not already indemnified the Agent for such Indemnified Taxes and
without limiting the obligation of the Borrower to do so), (ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of Section
12.04(c)(ii) relating to the maintenance of a Participant Register and (iii) any
Excluded Taxes attributable to such Lender, in each case, that are payable or
paid by the Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability
delivered to any Lender by the Agent shall be conclusive absent manifest error.
Each Lender hereby authorizes the Agent to set off and apply any and all amounts
at any time owing to such Lender under any Loan Document or otherwise payable by
the Agent to the Lender from any other source against any amount due to the
Agent under this clause (g).
 
Section 5.04         Designation of Different Lending Office.  If any Lender
requests compensation under Section 5.01, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 5.03, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (a) would eliminate or reduce amounts
payable pursuant to Section 5.01 or Section 5.03, as the case may be, in the
future and (b) would not subject such Lender to any unreimbursed cost or expense
and would not otherwise be disadvantageous to such Lender.  The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
 
Section 5.05        Illegality.  Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its obligation to make or maintain Eurodollar
Loans either generally or having a particular Interest Period hereunder, then
(a) such Lender shall promptly notify the Borrower and the Agent thereof and
such Lender’s obligation to make such Eurodollar Loans shall be suspended (the
“Affected Loans”) until such time as such Lender may again make and maintain
such Eurodollar Loans and (b) all Affected Loans which would otherwise be made
by such Lender shall be made instead as ABR Loans (and, if such Lender so
requests by notice to the Borrower and the Agent, all Affected Loans of such
Lender then outstanding shall be automatically converted into ABR Loans on the
date specified by such Lender in such notice) and, to the extent that Affected
Loans are so made as (or converted into) ABR Loans, all payments of principal
which would otherwise be applied to such Lender’s Affected Loans shall be
applied instead to its ABR Loans.
 
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ARTICLE VI
CONDITIONS PRECEDENT
 
Section 6.01        Interim Facility Effective Date.  The obligations of the
Lenders to enter into and execute this Agreement and make Loans and other
extensions of credit hereunder during the Interim Period, shall commence on the
first Business Day when each of the following conditions precedent shall have
been satisfied (or waived in accordance with Section 12.02) in a manner
satisfactory to the Agent, which day shall be no later than two (2) Business
Days after the entry of the Interim Order (the “Interim Facility Effective
Date”):
 
(a)          the Petition Date shall have occurred;
 
(b)        the Bankruptcy Court shall have entered the Interim Order within five
(5) Business Days following the Petition Date, which Interim Order (i) shall
have been entered on the docket of the Bankruptcy Court, (ii) shall be in full
force and effect and shall not have been vacated, stayed, reversed, modified or
amended in any respect without the prior written consent of the Agent and the
Majority Lenders, and (iii) the Loan Parties shall be in compliance with the
terms of the Interim Order in all respects;
 
(c)        all first-day motions filed by the Loan Parties (including any
motions related to cash management or any critical vendor or supplier motions)
and related orders, including the Cash Management Order, entered by the
Bankruptcy Court in the Bankruptcy Cases shall be in form and substance
reasonably satisfactory to the Agent;
 
(d)         all motions related to the DIP Facility and related orders entered
by the Bankruptcy Court (including the applicable DIP Order) shall be in form
and substance satisfactory to the Agent;
 
(e)          the Agent shall have received (i) duly executed and delivered
counterparts (in such numbers as may be requested by the Agent) of this
Agreement and the other Loan Documents to be executed and delivered on or prior
to such date, from each party hereto or thereto, as applicable, signed on behalf
of such party, in each case in form and substance acceptable to the Agent and
Lenders, and (ii) the duly executed Notes payable to each Lender that requests a
Note in the principal amount equal to such Lender’s Commitment and Loans;
 
(f)          the Agent shall have received a certificate of the Borrower and of
each Guarantor certifying as of the Interim Facility Effective Date (i)
resolutions of the board of directors or other managing body with respect to the
authorization of the Borrower or such Guarantor to execute and deliver the Loan
Documents to which it is a party and to enter into the transactions contemplated
in those documents, (ii) the individuals (A) who are authorized to sign the Loan
Documents to which the Borrower or such Guarantor is a party and (B) who will,
until replaced by another individual duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the other Loan
Documents to which it is a party, (iii) specimen signatures of such authorized
individuals, and (iv) the articles or certificate of incorporation or formation
and bylaws, operating agreement or partnership agreement, as applicable, of the
Borrower and each Guarantor, in each case, certified as being true and
complete.  The Agent and the Lenders may conclusively rely on such certificate
until the Agent receives notice in writing from the Borrower to the contrary;
 
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(g)         the Agent shall have received certificates of the appropriate state
agencies with respect to the existence, qualification and good standing of the
Borrower and each Guarantor;
 
(h)        the Agent shall have received a certificate of insurance coverage of
the Borrower evidencing that the Borrower is carrying insurance in accordance
with Section 7.12;
 
(i)          subject to the applicable DIP Order, all reasonable and documented
pre- and post-petition fees, charges and expenses including, without limitation,
(i) the fees, charges and expenses of Orrick, Herrington & Sutcliffe, RPA
Advisors, LLC, and one local counsel to the Agent in each applicable
jurisdiction, in each case pursuant to invoices delivered to the Borrower at
least three (3) Business Days before the Interim Facility Effective Date, (ii)
the applicable Up-Front Fee set forth in Section 3.05(d), (iii) the fees agreed
to in the Fee Letter and (iv) all other amounts due and payable pursuant to
invoices delivered to the Borrower at least three (3) Business Days before the
Interim Facility Effective Date, in each case as required to be paid to the
Agent and Lenders on or before the Interim Facility Effective Date, shall have
been paid;
 
(j)          the Agent shall have received a Budget, containing line items of
sufficient detail to reflect the Loan Parties’ projected receipts and
disbursements for the 13-week period commencing on the Petition Date, in form
and substance acceptable to the Agent and the Majority Lenders and which shall
be attached hereto as Exhibit G (the “Initial Budget”), together with a
certificate of the Borrower stating that such Initial Budget has been prepared
on a reasonable basis and in good faith and is based on assumptions believed by
the Borrower to be reasonable at the time made and from the best information
then available to the Borrower;
 
(k)        the receipt by the Agent of a Borrowing Request in accordance with
Section 2.03, which shall include the intended uses of proceeds in accordance
with the Initial Budget;
 
(l)         there shall not exist any action, suit, investigation, litigation or
proceeding pending or threatened (other than the Bankruptcy Cases) in any court
or before any Governmental Authority or facts or circumstances that, in the
reasonable opinion of the Agent and the Majority Lenders, materially and
adversely affects any of the transactions contemplated hereby, or that has or
could be reasonably likely to result in a Material Adverse Effect;
 
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(m)        the holders of the Existing Obligations shall have received adequate
protection in respect of the Liens securing such Existing Obligations pursuant
to, and on the terms set forth in, the Interim Order;
 
(n)         all Obligations shall be secured by a perfected lien and security
interest on all Collateral of the Loan Parties pursuant to, and such Lien and
security interest shall have the priorities set forth in the Interim Order,
subject only to the Liens permitted by Section 9.03 and all filing and recording
fees and taxes with respect to such Liens and security interests that are due
and payable as of the Interim Facility Effective Date shall have been duly paid;
 
(o)         the Agent shall have received such information as the Agent may
reasonably require, all of which shall be reasonably satisfactory to the Agent
in form and substance, on the title to not less than eighty percent (80%) of the
Oil and Gas Properties evaluated in the most recently delivered Reserve Report;
 
(p)         The Agent shall be reasonably satisfied with the environmental
condition of the Oil and Gas Properties of the Borrower and its Subsidiaries;
 
(q)         The Agent shall have received a certificate of a Responsible Officer
certifying that the Borrower has received all consents and approvals required by
Section 7.03;
 
(r)         the Agent and the Lenders shall have received, and be reasonably
satisfied in form and substance with, all documentation and other information
required by bank regulatory authorities under applicable “know-your-customer”
and anti-money laundering rules and regulations, including but not restricted to
the USA PATRIOT Act, and, if the Borrower qualifies as a “legal entity customer”
under the Beneficial Ownership Regulation, a Beneficial Ownership Certification
in respect of the Borrower;
 
(s)          [Reserved]; and
 
(t)           the Agent shall have received the duly executed Fee Letter.
 
For purposes of determining compliance with the conditions specified in this
Section 6.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Agent shall have received notice from
such Lender prior to the proposed Interim Facility Effective Date specifying its
objection thereto.
 
Section 6.02         Final Facility Effective Date.  The obligation of each
Lender to make its Loans hereunder and the obligation of the Issuing Bank to
issue Letters of Credit hereunder during the Final Period shall commence as of
the Business Day when each of the following conditions precedent shall have been
satisfied or waived in accordance with Section 12.02) in a manner satisfactory
to the Agent (the “Final Facility Effective Date”):
 
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(a)          the Bankruptcy Court shall have entered the Final Order within
thirty-five (35) days (or such later date consented to by the Agent and the
Majority Lenders) following the entry of the Interim Order, which Final Order
shall (i) be in substantially the form of the Interim Order, with only such
modifications thereto as are satisfactory in form and substance to the Agent,
(ii) shall have been entered on the docket of the Bankruptcy Court and (iii)
shall be in full force and effect and shall not have been vacated, stayed,
reversed, modified or amended in any respect without the prior written consent
of the Agent and the Majority Lenders;
 
(b)          the Borrower shall have paid the Up-Front Fee set forth in Section
3.05(d) with respect to the Final Facility Effective Date; and
 
(c)          the Debtors shall be in compliance in all respects with (i) the DIP
Orders and (ii) subject to application of the Permitted Variance, with the
Budget.
 
For purposes of determining compliance with the conditions specified in this
Section 6.02, 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 Agent shall have received notice from
such Lender prior to the proposed Final Facility Effective Date specifying its
objection thereto.
 
Section 6.03       Conditions Precedent to Each Borrowing. The obligation of
each Lender to make a Loan on the occasion of any Borrowing (including the
Refinanced Loans and the initial funding, if any, of New Money Loans on the
Interim Facility Effective Date), and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
 
(a)         at the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing;
 
(b)         at the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Material Adverse Effect shall have occurred;
 
(c)       the Agent shall have received a Borrowing Request in accordance with
Section 2.03 or a request for a Letter of Credit in accordance with Section
2.08(b), as applicable, which shall include the intended uses of proceeds in
accordance with the Budget;
 
(d)       the representations and warranties of the Borrower and the Guarantors
set forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects (except that any representation and warranty
that is qualified as to “materiality” or “Material Adverse Effect” shall be true
and correct in all respects after giving effect to such qualification) on and as
of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, such
representations and warranties shall continue to be true and correct in all
material respects as of such specified earlier date (except that any
representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects as of such specified
earlier date after giving effect to such qualification);
 
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(e)         the making of such Loan or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, would not conflict with, or
cause any Lender or the Issuing Bank to violate or exceed, any applicable
Governmental Requirement, and no Change in Law shall have occurred, and no
litigation shall be pending or threatened (other than the Bankruptcy Cases),
which does or, with respect to any threatened litigation, seeks to, enjoin,
prohibit or restrain, the making or repayment of any Loan, the issuance,
amendment, renewal, extension or repayment of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated by
this Agreement or any other Loan Document;
 
(f)          at the time of and immediately after giving effect to each such
Borrowing or the issuance, amendment, renewal or extension of each such Letter
of Credit, or both, as applicable, the aggregate Revolving Credit Exposures for
all Lenders shall not exceed the then-effective Available Commitments;
 
(g)          [Reserved];
 
(h)          DIP Orders.
 
(i)         The Interim Order (A) shall be in full force and effect and shall
not have been vacated, reversed, modified, amended or stayed without the written
consent of the Agent and the Majority Lenders, and (B) shall, without
limitation, approve the Interim Refinanced Loans.
 
(ii)       The Final Order (A) shall be in full force and effect and shall not
have been vacated, reversed, modified, amended or stayed without the written
consent of the Agent and the Majority Lenders, and (B) shall, without
limitation, approve the Refinanced Loans.
 
(iii)        The Loan Parties shall be in compliance with the applicable DIP
Order.
 
(i)         at the time of such Borrowing before giving effect thereto, such
Borrowing shall not trigger a mandatory prepayment under Section 3.04(c);
 
(j)           no trustee or examiner shall have been appointed with respect to
the Loan Parties or their Property; and
 
(k)          subject to the procedures described in any order of the Bankruptcy
Court regarding payments for professional fees and expenses, if any, all
reasonable and documented fees, charges and expenses (including, without
limitation, the fees, charges and expenses of Orrick, Herrington & Sutcliffe,
LLP, RPA Advisors, LLC, one local counsel to the Agent in each applicable
jurisdiction and any other professional advisor, as applicable), in each case
pursuant to invoices delivered to the Borrower at least three (3) Business Days
before the date of such Borrowing, and all other amounts due and payable on or
prior to the date of such Borrowing, required to be paid to the Agent and
Lenders on or before the date of such Borrowing shall have been paid (or will be
paid with the proceeds of the Loan authorized under the Interim Order or the
Final Order, as applicable).
 
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In addition to the other conditions precedent herein set forth, if any Lender
becomes, and during the period it remains, a Defaulting Lender, the Issuing Bank
will not be required to issue any Letter of Credit, or to amend, extend increase
or renew any outstanding Letter of Credit (or increase the face amount thereof,
alter the drawing terms thereunder or extend the expiry date thereof), unless
the Issuing Bank is satisfied that any exposure that would result therefrom is
eliminated or fully covered by the commitments of the Non-Defaulting Lenders or
by Cash Collateralization or a combination thereof satisfactory to the Issuing
Bank in its sole discretion.
 
Each request for a Borrowing and each request for the issuance, amendment,
renewal or extension of any Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as to the
matters specified in Section 6.03.
 
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
 
The Borrower (and each Parent Guarantor, in the case of Section 7.30) represents
and warrants to the Lenders that:
 
Section 7.01        Organization; Powers.  Subject to any restrictions arising
on account of any Debtor’s status as a “debtor” under the Bankruptcy Code and
entry of the DIP Orders, each Debtor is duly organized, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary, to own
its assets and to carry on its business as now conducted, and is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.
 
Section 7.02       Authority; Enforceability.  Subject to any restrictions
arising on account of any Debtor’s status as a “debtor” under the Bankruptcy
Code and entry of the DIP Order, the Transactions are within the Borrower’s and
each Guarantor’s corporate powers and have been duly authorized by all necessary
corporate and, if required, member action (including, without limitation, any
action required to be taken by any class of directors of the Borrower or any
other Person, whether interested or disinterested, in order to ensure the due
authorization of the Transactions).  When executed and delivered, each Loan
Document to which the Borrower and any Guarantor is a party will have been duly
executed and delivered by the Borrower and such Guarantor and, upon entry of the
Interim Order or the Final Order, as applicable, will constitute a legal, valid
and binding obligation of the Borrower and such Guarantor, as applicable,
enforceable in accordance with its terms, subject to entry of each DIP Order,
and further subject to other applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
 
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Section 7.03        Approvals; No Conflicts.  Subject to the entry of the DIP
Order, the Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority
or any other third Person (including the members or any class of directors of
the Borrower or any other Person, whether interested or disinterested), nor is
any such consent, approval, registration, filing or other action necessary for
the validity or enforceability of any Loan Document or the consummation of the
Transactions, except such as have been obtained or made and are in full force
and effect, and except for the filing and recording of Security Instruments to
perfect the Liens as required by this Agreement and the applicable DIP Order,
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of any Debtor or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Debtor or its Properties, or give
rise to a right thereunder to require any payment to be made by such Debtor and
(d) will not result in the creation or imposition of any Lien on any Property of
any Debtor (other than the Liens and security interests in favor of the Agent
(or any designee) created by the Loan Documents).
 
Section 7.04         Financial Position; No Material Adverse Change.
 
(a)          The Borrower has heretofore furnished to the Lenders (i) the
audited financial statements of Borrower ended December 31, 2018 and (ii) the
unaudited balance sheet and statements of income, members’ equity and cash flows
as of and for the fiscal quarter ended March 31, 2019.  Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of Borrower and its Consolidated
Subsidiaries as of such date and for such period in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the unaudited quarterly financial statements.
 
(b)          Since the Petition Date, (i) there has been no event, development
or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect and (ii) the business of Debtors has been conducted only in the
ordinary course consistent with past business practices.
 
(c)       No Debtor has on the date hereof any material Debt (including
Disqualified Capital Stock), or any contingent liabilities, off-balance sheet
liabilities or partnerships, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the Financial
Statements.
 
Section 7.05        Litigation.  Except as set forth on Schedule 7.05, and other
than the Bankruptcy Cases, there are no actions, suits, investigations or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower or Parent, threatened against or
affecting any Debtor which (a) affect or pertain to the Transactions or this
Agreement or any other Loan Document, or (b) either individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect or is
not otherwise subject to the automatic stay as a result of the Bankruptcy Cases.
 
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Section 7.06         Environmental Matters.  Except as could not be reasonably
expected to have a Material Adverse Effect (or with respect to (c), (d) and (e)
below, where the failure to take such actions could not be reasonably expected
to have a Material Adverse Effect):
 
(a)        neither any Property of any Debtor nor the operations conducted
thereon violate any order or requirement of any court or Governmental Authority
or any Environmental Laws;
 
(b)         no Property of any Debtor nor the operations currently conducted
thereon or, to the knowledge of the Borrower, by any prior owner or operator of
such Property or operation, are in violation of or subject to any existing,
pending or threatened action, suit, investigation, inquiry or proceeding by or
before any court or Governmental Authority or to any remedial obligations under
Environmental Laws;
 
(c)         all notices, permits, licenses, exemptions, approvals or similar
authorizations, if any, required to be obtained or filed in connection with the
operation or use of any and all Property of any Debtor, including, without
limitation, past or present treatment, storage, disposal or release of a
hazardous substance, oil and gas waste or solid waste into the environment, have
been duly obtained or filed or requested, and each Debtor is in compliance with
the terms and conditions of all such notices, permits, licenses and similar
authorizations;
 
(d)         all hazardous substances, solid waste and oil and gas waste, if any,
generated at any and all Property of any Debtor have in the past been
transported, treated and disposed of in accordance with Environmental Laws and
so as not to pose an imminent and substantial endangerment to public health or
welfare or the environment, and, to the knowledge of the Borrower, all such
transport carriers and treatment and disposal facilities have been and are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending or threatened
action, investigation or inquiry by any Governmental Authority in connection
with any Environmental Laws;
 
(e)         the Borrower has taken all steps reasonably necessary to determine
and has determined that no oil, hazardous substances, solid waste or oil and gas
waste, have been disposed of or otherwise released and there has been no
threatened release of any oil, hazardous substances, solid waste or oil and gas
waste on or to any Property of any Debtor except in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment;
 
(f)          to the extent applicable, all Property of each Debtor currently
satisfies all design, operation, and equipment requirements imposed by the OPA,
and the Borrower does not have any reason to believe that such Property, to the
extent subject to the OPA, will not be able to maintain compliance with the OPA
requirements during the term of this Agreement; and
 
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(g)         no Debtor has any known contingent liability or Remedial Work in
connection with any release or threatened release of any oil, hazardous
substance, solid waste or oil and gas waste into the environment.
 
Section 7.07         Compliance with the Laws and Agreements; No Defaults.
 
(a)         Each Debtor is in compliance with all Governmental Requirements
applicable to it or its Property and all agreements and other instruments
binding upon it or its Property and, subject to any restrictions arising on
account of any Debtor’s status as a “debtor” under the Bankruptcy Code,
possesses all licenses, permits, franchises, exemptions, approvals and other
authorizations granted by Governmental Authorities necessary for the ownership
of its Property and the present conduct of its business, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
 
(b)          Except to the extent subject to the automatic stay under the
Bankruptcy Cases, no Debtor is (i) in default nor has any event or circumstance
occurred which, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default or would require any
Debtor to Redeem or make any offer to Redeem all or any portion of any Debt
outstanding under any indenture, note, credit agreement or instrument pursuant
to which any Material Indebtedness is outstanding or by which any Debtor or any
of such Debtor’s Properties is bound or (ii) in the actual knowledge of a
Responsible Officer of such Debtor, in material default under any material
contract.
 
(c)          No Default has occurred and is continuing.
 
Section 7.08       Investment Company Act.  No Debtor is an “investment company”
or a company “controlled” by an “investment company,” within the meaning of, or
subject to regulation under, the Investment Company Act of 1940, as amended.
 
Section 7.09         Taxes.  Each Debtor has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are
being contested in good faith by appropriate proceedings and for which such
Debtor has set aside on its books adequate reserves in accordance with GAAP, (b)
to the extent otherwise excused or prohibited by the Bankruptcy Code and not
otherwise authorized by the Bankruptcy Court or (c) to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect.
 
Section 7.10         ERISA.
 
Except to the extent excused by the Bankruptcy Court or as a result of the
filing of the Bankruptcy Cases:
 
(a)        Each Debtor and each ERISA Affiliate have complied in all material
respects with ERISA and, where applicable, the Code regarding each Plan, if any.
 
(b)          Each Plan, if any, is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
 
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(c)        No act, omission or transaction has occurred that could result in
imposition on any Debtor or any ERISA Affiliate (whether directly or indirectly)
of (i) either a civil penalty assessed pursuant to subsections (c), (i) or (l)
of section 502 of ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of
the Code or (ii) breach of fiduciary duty liability damages under section 409 of
ERISA.
 
(d)          No Plan (other than a defined contribution plan) or any trust
created under any such Plan has been terminated since September 2, 1974.  No
liability to the PBGC (other than for the payment of current premiums which are
not past due) by any Debtor or any ERISA Affiliate has been or is expected by
such Debtor or ERISA Affiliate to be incurred with respect to any Plan.  No
ERISA Event with respect to any Plan has occurred.
 
(e)         Full payment when due has been made of all amounts which any Debtor
or any ERISA Affiliate is required under the terms of each Plan, if any, or
applicable law to have paid as contributions to such Plan as of the date hereof,
and no accumulated funding deficiency (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, exists with respect to any
Plan.
 
(f)           The actuarial present value of the benefit liabilities under each
Plan, if any, which is subject to Title IV of ERISA does not, as of the end of
the Borrower’s most recently ended fiscal year, exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities.  The term “actuarial
present value of the benefit liabilities” shall have the meaning specified in
section 4041 of ERISA.
 
(g)          No Debtor nor any ERISA Affiliate sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by the
Borrower, any of its Subsidiaries or any ERISA Affiliate in its sole discretion
at any time without any material liability.
 
(h)          No Debtor nor any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the six-year period preceding the date
hereof sponsored, maintained or contributed to, any Multiemployer Plan.
 
(i)          No Debtor nor any ERISA Affiliate is required to provide security
under section 401(a)(29) of the Code due to a Plan amendment that results in an
increase in current liability for the Plan.
 
Section 7.11         Disclosure; No Material Misstatements.  None of the
reports, financial statements, certificates or other information furnished by or
on behalf of any Debtor to the Agent or any Lender or any of their Affiliates in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or under any other Loan Document (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.  There
is no fact peculiar to any Debtor other than as set forth in the DIP Orders that
could reasonably be expected to have a Material Adverse Effect or in the future
is reasonably likely to have a Material Adverse Effect and which has not been
set forth in this Agreement or the Loan Documents or the other documents,
certificates and statements furnished to the Agent or the Lenders by or on
behalf of any Debtor prior to, or on, the date hereof in connection with the
transactions contemplated hereby.  There are no statements or conclusions in any
Reserve Report which are based upon or include misleading information or fail to
take into account material information regarding the matters reported therein.
 
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Section 7.12     Insurance.  The Debtors have, (i) all insurance policies
sufficient for the compliance by each of them with all material Governmental
Requirements and all material agreements and (ii) insurance coverage in at least
amounts and against such risk (including, without limitation, public liability)
that are usually insured against by companies similarly situated and engaged in
the same or a similar business for the assets and operations of the Debtors. 
The Agent and the Lenders have been named as additional insureds in respect of
such liability insurance policies and the Agent has been named as loss payee
with respect to Property loss insurance.
 
Section 7.13        Restriction on Liens.  Subject to any restrictions arising
on account of any Debtor’s status as a “debtor” under the Bankruptcy Code, no
Debtor is a party to any material agreement or arrangement (other than any
Existing Second Lien Loan Documents), or, other than as a result of the
Bankruptcy Cases, subject to any order, judgment, writ or decree, which either
restricts or purports to restrict its ability to grant Liens to the Agent and
the Lenders on or in respect of their Properties to secure the Obligations.
 
Section 7.14       Subsidiaries.  Except as set forth on Schedule 7.14 or as
disclosed in writing from time to time to the Agent (which shall promptly
furnish a copy to the Lenders), which shall be a supplement to Schedule 7.14,
the Borrower has no Subsidiaries.  No Debtor has any Foreign Subsidiaries.  Each
Debtor set forth on Schedule 7.14 (as supplemented from time to time) is a
Wholly-Owned Subsidiary.  The Parent does not directly own any Equity Interests
in any Person other than Equity Interests in the Borrower and Legacy GP, and
Legacy GP does not directly own any Equity Interests in any Person other than
Equity Interests in the Borrower.
 
Section 7.15         Location of Business and Offices.  The Borrower’s
jurisdiction of organization is Delaware; the name of the Borrower as listed in
the public records of its jurisdiction of organization is Legacy Reserves LP,
and the organizational identification number of the Borrower in its jurisdiction
of organization is 4038949 (or as set forth in a notice delivered to the Agent
pursuant to Section 8.01(n)).  The Borrower’s principal place of business and
chief executive offices are located at the address specified in Section 12.01
(or as set forth in a notice delivered pursuant to Section 8.01(n)).  Each
Subsidiary’s jurisdiction of organization, name as listed in the public records
of its jurisdiction of organization, organizational identification number in its
jurisdiction of organization, and the location of its principal place of
business and chief executive office is stated on Schedule 7.15 (or as set forth
in a notice delivered pursuant to Section 8.01(n)).

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Section 7.16         Properties; Titles, Etc.

Except as a result of the filing of the Bankruptcy Cases:

(a)          Each Debtor has good and defensible title to its Oil and Gas
Properties evaluated in the most recently delivered Reserve Report, good and
defensible title to its Oil and Gas Properties comprised of natural gas
pipelines or other gathering systems or pipelines or midstream assets and good
title to all its personal Properties, in each case, free and clear of all Liens
except Liens permitted by Section 9.03. After giving full effect to the Excepted
Liens, the any Debtor specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report, and the ownership of such Properties shall
not in any material respect obligate any Debtor to bear the costs and expenses
relating to the maintenance, development and operations of each such Property in
an amount in excess of the working interest of each Property set forth in the
most recently delivered Reserve Report that is not offset by a corresponding
proportionate increase in any Debtor’s net revenue interest in such Property.

(b)         All material leases and agreements necessary for the present conduct
of the business of the Debtors are valid and subsisting, in full force and
effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases which could reasonably be expected to have a
Material Adverse Effect.

(c)         The rights and Properties presently owned, leased or licensed by the
Debtors including, without limitation, all easements and rights of way, include
all rights and Properties necessary to permit the Debtors to conduct their
business in all material respects in the same manner as its business has been
conducted prior to the date hereof.

(d)        All of the material Properties of the Debtors that are reasonably
necessary for the operation of their businesses are in good working condition
and are maintained in accordance with prudent business standards.

(e)          Each Debtor owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual Property material to its
business, and the use thereof by such Debtor does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.  The Debtors either own or have valid licenses or other rights to use
all databases, geological data, geophysical data, engineering data, seismic
data, maps, interpretations and other technical information used in their
businesses as presently conducted, subject to the limitations contained in the
agreements governing the use of the same, which limitations are customary for
companies engaged in the business of the exploration and production of
Hydrocarbons, with such exceptions as could not reasonably be expected to have a
Material Adverse Effect.

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Section 7.17         Maintenance of Properties.  Except to the extent any
leases, subleases or other contracts are rejected in the Bankruptcy Cases as
part of the Debtors’ exercise of its reasonable business judgment, and except as
could not reasonably be expected to have a Material Adverse Effect, the Oil and
Gas Properties (and Properties unitized therewith) have been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all Government Requirements and in conformity with the provisions of all leases,
subleases or other contracts comprising a part of the Hydrocarbon Interests and
other contracts and agreements forming a part of the Oil and Gas Properties. 
Specifically in connection with the foregoing, except as could not reasonably be
expected to have a Material Adverse Effect, (a) no Oil and Gas Property is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (b)
none of the wells comprising a part of the Oil and Gas Properties (or Properties
unitized therewith) is deviated from the vertical more than the maximum
permitted by Government Requirements, and such wells are, in fact, bottomed
under and are producing from, and the well bores are wholly within, the Oil and
Gas Properties (or in the case of wells located on Properties unitized
therewith, such unitized Properties).  Subject to any necessary order or
authorization of the Bankruptcy Court, all pipelines, wells, separation,
treating, gas processing plants, compressors, platforms and other material
improvements, fixtures and equipment owned in whole or in part by any Debtor
that are necessary to conduct normal operations are being maintained in a state
adequate to conduct normal operations, and with respect to such of the foregoing
which are operated any Debtor, in a manner consistent with such Debtor’s past
practices (other than those the failure of which to maintain in accordance with
this Section 7.17 could not reasonably be expect to have a Material Adverse
Effect).

Section 7.18       Gas Imbalances, Prepayments.  As of the date hereof, except
as set forth on Schedule 7.18 or on the most recent certificate delivered
pursuant to Section 8.12(c), on a net basis there are no gas imbalances, take or
pay or other prepayments which would require the Debtors to deliver, in the
aggregate, two percent (2%) or more of the monthly production from Hydrocarbons
produced from the Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor.

Section 7.19       Marketing of Production.  Except for contracts listed and in
effect on the date hereof on Schedule 7.19, and thereafter either disclosed in
writing to the Agent or included in the most recently delivered Reserve Report
(with respect to all of which contracts the Borrower represents that it or its
Subsidiaries are receiving a price for all production sold thereunder which is
computed substantially in accordance with the terms of the relevant contract and
are not having deliveries curtailed substantially below the subject Property’s
delivery capacity), no material agreements exist which are not cancelable on 60
days’ notice or less without penalty or detriment for the sale of production
from the Borrower’s or its Subsidiaries’ Hydrocarbons (including, without
limitation, calls on or other rights to purchase, production, whether or not the
same are currently being exercised) that (a) pertain to the sale of production
at a fixed price and (b) have a maturity or expiry date of more than six (6)
months from the date hereof.

Section 7.20        Swap Agreements.  Schedule 7.20, as of the date hereof, and
after the date hereof, each report required to be delivered by the Borrower
pursuant to Section 8.01(f), sets forth, a true and complete summary of all Swap
Agreements of each Debtor, which includes the material terms thereof (including
the type, term and notional amounts or volumes).

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Section 7.21        Use of Loans and Letters of Credit.  The proceeds of the
Loans and Letters of Credit shall be used in accordance with Section 8.18.

Section 7.22         [Reserved].

Section 7.23       USA PATRIOT; AML Laws; Anti-Corruption Laws and Sanctions. 
Each Debtor has implemented and maintains in effect policies and procedures
designed to ensure compliance by such Debtor and its respective directors,
officers, employees and agents with the USA PATRIOT Act, Anti-Corruption Laws,
applicable AML Laws and applicable Sanctions.  None of (a) the Debtors or any of
their respective directors or officers, or, to the knowledge of the Borrower,
any of their respective employees or Affiliates, or (b) to the knowledge of the
Borrower, any agent of any Debtor or other Affiliate that will act in any
capacity in connection with or benefit from the credit facility established
hereby, (i) is a Sanctioned Person or (ii) is in violation of AML Laws,
Anti-Corruption Laws, or Sanctions.  No Borrowing or Letter of Credit, use of
proceeds or other transaction contemplated by this Agreement will cause a
violation of AML Laws, Anti-Corruption Laws or applicable Sanctions by any
Person participating in the transactions contemplated by this Agreement, whether
as lender, borrower, guarantor, agent, or otherwise.  No Debtor, or, to the
knowledge of the Borrower, any other Affiliate has engaged in or intends to
engage in any dealings or transactions with, or for the benefit of, any
Sanctioned Person or with or in any Sanctioned Country.

Section 7.24       International Operations.  None of the Debtors own nor have
any Debtors acquired or made any other material expenditure (whether such
expenditure is capital, operating or otherwise) in or related to, any Oil and
Gas Properties located outside of the geographical boundaries of the United
States or in the offshore federal waters of the United States of America.

Section 7.25       Accounts.  Schedule 7.25 lists all Deposit Accounts,
Securities Accounts and Commodity Accounts maintained by or for the benefit of
any Debtor as of the Interim Facility Effective Date, together with an
indication as to whether each such account is an Excluded Account and the basis
for such determination.

Section 7.26         [Reserved].

Section 7.27         [Reserved].

Section 7.28         DIP Orders. The applicable DIP Order is in full force and
effect and has not been vacated, reversed, modified, amended or stayed without
the prior written consent of the Agent and the Majority Lenders.

Section 7.29     Budget.  The Debtors have not failed to disclose any material
assumptions with respect to the Budget and affirm the reasonableness of the
assumptions in the Budget in all material respects.

Section 7.30       Representations and Warranties of the Parent Guarantors. 
Each of the Parent Guarantors hereby makes each of the representations and
warranties to the Lenders set forth in Section 7.01, Section 7.02, Section 7.03,
Section 7.04, Section 7.05, Section 7.06, Section 7.07, Section 7.08, Section
7.09, Section 7.10, Section 7.11, Section 7.12, Section 7.13, Section 7.14,
Section 7.21 and Section 7.23, as if each reference to “the Borrower” therein
were a reference to “such Parent Guarantor”, and provided that each reference in
each such representation and warranty to the Borrower’s knowledge shall, for the
purposes of this Section 7.30, be deemed to be a reference to such Parent
Guarantor’s knowledge.

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ARTICLE VIII
AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower (and each Parent Guarantor, in the case of Section
8.01, Section 8.02 and Section 8.21) covenants and agrees with the Lenders that:

Section 8.01         Financial Statements; Other Information.  The Borrower will
furnish to the Agent and each Lender:

(a)         Annual Financial Statements.  As soon as available, but in any event
not later than ninety (90) days after the end of each fiscal year, the Parent’s
audited consolidated balance sheet and related statements of operations,
shareholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by independent public accountants of recognized national
standing and reasonably acceptable to the Agent (without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
position and results of operations of the Parent and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied.

(b)          Quarterly Financial Statements.  As soon as available, but in any
event not later than forty-five (45) days after the end of each of the first
three (3) fiscal quarters of each fiscal year of the Parent, its consolidated
balance sheet and related statements of operations, shareholders’ equity and
cash flows as of the end of and for such quarter and the then elapsed portion of
the fiscal year, setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance sheet, as
of the end of) the previous fiscal year, all certified by a Financial Officer of
the Parent as presenting fairly in all material respects the financial position
and results of operations of the Parent and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes.

(c)         Certificate of Financial Officer – Compliance.  Concurrently with
any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
certificate of a Financial Officer of the Parent and the Borrower in
substantially the form of Exhibit C hereto (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance with
Section 9.01, (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred
to in Section 7.04 (or, if later, the most recently delivered audited financial
statements pursuant to Section 8.01(a)) and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate and (iv) specifying each Subsidiary.

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(d)        Certificate of Accounting Firm – Defaults.  Concurrently with any
delivery of financial statements under Section 8.01(a), a certificate of the
accounting firm that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines).

(e)          [Reserved].

(f)         Certificate of Financial Officer – Swap Agreements.  Concurrently
with any delivery of financial statements under Section 8.01(a) and Section
8.01(b), a certificate of a Financial Officer, in form and substance
satisfactory to the Agent, setting forth as of the last Business Day of such
calendar month or fiscal year, a true and complete summary of all Swap
Agreements of each Debtor which includes the material terms thereof (including
the type, term and notional amounts or volumes) not listed on Schedule 7.20.

(g)        Certificate of Insurer – Insurance Coverage.  Concurrently with any
delivery of financial statements under Section 8.01(a), a certificate of
insurance coverage from each insurer with respect to the insurance required by
Section 8.07, in form and substance reasonably satisfactory to the Agent, and,
if requested by the Agent or any Lender, all copies of the applicable policies.

(h)        Other Accounting Reports.  Promptly upon receipt thereof, a copy of
each other report or letter submitted to any Debtor by independent accountants
in connection with any annual, interim or special audit made by them of the
books of any such Debtor, and a copy of any response by such Debtor to such
letter or report.

(i)          SEC and Other Filings; Reports to Shareholders.  Promptly after the
same become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent, the Borrower or any
Subsidiary with the SEC, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be.

(j)           [Reserved].

(k)        Lists of Purchasers.  Concurrently with the delivery of any Reserve
Report to the Agent pursuant to Section 8.12, a list of all Persons purchasing
Hydrocarbons from any Debtor.

(l)          Notice of Sales of Oil and Gas Properties.  In the event any Debtor
intends to sell, transfer, assign or otherwise dispose of any Oil or Gas
Properties included in the most recently delivered Reserve Report (or any Equity
Interests in any Debtor owning interests in such Oil and Gas Properties), prior
written notice of such disposition, the price thereof, the anticipated date of
closing, and any other details thereof requested by the Agent or any Lender.

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(m)        Notice of Casualty Events.  Prompt written notice, and in any event
within three (3) Business Days, of the occurrence of any Casualty Event or the
commencement of any action or proceeding that could reasonably be expected to
result in a Casualty Event.

(n)         Information Regarding Borrower and Guarantors.  Prompt written
notice (and in any event within thirty (30) days prior thereto) of any change
(i) in the Borrower or any Guarantor’s corporate name or in any trade name used
to identify such Person in the conduct of its business or in the ownership of
its Properties, (ii) in the location of the Borrower or any Guarantor’s chief
executive office or principal place of business, (iii) in the Borrower or any
Guarantor’s identity or corporate structure or in the jurisdiction in which such
Person is incorporated or formed, (iv) in the Borrower or any Guarantor’s
jurisdiction of organization or such Person’s organizational identification
number in such jurisdiction of organization, and (v) in the Borrower or any
Guarantor’s federal taxpayer identification number, if any.

(o)        Production Report and Lease Operating Statements.  On or prior to the
20th Business Day after the end of each month, the Borrower shall deliver to the
Agent, a report setting forth, for each calendar month during the then-current
fiscal year to date, the volume of production and sales attributable to
production (and the prices at which such sales were made and the revenues
derived from such sales) for each such calendar month from the Oil and Gas
Properties, and setting forth the related ad valorem, severance and production
taxes and lease operating expenses attributable thereto and incurred for each
such calendar month.

(p)         Notices of Certain Changes.  Promptly, but in any event within five
(5) Business Days after the execution thereof, copies of any amendment,
modification or supplement to any of the certificate or articles of
incorporation, by-laws, any preferred stock designation or any other organic
document of any Debtor.

(q)         Other Requested Information.  Promptly following any request
therefor, such other information regarding the operations, business affairs and
financial condition of any Debtor (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be filed
under ERISA), or compliance with the terms of this Agreement or any other Loan
Document, as the Agent may reasonably request.

(r)         Property Tax Receipts.  Not later than March 15th of each year,
receipts or other written evidence reasonably satisfactory to the Agent (it
being agreed and understood that independent third party verification shall not
be required to the extent that the Agent’s internal policies allow)
demonstrating the Borrower or the applicable Guarantor has paid in full all of
its property Tax obligations for the previous calendar year with respect to any
improved real Property subject to a Lien of the Security Instruments.

(s)          Material Permian Acreage.  Not later than five (5) Business Days
after the consummation of an acquisition of Material Permian Acreage by any
Debtor, written notice thereof, legal descriptions of the Properties acquired
thereby and such other details as may be reasonably requested by the Agent.

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(t)          Budget Update; Cash Reporting.

(i)          On or prior to the 20th Business Day after the end of each month,
the Borrower shall deliver to the Agent: (i) an updated Capital Expenditure
Budget including a report from a Financial Officer identifying and addressing
any variance of actual performance to the Capital Expenditure Budget for the
prior month and (ii) an updated accounts payable schedule as of the last day of
the immediately prior month.

(ii)        On each Friday following the end of each four-week period, beginning
on July 5, 2019 (each, a “Reporting Date”), the Borrower shall deliver to the
Agent an updated Budget (which shall each be satisfactory to the Agent and
subject to the Agent’s approval in its reasonable discretion; provided that the
Agent shall have five (5) Business Days to approve any revised Budget provided,
further, that if the Agent does not approve any updated Budget by the sixth
(6th) Business Day following receipt thereof, the previously delivered Budget
shall remain in effect for purposes of the variance testing covenant and
reporting).

(iii)        On each Friday immediately following each Reporting Date (such
date, the “Variance Testing Date”), the Borrower shall deliver to the Agent (in
form reasonably satisfactory to the Agent) a variance report tested as of the
most recent Reporting Date for the four-week period ending on such Reporting
Date (each such period, a “Variance Testing Period”) setting forth: (w) the
aggregate disbursements of the Debtors for line items other than capital
expenditures and aggregate receipts during the applicable Variance Testing
Period, (x) any variance (whether positive or negative, expressed as a
percentage) between the aggregate disbursements for line items other than
capital expenditures made during such Variance Testing Period by the Debtors
against the aggregate disbursements for line items other than capital
expenditures for the Testing Period set forth in the applicable Budget, (y) the
aggregate disbursements of the Debtors for capital expenditures during the
applicable Variance Testing Period, and (z) any variance (whether positive or
negative, expressed as a percentage) between the aggregate disbursements for
capital expenditures for the testing Period set forth in the applicable Budget.

(iv)        On the last day of each calendar week, the Borrower shall deliver to
the Agent, a variance report comparing the Debtors’ actual receipts and
disbursements for the prior calendar week and the prior four calendar weeks (on
a cumulative basis) with the projected receipts and disbursements for such week
and the prior four calendar weeks (on a cumulative basis) as reflected in the
applicable Budget for such weeks, which variance report shall include a report
from a Financial Officer of the Debtors identifying and addressing any variance
of actual performance to projected performance for the prior week.

Section 8.02       Notices of Material Events.  The Borrower will furnish to the
Agent and each Lender, promptly after the Borrower obtains knowledge thereof,
written notice of the following:

(a)          the occurrence of any Default;
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(b)        other than the Bankruptcy Cases, the filing or commencement of, or
the threat in writing of, any action, suit, investigation, arbitration or
proceeding by or before any arbitrator or Governmental Authority against or
affecting any Debtor, or any material adverse development in any action, suit,
proceeding, investigation or arbitration (whether or not previously disclosed to
the Lenders), that, in either case, if adversely determined, could reasonably be
expected to result in liability in excess of $1,000,000 (not subject to the
automatic stay in the Bankruptcy Cases);

(c)          the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Debtors in an aggregate amount exceeding $1,000,000;

(d)        at least two (2) Business Days prior to filing (or such shorter
period as the Agent may agree), the Borrower shall use commercially reasonable
efforts to provide the Agent copies of all pleadings and motions (other than
“first day” motions and proposed orders, but including the Approved Plan of
Reorganization and any disclosure statement related thereto) to be filed by or
on behalf of the Borrower or any of the other Loan Parties with the Bankruptcy
Court in the Bankruptcy Cases, or to be distributed by or on behalf of the
Borrower or any of the other Loan Parties to any official committee appointed in
the Bankruptcy Cases, which such pleadings shall include the Agent as a notice
party;

(e)          on a timely basis as specified in any DIP Order, all notices
required to be given to all parties specified in such DIP Order, in the manner
specified therefor therein; and

(f)          any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 8.03         Existence; Conduct of Business.  Each Debtor will do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business and maintain, if necessary,
its qualification to do business in each other jurisdiction in which any of its
Oil and Gas Properties is located or the ownership of its Properties requires
such qualification, except where the failure to so qualify could not reasonably
be expected to have a Material Adverse Effect; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation, dissolution, sale or other
disposition permitted under Section 9.12.

Section 8.04       Payment of Obligations.  Each Debtor will pay its
obligations, including Tax liabilities of such Debtor before the same shall
become delinquent or in default, except (x) to the extent such payment is
excused by, or is otherwise prohibited by the provisions of the Bankruptcy Code
or order of the Bankruptcy Court and (y) where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) such
Debtor has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.

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Section 8.05         Performance of Obligations under Loan Documents.  Except to
the extent excused by the Bankruptcy Court or as a result of the filing of the
Bankruptcy Cases each Debtor will pay its Obligations in accordance with the
Loan Documents, and each Debtor will do and perform every act and discharge all
of the obligations to be performed and discharged by such Debtor under the Loan
Documents, including, without limitation, this Agreement, at the time or times
and in the manner specified.

Section 8.06         Operation and Maintenance of Properties.  Subject to any
necessary order or authorization of the Bankruptcy Court, each Debtor will:

(a)        operate its Oil and Gas Properties and other material Properties or
cause such Oil and Gas Properties and other material Properties to be operated
in a careful and efficient manner in accordance with the practices of the
industry and in compliance with all applicable contracts and agreements and in
compliance with all Governmental Requirements, including, without limitation,
applicable proration requirements and Environmental Laws, and all applicable
laws, rules and regulations of every other Governmental Authority from time to
time constituted to regulate the development and operation of its Oil and Gas
Properties and the production and sale of Hydrocarbons and other minerals
therefrom, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect;

(b)         keep and maintain all Property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted
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, without limitation, all material
equipment, machinery and facilities;

(c)        promptly pay and discharge, or make reasonable and customary efforts
to cause to be paid and discharged, all delay rentals, royalties, expenses and
indebtedness accruing under the leases or other agreements affecting or
pertaining to its Oil and Gas Properties and will do all other things necessary
to keep unimpaired their rights with respect thereto and prevent any forfeiture
thereof or default thereunder;

(d)          promptly perform or make reasonable and customary efforts to cause
to be performed, in accordance with industry standards and in all material
respects, the obligations required by each and all of the assignments, deeds,
leases, sub-leases, contracts and agreements affecting its interests in its Oil
and Gas Properties and other material Properties; and

(e)         to the extent a Debtor is not the operator of any Property, the
Borrower shall use reasonable efforts to cause the operator to comply with this
Section 8.06.

Section 8.07         Insurance.  Each Debtor will maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.  The loss payable
clauses or provisions in said insurance policy or policies insuring any of the
collateral for the Loans shall be endorsed in favor of and made payable to the
Agent as its interests may appear and such policies shall name the Agent and the
Lenders as “additional insureds” and provide that the insurer will give at least
thirty (30) days prior notice of any cancellation to the Agent.

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Section 8.08         Books and Records; Inspection Rights.  Each Debtor will
keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and
activities.  Each Debtor will permit any representatives designated by the Agent
or any Lender, upon reasonable prior notice, to visit and inspect its
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.

Section 8.09         Compliance with Laws.  Subject to any necessary order or
authorization of the Bankruptcy Court, each Debtor will comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its Subsidiaries’ Property.  Each Debtor will maintain in effect and enforce
policies and procedures designed to ensure compliance by such Debtor and its
respective directors, officers, employees and agents with Anti-Corruption Laws,
applicable AML Laws and applicable Sanctions.

Section 8.10         Environmental Matters.

(a)        Subject to any necessary order or authorization of the Bankruptcy
Court, each Debtor shall:  (i) comply, and shall cause its Properties and
operations to comply, with all applicable Environmental Laws, the breach of
which could be reasonably expected to have a Material Adverse Effect; (ii) not
dispose of or otherwise release any oil, oil and gas waste, hazardous substance,
or solid waste on, under, about or from any of such Debtor’s or any other
Property to the extent caused by the Debtor’s operations except in compliance
with applicable Environmental Laws, the disposal or release of which could
reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or
file all notices, permits, licenses, exemptions, approvals, registrations or
other authorizations, if any, required under applicable Environmental Laws to be
obtained or filed in connection with the operation or use of the Debtor’s
Properties, which failure to obtain or file could reasonably be expected to have
a Material Adverse Effect; (iv) promptly commence and diligently prosecute to
completion any assessment, evaluation, investigation, monitoring, containment,
cleanup, removal, repair, restoration, remediation or other remedial obligations
(collectively, the “Remedial Work”) in the event any Remedial Work is required
or reasonably necessary under applicable Environmental Laws because of or in
connection with the actual or suspected past, present or future disposal or
other release of any oil, oil and gas waste, hazardous substance or solid waste
on, under, about or from any of the Debtor’s Properties, which failure to
commence and diligently prosecute to completion could reasonably be expected to
have a Material Adverse Effect; and (v) establish and implement such procedures
as may be reasonably necessary to continuously determine and assure that the
Debtor’s obligations under this Section 8.10(a) are timely and fully satisfied,
which failure to establish and implement could reasonably be expected to have a
Material Adverse Effect.

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(b)         The Borrower will promptly, but in no event later than five (5) days
after the occurrence thereof, notify the Agent and the Lenders in writing of any
threatened action, investigation or inquiry by any Governmental Authority or any
threatened demand or lawsuit by any landowner or other third party against any
Debtor or its Properties of which the Borrower has knowledge in connection with
any Environmental Laws (excluding routine testing and corrective action) if the
Borrower reasonably anticipates that such action will result in liability
(whether individually or in the aggregate) in excess of $1,000,000, not fully
covered by insurance, subject to normal deductibles.

(c)         Each Debtor will provide environmental audits and tests in
accordance with American Society of Testing Materials standards upon request by
the Agent and the Lenders (or as otherwise required to be obtained by the Agent
or the Lenders by any Governmental Authority), in connection with any future
acquisitions of Oil and Gas Properties or other material Properties.

Section 8.11         Further Assurances.

(a)        Each Debtor at its sole expense will promptly execute and deliver to
the Agent all such other documents, agreements and instruments reasonably
requested by the Agent to comply with, cure any defects or accomplish the
conditions precedent, covenants and agreements of such Debtor, as the case may
be, in the Loan Documents, including the Notes, or to further evidence and more
fully describe the collateral intended as security for the Obligations, or to
correct any omissions in this Agreement or the Security Instruments, or to state
more fully the obligations secured therein, or to perfect, protect or preserve
any Liens created pursuant to this Agreement or any of the Security Instruments
or the priority thereof, or to make any recordings, file any notices or obtain
any consents, all as may be reasonably necessary or appropriate, in the sole
discretion of the Agent, in connection therewith.  For the avoidance of doubt,
with respect to any fee-owned or easement real Property of the Borrower or any
Guarantor (other than oil and gas reserves), to the extent reflected in
Borrower’s midstream cash flow projections, upon the reasonable request of the
Agent, the Borrower shall, or shall cause such Guarantor to, promptly upon such
request, provide the Lenders with title insurance and, to the extent available
in the applicable jurisdiction, extended coverage insurance, covering its
interest in such real Property, in an amount equal to the purchase price of such
interest in real Property (or such other lesser amount as shall be reasonably
specified by the Agent), as well as an ALTA survey, which accurately depicts the
current condition thereof, together with a surveyor’s certificate.

(b)         The Borrower hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Mortgaged Property without the signature of the Borrower or any
other Guarantor where permitted by law.  A carbon, photographic or other
reproduction of the Security Instruments or any financing statement covering the
Mortgaged Property or any part thereof shall be sufficient as a financing
statement where permitted by law.  The Agent will promptly send the Borrower any
financing or continuation statements it files without the signature of the
Borrower or any other Guarantor and the Agent will promptly send the Borrower
the filing or recordation information with respect thereto.

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Section 8.12         Reserve Reports.

(a)          On or before March 1st and September 1st of each year, the Borrower
shall furnish to the Agent and the Lenders a Reserve Report as of the
immediately preceding December 31st or June 30th, as applicable.  The Reserve
Report as of December 31st of each year shall be prepared by one or more
independent petroleum engineers reasonably acceptable to the Agent and the June
30th Reserve Report of each year shall be prepared by or under the supervision
of the “Manager of Acquisitions and Planning” (or similarly titled position) of
the Borrower who shall certify such Reserve Report to be true and accurate and
to have been prepared in accordance with the procedures used in the immediately
preceding December 31st Reserve Report.

(b)          [Reserved].

(c)       With the delivery of each Reserve Report, the Borrower shall provide
to the Agent and the Lenders a certificate from a Responsible Officer certifying
that in all material respects:  (i) the information contained in the Reserve
Report and any other information delivered in connection therewith is true and
correct, (ii) each applicable Debtor owns good and defensible title to the Oil
and Gas Properties evaluated in such Reserve Report and such Properties are free
of all Liens except for Liens permitted by Section 9.03, (iii) except as set
forth on an exhibit to the certificate, on a net basis there are no gas
imbalances, take or pay or other prepayments in excess of the volume specified
in Section 7.18 with respect to their Oil and Gas Properties evaluated in such
Reserve Report that would require any Debtor to deliver Hydrocarbons either
generally or produced from such Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor, (iv) none of their
Oil and Gas Properties have been sold since the Petition Date except as set
forth on an exhibit to the certificate, which certificate shall list all of its
Oil and Gas Properties sold and in such detail as reasonably required by the
Agent, (v) attached to the certificate is a list of all marketing agreements
entered into subsequent to the later of the date hereof or the most recently
delivered Reserve Report that the Borrower could reasonably be expected to have
been obligated to list on Schedule 7.19 had such agreement been in effect on the
date hereof and (vi) attached thereto is a schedule of the Oil and Gas
Properties evaluated by such Reserve Report that are Mortgaged Properties and
demonstrating the percentage of the present value that such Mortgaged Properties
represent.

Section 8.13         Title Information.

(a)        On or before the delivery to the Agent and the Lenders of each
Reserve Report required by Section 8.12(a), to the extent requested by the
Agent, the Borrower will deliver title information in form and substance
acceptable to the Agent covering enough of the Oil and Gas Properties evaluated
by such Reserve Report that were not included in the immediately preceding
Reserve Report, so that the Agent shall have received together with title
information previously delivered to the Agent, satisfactory title information on
at least 80% of the total value of the Oil and Gas Properties evaluated by such
Reserve Report.

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(b)         If the Borrower has provided title information for additional
Properties under Section 8.13(a), the Borrower shall, within sixty (60) days of
notice from the Agent that title defects or exceptions exist with respect to
such additional Properties, either (i) cure any such title defects or exceptions
(including defects or exceptions as to priority) which are not permitted by
Section 9.03 raised by such information, (ii) substitute acceptable Mortgaged
Properties with no title defects or exceptions except for Excepted Liens (other
than Excepted Liens described in clauses (e), (g) and (h) of such definition)
having an equivalent value or (iii) deliver title information in form and
substance reasonably acceptable to the Agent so that the Agent shall have
received, together with title information previously delivered to the Agent,
satisfactory title information on at least 80% of the value of the Oil and Gas
Properties evaluated by such Reserve Report.

Section 8.14         Additional Collateral; Additional Guarantors.

(a)         The Parent shall, and shall cause each other Debtor to, guarantee
the Obligations pursuant to the Loan Guarantee.  In connection with any such
guarantee, the Parent shall, or shall cause such Debtor to promptly, (A) execute
and deliver this Agreement or a joinder to this Agreement, in form and substance
reasonably acceptable to the Agent (the “Joinder Agreement”), and any other Loan
Document reasonably requested by the Agent, (B) pledge all of the Equity
Interests of such Debtor pursuant to a Security Instrument or other Loan
Document (including, without limitation, delivery of original stock
certificates, if any, evidencing the Equity Interests of such Debtor, together
with appropriate undated stock powers for each certificate duly executed in
blank by the registered owner thereof) and (C) execute and deliver such other
additional closing documents, certificates and legal opinions as shall
reasonably be requested by the Agent.

(b)         Notwithstanding the restrictions in Section 9.06, each Subsidiary of
a Loan Party now existing or created, acquired or coming into existence after
the date hereof, other than the Guarantors party hereto, shall promptly execute
and deliver to the Agent a Joinder Agreement and any Security Instrument or
other Loan Document (or joinder thereto) as may be required by the Agent. Such
Subsidiary shall, and the Parent shall cause such Subsidiary to, deliver to the
Agent, simultaneously with its delivery of such Joinder Agreement and any such
Security Instrument or other Loan Document (or joinder), (x) written evidence
reasonably satisfactory to the Agent that such Subsidiary has taken all
organizational action necessary to duly approve and authorize its execution,
delivery and performance of such Joinder Agreement (including under the Loan
Guarantee), any such Security Instrument and any other documents which it is
required to execute, and (y) such additional closing documents, certificates and
opinions of counsel as the Agent shall reasonably require.

Section 8.15        ERISA Compliance.  The Parent will promptly furnish, and
will cause each other Debtor and any ERISA Affiliate to promptly furnish, to the
Agent (a) promptly after the filing thereof with the United States Secretary of
Labor, the Internal Revenue Service or the PBGC, copies of each annual and other
report with respect to each Plan, if any, or any trust created thereunder, (b)
immediately upon becoming aware of the occurrence of any ERISA Event or of any
“prohibited transaction,” as described in section 406 of ERISA or in section
4975 of the Code, in connection with any Plan or any trust created thereunder, a
written notice signed by the President or the principal Financial Officer of the
Borrower, its Subsidiaries or the ERISA Affiliate, as the case may be,
specifying the nature thereof, what action the Parent, such applicable Debtor or
the ERISA Affiliate is taking or proposes to take with respect thereto, and,
when known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, and (c) immediately upon
receipt thereof, copies of any notice of the PBGC’s intention to terminate or to
have a trustee appointed to administer any Plan.  With respect to each Plan, if
any (other than a Multiemployer Plan), the Parent will, and the Parent will
cause each other Debtor and its ERISA Affiliates to, (i) satisfy in full and in
a timely manner, without incurring any late payment or underpayment charge or
penalty and without giving rise to any lien, all of the contribution and funding
requirements of section 412 of the Code (determined without regard to
subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay,
or cause to be paid, to the PBGC in a timely manner, without incurring any late
payment or underpayment charge or penalty, all premiums required pursuant to
sections 4006 and 4007 of ERISA.

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Section 8.16         [Reserved].

Section 8.17         [Reserved].

Section 8.18       Use of Proceeds.  The proceeds of the Loans and Letters of
Credit shall be used (a) to pay related transaction costs, fees and expenses;
(b) to provide working capital and for other general corporate purposes of the
Debtors in accordance with the Budget; (c) to make adequate protection payments
as authorized by the Bankruptcy Court in the Interim Order or the Final Order,
as applicable; (d) to pay obligations arising from or related to the Carve-Out;
(e) to pay restructuring costs incurred in connection with the Bankruptcy Cases;
and (f) in the case of the Refinancing Facility, to refinance amounts
outstanding under the Existing Credit Agreement, pursuant to the terms set forth
in Article II.  The Borrower and the other Loan Parties are not engaged
principally, or as one of its or their important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock (within the meaning of Regulation T, U or X of
the Board).  No part of the proceeds of any Loan or Letter of Credit will be
used for any purpose which violates the provisions of Regulations T, U or X of
the Board.

Section 8.19         [Reserved].

Section 8.20         [Reserved].

Section 8.21        Affirmative Covenants of the Parent Guarantors.  Each of the
Parent Guarantors hereby covenants and agrees to comply with each of the
covenants set forth in Section 8.03, Section 8.04, Section 8.05, Section 8.07,
Section 8.08, Section 8.09, Section 8.10, Section 8.11 and Section 8.15, as if
each reference to “the Borrower” therein were a reference to “such Parent
Guarantor”.

Section 8.22         [Reserved].

Section 8.23        Delivery of Proposed DIP Orders.  The Borrower will deliver
to the Agent, as soon as practicable in advance of filing with the Bankruptcy
Court, (i) the proposed DIP Orders (which must be in form and substance
satisfactory to the Agent) and (ii) the Approved Plan of Reorganization,
including any proposed disclosure statement related to such Approved Plan of
Reorganization.

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Section 8.24       Cash Management. Each Debtor shall maintain their cash
management system as it existed prior to the Petition Date for the benefit of
the entire DIP Facility, with any changes made pursuant to an order of the
Bankruptcy Court.

ARTICLE IX
NEGATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower (and each Parent Guarantor, in the case of Section
9.01, Section 9.04(a), Section 9.21, Section 9.22 and Section 9.23) covenants
and agrees with the Lenders that:

Section 9.01         Financial Covenants.

(a)         Variance Testing Period.  The Debtors shall not allow, during any
Variance Testing Period, the Debtors’ actual cash expenses and disbursements
during such Variance Testing Period to be more than 115% of the projected cash
expenses and disbursements for such Variance Testing Period, as set forth in the
Budget (the “Permitted Variance”), provided that the cash expenses and
disbursements considered for determining compliance with this covenant shall
exclude (i) disbursements and expenses in respect of professional fees incurred
in the Bankruptcy Cases during such Variance Testing Period, (ii) the Upfront
Fees payable to the RBL Lenders, as set forth in the Exit Term Sheet (as defined
in the Final Order), and (iii) disbursements owed to third parties on account of
royalty interests and working interests and provided, further that the Debtors
may carry forward budgeted but unused disbursements set forth in the Budget for
a Variance Testing Period for use during the immediately succeeding Variance
Testing Period.

Section 9.02         Debt.  No Debtor will incur, create, assume or suffer to
exist any Debt, except:

(a)          the Obligations;

(b)         accounts payable and other accrued expenses, liabilities or other
obligations to pay (for the deferred purchase price of Property or services)
from time to time incurred in the ordinary course of business which are not
greater than ninety (90) days past the date of invoice or delinquent or which
are being contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP;

(c)         unsecured intercompany Debt between Debtors to the extent permitted
by Section 9.05; provided that such Debt is not held, assigned, transferred,
negotiated or pledged to any Person other than a Debtor, and, provided further,
that any such Debt owed by a Debtor shall be subordinated to the Obligations on
terms satisfactory to the Agent, including as set forth in the Loan Guarantee;

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(d)          endorsements of negotiable instruments for collection in the
ordinary course of business;

(e)          debt of the Debtors under Capital Leases entered into prior to the
Petition Date and set forth on Schedule 9.02(e) hereto;

(f)          to the extent set forth on Schedule 9.02(f), Debt of the Debtors in
existence on the Petition Date in respect of performance, bid, surety or similar
bonds or surety obligations for the account of the Debtors, in each case, to the
extent required by any Governmental Requirements applicable to the Debtors and
otherwise in connection with the operation of the Oil and Gas Properties of the
Debtors, together with all replacements, extensions and renewals thereof made in
the ordinary course of business;

(g)          (i) the Existing Senior Indentures, (ii) the Existing Second Lien
Loan Documents and (iii) the Existing Obligations; and

(h)          Debt for borrowed money outstanding on the Petition Date and set
forth on Schedule 9.02(e) hereto.

Section 9.03       Liens.  No Debtor will create, incur, assume or permit to
exist any Lien on any of its Properties (now owned or hereafter acquired),
except:

(a)          Liens securing the payment of any Obligations;

(b)         (i) Excepted Liens on any Property of the Debtors, (ii) Excepted
Liens on any Property (other than the Parent’s right, title and interest in, and
to, any and all Equity Interests issued by any of the direct or indirect
Subsidiaries of the Parent) of the Parent and (iii) inchoate Tax Liens on the
Parent’s right, title and interest in, and to, any and all Equity Interests
issued by any of the direct or indirect Subsidiaries of the Parent;

(c)         Liens on any Property of the Debtors securing Debt arising in
respect of Capital Leases so long as such Debt is permitted under Section
9.02(e); provided that such Liens attach only to the assets acquired with the
proceeds of such Debt and do not cover any Hydrocarbon Interests or Equity
Interests in Persons owning direct or indirect interests in Hydrocarbon
Interests);

(d)         Liens on any Property of the Debtors existing on the Petition Date
and set forth on Schedule 9.03(d); provided that (i) no such Lien shall at any
time be extended to cover any additional Property not subject thereto on the
Petition Date and (ii) the principal amount of the Debt secured by such Liens
shall not be extended, renewed, refunded or refinanced;

(e)          Liens securing Existing Obligations; provided that such Liens are
subject to the terms and conditions of the DIP Order;

(f)          Liens securing obligations under the Existing Second Lien Loan and
the other Existing Second Lien Loan Documents; provided that such Liens are
subject to the terms and conditions of the DIP Order; and

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(g)          Adequate Protection Liens.

Section 9.04         Dividends, Distributions and Redemptions.

(a)         Dividends and Distributions.  The Debtors will not declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, return
any capital to its stockholders or make any distribution of their Property to
their respective Equity Interest holders, except the Debtors (other than Parent)
may declare and pay dividends or distributions ratably with respect to their
Equity Interests.

(b)        Prepayments, Redemptions of Existing Obligations, Existing Second
Lien Loans; Certain Amendments.  The Debtors will not make any Redemption or any
other prepayments of principal, interest or payment of fees on, or in connection
with, the Existing Loan Documents or the Existing Second Lien Loan Documents, in
each case, other than payments expressly provided for herein or pursuant to
orders entered upon pleadings in form and substance reasonably satisfactory to
the Agent. No Debtor shall consent to any amendment, supplement, waiver or other
modification of the terms or provisions contained in any of (i) the Existing
Second Lien Loan Documents, (ii) the Existing Loan Documents or (iii) any other
Debt for borrowed money.

(c)          [Reserved].

Section 9.05        Investments, Loans and Advances.  No Debtor will make or
permit to remain outstanding any Investments in or to any Person, except that
the foregoing restriction shall not apply to:

(a)          Investments in all of the Debtors and Binger in existence on the
Interim Facility Effective Date and set forth in Schedule 9.05(a);

(b)          Investments of the Debtors reflected in the Financial Statements;

(c)          Investments of the Debtors in the form of accounts receivable
arising in the ordinary course of business;

(d)          Investments of the Debtors in the form of direct obligations of the
United States or any agency thereof, or obligations guaranteed by the United
States or any agency thereof, in each case maturing within one year from the
date of creation thereof;

(e)          Investments of the Debtors in the form of commercial paper maturing
within one year from the date of creation thereof rated in the highest grade by
S&P or Moody’s;

(f)         Investments of the Debtors in the form of deposits maturing within
one year from the date of creation thereof with, including certificates of
deposit issued by, any Lender or any office located in the United States of any
other bank or trust company which is organized under the laws of the United
States or any state thereof, has capital, surplus and undivided profits
aggregating at least $250,000,000 (as of the date of such bank or trust
company’s most recent financial reports) and has a short term deposit rating of
no lower than A2 or P2, as such rating is set forth from time to time, by S&P or
Moody’s, respectively;

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(g)        Investments of the Debtors in the form of deposits in money market
funds investing exclusively in Investments described in Section 9.05(d), Section
9.05(e) or Section 9.05(f);

(h)          Investments made by a Debtor in or to any other Debtor;

(i)         Investments made by the Debtors in direct ownership interests in
additional Oil and Gas Properties and gas gathering systems related thereto or
related to farm-out, farm-in, joint operating, joint venture or area of mutual
interest agreements, gathering systems, pipelines or other similar arrangements
which are usual and customary in the oil and gas exploration and production
business located within the geographic boundaries of the United States of
America, and only to the extent an Event of Default does not exist and the total
Revolving Credit Exposures would not exceed the Available Commitments as a
result of making such Investments;

(j)          Investments made by the Debtors in the form of loans or advances to
employees, officers or directors in the ordinary course of business of the
Debtors, in each case only as permitted by applicable law, including Section 402
of the Sarbanes Oxley Act of 2002, but in any event not to exceed $250,000 in
the aggregate at any time;

(k)        Investments in stock, obligations or securities received in
settlement of debts arising from Investments permitted under this Section 9.05
owing to any Debtor as a result of a bankruptcy or other insolvency proceeding
of the obligor in respect of such debts or upon the enforcement of any Lien in
favor of any Debtor; provided that the Borrower shall give the Agent prompt
written notice in the event that the aggregate amount of all investments held at
any one time under this Section 9.05(k) exceeds $250,000;

(l)           [Reserved]; and

(m)         Loans and advances made by the Borrower to the Parent to the extent
any such loan or advance (i) is made in lieu of a Restricted Payment permitted
pursuant to Section 9.04 or otherwise under this Agreement and (ii) if made as a
Restricted Payment, would be permitted pursuant to Section 9.04 or otherwise
under this Agreement.

Section 9.06        Nature of Business.  Subject to any restrictions arising on
account of the Debtors’ status as a “debtor” under the Bankruptcy Code and entry
of the DIP Order, no Debtor will allow any material change to be made (i) in the
character of its business as an independent oil and gas exploration and
production company or (ii) to the Debtor’s identity or corporate structure, the
jurisdiction in which such Person is incorporated or formed, or any
organizational documents of such Debtor. Debtors will not operate its business
outside the geographical boundaries of the United States.

Section 9.07         [Reserved].

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Section 9.08        Proceeds of Loans; OFAC.  The Borrower will not permit the
proceeds of the Loans to be used (i) for any purpose other than those permitted
by Section 8.18.  Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulations T, U or X or any other regulation of the Board
or to violate Section 7 of the Securities Exchange Act or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect. If requested by the Agent, the Borrower will furnish to the Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 or such other form referred to in Regulation U,
Regulation T or Regulation X of the Board, as the case may be.  No Debtor or its
respective directors, officers, employees, Affiliates and agents shall use,
directly or indirectly, the proceeds of any Borrowing or Letter of Credit, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
other Affiliate, joint venture partner or other Person, (A) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws or AML Laws, (B) for the purpose of funding, financing or
facilitating any activities, business or transaction of or with any Sanctioned
Person, or in any Sanctioned Country, or involving any goods originating in or
with a Sanctioned Person or Sanctioned Country, or (C) in any manner that would
result in the violation of any Sanctions by any Person (including any Person
participating in the transactions contemplated hereunder, whether as
underwriter, advisor lender, investor or otherwise).

Section 9.09         ERISA Compliance.  No Debtor will at any time:

(a)        engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which any Debtor or any ERISA Affiliate could be
subjected to either a civil penalty assessed pursuant to subsections (c), (i) or
(l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code;

(b)         terminate, or permit any ERISA Affiliate to terminate, any Plan in a
manner, or take any other action with respect to any Plan, which could result in
any liability of any Debtor or any ERISA Affiliate to the PBGC;

(c)          fail to make, or permit any ERISA Affiliate to fail to make, full
payment when due of all amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, any Debtor or any ERISA Affiliate
is required to pay as contributions thereto;

(d)         permit to exist, or allow any ERISA Affiliate to permit to exist,
any accumulated funding deficiency within the meaning of section 302 of ERISA or
section 412 of the Code, whether or not waived, with respect to any Plan;

(e)          permit, or allow any ERISA Affiliate to permit, the actuarial
present value of the benefit liabilities under any Plan maintained by any Debtor
or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the
current value of the assets (computed on a plan termination basis in accordance
with Title IV of ERISA) of such Plan allocable to such benefit liabilities.  The
term “actuarial present value of the benefit liabilities” shall have the meaning
specified in section 4041 of ERISA;

(f)          contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any Multiemployer Plan;

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(g)         acquire, or permit any ERISA Affiliate to acquire, an interest in
any Person that causes such Person to become an ERISA Affiliate with respect to
any Debtor or with respect to any ERISA Affiliate of any Debtor if such Person
sponsors, maintains or contributes to, or at any time in the six-year period
preceding such acquisition has sponsored, maintained, or contributed to, (i) any
Multiemployer Plan, or (ii) any other Plan that is subject to Title IV of ERISA
under which the actuarial present value of the benefit liabilities under such
Plan exceeds the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Plan allocable to such
benefit liabilities;

(h)          incur, or permit any ERISA Affiliate to incur, a liability to or on
account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA;

(i)          contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any employee welfare benefit plan, as defined in section 3(1) of ERISA,
including, without limitation, any such plan maintained to provide benefits to
former employees of such entities, that may not be terminated by such entities
in their sole discretion at any time without any material liability; or

(j)          amend, or permit any ERISA Affiliate to amend, a Plan resulting in
an increase in current liability such that any Debtor or any ERISA Affiliate is
required to provide security to such Plan under section 401(a)(29) of the Code.

Section 9.10       Sale or Discount of Receivables.  No Debtor will discount or
sell (with or without recourse) any of its notes receivable or accounts
receivable.

Section 9.11       Mergers, Divisions, Etc.  No Debtor will merge into or with
or consolidate with any other Person, or sell, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its Property (whether now owned or hereafter acquired) to any other
Person, or liquidate or dissolve or divide.

Section 9.12         Sale of Properties.  No Debtor will sell, assign, farm-out,
convey or otherwise transfer any Property except for:

(a)          the sale of Hydrocarbons in the ordinary course of business;

(b)        farmouts of undeveloped acreage and assignments in connection with
such farmouts with respect to which a Debtor retains an overriding royalty
interest above a 75% net revenue interest in such disposed Property;

(c)         the sale or transfer of equipment that is no longer necessary for
the business of such Debtor or is replaced by equipment of at least comparable
value and use;

(d)        if no Event of Default then exists or would result as a result
thereof, sales and other dispositions of Property (not otherwise permitted
above) having a fair market value not to exceed $1,000,000; and

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(e)          dispositions of any Property of any Debtor pursuant to an order of
the Bankruptcy Court; provided that such disposition shall be subject to the
prior consent of the Agent and the Majority Lenders.

Section 9.13       Environmental Matters.  No Debtor will violate or permit any
of its Property to be in violation of, or do anything or permit anything to be
done which will subject any such Property to any Remedial Work under any
Environmental Laws, assuming disclosure to the applicable Governmental Authority
of all relevant facts, conditions and circumstances, if any, pertaining to such
Property where such violations or remedial obligations could reasonably be
expected to have a Material Adverse Effect.

Section 9.14        Transactions with Affiliates.  The Borrower will not enter
into any transaction, including, without limitation, any purchase, sale, or
lease or exchange of Property, with any non-Debtor Affiliate, other than
transactions or arrangements in place as of the Petition Date (including
contractual obligations in place at such time) or approved by the Bankruptcy
Court pursuant to an order in form and substance reasonably satisfactory to the
Agent and the Majority Lenders.

Section 9.15        Subsidiaries.  The Borrower shall have no Subsidiaries other
than Wholly-Owned Subsidiaries.  No Debtor will create or acquire any additional
Subsidiary.  No Debtor sell, assign or otherwise dispose of any Equity Interests
in any of its Subsidiaries.  The Borrower shall have no Foreign Subsidiaries.

Section 9.16      Negative Pledge Agreements; Dividend Restrictions.  No Debtor
will create, incur, assume or suffer to exist any contract, agreement or
understanding (other than this Agreement, any other Loan Document, the Existing
Loan Documents, the Existing Senior Indentures or the Existing Second Lien Loan
Documents) that in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property in favor of the Agent
and the Lenders or the secure the Obligations, except restrictions imposed
pursuant to an agreement entered into in connection with a disposition permitted
under Section 9.12.

Section 9.17       Gas Imbalances, Take-or-Pay or Other Prepayments.  No Debtor
will allow gas imbalances, take-or-pay or other prepayments with respect to the
Oil and Gas Properties of any Debtor that would require such Debtor to deliver,
in the aggregate, two percent (2%) or more of the monthly production of
Hydrocarbons at some future time without then or thereafter receiving full
payment therefor.

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Section 9.18         Swap Agreements.  No Debtor will enter into any Swap
Agreements with any Person other than (a) Swap Agreements in respect of
commodities (i) with an Approved Counterparty and (ii) the notional volumes for
which (when aggregated with other commodity Swap Agreements then in effect other
than basis differential swaps on volumes already hedged pursuant to other Swap
Agreements) do not exceed, as of the date such Swap Agreement is executed, 85%
of the reasonably anticipated projected production from Total Proved Reserves
(provided that proved developed non-producing and proved undeveloped reserves
shall not in the aggregate constitute more than 25% of Total Proved Reserves)
for each month during the period during which such Swap Agreement is in effect
for each of crude oil, natural gas and natural gas liquids, each calculated
separately (for purposes of the foregoing, natural gas liquids volumes may be
hedged directly or for crude oil volumes in a 2:1 ratio), for each of the next
five (5) succeeding calendar years, provided that upon the date any Debtor signs
a definitive acquisition agreement for any acquisition of Property or Equity
Interests of any Person not prohibited by this Agreement, Swap Agreements may be
entered into for 85% of the reasonably anticipated projected production from
Proved Developed Producing Properties the subject of such acquisition (provided
that should such acquisition fail to close within sixty (60) days of the date
the Debtor signing such definitive acquisition agreement, such Debtor shall
terminate or unwind such Swap Agreements entered into in respect of such
acquisition such that such Debtor is in compliance with clause (a)(ii) above),
excluding the effect of the provision for pending acquisitions, floor options
may be purchased limited to total notional volumes of all Swap Agreements and
puts options not exceeding 100% of projected production from Proved Developed
Producing Properties as described in (a)(ii) above, and (b) Swap Agreements in
respect of interest rates with an Approved Counterparty, which effectively
convert interest rates from floating to fixed, the notional amounts of which
(when aggregated with all other Swap Agreements of the Debtors then in effect
effectively converting interest rates from floating to fixed) do not exceed 100%
of the then outstanding principal amount of the Borrower’s Debt for borrowed
money which bears interest at a floating rate.  In no event shall any Swap
Agreement contain any requirement, agreement or covenant for any Debtor to post
collateral or margin to secure its obligations under such Swap Agreement or to
cover market exposures.

Section 9.19        Marketing Activities.  No Debtor will engage in marketing
activities for any Hydrocarbons or enter into any contracts related thereto
other than (a) contracts for the sale of Hydrocarbons scheduled or reasonably
estimated to be produced from their proved Oil and Gas Properties during the
period of such contract, (b) contracts for the sale of Hydrocarbons scheduled or
reasonably estimated to be produced from proved Oil and Gas Properties of third
parties during the period of such contract associated with the Oil and Gas
Properties of the Debtors that any Debtor has the right to market pursuant to
joint operating agreements, unitization agreements or other similar contracts
that are usual and customary in the oil and gas business and (c) other contracts
for the purchase and/or sale of Hydrocarbons of third parties (i) which have
generally offsetting provisions (i.e., corresponding pricing mechanics, delivery
dates and points and volumes) such that no “position” is taken and (ii) for
which appropriate credit support has been taken to alleviate the material credit
risks of the counterparty thereto.

Section 9.20         Accounting Changes.  No Debtor will (i) make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or (ii) change the fiscal year of any Debtor.

Section 9.21        New Accounts.  No Debtor will open or otherwise establish,
or deposit, credit or otherwise transfer any Cash Receipts, securities,
financial assets or any other property into, any Deposit Account, Securities
Account or Commodity Account other than (a) any Deposit Account, Securities
Account or Commodity Account in which the Agent has been granted a
first-priority perfected Lien and that, in each case, is subject to a Security
Instrument or (b) any Excluded Account (solely with respect to amounts referred
to in the definition thereof).

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Section 9.22        Volumetric Production Payment.  No Debtor will sell, grant,
issue or otherwise enter into any Volumetric Production Payment, forward sale
agreement or other sales of Hydrocarbons in place that would require any Debtor
to deliver Hydrocarbons at some future time without receipt by the Debtor of
full payment therefor at such future time or sale of royalty interests or
overriding royalty interests; provided however, without limiting the other
provisions of this Article IX, this Section 9.22 shall not limit the ability of
a Debtor to (i) enter into gas balancing arrangements, (ii) settle gas
imbalances and (iii) (A) perform on take or pay contracts, (B) deliver
Hydrocarbons in accordance with the terms of any Hydrocarbon Lease to a party
thereto, or (C) enter into midstream or marketing contracts in the ordinary
course of business for sale of Hydrocarbons, in the case of clauses (iii)(A),
(iii)(B) and (iii)(C), as and when produced.

Section 9.23       Passive Holding Company Status of Parent Guarantors.  Neither
of the Parent Guarantors shall engage in any operating or business activities or
other transactions other than (i) the ownership and/or acquisition of the Equity
Interests (other than Disqualified Capital Stock) of the Borrower or Legacy GP,
(ii) the maintenance of its legal existence, including the ability to incur
fees, costs and expenses relating to such maintenance, (iii) to the extent
applicable, participating in tax, accounting and other administrative matters as
a member of the consolidated group of the Parent Guarantors and the Borrower and
(iv) the performance of its obligations under and in connection with the Loan
Documents, the Bankruptcy Cases, the Existing Loan Documents, the Existing
Second Lien Loan Documents and any documents relating to other Debt permitted
under Section 9.02.

Section 9.24        Negative Covenants of the Parent Guarantors.  Each of the
Parent Guarantors hereby covenants and agrees to comply with each of the
covenants set forth in Section 9.04(b), Section 9.09, Section 9.14, Section
9.16, and Section 9.21, as if each reference to “the Borrower” were a reference
to “such Parent Guarantor”.

Section 9.25         Key Employee Plans. No Debtor shall (a) enter into any key
employee retention plan and incentive plan, other than such plans in effect as
of the Petition Date or (b) amend or modify any existing key employee retention
plan and incentive plan, unless such plan, amendment or modification, as
applicable, is satisfactory to the Agent and Majority Lenders.

Section 9.26         [Reserved].

Section 9.27         Superpriority Claims. No Debtor will create or permit to
exist any Superpriority Claim other than Superpriority Claims permitted by the
DIP Orders and the orders approving the “first day” motions in respect of the
Bankruptcy Cases.

Section 9.28        Bankruptcy Orders. No Debtor will (a) obtain or seek to
obtain any stay from the Bankruptcy Court on the exercise of the Agent’s or any
Lender’s remedies hereunder or under any other Loan Document, except as
specifically provided in the DIP Order, (b) seek to change or otherwise modify
any DIP Order or other order in the Bankruptcy Court with respect to the DIP
Facility or (c) without the consent of the Majority Lenders, propose, file,
consent, solicit votes with respect to or support any chapter 11 plan or debtor
in possession financing unless (i) such plan or financing would, on the date of
effectiveness, pay in full in cash all Obligations or (ii) such plan is an
Approved Plan of Reorganization.

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ARTICLE X
EVENTS OF DEFAULT; REMEDIES

Section 10.01       Events of Default.  One or more of the following events
shall constitute an “Event of Default”:

(a)         the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b)         the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in Section 10.01(a))
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five (5)
Business Days;

(c)         any representation or warranty made or deemed made by or on behalf
of any Debtor in or in connection with any Loan Document or any amendment or
modification of any Loan Document or waiver under such Loan Document, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with any Loan Document or any amendment or modification thereof
or waiver thereunder, shall prove to have been incorrect when made or deemed
made;

(d)          any Debtor shall fail to observe or perform any covenant, condition
or agreement contained in Section 8.01(m), Section 8.01(n), Section 8.02,
Section 8.03 or in Article IX;

(e)         any Debtor shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those specified in Section
10.01(a), Section 10.01(b) or Section 10.01(d)) or any other Loan Document, and
such failure shall continue unremedied for a period of thirty (30) days after
the earlier to occur of (i) notice thereof from the Agent to the Borrower (which
notice will be given at the request of any Lender) or (ii) a Responsible Officer
of any Debtor otherwise becoming aware of such default;

(f)          any event or condition occurs that results in any Material
Indebtedness incurred on or after the Petition Date becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any such Material
Indebtedness or any trustee or agent on its or their behalf to cause any such
Material Indebtedness to become due, or to require the Redemption thereof or any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require any Debtor to make an offer in respect thereof;

(g)        the Loan Documents shall not have been executed and delivered by the
Debtors, the Agent and the Lenders within five (5) business days after the date
of entry of the Interim Order (or shall not have been filed with, and approved
by, the Bankruptcy Court within the times specified and otherwise in accordance
with the Interim Order);

(h)          dismissal of the Bankruptcy Cases or conversion of the Bankruptcy
Cases to a Chapter 7 case;

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(i)          appointment of a Chapter 11 trustee, a responsible officer or an
examiner with enlarged powers (beyond those set forth in Section 1106(a)(3) and
(4) of the Bankruptcy Code) relating to the operation of the business of any
Loan Party in the Bankruptcy Case;

(j)         the Bankruptcy Court’s granting of any superpriority claim or lien
on the Collateral which is pari passu with or senior to the Superpriority Claims
or Liens of the Lenders in the Bankruptcy Case;

(k)         failure of the Final Order to be entered within thirty-five (35)
days (or a later date consented to by the Agent and the Majority Lenders) after
entry of the Interim Order;

(l)          failure of the Interim Order or Final Order to be in full force and
effect, including by the entry of an order reversing, amending, supplementing,
staying for a period in excess of five (5) days, vacating or otherwise modifying
the Interim Order or Final Order in a manner that is adverse to the Agent or the
Lenders;

(m)        after entry of the Final Order, the entry of any final order in the
Bankruptcy Case charging any of the Collateral, including under Section 506(c)
or Section 552(b) of the Bankruptcy Code, or the commencement of any action by
any Loan Party which is adverse to the Lenders or their rights and remedies
under the DIP Facility in the Bankruptcy Case;

(n)          reversal or modification of the Refinancing Facility by the
Bankruptcy Court;

(o)          failure of any Loan Party to comply with the terms of the
applicable DIP Order;

(p)          entry of a final order by the Bankruptcy Court terminating the use
of cash collateral;

(q)         payment by any Loan Party (by way of adequate protection or
otherwise) of any principal or interest or other amount on account of any
prepetition Debt or payables (other than as agreed herein or pursuant to the
consent of the Required Lenders) or as described in the Interim Order, the Final
Order or pursuant to any orders approving any “first day” motions;

(r)          entry of an order or orders granting relief from any stay of
proceeding (including, without limitation, the automatic stay) so as to allow a
third party or third parties to proceed against any assets of any Loan Party
having a value, individually or in the aggregate, in excess of $1,000,000 or to
permit other actions that would have a Material Adverse Effect on any Loan Party
or its estate;

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(s)          if (i) the Existing Intercreditor Agreement shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with its terms
against the Borrower, any party thereto or any holder of the liens subordinated
thereby, or shall be repudiated by any of them, or be amended, modified or
supplemented to cause the liens securing the obligations of the Existing Second
Lien Credit Agreement to be senior or pari passu in priority to the liens
securing the obligations under the Existing Credit Agreement, (ii) the Borrower
takes any action inconsistent with the terms of the Existing Intercreditor
Agreement (other than in connection with an Approved Plan of Reorganization
reasonably acceptable to the Required Lenders), (iii) any Person bound by the
Existing Intercreditor Agreement takes any action inconsistent with the terms
thereof and the Borrower shall fail to promptly take all actions necessary to
oppose such action or (iv) any order of any court of competent jurisdiction is
granted which is materially inconsistent with the terms of the Existing
Intercreditor Agreement;

(t)          (i) subject to Section 12.02(c), unless otherwise agreed by the
Required Lenders or pursuant to the terms of the DIP Orders, the filing or
confirmation of an Approved Plan of Reorganization that does not provide for
termination of the Commitments under the DIP Facility and, except as may be
provided herein with respect to the Refinanced Loans, including under Section
2.01(b), payment in full in cash of all Obligations under the Loan Documents
owed to the Lenders in respect of the DIP Facility on the effective date of such
Approved Plan of Reorganization, or (ii) if any Debtor shall seek, support, or
fail to contest in good faith the filing or confirmation of any plan of
reorganization other than the Approved Plan of Reorganization;

(u)          failure to satisfy any of the Chapter 11 Milestones in accordance
with the terms relating to such Chapter 11 Milestone;

(v)         (i) the entry of the Interim Order shall have not occurred on or
prior to the date that is five (5) days after the Petition Date, (ii) the entry
of the Final Order shall have not occurred prior to or on the date that is
thirty-five (35) days (or a later date consented to by the Agent and the
Majority Lenders) after entry of the Interim Order or (iii) the entry of an
order reversing, amending, supplementing, staying for a period in excess of five
(5) days, vacating or otherwise modifying the Interim Order or Final Order in a
manner that is adverse to the Agent or the Lenders;

(w)         with respect to the Debtors (i) one or more judgments for the
payment of money in an aggregate amount in excess of $5,000,000 (to the extent
not covered by independent third party insurance provided by insurers of the
highest claims paying rating or financial strength as to which the insurer does
not dispute coverage and is not subject to an insolvency proceeding) or (ii) any
one or more non-monetary judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, shall be
rendered against any Debtor or any combination thereof; and, in case of each of
clause (i) or (ii), the same shall remain undischarged for a period of thirty
(30) consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of any Debtor to enforce any such judgment, and unless, with respect
to any of the foregoing, the same shall be effectively stayed pursuant to the
Bankruptcy Code;

(x)         the Loan Documents after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms
against a Debtor party thereto or shall be repudiated by them, or cease to
create a valid and perfected Lien of the priority required thereby on any of the
Collateral purported to be covered thereby, or any Debtor shall so state in
writing, or any Loan Party shall contest the validity or perfection of the Liens
and security interests securing the Obligations;

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(y)        an ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of any Debtor in
an aggregate amount exceeding $2,000,000 in any year; and

(z)          any Change in Control shall occur.

Section 10.02       Remedies.

(a)          In the case of an Event of Default, subject in all respects to the
Carve Out, (i) the Agent may, and at the request of the Majority Lenders, shall
(A) deliver a notice to the Borrower of the Event of Default, (B) declare the
termination, reduction, or restriction of the Commitments, and thereupon the
Commitments shall be terminated, reduced, or restricted immediately unless and
until the Majority Lenders and the Agent shall reinstate the same in writing,
(C) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other Obligations), shall become due and payable
immediately, in each case, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other notice of any kind, all of
which are hereby waived by each Loan Party, (D) declare a termination, reduction
or restriction on the ability of the Loan Parties to use any cash collateral
(other than as set forth in clause (iii) below) (E) terminate the DIP Facility
and (F) charge the Default Rate (each of clauses (A) through (F) above, a
“Termination Declaration” and the earliest date to occur of any such Termination
Declaration, the “Termination Declaration Date”), in each case of clauses (A)
through (F) above, without first obtaining relief from the automatic stay under
section 362 of the Bankruptcy Code; (ii) five (5) Business Days after the
Termination Declaration Date, the Loan Parties and/or any Committee shall be
permitted to seek an emergency hearing before the Bankruptcy Court (which they
shall seek on an expedited basis) solely to determine whether an Event of
Default has occurred, provided, however, that (1) if the Loan Parties seek an
expedited emergency hearing within five (5) Business Days, until such time the
Bankruptcy Court has entered an order ruling on whether an Event of Default has
occurred, the Agent shall not be permitted to exercise its rights and remedies
with respect to such Termination Declaration or such Events of Default, and (2)
if the Loan Parties and any Committee do not seek an expedited emergency hearing
within five (5) Business Days after the Termination Declaration Date, the Agent
shall be entitled to exercise all rights and remedies provided for in the Loan
Documents with respect to such Termination Declaration, including the right to
foreclose on, or otherwise exercise its rights with respect to all or any
portion of the Collateral, including by applying the proceeds thereof to the
Obligations; and (iii) the Loan Parties shall not be permitted to use any
proceeds of the Loans, or any other cash collateral, except in accordance with
the Budget (subject to the Permitted Variances).

(b)          In the case of the occurrence of an Event of Default, the Agent and
the Lenders will have all other rights and remedies available at law and equity.

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(c)          All proceeds realized from the liquidation or other disposition of
collateral or otherwise received after maturity of the Loans or the Notes,
whether by acceleration or otherwise, shall be applied:

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

(ii)      second, pro rata to payment or reimbursement of that portion of the
Obligations constituting fees, expenses and indemnities payable to the Lenders;

(iii)      third, pro rata to payment of (i) accrued and unpaid interest on the
New Money Loans and LC Disbursements, (ii) accrued and unpaid interest on the
Refinanced Loans, (iii) fees on each Letter of Credit and (iv) other accrued and
unpaid interest included in the Obligations;

(iv)        fourth, pro rata to (i) payment of principal outstanding on the New
Money Loans, (ii) payment of principal outstanding on the Refinanced Loans,
(iii) Secured Swap Obligations owing to Secured Swap Parties, (iv) Secured Cash
Management Obligations owing to Secured Cash Management Providers, and (v) to
serve as cash collateral to be held by the Agent to secure the LC Exposure;

(v)          fifth, pro rata to any other Obligations; and

(vi)       sixth, any excess, after all of the Obligations shall have been
indefeasibly paid in full in cash, shall be held as required by the Bankruptcy
Court and/or any other Governmental Requirement.

Notwithstanding the foregoing, Secured Cash Management Obligations arising under
any Secured Cash Management Agreement shall be excluded from the application
described above if the Agent has not received written notice thereof, together
with such supporting documentation as the Agent may request, from the applicable
Secured Cash Management Provider. Each Secured Cash Management Provider not a
party to this Agreement that has given the notice contemplated by the preceding
sentence shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Agent pursuant to the terms of Article XI hereof for itself
and its Affiliates as if a “Lender” party hereto.

Section 10.03     Disposition of Proceeds.  The Security Instruments contain an
assignment by the Borrower and/or the Guarantors unto and in favor of the Agent
for the benefit of the Lenders of all of the Borrower’s or each Guarantor’s
interest in and to production and all proceeds attributable thereto which may be
produced from or allocated to the Mortgaged Property.  The Security Instruments
further provide in general for the application of such proceeds to the
satisfaction of the Obligations and other obligations described therein and
secured thereby.  Notwithstanding the assignment contained in such Security
Instruments, except after the occurrence and during the continuance of an Event
of Default, (a) the Agent and the Lenders 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 Agent or the Lenders, but the Lenders
will instead permit such proceeds to be paid to the Debtors and (b) the Lenders
hereby authorize the Agent to take such actions as may be necessary to cause
such proceeds to be paid to the Debtors.

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ARTICLE XI
THE AGENTS

Section 11.01     Appointment; Powers.  Each of the Lenders and each Issuing
Bank hereby irrevocably appoints the Agent as its agent and authorizes the Agent
to take such actions on its behalf and to exercise such powers as are delegated
to the Agent by the terms hereof and the other Loan Documents, together with
such actions and powers as are reasonably incidental thereto.

Section 11.02      Duties and Obligations of Agent.  The Agent shall have no
duties or obligations except those expressly set forth in the Loan Documents. 
Without limiting the generality of the foregoing, (a) the Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing (the use of the term “agent” herein and
in the other Loan Documents with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law; rather, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties), (b) the
Agent shall have no duty to take any discretionary action or exercise any
discretionary powers, except as provided in Section 11.03, and (c) except as
expressly set forth herein, the Agent shall have no duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Agent or any of its Affiliates in any capacity.  The Agent shall
be deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Agent by the Borrower or a Lender, and shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any
other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or under any other Loan Document or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, (v) the satisfaction of any condition set forth in
Article VI or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Agent, (vi) the existence, value, perfection or
priority of any collateral security or the financial or other condition of the
Debtors or any other obligor or guarantor, or (vii) any failure by the Borrower
or any other Person (other than itself) to perform any of its obligations
hereunder or under any other Loan Document or the performance or observance of
any covenants, agreements or other terms or conditions set forth herein or
therein.  For purposes of determining compliance with the conditions specified
in Article VI, each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Agent shall have received written notice from such Lender
prior to the proposed closing date specifying its objection thereto.

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Section 11.03      Action by Agent.  The Agent shall have no duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Agent is required to exercise in writing as directed by the Majority
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 12.02) and in all cases the Agent
shall be fully justified in failing or refusing to act hereunder or under any
other Loan Documents unless it shall (a) receive written instructions from the
Majority Lenders, the Required Lenders or the Lenders, as applicable, (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02) specifying the action to be taken
and (b) be indemnified to its satisfaction by the Lenders against any and all
liability and expenses which may be incurred by it by reason of taking or
continuing to take any such action.  The instructions as aforesaid and any
action taken or failure to act pursuant thereto by the Agent shall be binding on
all of the Lenders.  If a Default has occurred and is continuing, then the Agent
shall take such action with respect to such Default as shall be directed by the
requisite Lenders in the written instructions (with indemnities) described in
this Section 11.03, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interests of the Lenders.  In no event,
however, shall the Agent be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement, the Loan Documents
or applicable law.  The Agent shall not be liable for any action taken or not
taken by it with the consent or at the request of the Required Lenders or the
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 12.02), and otherwise the Agent
shall not be liable for any action taken or not taken by it hereunder or under
any other Loan Document or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith INCLUDING
ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction by a final and
non-appealable judgment.

Section 11.04     Reliance by Agent.  The Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  The
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon and each of the Borrower, the Lenders and each
Issuing Bank hereby waives the right to dispute the Agent’s record of such
statement, except in the case of gross negligence or willful misconduct by the
Agent.  The Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.  The Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof permitted
hereunder shall have been filed with the Agent.

Section 11.05     Subagents.  The Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Agent.  The Agent and any such sub-agent may perform any and
all its duties and exercise its rights and powers through their respective
Related Parties.  The exculpatory provisions of the preceding Sections of this
Article XI shall apply to any such sub-agent and to the Related Parties of the
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

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Section 11.06      Resignation or Removal of Agent.  Subject to the appointment
and acceptance of a successor Agent as provided in this Section 11.06, the Agent
may resign at any time by notifying the Lenders, each Issuing Bank and the
Borrower, and the Agent may be removed at any time with or without cause by the
Majority Lenders.  Upon any such resignation or removal, the Majority Lenders
shall have the right, in consultation with the Borrower, to appoint a
successor.  If no successor shall have been so appointed by the Majority Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation or removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders and each Issuing Bank, appoint a
successor Agent.  Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder.  The fees
payable by the Borrower to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the Agent’s resignation hereunder, the provisions of this
Article XI and Section 12.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.

Section 11.07       Agent and Lenders.  Each bank serving as an Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not an Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Debtor or other Affiliate thereof as if it were
not an Agent hereunder.

Section 11.08       No Reliance.  Each Lender acknowledges that it has,
independently and without reliance upon the Agent, any other Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and each
other Loan Document to which it is a party.  Each Lender also acknowledges that
it will, independently and without reliance upon the Agent, any other Agent or
any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document,
any related agreement or any document furnished hereunder or thereunder.  The
Agents shall not be required to keep themselves informed as to the performance
or observance by any Debtor of this Agreement, the Loan Documents or any other
document referred to or provided for herein or to inspect the Properties or
books of the Debtors.  Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, no Agent nor the Arranger shall have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrower (or any of its Affiliates) which
may come into the possession of such Agent or any of its Affiliates.  In this
regard, each Lender acknowledges that Orrick, Herrington & Sutcliffe LLP is
acting in this transaction as special counsel to the Agent only, except to the
extent otherwise expressly stated in any legal opinion or any Loan Document. 
Each other party hereto will consult with its own legal counsel to the extent
that it deems necessary in connection with the Loan Documents and the matters
contemplated therein.

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Section 11.09      Agent May File Proofs of Claim.  In case of the pendency of
any proceeding under any Debtor Relief Law or other judicial proceeding relative
to any Debtor, the 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 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, LC Exposure and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the Issuing
Bank and the Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the Issuing Bank and the
Agent and their respective agents and counsel and all other amounts due the
Lenders, the Issuing Bank and the Agent under Section 12.03) allowed in such
judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the Issuing Bank to make such payments to the Agent and, in the
event that the Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Agent and its agents and counsel,
and any other amounts due the Agent under Section 12.03.

Nothing contained herein shall be deemed to authorize the Agent to authorize or
consent to or accept or adopt on behalf of any Lender any chapter 11 plan,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or to authorize the Agent to vote in respect of the claim of any
Lender in any such proceeding.

Section 11.10      Authority of Agent to Release Collateral and Liens.  Each
Lender and each Issuing Bank hereby authorizes the Agent to release any
collateral that is permitted to be sold or released pursuant to the terms of the
Loan Documents.  Each Lender and each Issuing Bank hereby authorizes the Agent
to execute and deliver to the Borrower, at the Borrower’s sole cost and expense,
any and all releases of Liens, termination statements, assignments or other
documents reasonably requested by the Borrower in connection with any sale or
other disposition of Property to the extent such sale or other disposition is
permitted by the terms of Section 9.12 or is otherwise authorized by the terms
of the Loan Documents.

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Section 11.11      Secured Cash Management Agreements.  No Secured Cash
Management Provider that obtains the benefits of Section 10.02(c), any Loan
Guarantee or any Collateral by virtue of the provisions hereof or of any Loan
Guarantee, any Security Instrument or any other Loan Document shall have any
right to notice of any action or to consent to, direct or object to any action
hereunder or under any other Loan Document or otherwise in respect of the
Collateral (including the release or impairment of any Collateral) other than in
its capacity as a Lender and, in such case, only to the extent expressly
provided in the Loan Documents. Notwithstanding any other provision of this
Article XI to the contrary, the Agent shall not be required to verify the
payment of, or that other satisfactory arrangements have been made with respect
to, Obligations arising under Secured Cash Management Agreements unless the
Agent has received written notice of such Obligations, together with such
supporting documentation as the Agent may request, from the applicable Secured
Cash Management Provider.

Section 11.12    The Arranger.  The Arranger shall have no duties,
responsibilities or liabilities under this Agreement and the other Loan
Documents other than its duties, responsibilities and liabilities in its
capacity as a Lender hereunder to the extent it is a party to this Agreement as
a Lender.

ARTICLE XII
MISCELLANEOUS

Section 12.01       Notices.

(a)         Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to Section 12.01(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

(i)          if to any Loan Party, to the Borrower at

Legacy Reserves LP
303 West Wall Street, Suite 1800
Midland, Texas  79701
Attention:  Robert Norris
Email:  rnorris@legacyreserves.com
Phone:  432-689-5217

with a copy to

Legacy Reserves LP
303 West Wall Street, Suite 1800
Midland, Texas  79701
Attention: Bert Ferrara
Email:  bferrara@legacyreserves.com
Phone: 432-221-6363

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(ii)          if to the Agent, to it at

Wells Fargo Bank, National Association
1000 Louisiana Street, 9th Floor
Houston, Texas 77002
Attention: Brett Steele, Director
Facsimile: 713-319-1920
Email: Brett.A.Steele@wellsfargo.com

(iii)       if to any other Lender, in its capacity as such, or any other Lender
in its capacity as an Issuing Bank, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

(b)        Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Agent; provided that the foregoing shall not apply to notices
pursuant to Article II, Article III, Article IV and Article V unless otherwise
agreed by the Agent and the applicable Lender.  The Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.

(c)        Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.  All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

Section 12.02       Waivers; Amendments.

(a)          No failure on the part of the Agent, any other Agent, any Issuing
Bank or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege, or any abandonment or
discontinuance of steps to enforce such right, power or privilege, under any of
the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under any of the Loan
Documents preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  The rights and remedies of the Agent, each
other Agent, each Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have.  No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by Section
12.02(b), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Agent, any other Agent, any Lender or any Issuing Bank may have had notice
or knowledge of such Default at the time.

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(b)          Neither this Agreement nor any provision hereof nor any Security
Instrument nor any provision thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Majority Lenders or by the Borrower and the Agent with the consent of
the Majority Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender; (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, or reduce any other
Obligations hereunder or under any other Loan Document, without the written
consent of each Lender affected thereby; (iii) postpone the scheduled date of
payment or prepayment of the principal amount of any Loan or LC Disbursement, or
any interest thereon, or any fees payable hereunder, or any other Obligations
hereunder or under any other Loan Document, or reduce the amount of, waive or
excuse any such payment, or postpone or extend the Termination Date or the
Maturity Date without the written consent of each Lender affected thereby; (iv)
change Section 4.01(b) or Section 4.01(c) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender; (v) waive or amend Section 3.04(c), Section 6.01, Section 6.02, Section
8.14, Section 10.02(c), Section 12.14 or any provisions of this Section 12.02(b)
or change the definition of the terms “Domestic Subsidiary”, “Foreign
Subsidiary”, “Material Domestic Subsidiary” or “Subsidiary”, without the written
consent of each Lender (other than a Defaulting Lender); provided, further, that
any waiver or amendment to the terms of Section 12.14 or this proviso in this
Section 12.02(b)(v) shall also require the written consent of each Secured Swap
Party (unless such Secured Swap Party is a Defaulting Lender), and any amendment
or waiver to the terms of Section 10.02(c) shall also require the written
consent of each Secured Swap Party adversely affected thereby; (vi) amend or
otherwise modify any Security Instrument in a manner that results in the Secured
Swap Obligations secured by such Security Instrument no longer being secured
thereby on an equal and ratable basis with the principal of the Loans, or amend
or otherwise change the definition of “Secured Swap Agreement,” “Secured Swap
Obligations” or “Secured Swap Party” without the written consent of each Secured
Swap Party adversely affected thereby; (vii) release any Guarantor, release all
or substantially all of the collateral (other than as provided in Section
11.10), or reduce the percentage set forth in Section 8.13 to be less than 80%,
without the written consent of each Lender (other than a Defaulting Lender); or
(viii) change any of the provisions of this Section 12.02(b) or the definitions
of “Required Lenders” or “Majority Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or under any other Loan Documents or make any
determination or grant any consent hereunder or any other Loan Documents,
without the written consent of each Lender (other than a Defaulting Lender);
provided further that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Agent, any other Agent or the Issuing Bank
hereunder or under any other Loan Document without the prior written consent of
the Agent, such other Agent or the Issuing Bank, as the case may be and (B)
nothing in this Section 12.02 shall cause any waiver, amendment, modification or
consent to (1) any fee letter between the Borrower and any Lender or the Agent
or the Issuing Bank to require the consent of the Majority Lenders, (2) any
Letter of Credit Agreements between the Borrower or any Subsidiary of the
Borrower and the Issuing Bank to require the consent of the Majority Lenders,
(3) any Letter of Credit issued by the Issuing Bank pursuant to the terms of
this Agreement to require the consent of the Majority Lenders except as
specifically required by Section 2.08, or (4) any Secured Cash Management
Agreement to require the consent of the Majority Lenders.  Notwithstanding the
foregoing, (A) any supplement to Schedule 7.14 (Subsidiaries) shall be effective
simply by delivering to the Agent a supplemental schedule clearly marked as such
and, upon receipt, the Agent will promptly deliver a copy thereof to the
Lenders, (B) any Security Instrument may be supplemented to add additional
collateral or join additional Persons as Guarantors with the consent of the
Agent, and (C) the Borrower and the Agent may amend this Agreement or any other
Loan Document without the consent of the Lenders in order to correct, amend or
cure any ambiguity, inconsistency or defect or correct any typographical error
or other manifest error in any Loan Document.

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(c)          Anything herein to the contrary notwithstanding, if the Debtors’
proposed plan of reorganization (“Proposed Plan”) provides for (in whole or in
part) the refinancing of the Refinanced Loans and the Existing Obligations on
the effective date of an Approved Plan of Reorganization in lieu of repayment in
full in cash of the Refinanced Loans and the Existing Obligations, then, if such
Proposed Plan has been accepted by a class consisting solely of the Existing
Lenders, then the holders of not less than 66 2/3% of the Refinanced Loans (the
“Required Refinanced Lenders”) may (without the consent of any other Refinanced
Lenders or the Agent) agree on behalf of all Refinanced Lenders that the full
amount of the Refinanced Loans will not be required to be repaid in cash on the
Maturity Date, but instead shall be treated in any manner approved by the
Required Refinanced Lenders.  No amendment or waiver shall, unless signed by all
Refinanced Lenders, amend this clause (c) or change the definition of the term
Required Refinanced Lenders or the percentage of Refinanced Lenders which shall
be required for Refinanced Lenders to take any action hereunder, in each case
without the consent of all Refinanced Lenders.

Section 12.03       Expenses, Indemnity; Damage Waiver.

(a)         The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Agent, the reasonable travel, photocopy, mailing, courier,
telephone and other similar expenses and, in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation,
execution, delivery and administration (both before and after the execution
hereof and including advice of counsel to the Agent as to the rights and duties
of the Agent and the Lenders with respect thereto) of this Agreement and the
other Loan Documents and any amendments, modifications or waivers of or consents
related to the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
costs, expenses, Taxes, assessments and other charges incurred by any Agent or
any Lender in connection with any filing, registration, recording or perfection
of any security interest contemplated by this Agreement or any Security
Instrument or any other document referred to therein, (iii) all reasonable
out-of-pocket expenses incurred by each Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit issued by such
Issuing Bank or any demand for payment thereunder, (iv) all out-of-pocket
expenses incurred by any Agent, any Issuing Bank or any Lender, including the
fees, charges and disbursements of any counsel for any Agent, any Issuing Bank
or any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Loan Document, including its rights
under this Section 12.03, or in connection with the Loans made or Letters of
Credit issued hereunder, including, without limitation, all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit, and (v) all reasonable out-of-pocket fees,
charges and expenses of one special bankruptcy counsel for each Secured Swap
Party in connection with the structuring and preparation of any Secured Swap
Agreement to be entered into after the Petition Date.

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(b)       THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER, EACH ISSUING
BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS
(EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH
INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND
RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL
FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT
OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY
OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (ii) THE FAILURE OF ANY DEBTOR TO COMPLY WITH THE TERMS OF ANY LOAN
DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii)
ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT
OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY
INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv)
ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING,
WITHOUT LIMITATION, (A) ANY REFUSAL BY ANY ISSUING BANK TO HONOR A DEMAND FOR
PAYMENT UNDER A LETTER OF CREDIT ISSUED BY SUCH ISSUING BANK IF THE DOCUMENTS
PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS
OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF
CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER
PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER
ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE DEBTORS
BY THE DEBTORS, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO
RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY
ENVIRONMENTAL LAW APPLICABLE TO THE DEBTORS OR ANY OF THEIR PROPERTIES,
INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE,
THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR
TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON
ANY OF THEIR PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY ANY DEBTOR WITH
ANY ENVIRONMENTAL LAW APPLICABLE TO ANY SUCH DEBTOR, (x) THE PAST OWNERSHIP BY
ANY DEBTOR OF ANY OF ITS PROPERTIES OR PAST ACTIVITY ON ANY OF ITS PROPERTIES
WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL,
GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR
ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE ANY DEBTOR OR
ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY OWNED OR OPERATED BY ANY DEBTOR, (xii) ANY ENVIRONMENTAL LIABILITY
RELATED IN ANY WAY TO ANY DEBTOR, (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR
SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

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(c)          To the extent that the Borrower fails to pay any amount required to
be paid by it to any Agent, the Arranger or any Issuing Bank under Section
12.03(a) or (b), each Lender severally agrees to pay to such Agent, the Arranger
or such Issuing Bank, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent, the Arranger or such
Issuing Bank in its capacity as such.

(d)         To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

(e)          All amounts due under this Section 12.03 shall be payable within
ten (10) Business Days of written demand therefor.

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Section 12.04       Successors and Assigns.

(a)        The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), except that (i) neither the Borrower nor any other Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Agent and each Lender, not to be
unreasonably withheld or delayed (and any attempted assignment or transfer by
the Borrower without such consent shall be null and void), (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section 12.04; provided that any such assignment or
participation must comply with any restrictions on assignments or
participations, as applicable, as agreed to by the transferring lender in any
restructuring support agreement and (iii) no Lender may assign to the Borrower,
an Affiliate of the Borrower, a Defaulting Lender or an Affiliate of a
Defaulting Lender all or any portion of such Lender’s rights and obligations
under this Agreement or all or any portion of its Commitments or the Loans owing
to it hereunder.  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
any Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Agent, each Issuing Bank and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)          (i) Subject to the conditions set forth in Section 12.04(b)(ii),
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of the Agent, provided that no
consent of the Agent shall be required for an assignment to an assignee that is
a Lender or any Affiliate of a Lender, immediately prior to giving effect to
such assignment.

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

(A)         Subject to clause (C) below, except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment or Loans, as applicable, the amount
of the Commitment or Loans, as applicable, of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Agent) shall not be less
than $5,000,000 (or a lesser amount if the assigning Lender’s outstanding
Commitment or Loans, as applicable, amounts to less than $5,000,000);

(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)          each assignment of any Lender’s Commitment and/or New Money Loan
(including any portion thereof) shall include an assignment in the same
proportion of such Lenders’ Refinanced Loans;

(D)          the parties to each assignment shall execute and deliver to the
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500;

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(E)          the assignee, if it shall not be a Lender, shall deliver to the
Agent an Administrative Questionnaire; and

(F)          no such assignment shall be made to the Borrower, any Affiliate of
the Borrower, a Defaulting Lender (or any entity who, upon becoming a Lender
hereunder, would constitute a Defaulting Lender), any Affiliate of a Defaulting
Lender or a natural person.

(iii)        Subject to Section 12.04(b)(iv) and the acceptance and recording
thereof, and except in the case of an assignment to an Affiliate of a Lender,
from and after the effective date specified in each Assignment and Assumption
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section 5.01,
Section 5.02, Section 5.03 and Section 12.03).  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 12.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
Section 12.04(c).

(iv)      The Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The entries in the Register shall be conclusive, and the
Borrower, the Agent, each Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.  In connection with any changes to the Register, if
necessary, the Agent will reflect the revisions on Annex I and forward a copy of
such revised Annex I to the Borrower, each Issuing Bank and each Lender.

(v)         Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 12.04(b)
and any written consent to such assignment required by Section 12.04(b), the
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register.  No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this Section 12.04(b).

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(c)          (i) Any Lender may, without the consent of the Borrower the Agent
or any Issuing Bank, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Agent, each Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
that (1) increase the commitment of such Participant, (2) reduces or forgives
any principal, interest or fees payable to such Participant, (3) extends the
Maturity Date or the date of payment of interest or fees on the Loans or
commitments with respect to such Participant, (4) release of all or
substantially all of the value of the Loan Guarantee or Collateral, and (5) any
adverse change to the superpriority status of the claims or liens on the
Collateral.  In addition such agreement must provide that the Participant be
bound by the provisions of Section 12.03.  Subject to Section 12.04(c)(ii) the
Borrower agrees that each Participant shall be entitled to the benefits of
Section 5.01, Section 5.02 and Section 5.03 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 12.04(b)
(subject to the requirements and limitations therein, including the requirements
under Section 5.03(e) (it being understood that the documentation required under
Section 5.03(e) shall be delivered to the participating Lender)).  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 12.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 4.01(c) as though it were a Lender.

(ii)         A Participant shall not be entitled to receive any greater payment
under Section 5.01 or Section 5.03 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.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 5.03 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.03(e) as though it were a Lender.  Each Lender that sells a participation
shall, acting solely for this purpose as a non-fiduciary agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under the Loan Documents (the “Participant
Register”). Any such Participant Register shall be available for inspection by
the Agent at any reasonable time and from time to time upon reasonable prior
notice; provided that the applicable Lender shall have no obligation to show
such Participant Register to the Borrower except to the extent such disclosure
is necessary to establish that such Loan, commitment, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the Treasury
regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.

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(d)          Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank or other central bank having jurisdiction over such Lender,
and this Section 12.04(d) 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.

Section 12.05       Survival; Revival; Reinstatement.

(a)         All covenants, agreements, representations and warranties made by
the Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Agent, any
other Agent, any Issuing Bank or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated. 
The provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and
Article XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement, any other Loan Document or any
provision hereof or thereof.

(b)        To the extent that any payments on the Obligations or proceeds of any
collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Agent’s and the Lenders’ Liens, security interests, rights, powers and
remedies under this Agreement and each Loan Document shall continue in full
force and effect.  In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the Agent and the Lenders to effect such reinstatement.

Section 12.06       Counterparts; Integration; Effectiveness.

(a)          This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.

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(b)        This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

(c)         Except as provided in Section 6.01, this Agreement shall become
effective when it shall have been executed by the Agent and when the Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

Section 12.07      Severability.  Any provision of this Agreement or any other
Loan Document held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08      Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations (of whatsoever
kind, including, without limitations Secured Swap Obligations) at any time owing
by such Lender or Affiliate to or for the credit or the account of any Debtor
against any of and all the obligations of the Debtors owed to such Lender now or
hereafter existing under this Agreement or any other Loan Document, irrespective
of whether or not such Lender shall have made any demand under this Agreement or
any other Loan Document and although such obligations may be unmatured.  The
rights of each Lender under this Section 12.08 are in addition to other rights
and remedies (including other rights of setoff) which such Lender or its
Affiliates may have.

Section 12.09       GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

(a)         THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED
STATES FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE
OR TAKE INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER
IS LOCATED.  CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN
REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY
TO THIS AGREEMENT OR THE NOTES.

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(b)         THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR
PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN
CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE AGENT, ANY LENDER, THE ISSUING
BANK, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR
THERETO, IN ANY FORUM OTHER THAN THE BANKRUPTCY COURT AND IF THE BANKRUPTCY
COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION, THE COURTS OF THE STATE OF
TEXAS SITTING IN HOUSTON, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION
OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION,
LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE AGENT,
ANY LENDER OR THE ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c)        EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE
ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED
PURSUANT TO SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO
BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL
AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.

(d)      EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN, (ii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF
COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 12.09.

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Section 12.10       Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 12.11       Confidentiality.  The Agent, each other Agent, each Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement or any other Loan Document, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section 12.11, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any Swap Agreement relating to the Borrower or any of its Subsidiaries and their
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 12.11 or (ii) becomes available to the Agent, any other Agent, any
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower.  For the purposes of this Section 12.11, “Information” means all
information received from the Debtors relating to any Debtor and its business,
other than any such information that is available to the Agent, any other Agent,
any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
the Borrower or any of its Subsidiaries; provided that, in the case of
information received from the Borrower, or any of its Subsidiaries after the
date hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to maintain the confidentiality of
Information as provided in this Section 12.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

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Section 12.12       Interest Rate Limitation.  It is the intention of the
parties hereto that each Lender shall conform strictly to usury laws applicable
to it.  Accordingly, if the transactions contemplated hereby would be usurious
as to any Lender under laws applicable to it (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable to such Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in any of the Loan Documents or any agreement entered into in
connection with or as security for the Notes, it is agreed as follows:  (a) the
aggregate of all consideration which constitutes interest under law applicable
to any Lender that is contracted for, taken, reserved, charged or received by
such Lender under any of the Loan Documents or agreements or otherwise in
connection with the Notes shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be canceled automatically
and if theretofore paid shall be credited by such Lender on the principal amount
of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower); and (b) in the event that the maturity of the Notes is
accelerated by reason of an election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrower).  All sums paid or agreed to be paid to any Lender for the use,
forbearance or detention of sums due hereunder shall, to the extent permitted by
law applicable to such Lender, be amortized, prorated, allocated and spread
throughout the stated term of the Loans evidenced by the Notes until payment in
full so that the rate or amount of interest on account of any Loans hereunder
does not exceed the maximum amount allowed by such applicable law.  If at any
time and from time to time (i) the amount of interest payable to any Lender on
any date shall be computed at the Highest Lawful Rate applicable to such Lender
pursuant to this Section 12.12 and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Lender would
be less than the amount of interest payable to such Lender computed at the
Highest Lawful Rate applicable to such Lender, then the amount of interest
payable to such Lender in respect of such subsequent interest computation period
shall continue to be computed at the Highest Lawful Rate applicable to such
Lender until the total amount of interest payable to such Lender shall equal the
total amount of interest which would have been payable to such Lender if the
total amount of interest had been computed without giving effect to this Section
12.12.  To the extent that Chapter 303 of the Texas Finance Code is relevant for
the purpose of determining the Highest Lawful Rate applicable to a Lender, such
Lender elects to determine the applicable rate ceiling under such Chapter by the
weekly ceiling from time to time in effect.  Chapter 346 of the Texas Finance
Code does not apply to the Borrower’s obligations hereunder.

Section 12.13      EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
“CONSPICUOUS.”

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Section 12.14       Collateral Matters; Secured Swap Agreements; Secured Cash
Management Agreements.  The benefit of the Security Instruments and the other
Loan Documents and of the provisions of this Agreement relating to any
Collateral securing the Obligations shall also extend to and be available to
Secured Swap Parties and Secured Cash Management Providers, in each case on a
pro rata basis in respect of Secured Swap Obligations and Secured Cash
Management Obligations.  In addition, it is understood and agreed that the
benefit of the Security Instruments and the provisions of this Agreement
relating to any Collateral securing the Obligations shall also extend to and be
available to such Lenders or their Affiliates as provided herein and in the
Security Instruments notwithstanding that any such Lender (as defined in the
Existing Credit Agreement) is not a Lender hereunder.  Except as set forth in
Section 12.02(b), no Secured Swap Party that is no longer a Lender (or an
Affiliate of a Lender) nor any Secured Cash Management Provider shall have any
voting rights under any Loan Document as a result of the existence of Secured
Swap Obligations or Secured Cash Management Obligations. All Secured Cash
Management Agreements are independent agreements governed by the terms thereof
and will remain in full force and effect, unaffected by any repayment,
prepayment, acceleration, reduction, increase or change in the terms of the
Loans created under this Agreement except as otherwise provided in such Secured
Cash Management Agreements, and any payoff statement from any Lender relating to
this Agreement shall not apply to Secured Cash Management Agreements, except as
otherwise expressly provided in such payoff statement.

Section 12.15      No Third Party Beneficiaries.  This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and the Issuing Bank
to issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Borrower, and no other Person (including, without limitation, any
Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or
materialsman) shall have any rights, claims, remedies or privileges hereunder or
under any other Loan Document against the Agent, the other Agents, the Issuing
Bank or any Lender for any reason whatsoever.  There are no third party
beneficiaries other than to the extent contemplated by the last sentence of
Section 12.04(a).

Section 12.16      USA PATRIOT Act Notice.  Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act, it is
required to obtain, verify and record information that identifies the Borrower
and the Guarantors, which information includes the name and address of the
Borrower and the Guarantors and other information that will allow such Lender to
identify the Borrower and the Guarantors in accordance with the USA PATRIOT Act.

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Section 12.17     Non-Fiduciary Status.  The arranging and other services
regarding this Agreement provided by the Agent, the Arranger, and the Lenders
are arm’s-length commercial transactions between the Borrower, and its
Affiliates, on the one hand, and the Agent, the Arranger, and the Lenders, on
the other hand.  The Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate.  The
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; the Agent, the Arranger and each Lender is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrower or any of its Affiliates, or any other Person and
neither the Agent, the Arranger nor any Lender has any obligation to the
Borrower, or any of its Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan
Documents.  The Agent, the Arranger and the Lenders and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Borrower, and its Affiliates, and none
of the Agent, the Arranger, or any Lender has any obligation to disclose any of
such interests to the Borrower or its Affiliates.  To the fullest extent
permitted by law, the Borrower hereby waives and releases any claims that it may
have against the Agent, the Arranger or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

Section 12.18      Cashless Settlement.  Notwithstanding anything to the
contrary contained in this Agreement, any Lender may exchange, continue or
rollover all or a portion of its Loans in connection with any amendment,
repayment, refinancing, incremental, extension, loan modification or similar
transaction permitted by the terms of this Agreement, pursuant to a cashless
settlement mechanism approved by the Borrower, the Agent and such Lender and
such cashless settlement shall be deemed to comply with any requirement
hereunder or any other Loan Document or DIP Order that such payment be made “in
dollars,” in “immediately available funds,” “in cash” or any other similar
concept.

Section 12.19     Joinder of Subsidiaries.  Upon the execution and delivery by a
Subsidiary and the Agent of a Joinder Agreement, and delivery to the Agent of
such other Security Instruments, documents and opinions with respect to such
Subsidiary as may reasonably be requested by the Agent, such Subsidiary shall
become a Guarantor hereunder, with the same force and effect as if originally
named as such herein, and without the consent of any other party hereto.  The
rights and obligations of each Loan Party hereunder and under the other Loan
Documents shall remain in full force and effect notwithstanding the addition of
any Subsidiary as a party to this Agreement.

Section 12.20       [Reserved].

Section 12.21       [Reserved].

Section 12.22      Acknowledgement and Consent to Bail-In of EEA Financial
Institutions.  Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

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(a)       the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)          the effects of any Bail-in Action on any such liability, including,
if applicable:

(i)          a reduction in full or in part or cancellation of any such
liability;

(ii)        a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii)        the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

Section 12.23     Acknowledgement Regarding Any Supported QFCs.  To the extent
that the Loan Documents provide support, through a guarantee or otherwise, for
Swap Agreements or any other agreement or instrument that is a QFC (such
support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties
acknowledge and agree as follows with respect to the resolution power of the
Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act
and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(together with the regulations promulgated thereunder, the “U.S. Special
Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support
(with the provisions below applicable notwithstanding that the Loan Documents
and any Supported QFC may in fact be stated to be governed by the laws of the
State of New York and/or of the United States or any other state of the United
States):

(a)          In the event a Covered Entity that is party to a Supported QFC
(each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special
Resolution Regime, the transfer of such Supported QFC and the benefit of such
QFC Credit Support (and any interest and obligation in or under such Supported
QFC and such QFC Credit Support, and any rights in property securing such
Supported QFC or such QFC Credit Support) from such Covered Party will be
effective to the same extent as the transfer would be effective under the U.S.
Special Resolution Regime if the Supported QFC and such QFC Credit Support (and
any such interest, obligation and rights in property) were governed by the laws
of the United States or a state of the United States. In the event a Covered
Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding
under a U.S. Special Resolution Regime, Default Rights under the Loan Documents
that might otherwise apply to such Supported QFC or any QFC Credit Support that
may be exercised against such Covered Party are permitted to be exercised to no
greater extent than such Default Rights could be exercised under the U.S.
Special Resolution Regime if the Supported QFC and the Loan Documents were
governed by the laws of the United States or a state of the United States.
Without limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.

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(b)          As used in this Section 12.23, the following terms have the
following meanings:

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following:

(i)          a “covered entity” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 252.82(b);

(ii)         a “covered bank” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 47.3(b); or

(iii)        a “covered FSI” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

ARTICLE XIII
LOAN GUARANTEE

Section 13.01     Guarantee.  Each Guarantor hereby agrees that it is jointly
and severally liable for, and absolutely, irrevocably and unconditionally
guarantees to the Agent, the Lenders, the Issuing Banks and the other Secured
Parties, the prompt payment and performance when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of the
Secured Obligations and all reasonable costs and expenses including, without
limitation, all court costs and attorneys’ and paralegals’ fees and expenses
paid or incurred by the Agent, the Issuing Banks and the Lenders in endeavoring
to collect all or any part of the Secured Obligations from, or in prosecuting
any action against, the Borrower, any Guarantor or any other guarantor of all or
any part of the Secured Obligations (such costs and expenses, together with the
Secured Obligations, being collectively called the “Guaranteed Obligations”);
provided, that the guarantee of any Subsidiary Guarantor will not apply to any
Secured Swap Obligation if and to the extent that it would be unlawful for such
Subsidiary Guarantor to guarantee such Secured Swap Obligation under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Subsidiary Guarantor’s failure for any reason (and
after giving effect to the guarantees by the other Guarantors of the Secured
Obligations of such Subsidiary Guarantor) to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act at the time the guarantee
of such Subsidiary Guarantor becomes effective with respect to such Secured Swap
Obligation.  Each Guarantor further agrees that the Guaranteed Obligations may
be extended or renewed in whole or in part without notice to or further assent
from it, and that it remains bound upon its guarantee notwithstanding any such
extension or renewal. All terms of this Loan Guarantee apply to and may be
enforced by or on behalf of any domestic or foreign branch or Affiliate of any
Lender that extended any portion of the Guaranteed Obligations.

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Section 13.02      Guarantee of Payment.  This Loan Guarantee is a guarantee of
payment and not of collection.  Each Guarantor waives any right to require the
Agent, any Issuing Bank, any Lender or any other Secured Party to sue the
Borrower, any other Guarantor, any other guarantor, or any other Person
obligated for all or any part of the Guaranteed Obligations (each, an “Obligated
Party”), or to enforce its rights against any collateral securing all or any
part of the Guaranteed Obligations.

Section 13.03       No Discharge or Diminishment of Loan Guarantee.

(a)        Except as otherwise provided for herein, the obligations of each
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of the Borrower or any other guarantor of or other Person liable for
any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Obligated Party or its
assets or any resulting release or discharge of any obligation of any Obligated
Party; or (iv) the existence of any claim, setoff or other right which any Loan
Guarantor may have at any time against any Obligated Party, the Agent, any
Issuing Bank, any Lender, or any other Person, whether in connection herewith or
in any unrelated transaction.

(b)        The obligations of each Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.

(c)         Further, the obligations of any Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the Agent,
any Issuing Bank, any Lender or any other Secured Party to assert any claim or
demand or to enforce any remedy with respect to all or any part of the
Guaranteed Obligations; (ii) any waiver or modification of or supplement to any
provision of any agreement relating to the Guaranteed Obligations; (iii) any
release, non-perfection or invalidity of any indirect or direct security for the
obligations of any Borrower for all or any part of the Guaranteed Obligations or
any obligations of any other guarantor of or other Person liable for any of the
Guaranteed Obligations; (iv) any action or failure to act by the Agent, any
Issuing Bank, any Lender or any other Secured Party with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Guarantor or
that would otherwise operate as a discharge of any Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).

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Section 13.04     Defenses Waived.  To the fullest extent permitted by
applicable law, each Guarantor hereby waives any defense based on or arising out
of any defense of the Borrower or any other Guarantor or the unenforceability of
all or any part of the Guaranteed Obligations from any cause, or the cessation
from any cause of the liability of the Borrower or any other Guarantor, other
than the indefeasible payment in full in cash of the Guaranteed Obligations.
Without limiting the generality of the foregoing, each Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and, to the fullest
extent permitted by law, any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against any
Obligated Party or any other Person.  Each Guarantor confirms that it is not a
surety under any state law and shall not raise any such law as a defense to its
obligations hereunder.  The Agent may, at its election, foreclose on any
Collateral held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Guarantor under this
Loan Guarantee except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid in cash.  To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against any Obligated Party or any security.

Section 13.05     Rights of Subrogation.  No Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
Collateral, until the Borrower and the Guarantors have fully performed all their
obligations to the Agent, the Issuing Banks, the Lenders and the other Secured
Parties.

Section 13.06     Reinstatement; Stay of Acceleration.  If at any time any
payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, each Guarantor’s obligations under
this Loan Guarantee with respect to that payment shall be reinstated at such
time as though the payment had not been made and whether or not the Agent, the
Issuing Banks, the Lenders or the other Secured Parties are in possession of
this Loan Guarantee.  If acceleration of the time for payment of any of the
Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Guarantors forthwith on demand
by the Agent.

Section 13.07    Information.  Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Guarantor assumes and incurs under this Loan Guarantee, and agrees that
none of the Agent, any Issuing Bank or any Lender shall have any duty to advise
any Guarantor of information known to it regarding those circumstances or risks.

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Section 13.08     Taxes.  The provisions of Section 5.03 shall apply
mutatis mutandis to all payments by the Guarantors of the Guaranteed
Obligations.

Section 13.09     Maximum Liability.  The provisions of this Loan Guarantee are
severable, and in any action or proceeding involving any state corporate law, or
any state, federal or foreign bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally, if the obligations of any
Guarantor under this Loan Guarantee would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of such Guarantor’s
liability under this Loan Guarantee, then, notwithstanding any other provision
of this Loan Guarantee to the contrary, the amount of such liability shall,
without any further action by the Guarantors or the Lenders, be automatically
limited and reduced to the highest amount that is valid and enforceable as
determined in such action or proceeding (such highest amount determined
hereunder being the relevant Guarantor’s “Maximum Liability”).  This Section
with respect to the Maximum Liability of Loan Guarantor is intended solely to
preserve the rights of the Lenders to the maximum extent not subject to
avoidance under applicable law, and no Guarantor nor any other Person or entity
shall have any right or claim under this Section with respect to such Maximum
Liability, except to the extent necessary so that the obligations of any
Guarantor hereunder shall not be rendered voidable under applicable law. Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Liability of each Guarantor without impairing this
Loan Guarantee or affecting the rights and remedies of the Lenders hereunder;
provided that nothing in this sentence shall be construed to increase any
Guarantor’s obligations hereunder beyond its Maximum Liability.

Section 13.10     Contribution.  In the event any Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guarantee or
shall suffer any loss as a result of any realization upon any collateral granted
by it to secure its obligations under this Loan Guarantee, each other Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s Applicable Share of such payment or
payments made, or losses suffered, by such Paying Guarantor.  For purposes of
this Section, each Non-Paying Guarantor’s “Applicable Share” with respect to any
such payment or loss by a Paying Guarantor shall be determined as of the date on
which such payment or loss was made by reference to the ratio of (a) such
Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect
to any right to receive, or obligation to make, any contribution hereunder) or,
if such Non-Paying Guarantor’s Maximum Liability has not been determined, the
aggregate amount of all monies received by such Non-Paying Guarantor from the
Borrower after the Interim Facility Effective Date (whether by loan, capital
infusion or by other means) to (b) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying Guarantor) as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantor, the aggregate amount of all monies received by such
Guarantors from the Borrower after the Interim Facility Effective Date (whether
by loan, capital infusion or by other means).  Nothing in this provision shall
affect any Guarantor’s several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor’s Maximum Liability).  Each of the Guarantors
covenants and agrees that its right to receive any contribution under this Loan
Guarantee from a Non-Paying Guarantor shall be subordinate and junior in right
of payment to the payment in full in cash of the Guaranteed Obligations.  This
provision is for the benefit of the Agent, the Issuing Banks, the Lenders and
the Guarantors and may be enforced by any one, or more, or all of them in
accordance with the terms hereof.

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Section 13.11       Representations and Warranties.  Each Guarantor hereby
represents and warrants to the Agent and each Lender that:

(a)          the representations and warranties set forth in Article VII as they
relate to such Guarantor or to the Loan Documents to which such Guarantor is a
party are true and correct in all material respects (except that any
representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects after giving effect to
such qualification), provided that each reference in each such representation
and warranty to the Borrower’s knowledge shall, for the purposes of this clause,
be deemed to be a reference to such Guarantor’s knowledge.

(b)         on the date hereof, the correct legal name of such Guarantor, all
names and trade names that such Guarantor has used in the last five (5) years,
such Guarantor’s jurisdiction of organization and each jurisdiction of
organization of such Guarantor over the last five (5) years, organizational
number, taxpayor identification number, and the location(s) of such Guarantor’s
chief executive office or sole place of business over the last five years are
specified on Schedule 13.11.

(c)         the Borrower is a member of an affiliated group of companies that
includes each Guarantor, and the Borrower and the other Guarantors are engaged
in related businesses.  Each Guarantor agrees that it shall benefit, directly or
indirectly, from the transactions contemplated by this Agreement; and it has
determined that this Loan Guarantee is necessary and convenient to the conduct,
promotion and attainment of the business of such Guarantor and the Borrower.

Section 13.12       Subordination of Indebtedness.

(a)         Subordination of All Guarantor Claims. As used herein, the term
“Guarantor Claims” shall mean all debts and obligations of the Borrower or any
other Guarantor to the Borrower or any other Guarantor, whether such debts and
obligations now exist or are hereafter incurred or arise, or whether the
obligation of the debtor thereon be direct, contingent, primary, secondary,
several, joint and several, or otherwise, and irrespective of whether such debts
or obligations be evidenced by note, contract, open account, or otherwise, and
irrespective of the Person or Persons in whose favor such debts or obligations
may, at their inception, have been, or may hereafter be created, or the manner
in which they have been or may hereafter be acquired by.  After and during the
continuation of an Event of Default, no Guarantor shall receive or collect,
directly or indirectly, from any other obligor in respect thereof any amount
upon the Guarantor Claims.

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(b)         Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving any Guarantor, the Agent on behalf of the Agent and the Secured
Parties shall have the right to prove their claim in any proceeding, so as to
establish their rights hereunder and receive directly from the receiver, trustee
or other court custodian, dividends and payments which would otherwise be
payable upon Guarantor Claims. Each Guarantor hereby assigns such dividends and
payments to the Agent for the benefit of the Agent and the Secured Parties for
application against the Borrower Obligations as provided under Section 10.02(c)
hereof. Should any Agent or Secured Party receive, for application upon the
Guaranteed Obligations, any such dividend or payment which is otherwise payable
to any Guarantor, and which, as between such Guarantors, shall constitute a
credit upon the Guarantor Claims, then upon payment in full in cash of the
Borrower Obligations, the expiration of all Letters of Credit outstanding under
the Credit Agreement and the termination of all of the Commitments, the intended
recipient shall become subrogated to the rights of the Agent and the Secured
Parties to the extent that such payments to the Agent and the Secured Parties on
the Guarantor Claims have contributed toward the liquidation of the Guaranteed
Obligations, and such subrogation shall be with respect to that proportion of
the Guaranteed Obligations which would have been unpaid if the Agent and the
Secured Parties had not received dividends or payments upon the Guarantor
Claims.

(c)         Payments Held in Trust.  In the event that, notwithstanding clauses
(a) and (b) above, any Guarantor should receive any funds, payments, claims or
distributions which is prohibited by such clauses, then it agrees: (i) to hold
in trust for the Agent and the Secured Parties an amount equal to the amount of
all funds, payments, claims or distributions so received, and (ii) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Agent, for the benefit of the
Secured Parties; and each Guarantor covenants promptly to pay the same to the
Agent.

(d)       Liens Subordinate. Each Guarantor agrees that, until the Obligations
are paid in full in cash, no Letter of Credit shall be outstanding and the
termination of all of the Commitments, any Liens securing payment of the
Guarantor Claims shall be and remain inferior and subordinate to any Liens
securing payment of the Guaranteed Obligations, regardless of whether such
encumbrances in favor of such Guarantor, the Agent or any Secured Party
presently exist or are hereafter created or attach.  Without the prior written
consent of the Agent, no Guarantor, during the period in which any of the
Obligations are outstanding or the Commitments are in effect, shall (i) exercise
or enforce any creditor’s right it may have against any debtor in respect of the
Guarantor Claims, or (ii) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceeding (judicial or otherwise, including
without limitation the commencement of or joinder in any liquidation,
bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce
any Lien securing payment of the Guarantor Claims held by it.

(e)          Notation of Records.  Upon the request of the Agent, all promissory
notes and all accounts receivable ledgers or other evidence of the Guarantor
Claims accepted by or held by any Guarantor shall contain a specific written
notice thereon that the indebtedness evidenced thereby is subordinated under the
terms of this Loan Guarantee.

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Section 13.13       Other Terms.

(a)          Notices. All notices and other communications to any Guarantor
shall be given in the manner and subject to the terms of Section 12.01; provided
that each Guarantor acknowledges and agrees that any such notice, request or
demand to or upon any Guarantor by the Agent, the Lenders or any other Secured
Party may be addressed the Borrower and any notice provided to the Borrower
hereunder shall constitute notice to each Guarantor on the date received by the
Borrower in accordance with Section 12.01.

(b)          Indemnities, Etc.

(i)         Each Guarantor agrees to pay, and to save the Agent and the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all Other Taxes which may be payable or
determined to be payable in connection with any of the transactions contemplated
by this Loan Guarantee.

(ii)       Each Guarantor agrees to pay, and to save the Agent and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Loan Guarantee to the extent the Borrower
would be required to do so pursuant to Section 12.03 hereof.

(c)          Acknowledgments. Each Guarantor hereby acknowledges that:

(i)        it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, including the Loan Guarantee and the other Loan
Documents to which it is a party;

(ii)         neither the Agent nor any Secured Party has any fiduciary
relationship with or duty to any Guarantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Guarantors, on the one hand, and the Agent and Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and

(iii)      no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Guarantors and the Secured Parties.

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(iv)        each Guarantor specifically agrees that it has a duty to read this
Agreement, the Security Instruments and the other Loan Documents and agrees that
it is charged with notice and knowledge of the terms of this Agreement, the
Security Instruments and the other Loan Documents; that it has in fact read this
Agreement, the Security Instruments and the other Loan Documents and is fully
informed and has full notice and knowledge of the terms, conditions and effects
thereof; that it has been represented by independent legal counsel of its choice
throughout the negotiations preceding its entry of this Agreement and the
Security Instruments; and has received the advice of its attorney in entering
into this Agreement and the Security Instruments; and that it recognizes that
certain of the terms of this Agreement and the Security Instruments result in
one party assuming the liability inherent in some aspects of the transaction and
relieving the other party of its responsibility for such liability. EACH PARTY
HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE SECURITY
INSTRUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH
PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

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The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.

BORROWER:
LEGACY RESERVES LP, as a debtor and debtor-in-possession
       
By:
Legacy Reserves GP, LLC, its general partner
       
By:
Legacy Reserves Inc., its sole member
       
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

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GUARANTORS:
LEGACY RESERVES OPERATING LP
 
as a debtor and debtor-in-possession
       
By:
Legacy Reserves Operating GP LLC, its general partner
       
By:
Legacy Reserves LP, its sole member
       
By:
Legacy Reserves GP, LLC, its general partner
       
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer
       
LEGACY RESERVES OPERATING GP LLC, as a debtor and debtor-in-possession
       
By:
Legacy Reserves LP, its sole member
       
By:
Legacy Reserves GP, LLC, its general partner
       
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

224

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LEGACY RESERVES INC.
 
LEGACY RESERVES ENERGY SERVICES LLC
 
DEW GATHERING LLC
 
PINNACLE GAS TREATING LLC
 
LEGACY RESERVES GP, LLC
 
LEGACY RESERVES SERVICES LLC
 
LEGACY RESERVES FINANCE CORPORATION
 
LEGACY RESERVES MARKETING LLC, each as a debtor and debtor-in-possession
     
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

225

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ADMINISTRATIVE AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent and a Lender
       
By:
     
Name: Brett Steele
   
Title: Director

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

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LENDERS:
[_________________________]
       
By:
     
[Name]
   
[Title]

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]
 

227

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Exhibit B-2

Interim DIP Order

228

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

 
§
 
In re:
§
Chapter 11
 
§
 
LEGACY RESERVES INC., et al.,1
§
Case No. 19-_____ (__)
 
§
 

Debtors.
§
Jointly Administered
 
§
 

INTERIM ORDER (I) AUTHORIZING DEBTORS TO OBTAIN
POSTPETITION FINANCING PURSUANT TO SECTION 364 OF
THE BANKRUPTCY CODE, (II) AUTHORIZING THE USE OF
CASH COLLATERAL PURSUANT TO SECTION 363 OF THE
BANKRUPTCY CODE, (III) GRANTING ADEQUATE PROTECTION
TO THE EXISTING RBL SECURED PARTIES AND THE
EXISTING SECOND LIEN SECURED PARTIES PURSUANT TO
SECTIONS 361, 362, 363, AND 364 OF THE BANKRUPTCY CODE,
(IV) GRANTING LIENS AND SUPERPRIORITY CLAIMS, (V) MODIFYING
THE AUTOMATIC STAY, AND (VI) SCHEDULING A FINAL HEARING

Upon the motion, dated June [●], 2019 (the “DIP Motion”), of the DIP Borrower
(as defined below), and the other debtors and debtors-in-possession
(collectively, the “Debtors”), in the above-referenced chapter 11 cases (the
“Cases”), seeking entry of an interim order (this “Interim Order”) pursuant to
section 105, 361, 362, 363(b), 363(c)(2), 364(c)(l), 364(c)(2), 364(c)(3),
364(d)(l), 364(e), 507, and 552 of chapter 11 of title 11 of the United States
Code (as amended, the “Bankruptcy Code”), Rules 2002, 4001, 6004, and 9014 of
the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules
2002-1, 4001-1(b), 4002-1(i), and 9013-1 of the Local Rules of the United States
Bankruptcy Court for the Southern District of Texas and the Texas Complex
Chapter 11 Case Procedures (together, the “Local Rules”), that, among other
things:

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1       The Debtors in these chapter 11 cases, along with the last four digits
of each Debtor’s federal tax identification number, as applicable, are:  Legacy
Reserves Inc. (9553); Legacy Reserves GP, LLC (1065); Legacy Reserves LP (1069);
Legacy Reserves Finance Corporation (1181); Legacy Reserves Services LLC (2710);
Legacy Reserves Operating LP (7259); Legacy Reserves Energy Services LLC (1233);
Legacy Reserves Operating GP LLC (7209); Dew Gathering LLC (4482); Pinnacle Gas
Treating LLC (3711); Legacy Reserves Marketing LLC (7593).  The location of the
Debtors’ service address is:  303 W. Wall St., Suite 1800, Midland, TX 79701.

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(i)          authorizes Legacy Reserves LP, a Delaware limited liability company
(“Legacy”) designated as the “Borrower” under, and as defined in, the DIP Credit
Agreement (as defined below) (the “DIP Borrower”) to obtain, and Legacy’s
limited partner, Legacy Reserves Inc., a Delaware corporation (its “Limited
Partner”), and Legacy’s general partner, Legacy Reserves GP, LLC, a Delaware
limited liability company (its “General Partner”, and, together with the Limited
Partner, its “Partners”) and the other guarantors under the DIP Loan Documents
(as defined below) (collectively, the “DIP Guarantors”) to unconditionally
guaranty, jointly and severally, the DIP Borrower’s obligations in respect of,
senior secured priming and superpriority postpetition financing, which if
approved on a final basis would be a revolving loan credit facility (the “DIP
Facility” and the loans thereunder, the “DIP Loans”) in an aggregate principal
amount of up to $350,000,000, consisting of: (a) a new money revolving loan
facility in the aggregate principal amount of $100,000,000 in commitments from
the DIP Lenders (the “Commitments”), inclusive of a sub-facility of up to
$1,000,000 for the issuance of letters of credit (the “DIP LC Sub-Facility”),
which shall reduce availability under the DIP Facility on a dollar-for-dollar
basis (the “New Money Facility” and the loans thereunder, the “New Money
Loans”), and (b)  a refinancing term facility in the aggregate principal amount
of up to $250,000,000 (the “Refinancing Facility” and the loans thereunder, the
“Refinanced Loans”), pursuant to the terms of (x) this Interim Order, (y) that
certain Debtor-in-Possession Credit Agreement (as the same may be amended,
restated, supplemented, or otherwise modified from time to time in accordance
with its terms, the “DIP Credit Agreement”),2 by and among the DIP Borrower,
Wells Fargo Bank, National Association, as administrative agent and collateral
agent (in such capacity, and as administrative agent and collateral agent under
the DIP Facility, collectively, the “DIP Agent”), and other financial
institutions as such may become from time to time party to the DIP Credit
Agreement as “Lenders” under, and as defined in, the DIP Credit Agreement (the
“New Money DIP Lenders,” and together with the Refinancing DIP Lenders (as
defined below), collectively, the “DIP Lenders,” and together with the DIP Agent
and any other party to which DIP Obligations (as defined below) are owed, the
“DIP Secured Parties”), in substantially the form attached to the DIP Motion,
and (z) any and all other Loan Documents (as defined in the DIP Credit
Agreement, and together with the DIP Credit Agreement, collectively, the “DIP
Loan Documents”), to: (a) to pay DIP Facility-related transaction costs, fees
and expenses; (b) to provide working capital for the Debtors and for other
general corporate purposes of the Debtors, all in accordance with the applicable
DIP Budget (as defined below); (c) to pay Adequate Protection (as defined below)
payments as authorized by the Bankruptcy Court in the Interim Order or the Final
Order (each as defined below); (d) to pay obligations arising from or related to
the Carve-Out; (e) to pay restructuring costs incurred in connection with the
Bankruptcy Case; (f) in the case of the Refinancing Facility, convert to DIP
Obligations under the DIP Loan Documents, $250,000,000 of the outstanding
principal amount of the Existing RBL Loans (as defined in the Existing RBL
Credit Facility (as defined below)) held by the Refinancing DIP Lenders (defined
below) ratably in accordance with their respective shares of the New Money
Facility (according to the refinancing mechanics described below) (the
“Refinancing”, and the holders of such refinanced Existing RBL Loans, the
“Refinancing DIP Lenders”, and the Refinancing DIP Lenders together with the DIP
Agent, collectively, the “Refinancing DIP Secured Parties”), and such converted
Existing RBL Loans, the Refinanced Loans); (g) pay certain transaction fees and
other costs and expenses of administration of the Cases; and (h) pay fees and
expenses (including reasonable attorneys’ fees and expenses) and interest and
other payments owed to the DIP Secured Parties under the DIP Loan Documents and
this Interim Order;

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2          Unless otherwise specified herein, all capitalized terms used herein
without definition shall have the respective meanings given to such terms in the
DIP Credit Agreement.  A copy of the DIP Credit Agreement is attached hereto as
Schedule 1.

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(ii)         approves the terms of, and authorizes the Debtors to execute and
deliver, and perform under, the DIP Loan Documents and Secured Swap Agreements
(as defined in the DIP Credit Agreement) and authorizes and directs the Debtors
to perform such other and further acts as may be required in connection with the
DIP Loan Documents and this Interim Order;

(iii)        subject to the Carve-Out, grants (x) to the DIP Agent, for the
benefit of itself and the other DIP Secured Parties, Liens (as defined in the
DIP Credit Agreement) on all of the DIP Collateral (as defined below) pursuant
to section 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, which Liens
shall be senior to the Primed Liens (as defined below) and the Adequate
Protection Liens (as defined below), and shall be junior solely to any valid,
enforceable, and non-avoidable Liens (including the Excluded Liens (under and as
defined in the DIP Credit Agreement, attached to this Interim Order as Schedule
1)) that are (A) in existence on the Petition Date (as defined below), (B)
either perfected as of the Petition Date or perfected subsequent to the Petition
Date solely to the extent permitted by section 546(b) of the Bankruptcy Code,
and (C) senior in priority to the Existing RBL Liens and the Existing Second
Liens (each as defined below) to the extent provided under and after giving
effect to any intercreditor or subordination agreement (all such Liens,
collectively in (A), (B), and (C), the “Existing Prior Liens”) and (y) to the
DIP Secured Parties, pursuant to section 364(c)(1) of the Bankruptcy Code,
superpriority administrative claims having recourse to all prepetition and
postpetition property of the Debtors’ estates, now owned or hereafter acquired
and the proceeds of each of the foregoing, including,3 upon entry of this
Interim Order, any Debtor’s rights under section 549 of the Bankruptcy Code and
the proceeds thereof, and upon entry of the Final Order, the proceeds of
Avoidance Actions (as defined below), whether received by judgment, settlement,
or otherwise;

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

3          As used herein, the words “including” or “include” and variations
thereof shall not be deemed to be terms of limitation, and shall be deemed to be
followed by the words “without limitation.”

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(iv)        authorizes the Debtors to use “cash collateral” as such term is
defined in section 363 of the Bankruptcy Code (the “Cash Collateral”), including
Cash Collateral in which the DIP Secured Parties and/or the Existing RBL Secured
Parties (as defined below) have a Lien or other interest, in each case whether
existing on the Petition Date, arising pursuant to this Interim Order or
otherwise, for the purposes described in the DIP Loan Documents and this Interim
Order;

(v)         vacates the automatic stay imposed by section 362 of the Bankruptcy
Code solely to the extent necessary to implement and effectuate the terms and
provisions of the DIP Loan Documents and this Interim Order;

(vi)       authorizes the DIP Borrower at any time prior to the earlier of June
[●], 2019, and the entry of the Final Order to borrow on a revolving basis in
accordance with the DIP Budget under the New Money Facility in an aggregate
outstanding principal amount that, when taken together with the aggregate face
amount of letters of credit outstanding under the DIP LC Sub-Facility, will not
exceed $35,000,000, and to convert to DIP Obligations (as defined below) under
the DIP Loan Documents each Refinancing DIP Lender’s ratable share of
$87,500,000 of the outstanding principal amount of the Loans (as defined in the
Existing RBL Credit Agreement) as part of the Refinancing, and authorizes the
DIP Guarantors to unconditionally guaranty such obligations jointly and
severally; provided, that any amounts repaid under the New Money Facility may be
reborrowed, subject to the terms of the DIP Loan Documents and this Interim
Order;

232

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(vii)      subject to the Carve-Out, solely to the extent of any diminution in
value of their collateral, grants (x) the Existing RBL Secured Parties, as of
the Petition Date and in accordance with the relative priorities set forth
herein, the Existing RBL Adequate Protection (as defined below), which consists
of, among other things, Existing RBL Adequate Protection Liens (as defined
below), the Existing RBL Adequate Protection Superpriority Claims (as defined
below) and the cash interest described below with respect to the Existing RBL
Loans, and (y) the lenders under the Existing Second Lien Credit Facility (each
as defined in the Existing Second Lien Credit Facility (as defined below)), the
Existing Second Lien Agent (as defined below), and any other parties to whom
obligations may be owed under the Existing Second Lien Credit Facility (as
defined below), as of the Petition Date and in accordance with the relative
priorities set forth herein, the Existing Second Lien Adequate Protection (as
defined below), which consists of, among other things, Second Lien Adequate
Protection Liens (as defined below), the Second Lien Adequate Protection
Superpriority Claims (as defined below) and the cash payments described below
with respect to the Existing Second Lien Loans;

(viii)      schedules a final hearing on the DIP Motion (the “Final Hearing”),
at which, for the avoidance of doubt, the rights of all parties in interest are
fully preserved to present arguments concerning the Final Order, to be held on
June [●], 2019 at [●] [a/p].m. (prevailing Central Time) to consider entry of a
final order that grants all of the relief requested in the DIP Motion on a final
basis and which final order shall be in form and substance (including with
respect to any subsequent modifications to the form or substance made in
response to objections of other creditors4 or this Court) acceptable to the DIP
Secured Parties and the Existing RBL Agent (as defined below) (the “Final
Order”);

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4          Nothing herein permits a creditor to file any objection prohibited by
the Intercreditor Agreement (as defined below).

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(ix)        waives, solely upon entry of the Final Order, rights of the Debtors
and their estates to surcharge collateral pursuant to section 506(c) of the
Bankruptcy Code;

(x)       provides that the DIP Secured Parties and the Existing RBL Secured
Parties are entitled to all of the rights and benefits of section 552(b) of the
Bankruptcy Code, and, subject to the entry of the Final Order, the “equities of
the case” exception shall not apply;

(xi)        waives the equitable doctrine of “marshaling” and any other similar
doctrine with respect to any of the DIP Collateral, the Existing RBL Collateral,
or the Existing Second Lien Collateral, as applicable; and

(xii)       provides for the immediate effectiveness of this Interim Order and
waives any applicable stay (including under Bankruptcy Rule 6004) to permit such
immediate effectiveness.

Having considered the DIP Motion, the DIP Credit Agreement, the Declaration of
Kevin M. Cofsky In Support of the Debtors’ [Emergency] Motion for Entry of
Interim and Final Orders (I) Authorizing Debtors to Obtain Postpetition
Financing Pursuant to Section 364 of the Bankruptcy Code, (II) Authorizing the
Use of Cash Collateral Pursuant to Section 363 of the Bankruptcy Code, (III)
Granting Adequate Protection to the Existing RBL Secured Parties and the
Existing Second Lien Secured Parties Pursuant to Sections 361, 362, 363, and 364
of the Bankruptcy Code, (IV) Granting Liens and Superpriority Claims, (V)
Modifying the Automatic Stay, and (VI) Scheduling a Final Hearing (the “Cofsky
Declaration”), the Declaration of James Daniel Westcott in Support of the
Debtors’ Chapter 11 Petitions and First Day Pleadings (the “First Day
Declaration”), and the evidence submitted or proffered at the hearing on this
Interim Order (the “Interim Hearing”); and in accordance with Bankruptcy Rules
2002, 4001(b), 4001(c), 4001(d), and 9014, and all applicable Local Rules,
notice of the DIP Motion and the Interim Hearing having been provided pursuant
to Bankruptcy Rule 4001(b)(1)(C); an Interim Hearing having been held and
concluded on June [●], 2019; and it appearing that approval of the interim
relief requested in the DIP Motion is necessary to avoid immediate and
irreparable harm to the Debtors pending the Final Hearing and otherwise is fair
and reasonable and in the best interests of the Debtors, their creditors, their
estates and all parties in interest, and is essential for the continued
operation of the Debtors’ business and the preservation of the value of the
Debtors’ assets; and it appearing that the Debtors’ entry into the DIP Credit
Agreement and Secured Swap Agreements is a sound and prudent exercise of the
Debtors’ business judgment; and after due deliberation and consideration, and
good and sufficient cause appearing therefor:

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THIS COURT MAKES THE FOLLOWING FINDINGS OF FACT AND CONCLUSIONS OF LAW:5

A.         Petition Date.  On June [●], 2019 (the “Petition Date”), each of the
Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy
Code with the United States Bankruptcy Court for the [Southern District of
Texas] (this “Court”).  The Debtors have continued in the management and
operation of their businesses and properties as debtors-in-possession pursuant
to section 1107 and 1108 of the Bankruptcy Code.  No statutory committee of
unsecured creditors (to the extent such committee is appointed, the
“Committee”), trustee, or examiner has been appointed yet in the Cases.

B.          Jurisdiction and Venue.  This Court has core jurisdiction over the
Cases, the DIP Motion and the parties and property affected hereby pursuant to
28 U.S.C. §§ 157(b) and 1334.  Venue for the Cases and proceedings on the DIP
Motion is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.  The
statutory and other predicates for the relief sought herein are sections 105,
361, 362, 363, 364, 507, and 552 of the Bankruptcy Code, Bankruptcy Rules 2002,
4001, 6004, and 9014, and the Local Rules.

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

5          Findings of fact shall be construed as conclusions of law, and
conclusions of law shall be construed as findings of fact, as appropriate,
pursuant to Bankruptcy Rule 7052.

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C.          Notice.  The Interim Hearing is being held pursuant to the
authorization of Bankruptcy Rule 4001.  Notice of the Interim Hearing and the
emergency relief requested in the DIP Motion [has been] provided by the Debtors,
whether by facsimile, electronic mail, overnight courier or hand delivery, to
certain parties in interest, including:  (a) the Office of the U.S. Trustee for
the Southern District of Texas (the “United States Trustee”); (b) the holders of
the 30 largest unsecured claims against the Debtors (on a consolidated basis);
(c) the DIP Agent, Secured Swap Parties and their respective counsel thereto;
(d) the Existing RBL Agent and counsel thereto; (e) the Existing RBL Lenders;
(f) the Existing Second Lien Agent and counsel thereto; (g) the Existing Second
Lien Lenders; (h) the United States Attorney’s Office for the Southern District
of Texas; (i) the Internal Revenue Service; (j) the United States Securities and
Exchange Commission; (k) the Environmental Protection Agency and similar state
environmental agencies for states in which the Debtors conduct business; (l) the
state attorneys general for states in which the Debtors conduct business; and
(m) any party that has requested notice pursuant to Bankruptcy Rule 2002.  Under
the circumstances, such notice of the DIP Motion, the relief requested therein
and the Interim Hearing complies with Bankruptcy Rule 4001(b), (c), and (d) and
the Local Rules, and no other notice need be provided for entry of this Interim
Order.

D.         Debtors’ Stipulations Regarding the DIP Facility.  The Debtors, on
their behalf and on behalf of their estates, admit, stipulate, acknowledge, and
agree (the “Debtors’ DIP Stipulations”) as follows:

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(i)        Release of Claims.  Upon entry of this Interim Order, each Debtor and
its estate shall be deemed to have forever waived, discharged, and released each
of the DIP Secured Parties and their respective affiliates, assigns, or
successors and the respective members, managers, equity holders, affiliates,
agents, attorneys, financial advisors, consultants, officers, directors,
employees, and other representatives of the foregoing (all of the foregoing,
collectively, the “DIP Secured Party Releasees”), solely in their capacity as
such, from any and all “claims” (as defined in the Bankruptcy Code),
counterclaims, causes of action (including causes of action in the nature of
“lender liability”), defenses, setoff, recoupment, other offset rights, and
other rights of disgorgement or recovery against any and all of the DIP Secured
Party Releasees, whether arising at law or in equity, relating to and/or
otherwise in connection with the DIP Obligations, the DIP Liens, or the
debtor-creditor relationship between any of the DIP Secured Parties, on the one
hand, and any of the Debtors, on the other hand; provided, that nothing herein
shall relieve the DIP Secured Party Releasees from fulfilling their obligations
or commitments under the DIP Facility; provided, further that, the DIP Secured
Party Releases shall be limited to such claims arising prior to or including the
date of the entry of this Order.

E.          Debtors’ Stipulations Regarding the Existing RBL Credit Facility. 
Subject only to the rights of parties in interest that are specifically set
forth in paragraph 6 below, the Debtors, on their behalf and on behalf of their
estates, admit, stipulate, acknowledge, and agree (paragraphs E hereof shall be
referred to herein collectively as the “Debtors’ Existing RBL Stipulations”) as
follows:

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(i)          Existing RBL Credit Facility. Pursuant to that certain Third
Amended and Restated Credit Agreement, originally dated as of April 1, 2014  (as
amended, restated, or otherwise modified from time to time, the “Existing RBL
Credit Agreement,” and collectively with any other agreements and documents
executed or delivered in connection therewith, including the “Loan Documents” as
defined therein, each as may be amended, restated, supplemented, or otherwise
modified from time to time, the “Existing RBL Loan Documents”, and including all
exhibits and other ancillary documentation in respect thereof, the “Existing RBL
Credit Facility”), by and among Legacy Reserves LP as Borrower (as defined
therein), Wells Fargo Bank, National Association as Administrative Agent (the
“Existing RBL Agent”) and the financial institutions and other persons or
entities party thereto from time to time as Lenders in such capacities, the
“Existing RBL Lenders” and, together with the Existing RBL Agent and any other
party to which Existing RBL Obligations (as defined below) are owed, the
“Existing RBL Secured Parties”), the Existing RBL Secured Parties agreed to
extend loans and other financial accommodations to, and issue letters of credit
for the account of, the Borrower (as defined in the Existing RBL Credit
Agreement) pursuant to the Existing RBL Loan Documents.  All obligations of the
Debtors arising under the Existing RBL Credit Agreement or the other Existing
RBL Loan Documents (other than such obligations that become Refinancing DIP
Obligations pursuant to this Interim Order or the Final Order) shall
collectively be referred to herein as the “Existing RBL Obligations.”

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(ii)        Existing RBL Liens and Existing RBL Collateral.  Pursuant to the
Security Instruments (as defined in the Existing RBL Credit Agreement) (as such
documents were amended, restated, supplemented, or otherwise modified from time
to time, the “Existing RBL Collateral Documents”), by and among Legacy, its
Partners, and its subsidiaries party thereto (collectively, the “Grantors”) and
the Existing RBL Agent, each Grantor granted to the Existing RBL Agent, for the
benefit of the Existing RBL Agent and the other Existing RBL Secured Parties, to
secure the Existing RBL Obligations, a first priority security interest in and
continuing Lien (the “Existing RBL Liens”) on substantially all of such
Grantor’s assets and properties (which, for the avoidance of doubt, includes
Cash Collateral) and all proceeds, products, accessions, rents, and profits
thereof, in each case not including property subject to the Excepted Liens (as
defined in the Existing RBL Credit Agreement) and whether then owned or existing
or thereafter acquired or arising.  All “Collateral” as defined in the Existing
RBL Collateral Documents granted or pledged by such Grantors pursuant to any
Existing RBL Collateral Document or any other Existing RBL Loan Document shall
collectively be referred to herein as the “Existing RBL Collateral.”  As of the
Petition Date, (a) the Existing RBL Liens (I) are legal, valid, binding,
enforceable, and perfected Liens, (II) were granted to, or for the benefit of,
the Existing RBL Secured Parties for fair consideration and reasonably
equivalent value, (III) are not subject to avoidance, recharacterization, or
subordination pursuant to the Bankruptcy Code or applicable non-bankruptcy law
(except for the priming contemplated herein), and (IV) are subject and
subordinate only to (A) the DIP Liens (as defined below), (B) the Carve-Out (as
defined below), (C) the Existing Prior Liens and (D) the Existing RBL Adequate
Protection Liens (as defined below), and (E) for the avoidance of doubt, remain
at all times subject to the Intercreditor Agreement (as defined below), and (b)
(I) the Existing RBL Obligations constitute legal, valid, and binding
obligations of the applicable Debtors, enforceable in accordance with the terms
of the applicable Existing RBL Loan Documents (other than in respect of the stay
of enforcement arising from section 362 of the Bankruptcy Code), (II) no
setoffs, recoupments, offsets, defenses, or counterclaims to any of the Existing
RBL Obligations exist, (III) no portion of the Existing RBL Obligations or any
payments made to any or all of the Existing RBL Secured Parties are subject to
avoidance, disallowance, disgorgement, recharacterization, recovery,
subordination, attack, offset, counterclaim, defense, or “claim” (as defined in
the Bankruptcy Code) of any kind pursuant to the Bankruptcy Code or applicable
non-bankruptcy law, and (IV) the obligations of each Guarantor (as defined in
the Existing RBL Credit Agreement) under that certain Guaranty Agreement, the
Security Instruments, and the other Existing RBL Loan Documents shall continue
in full force and effect to unconditionally guaranty the Existing RBL
Obligations notwithstanding any use of Cash Collateral permitted hereunder or
any financing and financial accommodations extended by the DIP Secured Parties
to the Debtors pursuant to the terms of this Interim Order or the DIP Loan
Documents.

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(iii)       Amounts Owed under Existing RBL Loan Documents.  As of the Petition
Date, the applicable Debtors owed the Existing RBL Secured Parties, pursuant to
the Existing RBL Loan Documents, without defense, counterclaim, reduction or
offset of any kind, in respect of loans made, letters of credit issued, and
other financial accommodations made by the Existing RBL Secured Parties, an
aggregate principal amount of not less than $[●]6 on account of the Loans (as
defined in the Existing RBL Credit Agreement) and not less than $[●]7 on account
of the Letters of Credit (as defined in the Existing RBL Credit Agreement), plus
all accrued and hereafter accruing and unpaid interest thereon and any
additional fees, expenses (including any reasonable and documented attorneys’,
accountants’, appraisers’, and financial advisors’ fees and expenses that are
chargeable or reimbursable under the Existing RBL Loan Documents), and other
amounts now or hereafter due under the Existing RBL Loan Documents, which such
amounts shall be reduced upon the entry of this Interim Order and the closing of
the DIP Facility by the amount of the Refinanced Loans approved herein.

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6          [NTD: TBD as of filing.]
7          [NTD: TBD as of filing.]

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(iv)      Release of Claims.  Subject to paragraph 6 below and entry of the
Final Order, each Debtor and its estate shall be deemed to have forever waived,
discharged, and released each of the Existing RBL Secured Parties and their
respective affiliates, assigns, or successors and the respective members,
managers, equity holders, affiliates, agents, attorneys, financial advisors,
consultants, officers, directors, employees, and other representatives of the
foregoing (all of the foregoing, collectively, the “Existing RBL Secured Party
Releasees”), solely in their capacity as such, from any and all “claims” (as
defined in the Bankruptcy Code), counterclaims, causes of action (including
causes of action in the nature of “lender liability”), defenses, setoff,
recoupment, other offset rights, and other rights of disgorgement or recovery
against any and all of the Existing RBL Secured Party Releasees, whether arising
at law or in equity, relating to and/or otherwise in connection with the
Existing RBL Obligations, the Existing RBL Liens, or the debtor-creditor
relationship between any of the Existing RBL Secured Parties, on the one hand,
and any of the Debtors, on the other hand, including (a) any recharacterization,
subordination, avoidance, disallowance, or other claim arising under or pursuant
to section 105 or chapter 5 of the Bankruptcy Code or under any other similar
provisions of applicable state law, federal law, or municipal law and (b) any
right or basis to challenge or object to the amount, validity, or enforceability
of the Existing RBL Obligations or any payments or other transfers made on
account of the Existing RBL Obligations, or the validity, enforceability,
priority, or non-avoidability of the Existing RBL Liens securing the Existing
RBL Obligations, including any right or basis to seek any disgorgement or
recovery of payments of cash or any other distributions or transfers previously
received by any of the Existing RBL Secured Party Releasees; provided, that the
Existing RBL Secured Party Releases shall be limited to such claims arising
prior to or including the date of the entry of the Final Order.

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(v)        That certain Intercreditor Agreement, dated as of October 25, 2016,
between the Existing RBL Agent and the Existing Second Lien Agent, and
acknowledged and agreed to by Legacy and the Guarantors (as defined in the
Existing RBL Credit Agreement) (as amended, restated, supplemented, or otherwise
modified in accordance with its terms, the “Intercreditor Agreement”), sets
forth subordination and other provisions governing the relative priorities and
rights of the Existing RBL Secured Parties and their respective Existing RBL
Obligations and Existing RBL Liens, on the one hand, and the Existing Second
Lien Secured Parties and their respective Existing Second Lien Obligations (as
defined below) and Existing Second Liens on the other hand, is in full force and
effect as of the Petition Date; provided, for the avoidance of doubt, that this
paragraph does not modify the Intercreditor Agreement.

F.           Debtors’ Stipulations Regarding the Existing Second Lien Credit
Facility.  Subject only to the rights of parties in interest that are
specifically set forth in paragraph 6 below, the Debtors, on their behalf and on
behalf of their estates, admit, stipulate, acknowledge, and agree (paragraphs F
hereof shall be referred to herein collectively as the “Debtors’ Existing Second
Lien Stipulations”) as follows:

(i)        Existing Second Lien Credit Facility. Pursuant to that certain Term
Loan Credit Agreement, dated as of October 25, 2016 (as amended, restated, or
otherwise modified from time to time, the “Existing Second Lien Credit
Agreement,” and collectively with any other agreements and documents executed or
delivered in connection therewith, including the “Loan Documents” as defined
therein, each as may be amended, restated, supplemented, or otherwise modified
from time to time, the “Existing Second Lien Loan Documents”, and including all
exhibits and other ancillary documentation in respect thereof, the “Existing
Second Lien Credit Facility” and collectively with the Existing RBL Loan
Documents, the “Existing Secured Loan Documents”), by and among the Borrower,
Cortland Capital Market Services LLC, the agent for the Existing Second Lien
Secured Parties (as defined below) (the “Existing Second Lien Agent”) and the
financial institutions and other persons or entities party thereto from time to
time as Lenders (in such capacities, the “Existing Second Lien Lenders” and,
together with the Existing Second Lien Agent and any other party to which
Existing Second Lien Obligations (as defined below) are owed, the “Existing
Second Lien Secured Parties”), the Existing Second Lien Secured Parties agreed
to extend loans and provide other financial accommodations to the Borrower (as
defined in the Existing Second Lien Credit Agreement) pursuant to the Existing
Second Lien Loan Documents. All obligations of the Debtors arising under the
Existing Second Lien Credit Agreement or the other Existing Second Lien Loan
Documents shall collectively be referred to herein as the “Existing Second Lien
Obligations.”

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(ii)       Existing Second Liens and Existing Second Lien Collateral.  Pursuant
to the Term Loan Security Instruments (as defined in the Existing Second Lien
Credit Agreement) (as such documents were amended, restated, supplemented, or
otherwise modified from time to time, the “Existing Second Lien Collateral
Documents”), by and among Legacy, its Partners, and its subsidiaries party
thereto (collectively, the “Grantors”) and the Existing Second Lien Agent, each
Grantor granted to the Existing Second Lien Agent, for the benefit of the
Existing Second Lien Agent and the other Existing Second Lien Secured Parties,
to secure the Existing Second Lien Obligations, including interest, fees, costs,
expenses, premiums, and other charges thereunder, a security interest in and
continuing Lien (the “Existing Second Liens”) on substantially all of such
Grantor’s assets and properties (which, for the avoidance of doubt, includes
Cash Collateral) and all proceeds, products, accessions, rents, and profits
thereof, in each case not including the property subject to the Excepted Liens
(as defined in the Existing Second Lien Credit Agreement) and whether then owned
or existing or thereafter acquired or arising.  All “Collateral” as defined in
the Existing Second Lien Collateral Documents granted or pledged by such
Grantors pursuant to any Existing Second Lien Collateral Document or any other
Existing Second Lien Loan Document shall collectively be referred to herein as
the “Existing Second Lien Collateral”, and collectively with the Existing RBL
Collateral, the “Existing Collateral”.  As of the Petition Date, (a) the
Existing Second Liens (I) are legal, valid, binding, enforceable, and perfected
Liens, (II) were granted to, or for the benefit of, the Existing Second Lien
Secured Parties for fair consideration and reasonably equivalent value, (III)
are not subject to avoidance, recharacterization, or subordination pursuant to
the Bankruptcy Code or applicable non-bankruptcy law (except for the priming
contemplated herein), and (IV) are subject and subordinate only to (A) the DIP
Liens (as defined below), (B) the Carve-Out (as defined below), (C) the Existing
Prior Liens, (D) the Existing RBL Liens, and (E) the Adequate Protection Liens,
and for the avoidance of doubt, remain at all times subject to the Intercreditor
Agreement (as defined below); and (b) (I) the Existing Second Lien Obligations
constitute legal, valid, and binding obligations of the applicable Debtors,
enforceable in accordance with the terms of the applicable Existing Second Lien
Loan Documents (other than in respect of the stay of enforcement arising from
section 362 of the Bankruptcy Code), (II) no setoffs, recoupments, offsets,
defenses, or counterclaims to any of the Existing Second Lien Obligations exist,
(III) no portion of the Existing Second Lien Obligations or any payments made to
any or all of the Existing Second Lien Secured Parties are subject to avoidance,
disallowance, disgorgement, recharacterization, recovery, subordination, attack,
offset, counterclaim, defense, or “claim” (as defined in the Bankruptcy Code) of
any kind pursuant to the Bankruptcy Code or applicable non-bankruptcy law, and
(IV) the obligations of each Guarantor (as defined in the Existing Second Lien
Credit Agreement) under that certain Guaranty Agreement, the Existing Second
Lien Collateral Documents, and the other Existing Second Lien Loan Documents
shall continue in full force and effect to unconditionally guaranty the Existing
Second Lien Obligations notwithstanding any use of Cash Collateral permitted
hereunder or any financing and financial accommodations extended by the DIP
Secured Parties to the Debtors pursuant to the terms of this Interim Order, the
DIP Loan Documents, or the Secured Swap Agreements.

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(iii)       Amounts Owed under Existing Second Lien Loan Documents.  As of the
Petition Date, the applicable Debtors owed the Existing Second Lien Secured
Parties, pursuant to the Existing Second Lien Loan Documents, without defense,
counterclaim, reduction or offset of any kind, in respect of loans made, letters
of credit issued to the extent permitted, and other financial accommodations
made by the Existing Second Lien Secured Parties, an aggregate principal amount
of not less than $[●]8 on account of the Loans (as defined in the Existing
Second Lien Credit Agreement), plus subject in each case to section 506(b) of
the Bankruptcy Code, all accrued and hereafter accruing and unpaid interest
thereon and any additional fees, costs, charges, and other amounts now or
hereafter due under the Existing Second Lien Loan Documents (including any
reasonable and documented attorneys’, accountants’, appraisers’, and financial
advisors’ fees and expenses that are chargeable or reimbursable under the
Existing Second Lien Loan Documents).  The Existing Second Lien Secured Parties
reserve all rights to assert the Applicable Premium (as defined in the Existing
Second Lien Credit Agreement).

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8          [NTD: TBD as of filing.]

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(iv)       Release of Claims.  Subject to paragraph 6 below and entry of the
Final Order, each Debtor and its estate shall be deemed to have forever waived,
discharged, and released each of the Existing Second Lien Secured Parties and
their respective affiliates, assigns, or successors and the respective members,
managers, equity holders, affiliates, agents, attorneys, financial advisors,
consultants, officers, directors, employees, and other representatives of the
foregoing (all of the foregoing, collectively, the “Existing Second Lien Secured
Party Releasees”), solely in their capacity as such, from any and all “claims”
(as defined in the Bankruptcy Code), counterclaims, causes of action (including
causes of action in the nature of “lender liability”), defenses, setoff,
recoupment, other offset rights, and other rights of disgorgement or recovery
against any and all of the Existing Second Lien Secured Party Releasees, whether
arising at law or in equity, relating to and/or otherwise in connection with the
Existing Second Lien Obligations, the Existing Second Liens, or the
debtor-creditor relationship between any of the Existing Second Lien Secured
Parties, on the one hand, and any of the Debtors, on the other hand, including
(a) any recharacterization, subordination, avoidance, disallowance, or other
claim arising under or pursuant to section 105 or chapter 5 of the Bankruptcy
Code or under any other similar provisions of applicable state law, federal law,
or municipal law and (b) any right or basis to challenge or object to the
amount, validity, or enforceability of the Existing Second Lien Obligations or
any payments or other transfers made on account of the Existing Second Lien
Obligations, or the validity, enforceability, priority, or non-avoidability of
the Existing Second Liens securing the Existing Second Lien Obligations,
including any right or basis to seek any disgorgement or recovery of payments of
cash or any other distributions or transfers previously received by any of the
Existing Second Lien Secured Party Releasees; provided, that the Existing Second
Lien Secured Party Releases shall be limited to such claims arising prior to or
including the date of the entry of the Final Order.

G.          Cash Collateral.  All of the Debtors’ cash, including any cash in
deposit accounts of the Debtors, wherever located, constitutes Cash Collateral
of the Existing RBL Agent and the other Existing RBL Secured Parties and, to the
extent of the Existing Second Lien Agent and the other Existing Second Lien
Secured Parties interests in such cash, the Existing Second Lien Agent and the
other Existing Second Lien Secured Parties.

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H.          Intercreditor Agreement.  Pursuant to section 510(a) of the
Bankruptcy Code, the Intercreditor Agreement and any other applicable
intercreditor or subordination provisions contained in any credit agreement,
security agreement, indenture, or related document, (A) shall remain in full
force and effect, (B) shall continue to govern the relative priorities, rights,
and remedies of the Existing RBL Secured Parties and the Existing Second Lien
Secured Parties (including the relative priorities, rights, and remedies of such
parties with respect to the replacement liens and administrative expense claims
and superpriority administrative expense claims granted, or amounts payable, by
the Debtors under this Interim Order or otherwise and the modification of the
automatic stay), and (C) shall not be amended, altered or modified by the terms
of this Interim Order or the DIP Loan Documents, and for avoidance of doubt, any
acts or omissions by any Existing RBL Secured Party or Existing Second Lien
Secured Party in connection with any chapter 11 plan of reorganization or
liquidation in these Cases (whether confirmed under section 1129(a) or (b) of
the Bankruptcy Code), and any distributions on account of, or other treatment
of, any Existing RBL Obligations or Existing Second Lien Obligations pursuant to
any such plan, shall remain subject to the Intercreditor Agreement (including
its turnover provisions) or any other applicable intercreditor or subordination
provisions; provided, however that the foregoing shall not prejudice the rights
of any party to the Intercreditor Agreement to assert that taking any action or
not taking any action is permitted by or prohibited by, as the case may be, the
Intercreditor Agreement, and all parties’ rights with respect to such assertions
are reserved.

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I.            Findings Regarding the DIP Facility.

(i)         Need for Postpetition Financing.  The Debtors have an immediate need
to obtain the DIP Loans and use Cash Collateral to, among other things, permit
the orderly continuation of the operation of their business, to maintain
business relationships with vendors, suppliers, and customers, to make payroll,
to make capital expenditures, to satisfy other working capital and general
corporate purposes of the Debtors (including fees and expenses related to the
Cases), to refinance the Refinance Loans, and to otherwise preserve the value of
the Debtors’ estates.  The Debtors’ access to sufficient working capital and
liquidity through the use of Cash Collateral and borrowing under the DIP
Facility is vital to a successful reorganization and/or to otherwise preserve
the enterprise value of the Debtors’ estates.  Immediate and irreparable harm
will be caused to the Debtors and their estates if immediate financing is not
obtained and permission to use Cash Collateral is not granted, in each case in
accordance with the terms of this Interim Order (including the DIP Budget) and
the DIP Loan Documents.

(ii)         No Credit Available on More Favorable Terms.  The Debtors have been
and continue to be unable to obtain financing on more favorable terms from
sources other than the DIP Secured Parties under the DIP Loan Documents and this
Interim Order.  The Debtors are unable to obtain unsecured credit allowable
under section 503(b)(1) of the Bankruptcy Code as an administrative expense or
secured credit allowable only under sections 364(c)(1), 364(c)(2), or 364(c)(3)
of the Bankruptcy Code.  The Debtors are unable to obtain secured credit under
section 364(d)(1) of the Bankruptcy Code without (a) granting to the DIP Secured
Parties the rights, remedies, privileges, benefits, and protections provided
herein and in the DIP Loan Documents, including the DIP Liens and the DIP
Superpriority Claims (as defined below), (b) allowing the DIP Secured Parties to
provide the loans, letters of credit, and other financial accommodations under
the DIP Facility (including, subject to entry of the Final Order, the completion
of the Refinancing) on the terms set forth herein and in the DIP Loan Documents,
(c) granting to the Existing RBL Secured Parties the rights, remedies,
privileges, benefits, and protections provided herein and in the DIP Loan
Documents, including the Existing RBL Adequate Protection and the conversion of
certain Existing RBL Obligations into DIP Obligations through the Refinancing,
and (d) granting to the Existing Second Lien Secured Parties the rights,
remedies, privileges, benefits, and protections provided herein, including the
Existing Second Lien Adequate Protection (all of the foregoing described in
clauses (a), (b), (c), and (d) above, collectively, the “DIP Protections”).

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(iii)       Entering into the Refinancing Facility is appropriate because (i)
the aggregate value of the Existing RBL Collateral securing the Existing RBL
Obligations substantially exceeds the aggregate amount of the Refinanced Loans;
(ii) the Refinancing of the Existing RBL Loans into the Refinanced Loans will
provide the Debtors significant savings on account of interest that otherwise
would or could accrue on the Existing RBL Loans at the rate applicable
thereunder during the course of these Cases; and (iii) the Existing RBL Lenders
would not otherwise consent to the use of their Cash Collateral or the
subordination of their liens to the DIP Liens, and the DIP Agent and the
Refinancing DIP Lenders would not be willing to provide the New Money Facility
or extend credit to the Debtors thereunder without the inclusion of the
Refinancing Facility within the DIP Facility.

(iv)      The terms of the DIP Loans pursuant to the DIP Loan Documents and the
use of the Existing Collateral (including the Cash Collateral) pursuant to this
Order are fair and reasonable, reflect the Debtors’ exercise of prudent business
judgment consistent with their fiduciary duties and constitute reasonably
equivalent value and fair consideration.

J.          Interim Financing.  During the Interim Period (as defined below),
the DIP Secured Parties and, as applicable, the Existing RBL Secured Parties and
the Existing Second Lien Secured Parties (together, the “Existing Secured
Parties”) are willing to provide financing to the Debtors and/or consent, or be
deemed to consent, to the use of Cash Collateral by the Debtors, subject to (i)
the entry of this Interim Order and (ii) the terms and conditions of the DIP
Loan Documents.

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K.          Adequate Protection for Existing Secured Parties.  The Existing
Secured Parties have agreed to permit the Debtors’ continued use of the Existing
RBL Collateral and the Existing Second Lien Collateral, including the Cash
Collateral, during the Interim Period, subject to the terms and conditions set
forth herein, including the protections afforded a party acting in “good faith”
under section 364(e) of the Bankruptcy Code.  In addition, the DIP Facility
contemplated hereby provides for a priming of the Existing Prior Liens pursuant
to section 364(d) of the Bankruptcy Code.  The Existing Secured Parties are
entitled to the adequate protection as set forth herein, including pursuant to
section 361, 362, 363, and 364 of the Bankruptcy Code.  Based on the DIP Motion
and on the record presented to this Court at the Interim Hearing, the terms of
the proposed adequate protection arrangements, use of the Cash Collateral, and
the DIP Facility contemplated hereby are fair and reasonable, reflect the
Debtors’ prudent exercise of business judgment consistent with their fiduciary
duties, and constitute reasonably equivalent value and fair consideration for
the consent of the Existing Secured Parties.  The Existing RBL Secured Parties
and the Existing Second Lien Secured Parties consent to, or are deemed to
consent to, or if not either of the foregoing, the Court hereby approves the
relief set forth herein over the absence of such consent or lack thereof,
pursuant to the Existing Secured Loan Documents, and, in any event, the
prepetition Liens and security interests of such parties are adequately
protected pursuant to the terms of this Interim Order.  Notwithstanding anything
to the contrary herein, the Existing Secured Parties’ consent to the DIP
Facility and to the priming of the Existing RBL Liens and the Existing Second
Liens by the DIP Liens is expressly limited to the present DIP Facility and the
DIP Liens securing same and shall not be applicable to any other
debtor-in-possession credit facility, even if it contains substantially the same
economic terms as this DIP Facility.

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L.          Section 552.  In light of the subordination of their Liens and
superpriority administrative claims to (i) the Carve-Out, in the case of the DIP
Secured Parties, and (ii) the Carve-Out and the DIP Liens, in the case of the
Existing RBL Secured Parties, each of the DIP Secured Parties and the Existing
Secured Parties is entitled to all of the rights and benefits of section 552(b)
of the Bankruptcy Code, and, subject to the entry of the Final Order, the
“equities of the case” exception shall not apply.

M.          Business Judgment and Good Faith Pursuant to Section 364(e).

(i)         The DIP Secured Parties have indicated a willingness to provide
postpetition secured financing, and related hedging, via the DIP Facility to the
Debtors in accordance with the DIP Loan Documents, the Secured Swap Agreements,
and this Interim Order.

(ii)        The terms and conditions of the DIP Facility (including the
Refinancing) as set forth in the DIP Loan Documents and this Interim Order, and
the fees, expenses, and other charges paid and to be paid thereunder or in
connection therewith, are fair, reasonable, and the best available under the
circumstances, and the Debtors’ agreement to the terms and conditions of the DIP
Loan Documents and the Secured Swap Agreements and to the payment of such fees
reflect the Debtors’ exercise of prudent business judgment consistent with their
fiduciary duties.  Such terms and conditions are supported by reasonably
equivalent value and fair consideration.

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(iii)       The DIP Secured Parties, the Existing RBL Secured Parties, the
Existing Second Lien Secured Parties and the Debtors, with the assistance and
counsel of their respective advisors, have acted in good faith and at
arm’s-length in, as applicable, negotiating, consenting to, and/or agreeing to,
the DIP Facility (including the Refinancing), the Debtors’ use of the DIP
Collateral, the Existing RBL Collateral, the Existing Second Lien Collateral
(including Cash Collateral), the DIP Loan Documents, and the DIP Protections
(including the Existing RBL Adequate Protection and the Existing Second Lien
Adequate Protection).  The DIP Obligations (including all advances that are made
at any time to the Debtors under the DIP Loan Documents and including the
Refinanced Loans) and the Debtors’ use of the DIP Collateral, the Existing RBL
Collateral, and the Existing Second Lien Collateral (including Cash Collateral)
shall be deemed to have been extended and/or consented to by the DIP Secured
Parties, the Existing RBL Secured Parties, and the Existing Second Lien Secured
Parties for valid business purposes and uses and in good faith, as that term is
used in section 364(e) of the Bankruptcy Code, and in express and good faith
reliance upon the protections offered by section 364(e) of the Bankruptcy Code
and this Interim Order, and, accordingly, the DIP Liens, the DIP Superpriority
Claims, the Existing RBL Adequate Protection, Existing Second Lien Adequate
Protection and the other DIP Protections shall be entitled to the full
protection of section 364(e) of the Bankruptcy Code in the event this Interim
Order or any provision hereof or thereof is vacated, reversed, amended, or
modified on appeal or otherwise.

N.         Relief Essential; Best Interest.  The Debtors have requested
immediate entry of this Interim Order pursuant to Bankruptcy Rules 4001(b)(2)
and 4001(c)(2) and the Local Rules.  Absent granting the relief set forth in
this Interim Order, the Debtors’ estates, their businesses and properties, and
their ability to successfully reorganize or otherwise preserve the enterprise
value of the Debtors’ estates will be immediately and irreparably harmed. 
Consummation of the DIP Facility and authorization of the use of Cash Collateral
in accordance with this Interim Order, the DIP Loan Documents and the Secured
Swap Agreements is therefore in the best interests of the Debtors’ estates and
consistent with their fiduciary duties.  Based on all of the foregoing,
sufficient cause exists for immediate entry of the Interim Order pursuant to
Bankruptcy Rules 4001(b)(2) and 4001(c)(2) and the applicable Local Rules.

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NOW, THEREFORE, based on the DIP Motion, the Cofsky Declaration, the First Day
Declaration, and the record before this Court with respect to the DIP Motion,
and with the consent of the Debtors, the Existing RBL Agent, and the requisite
Existing RBL Secured Parties (on behalf of all of the Existing RBL Secured
Parties), and the DIP Agent (on behalf of all of the DIP Secured Parties), and
the consent of the Existing Second Lien Secured Parties, or deemed consent of
the Existing Second Lien Secured Parties pursuant to the terms of the
Intercreditor Agreement, in each case, to the form and entry of this Interim
Order, and good and sufficient cause appearing therefor,

IT IS ORDERED that:

1.          Motion Granted.  The DIP Motion is hereby granted in accordance with
the terms and conditions set forth in this Interim Order and the DIP Loan
Documents.  Any objections, reservations of rights, and/or other statements with
respect to the DIP Motion with respect to the entry of this Interim Order that
have not been withdrawn, waived, or settled, and all reservations of rights
included therein, are hereby denied and overruled.

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2.           DIP Loan Documents and DIP Protections.

(a)        Approval of DIP Loan Documents and the Secured Swap Agreements.  The
Debtors are expressly and immediately authorized to enter into the DIP Facility,
to execute, deliver, and perform under the DIP Loan Documents, the Secured Swap
Agreements and this Interim Order, to incur the DIP Obligations (as defined
below), inclusive of $87,500,000 of Refinanced Loans upon entry of this Interim
Order and the remaining $162,500,000 of Refinanced Loans subject to entry of the
Final Order, with each Refinancing DIP Lender’s ratable share based on the ratio
of such Refinancing DIP Lender’s share of the New Money Facility, including the
DIP LC Sub-Facility), in accordance with, and subject to, the terms of this
Interim Order and the DIP Loan Documents, and to execute, deliver, and perform
under all other instruments, certificates, agreements, and documents that may be
required or necessary for the performance by the applicable Debtors under the
DIP Loan Documents the Secured Swap Agreements and the creation and perfection
of the DIP Liens described in, and provided for, by this Interim Order and the
DIP Loan Documents.  The Debtors are hereby authorized and directed to do and
perform all acts and pay the principal, interest, fees, expenses, and other
amounts described in the DIP Loan Documents the Secured Swap Agreements as such
become due pursuant to the DIP Loan Documents the Secured Swap Agreements and
this Interim Order, including all closing fees, administrative fees, commitment
fees, and reasonable and documented attorneys’, financial advisors’, and
accountants’ fees, and disbursements arising under the DIP Loan Documents, the
Secured Swap Agreements and this Interim Order, which amounts shall not be
subject to further approval of this Court and shall be nonrefundable and not
subject to challenge in any respect; provided, that the payment of the fees and
expenses of the Lender Professionals (as defined below) shall be subject to the
provisions of paragraph 23(b).  Upon their execution and delivery, the DIP Loan
Documents the Secured Swap Agreements shall represent the legal, valid, and
binding obligations of the applicable Debtors enforceable against such Debtors
in accordance with their terms.  Each officer of a Debtor acting singly is
hereby authorized to execute and deliver each of the DIP Loan Documents, such
execution and delivery to be conclusive evidence of such officer’s respective
authority to act in the name of and on behalf of the Debtors.

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(b)        DIP Obligations.  For purposes of this Interim Order, the term “DIP
Obligations” shall mean all amounts and other obligations and liabilities owing
by the respective Debtors under the DIP Credit Agreement and other DIP Loan
Documents (including all “Obligations” as defined in the DIP Credit Agreement),
including the Refinancing DIP Obligations (as defined below), and shall include
the principal of, interest on, and fees, costs, expenses, premiums, and other
charges owing in respect of, such amounts (including any reasonable and
documented attorneys’, accountants’, financial advisors’, and other fees, costs,
and expenses that are chargeable or reimbursable under the DIP Loan Documents,
the Secured Swap Agreements and/or this Interim Order), and any obligations in
respect of indemnity claims, whether contingent or otherwise.  Notwithstanding
anything to the contrary herein, the relative rights and priorities of the DIP
Secured Parties in respect of the DIP Collateral shall be as provided in this
Interim Order (and, with respect to the Refinancing DIP Secured Parties, as
provided in this Interim Order as to the portion of the Refinancing to be
effectuated with respect to the first $35,000,000 advanced under the New Money
Facility, and upon entry of the Final Order, as provided in such Final Order as
to the portion of the Refinancing to be effectuated with respect to the
remaining $65,000,000 advanced under the New Money Facility) and the other DIP
Loan Documents.

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(c)         Authorization to Incur DIP Obligations and Use Cash Collateral.  To
enable the Debtors to continue to operate their business and preserve and
maximize the value of their estates, during the period from the entry of this
Interim Order through and including the earliest to occur of (i) the entry of
the Final Order, or (ii) a Termination Event (as defined below), in each case
unless extended by written agreement of the DIP Agent and the Existing RBL Agent
(the period from the entry of this Interim Order through and including such
earliest date, the “Interim Period”), the DIP Borrower is hereby authorized (x)
to use Cash Collateral, (y) to borrow and obtain letters of credit under the DIP
Facility and (z) to enter into Secured Swap Agreements with Secured Swap
Parties; provided, that (I) the aggregate amount of New Money Loans to be made
available for all such borrowings and letters of credit made during this period
shall not exceed $35,000,000 under the New Money Facility; (II) the Existing RBL
Loans held by Refinancing DIP Lenders will be as part of the Refinancing
converted to Refinanced Loans under the Refinancing Facility, such amount of
Refinanced Loans to be calculated based on each such Refinancing DIP Lender’s
pro rata share of its Commitments to the New Money Facility and otherwise
consistent with the refinancing mechanics described above; (III) any amounts
repaid under the New Money Facility may be reborrowed subject to the terms of
the DIP Loan Documents and this Interim Order; (IV) any proposed use of the
proceeds of DIP Loans or use of Cash Collateral shall be consistent with the
terms and conditions of this Interim Order and the DIP Loan Documents, including
the DIP Budget (as defined below) and the Budget Covenants, subject to any
applicable Permitted Variance, as defined and contained in paragraph 2(f) below;
and (V) any Secured Swap Agreements shall only be entered into with Secured Swap
Parties in accordance with and subject to the limitations set forth in the DIP
Credit Agreement.  Following the entry of the Final Order, the DIP Borrower’s
authority to incur further DIP Obligations, if any, and use further Cash
Collateral will be governed by the terms of such Final Order and the DIP Loan
Documents.  All DIP Obligations shall be unconditionally guaranteed, on a joint
and several basis, by the DIP Guarantors, as further provided in the DIP Loan
Documents.

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(d)        Refinancing.  Upon entry of (i) this Interim Order, each Refinancing
DIP Lender’s ratable share of $87,500,000 of the outstanding principal amount of
the Loans (as defined in the Existing RBL Credit Agreement) and (ii) the Final
Order, each Refinancing DIP Lender’s ratable share of an additional $162,500,000
(in each case, with each Refinancing DIP Lender’s ratable share based on the
ratio of such Refinancing DIP Lender’s share of Commitments to the New Money
Facility, including the DIP LC Sub-Facility) will be immediately, automatically,
and irrevocably (upon entry of the Interim Order or the Final Order, as
applicable), deemed to have been converted into Refinancing DIP Obligations (as
defined below) and, except as otherwise provided in the Final Order and the DIP
Loan Documents, shall be entitled to all the priorities, privileges, rights, and
other benefits afforded to the other DIP Obligations under the Final Order and
the DIP Loan Documents.  The conversion of the Refinancing DIP Obligations as
described in this paragraph 2(d) shall be authorized as compensation for, in
consideration for, as a necessary inducement for, and on account of the
agreement of the Refinancing DIP Lenders to fund amounts under the New Money
Facility and not as payments under, adequate protection for, or otherwise on
account of, any Existing RBL Obligations. As used herein, the term “Refinancing
DIP Obligations” shall mean the Refinanced Loans and all interest accrued and
accruing thereon and all other amounts owing by the respective Debtors in
respect thereof.

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(e)         Budget.  Attached hereto as Schedule 2 is the Debtors’ initial
13-week cash flow forecast (the “Initial 13-Week Cash Flow Forecast”), which
shall be consistent in all material respects with the applicable period covered
by the initial DIP Budget, attached hereto as Schedule 3, including amounts
required to be paid with respect to the DIP Facility (the “Initial DIP Budget”),
that reflects on a line-item basis the Debtors’ (i) weekly projected cash
receipts (including from non-ordinary course assets sales), (ii) weekly
projected disbursements (including ordinary course operating expenses,
bankruptcy-related expenses under the Cases, capital expenditures, issuances of
any letter of credit, including the fees relating thereto, and estimated fees
and expenses of the DIP Agent (including counsel and financial advisors
therefor), the Existing RBL Agent (including counsel and financial advisors
therefor), the Existing Second Lien Agent (including counsel and financial
advisors therefor), and any other fees and expenses relating to the DIP
Facility), and certain funds managed by GSO Capital Partners LP, which are
lenders under the Existing Second Lien Loan Documents (the “Existing Required
Second Lien Lenders”), (iii) the sum of weekly unused availability under the DIP
Facility plus unrestricted cash on hand (collectively, “Aggregate Liquidity”),
and (iv) the weekly outstanding principal balance of the loans made and letters
of credit issued under the DIP Facility (including the principal amount of the
Refinanced Loans).  Commencing on June 28, 2019 (the “Initial Reporting Date”)
and continuing on every fourth Friday (each, a “Subsequent Reporting Date” and,
each such Subsequent Reporting Date together with the Initial Reporting Date, a
“Reporting Date”), the Debtors shall prepare and deliver to the DIP Agent, the
Existing RBL Agent and the Existing Required Second Lien Lenders (i) an updated
“rolling” 13-week cash flow forecast (the “Proposed 13-Week Cash Flow Forecast”)
and (ii) and an updated DIP Budget (as defined below) (a “Proposed DIP Budget”),
which each shall be in form and substance reasonably satisfactory to the DIP
Agent and subject to the DIP Agent’s approval in its reasonable discretion,
provided, that the DIP Agent shall have five (5) Business Days to approve any
Proposed 13-Week Cash Flow Forecast and Proposed DIP Budget, and provided,
further that if the DIP Agent does not approve any Proposed 13-Week Cash Flow
Forecast and/or Proposed DIP Budget by the sixth Business Day following receipt
thereof, the previously delivered 13-Week Cash Flow Forecast (as defined below)
and DIP Budget (as defined below) shall remain in effect for purposes of
variance testing and reporting described in paragraph 2(f) below), and that the
13-Week Cash Flow Forecast shall at all times be consistent with the DIP Budget.
For the avoidance of doubt, unless the DIP Agent has approved in writing the
Proposed 13-Week Cash Flow and Proposed DIP Budget, or any other proposed
modification to the Initial 13-Week Cash Flow Forecast or Supplemental 13-Week
Cash Flow Forecast, and the Initial DIP Budget or Supplemental DIP Budget, as
applicable, then in effect, the Debtors shall continue to be subject to and be
governed by the terms of the Initial 13-Week Cash Flow Forecast or Supplemental
13-Week Cash Flow Forecast (as defined below), and the Initial DIP Budget or
Supplemental DIP Budget (as defined below), as applicable, then in effect, in
accordance with this Interim Order, and the DIP Secured Parties and the Existing
RBL Secured Parties shall, as applicable, have no obligation to fund under any
such Proposed 13-Week Cash Flow Forecast or Proposed DIP Budget or otherwise
fund any amounts not otherwise provided for in the Initial 13-Week Cash Flow
Forecast or Supplemental 13-Week Cash Flow Forecast, nor the Initial DIP Budget
or Supplemental DIP Budget, as applicable, or permit the use of Cash Collateral
with respect thereto, as applicable.  Once the Proposed 13-Week Cash Flow
Forecast and Proposed DIP Budget have each been approved in writing by the DIP
Agent, each shall supplement and replace the Initial 13-Week Cash Flow Forecast
or the Supplemental 13-Week Cash Flow Forecast (as defined below), and the
Initial DIP Budget or the Supplemental DIP Budget (as defined below), as
applicable, then in effect (each such Proposed 13-Week Cash Flow Forecast and
Proposed DIP Budget that has been approved in writing by the DIP Agent pursuant
to the terms of this Interim Order, respectively a “Supplemental 13-Week Cash
Flow Forecast” and a “Supplemental DIP Budget”) without further notice, motion,
or application to, order of, or hearing before, this Court (the Initial 13-Week
Cash Flow Forecast, as modified by all Supplemental 13-Week Cash Flow Forecast,
shall constitute the “13-Week Cash Flow Forecast”, and the Initial DIP Budget,
as modified by all Supplemental DIP Budgets, shall constitute the “DIP Budget”).

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(f)         Budget Covenants.  The Debtors shall only incur DIP Obligations and
expend Cash Collateral and other DIP Collateral proceeds in accordance with the
DIP Budget (and, in the case of the costs and expenses of the DIP Agent and the
Existing RBL Agent, in accordance with the DIP Loan Documents and this Interim
Order without being limited by the DIP Budget), subject to the Permitted
Variances set forth in this paragraph, which shall be tested on each Friday (or,
if such Friday is not a Business Day, the immediately preceding Business Day)
immediately following each Reporting Date (such date, the “Variance Testing
Date”).  On or before 5:00 p.m. (prevailing Eastern Time) on each Variance
Testing Date, the Debtors shall prepare and deliver, which shall be certified by
a financial officer of the Debtors and in form and substance reasonably
satisfactory to the DIP Agent, the Existing RBL Agent and the Existing Required
Second Lien Lenders, a variance report tested as of the most recent Reporting
Date for the four-week period ending on such Reporting Date (each such period, a
“Variance Testing Period”, and each such report, a “Variance Report”) setting
forth: (i) the aggregate disbursements of the Debtors for line items other than
capital expenditures and aggregate receipts during the applicable Variance
Testing Period, (ii) any variance (whether positive or negative, expressed as a
percentage) between the aggregate disbursements for line items other than
capital expenditures made during such Variance Testing Period by the Debtors
against the aggregate disbursements for line items other than capital
expenditures for the Testing Period set forth in the applicable 13-Week Cash
Flow Forecast and DIP Budget, (iii) the aggregate disbursements of the Debtors
for capital expenditures during the applicable Variance Testing Period, and (iv)
any variance (whether positive or negative, expressed as a percentage) between
the aggregate disbursements for capital expenditures for the testing Period set
forth in the applicable 13-Week Cash Flow Forecast and DIP Budget; and (e) on
the last calendar day of each week, the Debtors shall deliver to the DIP Agent,
the Existing RBL Agent and the Existing Required Second Lien Lenders a variance
report comparing the Debtors’ actual receipts and disbursements for the prior
calendar week and the prior four calendar weeks (on a cumulative basis) with the
projected receipts and disbursements for such week and the prior four calendar
weeks (on a cumulative basis) as reflected in the applicable DIP Budget for such
weeks (the “Cumulative Variance Report”), which Cumulative Variance Report shall
include a report from the Debtors identifying and addressing any variance of
actual performance to projected performance for the prior week.  The Debtors
shall not allow, during any Variance Testing Period,  the Debtors’ actual cash
expenses and disbursements during such Variance Testing Period to be more than
115% of the projected cash expenses and disbursements for such Variance Testing
Period, as set forth in the DIP Budget (the “Permitted Variance”), provided,
that the cash expenses and disbursements considered for determining compliance
with this covenant shall exclude (i) disbursements and expenses in respect of
professional fees incurred in the Bankruptcy Cases during such Variance Testing
Period and (ii) disbursements owed to third parties on account of royalty
interests and working interests and provided, further that the Debtors may carry
forward budgeted but unused disbursements set forth in the DIP Budget for a
Variance Testing Period for use during the immediately succeeding Variance
Testing Period.

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(g)         Interest, Fees, Costs, Indemnities, and Expenses.  The DIP
Obligations shall bear interest at the rates, and be due and payable (and paid),
as set forth in, and in accordance with the terms and conditions of, this
Interim Order and the DIP Loan Documents, in each case without further notice,
motion, or application to, order of, or hearing before, this Court.  The Debtors
shall pay within two Business Days (as defined in the DIP Credit Agreement) all
fees, costs, indemnities, expenses (including reasonable and documented
out-of-pocket legal and other professional fees and expenses of the DIP Agent
and the Secured Swap Parties to the extent provided in the DIP Credit
Agreement), and other charges payable under the terms of the DIP Loan Documents
and the Secured Swap Agreements.  All such fees, costs, indemnities, expenses,
and disbursements, whether incurred, paid or required to be paid prepetition or
postpetition and whether or not budgeted in the DIP Budget, are hereby affirmed,
ratified, authorized, and payable (and any funds held by the DIP Agent and/or
its professionals as of the Petition Date for payment of such fees, costs,
indemnities, expenses, and disbursements may be applied for payment) as
contemplated in this Interim Order and the DIP Loan Documents, and, subject to
the provisions of paragraph 23(b) with respect to the fees and expenses of the
Lender Professionals, shall be non-refundable and not subject to challenge in
any respect and shall be payable without need to obtain further Court approval.

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(h)        Use of DIP Facility and Proceeds of DIP Collateral.  The DIP Borrower
shall apply the proceeds of all DIP Collateral solely in accordance with this
Interim Order, the DIP Loan Documents, and the DIP Budget (subject to any
applicable Permitted Variance).  Without limiting the foregoing, the Debtors
shall not be permitted to make any payments (from the DIP Collateral, the
proceeds of DIP Loans, or otherwise) on account of any prepetition debt or
obligation prior to the effective date of a confirmed chapter 11 plan or plans
with respect to any of the Debtors, except (i) with respect to the Existing RBL
Obligations or the Refinanced Loans, as set forth in this Interim Order and a
Final Order; (ii) as provided in the orders entered by the Court in the Cases
(other than this Interim Order) (the “First Day Orders”) pursuant to motions and
applications filed by the Debtors within ten (10) days after the Petition Date,
which First Day Orders shall be in form and substance reasonably acceptable to
the DIP Agent with respect to any provisions that affect the rights or duties of
the DIP Secured Parties or the Existing RBL Secured Parties; (iii) as expressly
provided in other motions, orders, and requests for relief, each in form and
substance reasonably acceptable to the DIP Secured Parties and the Existing RBL
Agent prior to such motion, order, or request for such relief being filed; or
(iv) as otherwise expressly provided in the DIP Credit Agreement, without giving
effect to any amendment or waiver thereof to which the Existing RBL Agent has
not consented in writing.

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(i)        Conditions Precedent.  The DIP Secured Parties and Existing RBL
Secured Parties each have no obligation to extend credit under the DIP Facility
or permit use of any DIP Collateral or Existing RBL Collateral or any proceeds
thereof, including Cash Collateral, as applicable, during the Interim Period
unless and until all conditions precedent to the extension of credit and/or use
of DIP Collateral, Existing RBL Collateral, or proceeds thereof under the DIP
Loan Documents and this Interim Order have been satisfied in full or waived in
writing by the DIP Secured Parties and the Existing RBL Agent in accordance with
the DIP Loan Documents or Existing RBL Credit Agreement, as applicable, and this
Interim Order.

(j)         DIP Liens.  Subject to the Carve-Out, as security for the DIP
Obligations, effective as of the Petition Date, the following security interests
and Liens, which shall immediately and without any further action by any Person
be valid, binding, perfected, continuing, enforceable, and non-avoidable upon
the entry of this Interim Order, are hereby granted by the Debtors to the DIP
Agent, for itself and the other DIP Secured Parties (all such security interests
and Liens granted to the DIP Agent for the benefit of all the DIP Secured
Parties pursuant to this Interim Order and the DIP Loan Documents, the “DIP
Liens”), on all assets and property of any kind (including all assets pledged
under, and the “Collateral” as defined in, the Existing RBL Loan Documents) that
is subject to a lien in favor of the DIP Agent to secure the DIP Obligations or
which under the terms of any DIP Loan Document is purported to be subject to
such lien, which includes, for the avoidance of doubt, all existing (whether
pre- or post-petition) and after-acquired, tangible and intangible, personal and
real property and assets of each of the Debtors and any proceeds thereof
(including, upon entry of the Final Order, the proceeds of Avoidance Actions (as
defined below), whether received by judgment, settlement, or otherwise)
(collectively, the “DIP Collateral”) provided, that such DIP Collateral shall
not include (a) the Excluded Assets (as defined in the DIP Credit Agreement)
(collectively, the “Excluded Assets”); or (b) any Building or Manufactured
(Mobile) Home (each as defined in the applicable Flood Insurance Regulations),
unless and until (A) the DIP Lenders have determined, pursuant to the DIP Loan
Documents, that such Building or Manufactured (Mobile) Home is not covered by
and does not require flood insurance or (B) flood insurance in form and
substance satisfactory to the DIP Lenders has been obtained; except that the DIP
Collateral shall include any Building or Manufactured (Mobile) Home located at
1760 Anderson County Road 2608, Tennessee Colony, Anderson County, Texas
75681-0000; provided, that the Avoidance Actions themselves shall not be DIP
Collateral; provided, further, that the DIP Liens on the proceeds of Avoidance
Actions shall be subject to the entry of the Final Order:

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(A)       pursuant to section 364(c)(2) of the Bankruptcy Code, a perfected,
binding, continuing, enforceable, and non-avoidable first priority Lien on and
security interest in all DIP Collateral that is not otherwise subject to a
valid, perfected, and enforceable security interest or Lien in existence as of
the Petition Date or a valid Lien perfected (but not granted) after the Petition
Date (to the extent that such perfection in respect of a prepetition claim is
expressly permitted under the Bankruptcy Code) including, subject to the entry
of the Final Order, any proceeds or property recovered, unencumbered or
otherwise under sections 502(d), 544, 545, 547, 548, 549, 550, and 553 of the
Bankruptcy Code and any other avoidance or similar action under the Bankruptcy
Code or similar state or municipal law (collectively, the “Avoidance Actions”),
whether received by judgment, settlement, or otherwise;

(B)       pursuant to section 364(c)(3) of the Bankruptcy Code, a perfected,
binding, continuing, enforceable, and non-avoidable Lien on and security
interest in all DIP Collateral that is subject solely to the Existing Prior
Liens, which DIP Lien shall be junior only to such Existing Prior Liens and the
Carve-Out; and

(C)       pursuant to Bankruptcy Code section 364(d), a perfected, binding,
continuing, enforceable, and non-avoidable first priority, senior priming Lien
on and security interest in all other DIP Collateral, including Cash Collateral,
all accounts receivable, inventory, real and personal property, plant and
equipment of the Debtors that secure the obligations of the Debtors under the
Existing RBL Credit Facility and the Existing Second Lien Credit Facility
(collectively, the “Existing Primed Secured Facilities”; the lenders, holders
and agents under the Existing Primed Secured Facilities, the “Existing Primed
Secured Parties”), to the extent that such DIP Collateral is subject to valid,
perfected and non-avoidable liens in favor of third parties as of the
commencement of the Bankruptcy Case; which Priming Liens (as defined below)
shall be senior to the Adequate Protection Liens and senior and priming to (A)
the Existing RBL Liens and (B) any Liens that are junior to the Existing RBL
Liens or the Existing RBL Adequate Protection Liens, after giving effect to any
intercreditor or subordination agreements (the Liens referenced in clauses (A)
and (B), collectively, the “Priming Liens”).

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(k)        Enforceable Obligations.  The DIP Loan Documents and the Secured Swap
Agreements shall constitute and evidence the valid and binding DIP Obligations
of the Debtors, which DIP Obligations shall be enforceable against the Debtors,
their estates, and any successors thereto (including any trustee or other estate
representative in any Successor Case (as defined below), and their creditors and
other parties-in-interest, in accordance with their terms.  Subject to the
provisions of paragraph 2(d) hereof with respect to the Refinancing DIP
Obligations, no obligation, payment, transfer, or grant of security under the
DIP Credit Agreement, the other DIP Loan Documents, or this Interim Order shall
be stayed, restrained, voidable, avoidable, disallowable, or recoverable under
the Bankruptcy Code or under any applicable law (including under section 502(d),
544, 547, 548, or 549 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, or similar
statute or common law), or subject to any avoidance, reduction, setoff,
surcharge, recoupment, offset, recharacterization, subordination (whether
equitable, contractual, or otherwise), counterclaim, cross-claim, defense, or
any other challenge under the Bankruptcy Code or any applicable law or
regulation by any person or entity.

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(l)         Superpriority Administrative Claim Status.  In addition to the DIP
Liens granted herein, effective immediately upon entry of this Interim Order,
(i) all of the DIP Obligations and (ii) the Secured Swap Obligations (as defined
in the DIP Credit Agreement) owing to any DIP Lender or its Affiliate (as
defined in the DIP Credit Agreement) under any Secured Swap Agreement shall
constitute allowed superpriority administrative claims pursuant to section
364(c)(1) of the Bankruptcy Code, which shall have priority, subject only to the
payment of the Carve-Out (as defined below) in accordance with this Interim
Order, over all administrative expense claims, adequate protection and other
diminution claims (including the Existing RBL Adequate Protection Superpriority
Claims (as defined below) and the Second Lien Adequate Protection Superpriority
Claims (as defined below)), priority and other unsecured claims, and all other
claims against the Debtors or their estates, now existing or hereafter arising,
of any kind or nature whatsoever, including administrative expenses or other
claims of the kinds specified in section 105, 326, 328, 330, 331, 503(a),
503(b), 506(c) (subject to the entry of the Final Order to the extent provided
in paragraph 8), 507(a), 507(b), 546, 726, 1113, and 1114, whether or not such
expenses or claims may become secured by a judgment Lien or other non-consensual
Lien, levy, or attachment (the “DIP Superpriority Claims”), which such claims
arising in respect of the New Money Facility and the Refinancing Facility shall
be pari passu.  The DIP Superpriority Claims shall, for purposes of section
1129(a)(9)(A) of the Bankruptcy Code, be considered administrative expenses
allowed under section 503(b) of the Bankruptcy Code, shall be against each
Debtor on a joint and several basis, and shall be payable from and have recourse
to all prepetition and postpetition property of the Debtors and all proceeds
thereof, including, subject to entry of the Final Order, the proceeds of
Avoidance Actions, whether received by judgment, settlement, or otherwise. 
Other than with respect to the Carve-Out, no costs or expenses of
administration, including professional fees allowed and payable under section
328, 330, or 331 of the Bankruptcy Code, or otherwise, that have been or may be
incurred in these proceedings or in any Successor Cases, and no priority claims
are, or will be, senior to, prior to, or on a parity with the DIP Superpriority
Claims.  For the avoidance of doubt, the DIP Superpriority Claims granted to the
Refinancing DIP Secured Parties shall rank pari passu with the DIP Superpriority
Claims of the other DIP Secured Parties.

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(m)       Priority of DIP Liens and DIP Superpriority Claims.  Subject in all
respects to the Carve-Out (as defined herein), the DIP Liens and the DIP
Superpriority Claims: (i) shall not be subject to section 510, 549, 550, or 551
of the Bankruptcy Code or, subject to entry of the Final Order, section 506(c)
of the Bankruptcy Code or the “equities of the case” exception of section 552 of
the Bankruptcy Code, (ii) shall not be subordinate to, or pari passu with (A)
any Lien that is avoided and preserved for the benefit of the Debtors and their
estates under section 551 of the Bankruptcy Code or otherwise or (B) any Liens
or claims of any Debtor or any direct or indirect subsidiary thereof against any
Debtor or any of such Debtor’s property, (iii) shall be valid and enforceable
against any trustee or any other estate representative elected or appointed in
the Cases, upon the conversion of any of the Cases to a case under chapter 7 of
the Bankruptcy Code or in any other proceedings related to any of the foregoing
(each, a “Successor Case”), and/or upon the dismissal of any of the Cases, and
(iv) notwithstanding anything to the contrary in any First Day Order of this
Court in any of the Cases, shall be senior to any administrative claims arising
under any such First Day Order.

3.           Adequate Protection for Existing RBL Secured Parties.  With respect
to all Existing RBL Loans that have not been converted to Refinanced Loans, in
consideration for the use of the Existing RBL Collateral (including Cash
Collateral) and the priming of the Existing RBL Liens, the Existing RBL Agent,
for the benefit of the Existing RBL Secured Parties, shall receive the following
adequate protection (collectively, the “Existing RBL Adequate Protection”):

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(a)        Existing RBL Loans Interest Payments.  The Existing RBL Lenders shall
be entitled to payment of all interest accruing on their pro rata share of the
Existing RBL Facility regardless of whether such interest accrued before or
after the Petition Date, which shall be paid in cash at the rate of ABR plus 4%
per annum on the last day of each month (or, if such day is not a Business Day,
the next Business Day) and on the Maturity Date.

(b)        Existing RBL Adequate Protection Liens.  To the extent there is a
diminution in value of the interests of the Existing RBL Secured Parties in the
Existing RBL Collateral (including Cash Collateral) from and after the Petition
Date, the Existing RBL Agent, for the benefit of all the Existing RBL Secured
Parties, is hereby granted, subject to the terms and conditions set forth below,
pursuant to section 361, 363(e), and 364 of the Bankruptcy Code, replacement
Liens upon all of the DIP Collateral, including, subject to the entry of the
Final Order, the proceeds of Avoidance Actions, whether received by judgment,
settlement, or otherwise (such adequate protection replacement Liens, the
“Existing RBL Adequate Protection Liens”), which Existing RBL Adequate
Protection Liens on such DIP Collateral shall be subject and subordinate only to
the DIP Liens, the Existing Prior Liens and the Carve-Out.

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(c)       Existing RBL Adequate Protection Superpriority Claims.  To the extent
of any diminution in value of the Existing RBL Collateral from and after the
Petition Date, the Existing RBL Secured Parties are hereby further granted
allowed superpriority administrative claims (such adequate protection
superpriority claims, the “Existing RBL Adequate Protection Superpriority
Claims”), pursuant to section 507(b) of the Bankruptcy Code, with priority over
all administrative expense claims and priority and other unsecured claims
against the Debtors or their estates, now existing or hereafter arising, of any
kind or nature whatsoever, including administrative expenses of the kind
specified in section 105, 326, 328, 330, 331, 503(a), 503(b), 506(c) (subject to
the entry of the Final Order to the extent provided in paragraph 8), 507(a),
507(b), 546(c), 546(d), 726 , 1113, 1114, junior only to the DIP Superpriority
Claims and the Carve-Out to the extent provided herein, and payable from and
having recourse to all prepetition and postpetition property of the Debtors and
all proceeds thereof (including, subject to entry of the Final Order, all
proceeds of Avoidance Actions, whether received by judgment, settlement, or
otherwise); provided, that the Existing RBL Secured Parties shall not receive or
retain any payments, property, or other amounts in respect of the Existing RBL
Adequate Protection Superpriority Claims unless and until all DIP Obligations
have been Paid in Full. Subject to the relative priorities set forth above, the
Existing RBL Adequate Protection Superpriority Claims against each Debtor shall
be allowed and enforceable against each Debtor and its estate on a joint and
several basis.  For purposes of this Interim Order, the terms “Paid in Full,”
“Repaid in Full,” “Repay in Full,” “Pay in Full,” and “Payment in Full” shall
mean, with respect to any referenced DIP Obligations and/or Existing RBL
Obligations, (i) the indefeasible payment in full in cash of such obligations,
and (ii) the termination or cash collateralization, in accordance with the DIP
Loan Documents or Existing RBL Loan Documents, as applicable, of all undrawn
letters of credit outstanding thereunder, and (iii) the termination of all
credit commitments under the DIP Loan Documents and/or Existing RBL Loan
Documents, as applicable.

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(d)        Priority of Existing RBL Adequate Protection Liens and Existing RBL
Adequate Protection Superpriority Claims.  Subject in all respects to the
Carve-Out, the Existing RBL Adequate Protection Liens and the Existing RBL
Adequate Protection Superpriority Claims (i) shall not be subject to section
510, 549, 550, or 551 of the Bankruptcy Code or, subject to entry of the Final
Order, section 506(c) of the Bankruptcy Code or the “equities of the case”
exception of section 552 of the Bankruptcy Code, (ii) shall not be subordinate
to, or pari passu with (A) any Lien that is avoided and preserved for the
benefit of the Debtors and their estates under section 551 of the Bankruptcy
Code or otherwise or (B) any Liens or claims of any Debtor or any direct or
indirect subsidiary thereof against any Debtor or any of such Debtor’s property,
(iii) shall be valid, binding, perfected, and enforceable against any trustee or
any other estate representative elected or appointed in the Cases or any
Successor Cases, and/or upon the dismissal of any of the Cases, and (iv)
notwithstanding anything to the contrary in any First Day Order of this Court in
any of the Cases, shall be senior to any administrative claims arising under any
such First Day Order.

(e)        Professional Fees of Existing RBL Secured Parties.  Subject to
paragraph 23(b) herein, as further adequate protection, and without limiting any
rights of the Existing RBL Agent and the other Existing RBL Secured Parties
under section 506(b) of the Bankruptcy Code, which rights are hereby preserved,
and in consideration, and as a requirement, for obtaining the consent of those
Existing RBL Secured Parties that have so consented to the entry of this Interim
Order and the Debtors’ consensual use of Cash Collateral as provided herein, the
Debtors shall pay or reimburse in cash the Existing RBL Secured Parties for any
and all reasonable and documented fees, expenses, and charges to the extent, and
at the times, payable under the Existing RBL Loan Documents, including any
unpaid fees and expenses accrued prior to or after the Petition Date within five
(5) Business Days after the presentment of any such invoices to the Debtors.

(f)        The Debtors shall deliver to the Existing RBL Agent and Existing
Required Second Lien Lenders all information, reports, documents, and other
material that the Debtors provide to the DIP Secured Parties pursuant to the DIP
Loan Documents.

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(g)        Notwithstanding the Payment in Full of the DIP Obligations and the
termination of the DIP Loan Documents, this Interim Order or Final Order, as
applicable, shall continue in full force and effect for the benefit of the
Existing RBL Agent and the Existing RBL Secured Parties, and may be enforced by
the Existing RBL Agent until such time as the Existing RBL Secured Obligations
are Paid in Full.  Unless otherwise expressly set forth herein or in the DIP
Loan Documents, any consent or approval rights or similar rights granted or
referenced in this Interim Order or in the DIP Loan Documents in favor of any or
all of the DIP Agent, the other DIP Secured Parties, the Existing RBL Agent, and
the other Existing RBL Secured Parties may be exercised (or not exercised) in
the sole discretion of such party.

(h)        Right to Seek Additional Adequate Protection.  The Existing RBL
Agent, on behalf of the Existing RBL Secured Parties, may request Court approval
for additional or alternative adequate protection, without prejudice to any
objection of the Debtors or any other party in interest to the grant of any
additional or alternative adequate protection (consistent with the Intercreditor
Agreement); provided, that any such additional or alternative adequate
protection shall at all times be subordinate and junior to the Carve-Out and the
claims and liens of the DIP Secured Parties granted under this Interim Order and
the DIP Loan Documents; provided, further, that nothing in this paragraph shall
authorize the Existing RBL Agent or Existing RBL Secured Parties to deny the
Debtors access to Cash Collateral or DIP Loans in accordance with the DIP Budget
(including any Permitted Variances) pursuant to the terms of this Interim Order
during the pendency of such request for additional or alternative adequate
protection.

4.           Adequate Protection for Existing Second Lien Secured Parties.  In
consideration for the use of the Existing Second Lien Collateral (including Cash
Collateral) and the priming of the Existing Second Liens, the Existing Second
Lien Agent, for the benefit of the Existing Second Lien Secured Parties, shall
receive, subject to the Carve-Out and the terms of the Intercreditor Agreement,
the following adequate protection (collectively, the “Existing Second Lien
Adequate Protection” and, together with the Existing RBL Adequate Protection,
the “Existing Secured Party Adequate Protection”):

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(a)       Second Lien Adequate Protection Liens.  To the extent there is a
diminution in value of the interests of the Existing Second Lien Secured Parties
in the Existing Second Lien Collateral (including Cash Collateral) from and
after the Petition Date, the Existing Second Lien Agent, for the benefit of all
the Existing Second Lien Secured Parties, is hereby granted, subject to the
terms and conditions set forth below, pursuant to section 361, 363(e), and 364
of the Bankruptcy Code, replacement Liens upon all of the DIP Collateral,
including, subject to the entry of the Final Order, the proceeds of Avoidance
Actions, whether received by judgment, settlement, or otherwise (such adequate
protection replacement Liens, the “Second Lien Adequate Protection Liens” and,
together with the Existing RBL Adequate Protection Liens, the “Adequate
Protection Liens”), which Second Lien Adequate Protection Liens on such DIP
Collateral shall be subject and subordinate only to the DIP Liens, the Existing
Prior Liens, the Existing RBL Adequate Protection Liens, the Existing RBL Liens,
and the Carve-Out; provided that, the Adequate Protection Liens shall attach
automatically to DIP Collateral upon entry of this Interim Order.  The Second
Lien Adequate Protection Liens (i) shall not be subject to sections 510, 549,
550, or 551 of the Bankruptcy Code or, subject to entry of the Final Order,
section 506(c) of the Bankruptcy Code or the “equities of the case” exception of
section 552 of the Bankruptcy Code, (ii) shall not be subordinate to, or pari
passu with (A) any Lien that is avoided and preserved for the benefit of the
Debtors and their estates under section 551 of the Bankruptcy Code or otherwise
or (B) any Liens or claims of any Debtor or any direct or indirect subsidiary
thereof against any Debtor or any of such Debtor’s property, (iii) shall be
valid, binding, perfected, and enforceable against any trustee or any other
estate representative elected or appointed in the Cases or any Successor Cases,
and/or upon the dismissal of any of the Cases, and (iv) notwithstanding anything
to the contrary in any First Day Order of this Court in any of the Cases, shall
be senior to any administrative claims arising under any such First Day Order. 
For the avoidance of doubt, the Second Lien Adequate Protection Liens shall at
all times remain subject to the Intercreditor Agreement.

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(b)        Enforceable in Successor Cases.  The Second Lien Adequate Protection
Liens shall be valid, binding, perfected, and enforceable against any trustee or
any other estate representative elected or appointed in the Cases or any
Successor Cases, and/or upon the dismissal of any of the Cases.  For the
avoidance of doubt, the Second Lien Adequate Protection Liens shall at all times
remain subject to the Intercreditor Agreement.

(c)        Second Lien Adequate Protection Superpriority Claims.  To the extent
of Diminution in Existing Second Lien Collateral Value, the Existing Second Lien
Secured Parties are hereby further granted allowed superpriority administrative
claims (such adequate protection superpriority claims, the “Second Lien Adequate
Protection Superpriority Claims”), pursuant to section 507(b) of the Bankruptcy
Code, with priority over all administrative expense claims and priority and
other unsecured claims against the Debtors or their estates, now existing or
hereafter arising, of any kind or nature whatsoever, including administrative
expenses of the kind specified in section 105, 326, 328, 330, 331, 503(a),
503(b), 506(c) (subject to the entry of the Final Order to the extent provided
in paragraph 8), 507(a), 507(b), 546(c), 546(d), 726 , 1113, 1114, junior only
to the DIP Superpriority Claims, the Existing RBL Adequate Protection
Superpriority Claims, and the Carve-Out to the extent provided herein, and
payable from and having recourse to all prepetition and postpetition property of
the Debtors and all proceeds thereof (including, subject to the entry of the
Final Order, the proceeds of Avoidance Actions, whether received by judgment,
settlement, or otherwise); provided, that the Existing Second Lien Secured
Parties shall not receive or retain any payments, property, or other amounts in
respect of the Second Lien Adequate Protection Superpriority Claims unless and
until all DIP Obligations, Existing RBL Obligations, and the Existing RBL
Adequate Protection Superpriority Claims have been Paid in Full.  Subject to the
relative priorities set forth above, the Second Lien Adequate Protection
Superpriority Claims against each Debtor shall be allowed and enforceable
against each Debtor and its estate on a joint and several basis.  The Second
Lien Adequate Protection Superpriority Claims granted to the Existing Second
Lien Secured Parties may be impaired pursuant to any chapter 11 plan of
reorganization in the Cases with the vote of the applicable class of the holders
of such claims that satisfies the requirements of section 1126 of the Bankruptcy
Code, in which case, Payment in Full (or any of the other variants of this
phrase referenced above) would occur upon consummation of such plan.

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(d)        Postpetition Accrual of Interest.  Subject to the terms of this
Interim Order and the terms of the Intercreditor Agreement, the Existing Second
Lien Obligations shall accrue interest under the Existing Second Lien Credit
Facility on a payment-in-kind basis to the extent determined to be allowable by
the Bankruptcy Court under section 506(b) of the Bankruptcy Code.

(e)       Consent to Priming and Adequate Protection.  The Existing Second Lien
Agent, on behalf of the Existing Second Lien Secured Parties, consents, or
pursuant to the Intercreditor Agreement, is deemed to consent, to the Existing
Second Lien Adequate Protection and the priming provided for herein; provided,
that such consent of the Existing Second Lien Agent to the priming of the
Existing Second Liens and the use of Cash Collateral is expressly conditioned
upon the entry of this Interim Order.

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(f)         Professional Fees of Existing Second Lien Secured Parties.  Subject
to paragraph 23(b) hereof and the terms of the Intercreditor Agreement, as
further adequate protection, and without limiting any rights of the Existing
Second Lien Agent and the other Existing Second Lien Secured Parties, which
rights are hereby preserved, and in consideration, and as a requirement, for
obtaining the consent of those Existing Second Lien Secured Parties that have so
consented to the entry of this Interim Order and the Debtors’ consensual use of
Cash Collateral as provided herein, the Debtors shall pay or reimburse in cash
the Existing Second Lien Secured Parties for any and all reasonable and
documented fees and expenses (including, without limitation, those of Latham &
Watkins LLP, PJT Partners, and Porter Hedges as local counsel) to the extent,
and at the times, payable under the Existing Second Lien Loan Documents,
including any unpaid fees and expenses accrued prior to or after the Petition
Date within five (5) Business Days after the presentment of any such invoices to
the Debtors.

(g)       The Debtors shall deliver to the Existing Required Second Lien Lenders
all information, reports, documents, and other material that the Debtors provide
to the DIP Secured Parties and the Existing RBL Agent pursuant to the DIP Loan
Documents.

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5.           Automatic Postpetition Lien Perfection.  This Interim Order shall
be sufficient and conclusive evidence of the validity, enforceability,
perfection, and priority of the DIP Liens and the Adequate Protection Liens
without the necessity of (a) filing or recording any financing statement, deed
of trust, mortgage, security agreement, pledge agreement, control agreement, or
other instrument or document that may otherwise be required under the law of any
jurisdiction, (b) obtaining “control” (as defined in any applicable Uniform
Commercial Code or other law) over any DIP Collateral (and the DIP Agent, and,
after Payment in Full of the DIP Obligations, the Existing RBL Agent, shall be
deemed, without any further action, to have control over all the Debtors’
deposit accounts, securities accounts, and commodities accounts within the
meaning of such Uniform Commercial Code and other law), or (c) taking any other
action to validate or perfect the DIP Liens and the Adequate Protection Liens or
to entitle the DIP Liens and the Adequate Protection Liens to the priorities
granted herein.  Notwithstanding the foregoing, each of the DIP Agent, the
Existing RBL Agent (solely with respect to the Existing RBL Adequate Protection
Liens), and the Existing Second Lien Agent (solely with respect to the Existing
Second Lien Adequate Protection Liens) may, each in their sole discretion, enter
into and file, as applicable, financing statements, mortgages, security
agreements, notices of Liens, and other similar documents, and is hereby granted
relief from the automatic stay of section 362 of the Bankruptcy Code in order to
do so, and all such financing statements, mortgages, security agreements,
notices, and other agreements or documents shall be deemed to have been entered
into, filed, or recorded as of the Petition Date.  The applicable Debtors shall
execute and deliver to the DIP Agent, the Existing RBL Agent and/or the Existing
Second Lien Agent, as applicable, all such financing statements, mortgages,
notices, and other documents as such parties may reasonably request to evidence
and confirm the contemplated validity, perfection, and priority of the DIP
Liens, the Existing RBL Adequate Protection Liens, and the Second Lien Adequate
Protection Liens as applicable, granted pursuant hereto.  Without limiting the
foregoing, each of the DIP Agent, the Existing RBL Agent, and the Existing
Second Lien Agent may, in its discretion, file a photocopy of this Interim Order
as a financing statement with any recording officer designated to file financing
statements or with any registry of deeds or similar office in any jurisdiction
in which any Debtor has real or personal property, and in such event, the
subject filing or recording officer shall be authorized and hereby is directed
to file or record such copy of this Interim Order.  Subject to the entry of the
Final Order, any provision of any lease, loan document, easement, use agreement,
proffer, covenant, license, contract, organizational document, or other
instrument or agreement that requires the payment of any fees or other monetary
obligations to any governmental entity or non-governmental entity in order for
the Debtors to pledge, grant, mortgage, sell, assign, or otherwise transfer any
fee or leasehold interest or the proceeds thereof or other DIP Collateral is and
shall be deemed to be inconsistent with the provisions of the Bankruptcy Code,
and shall have no force or effect with respect to the Liens on such leasehold
interests or other applicable DIP Collateral or the proceeds of any assignment
and/or sale thereof by any Debtor, in favor of the DIP Secured Parties in
accordance with the terms of the DIP Loan Documents and this Interim Order or in
favor of the Existing Secured Parties in accordance with this Interim Order.  To
the extent that the Existing RBL Agent is the secured party under any security
agreement, mortgage, leasehold mortgage, landlord waiver, financing statement,
or account control agreements, listed as loss payee or additional insured under
any of the Debtors’ insurance policies, or is the secured party under any of the
Existing RBL Loan Documents, the DIP Agent shall also be deemed to be the
secured party under such account control agreements, loss payee or additional
insured under the Debtors’ insurance policies, and the secured party under each
such Existing RBL Loan Document, shall have all rights and powers attendant to
that position (including rights of enforcement), and shall act in that capacity
and distribute any proceeds recovered or received first, for the benefit of the
DIP Secured Parties in accordance with the DIP Loan Documents and second,
subsequent to Payment in Full of all DIP Obligations, for the benefit of the
Existing RBL Secured Parties.  The Existing RBL Agent shall serve as agent for
the DIP Agent for purposes of perfecting the DIP Agent’s Liens on all DIP
Collateral that, without giving effect to the Bankruptcy Code and this Interim
Order, is of a type such that perfection of a Lien therein may be accomplished
only by possession or control by a secured party.

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6.          Reservation of Certain Third Party Rights and Bar of Challenges and
Claims.  The Debtors’ DIP Stipulations shall be binding upon the Debtors, their
estates, and each other party in interest, including the Committee, in all
circumstances upon entry of this Interim Order.  The Debtors’ Existing RBL
Stipulations and the Debtors’ Existing Second Lien Stipulations shall be binding
upon each party in interest (other than the Debtors), including the Committee,
if any, and any chapter 11 trustee (or if the Cases are converted to cases under
chapter 7 prior to the expiration of the Challenge Period (as defined below),
the chapter 7 trustee in such Successor Case), except to the extent and only to
the extent such party in interest with standing  first, commences, by the
earlier of (x) forty-five (45) calendar days after the Petition Date, (y) with
respect to any Committee, within the earlier of (i) sixty (60) calendar days of
the formation of any Committee and (ii) seventy-five (75) days from the Petition
Date, which in each case shall be referred to as the “Challenge Period,” and the
date that is the next calendar day after the termination of the Challenge Period
in the event that either (i) no Challenge (as defined below) is properly raised
during the Challenge Period or (ii) with respect only to those parties who
properly file a Challenge, such Challenge is fully and finally adjudicated,
shall be referred to as the “Challenge Period Termination Date”), (A) a
contested matter or adversary proceeding challenging or otherwise objecting to
the admissions, stipulations, findings, or releases included in the Debtors’
Existing RBL Stipulations and/or the Debtors’ Existing Second Lien Stipulations,
as applicable, or (B) a contested matter or adversary proceeding against any or
all of the Existing RBL Secured Parties and/or the Existing Second Lien Secured
Parties, as applicable, in connection with or related to the Existing RBL
Obligations and/or the Existing Second Lien Obligations, as applicable, or the
actions or inactions of any of the Existing RBL Secured Parties and/or the
Existing Second Lien Secured Parties, as applicable, arising out of or related
to the Existing RBL Obligations and/or the Existing Second Lien Obligations, as
applicable, the Existing RBL Loan Documents and/or the Existing Second Lien Loan
Documents, as applicable, including any claim against any or all of the Existing
RBL Secured Parties and/or the Existing Second Lien Secured Parties, as
applicable, in the nature of a “lender liability” cause of action, setoff,
counterclaim, or defense to the Existing RBL Obligations and/or the Existing
Second Lien Obligations, as applicable (including those under section 506, 544,
547, 548, 549, 550, and/or 552 of the Bankruptcy Code or by way of suit against
any of the Existing RBL Secured Parties and/or any of the Existing Second Lien
Secured Parties, as applicable) (clauses (A) and (B) collectively, the
“Challenges” and, each individually, a “Challenge”), and second, obtains a
final, non-appealable order in favor of such party in interest sustaining any
such Challenge in any such timely-filed contested matter, adversary proceeding,
or other action (any such Challenge timely brought for which such a final and
non-appealable order is so obtained, a “Successful Challenge”).  If a chapter 7
trustee or a chapter 11 trustee is appointed or elected during the Challenge
Period, then the Challenge Period Termination Date with respect to such trustee
only, shall be the later of (i) the last day of the Challenge Period and (ii)
the date that is twenty (20) days after the date on which such trustee is
appointed or elected.  Except as otherwise expressly provided herein, from and
after the Challenge Period Termination Date and for all purposes in these Cases
and any Successor Cases (and after the dismissal of these Cases or any Successor
Cases), (i) all payments made to or for the benefit of the Existing RBL Secured
Parties and/or the Existing Second Lien Secured Parties, as applicable, pursuant
to, or otherwise authorized by, this Interim Order (whether made prior to, on,
or after the Petition Date) shall be indefeasible and not be subject to
counterclaim, set-off, subordination, recharacterization, defense, disallowance,
recovery, or avoidance, (ii) any and all such Challenges by any party in
interest shall be deemed to be forever released, waived, and barred, (iii) all
of the Existing RBL Obligations and/or the Existing Second Lien Obligations, as
applicable, shall be deemed to be fully allowed claims within the meaning of
section 506 of the Bankruptcy Code (which claims and Liens shall have been
deemed satisfied to the extent the Existing RBL Obligations are converted into
Refinancing DIP Obligations as provided herein), and (iv) the Debtors’ Existing
RBL Stipulations and/or the Debtors’ Existing Second Lien Stipulations, as
applicable, including the release provisions therein, shall be binding on all
parties in interest in these Cases or any Successor Cases, including any
Committee or chapter 11 or chapter 7 trustee.  Notwithstanding the foregoing, to
the extent any Challenge is timely asserted, the Debtors’ Existing RBL
Stipulations and/or the Debtors’ Existing Second Lien Stipulations, as
applicable, and the other provisions in clauses (i) through (iv) in the
immediately preceding sentence shall nonetheless remain binding and preclusive
on any Committee and on any other party in interest from and after the Challenge
Period Termination Date, except to the extent that such Debtors’ Existing RBL
Stipulations and/or the Debtors’ Existing Second Lien Stipulations, as
applicable, or the other provisions in clauses (i) through (iv) of the
immediately preceding sentence were expressly challenged in such Challenge and
such Challenge becomes a Successful Challenge.  The Challenge Period may be
extended only with the written consent of the Existing RBL Agent in its sole
discretion with respect to Challenges made in connection with the Existing RBL
Obligations, and only with the written consent of the Existing Second Lien Agent
in its sole discretion (at the direction of the Existing Second Lien Lenders in
accordance with the Existing Second Lien Credit Agreement) with respect to
Challenges made in connection with the Existing Second Lien Obligations. 
Notwithstanding any provision to the contrary herein, nothing in this Interim
Order shall be construed to grant standing on or authority to any party in
interest, including any Committee, to pursue or bring any cause of action,
including any Challenge, on behalf of the Debtors or their Debtors’ estates. 
The failure of any party in interest, including any Committee, to obtain an
order of this Court prior to the Challenge Period Termination Date granting
standing to bring any Challenge on behalf of the Debtors’ estates shall not be a
defense to failing to commence a Challenge prior to the Challenge Period
Termination Date as required under this paragraph 6 or to require or permit an
extension of the Challenge Period Termination Date.  For the avoidance of doubt,
as to the Debtors, upon entry of this Interim Order, all Challenges, and any
right to assert any Challenge, are hereby irrevocably waived and relinquished as
of the Petition Date, and the Debtors’ Existing RBL Stipulations and/or the
Debtors’ Existing Second Lien Stipulations, as applicable, shall be binding in
all respects on the Debtors irrespective of the filing of any Challenge.

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7.            Carve-Out.

(a)        Carve-Out.  As used in this Interim Order, the “Carve-Out” means the
sum of (i) all fees required to be paid to the Clerk of the Court and to the
Office of the United States Trustee under section 1930(a) of title 28 of the
United States Code plus interest at the statutory rate (without regard to the
notice set forth in (iii) below); (ii) all reasonable fees and expenses up to
$50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
(without regard to the notice set forth in (iii) below); (iii) to the extent
allowed at any time, whether by interim order, procedural order, or otherwise,
all unpaid fees and expenses (the “Allowed Professional Fees”) incurred or
accrued by persons or firms retained by the Debtors pursuant to section 327,
328, or 363 of the Bankruptcy Code (the “Debtor Professionals”) and any
Committee pursuant to section 328 or 1103 of the Bankruptcy Code (the “Committee
Professionals” and, together with the Debtor Professionals, the “Professional
Persons”) at any time before or on the first business day following the day on
which a Carve-Out Trigger Notice (as defined below) is given by the DIP Agent to
the Debtors with a copy to counsel to the Committee (the day on which a
Carve-Out Trigger Notice is so given, the “Trigger Notice Date”); and (iv)
Allowed Professional Fees of Professional Persons in an aggregate amount not to
exceed $2,750,000 incurred after the first business day following the Trigger
Notice Date, to the extent allowed at any time, whether by interim order,
procedural order, or otherwise (the amount set forth in this clause (iv) being
the “Carve-Out Cap”).  Such Carve-Out Cap may be incurred on behalf of the
Debtor Professionals in an amount not to exceed $2,500,000 and on behalf of any
Committee Professionals in an amount not to exceed $250,000 (other than any such
fees and disbursements incurred in connection with the initiation or prosecution
of any claims, causes of action, adversary proceedings or other litigation
against the agents or lenders under the Existing RBL Credit Facility, the
Existing Second Lien Credit Facility, or the DIP Facility).  For purposes of the
foregoing, “Carve-Out Trigger Notice” shall mean a written notice delivered by
the DIP Agent to the Debtors and their counsel, the Existing Second Lien Secured
Parties and their counsel, the U.S. Trustee, and lead counsel to any Committee,
which notice may be delivered following the occurrence and during the
continuation of an Event of Default (as defined in the DIP Credit Agreement)
expressly stating that the Carve-Out Cap is invoked.  No portion of the
Carve-Out, any cash collateral or proceeds of the DIP Facility may be used for
or in connection with (i) preventing, hindering or delaying the DIP Agent’s or
other DIP Secured Parties’ enforcement or realization upon the DIP Collateral
once an Event of Default has occurred and is continuing, (ii) using or seeking
to use Cash Collateral or selling or otherwise disposing of the DIP Collateral
without the consent of the Required DIP Lenders (as defined in the DIP Credit
Agreement), (iii) using or seeking to use any insurance proceeds related to the
DIP Collateral without the consent of the DIP Agent or (iv) incurring
indebtedness other than the DIP Facility or in accordance with the DIP Budget;
provided, that, the Debtors shall be permitted to use the proceeds of the DIP
Facility or Cash Collateral as necessary to contest an Event of Default alleged
by the DIP Agent or any DIP Lender; and provided, further that a Committee may
incur up to $50,000 in the aggregate in investigating the Existing RBL Credit
Facility, Existing RBL Liens, Existing Second Lien Credit Facility or Existing
Second Liens to the extent such Committee brings any Challenge before the
Challenge Period Termination Date.  For the avoidance of doubt, nothing
contained herein shall be deemed a waiver of the any party’s right to object to
any fees of the Professional Persons.

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(b)       Payment of Allowed Professional Fees Prior to Trigger Notice Date. 
Any payment or reimbursement made prior to the occurrence of the Trigger Notice
Date in respect of any Allowed Professional Fees shall not reduce the
Carve-Out.  Prior to the occurrence of the Trigger Notice Date, the Debtors
shall be permitted to pay allowed fees and expenses of the Debtor Professionals
and the Committee Professionals subject to this Interim Order, the Bankruptcy
Code, the Bankruptcy Rules, the Local Rules, and any interim compensation
procedures order entered by this Court.

(c)        No Direct Obligation to Pay Professional Fees; No Waiver of Right to
Object to Fees.  None of the DIP Secured Parties, the Existing RBL Secured
Parties, or the Existing Second Lien Secured Parties shall be responsible for
the payment or reimbursement of any fees or disbursements of any Professional
Person incurred in connection with the Cases or any successor cases under any
chapter of the Bankruptcy Code.  Nothing in this Interim Order or otherwise
shall be construed to obligate any DIP Secured Party, any Existing RBL Secured
Party, or any Existing Second Lien Secured Party in any way, to pay compensation
to, or to reimburse expenses of, any Professional Person or to guarantee that
the Debtors have sufficient funds to pay such compensation or reimbursement. 
Nothing herein shall be construed as consent to the allowance of any
professional fees or expenses of any of the Debtors, the Committee, any other
official or unofficial committee in these Cases or any Successor Cases, or of
any person or entity, or shall affect the right of any party to object to the
allowance and payment of any such fees and expenses.

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(d)         Funding of Carve-Out a DIP Obligation.  Any funding of the Carve-Out
shall be added to, and made a part of, the DIP Obligations secured by the DIP
Collateral and shall be otherwise entitled to the protections granted under this
Interim Order, the DIP Loan Documents, the Bankruptcy Code, and applicable law.

8.           Waiver of 506(c) Claims.  Subject to the entry of the Final Order,
as a further condition of (i) the DIP Facility and any obligation of the DIP
Secured Parties to make credit extensions pursuant to the DIP Loan Documents
(and the consent of the DIP Secured Parties and the Existing Secured Parties to
the payment of the Carve-Out to the extent provided herein) and (ii) the
Debtors’ use of Cash Collateral pursuant to this Interim Order and a Final
Order, (a) no costs or expenses of administration of the Cases or any Successor
Cases shall be charged against or recovered from or against any or all of the
DIP Secured Parties and/or the Existing Secured Parties, the Existing
Collateral, the DIP Collateral, and the Cash Collateral, in each case pursuant
to section 506(c) of the Bankruptcy Code or otherwise, without the prior written
consent of the DIP Agent, the Existing RBL Agent, and the Existing Required
Second Lien Lenders, (b) no such consent shall be implied from any other action,
inaction, or acquiescence of any or all of the DIP Secured Parties and the
Existing Secured Parties, and (c) the exercise prior to the entry of the Final
Order of any rights under section 506(c) of the Bankruptcy Code or otherwise to
charge any costs or expense of administration of the Cases or any Successor
Cases from or against the Existing RBL Secured Parties or their Existing RBL
Liens on or other interests in any or all of the DIP Collateral, the Existing
RBL Collateral, and the Cash Collateral, or the Existing Second Lien Secured
Parties or their Existing Second Liens on or other interests in any or all of
the DIP Collateral, the Existing Second Lien Collateral, and the Cash
Collateral, shall not impair and shall be subject to, and junior to, the DIP
Liens on and the DIP Secured Parties’ other interests in the DIP Collateral, the
Existing Collateral, and the Cash Collateral and the other DIP Protections
accorded the DIP Secured Parties.

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9.         After-Acquired Property.  Except as otherwise expressly provided in
this Interim Order, pursuant to section 552(a) of the Bankruptcy Code, all
property acquired by the Debtors on or after the Petition Date is not, and shall
not be, subject to any Lien of any person or entity resulting from any security
agreement entered into by the Debtors prior to the Petition Date, except to the
extent that such property constitutes proceeds of property of the Debtors that
is subject to a valid, enforceable, perfected, and unavoidable Lien as of the
Petition Date (or a valid, enforceable, and unavoidable Lien that is perfected
subsequent to the Petition Date solely to the extent permitted by section 546(b)
of the Bankruptcy Code) that is not subject to subordination or avoidance under
the Bankruptcy Code or other provisions or principles of applicable law.  If the
Debtors engage in any “land swap” transactions, the DIP Liens, Existing RBL
Liens, Existing RBL Adequate Protection Liens, Existing Second Liens, and Second
Lien Adequate Protection Liens shall attach to assets acquired in such “land
swap” transactions as proceeds of property subject to such Liens.

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10.          Protection of DIP Secured Parties’ and Existing RBL Secured
Parties’ Rights.

Unless the requisite DIP Secured Parties under the DIP Loan Documents and the
Secured Swap Agreements and the requisite Existing RBL Secured Parties under the
Existing RBL Loan Documents shall have provided their prior written consent or
all DIP Obligations and Existing RBL Obligations have been Paid in Full, there
shall not be entered in any of these Cases or any Successor Cases any order
(including any order confirming any plan of reorganization or liquidation) that
authorizes any of the following:  (i) the obtaining of credit or the incurring
of indebtedness that is secured by a security, mortgage, or collateral interest
or other Lien on all or any portion of the DIP Collateral or Existing RBL
Collateral and/or that is entitled to administrative priority status, other than
the Carve-Out, in each case that is superior to or pari passu with the DIP
Liens, the DIP Superpriority Claims, the Existing RBL Liens, the Existing Prior
Liens, the Existing RBL Adequate Protection Liens, the Existing RBL Adequate
Protection Superpriority Claims, and/or the other DIP Protections; (ii) the use
of Cash Collateral for any purpose other than to Pay in Full the DIP Obligations
and the Existing RBL Obligations or as otherwise permitted in the DIP Loan
Documents and this Interim Order, (iii) the return of goods pursuant to section
546(h) of the Bankruptcy Code (or other return of goods on account of any
prepetition indebtedness) to any creditor of any Debtor, or (iv) any material
modification of any of the DIP Secured Parties’ or the Existing RBL Secured
Parties’ rights under this Interim Order, the DIP Loan Documents, or the
Existing RBL Loan Documents with respect to any DIP Obligations.

11.          Proceeds of Subsequent Financing.  Without limiting the provisions
and protections of the Carve-Out and paragraph 10 above, if at any time prior to
the Payment in Full of all the DIP Obligations (including subsequent to the
confirmation of any chapter 11 plan or plans with respect to any of the
Debtors), the Debtors’ estates, any trustee, any examiner with enlarged powers,
or any responsible officer subsequently appointed shall obtain credit or incur
debt pursuant to section 364(b), 364(c), 364(d), or any other provision of the
Bankruptcy Code in violation of this Interim Order or the DIP Loan Documents,
then all of the cash proceeds derived from such credit or debt and all Cash
Collateral shall immediately be turned over to the DIP Agent for application to
the DIP Obligations until Paid in Full.

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12.        Cash Collection.  From and after the date of the entry of this
Interim Order, all collections and proceeds of any DIP Collateral or Existing
RBL Collateral or services provided by any Debtor and all Cash Collateral that
shall at any time come into the possession, custody, or control of any Debtor,
or to which any Debtor is now or shall become entitled at any time, shall be
promptly deposited in the same lock-box and/or deposit accounts into which the
collections and proceeds of the Existing RBL Collateral (the “Existing
Collateral Accounts”) were deposited under the Existing RBL Loan Documents (or
in such other accounts of the Debtors as are designated by the DIP Agent from
time to time) (collectively, the “Cash Collection Accounts”), which accounts
shall be subject to the sole dominion and control of the DIP Agent and the
Existing RBL Agent (and the funds in such accounts may be used by the Debtors to
the extent provided in this Interim Order and the DIP Loan Documents).  Upon the
direction of the DIP Agent or, following Payment in Full of the DIP Obligations,
the Existing RBL Agent, at any time after the occurrence of a Termination Event
and subject in all instances to the provisions of paragraph 7 and paragraph 15,
all proceeds in the Cash Collection Accounts shall be remitted to the DIP Agent
for application to the DIP Obligations until Payment in Full, and then to the
Existing RBL Agent for application to the Existing RBL Adequate Protection
Claims until Payment in Full of such claims.  The Debtors are authorized to
incur obligations and liabilities for treasury, depositary, or cash management
services, including overnight overdraft services, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts, and interstate
depository network services provided on a postpetition basis by any financial
institution at which any Cash Collection Account is maintained; provided,
however, that, except to the extent otherwise required by this Court, nothing
herein shall require any DIP Secured Party or Existing RBL Secured Party to
incur any overdrafts or provide any such services or functions to the Debtors.

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13.          Disposition of DIP Collateral; Credit Bid.

(a)       Unless the DIP Obligations and the Existing RBL Obligations are Paid
in Full upon the closing of a sale or other disposition of the DIP Collateral or
Existing RBL Collateral, the Debtors shall not sell, transfer, lease, encumber,
or otherwise dispose of any portion of the DIP Collateral or any Existing RBL
Collateral (or enter into any binding agreement to do so) (other than the sale
of crude oil, natural gas, or other hydrocarbons in the ordinary course of
business with respect to recurring revenues) without the prior written consent
of the DIP Agent and, solely with respect to the Existing RBL Collateral, the
Existing RBL Agent (and no such consent shall be implied from any other action,
inaction, or acquiescence by any DIP Secured Party or Existing RBL Secured Party
or any order of this Court), except as permitted in the DIP Loan Documents
and/or the Existing RBL Loan Documents, as applicable, and this Interim Order. 
Except to the extent otherwise expressly provided in the DIP Loan Documents, all
proceeds from the sale, transfer, lease, encumbrance, or other disposition of
any DIP Collateral (other than the sale of crude oil, natural gas, or other
hydrocarbons in the ordinary course of business) shall be remitted to the DIP
Agent for application to the DIP Obligations until such DIP Obligations are Paid
in Full in accordance with the terms of this Interim Order and the DIP Loan
Documents, and then to the Existing RBL Agent for application to the Existing
RBL Adequate Protection Claims until Payment in Full of such claims.  In
addition, the Debtors are authorized and directed to enter into such blocked
account agreements (with cash dominion, if the DIP Agent so elects) with the DIP
Agent and such financial institutions as the DIP Agent may require, and, if it
so elects, the DIP Agent shall be entitled to enjoy the benefit of all control
agreements to which the Existing RBL Agent is a party without the need to enter
into new blocked account agreements.

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(b)        Subject to any Successful Challenge and the Intercreditor Agreement,
(i) so long as the DIP Obligations have been or will be repaid in full in cash,
the Existing RBL Agent (or one or more of its designees, affiliates, or
assignees) shall have the right to credit bid up to the full amount of any
Existing RBL Obligations in any sale of the Existing RBL Collateral (or any DIP
Collateral subject to any Existing RBL Adequate Protection Liens) under or
pursuant to (A) section 363 of the Bankruptcy Code, (B) any plan of
reorganization or plan of liquidation under section 1129 of the Bankruptcy Code
to the extent any sale contemplated thereunder does not result in Payment in
Full of all of the DIP Obligations on the effective date of such plan, or (C)
section 725 of the Bankruptcy Code and (ii) so long as the DIP Obligations and
the Existing RBL Obligations have been or will be repaid in full in cash, the
Existing Second Lien Agent (or one or more of its designees, affiliates, or
assignees) shall have the right to credit bid up to the full amount of any
Existing Second Lien Obligations in any sale of the Existing Second Lien
Collateral (or any DIP Collateral subject to any Second Lien Adequate Protection
Liens) under or pursuant to (A) section 363 of the Bankruptcy Code, (B) any plan
of reorganization or plan of liquidation under section 1129 of the Bankruptcy
Code to the extent any sale contemplated thereunder does not result in Payment
in Full of all of the DIP Obligations on the effective date of such plan, or
(iii) section 725 of the Bankruptcy Code; provided, however, that any credit bid
by the Existing Second Lien Agent (on behalf of the Existing Second Lien Secured
Parties) shall include a sufficient cash purchase price to Pay in Full the DIP
Obligations and the Existing RBL Obligations on the closing date of any such
sale or otherwise satisfy the requirements of the Intercreditor Agreement.  The
Debtors, on behalf of themselves and their estates, stipulate and agree that (i)
any sale of all or part of the Existing RBL Collateral (or any DIP Collateral
subject to any Existing RBL Adequate Protection Liens) that does not include the
right to credit bid up to the full amount of the Existing RBL Obligations would
mean that the Existing RBL Agent and the other Existing RBL Secured Parties will
not receive the indubitable equivalent of their claims and interests, and (ii)
any sale of all or part of the Existing Second Lien Collateral (or any DIP
Collateral subject to the Existing Second Lien Adequate Protection Liens) that
does not include the right to credit bid up to the full amount of the Existing
Second Lien Obligations, subject to the Intercreditor Agreement, would mean that
the Existing Second Lien Agent and the other Existing Second Lien Secured
Parties will not receive the indubitable equivalent of their claims and
interests.  The DIP Agent (or one or more of its designees, affiliates, or
assignees) shall have the unqualified right to credit bid any or all of the DIP
Obligations under or pursuant to (i) section 363 of the Bankruptcy Code, (ii)
any plan of reorganization or plan of liquidation under section 1129 of the
Bankruptcy Code, or (iii) section 725 of the Bankruptcy Code.  If the DIP Agent,
the Existing RBL Agent, or the Existing Second Lien Agent or their respective
designees, affiliates, or assignees make a credit bid in connection with any
auction or other sale process relating to the sale or other disposition of any
DIP Collateral, Existing RBL Collateral, or Existing Second Lien Collateral then
for purposes of such auction or sale process or any applicable order of this
Court, the DIP Agent, the Existing RBL Agent, and/or the Existing Second Lien
Agent shall be automatically deemed to be a qualified bidder and its bid shall
be automatically deemed to constitute a qualified bid, regardless of whether the
qualified bidder or qualified bid requirements are satisfied.

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14.         Termination Events.  The following shall constitute a termination
event under this Interim Order, the DIP Loan Documents and the Secured Swap
Agreements unless waived in writing by each of the DIP Agent and the Existing
RBL Agent (each, a “Termination Event”):

(a)      The occurrence of an “Event of Default” under the DIP Credit Agreement,
as set forth therein (a “DIP Default Termination Event”), including, for
avoidance of doubt, the failure to obtain entry of the Final Order, in form and
substance acceptable to the DIP Secured Parties and the Existing RBL Agent, on
or before the date that is thirty-five (35) days following entry of the Interim
Order.

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(b)         Any other breach, default, or other violation by any of the Debtors
of the terms and provisions of this Interim Order.

(c)         The Debtors’ failure to (i) enter into a restructuring support
agreement (the “RSA”) in form and substance acceptable to the DIP Lenders and
the Existing RBL Lenders by the date that is no later than 45 days after the
Petition Date, and (ii) if required as a term of such RSA and not waived, (x)
file a motion seeking approval to enter into the RSA by the date that is no
later than 30 days after the Petition Date and (y) obtain an order from the
Bankruptcy Court authorizing the entry into the RSA by the date that is no later
than 60 days after the Petition Date.

(d)        The Debtors’ failure to file a chapter 11 plan (the “Plan”) and a
disclosure statement for the Plan (the “Disclosure Statement”) that provides for
Payment in Full of the DIP Obligations and the Existing RBL Obligations in
accordance with the RSA, or, is otherwise in form and substance reasonably
acceptable to the Required DIP Lenders, or, after the DIP Obligations have been
Paid in Full, the “Majority Lenders” under the Existing RBL Credit Agreement, in
each case, by the date that is no later than 150 days after the Petition Date.

(e)         The Disclosure Statement not being approved by the Bankruptcy Court
by the date that is no later than 180 days after the Petition Date.

(f)        The Bankruptcy Court not entering an order confirming the Plan by the
date that is no later than 210 days after the Petition Date; provided, that, the
DIP Agent with the consent of the requisite DIP Lenders, or, after Payment in
Full of the DIP Obligations, the Existing RBL Agent with the consent of the
requisite Existing RBL Lenders under the Existing RBL Credit Agreement, may
extend the time by which the Debtors may satisfy the milestones described in
provisions (c)-(f) (together, the “Chapter 11 Milestones”)  without further
order of this Court.

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15.          Rights and Remedies upon Termination Event.

(a)        Subject to the provisions of this paragraph 15, immediately upon the
occurrence and continuation of a Termination Event, the DIP Agent may exercise
all rights and remedies under this Interim Order, the DIP Loan Documents, and/or
applicable non-bankruptcy law, including the right to (A) declare all DIP
Obligations to be immediately due and payable, (B) declare the termination,
reduction, or restriction of any further commitment to extend credit to the
Debtors, to the extent any such commitment remains, and/or (C) terminate the DIP
Facility and any other DIP Loan Documents as to any future liability or
obligation of the DIP Agent and the other DIP Secured Parties, but without
affecting any of the DIP Obligations or the DIP Liens securing the DIP
Obligations.

(b)        Subject to the provisions of this paragraph 15, immediately upon the
occurrence and continuation of a Termination Event, the DIP Agent or the
Existing RBL Agent may declare a termination, reduction, or restriction on the
ability of the Debtors to use any Cash Collateral (any such declaration under
any of clauses 15(a) or 15(b) shall be made to the respective lead counsel to
the Debtors, counsel to any Committee, counsel to the Existing Second Lien
Secured Parties, and the United States Trustee, and shall be referred to herein
as a “Termination Declaration” and the date that is the earliest to occur of any
such Termination Declaration being herein referred to as the “Termination”).

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(c)        Upon the making of a Termination Declaration, the Debtors and all
parties in interest shall have five (5) Business Days to seek an emergency
hearing (the “Termination Hearing Period”) before this Court for the sole
purpose of contesting whether a Termination Event has occurred, and section 105
of the Bankruptcy Code may not be invoked by the Debtors, the Committee, or any
other party in interest in an effort to restrict or preclude any DIP Secured
Party and/or Existing Secured Party from exercising any rights or remedies set
forth in this Interim Order, the DIP Loan Documents, or the Existing RBL Loan
Documents.  During the Termination Hearing Period, the Debtors may not use Cash
Collateral or any amounts previously or thereafter advanced under the DIP
Facility except in accordance with the DIP Budget (subject to the Permitted
Variances); provided, that, if the Termination Hearing Period ends prior to the
occurrence of the hearing contemplated thereby, for the period between the last
day of the Termination Hearing Period and the day of such hearing, the Debtors
may not use Cash Collateral, request any additional Borrowings (as defined in
the DIP Credit Agreement) or use any amounts previously advanced under the DIP
Facility.

(d)       Subject in all respects to the Carve-Out, following the conclusion of
the Termination Hearing Period (unless prior to such time this Court determines
that a Termination Event has not occurred and/or is not continuing), (i) the DIP
Agent is hereby granted relief from the automatic stay, without further notice,
hearing, motion, order, or other action of any kind, to foreclose on, or
otherwise enforce and realize on, its DIP Liens on all or any portion of the DIP
Collateral, including by collecting accounts receivable and applying the
proceeds thereof to the DIP Obligations or Existing Secured Party Adequate
Protection and by occupying the Debtors’ premises to sell or otherwise dispose
of the DIP Collateral and (ii) each Secured Swap Party is hereby granted relief
from the automatic stay, without further notice, hearing, motion, order, or
other action of any kind, to exercise all rights under any Secured Swap
Agreement (including, without limitation, the suspension, termination,
liquidation, withholding of performance, or acceleration thereof, and the
setoff, netting, and application of any payment, settlement payment, termination
values, termination payments, and any other amounts that such Secured Swap Party
would be entitled to receive from or otherwise be obligated to pay to any Debtor
under any Secured Swap Agreement in accordance with the terms of each such
Secured Swap Agreement).

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(e)        Subject in all respects to the Carve-Out, upon the effectiveness of
any relief from the automatic stay with respect to the DIP Facility pursuant to
paragraph 15(d) hereof, the Existing RBL Agent shall have relief from the
automatic stay as against the Existing RBL Collateral to the same extent as the
DIP Agent, and without further notice, hearing, motion, order, or other action
of any kind, to foreclose on, or otherwise enforce and realize on its Existing
RBL Liens and the Existing RBL Adequate Protection Liens on, all or any portion
of the Existing RBL Collateral (including by collecting accounts receivable and
applying the proceeds thereof to the Existing RBL Obligations, and by occupying
the Debtors’ premises to sell or otherwise dispose of the Existing RBL
Collateral) or otherwise exercise remedies against the Existing RBL Collateral
permitted by this Interim Order, the Existing RBL Loan Documents, and/or
applicable non-bankruptcy law; provided, however, that any such foreclosure or
other enforcement by the Existing RBL Agent of any Existing RBL Liens or any
Existing RBL Adequate Protection Liens or any other such exercise of remedies by
the Existing RBL Agent against the Existing RBL Collateral shall not interfere
with or otherwise be inconsistent with any foreclosure or other enforcement by
the DIP Agent of any DIP Liens or other DIP Protections or any other exercise of
remedies by the DIP Agent, and any proceeds received by the Existing RBL Agent
in connection with such foreclosure, enforcement, or other exercise of remedies
shall be turned over to the DIP Agent for application to the DIP Obligations
until Paid in Full.

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(f)       Subject to the provisions of paragraphs 6 and 15(c) hereof, and
subject to the Carve-Out, the Existing Prior Liens, and the terms of the
Intercreditor Agreement, all proceeds realized in connection with the exercise
of the rights and remedies of the DIP Secured Parties or the Existing RBL
Secured Parties shall be turned over first to the DIP Agent for application to
the DIP Obligations under, and in accordance with the provisions of, the DIP
Loan Documents and this Interim Order (which provides, first, for application to
the outstanding New Money Loans, and then, to the Refinanced Loans) until
Payment in Full of all of the DIP Obligations and then to the Existing RBL Agent
for application to the Existing RBL Obligations under, and in accordance with
the provisions of, the Existing RBL Loan Documents and this Interim Order until
Payment in full of the Existing RBL Obligations and then to the Existing Second
Lien Agent for application to the Existing Second Lien Obligations under, and in
accordance with the provisions of, the Existing Second Lien Loan Documents and
this Interim Order until Payment in Full of the Existing Second Lien
Obligations.

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16.        Restriction on Use of Proceeds.  Notwithstanding anything herein to
the contrary, no loans and/or proceeds from the DIP Facility, DIP Collateral,
Cash Collateral (including any retainer held by any professionals for the
below-referenced parties), Existing RBL Collateral, Existing Second Lien
Collateral, or any portion of the Carve-Out may be used by (a) any Debtor,
Committee, or trustee or other estate representative appointed in the Cases or
any Successor Cases, or any other person, party, or entity (including any of the
Debtor Professionals, the Committee Professionals, or the members of any
Committee (“Committee Members”)) to investigate or prosecute any Challenge
(including any litigation or other action) in connection with the value of the
DIP Collateral, the Existing RBL Collateral, or the Existing Second Lien
Collateral (or to pay any professional fees and disbursements incurred in
connection therewith) at any time; or (b) any Debtor, any Committee, or any
trustee or other estate representative appointed in the Cases or any Successor
Cases, or any other person, party, or entity (including any of the Debtor
Professionals, the Committee Professionals, or the Committee Members) to (or to
pay any professional fees and disbursements incurred in connection therewith): 
(i) request authorization to obtain postpetition loans or other financial
accommodations pursuant to section 364(c) or 364(d) of the Bankruptcy Code, or
otherwise, other than from the DIP Secured Parties, or to seek any modification
to this Interim Order not approved by the DIP Agent (after having obtained the
approval of the requisite DIP Secured Parties under the DIP Credit Agreement)
and, to the extent such modification would affect the rights of any of the
Existing RBL Secured Parties, the Existing RBL Agent (after obtaining the
approval of the requisite Existing RBL Secured Parties under the Existing RBL
Credit Agreement); (ii) investigate (except as set forth below), assert, join,
commence, support, or prosecute any action for any claim, counterclaim, action,
proceeding, application, motion, objection, defense, or other contested matter
seeking any order, judgment, determination, or similar relief against, or
adverse to the interests of, in any capacity, any or all of the DIP Secured
Parties, the Existing RBL Secured Parties, the Existing Second Lien Secured
Parties, their respective affiliates, assigns, or successors and the respective
officers, directors, employees, agents, attorneys, representatives, and other
advisors of the foregoing, with respect to any transaction, occurrence,
omission, action, or other matter (including formal or informal discovery
proceedings in anticipation thereof), including (A) any Challenges and any
Avoidance Actions or other actions arising under chapter 5 of the Bankruptcy
Code; (B) any action with respect to the validity, enforceability, priority, and
extent of the DIP Obligations, the Existing RBL Obligations and/or the Existing
Second Lien Obligations, or the validity, extent, and priority of the DIP Liens,
the Existing RBL Liens, the Existing RBL Adequate Protection Liens, the Existing
Second Liens, and/or the Existing Second Lien Adequate Protection Liens; (C) any
action seeking to invalidate, set aside, avoid, or subordinate, in whole or in
part, the DIP Liens, the other DIP Protections, the Existing RBL Liens, the
Existing RBL Adequate Protection Liens, the other Existing RBL Adequate
Protection, the Existing Second Liens, the Existing Second Lien Adequate
Protection Liens, or the other Existing Second Lien Adequate Protection; (D) any
“lender liability” cause of action; (E) except to contest in good faith the
occurrence or continuance of any Termination Event as permitted in paragraph 15,
any action seeking, or having the effect of, preventing, hindering, or otherwise
delaying any or all of the DIP Secured Parties’, and, after the Payment in Full
of the DIP Obligations, the Existing RBL Secured Parties’, assertion,
enforcement, or realization on the Cash Collateral, the DIP Collateral, or the
Existing RBL Collateral in accordance with the DIP Loan Documents or the
Existing RBL Loan Documents, as applicable, or this Interim Order); and/or (F)
any action seeking to modify any of the rights, remedies, priorities,
privileges, protections, and benefits granted to any or all of the DIP Secured
Parties, the Existing RBL Secured Parties, and the Existing Second Lien Secured
Parties hereunder or under the DIP Loan Documents, the Existing RBL Loan
Documents, or the Existing Second Lien Loan Documents, as applicable, or any
payments made thereunder or in respect thereof; provided, however, that up to
$50,000 in the aggregate of the Carve-Out, any DIP Collateral, any Existing RBL
Collateral, any Existing Second Lien Collateral, any Cash Collateral, and
proceeds of the DIP Facility may be used by the Committee (to the extent such
Committee is appointed) to investigate (but not to prosecute) the claims and/or
Liens of the Existing RBL Agent and the other Existing RBL Secured Parties under
the Existing RBL Loan Documents and the claims and/or Liens of the Existing
Second Lien Agent and the other Existing Second Lien Secured Parties under the
Existing Second Lien Loan Documents (but not the claims and/or Liens of the DIP
Agent and the other DIP Secured Parties) so long as such investigation occurs
and any Challenge is brought within the Challenge Period; provided, further,
that the Debtors shall be permitted to use the proceeds of the DIP Facility or
Cash Collateral as necessary to contest an Event of Default alleged by the DIP
Agent or any DIP Lender.; (iii) pay any fees or similar amounts to any person
(other than the Existing RBL Secured Parties) who has proposed or may propose to
purchase interests in any of the Debtors without the prior written consent of
the DIP Agent and the Existing RBL Agent; (iv) use or seek to use any insurance
proceeds related to any DIP Collateral, any Existing RBL Adequate Protection
Collateral, any Existing RBL Collateral or any Cash Collateral without the
consent of the DIP Agent; (v) incur or seek to incur indebtedness other than the
DIP Facility or in accordance with the DIP Budget; (vi) use or seek to use Cash
Collateral or (vii) sell or otherwise dispose of DIP Collateral or Existing RBL
Collateral, unless otherwise permitted hereby, without the prior written consent
of the DIP Agent and the Existing RBL Agent, as applicable.

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17.        Proofs of Claim.  Neither the Existing RBL Secured Parties nor the
Existing Second Lien Secured Parties will be required to file proofs of claim in
any of the Cases or Successor Cases for any claim allowed herein.  The Debtors’
Existing RBL Stipulations shall be deemed to constitute a timely filed proof of
claim for the Existing RBL Secured Parties in respect of all Existing RBL
Obligations and the Debtors’ Existing Second Lien Stipulations shall be deemed
to constitute a timely filed proof of claim for the Existing Second Lien Secured
Parties in respect of all Existing Second Lien Obligations.  In addition, the
Existing RBL Secured Parties, the DIP Secured Parties, and the Existing Second
Lien Secured Parties will not be required to file any request for allowance
and/or payment of any administrative expenses, and this Order shall be deemed to
constitute a timely filed request for allowance and/or payment of any Existing
RBL Obligations and Existing Second Lien Obligations constituting administrative
expenses or any DIP Obligations, as applicable.  Notwithstanding any order
entered by this Court in relation to the establishment of a bar date in any of
the Cases or Successor Cases to the contrary, each of the Existing RBL Agent,
for the benefit of itself and the other Existing RBL Secured Parties, the
Existing Second Lien Agent, for the benefit of itself and the other Existing
Second Lien Secured Parties, and the DIP Agent, for the benefit of itself and
the other DIP Secured Parties, is hereby authorized and entitled, in its sole
discretion, but not required, to file (and amend and/or supplement, in its
discretion) in each of the Cases or Successor Cases (i) in the case of Existing
RBL Agent, a proof of claim and/or aggregate proofs of claim in respect of any
Existing RBL Obligations, (ii) in the case of each of the Existing RBL Agent and
the DIP Agent, a request or aggregate requests for allowance and/or payment of
any portion of the Existing RBL Obligations constituting administrative expenses
or any DIP Obligations, as applicable, and (iii) in the case of the Existing
Second Lien Agent, a proof of claim and/or aggregate proofs of claim in respect
of any Existing Second Lien Obligations.  This paragraph 17 shall in all regards
remain subject to the Intercreditor Agreement.

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18.         Preservation of Rights Granted Under the Interim Order.

(a)      No Non-Consensual Modification or Extension of Interim Order.  The
Debtors irrevocably waive any right to seek any amendment, modification, or
extension of this Interim Order (including through any chapter 11 plan of
reorganization) without the prior written consent of the DIP Agent and the
Existing RBL Agent, and no such consent shall be implied by any other action,
inaction, or acquiescence of the DIP Secured Parties or any of the Existing RBL
Secured Parties.  In the event any or all of the provisions of this Interim
Order are hereafter modified, amended, or vacated by a subsequent order of this
Court or any other court, such modification, amendment, or vacatur shall not
affect the validity, perfection, priority, allowability, enforceability, or
non-avoidability of any advances, payments, or use of cash authorized or made
hereby or pursuant to the DIP Loan Documents or Secured Swap Agreements, or
Lien, claim, priority, or other DIP Protections authorized or created hereby or
pursuant to the DIP Loan Documents or Secured Swap Agreements.  Based on the
findings set forth in this Interim Order and in accordance with section 364(e)
of the Bankruptcy Code, which is applicable to the DIP Facility, in the event
any or all of the provisions of this Interim Order are hereafter reversed,
modified, vacated, or stayed by a subsequent order of this Court or any other
court, the DIP Secured Parties and the Existing Secured Parties shall be
entitled to the protections provided in section 364(e) of the Bankruptcy Code,
and notwithstanding any such reversal, modification, vacatur, or stay, any use
of Cash Collateral or any DIP Obligations or any DIP Protections (including the
Existing Secured Party Adequate Protection) incurred or granted by the Debtors
prior to the actual receipt of written notice by the DIP Agent, the Existing RBL
Agent, or the Existing Second Lien Agent, as applicable, of the effective date
of such reversal, modification, vacatur, or stay shall remain in full force and
effect and be binding on all parties in interest and be governed in all respects
by the original provisions of this Interim Order (and shall maintain their
respective priorities as provided by this Interim Order), and the DIP Secured
Parties, the Existing RBL Secured Parties, and the Existing Second Lien Secured
Parties shall be entitled to all of the DIP Protections (including the Existing
Secured Party Adequate Protection) and all other rights, remedies, Liens,
priorities, privileges, protections, and benefits granted pursuant to section
364(e) of the Bankruptcy Code, this Interim Order, or the DIP Loan Documents.

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(b)       Dismissal.  If any order dismissing any of the Cases under section
1112 of the Bankruptcy Code or otherwise is at any time entered, then
notwithstanding any such dismissal, (i) the DIP Protections (including the
Existing Secured Party Adequate Protection) and all other rights, remedies,
Liens, priorities, privileges, protections, and benefits granted to any or all
of the DIP Secured Parties and the Existing Secured Parties, respectively, shall
remain in full force and effect and be binding on all parties in interest and be
governed in all respects by the provisions of this Interim Order (and shall
maintain their respective priorities as provided by this Interim Order) until
all DIP Obligations and all Existing RBL Adequate Protection Claims have been
Paid in Full, and such order of dismissal shall so provide (in accordance with
section 105 and 349 of the Bankruptcy Code), and (ii) this Court shall retain
jurisdiction, notwithstanding such dismissal, for the purposes of enforcing such
DIP Protections (including the Existing Secured Party Adequate Protection) and
all other rights, remedies, Liens, priorities, privileges, protections, and
benefits granted to any or all of the DIP Secured Parties and the Existing
Secured Parties, respectively.

(c)        Survival of Interim Order.  The provisions of this Interim Order, the
DIP Loan Documents and the Secured Swap Agreements any actions taken pursuant
hereto or thereto, and all of the DIP Protections (including the Existing
Secured Party Adequate Protection), and all other rights, remedies, Liens,
priorities, privileges, protections, and benefits granted to any or all of the
DIP Secured Parties and the Existing Secured Parties, respectively, shall
survive, and shall not be modified, impaired, or discharged by, the entry of any
order confirming any plan of reorganization in any Case or Successor Case,
converting any Case to a case under chapter 7, dismissing any of the Cases,
withdrawing of the reference of any of the Cases or any Successor Cases or
providing for abstention from handling or retaining of jurisdiction of any of
the Cases or any Successor Case in this Court, or terminating the joint
administration of these Cases or any Successor Case or by any other act or
omission.  The terms and provisions of this Interim Order, including all of the
DIP Protections (including the Existing Secured Party Adequate Protection) and
all other rights, remedies, Liens, priorities, privileges, protections, and
benefits granted to any or all of the DIP Secured Parties and the Existing
Secured Parties, respectively, shall continue in full force and effect and be
binding on all parties in interest notwithstanding the entry of any such order,
and such DIP Protections (including the Existing Secured Party Adequate
Protection), and such other rights, remedies, Liens priorities, privileges,
protections, and benefits, shall continue in full force and effect in these
proceedings and in any Successor Cases and after dismissal of any thereof, and
shall maintain their respective priorities as provided by this Interim Order.
Subject to the provisions of paragraph 2(d) of this Interim Order with respect
to the treatment of the Refinancing DIP Obligations, the DIP Obligations shall
not be discharged by the entry of an order confirming any such chapter 11 plan,
the Debtors having waived such discharge pursuant to section 1141(d)(4) of the
Bankruptcy Code.

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19.         Insurance Policies.  Upon entry of this Interim Order, the DIP Agent
shall be deemed to be, without any further action or notice, named as additional
insureds and loss payees, as applicable, on each insurance policy maintained by
the Debtors that in any way covers the DIP Collateral, and the Debtors shall
take such actions as are reasonably requested by the DIP Agent, the Existing RBL
Agent, or the Existing Second Lien Agent from time to time to evidence or
effectuate the foregoing.

20.        Preservation of Prepetition Priorities and Interests.  Nothing in
this Interim Order is intended to change or otherwise modify the prepetition
priorities among secured creditors of the Debtors (including under the
Intercreditor Agreement), including any sureties’, operators’, or nonoperators’
recoupment rights to the extent their rights are valid, enforceable,
nonavoidable, and perfected, and nothing in this Interim Order shall be deemed
to have changed or modified such prepetition priorities, all of which are hereby
expressly preserved; provided, however, that the Debtors, the Committee, the DIP
Secured Parties, and all other parties in interest reserve all rights to object
to any of the foregoing claims or liens.

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21.         Surety Bonds.  Notwithstanding anything to the contrary in the
Debtors’ Emergency Motion for Interim and Final Authority to (I) Continue
Insurance Policies and Surety Bond Program, (II) Pay All Obligations With
Respect Thereto, (III) Authorizing Financial Institutions to Honor and Process
Related Checks and Transfers, and (II) Granting Related Relief (the “Insurance
and Surety Bond Motion”) and any order approving the relief sought therein in
the ordinary course of business, the Debtors may only (a) renew, amend, modify,
supplement, and extend their existing Surety Bond Program, (b) obtain new or
replacement surety bonds, (c) post new or additional collateral, or issue
letters of credit, (d) execute other agreements in connection with the Surety
Bond Program (as defined in the Insurance and Surety Bond Motion), and (e)
continue to perform under the Surety Indemnity Agreements (as defined in the
Insurance and Surety Bond Motion), in each case of (a)-(e), with the consent of
the DIP Agent, not to be unreasonably withheld.

22.         Postpetition Hedging Arrangement.  For the avoidance of doubt, (a)
any Secured Swap Agreement (as defined in the DIP Credit Agreement) must be with
an Approved Counterparty (as defined in the DIP Credit Agreement) and otherwise
subject to the limitations provided in the DIP Credit Agreement, and (b) any
Secured Swap Obligations will be granted DIP Superpriority Claims, DIP Liens,
automatic stay relief, and the other DIP Protections afforded by this Interim
Order and the Final Order in respect of each such transaction until the Secured
Swap Obligations are indefeasibly paid in full in cash, or as otherwise provided
by this Interim Order and the Final Order, as applicable.  The relief and
protections provided by this Interim Order and the Final Order, as applicable,
to any such Secured Swap Party with respect to such Secured Swap Obligations
shall not be subject to discharge or impairment, except as otherwise provided by
this Interim Order and the Final Order, as applicable.

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23.         Other Rights and Obligations.

(a)       Expenses.  As provided in the DIP Loan Documents (and without limiting
the Debtors’ respective obligations thereunder), the applicable Debtors will pay
all reasonable and documented expenses incurred by the DIP Agent (including the
reasonable fees and disbursements of all counsel for the DIP Agent, any Secured
Swap Party to the extent provided in the DIP Credit Agreement, and any internal
or third-party appraisers, consultants, advisors, and auditors engaged by or for
the benefit of the DIP Agent and/or its counsel) in connection with the Cases,
including the preparation, execution, delivery, and administration of the DIP
Loan Documents, the Secured Swap Agreements, this Interim Order, the Final
Order, and any other agreements, instruments, pleadings, or other documents
prepared or reviewed in connection with any of the foregoing, whether or not any
or all of the transactions contemplated hereby or by the DIP Loan Documents are
consummated.

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(b)        Notice of Professional Fees.  Professionals for the DIP Agent, the
Secured Swap Parties, the Existing RBL Agent and the Existing Second Lien
Secured Parties (including professionals engaged by counsel to the DIP Agent,
the Existing RBL Agent, or the Existing Second Lien Secured Parties, as
applicable) (collectively, the “Lender Professionals”) shall not be required to
comply with the United States Trustee fee guidelines or submit invoices to this
Court, United States Trustee, any Committee or any other party in interest. 
Copies of summary invoices submitted to the Debtors by such Lender Professionals
shall be forwarded by the Debtors to the United States Trustee, counsel for any
Committee, and such other parties as this Court may direct.  The summary
invoices shall be sufficiently detailed to enable a determination as to the
reasonableness of such fees and expenses; provided, however, that such summary
invoices may be redacted to the extent necessary to delete any information
subject to the attorney-client privilege, any information constituting attorney
work product, or any other confidential information, and the provision of such
summary invoices shall not constitute any waiver of the attorney-client
privilege or of any benefits of the attorney work product doctrine or other
applicable privilege; and provided, further that to the extent DIP Agent and
Existing RBL Agent are the same and have a single set of advisors, such advisors
may submit a single combined invoice for their aggregated services.  If the
Debtors, United States Trustee, or any Committee object to the reasonableness of
the fees and expenses of any of the Lender Professionals and cannot resolve such
objection within ten (10) days of receipt of such invoices, then the Debtors,
United States Trustee, or the Committee, as the case may be, shall file with
this Court and serve on such Lender Professionals an objection (the “Fee
Objection”) limited to the issue of the reasonableness of such fees and
expenses, and any failure by any such party to file a Fee Objection within such
ten (10) day period shall constitute a waiver of any right of such party to
object to the applicable invoice.  Notwithstanding any provision herein to the
contrary, any objection to, and any hearing on an objection to, payment of any
fees and expenses set forth in a professional fee invoice in respect of Lender
Professionals shall be limited to the reasonableness of the particular items or
categories of the fees and expenses that are the subject of such objection.  The
Debtors shall timely pay in accordance with the terms and conditions of this
Interim Order (a) the undisputed fees, and expenses reflected on any invoice to
which a Fee Objection has been timely filed and (b) all fees, costs, and
expenses on any invoice to which no Fee Objection has been timely filed.  All
such unpaid fees, costs, expenses, and charges of the DIP Agent, the Secured
Swap Parties, Existing RBL Agent and/or Existing Second Lien Secured Parties, as
applicable, that have not been disallowed by this Court on the basis of an
objection filed by the Debtor, the United States Trustee, or the Committee (or
any subsequent trustee of the Debtors’ estates) in accordance with the terms
hereof shall constitute DIP Obligations, Existing RBL Obligations and/or
Existing Second Lien Obligations, as applicable, and shall be secured by the DIP
Collateral, Existing RBL Collateral and/or Existing Second Lien Collateral, as
applicable, as specified in this Interim Order.  Any and all fees and expenses
paid prior to the Petition Date by any Debtor to the DIP Secured Parties, the
Existing RBL Secured Parties and/or the Existing Second Lien Secured Parties in
connection with or with respect to the DIP Facility, the DIP Credit Agreement,
or the other DIP Loan Documents and Secured Swap Agreements are hereby approved
in full and non-refundable and shall not otherwise be subject to any Challenge. 
All fees, costs, expenses and charges paid to the Existing Second Lien Agent
and/or Existing Second Lien Secured Parties pursuant to this paragraph 23(a)
shall be subject to the Intercreditor Agreement and section 506(b) of the
Bankruptcy Code in all regards.

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(c)         Information Rights.  The Debtors shall substantially
contemporaneously provide the advisors to the Committee, the United States
Trustee, the advisors to the Existing RBL Secured Parties, and the advisors to
the Existing Second Lien Secured Parties with all required written financial
reporting and other periodic reporting that is required to be provided to the
DIP Agent or the other DIP Secured Parties under the DIP Loan Documents and the
DIP Orders; provided, that, to the extent such information constitutes material
non-public information, such information will be shared either (i) with the
advisors to the Committee, the advisors to the Existing RBL Secured Parties and
the advisors to the Existing Second Lien Secured Parties on a professionals’
eyes only basis or (ii) with the advisors to the Committee, the advisors to the
Existing RBL Secured Parties, and the advisors to the Existing Second Lien
Secured Parties for distribution to the members of the Committee, the Existing
RBL Secured Parties, and the Existing Second Lien Secured Parties pursuant to a
confidentiality agreement in form and substance reasonably satisfactory to the
Debtors; provided, further, that for the avoidance of doubt, the United States
Trustee, the members of the Committee, the Existing RBL Secured Parties, and the
Existing Second Lien Secured Parties shall not be entitled to any consent right
granted to the DIP Agent and/or any of the other DIP Secured Parties with
respect to such written financial reporting and other periodic reporting.

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(d)       Binding Effect.  Subject only to paragraph 6 above, the provisions of
this Interim Order, including all findings herein, and the DIP Loan Documents
and the Secured Swap Agreements shall be binding upon all parties in interest in
these Cases and any Successor Cases, including the DIP Secured Parties, the
Existing Secured Parties, any Committee, and the Debtors and their respective
estates, successors, and assigns (including any chapter 7 or chapter 11 trustee
hereinafter appointed or elected for the estate of any of the Debtors, an
examiner appointed pursuant to section 1104 of the Bankruptcy Code, or any other
fiduciary or responsible person appointed as a legal representative of any of
the Debtors or with respect to the property of the estate of any of the
Debtors), whether in any of the Cases, in any Successor Cases, or upon dismissal
of any such Case or Successor Case; provided, however, that the DIP Secured
Parties and the Existing Secured Parties shall have no obligation to permit the
use of Cash Collateral or to extend any financing to any chapter 7 or chapter 11
trustee or other responsible person appointed for the estates of the Debtors in
any Case or Successor Case.

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(e)        No Waiver.  The failure of the Existing Secured Parties or the DIP
Secured Parties to seek relief or otherwise exercise their rights and remedies
under this Interim Order, the Existing Loan Documents, the DIP Loan Documents,
the Secured Swap Agreements, or otherwise (or any delay in seeking or exercising
same) shall not constitute a waiver of any of such parties’ rights hereunder,
thereunder, or otherwise.  Nothing contained in this Interim Order (including
the authorization of the use of any Cash Collateral) shall impair or modify any
rights, claims, or defenses available in law or equity to any Existing Secured
Party or any DIP Secured Party, including rights of a party to a Secured Swap
Agreement (as defined in the DIP Credit Agreement), securities contract,
commodity contract, forward contract, or repurchase agreement with a Debtor to
assert rights of setoff or other rights with respect thereto as permitted by law
(or the right of a Debtor to contest such assertion).  Except as prohibited by
this Interim Order, the entry of this Interim Order is without prejudice to, and
does not constitute a waiver of, expressly or implicitly, or otherwise impair,
any right or ability of the Existing Secured Parties or the DIP Secured Parties
under the Bankruptcy Code or under non-bankruptcy law to (i) request conversion
of the Cases or any Successor Cases to cases under chapter 7, dismissal of the
Cases or any Successor Cases, or the appointment of a trustee or examiner in the
Cases or any Successor Cases, or to oppose the use of Cash Collateral in any
Successor Case or on terms other than those set forth in this Interim Order,
(ii) propose, subject to the provisions of section 1121 of the Bankruptcy Code,
any chapter 11 plan or plans with respect to any of the Debtors or seek early
termination of the Debtors’ exclusive rights to propose a plan under the
Bankruptcy Code, or (iii) except as expressly provided herein, exercise any of
the rights, claims, or privileges (whether legal, equitable, or otherwise) of
the DIP Secured Parties or the Existing Secured Parties, respectively, under the
DIP Loan Documents and the Secured Swap Agreements, or the Existing Loan
Documents, the Bankruptcy Code, or otherwise.  Except to the extent otherwise
expressly provided in this Interim Order or by law, neither the commencement of
the Cases nor the entry of this Interim Order shall limit or otherwise modify
the rights and remedies of the Existing Secured Parties under the Existing Loan
Documents or with respect to any non-Debtor entities or their respective assets,
whether such rights and remedies arise under the Existing Loan Documents,
applicable law, or equity.

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(f)         No Third Party Rights.  Except as explicitly provided for herein or
in any DIP Loan Document, this Interim Order does not create any rights for the
benefit of any third party, creditor, equity holder, or direct, indirect, or
incidental beneficiary.  In determining to make any loan (whether under the DIP
Credit Agreement or otherwise) or to permit the use of Cash Collateral or in
exercising any rights or remedies as and when permitted pursuant to this Interim
Order or the DIP Loan Documents, the DIP Secured Parties and the Existing
Secured Parties shall not (i) be deemed to be in control of the operations of
the Debtors or to be acting as a “responsible person” or “owner or operator”
with respect to the operation or management of the Debtors (as such terms, or
any similar terms, are used in the United States Comprehensive Environmental
Response, Compensation and Liability Act, as amended, or any similar federal,
state or local statute or regulation) or (ii) owe any fiduciary duty to the
Debtors, their respective creditors, shareholders, or estates.

(g)        No Marshaling.  Neither the DIP Secured Parties, the Existing RBL
Secured Parties, nor the Existing Second Lien Secured Parties shall be subject
to the equitable doctrine of “marshaling” or any other similar doctrine with
respect to any of the DIP Collateral, the Existing RBL Collateral, or the
Existing Second Lien Collateral, as applicable.

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(h)        Amendments.  The Debtors are authorized and empowered, without
further notice and hearing or approval of this Court, to amend, modify,
supplement, or waive any provision of the DIP Loan Documents or Secured Swap
Agreements in accordance with the provisions thereof, in each case unless such
amendment, modification, supplement, or waiver (i) increases the interest rate
(other than as a result of the imposition of the default rate), (ii) increases
the aggregate lending commitments of all of the DIP Lenders in respect of the
DIP Facility, (iii) shortens the Maturity Date (as defined in the DIP Credit
Agreement), or (iv) adds or amends (in any respect unfavorable to the Debtors)
any Event of Default.  No waiver, modification, or amendment of any of the
provisions of the DIP Loan Documents or Secured Swap Agreements shall be
effective unless set forth in writing, signed by or on behalf of all the Debtors
and the DIP Agent (after having obtained the approval of the requisite DIP
Secured Parties under the DIP Credit Agreement) and, except as provided herein,
approved by this Court. Notwithstanding the foregoing, no waiver, modification
or amendment of any of the provisions of this Interim Order or the DIP Loan
Documents that would directly and adversely affect the rights or interests of
the Existing RBL Secured Parties or the Existing Second Lien Secured Parties, as
applicable, shall be effective unless also consented to in writing by the
Existing RBL Agent on behalf of the Existing RBL Secured Parties, and/or the
Existing Second Lien Agent on behalf of the Existing Second Lien Secured
Parties, as applicable (after obtaining the approval of the requisite Existing
RBL Secured Parties under the Existing RBL Credit Agreement, and/or of the
requisite Existing Second Lien Secured Parties under the Existing Second Lien
Credit Agreement, as applicable).

(i)         Inconsistency.  In the event of any inconsistency between the terms
and conditions of the DIP Loan Documents and of this Interim Order, the
provisions of this Interim Order shall govern and control.  In the event of any
inconsistency between the terms or conditions of this Interim Order and the
terms or conditions of any other order entered by this Court in the nature of a
First Day Order, the provisions of this Interim Order shall govern and control.

(j)         Enforceability.  This Interim Order shall constitute findings of
fact and conclusions of law pursuant to the Bankruptcy Rule 7052 and shall take
effect and be fully enforceable nunc pro tunc to the Petition Date immediately
upon execution hereof.  Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h),
6006(d), 7062, or 9024 or any other Bankruptcy Rule, any Local Rule, or Rule
62(a) of the Federal Rules of Civil Procedure, this Interim Order shall be
immediately effective and enforceable upon its entry, and there shall be no stay
of execution or effectiveness of this Interim Order.

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(k)         Reservation of Rights.  Nothing in this Interim Order shall be
deemed to constitute the consent of the DIP Secured Parties or the Existing
Secured Parties, and each of the foregoing expressly reserve the right, subject
to the Intercreditor Agreement, to object, to entry of any order of the Court
that provides for the sale or other disposition of all or substantially all of
the assets of the Debtors (or any other sale or other disposition of assets of
any of the Debtors outside the ordinary course of business) to any party unless,
in connection and concurrently with any such event, the proceeds of such sale
are or will be sufficient to Pay in Full the DIP Obligations, the Existing RBL
Obligations, the Existing RBL Adequate Protection, the Existing Second Lien
Obligations, and the Existing Second Lien Adequate Protection, as applicable.

(l)         No Requirement to Accept Title to Collateral.  The DIP Secured
Parties and the Existing Secured Parties shall not be obligated to accept title
to any portion of the DIP Collateral or the Existing Collateral in payment of
any of the DIP Obligations or Existing Obligations, as applicable, in lieu of
payment in cash or cash equivalents, nor shall the DIP Secured Parties and the
Existing Secured Parties be obligated to accept payment in cash or cash
equivalents that is encumbered by any interest of any person or entity other
than the DIP Secured Parties or the Existing Secured Parties, as applicable.

(m)       Headings.  Paragraph headings used herein are for convenience only and
are not to affect the construction of, or to be taken into consideration in,
interpreting this Interim Order.

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24.          Final Hearing.

(a)        The Final Hearing to consider entry of the Final Order and final
approval of the DIP Facility is scheduled for June [●], 2019, at [●] [a/p].m.
(prevailing Central Time) at the United States Bankruptcy Court for the Southern
District of Texas.

(b)        Final Hearing Notice.  As soon as reasonably practicable following
entry of this Interim Order, the Debtors shall serve (i) notice of the entry of
this Interim Order and of the Final Hearing (the “Final Hearing Notice”) and
(ii) a copy of this Interim Order on the parties having been given notice of the
Interim Hearing and to any other party that has filed a request for notices with
this Court and to any Committee after the same has been appointed, or Committee
counsel, if the same shall have been appointed.  The Final Hearing Notice shall
state that any party in interest objecting to the entry of the proposed Final
Order shall file written objections with the Clerk of the United States
Bankruptcy Court for the Southern District of Texas no later than June [●],
2019, at [●] [a/p].m. (prevailing Central Time) which objections shall be served
so that the same are received on or before such date by:  (a) proposed counsel
to the Debtors, Sidley Austin LLP, 1000 Louisiana St. #6000, Houston TX 77002
(Attn:  Duston McFaul, Brian Minyard and Charles Persons; dmcfaul@sidley.com;
bminyard@sidley.com; and cpersons@sidley.com); (b) counsel to the DIP Agent and
the Existing RBL Agent, (i) Orrick, Herrington & Sutcliffe LLP, 51 West 52nd
Street, New York, NY 10019-6142 (Attn: Raniero D’Aversa and Laura Metzger;
rdaversa@orrick.com and lmetzger@orrick.com) and (ii) Orrick, Herrington &
Sutcliffe LLP, 609 Main Street, 40th Floor, Houston Texas 77002-3106 (Attn:
[name], [email]); (c) counsel to any Committee appointed in these cases; (d)
[the Existing Second Lien Agent, 251 Little Falls Drive, Wilmington, DE 19808];
(e) counsel to the Existing Second Lien Agent, Latham & Watkins LLP, 885 3rd
Avenue, New York, NY 10022 (Attn: George Davis and Adam J. Goldberg,
george.davis@lw.com and adam.goldberg@lw.com); (f) counsel to the Ad Hoc Group
of Senior Noteholders, Davis Polk & Wardwell LLP, 450 Lexington Avenue New York,
NY 10017, (Attn:  [name], [name], and [name]; [email], [email], and [email])];
(g) the Office of the United States Trustee for the Southern District of Texas;
and (h) any other party that has filed a request for notices with this Court,
and such objections shall be filed with the Clerk of the United States
Bankruptcy Court for the Southern District of Texas, in each case to allow
actual receipt of the foregoing no later than June [●], 2019, at [●] [a/p].m.
(prevailing Central time).

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25.          Retention of Jurisdiction.  This Court has and will retain
jurisdiction to enforce this Interim Order according to its terms.

Signed:  June [●], 2019

     
[●]
 
UNITED STATES BANKRUPTCY JUDGE

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SCHEDULE 1

DIP Credit Agreement

306

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Annex I

 
Name of Lender
Applicable
Percentage
New Money DIP Loan
Commitment
1.
     
2.
     
3.
     
4.
     
5.
     
6.
     
7.
     
8.
     

307

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SCHEDULE 2

Initial 13-Week Cash Flow Forecast

308

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SCHEDULE 3

Initial DIP Budget

309

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Exhibit C

MIP Term Sheet

310

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EXECUTION VERSION

LEGACY RESERVES, INC.

MANAGEMENT INCENTIVE PLAN

The following term sheet (this “Term Sheet”) summarizes the principal terms of a
Management Incentive Plan (the “Plan”) to be sponsored by Legacy Reserves, Inc.
(the “Company”) and its subsidiaries (collectively, the “Company Group”) and of
grants to be made at Emergence under the Plan to management employees of the
Company Group (each, an “Employee”), including executive employees (each, an
“Executive”).  Capitalized terms used in this Term Sheet but not defined herein
shall have the meanings given to them in the Restructuring Term Sheet.

Company
Capital
Structure:

The Plan of Reorganization contemplates a minimum initial equity value of $[TBD]
million, which for purposes hereof will consist of [TBD] 1 million shares
(“Initial Share Count”) at $10 per share; such equity value and Initial Share
Count would be adjusted based on the amount of new equity funded on Emergence.

Incentive
Compensation:

There will be reserved, exclusively for Employees, a pool of equity (such
reserve, the “MIP Pool”) having a value equal to:

(i)   5.0% of the Initial Share Count granted as soon as administratively
practicable (but in no event more than 60 days following Emergence) in
accordance with this Term Sheet (the “Emergence Awards”) in the following form:
(A) 2.5% of the Initial Share Count in Restricted Stock Units (“RSUs”), and (B)
2.5% of the Initial Share Count in stock options with a strike price of $10.00
per share (“Options”);

(ii)  5.0% of the Initial Share Count will be reserved for potential future
issuance as determined by the new board of directors.2

Notwithstanding the foregoing, unless otherwise approved by the Plan Sponsor,
for purposes of the MIP Pool, the Initial Share Count will not include any: i)
shares issued in excess of [70] million shares (i.e. for shares issued in
respect of equity capitalization in excess of $[700] million) or ii) shares
issued to Plan Sponsor in respect of its new money funding in excess of 20
million shares (i.e. for shares issued to Plan Sponsor in excess of $200 million
funded).

Vesting:

Normal Vesting. Subject to an Employee’s continued employment through each
applicable vesting date, Emergence Awards will vest 25% on each of the first
four (4) anniversaries of the Emergence Date.

RSUs will be settled as soon as practicable following vesting.

Accelerated Vesting Prior to a Change in Control. If the Employee is terminated 
by the Company without Cause, by the Employee for Good Reason or due to death or
Disability, and such termination occurs outside of the Change in Control period
described below, the Employee will become vested in the Emergence Awards that
would have vested if the Employee’s employment had continued for an additional
12 months.

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1 NTD: To be equal to the number of shares with aggregate value equal to plan
value.

2 NTD:  We will ensure that options will not have exercise prices lower than the
fair market value on the grant date, but we do not want to commit to getting
independent 409A valuations. We will get independent 409A valuations at the time
of grant if we think necessary.

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Accelerated Vesting Upon a Change in Control.  Upon a Change in Control (as will
be defined in the applicable equity plan and excluding any acquisition of the
Company by Plan Sponsor and any of its affiliates) following which the Employee
is terminated by the Company without Cause or by the Employee for Good Reason
within 24 months following the Change in Control, 100% of an Employee’s unvested
Emergence Awards will accelerate and vest.

The definitions of “Cause,” “Without Cause,” “Good Reason” and “Disability” will
be on customary terms for similar management arrangements.

Forfeiture:

100% of any unvested Options or unvested RSUs (determined after giving effect to
any accelerated vesting set forth above) will be forfeited for no consideration
upon any termination of employment and, subject to the next sentence, the
Employee will be entitled to retain any vested Options that are not yet
exercised or any vested RSUs that are not yet settled, and any shares previously
received upon exercise of Options or settlement of RSUs, subject to the exercise
of the repurchase rights (discussed below).  All Options, whether or not vested,
will be forfeited for no consideration upon a termination for Cause.

Other Terms:

The option grants will be subject to customary adjustments with regard to any
extraordinary dividends paid.  The Options will expire on the earlier of (a) the
tenth (10th) anniversary of the Emergence Date or (b) 180 days following the
Employee’s termination of employment (other than for Cause) or one year
following his or her Death or Disability.  Unvested RSUs will be entitled to
dividends on a pro rata basis with outstanding shares and such dividend payments
will be retained and will be subject to vesting provisions set forth above.

Upon the exercise of an Option or the settlement of RSUs, Employees may elect to
pay the exercise price and tax withholding through the withholding of shares by
the Company.

If the Company is not publicly traded on a national securities exchange or over
the counter market, the Company will agree to provide fair market valuations to
facilitate the exercise of Options.

Executive
Investments:

The Executives will have the opportunity to invest in the common stock in a
manner to be agreed by the Executives, the Company and Plan Sponsor.

Employment
Agreements:

The Company will enter into amended and restated employment agreements with
Executives on the same terms as set forth in the existing agreements, subject to
conforming changes associated with this MIP and Change in Control definitions. 
For the avoidance of doubt, the reorganization of the Company will not
constitute a Change in Control under the applicable employment agreements.

312

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Company
Repurchase
Rights:

•     The Company shall have the right to repurchase, upon an Employee’s
termination of employment and for Fair Market Value, any common shares acquired
upon exercise of the Options or in settlement of the RSUs.  The repurchase right
will expire on the 12-month anniversary of the Employee’s termination of
employment or in connection with an initial public offering or other listing on
a national securities exchange.

•      The repurchase price will be paid in cash unless otherwise prohibited by
the terms of any loan agreement or other financing agreement or instrument to
which the Company is a party, in which case, in lieu of cash payment, the
Company may at its discretion issue to the Executive a promissory note bearing
simple interest at the prime rate and containing such other reasonable terms and
conditions as may be determined by the Company.

•     “Fair Market Value” means the fair market value of the applicable security
as of the Employee’s termination of employment, as determined by the new board
of directors in good faith and without applying any discounts for minority
interest, illiquidity or other similar factors.

Allocations

•      Allocations among individual Employees to be determined by mutual
agreement of Plan Sponsor and the Company.

 
313

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Exhibit D

Exit Facility Term Sheet

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LEGACY RESERVES INC.

$500,000,000 RBL EXIT FACILITY
$[___] NEW TERM LOAN FACILITY
SUMMARY OF TERMS AND CONDITIONS

This Summary of Terms and Conditions (this “Term Sheet”) is for discussion
purposes only and does not include descriptions of all of the terms, conditions,
covenants, representations, warranties and other provisions that are to be
contained in the definitive documentation relating to the transactions described
below.  This Term Sheet is delivered to you with the understanding that it is
subject to the confidentiality terms governing information received by you in
connection with the Existing Loan Documents. This Term Sheet is non-binding and
does not indicate a commitment to amend the Existing Credit Agreement or enter
into any transaction.  Consequently, this Term Sheet is entitled to protection
from any use or disclosure to any person or entity pursuant to Federal Rule of
Evidence 408 and any other rules or laws of similar import.  Any amendments to
the Existing Credit Agreement or any other transactions are subject to the
approval (including credit approval) of the Existing Agent and the Existing
Lenders in all regards and to definitive documentation in connection with the
Facilities.  The Borrower should not consider any discussions or course of
dealings that the Existing Agent, any Existing Lender or any of their respective
affiliates had or may have with the Borrower or any of its affiliates as a
forbearance, waiver or modification of the Existing Credit Agreement.  Those
matters that are not addressed in this Term Sheet and all other terms,
conditions, covenants, representations, warranties and other provisions are
subject to the mutual agreement of the parties thereto.  (For purposes of this
Term Sheet, “Definitive Documentation” means all documents related to the
Facilities (as defined below) and the Plan, including, without limitation, the
Disclosure Statement, the Plan, and the Confirmation Order). No party shall be
entitled to rely on any statement or representation made by any other party or
its representatives except as ultimately set forth in final, executed Definitive
Documentation, if any. Capitalized terms used but not defined herein shall have
the meaning set forth in the Existing Credit Agreement or the DIP Credit
Agreement (each as defined below), as applicable.

This Term Sheet and the information contained in this Term Sheet shall remain
strictly confidential and may not be shared with any person or entity (other
than the Loan Parties, the Lenders and their respective professionals and
advisors), unless otherwise consented to by the Borrower or the Lenders, as
applicable.

Parent:
TBD
   
Borrower:
Legacy Reserves Inc., a Delaware corporation (the “Borrower”), as reorganized
pursuant to the Plan and Confirmation Order.
   
Guarantors:
The obligations of (a) the Borrower under the Facilities, (b) any Loan Party
under any hedging agreements entered into between such Loan Party and any
counterparty that is a Lender (as defined below) (or any affiliate thereof), and
(c) any Loan Party under any cash management arrangements between such Loan
Party and a Lender (or any affiliate thereof) (such obligations, collectively,
the “Obligations”) will be unconditionally guaranteed, on a joint and several
basis, by each other Loan Party (other than, with respect to obligations under
clause (a), the Borrower) and each other wholly-owned direct or indirect
subsidiary of the Borrower (as reorganized through the Plan and Confirmation
Order) other than Unrestricted Subsidiaries (as defined below) (collectively,
such subsidiaries the “Restricted Subsidiaries” or the “Guarantors” and,
collectively with the Borrower, the “Loan Parties”; and such guarantee being
referred to as the “Guarantee”).  All Guarantees shall be guarantees of payment
and not of collection.

315

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The Borrower will be permitted to designate any existing or subsequently
acquired or organized subsidiary as an “Unrestricted Subsidiary” and
subsequently re-designate any such unrestricted subsidiary as a Restricted
Subsidiary; provided that (i) after giving effect to any such designation or
re-designation and any related transaction, all representations and warranties
are true and correct in all material respects, no event of default shall have
occurred and be continuing, Borrower shall be in compliance with the Financial
Covenants on a pro forma basis, and such designation or re-designation will be
made with respect to all Specified Additional Debt (as defined below), and (ii)
the fair market value of such subsidiary at the time it is designated as an
Unrestricted Subsidiary shall be treated as an investment by the Borrower at
such time.  Unrestricted Subsidiaries will not be subject to the representations
and warranties, affirmative or negative covenants or event of default provisions
of the Definitive Documentation and the results of operations and indebtedness
of Unrestricted Subsidiaries will not be taken into account for purposes of
determining compliance with the Financial Covenants contained in the Definitive
Documentation.
   
Sole Lead Arranger
and Bookrunner
Wells Fargo Securities, LLC
   
Administrative
Agent, Collateral
Agent and Issuing
Bank:
Wells Fargo Bank, National Association, acting through one or more of its
branches or affiliates (“Wells Fargo”) will act as (i) sole administrative agent
for the Facilities described below (in such capacity, the “Administrative
Agent”), (ii) sole collateral agent for the Facilities described below (in such
capacity, the “Collateral Agent”) for a syndicate of banks, financial
institutions and other institutional lenders (together with Wells Fargo, the
“Lenders”), and (iii) an Issuing Bank pursuant to the RBL Exit Facility (in such
capacity, together with any other Lender agreed to by such Lender, the
Administrative Agent and the Borrower, collectively, the “Issuing Bank”) and
will perform the duties customarily associated with each such role.
   
Lenders:
Initially, the Lenders in the RBL Exit Facility (as defined below) will be
(i) each Existing Lender holding Existing Loans and electing, pursuant to the
Plan, to participate in the RBL Exit Facility, and (ii) each holder of
Refinanced Loans (as defined in the DIP Credit Agreement) under the DIP Credit
Agreement that has not been repaid in cash pursuant to the Plan (collectively,
and together with any party that becomes a lender by assignment, the “Lenders”).
   
Prior Facilities
(a)  The Third Amended and Restated Credit Agreement dated as of April 1, 2014
(as amended, supplemented or otherwise modified prior to the Petition Date, and
including all exhibits and other ancillary documentation in respect thereof, as
amended, amended and restated, modified or supplemented from time to time, the
“Existing Credit Agreement” and the loans thereunder, the “Existing Loans”),
among Legacy Reserves, LP, as the borrower (the “Existing Borrower”), Wells
Fargo as the administrative agent (in such capacity, the “Existing Agent”), the
other agents and other entities party thereto, and the financial institutions
and other persons or entities party thereto as lenders (the “Existing Lenders”).

316

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(b)  The Senior Secured Superpriority Debtor-in-Possession Credit Agreement to
be entered into in connection with the Bankruptcy Cases (as amended, amended and
restated, modified or supplemented from time to time, the “DIP Credit Agreement”
and the “Refinanced Loans” (as defined therein), the “DIP Loans”) among the
Existing Borrower (together with its affiliated Chapter 11 debtors, the
“Debtors”), Legacy Reserves Inc., a Delaware corporation (the “Parent”), as
parent guarantor, Wells Fargo as administrative agent and collateral agent
thereunder and as defined therein (in such capacity, the “DIP Agent”), and the
lenders party thereto (the “DIP Lenders”).

(c)  The Term Loan Credit Agreement, dated as of October 25, 2016, among the
Existing Borrower, each of the lenders from time to time party thereto, and
Cortland Capital Market Services LLC, as the administrative agent (the “Existing
Second Lien Agent” as amended, supplemented or otherwise modified prior to the
Petition Date, and including all exhibits and other ancillary documentation in
respect thereof, the “Existing Second Lien Credit Facility”).

(d)  The 8.00% Senior Notes due 2020 (the “Existing 2020 Senior Notes”).

(e)  The 6.625% Convertible Senior Notes due 2021 (the “Existing 2021 Senior
Notes”).

(e)  The 8.00% Convertible Senior Notes due 2023 (the “Existing 2023 Convertible
Senior Notes” and, together with the Existing 2020 Senior Notes and the Existing
2021 Senior Notes, collectively, the “Existing Senior Notes”).
   
Chapter 11 Plan:
The Debtors shall seek confirmation of a chapter 11 plan (the “Plan”) in
connection with the voluntary cases commenced by the Debtors on June [14], 2019
(the “Petition Date”) in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the “Bankruptcy Court”), which Plan shall
(a) be filed no later than seventy-five (75) days after the Petition Date,
(b) be consistent in all material respects with the Restructuring Support
Agreement, the Restructuring Term Sheet, and this Term Sheet, and (c) give
effect to the transactions contemplated by this Term Sheet.
   
Facilities:
A senior secured, amended and restated facilities consisting of the RBL Exit
Facility and the New Term Loan Facility, each as described below (collectively,
the “Facilities”), in each case, as more fully described below and which shall
become effective on the effective date of the Plan, which shall occur no later
than 240 days following the Petition Date (the “Plan Effective Date”).

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(a)  RBL Exit Facility.  Pursuant to the Plan, and subject to adjustment for
Non-Electing Lenders (as defined and described below) and as part of the
treatment of their Obligations under the Plan, each Existing Lender that is a
holder of Existing Loans and elects to become an RBL Lender and each DIP Lender
under the DIP Credit Agreement with Refinanced Loans that have not been paid in
cash on the Plan Effective Date (each, an “Electing Lender”) shall become
revolving lenders (collectively, the “RBL Lenders”) on the Plan Effective Date
by agreeing to provide a lending commitment in respect of a senior secured first
lien reserve-based revolving credit facility (each such RBL Lender’s commitment,
as reduced from time to time in accordance with the terms hereof, its “Revolving
Commitment” and such revolving facility, the “RBL Exit Facility” and the loans
under such RBL Exit Facility, the “Revolving Loans”) in an amount equal to such
RBL Lender’s pro rata share of an aggregate $500 million (the aggregate
revolving commitments for all RBL Lenders, as reduced from time to time in
accordance with the terms hereof, the “Maximum Revolving Commitments”), $455
million of which shall be deemed funded (the “Funded Revolving Loans”) on the
Plan Effective Date and the balance of $45 million (the “Initial Availability
Amount”) shall be immediately available in accordance with the terms hereof
(subject to adjustment and approval as provided in Annex A hereto), after giving
effect to the transactions contemplated hereby and under the Plan.  Each RBL
Lender shall also receive, as part of the treatment of its Obligations under the
Plan, a pro rata share of cash in an amount equal to the Initial Availability
Amount on the Plan Effective Date (in addition to, and not in lieu of, any other
cash payments provided in the Plan).  In accordance with the Plan, the RBL Exit
Facility shall be secured pari passu with, but senior in payment priority to the
New Term Loan Facility (as defined below).

The Maximum Revolving Commitments, the Borrowing Base (as defined below) and the
Funded Revolving Loans (but not the Initial Availability Amount) are subject to
proportionate reduction in the event less than 100% of the Existing Lenders
elect to become RBL Lenders.  For the avoidance of doubt, the aggregate
outstanding Maximum Revolving Commitments and New Term Loans shall not exceed
$500 million on the Plan Effective Date.

(b)  New Term Loan Facility.  A first lien term loan facility in an aggregate
principal amount equal to $[__] million (the “New Term Loan Facility,” the loans
thereunder, the “New Term Loans” and the lenders thereunder, the “New Term Loan
Lenders”).  Pursuant to the Plan, each Existing Lender that is a holder of
Existing Loans and declines to participate in the RBL Exit Facility
(collectively, the “Non-Electing Lenders”), as part of the treatment of their
obligations under the Plan, shall become New Term Loan Lenders on the Plan
Effective Date in respect of New Term Loans deemed made by such New Term Loan
Lenders on the Plan Effective Date as “take-back” paper (or similar) in an
amount equal to such New Term Loan Lender’s pro rata share of the amount of the
New Term Loan Facility.  The New Term Loan Facility shall be secured pari
passu with the other Obligations on a “last-out” basis with respect to the
payment priority.

Without limiting the payment priority set forth in the mandatory and optional
prepayment provisions below, all proceeds of Collateral (as defined below) after
the occurrence and during the continuance of an Event of Default shall be
allocated first, pro rata to pay (i) all amounts outstanding under the RBL Exit
Facility (including, without limitation, interest, principal, fees and
cash-collateralization of Letters of Credit (as defined below)), (ii) hedging
agreements constituting Obligations and (iii) cash management obligations
constituting Obligations and second, to pay amounts outstanding under the New
Term Loan Facility.

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Letter of Credit
Sublimit:
The RBL Exit Facility will include a sub-facility for standby letters of credit
(each, a “Letter of Credit”) in the aggregate principal amount not to exceed
$5 million.
   
Amortization:
There shall be no amortization of the Revolving Loans or the New Term Loans.
   
Borrowing Base and
Borrowing Base
Redetermination:
Availability under the RBL Exit Facility shall be subject to a borrowing base
(the “Borrowing Base”), which shall be initially determined and periodically
redetermined in a customary manner (and, for the avoidance of doubt, giving
effect to hedging agreements constituting Obligations) (each such
redetermination, a “Borrowing Base Redetermination”) and as set forth below.

Initial Borrowing Base.  On the Plan Effective Date, the initial Borrowing Base
shall be $500 million.  Thereafter, until the First Scheduled Redetermination
Date (as defined below), the Borrowing Base shall be the amount during the
corresponding period as set forth in the table below:

   
Date
Borrowing Base
   
February 1, 2020 – February 29, 2020
$494 million
   
March 1, 2020 – March 31, 2020
$488 million
   
April 1, 2020 – April 30, 2020
$482 million
   
May 1, 2020 – May 31, 2020
$476 million
   
June 1, 2020
$470 million (subject to redetermination)

 
Scheduled Borrowing Base Redeterminations.  The first Scheduled Borrowing Base
Redetermination shall occur on June 1, 2020 (the “First Scheduled
Redetermination Date”) and on each April 1 and October 1 thereafter, commencing
on October 1, 2020.
     
Interim Borrowing Base Redeterminations.  Interim Borrowing Base
Redeterminations may be implemented after the First Scheduled Redetermination
Date (a) upon the request of the Administrative Agent or the Majority Lenders
(each, a “Lender Redetermination”), or (b) upon the request of the Borrower
(each, a “Borrower Redetermination” and, together with Lender Redeterminations,
collectively the “Interim Redeterminations”); provided that there shall be no
more than one Lender Redetermination and one Borrower Redetermination between
each Scheduled Borrowing Base Redeterminations.
     
Borrowing Base Deficiency.  If, at any time, the sum of total outstanding
balance of the Revolving Loans and other revolving credit exposure plus the New
Term Loans is greater than the then-effective Borrowing Base (such excess, a
“Borrowing Base Deficiency”) as a result of a Borrowing Base Redetermination, an
Interim Redetermination, or the adjustment in the Borrowing Base described
below, the Borrower shall, within 120 days after the later of (i) notice of such
Borrowing Base Deficiency or (ii) the date of such adjustment, repay the
Borrowing Base Deficiency in a single lump sum for application to the Revolving
Loans and other revolving credit exposure until there are no outstanding
Revolving Loans and Revolving Commitments, and then to the New Term Loans;
provided that such payment shall be made before the Revolving Loan Maturity Date
or New Term Loan Maturity Date, as applicable, together with the interest
accrued thereunder.

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Borrowing Base
Reductions:
Sale or Disposition Reduction.  Any sale or disposition of any Oil and Gas
Properties (as defined in the Existing Credit Agreement), including the net
effect of early terminations of hedges, the Borrowing Base value (as determined
in good faith by the Administrative Agent) of which exceeds five percent (5%) of
the then applicable Borrowing Base, shall result in a redetermination of the
Borrowing Base on a pro forma basis after giving effect to such sale,
disposition or early termination.  Any such redetermination shall not
constitute, and shall be in addition to, any Interim Redetermination which the
Majority Lenders may otherwise elect.
     
Issuance or Refinancing Reduction.  The Borrowing Base will also be
automatically reduced by 25% (or a lower percentage approved by the Required
Lenders) of each of (i) the stated principal amount of any permitted senior note
issuance (without regard to any OID) or (ii) the excess of the stated principal
amount from the original principal amount of any permitted refinancing debt.
   
Closing Date:
The Plan Effective Date (the “Closing Date”).  For the avoidance of doubt,
conditions to effectiveness of the RBL Exit Facility shall include the
following: (x) the conditions under the headings “Conditions to Closing” and
“Conditions to All Extensions of Credit” below; and (y) entry of an order by the
Bankruptcy Court confirming the Plan, which shall be in form and substance
reasonably satisfactory to the Administrative Agent (the “Confirmation Order”).

   
Use of Proceeds:
The proceeds of the Revolving Loans and other extensions of credit made from
time to time under the RBL Exit Facility shall be used to refinance, in part,
the Existing Loans and to fund ongoing working capital requirements and other
general corporate purposes of the Borrower and the other Loan Parties.  The
proceeds of the New Term Loans shall be used to refinance, in part, the Existing
Loans.
   
Definitive
Documentation;
Documentation
Principles:
The Facilities will be documented on loan documents that are based on the
Existing Credit Agreement; provided that (i) such documentation shall contain
the terms and conditions (a) set forth in this Term Sheet and (b) as may be
mutually agreed by the Borrower and the Administrative Agent, and (ii) in the
event that the New Term Loan Facility shall be documented in a separate credit
facility, (a) such documentation shall be on terms no more restrictive than
those of the RBL Exit Facility and (b) subject to a collateral agency agreement
whereby the Collateral Agent is appointed to act as secured party and hold
collateral for the benefit of all Facilities (and the principles described
therein, the “Documentation Principles”).

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Collateral:
The Obligations will be secured by valid and perfected first-priority security
interests in and liens on all of the following (collectively, the “Collateral”):
     
(a) 100% of the equity interests of all present and future Restricted
Subsidiaries of any Loan Party (other than equity interests of non-wholly owned
Restricted Subsidiaries to the extent a lien in favor of the Collateral Agent
cannot be granted without the consent of one or more third parties (other than
the Parent, its Restricted Subsidiaries and their respective affiliates));
     
(b) substantially all of the tangible and intangible personal property and
assets of the Loan Parties (including, without limitation, all equipment,
inventory and other goods, accounts, licenses, contracts, intercompany loans,
intellectual property and other general intangibles, deposit accounts,
securities accounts and other investment property and cash); and
     
(c) Oil and Gas Properties representing at least 95% of the total value of all
Oil and Gas Properties of the Loan Parties included in the most recent reserve
report, in each case, subject to customary exceptions to be agreed.
     
All such security interests in personal property and all liens on Oil and Gas
Properties and other real property will be created pursuant to the Definitive
Documentation and otherwise subject to the Documentation Principles.
   
Interest Rates:
At the Borrower’s option, the Revolving Loans will bear interest based on the
Base Rate or LIBOR, plus the applicable Revolving Interest Margin (as defined
below).
     
The interest margin for Revolving Loans (the “Revolving Interest Margin”) shall
be based upon utilization of the Borrowing Base (expressed as a percentage of
outstanding loans and Letters of Credit under the RBL Exit Facility divided by
the Borrowing Base) according to the following grid:
     
(a)  in the case of the RBL Exit Facility, based upon utilization of the
Borrowing Base (expressed as a percentage of outstanding Revolving Loans and
Letters of Credit under the RBL Exit Facility divided by the Borrowing Base) an
interest margin according to the following grid:

 
Utilization
Revolving Interest Margin
Commitment
Fee
 
Base Rate
LIBOR
 
≥ 90%
300 bps
400 bps
50.0 bps
 
< 90% but ≥ 75%
275 bps
375 bps
50.0 bps
 
< 75% but ≥ 50%
225 bps
325 bps
50.0 bps
 
< 50% but ≥ 25%
175 bps
275 bps
37.5 bps
 
< 25%
150 bps
250 bps
37.5 bps

 
(b) the New Term Loans will bear interest based on LIBOR, plus 200 bps.

“Base Rate” means the highest of (a) the rate of interest publicly announced by
Wells Fargo as its prime rate in effect at its principal office in New York
City, (b) the NYFRB Rate (defined as the greater of the federal funds effective
rate and the overnight bank funding rate) from time to time (but not less than
zero) plus 0.5% and (c) the one-month LIBO Rate plus 1.00%.

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“LIBOR” means the rate (but not less than zero) at which eurodollar deposits in
the London interbank market for one, two, three or six months (or, with the
consent of each RBL Lender, twelve months), as selected by the Borrower, are
quoted on the applicable Reuters screen.  The Definitive Documentation will
contain customary language that provides for the replacement of LIBOR with an
alternate rate of interest.
   
Default Rate:
At any time an event of default has occurred and is continuing (i) all
outstanding Base Rate Loans and LIBOR Loans under the Facilities shall bear
interest at 2.00% per annum above the rate applicable to Base Rate Loans or
LIBOR Loans, as applicable, and (ii) all other outstanding, overdue amounts
under the Facilities shall bear interest at 2.00% per annum above the rate
applicable to Base Rate Loans.
   
Fees:
(a)   Commitment Fee. The Borrower shall pay to the Administrative Agent, for
the account of the RBL Lenders, a commitment fee (the “Commitment Fee”) in
an amount per annum equal to the rate set forth in the preceding grid on the
average daily unused portion of the Maximum Revolving Commitments, payable
quarterly in arrears.

All accrued Commitment Fees will be fully earned and due and
payable quarterly in arrears for the account of the RBL Lenders (other than any
defaulting lenders) under the RBL Exit Facility and will accrue from and after
the Closing Date.

(b)   Upfront Fees. The Borrower shall pay to Wells Fargo, for the pro rata
account of each of the RBL Lenders as provided herein, upfront fees as follows:
(i) for each RBL Lender that executes the Restructuring Support Agreement prior
to entry of the Final DIP Order (as defined in the DIP Credit Agreement), an
aggregate amount equal to 15 bps of the aggregate amount of the RBL Exit
Facility, which shall be fully earned and will be due and payable in full in
cash on the date of entry of the Final DIP Order, and (ii) an aggregate amount
equal to 40 bps of the aggregate amount of the RBL Exit Facility, which shall be
fully earned and will be due and payable in full in cash to each RBL Lender
under the RBL Exit Facility on the Closing Date (the “Upfront Fees”).

(c)   Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of the RBL Lenders a Letter of Credit fee (due quarterly) equal
to the product of the LIBOR Margin and the undrawn amount of each Letter of
Credit.  In addition, Borrower shall pay to the Administrative Agent for the
account of any Issuing Bank a fronting fee equal to the product of 0.50% and the
undrawn amount of each Letter of Credit; provided that each such fee shall be no
less than $500.

(d)   Other Fees. Such other fees set forth in any fee letter (or similar)
between the Administrative Agent, Collateral Agent and/or Lead Arranger and the
Borrower.

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Maturity Date:
(a)   RBL Exit Facility. The final maturity of the RBL Exit Facility will occur
on the two year anniversary of the Closing Date (the “RBL Exit Maturity Date”).

(b)   New Term Loan Facility. The final maturity of the New Term Loan Facility
will occur on the 42 month anniversary of the Closing Date (the “New Term Loan
Maturity Date”).
   
Mandatory
Prepayments (RBL
Exit Facility):
(a)   Borrowing Base Deficiency. The Borrower shall prepay any Borrowing Base
Deficiency as provided in the paragraph titled “Borrowing Base Deficiency” in
the “Borrowing Base and Borrowing Base Redetermination” section.

(b)   Excess Revolving Credit Exposure.  If, at any time, the revolving credit
exposure exceeds the total Revolving Commitments as a result of any reduction or
termination of Revolving Commitments, the Borrower shall make a prepayment in an
amount no less than such excess.

(c)   Adjustment of Borrowing Base.  If there is any adjustment to the Borrowing
Base that results in the revolving credit exposure exceeding the total Revolving
Commitments, including in connection with any permitted note issuance or
permitted refinancing debt (see Borrowing Base Reductions – Issuance or
Refinancing Reduction) the Borrower shall make a prepayment in an amount no less
than such excess.

(d)   Asset Sales or Disposition.  If any Loan Party sells or disposes of any
Oil and Gas Property (other than in the ordinary course of business) while a
Borrowing Base Deficiency or an Event of Default exists, the Borrower or such
other Loan Party shall promptly make a prepayment in an amount equal to the (i)
in the case of a Borrowing Base Deficiency, the amount of net proceeds from such
sale so that no Borrowing Base Deficiency exists, or (ii) if there is an Event
of Default, all net proceeds of such sale, in each case no later than the next
succeeding Business Day after the net cash proceeds therefor are received by
such Loan Party.

(e)   Consolidated Cash Balance.  If, as of the end of any Business Day, the
Consolidated Cash Balance of the Loan Parties exceeds $20 million, the Loan
Parties shall, within one Business Day thereof, pay such amounts to be applied
in accordance with the terms hereof.

All mandatory prepayments will be applied to prepay outstanding Revolving Loans
(without a permanent reduction to the Maximum Revolving Commitments), including
any accrued and unpaid interest of such Revolving Loans being prepaid, and, in
the case of clauses (a) through (d) above, to cash-collateralize Letters of
Credit outstanding under the RBL Exit Facility.
   
Mandatory
Prepayments (New
Term Loan Facility):
None, while Revolving Commitments remain outstanding.

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Optional
Prepayments and
Commitment
Reductions (RBL
Exit Facility):
Revolving Loans under the RBL Exit Facility may be prepaid at any time, in whole
or in part, at the option of the Borrower, upon notice to the Administrative
Agent and in minimum principal amounts and in multiples to be agreed upon with
the Administrative Agent, without premium or penalty (except LIBOR breakage
costs).  Any optional prepayment of the RBL Exit Facility will be applied to
prepay outstanding Revolving Loans and cash-collateralize Letters of Credit
outstanding under the RBL Exit Facility (except as otherwise set forth herein,
without a permanent reduction in Maximum Revolving Commitments unless so elected
by the Loan Parties).

The unutilized portion of the Maximum Revolving Commitments may be terminated,
in whole or in part, at the option of the Borrower, upon notice to the
Administrative Agent and in minimum principal amounts and in multiples to be
agreed upon with the Administrative Agent.
   
Optional
Prepayments (New
Term Loan Facility):
The New Term Loans may be prepaid, in whole or in part, at the option of the
Borrower, upon prior notice and in minimum principal amounts and in multiples to
be agreed upon, without premium or penalty (except LIBOR breakage costs), to the
extent such prepayments are permitted by the Definitive
Documentation; provided that the RBL Exit Facility shall have been indefeasibly
repaid in full and all Revolving Commitments thereunder have terminated prior to
such prepayment.
   
Conditions to
Closing:
See Annex A.
   
Conditions to All
Extensions of Credit:
Each extension of credit under the Facilities will be subject to satisfaction of
the following: (a) all of the representations, warranties, and covenants in the
Definitive Documentation shall be true and correct in all material respects (or
if qualified by materiality or material adverse effect, in all respects) as of
the date of such extension of credit, or if such representation speaks as of an
earlier date, as of such earlier date; (b) no default or event of default under
the Facilities shall have occurred and be continuing or would result from such
extension of credit; (c) delivery of a customary borrowing notice; and (d) the
Loan Parties shall be in compliance with the Consolidated Cash Balance
limitation, both before and after giving effect to such extension of credit.
   
Cash Management:
The Loan Parties shall maintain their cash management system as it existed prior
to the Closing Date, with such changes as may be mutually agreed by the
Administrative Agent and the Borrower.  Each Loan Party will make all such Loan
Party’s deposit accounts subject to an account control agreement other than
Excluded Accounts (as defined below) (such deposit accounts, collectively,
“Controlled Accounts”).  Each Controlled Account shall be subject to a control
agreement, in form and substance satisfactory to the Administrative Agent, which
agreement shall transfer control of such account to the Collateral Agent upon
delivery of notice by the Collateral Agent to the financial institution
maintaining such account.

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As used herein, “Excluded Accounts” means with respect to the Borrower or any
other Loan Party, each deposit account that is not required to be subject to an
account control agreement, to the extent such deposit account is solely (a) a
payroll account containing a balance not exceeding the amount of payroll
expenses for one payroll period at any time, (b) a tax withholding account,
(c) zero balance accounts (other than lockbox accounts, to the extent account
control agreements are permitted by the applicable depository bank), (d) de
minimis accounts containing a balance not exceeding $50,000 per account at any
time and not to exceed $250,000 for all such accounts in the aggregate, or (e) a
customary fiduciary or trust accounts holding royalty payment and working
interest payments solely to the extent constituting property of a third party.
   
Representations and
Warranties:
Subject to the Documentation Principles, the Definitive Documentation will
contain representations and warranties subject to exceptions are customary for
transactions of this type as mutually agreed (which will be applicable to the
Loan Parties).
   
Affirmative
Covenants:
Subject to the Documentation Principles, the Definitive Documentation will
contain affirmative covenants subject to limitations and modifications as are
customary for transactions of this type as mutually agreed (which will be
applicable to the Loan Parties).

On or before March 1 and September 1 of each year, commencing with the first
such date to occur after the Closing Date, the Borrower shall furnish to the
Administrative Agent and the Lenders a reserve report evaluating the proved Oil
and Gas Properties of the Loan Parties as of the immediately preceding January 1
and July 1. The reserve report as of January 1 of each year shall be prepared by
one or more approved petroleum engineers. The July 1 reserve report of each year
shall be prepared by or under the supervision of the “Manager of Acquisitions
and Planning” (or similarly titled position) of the Borrower and such reserve
report shall be accompanied by customary certifications of such chief engineer
and a responsible officer of the Borrower.

Within fifteen (15) Business Days of the Closing Date (subject to a five (5)
Business Day extension by the Administrative Agent in its sole discretion), the
Loan Parties shall have maintained or entered into hedging transactions with
respect to at least seventy-five percent (75%) of the Loan Parties’ PDP reserves
through September 30, 2022, in form and substance reasonably acceptable to the
Administrative Agent.  For the avoidance of doubt, hedging transactions entered
into prior to the Closing Date may be maintained in satisfaction of this
covenant, subject to consent of the applicable hedge counterparty.
   
Negative Covenants:
Subject to the Documentation Principles, the Definitive Documentation will
contain negative covenants subject to exceptions, limitations, baskets and
modifications as are reasonably acceptable to the Administrative Agent,
including the following:
     
(a) limitation on liens, including exceptions for (i) capital lease or purchase
money indebtedness to the extent permitted under clause (e)(i), (ii) junior
liens to the extent permitted under clause (e)(iv), and (iii) other liens and
(iii) other liens securing indebtedness not to exceed the greater of $10 million
or 1.00% of consolidated total assets (“CTA”);

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(b) limitation on disposition of assets, other than (i) customary ordinary
course dispositions for the energy industry, (ii) any asset sale consisting of
Oil and Gas Properties (including the net unwinding of hedging transactions),
subject to the Borrowing Base redetermination right described in the paragraph
titled Borrowing Base Reductions if the Borrowing Base value of such Oil and Gas
Properties (as determined in good faith by the Administrative Agent) exceeds 5%
of the Borrowing Base, and (iii) other asset sales up to $10 million; provided
that any asset sale permitted hereunder shall be made for (1) fair value and
(2) at least 75% cash consideration;

(c) limitation on consolidations, mergers dissolutions and divisions;

(d) subject to customary permitted investments, limitation on loans, investments
and acquisitions of property, other than (i) investments in partnerships up to
$5 million, (ii) investments in Unrestricted Subsidiaries up to $5 million,
subject to minimum liquidity (unrestricted cash and availability under the RBL
Exit Facility) of at least 15% of the Borrowing Base, (iii) other investments up
to $10 million, and (iv) other investments subject to pro forma liquidity
(unrestricted cash and availability under the RBL Exit Facility) of at least 15%
of the Borrowing Base and pro-forma Total Leverage Ratio does not exceed 2.75 to
1.00, subject to cash netting up to $20 million;

(e) limitations on indebtedness, including exceptions for (i) capital leases or
purchase money indebtedness up to the greater of $30 million and 1.00% of CTA,
(ii) unsecured indebtedness up to $400 million, subject to a 25%
dollar-for-dollar reduction in the Borrowing Base and pro forma compliance with
Financial Covenants, (iii) acquisition indebtedness up to the greater of $30
million and 1.00% of CTA, (iv) subordinated secured or junior lien indebtedness
up to $50 million, subject to a 25% dollar-for-dollar reduction in the Borrowing
Base and pro forma compliance with Financial Covenants (the indebtedness
described in this clause (iv) and clause (ii) above, the “Specified Additional
Debt”), (v) earn-out indebtedness up to $15 million, and (vi) any other
indebtedness up to the greater of $30 million and 1.00% of CTA;

(f) limitations on transactions with affiliates;

(g) limitations on margin stock;

(h) limitations on contingent obligations;

(i) limitations on restricted debt payments (including prohibition against any
redemption of Specified Additional Debt during the term of the RBL Exit
Facility);

(j) limitations on restricted payments (including any dividends during the term
of the RBL Exit Facility) other than (i) permitted tax distributions,
(ii) restricted payments under management or employee stock plans not to exceed
$5 million in any fiscal year and (iii) for general corporate purposes not to
exceed $1 million in any fiscal year;

(k) limitations on derivative contracts (as set forth in greater detail below);

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(l) limitations on change in business nature, amendments to organization
documents, documents governing material indebtedness and corporate structure;

(m) limitations on accounting changes;

(n) ERISA compliance; and

(o) limitations on restrictions affecting the ability of Restricted Subsidiaries
to guarantee the loans, grant liens securing the loans or make distributions to
the Borrower.
 

Hedging
Requirements:
All hedging agreements shall be entered into, on a secured basis, with a Lender
(or an affiliate thereof), as the hedging counterparty, or on an unsecured basis
with counterparties reasonably acceptable to the Administrative
Agent; provided that no Borrowing Base value shall be given to any such
unsecured hedging agreements.  The Loan Parties shall not enter into any hedging
transaction which (i) extends more than twelve (12) months after the RBL Exit
Maturity Date, and (ii) together with all other hedging transactions, exceeds
ninety-five percent (95%) of the Loan Parties’ PDP reserves, as set forth in the
most recently delivered reserve report.  Other hedging requirements to be
mutually agreed.

Financial Covenants
(RBL Exit Facility):
The RBL Exit Facility will contain the following financial covenants, calculated
as of each fiscal quarter :

First Lien Leverage Ratio: First Lien Debt to EBITDA may not exceed 3.0 to 1.0
as of the last day of any fiscal quarter, subject to cash netting up to $20
million. EBITDA shall be calculated at the end of each fiscal quarter using the
results of the twelve month period ending with that fiscal quarter end.

Total Leverage Ratio: Total Debt to EBITDA for the four fiscal quarters then
ending, to be greater than 3.75 to 1.00, subject to cash netting up to $20
million.

Current Ratio: Consolidated Current Assets divided by Consolidated Current
Liabilities may not be less than 1.0 to 1.0 on a fiscal quarter basis.

Maximum Capital Expenditures:  If (i) the Total Leverage Ratio (subject to cash
netting up to $20 million) for the four fiscal quarters most recently ended is
greater than 2.0 to 1.0 and (ii) liquidity (the sum of unrestricted cash and
availability under the RBL Exit Facility) is less than $50 million, then the
Borrower will not initiate any drilling or completion activity of any wells or
similar material Capital Expenditures during such fiscal quarter if the sum of
(x) the aggregate amount of Capital Expenditures for the three fiscal quarters
most recently ended plus (y) Capital Expenditures to be made during such fiscal
quarter would exceed $175 million.

Any reference to EBITDA in this Term Sheet shall include adjustments for among
other things, extraordinary and non-recurring items including any items related
to the restructuring (i.e., retention payments, professional fees, etc.).

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Financial Covenants
(New Term Loan
Facility):
The New Term Loan Facility will contain the following financial covenant,
calculated on a quarterly basis:

Consolidated Total Leverage Ratio: Total Debt to EBITDA for the four fiscal
quarters then ending, to be greater than 4.25 to 1.00, subject to cash netting
up to $20 million.
   
Equity Cure Rights
In the event the Borrower fails to comply with the requirements of the Financial
Covenants, Parent will have the right to issue common equity securities for cash
or otherwise receive cash contributions to the capital of Parent  (in each case,
on terms reasonably satisfactory to the Administrative Agent) (any such equity
issuance or contribution, a “Specified Equity Contribution”), and contribute any
such cash to the capital of the Borrower, and apply the amount of the proceeds
thereof to increase on a dollar-for-dollar basis EBITDA (to be defined in a
manner to be mutually agreed) solely for purposes of determining compliance with
Financial Covenants (including, for the avoidance of doubt, determining if
Maximum Capital Expenditures is applicable) with respect to the then ended
fiscal quarter and any subsequent period that includes such fiscal quarter (the
“Cure Right”); provided that (i) the Cure Right will not be exercised more than
five (5) times during the term of the RBL Exit Facility, and (ii) the Cure Right
many not be exercised more than two (2) times in any four (4) consecutive fiscal
quarters.

Any amounts used to exercise a Cure Right will be disregarded in calculating
EBITDA for all other purposes, including calculation of basket levels and other
items governed by reference to EBITDA and will not result in any pro forma
indebtedness reduction (other than the indebtedness under the RBL Exit Facility
that is actually prepaid with such Cure Amount) or an increase in cash.
   
Events of Default:
Subject to the Documentation Principles, substantially similar to the events of
default in the Existing Credit Agreement, except as mutually agreed with the
Administrative Agent and as otherwise set forth in this Term Sheet, each subject
to limitations and modifications as are customary for transactions of this type
as mutually agreed (which will be applicable to the Loan Parties).
   
Amendments and
Waivers:
Amendments and waivers of the Definitive Documentation will require the approval
of the Lenders holding more than 50% of the applicable Facility, except that the
consent of (a) RBL Lenders holding more than 66-2/3% of the Aggregate
Commitments of the RBL Lenders shall be required to decrease or maintain the
Borrowing Base (and such other matters consistent with the Existing Credit
Agreement), (b) each Lender under the applicable Facility shall be required in
connection with (i) changing any provision specifying the number or percentage
of Lenders required to amend or waive any Definitive Documentation in respect of
the matters described in this clause (b) and clause (c) below and (ii) releasing
any guarantor (except in connection with a permitted transaction) or all or
substantially all of the Collateral, and (c) each affected Lender shall be
required in connection with (i) any increase or extension of its commitment,
(ii) the postponement of any scheduled date for payment of principal, interest,
fees or other amount payable to such Lender, and (iii) any reduction in the
principal amount of any loan, interest rate, fee or other amount payable to such
Lender.

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Assignments:
Customary for facilities of this type.

Expenses and
Indemnification:
Subject to the Documentation Principles, customary for facilities of this type.

Governing Law and
Forum:
Texas

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ANNEX A
Conditions to Closing

In addition to the conditions set forth in the section titled “Conditions to All
Extensions of Credit”, the closing of the Facilities will be subject to
satisfaction of typical and customary conditions precedent, consistent with the
Existing Credit Agreement and including, without limitation, the following:

1.          the Plan, the Confirmation Order, and any related order of the
Bankruptcy Court (and any amendments or modifications to any of the foregoing)
shall be consistent with the Restructuring Support Agreement, the Restructuring
Term Sheet and this Term Sheet and be in form and substance reasonably
satisfactory to the Administrative Agent, including approval of the Facilities
and releases and exculpations;

2.         the Confirmation Order shall be Final and in full force and effect
(as used herein, “Final” shall mean an order or judgement of the Bankruptcy
Court, or other court of competent jurisdiction with respect to the subject
matter, which has not been reversed, stayed, modified or amended, and as to
which (i) the time to appeal, petition for certiorari, or move for reargument or
rehearing (other than a request for a rehearing under Federal Rule of Civil
Procedure 60(b), which shall not be considered for purposes of this definition)
has expired and no appeal or petition for certiorari has been timely taken, or
(ii) any timely appeal that has been taken or any petition for certiorari that
has been or may be timely filed has been resolved by the highest court to which
the order or judgment was appealed or from which certiorari was sought or has
otherwise been dismissed with prejudice;

3.          any Order approving the Restructuring Support Agreement and
Restructuring Term Sheet shall not have been stayed, reversed, vacated or
otherwise modified in a manner materially adverse to interests of the
Administrative Agent and the RBL Lenders or otherwise contrary to this Term
Sheet or the Definitive Documentation and all conditions to effectiveness of the
Definitive Documentation shall have occurred or been waived by the respective
parties thereto having the authority to waive such conditions;

4.         the Plan Effective Date shall have occurred, all conditions precedent
to the confirmation and effectiveness of the Plan, as set forth in the Plan
(other than the effectiveness of the Facilities, which shall occur
contemporaneously with the Plan Effective Date), shall have been fulfilled or
waived as permitted therein, including, without limitation, all transactions
contemplated in the Plan or in the Confirmation Order to occur on the Plan
Effective Date shall have been substantially consummated in accordance with the
terms thereof and in compliance with applicable law, Bankruptcy Court and
regulatory approvals;

5.          the Administrative Agent and the Collateral Agent shall have
received satisfactory evidence as to the payment in full on the Plan Effective
Date of all material administrative expense claims, priority claims and other
claims required to be paid upon the Plan Effective Date;

6.         there shall have been no material adverse change in, or a material
adverse effect upon, the operations, business, properties or financial condition
of the Loan Parties taken as a whole (other than as a result of the events
leading up to, directly arising from or direct effects of the commencement or
continuance of the bankruptcy proceedings) from the date of the execution and
delivery by the DIP Lenders of the DIP Credit Agreement through the Closing
Date;

7.         (a) execution and delivery of the Definitive Documentation, and (b)
the Administrative Agent, the Collateral Agent, the New Term Loan Lenders, and
the RBL Lenders will have received (i) customary legal opinions as to the Loan
Parties and the Definitive Documentation (including, without limitation,
customary opinions of local counsel), (ii) customary evidence of authority and
incumbency, customary officers’ certificates, good standing certificates, in
each case with respect to the Borrower and the Guarantors, and a solvency
certificate for the Borrower and the other Loan Parties on a consolidated basis
after giving effect to the transactions contemplated by this Term Sheet and the
Plan on the Closing Date, and (iii) flood hazard diligence and documentation as
required by the federal Flood Disaster Protection Act of 1973 or otherwise in a
manner satisfactory to the Lenders;

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8.          all documents and filings required to perfect or evidence the
Collateral Agent’s first priority security interest in and liens on the
Collateral (including, without limitation, all certificates evidencing pledged
capital stock or membership or partnership interests, as applicable, with
accompanying executed stock powers, all UCC financing statements to be filed in
the applicable government UCC filing offices, all deposit account and securities
account control agreements and all mortgages, deeds of trust and real property
filings) shall have been executed and/or delivered and, to the extent
applicable, be in proper form for filing;

9.          all New Money Loans (as defined in the DIP Credit Agreement), shall
have been indefeasible paid in full in cash, and the Commitments shall have been
terminated thereunder;

10.        the Existing Lenders, including, without limitation, the Existing
Loans, shall receive the treatment outlined in this Term Sheet, the DIP Credit
Agreement, the Restructuring Support Agreement, the Restructuring Term Sheet,
and the Plan, and the DIP Lenders shall have received the treatment under the
Plan and the commitments thereunder shall have been terminated, and all security
interests related thereto shall have either (a) been terminated or (b) been
amended and restated to secure the Obligations under the Facilities, in either
case concurrently with the Closing Date;

11.        the class of Existing Lenders entitled to vote on the Plan shall have
accepted the Plan; and the DIP Lenders holding not less than 66 2/3% of the
outstanding DIP Loans under the DIP Credit Agreement have elected to become
Electing Lenders;

12.        the Administrative Agent and the Collateral Agent shall have received
an ACORD evidence of insurance certificate evidencing customary coverage of the
Loan Parties and naming the Collateral Agent in such capacity for the Lenders as
additional insured on all liability policies and loss payee on all property
insurance policies;

13.        all required governmental and third party consents and approvals
shall have been obtained and shall be in full force and effect;

14.       all fees and, to the extent invoiced at least one (1) business day
prior to the Closing Date, out-of-pocket expenses, required to be paid on the
Closing Date under the Plan in connection with the Facilities, including the
reasonable fees and expenses of one primary counsel, one local counsel in each
appropriate jurisdiction, and financial advisors to the Administrative Agent,
and any audit and appraisal fees and expenses, shall have been paid in full in
cash;

15.       Debtors shall have paid to the DIP Lenders holding DIP Loans all other
payments as provided for in any final orders entered in connection with the DIP
Credit Agreement and/or use of cash collateral, and the Plan, which amounts
shall be applied to the repayment of the DIP Obligations in accordance with the
Plan;

16.        the Administrative Agent and the Collateral Agent shall be in receipt
of one or more collateral agency agreements, which shall, subject to the
Documentation Principles, contain terms and provisions satisfactory to the
Administrative Agent, the Collateral Agent and the Borrower in their discretion,
duly executed and delivered by the Loan Parties, the Collateral Agent and the
Administrative Agent;

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17.        the Administrative Agent shall have received an updated business plan
for the Borrower and the other Loan Parties after giving effect to the
transactions contemplated hereby and under the Plan on the Closing Date;

18.        the Borrower shall have received a cash equity contribution of no
less than $200 million;

19.        if the Borrower shall have received a senior unsecured loan (the “New
Exit Loan”) as contemplated in the Restructuring Support Agreement, then such
New Exit Loan shall (i) have an aggregate principal amount not to exceed $50
million, (ii) have a maturity date no earlier than twenty-four (24) months after
the RBL Exit Maturity Date, (iii) not permit any cash payments (whether
principal (amortization), cash interest, fees or otherwise), until the RBL Exit
Facility has been paid in full in cash and the Revolving Commitments thereunder
shall have terminated, (iv) otherwise be reasonably acceptable to the Required
RBL Lenders, and (v) not be included in the calculation of the “Senior Debt Cap”
(as such term is defined in the Restructuring Term Sheet);

20.        the Total Leverage Ratio as of the Closing Date shall not be greater
than 2.75 to 1.00;

21.        the Existing Second Lien Facility and the Existing Senior Notes shall
have been fully converted and/or exchanged into equity interests and shall have
been released, discharged and/or terminated;

22.        the Borrower shall have conducted a refinancing process for the
obligations under the Existing Credit Agreement and all proposals received shall
have been delivered to the financial advisor of the Administrative Agent (on an
advisor-only basis) as evidence of such process; and

23.       the Initial Availability Amount shall not be less than $45 million;
provided that upon the approval of the Required RBL Lenders (RBL Lenders holding
66 2/3% or more of the Maximum Revolving Commitments), the Initial Availability
Amount may be reduced to no less than $35 million.

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333

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Exhibit E

Sponsor Backstop Commitment Agreement

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Exhibit F

Noteholder Backstop Parties

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Exhibit G

Noteholder Backstop Commitment Agreement

336

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Exhibit H

Post-Effective Date Governance Terms

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THIS TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION
OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE
BANKRUPTCY CODE.  ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE
SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE.

GOVERNANCE TERM SHEET
INTRODUCTION

This term sheet (this “Term Sheet”) describes the principal terms and conditions
relating to the post-Effective Date governance of the Reorganized Legacy
Reserves (the “Company”) following the completion of the Restructuring which
will be memorialized in a stockholders agreement (the “SHA”) entered into by the
post-Effective Date holders of New Common Stock and other equity interest in the
Company (such equity interests, collectively, the “Company Stock” and each
holder thereof, a “Stockholder”) (and any persons or entities who become
Stockholders at any time following the Effective Date shall be required to sign
a joinder to the SHA concurrently with their acquisition of Company Stock). 
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in that certain Restructuring Term Sheet, by and among [ ˜ ],
dated as of June [ ˜ ], 2019.

PRINCIPAL GOVERNANCE TERMS AND CONDITIONS
Governance;
Board of Directors
The board of directors of the Company (the “Board”) shall have full power to
manage and control the business and affairs of the Company and its
subsidiaries.  The Board shall initially be comprised of  seven (7) directors,
nominated and appointed as follows:

a.     one (1) director shall be Dan Westcott, CEO of Legacy Reserves;

b.     one (1) director shall be Kyle Hammond, President and COO of Legacy
Reserves,

c.    five (5) directors, which may include independent directors or current
board members of the Company Parties, shall be nominated by the Plan Sponsor or,
to the extent applicable with the prior written consent of the Plan Sponsor, a
Partner (any such directors that are not independent directors, the “Sponsor
Directors”, and any such directors that are independent directors, the
“Independent Directors”, and such Sponsor Directors and Independent Directors,
collectively, the “Sponsor Nominees”); provided that, in the event that the
Noteholder Backstop Parties acquire and continue to hold, in the aggregate, more
than seven percent (7%) of the New Common Stock (on a fully-diluted basis)
issued and outstanding as of the Effective Date, the Noteholder Backstop Parties
shall be entitled to nominate one (1) of the five (5) directors who are the
subject of this clause (c); provided, further, that in the event that (i) the
Plan Sponsor owns fifty percent (50%) or less, but ten percent (10%) or more, of
the New Common Stock that the Plan Sponsor owned on the Effective Date, the
number of Sponsor Nominees shall be adjusted so that they constitute a
proportional number of the directors of the Board (i.e., ranging from fifty
percent (50%) to ten percent (10%) of the total number of directors of the
Board), and (ii) if the Plan Sponsor owns less than ten percent (10%) of the New
Common Stock that the Plan Sponsor owned on the Effective Date, there shall be
no obligation for any Sponsor Nominee to be nominated to the Board; and

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d.    following the Effective Date, for so long as the Plan Sponsor owns more
than fifty percent (50%) of the  New Common Stock that the Plan Sponsor owned on
the Effective Date, additional directors may be nominated from time-to-time by
the Plan Sponsor, provided that such directors are mutually acceptable to the
Plan Sponsor and the Board.
 
Each director shall have one (1) vote.  All actions of the Board must be
approved by a majority of the Board, and no Board nominee may be subject to a
“bad actor” disqualification.
 
Each Stockholder shall take all actions reasonably necessary to cause the
individuals nominated in accordance with the preceding clauses (a) through (d)
to be appointed as directors of the Board, including voting all their shares of
Company Stock in favor of such nominees.
 
Unless otherwise agreed to by the Plan Sponsor, in its sole and absolute
discretion, each board of directors, committee or similar governing body of any
subsidiary of the Company shall be comprised of a majority of Sponsor Directors
(subject to proportionate adjustments consistent with clause (c) above).
 
For the avoidance of doubt, the Board shall be appointed in compliance with
section 1129(a)(5) of the Bankruptcy Code.
 
The Company’s and each of its subsidiaries’ organizational documents will
include a waiver of corporate opportunities or similar doctrines to the maximum
extent permitted under applicable law.

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Special Consent
Rights
Notwithstanding anything contained herein to the contrary, for so long as the
Plan Sponsor owns at least thirty percent (30%) of the New Common Stock that the
Plan Sponsor owned on the Effective Date, consent of the Plan Sponsor, in its
sole and absolute discretion, shall be required for each of the actions set
forth on Schedule I attached hereto to be taken by the Company and/or any of its
subsidiaries.

Additionally, the majority of directors that are not Sponsor Directors shall
have consent rights to transactions between the Company and its subsidiaries, on
the one hand, and affiliates of the Plan Sponsor, on the other hand, which
contemplate the aggregate payment in excess of $[ ˜ ]1 during any fiscal year
that are also not on an arms’-length basis (which consent shall not be
unreasonably withheld, conditioned or delayed).  The foregoing consent rights
contemplated by this paragraph shall no longer apply in the event that the
Company (or a successor entity or affiliate thereof) is listed on an Established
OTC Marketplace or on a national securities exchange.
Transfer
Restrictions
Subject to the provisions concerning a Drag-Along Sale and Tag-Along Sale
discussed below and customary permitted transfers (e.g., transfers to
affiliates), each Stockholder shall be permitted to, directly or indirectly,
sell, assign, transfer, convey, pledge or otherwise dispose of (including,
without limitation, through the use of derivative securities or other
instruments) (collectively, “Transfer”) any of its shares of Company Stock;
provided that, for so long as the Plan Sponsor owns more than fifty percent
(50%) of the New Common Stock that the Plan Sponsor owned on the Effective Date,
the Plan Sponsor shall have a right of first offer with respect to the Transfer
of such shares of Company Stock, which shall be subject to customary terms.

For the avoidance of doubt, and notwithstanding anything contained herein to the
contrary, for so long as the SHA remains in effect, the acquirer or transferee
of Company Stock in connection with any Transfer will be required to become a
party to the SHA in order for such Transfer to become effective.
Drag-Along Sale
After the Effective Date, the holders of the New Common Equity that own not less
than fifty percent (50%) of the then-outstanding shares of Company Stock
(collectively, the “Drag-Along Seller”) may elect to require the Company to
commence a process for, and require the Company and the other Stockholders to
cooperate with and consummate, (i) a sale of at least a majority of all of the
shares of Company Stock then issued and outstanding to, (ii) a merger of the
Company with, or (iii) a sale of all or substantially all  of the Company’s and
its subsidiaries’ assets to, in each case, one or more third party purchasers,
in one or a series of related transactions (any transaction in clauses (i)
through (iii) above, a “Company Sale”, and any Company Sale required by the
Drag-Along Seller, a “Drag-Along Sale”).  Each Stockholder will consent to, vote
in favor of, raise no objection to and waive any appraisal, dissenters’ or other
similar rights in connection with such Drag-Along Sale.  If a Drag-Along Sale
involves a sale or exchange of Company Stock (including pursuant to a merger),
then each holder will transfer its Company Stock on the same terms and
conditions applicable to the Drag-Along Seller subject to customary limitations
with respect to required representations, warranties, indemnification and other
covenants. In connection with a Drag-Along Sale involving a sale of all or
substantially all of the assets of the Company and its subsidiaries, the Company
and its subsidiaries shall enter into such agreements and arrangements with the
applicable third party purchaser of such assets in a form and on terms and
conditions reasonably acceptable to the Drag-Along Seller consistent with the
foregoing.

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1

Note to Draft:  Amount to be mutually agreed in SHA.

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Tag-Along Sale
After the Effective Date, in connection with any transfer (or a series of
related transfers) by one or more holders (collectively, the “Selling Interest
Holders”) of more than ten percent (10%) of the issued and outstanding shares of
Company Stock at the time of such Tag-Along Sale to one or more unaffiliated
third party purchasers (a “Tag-Along Sale”), each other Stockholder
(collectively, the “Tag-Along Interest Holders”) shall have the option to
participate in such Tag-Along Sale up to a corresponding percentage of the
Company Stock owned by such Tag-Along Interest Holder.  Tag-Along Interest
Holders shall receive the same form and amount of consideration per share of
Company Stock of a particular class that is being paid to the Selling Interest
Holders in connection with the Tag-Along Sale with respect to the Selling
Interest Holders’ corresponding shares of Company Stock of such class.  The
terms and conditions applicable to the Tag-Along Interest Holder in connection
with the Tag-Along Sale shall not be less favorable than those terms and
conditions applicable to the Selling Interest Holders subject to customary
limitations with respect to required representations, warranties,
indemnification and other covenants.
Pre-Emptive
Rights
If, after the Effective Date, the Company issues (other than pursuant to a
management incentive plan, its debt financing documentation, the exercise of the
Warrants, in connection with an M&A transaction, equity issuances of less than
2.5% of the pro forma shares of Company Stock and other customary exceptions)
shares of Company Stock (or any options, warrants or other equity securities
that are convertible into, or exchangeable or exercisable for, Company Stock),
then each Stockholder that owns more than five percent (5%) of the issued and
outstanding shares of Company Stock at such time shall be entitled to
participate in such issuance on a pro rata basis at the same purchase price and
subject to the same terms.
Initial Public

Offering;
Registration
Rights
For so long as the Plan Sponsor owns more than forty percent (40%) of the issued
and outstanding New Common Stock, the Plan Sponsor shall have the right to cause
an initial public offering of equity interests of the Company (or a successor
entity or affiliate thereof) (an “IPO”).

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If an IPO is undertaken, each Stockholder shall agree, if requested in
connection with the IPO, to convert or exchange its shares of Company Stock into
other equity securities of the Company or equity securities of any other entity
upon the same terms and conditions as the Plan Sponsor and take such other
actions and enter into and modify such agreements reasonably necessary in order
to facilitate the IPO.

Following an IPO, customary registration rights (including demand and piggyback
registration rights) will be provided to the Plan Sponsor and the Equity
Backstop Parties to the extent they receive any “restricted” or “control”
securities under the terms of the Plan or any agreements entered into in
connection with the Plan pursuant to a registration rights agreement in form and
substance reasonably acceptable to the Plan Sponsor and reasonably acceptable to
the Debtors (the “Registration Rights Agreement”). Each Stockholder that owns
more than ten percent (10%) of the outstanding shares of Company Stock will have
the right to participate on a pro rata basis in any registered public offering
initiated by the Company (or by parties exercising demand registration rights,
including the Plan Sponsor), subject to underwriter cutbacks, lockups and other
customary exceptions or limitations.  In addition, the Company shall use
reasonable best efforts to cause its directors and executive officers to enter
into similar lock-up agreements.

Each Stockholder shall enter into a customary lock-up agreement and coordination
agreement in connection with an IPO.

The Company shall bear the registration expenses of all piggyback and demand
registrations, and shall reimburse the holders of registrable securities
included in each registration (including registrations pursuant to an initial
public offering) for the reasonable fees and disbursements of one legal counsel
for all holders of registrable securities, which counsel shall be selected by
the largest selling holder participating in such issuance, up to an aggregate
amount of $50,000 per issuance.
SEC Filings;
Equity Listing
The Company shall be constituted as a C-corporation after the Effective Date
unless otherwise determined by the Plan Sponsor so long as the Plan Sponsor owns
twenty-five percent (25%) or more of the  New Common Stock that is held by the
Plan Sponsor as of the Effective Date, with prior notice to and in consultation
with the Debtors.
 
The Company and the Debtors shall use commercially reasonable efforts to
effectuate the listing of the Company Stock on an established OTC marketplace
(i.e., OTCQX or OTCQB, and not, for example, on the pink sheets) (an
“Established OTC Marketplace”) or on a national securities exchange within two
hundred and seventy (270) days of the Effective Date (the “Listing Period”);
provided that the Board may extend the Listing Period up to an additional two
hundred and seventy (270) days in the event that the Board (including a majority
of the Independent Directors at such time) determines such extension is in the
best interests of the Company.  Unless otherwise directed by the Plan Sponsor,
the Debtors agree that the Company will remain a public reporting company with
the Securities and Exchange Commission during the pendency of the Chapter 11
Cases and, at the election of the Plan Sponsor so long as the Plan Sponsor owns
more than fifty percent (50%) of the  New Common Stock that is owned by the Plan
Sponsor as of the Effective Date, upon and after the Effective Date; for the
avoidance of doubt, to the extent the Company is not listed on an Established
OTC marketplace or on a national securities exchange, or otherwise is not filing
periodic reports with the SEC, the Company will provide the information rights
set forth in the “Information Rights” section below to its Stockholders.

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At or prior to the listing of the Company Stock on an Established OTC
marketplace or on a national securities exchange, the Company shall use
commercially reasonable efforts to reflect the ownership of the Company Stock
through the facilities of the DTC.

For the avoidance of doubt, the deregistration of the Company under the
Securities Exchange Act of 1934 shall not be prohibited by the SHA, which
deregistration shall be subject to the approval of the Board and its
determination that such deregistration is both legally permissible and in the
best interests of the Company.
Expenses
The Company will pay all reasonable costs and expenses associated with due
diligence and the preparation, negotiation, administration, syndication and
closing of all definitive documentation relating to this Term Sheet (including
the equity investment by the Plan Sponsor), including, without limitation, the
legal fees of counsel and third party advisors to the Plan Sponsor, regardless
of whether or not the transactions contemplated by this Term Sheet occur.
Information Rights
Each Stockholder will be entitled to receive:
a.    quarterly unaudited financial statements within forty-five (45) days after
the end of each of the Company’s first three (3) fiscal quarters during each
fiscal year or, if later, such time as delivered to the lenders under the Exit
Facility (or any other senior credit facility of the Company); and
b.   audited annual financial statements within ninety (90) days after the end
of the Company’s fiscal year or, if later, such time as delivered to the lenders
under the Exit Facility (or any other senior credit facility of the Reorganized
Debtors).
The information required to be disclosed pursuant to the foregoing shall be
posted on a secure password-protected website maintained on behalf of the
Company, and all such information shall be subject to customary confidentiality
obligations as set forth in the SHA.

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Beginning no sooner than ninety (90) days after the Effective Date, the Company
will participate in quarterly conference calls (which may be a single conference
call with other investors) to discuss its results of operations for each fiscal
quarter. The conference call will be following the last day of each fiscal
quarter and not later than ten (10) business days following the date on which
the Company distributes the quarterly or annual financial statements described
above.  No fewer than two (2) business days prior to the conference call, the
Company will provide a notice to the Stockholders with the time and date of such
conference call as well as the instructions for obtaining access to the call.

Notwithstanding the foregoing, no information described in this section shall be
required to be provided if and for so long as the Company is filing periodic
reports with the SEC.
Amendments to
SHA
Any amendments to the SHA or the organizational documents of the Company or any
of its subsidiaries will require the prior approval of the Board; provided that
any amendment that materially and disproportionately adversely affects the
obligations or rights of any Stockholder (or class of Stockholders) relative to
other Stockholders (or classes of Stockholders) shall require the consent of the
Stockholders representing a majority of the shares of Company Stock so adversely
affected.
Governing Law; Jurisdiction
Delaware.
Parties to the SHA
All Stockholders shall be party to the SHA.

Termination
The SHA shall terminate immediately upon the earlier to occur of (i) an IPO,
(ii) the listing of the Company (or a successor entity or affiliate thereof) on
an Established OTC marketplace or on a national securities exchange, and (iii) a
Company Sale as a result of which the Plan Sponsor owns less than ten percent
(10%) of the equity capitalization of the Company or the surviving entity
following such Company Sale (unless waived by the Plan Sponsor); provided that
(a) the Plan Sponsor director nomination rights in “Governance; Board of
Directors”, the Plan Sponsor rights in “Special Consent Rights”, and the
Registration Rights Agreement and the provisions regarding deregistration of the
Company under the Exchange Act shall survive any termination pursuant to clause
(i) or clause (ii) (other than with respect to the Plan Sponsor director
nomination rights in “Governance; Board of Directors” which shall be limited to
the extent necessary to comply with applicable national securities exchange)
above and (b) the Drag-Along Sale right shall survive the listing of the Company
on an Established OTC Marketplace.

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Certificate of
Incorporation and
Bylaws
Following the Effective Date, the certificate of incorporation and bylaws of the
Company shall contain customary defensive provisions and other terms reasonably
acceptable to the Debtors, the Plan Sponsor and the Noteholder Backstop Parties.

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Schedule I

Actions Requiring Consent of the Plan Sponsor

1.
Create, authorize, issue, purchase, redeem, repurchase or amend the rights,
preferences or privileges of, any equity security of the Company or any of its
subsidiaries, including any security convertible into or exchangeable for any
equity security of the Company or any of its subsidiaries, including any
increase in the authorized number of equity securities of the Company or any of
its subsidiaries, or create, authorize, adopt or modify any option plan, equity
incentive plan or phantom stock plan with respect to the Company or any of its
subsidiaries (or their respective business); provided that the foregoing shall
not prohibit required repurchases in connection with incentive plans.

2.
Increase the number of equity securities of the Company or any of its
subsidiaries reserved for issuance to employees, directors or contractors of the
Issuer or its subsidiaries.

3.
Amend, restate, modify or replace the certificate of incorporation, by-laws or
any other organizational documents of the Company or any of its subsidiaries;

4.
Liquidate, wind up, dissolve or restructure the Company or any of its
subsidiaries or initiate any action relating to bankruptcy (including any action
seeking to take advantage of any bankruptcy laws or any other law providing for
the relief of debtors), reorganization or recapitalization with respect to any
such entity.

5.
Initiate a public offering of the securities of the Company or any of its
subsidiaries (or any successor thereto).

6.
Merge or consolidate with any other entity or sell all or substantially all of
the Company’s or its subsidiaries’ assets, or enter into any transaction that
would result in a change of control.

7.
Enter into transactions or agreements with affiliates of the Company (other than
wholly-owned subsidiaries of the Company).

8.
Incur or guarantee any indebtedness, in each case in an amount greater than $[●]
million, in any single transaction, or which would result in outstanding
indebtedness obligations in excess of $[●] million in the aggregate, or amend
the material terms of or otherwise refinance such indebtedness.

9.
Incur any liens outside of the ordinary course of business beyond those
expressly permitted by [ ˜ ].

10.
Change the accounting firm retained to audit the Company’s and its subsidiaries
financial statements.

11.
Propose, agree or commit to do any of the foregoing.

346

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Annex I

Equity Ownership Percentages

347

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EXHIBIT A-2

Restructuring Term Sheet (RBL Only)

348

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EXECUTION VERSION

THIS TERM SHEET IS NOT AN OFFER WITH RESPECT TO ANY SECURITIES OR A SOLICITATION
OF ACCEPTANCES OF A CHAPTER 11 PLAN WITHIN THE MEANING OF SECTION 1125 OF THE
BANKRUPTCY CODE.  ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE
SECURITIES LAWS AND/OR PROVISIONS OF THE BANKRUPTCY CODE.  NOTHING CONTAINED IN
THIS TERM SHEET SHALL BE AN ADMISSION OF FACT OR LIABILITY OR, UNTIL THE
OCCURRENCE OF THE AGREEMENT EFFECTIVE DATE ON THE TERMS DESCRIBED HEREIN AND IN
THE RESTRUCTURING SUPPORT AGREEMENT, DEEMED BINDING ON ANY OF THE PARTIES
HERETO.

RESTRUCTURING TERM SHEET

INTRODUCTION

This term sheet (this “Term Sheet”)1 describes the terms of a restructuring (the
“Restructuring”) of: (a) Legacy Reserves Inc., a Delaware corporation (“Legacy
Reserves”); (b) Legacy Reserves GP, LLC, a Delaware LLC; (c) Legacy Reserves LP,
a Delaware limited partnership; (d) Legacy Reserves Finance Corporation, a
Delaware corporation; (e) Legacy Reserves Operating LP, a Delaware limited
partnership; (f) Legacy Reserves Services LLC, a Texas LLC; (g) Legacy Reserves
Energy Services, LLC, a Texas LLC; (h) Legacy Reserves Services, Inc., a
Delaware corporation; (i) Dew Gathering LLC, a Texas LLC; and (j) Pinnacle Gas
Treating LLC, a Texas LLC (the foregoing clauses (a) through (j), collectively,
the “Company Parties”, and such Company Parties that file Chapter 11 Cases (as
defined below) as set forth herein, collectively, the “Debtors”).

The Restructuring will be accomplished through the commencement of cases (the
“Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the
“Bankruptcy Code”) in the United States Bankruptcy Court for the Southern
District of Texas (the “Bankruptcy Court”) to implement on a pre-arranged basis
the chapter 11 plan of reorganization described herein (the “Plan”).

This Term Sheet is being agreed to in connection with entry by the Debtors and
the Supporting Creditors into that certain Restructuring Support Agreement,
dated as of June 10, 2019 (as may be amended, supplemented or modified pursuant
to the terms thereof, the “RSA”).  Pursuant to the RSA, the parties thereto have
agreed to support the transactions contemplated therein and herein.

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1          Unless otherwise indicated herein, capitalized terms used but not
otherwise defined in this Term Sheet have the meanings ascribed to such terms as
set forth in Exhibit A to this Term Sheet or the RSA, as applicable.

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OVERVIEW OF THE RESTRUCTURING
In general, the Restructuring contemplates the following, in each case subject
to the terms and conditions described more fully herein, the RSA, and the Equity
Backstop Commitment Agreement:

(a) The Debtors will implement the Restructuring in the Bankruptcy Court
pursuant to the Plan on the terms set forth in this Term Sheet (as supplemented
by the RSA, Equity Backstop Commitment Agreement, DIP Documents, Exit Facility
Term Sheet and MIP Term Sheet).

(b) The Debtors will obtain a debtor-in-possession financing facility (the “DIP
Facility”) from certain of the RBL Lenders as set forth in the Senior Secured
Superpriority Debtor-In-Possession Credit Agreement attached hereto as Exhibit
B-1 (the “DIP Credit Agreement” and the lenders from time to time party thereto,
the “DIP Lenders”) and the proposed interim order approving the DIP Facility
attached hereto as Exhibit B-2 (the “Interim DIP Order”).  The DIP Facility
shall consist of (i) a new money revolving loan facility in the aggregate
principal amount of $100 million (“New Money DIP Claims”) and (ii) a refinancing
term loan facility in the aggregate principal amount of up to $250 million
(“Refinanced DIP Claims”).  The DIP Credit Agreement, the Interim DIP Order, the
final order approving the DIP Facility (the “Final DIP Order”, and together with
the Interim DIP Order, the “DIP Orders”), and other documents related thereto
are collectively referred to as, the “DIP Documents”.

(c) Certain funds managed or advised by GSO Capital Partners LP (collectively,
the “Plan Sponsor”) will agree (i)  to consent to the DIP Facility and the use
of their cash collateral to fund the Chapter 11 Cases pursuant to the DIP
Documents, (ii) to vote all of their prepetition claims (including Term Loan
Claims and Notes Claims) to accept the Plan pursuant to the RSA, (iii) to
backstop a $200 million equity commitment (the “Backstop Commitment”) pursuant
to the Equity Backstop Commitment Agreement and (iv) in the Plan Sponsor’s sole
discretion, provide additional capital in the form of an unsecured note (the
“New Exit Note”) subject to documentation, terms, and conditions to be agreed
between the Plan Sponsor and the Debtors.

(d) The DIP Lenders will agree (i) to provide the DIP Facility and consent to
the use of their cash collateral to fund the Chapter 11 Cases pursuant to the
DIP Documents and (ii) to vote all of their RBL Claims and Refinanced DIP Claims
to accept the Plan pursuant to the RSA.

(e) The RBL Lenders will agree to provide a senior secured revolving asset-based
lending credit facility in a maximum amount of $500 million as set forth in the
Exit Facility Term Sheet annexed hereto as Exhibit D (the “Exit Facility”).

(f) The Debtors may, at the Plan Sponsor’s option, offer an additional $200
million of New Common Equity pursuant to the Incremental Equity Investment as
described below.

(g) All Claims arising under the DIP Facility will be satisfied in full by one
or a combination of the following: (i) New Money DIP Claims shall be paid in
full in cash not later than the Effective Date, and (ii) Refinanced DIP Claims
(A) will be paid in cash and exchanged into the Exit Facility pursuant to the
Exit Facility Term Sheet, or (B) if the Exit Facility is not consummated, will
be paid in full in cash not later than the Effective Date.

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(h) All RBL Claims will be satisfied in full by one or a combination of the
following: (i) distribution of claims under the Exit Facility in exchange for
the RBL Claims; or (ii) if the Exit Facility is not consummated, payment in full
in cash not later than the Effective Date.  For avoidance of doubt, there shall
not be any cash paid on account of the principal balance of  RBL Claims pursuant
to any plan unless and until all Refinanced Claims are paid in full in cash on
the Effective Date.

(i) In full and final satisfaction of all Term Loan Claims, holders thereof will
receive  their Pro Rata share of 98.00% of the New Common Equity Pool.

(j) Holders of Notes Claims will receive (i) their respective Pro Rata share of
2.00% of the New Common Equity Pool and (ii) if and only if Class 5 (Notes
Claims) votes to accept the Plan, all holders of Notes Claims will receive (A)
their respective Pro Rata share of subscription rights to participate in an
equity rights offering in an amount not to exceed $100 million (the “Rights
Offering”), and (B) if and only if the Rights Offering is fully subscribed in
the amount of $100 million, those holders of Notes Claims that have subscribed
to the maximum amount available to them pursuant to the Rights Offering shall
receive their respective pro rata share (calculated as the proportion that the
New Common Stock to be issued to such holders pursuant to their participation in
the Rights Offering bears to the aggregate amount of New Common Stock issued
pursuant to the Plan) of rights to purchase up to 49% of the New Exit Note.

(k) Holders of Allowed Convenience Claims will receive payment in full in cash,
or such Allowed Convenience Claims shall be reinstated.

(l) Holders of General Unsecured Claims will receive either (i) if Class 5
(Notes Claims) votes to accept the Plan or the Bankruptcy Court approves of such
treatment, payment in in full in cash, or such General Unsecured Claims shall be
reinstated, or (ii) if Class 5 (Notes Claims) votes to reject the Plan and the
Bankruptcy Court does not approve payment in full in cash or reinstatement,
payment in cash in an amount equal to the product of such General Unsecured
Claims times the projected recovery rate for the Notes Claims pursuant to the
Plan.

(m) Holders of Allowed Trade Claims will be paid in the ordinary course of
business, receive payment in full in cash, or such Allowed Trade Claims shall be
reinstated.

(n) Holders of Interests in Legacy Reserves shall receive no recovery under the
Plan, and all such Interests shall be extinguished.

This Term Sheet incorporates the rules of construction as set forth in section
102 of the Bankruptcy Code.

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GENERAL PROVISIONS REGARDING THE RESTRUCTURING
The Backstop
Commitment
The Plan Sponsor (together with any third parties designated by the Plan Sponsor
and reasonably acceptable to the Debtors, collectively, the “Equity Backstop
Parties”) will provide the Backstop Commitment, which shall be $200 million (the
“Equity Backstop Amount”), subject to certain adjustments as described herein
and on the terms set forth in the Equity Backstop Commitment Agreement attached
hereto as Exhibit E (including all schedules and exhibits thereto, the
“Equity Backstop Commitment Agreement”).  The Equity Backstop Commitment
Agreement will provide for, among other things, a commitment fee (the “Equity
Backstop Fee”) of 6% of the Equity Backstop Amount (which fee, for the avoidance
of doubt, shall be in an amount equal to $12 million) payable to the Equity
Backstop Parties (a) in New Common Stock on the Effective Date or (b) in cash,
if the Effective Date has not occurred, upon the earlier of (x) consummation of
an alternative transaction or (y) termination of the Equity Backstop Commitment
Agreement in certain circumstances in accordance with its terms.
 

The Rights
Offering
If Class 5 votes to accept the Plan, holders of Notes Claims (“Noteholders”)
shall receive Subscription Rights to participate in the Rights Offering in an
amount equal to $100 million (the “Maximum Noteholder Subscription Amount”).  To
the extent that Noteholders do not subscribe to their full Pro Rata share of the
Maximum Noteholder Subscription Amount, Subscription Rights for such
unsubscribed portion shall be made available to Noteholders and the Plan Sponsor
(“Oversubscription Rights”) according to allocations and procedures in form and
substance acceptable to the Plan Sponsor and the Debtors.  For the avoidance of
doubt, in the event that Class 5 is entitled to participate in the Rights
Offering, the Plan Sponsor shall be entitled to participate in the Rights
Offering (including Oversubscription Rights) on account of its Note Claims. 
Each dollar of Noteholder subscriptions to the Rights Offering up to the Maximum
Noteholder Subscription Amount shall, at the Plan Sponsor’s option, decrease the
amount of the Backstop Commitment to be funded by the Plan Sponsor on a
dollar-for-dollar basis up to $100 million (the “Noteholder Subscription
Downsize”).  Subscription Rights, including Oversubscription Rights, shall be
transferable to eligible participants subject to the consent of the Plan Sponsor
(not to be unreasonably withheld) and the Debtors based on eligibility criteria
in form and substance acceptable to the Plan Sponsor and the Debtors.

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Incremental
Equity Investment
At the Plan Sponsor’s option (including in connection with a third party
investment), the Debtors may raise up to $200 million of additional exit equity
capital (the “Incremental Equity Investment”).  The Plan Sponsor (or a designee
mutually acceptable to the Debtors and the Plan Sponsor) shall be entitled to
purchase New Common Stock on account of the Incremental Equity Investment
(“Incremental Participation”). Incremental Participation shall be subject to
such other documentation, terms, and conditions (including, without limitation,
representations and warranties of the Debtors) to be agreed between the Plan
Sponsor and the Debtors.  Each dollar of Incremental Participation from a third
party purchaser shall, at the Plan Sponsor’s option, decrease the amount of the
Backstop Commitment to be funded by the Plan Sponsor on a dollar-for-dollar
basis (the “Incremental Downsize” and together with the Noteholder Subscription
Downsize, collectively, the “Sponsor Equity Downsize”).  For the avoidance of
doubt, the Incremental Downsize shall be in addition to any Noteholder
Subscription Downsize, and the Incremental Downsize may, whether individually or
in aggregate with the Noteholder Subscription Downsize, reduce the amount of the
Backstop Commitment to be funded pursuant to the Plan and Equity Backstop
Commitment Agreement to zero.
 

For the avoidance of doubt, for so long as the Equity Backstop Commitment
Agreement remains effective and has not been terminated, the Plan Sponsor’s
commitment to fund the Equity Backstop Amount on the Effective Date pursuant to
the Equity Backstop Commitment Agreement shall not be reduced by any component
of the Sponsor Equity Downsize except to the extent that readily available funds
are received by the Debtors on or before the Effective Date.
 

Plan Equity
Offerings Pricing
The New Common Stock issued pursuant to the Equity Backstop Commitment
(including the Equity Backstop Fee) and, to the extent implemented, the Rights
Offering and the Incremental Equity Investment, will be offered at the same per
share price determined in a manner acceptable to the Debtors and Plan Sponsor
based on a total enterprise value of the Debtors of $950 million.2

DIP Financing
DIP Facility:  Prior to the Petition Date, the Debtors will obtain commitments
for the DIP Facility pursuant to the terms set forth in the DIP Documents.

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2          The total enterprise value of the Debtors for purposes of pricing the
New Common Stock issued pursuant to the Equity Backstop Commitment Agreement
and, to the extent implemented, the Rights Offering and the Incremental Equity
Investment, is a component of a global settlement among the Debtors, the Plan
Sponsor, and the other parties to the RSA.  The Debtors, the Plan Sponsor, and
the other parties to the RSA reserve their respective rights with respect to
valuation of the Debtors and the assets of the Debtors’ estates in the event of
termination of the RSA other than upon consummation of the transactions
contemplated therein and herein as of the Effective Date.

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Exit Financing
Exit Facility:  Except as otherwise provided in this section, as a condition
precedent to the Effective Date, the Debtors shall enter into the Exit Facility,
a senior secured revolving reserve-based lending credit facility to be arranged
and provided by the Lenders under the Prepetition RBL Credit Agreement in the
maximum amount of $500 million, as set forth in the Exit Facility Term Sheet, or
otherwise on terms acceptable to the Debtors, the Plan Sponsor and the
Prepetition RBL Agent.  To the extent not paid in cash, holders of RBL Claims
and Refinanced DIP Claims shall receive a distribution of commitments under the
Exit Facility (in the manner set forth in the Exit Facility Term Sheet) in
exchange for such RBL and Refinanced DIP Claims, on a Pro Rata basis.  If the
Exit Facility is not consummated, the Debtors shall enter into an alternative
senior secured revolving reserve-based lending credit facility in form and
substance acceptable to the Debtors and the Plan Sponsor; provided, for the
avoidance of doubt, that, if the Exit Facility is not consummated, the RBL
Claims shall be paid in full in cash on the Effective Date.
 

New Exit Note:  If the Plan Sponsor and the Debtors determine that
post-emergence liquidity from the Exit Facility, the Backstop Commitment, the
Rights Offering, and the Incremental Equity Investment is insufficient
(including to account for any potential contingency), the Plan Sponsor may, at
its sole option, provide the New Exit Note in an amount and on terms to be
agreed upon between the Plan Sponsor and the Debtors.  If and only if Class 5 is
entitled to participate in the Rights Offering, and the Rights Offering is fully
subscribed in the amount of $100 million, Noteholders that subscribe to the
maximum amount available to them in connection with the Rights Offering shall be
permitted to participate in funding their pro rata share (calculated as the
proportion that the New Common Stock to be issued to such holders pursuant to
their participation in the Rights Offering bears to the aggregate amount of New
Common Stock issued pursuant to the Plan) of up to 49% of the aggregate amount
of the New Exit Note.
 

The Debtors shall timely seek approval from the Bankruptcy Court to obtain
relief necessary to effectuate the Exit Facility and the New Exit Note, as
applicable.
 

Third Party
Investor(s)
The Plan Sponsor may designate one or more third party investment partners
mutually acceptable to the Plan Sponsor and the Debtors (each a “Partner”) to
participate in the funding of the Restructuring, including, without limitation,
(a) by purchasing a strip of the Plan Sponsor’s rights in the Term Loan Claims
and/or the Notes Claims, (b) through assignment to any such Partner of any of
the Plan Sponsor’s rights, claims or interests with respect to the Term Loan
Claims, the Notes Claims, the Backstop Commitment, or subscription rights in
connection with the Rights Offering, the Incremental Equity Investment, or the
New Exit Note, or (c) through any combination of the foregoing.
 

The Debtors shall, without limitation to other terms and conditions to be agreed
between the Debtors, the Plan Sponsor, and any Partner in connection with such
Partner’s participation in any of the foregoing, agree to provide
representations and warranties to any such Partner in form and substance
reasonably acceptable to the Plan Sponsor and the Debtors pursuant to
documentation in form and substance reasonably acceptable to the Plan Sponsor
and the Debtors.

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TREATMENT OF CLAIMS AND INTERESTS OF THE DEBTORS UNDER THE PLAN
Class
No.
Type of Claim
Treatment
Impairment
/ Voting
Unclassified Non-Voting Claims
N/A
DIP Claims
On the Effective Date, in full satisfaction of each Allowed DIP Claim, each
holder thereof shall receive, in full satisfaction of its Claim (i) on account
of New Money DIP Claims, payment in full in cash; (ii) on account of Refinanced
DIP Claims, distribution of cash and commitments under the Exit Facility in the
manner set forth in the Exit Facility Term Sheet; and/or (iii) if the Exit
Facility is not consummated, payment in full in cash.
Entitled to vote the Refinanced DIP Claims in Class 3
N/A
Administrative Claims
On the Effective Date, except to the extent that a holder of an Allowed
Administrative Claim and the Debtor against which such Allowed Administrative
Claim is asserted, with the prior written consent of the Plan Sponsor, agree to
less favorable treatment for such holder, each holder of an Allowed
Administrative Claim shall receive, in full satisfaction of its Claim, payment
in full in cash.
N/A
N/A
Priority Tax Claims
Except to the extent that a holder of an Allowed Priority Tax Claim and the
Debtor against which such Allowed Priority Tax Claim is asserted, with the prior
written consent of the Plan Sponsor, agree to less favorable treatment for such
holder, each holder of an Allowed Priority Tax Claim shall receive, in full
satisfaction of its Claim, treatment in a manner consistent with section
1129(a)(9)(C) of the Bankruptcy Code.
N/A
Classified Claims and Interests of the Debtors
Class 1
Other Secured Claims
On the Effective Date, in full satisfaction of each Allowed Other Secured Claim,
each holder thereof shall receive, at the option of the applicable Debtor, with
the prior written consent of the Plan Sponsor: (i) payment in full in cash; (ii)
the collateral securing its Allowed Other Secured Claim; (iii) Reinstatement of
its Other Secured Claim; or (iv) such other treatment rendering its Allowed
Other Secured Claim Unimpaired in accordance with section 1124 of the Bankruptcy
Code.
Unimpaired; deemed to accept.

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Class 2
Other Priority Claims
On the Effective Date, in full satisfaction of each Allowed Other Priority
Claim, each holder thereof shall receive payment in full in cash.
Unimpaired; deemed to accept.
Class 3
RBL Claims
On the Effective Date, all RBL Claims will be satisfied in full by one of the
following: (i) distribution of their Pro Rata share of commitments under the
Exit Facility (in the manner set forth in the Exit Facility Term Sheet) in
exchange for the RBL Claims; or (ii) in the event that the Exit Facility is not
consummated, payment in full in cash.  For avoidance of doubt, there shall not
be any cash paid on account of the principal balance of  RBL Claims pursuant to
any plan unless and until all Refinanced Claims are paid in full in cash on the
Effective Date.
Depending on treatment under the Plan – unimpaired and deemed to accept;
impaired and entitled to vote.
Class 4
Term Loan Claims
The Term Loan Claims shall be deemed Allowed in the amount of $348.0 million in
connection with a global settlement pursuant to the Plan.3
 
On the Effective Date, in full satisfaction of each Term Loan Claim, each holder
thereof shall receive its Pro Rata share of 98.00% of the New Common Equity
Pool.
Impaired; entitled to vote.
Class 5
Notes Claims
The Notes Claims shall be deemed Allowed in the amount of $463.0 million in
connection with a global settlement pursuant to the Plan.
 
Noteholders will receive their respective Pro Rata share of 2.00% of the New
Common Equity Pool.  In addition, if Class 5 (Notes Claims) votes to accept the
Plan, Noteholders shall receive (i) their respective Pro Rata share of
Subscription Rights in the Rights Offering in an amount not to exceed the
Maximum Noteholder Subscription Amount and (ii) if and only if the Rights
Offering is fully subscribed in the amount of $100 million, Noteholders that
subscribe to the maximum amount available to them in connection with the Rights
Offering shall be permitted to participate in funding their pro rata share
(calculated as the proportion that the New Common Stock to be issued to such
holders pursuant to their participation in the Rights Offering bears to the
aggregate amount of New Common Stock issued pursuant to the Plan) of up to 49%
of the aggregate amount of the New Exit Note.  For the avoidance of doubt, the
Plan Sponsor shall be entitled to subscribe to the Rights Offering (including
oversubscription rights) and the New Exit Note in connection with any Notes
Claims held by the Plan Sponsor to the same extent as any other holder of Notes
Claims.
Impaired; entitled to vote.

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3          The Prepetition Term Loan Secured Parties reserve their respective
rights to assert claims in accordance with the Prepetition Term Loan Documents,
including the post-petition interest and the Applicable Premium (as defined in
the Prepetition Term Loan Credit Agreement), in the event of termination of the
RSA other than upon the Effective Date.

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Class 6A
General Unsecured Claims
Holders of General Unsecured Claims (excluding Convenience Claims) will receive
either (i) if Class 5 (Notes Claims) votes to accept the Plan or the Bankruptcy
Court approves of such treatment, payment in in full in cash, or such General
Unsecured Claims shall be reinstated, or (ii) if Class 5 (Notes Claims) votes to
reject the Plan and the Bankruptcy Court does not approve payment in full in
cash or reinstatement, payment in cash in an amount equal to the product of such
General Unsecured Claims times the projected recovery rate for the Notes Claims
pursuant to the Plan.
Depending on treatment under the Plan – unimpaired and deemed to accept;
impaired and entitled to vote.
Class 6B
Convenience Claims
On the Effective Date, in full satisfaction of each Allowed Convenience Claim,
each holder thereof shall receive payment in full in cash, or such Allowed
Convenience Claim shall be reinstated.
Unimpaired; deemed to accept.
Class 7
Trade Claims
Holders of Allowed Trade Claims will be paid in the ordinary course of business,
receive payment in full in cash, or such Allowed Trade Claims shall be
reinstated.
Unimpaired; deemed to accept.
Class 8
Intercompany Claims
On the Effective Date, Intercompany Claims shall be, at the option of the
Debtors, with the consent of the Plan Sponsor, either Reinstated or canceled,
released, and extinguished without any distribution.
Impaired; deemed to reject or Unimpaired; deemed to accept
Class 9
Interests in Debtors other than Legacy Reserves
On the Effective Date, Interests in the Debtors other than Legacy Reserves shall
be, at the option of the Debtors, with the consent of the Plan Sponsor, either
Reinstated or canceled, released, and extinguished without any distribution.
Impaired; deemed to reject or Unimpaired; deemed to accept
Class 10
Interests in Legacy Reserves
All Interests in Legacy Reserves will be canceled, released, and extinguished as
of the Effective Date, and will be of no further force or effect.
Impaired; deemed to reject.

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GENERAL PROVISIONS REGARDING THE PLAN
Subordination
The classification and treatment of Claims under the Plan shall conform to the
respective contractual, legal, and equitable subordination rights of such
Claims, and any such rights shall be settled, compromised, and released pursuant
to the Plan.
Restructuring
Transactions
The Confirmation Order shall be deemed to authorize, among other things, all
actions as may be necessary or appropriate to effect any transaction described
in, approved by, contemplated by, or necessary to effectuate the Plan, including
the Rights Offering and the issuance of all securities, notes, instruments,
certificates, and other documents required to be issued pursuant to the
Restructuring, in each case in a manner acceptable to the Plan Sponsor
(collectively, the “Restructuring Transactions”).  On the Effective Date, the
Debtors, as applicable, shall issue all securities, notes, instruments,
certificates, and other documents required to be issued pursuant to the
Restructuring.
Cancellation of Notes,
Instruments, Certificates,
and Other Documents
On the Effective Date, except to the extent otherwise provided in this Term
Sheet or the Plan, all notes, instruments, certificates, and other documents
evidencing Claims or Interests, including credit agreements and indentures,
shall be canceled and the obligations of the Debtors and any non-Debtor
Affiliates thereunder or in any way related thereto shall be deemed satisfied in
full and discharged.
Executory Contracts and
Unexpired Leases
The Debtors shall seek to assume or reject executory contracts and unexpired
leases with the reasonable consent of the Plan Sponsor.  The Debtors shall not
enter into any material contracts during the Chapter 11 Cases without the prior
written consent of the Plan Sponsor, not to be unreasonably withheld.  The Plan
will provide that the executory contracts and unexpired leases that are not
assumed or rejected as of the Confirmation Date (either pursuant to the Plan or
a separate motion) will be deemed assumed pursuant to section 365 of the
Bankruptcy Code.  For the avoidance of doubt, the Debtors shall obtain the Plan
Sponsor’s consent with respect to any decision to assume or reject an executory
contract or unexpired lease, including pursuant to the Plan.

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Retention of Jurisdiction
The Plan will provide for the retention of jurisdiction by the Bankruptcy Court
for usual and customary matters.
Discharge of Claims and
Termination of Interests
Pursuant to section 1141(d) of the Bankruptcy Code, and except as otherwise
specifically provided in the Plan, the Confirmation Order or in any contract,
instrument, or other agreement or document created pursuant to the Plan, the
distributions, rights, and treatment that are provided in the Plan shall be in
complete satisfaction, discharge, and release, effective as of the Effective
Date, of Claims (including any Intercompany Claims resolved or compromised after
the Effective Date by the Reorganized Debtors), Interests, and Causes of Action
of any nature whatsoever, including any interest accrued on Claims or Interests
from and after the Petition Date, whether known or unknown, against, liabilities
of, liens on, obligations of, rights against, and Interests in, the Debtors or
any of their assets or properties, regardless of whether any property shall have
been distributed or retained pursuant to the Plan on account of such Claims and
Interests, including demands, liabilities, and Causes of Action that arose
before the Effective Date, any liability (including withdrawal liability) to the
extent such Claims or Interests relate to services performed by employees of the
Debtors prior to the Effective Date and that arise from a termination of
employment, any contingent or non-contingent liability on account of
representations or warranties issued on or before the Effective Date, and all
debts of the kind specified in sections 502(g), 502(h), or 502(i) of the
Bankruptcy Code, in each case whether or not: (a) a Proof of Claim based upon
such debt or right is filed or deemed filed pursuant to section 501 of the
Bankruptcy Code; (b) a Claim or Interest based upon such debt, right, or
Interest is Allowed pursuant to section 502 of the Bankruptcy Code; or (c) the
holder of such a Claim or Interest has accepted the Plan. The Confirmation Order
shall be a judicial determination of the discharge of all Claims and Interests
subject to the occurrence of the Effective Date.

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Releases by the Debtors
Except as provided for in the Plan or the Confirmation Order, pursuant to
section 1123(b) of the Bankruptcy Code, for good and valuable consideration, on
and after the Effective Date, each Released Party is deemed released and
discharged by the Debtors, the Reorganized Debtors, and their Estates from any
and all Causes of Action, including any derivative claims, asserted on behalf of
the Debtors, that the Debtors, the Reorganized Debtors, or their Estates would
have been legally entitled to assert in their own right (whether individually or
collectively) or on behalf of the holder of any Claim against, or Interest in, a
Debtor or other Entity, based on or relating to, or in any manner arising from,
in whole or in part, the Debtors, the Debtors’ in- or out-of-court restructuring
efforts, intercompany transactions, the Equity Backstop Commitment Agreement,
the Exit Facility, the New Exit Note (if any), the Chapter 11 Cases, the
formulation, preparation, dissemination, negotiation, or filing of the RSA, the
Disclosure Statement, the DIP Facility, the Equity Backstop Commitment
Agreement, the Plan, the Exit Facility, the New Exit Note (if any) or any
Restructuring Transaction, contract, instrument, release, or other agreement or
document created or entered into in connection with the RSA, the Disclosure
Statement, the DIP Facility, or the Plan, the Equity Backstop Commitment
Agreement, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the
pursuit of Consummation, the administration and implementation of the Plan,
including the issuance or distribution of securities pursuant to the Plan, or
the distribution of property under the Plan or any other related agreement, or
upon any other act or omission, transaction, agreement, event, or other
occurrence taking place on or before the Effective Date.  Notwithstanding
anything to the contrary in the foregoing, the releases set forth above do not
release obligations of any party or Entity under the Plan, or any document,
instrument, or agreement executed to implement the Plan.
Releases by Holders of
Claims and Interests
Except as provided for in the Plan or Confirmation Order, as of the Effective
Date, each Releasing Party is deemed to have released and discharged each
Released Party from any and all Causes of Action, whether known or unknown,
including any derivative claims, asserted on behalf of the Debtors, that such
Entity would have been legally entitled to assert (whether individually or
collectively), based on or relating to, or in any manner arising from, in whole
or in part, the Debtors, the Debtors’ in- or out-of-court restructuring efforts,
intercompany transactions, the Equity Backstop Commitment Agreement, the Exit
Facility, the New Exit Note (if any), the Chapter 11 Cases, the formulation,
preparation, dissemination, negotiation, or filing of the RSA, the Disclosure
Statement, the DIP Facility, the Plan, the Equity Backstop Commitment Agreement,
the Exit Facility, the New Exit Note (if any) or any Restructuring Transaction,
contract, instrument, release, or other agreement or document created or entered
into in connection with the RSA, the Disclosure Statement, the DIP Facility, or
the Plan, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the
pursuit of Consummation, the administration and implementation of the Plan,
including the issuance or distribution of securities pursuant to the Plan, or
the distribution of property under the Plan or any other related agreement, or
upon any other related act or omission, transaction, agreement, event, or other
occurrence taking place on or before the Effective Date. Notwithstanding
anything to the contrary in the foregoing, the releases set forth above do not
release obligations of any party or Entity under the Plan, or any document,
instrument, or agreement executed to implement the Plan.

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Exculpation
Except as provided for in the Plan or Confirmation Order, no Exculpated Party
shall have or incur, and each Exculpated Party  is released and exculpated from
any Cause of Action for any claim  related to any act or omission in connection
with, relating to, or arising out of, the Chapter 11 Cases, the formulation,
preparation, dissemination, negotiation, or filing of the RSA and related
prepetition transactions, the Disclosure Statement, the Plan, or any
Restructuring Transaction, contract, instrument, release or other agreement or
document created or entered into in connection with the Disclosure Statement or
the Plan, the filing of the Chapter 11 Cases, the pursuit of Confirmation, the
pursuit of Consummation, the administration and implementation of the Plan,
including the issuance of securities pursuant to the Plan, or the distribution
of property under the Plan or any other related agreement, except for claims
related to any act or omission that is determined in a final order to have
constituted actual fraud, gross negligence or willful misconduct, but in all
respects such Entities shall be entitled to reasonably rely upon the advice of
counsel with respect to their duties and responsibilities pursuant to the Plan.

The Section 1125(e) Protected Parties have, and upon completion of the Plan
shall be deemed to have, participated in good faith and in compliance with the
applicable laws with regard to the solicitation of votes and distribution of
consideration pursuant to the Plan and, therefore, are not, and on account of
such distributions shall not be, liable at any time for the violation of any
applicable law, rule, or regulation governing the solicitation of acceptances or
rejections of the Plan or such distributions made pursuant to the Plan.  Each of
the Section 1125(e) Protected Parties shall be entitled to and granted the
protections and benefits of section 1125(e) of the Bankruptcy Code.

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Injunction
Except as otherwise expressly provided in the Plan or for obligations issued or
required to be paid pursuant to the Plan or the Confirmation Order, all Entities
who have held, hold, or may hold claims or interests that have been released,
discharged, or are subject to exculpation are permanently enjoined, from and
after the Effective Date, from taking any of the following actions against, as
applicable, the Debtors, the Reorganized Debtors, the Exculpated Parties, or the
Released Parties: (a) commencing or continuing in any manner any action or other
proceeding of any kind on account of or in connection with or with respect to
any such claims or interests; (b) enforcing, attaching, collecting, or
recovering by any manner or means any judgment, award, decree, or order against
such Entities on account of or in connection with or with respect to any such
claims or interests; (c) creating, perfecting, or enforcing any encumbrance of
any kind against such Entities or the property or the estates of such Entities
on account of or in connection with or with respect to any such claims or
interests; (d) asserting any right of setoff, subrogation, or recoupment of any
kind against any obligation due from such Entities or against the property of
such Entities on account of or in connection with or with respect to any such
claims or interests unless such holder has filed a motion requesting the right
to perform such setoff on or before the Effective Date, and notwithstanding an
indication of a claim or interest or otherwise that such holder asserts, has, or
intends to preserve any right of setoff pursuant to applicable law or otherwise;
and (e) commencing or continuing in any manner any action or other proceeding of
any kind on account of or in connection with or with respect to any such claims
or interests released or settled pursuant to the Plan.
Taxes
The Plan and the Restructuring Transactions contemplated herein and therein
shall be implemented in a tax efficient manner satisfactory to the Plan Sponsor,
with prior notice to and in consultation with the Debtors.

OTHER MATERIAL PROVISIONS REGARDING THE RESTRUCTURING
Management
Incentive Plan
On the Effective Date, the Reorganized Debtors will continue all existing
management compensation plans, and implement a new equity-based management
incentive plan (the “Management Incentive Plan”) on terms and conditions set
forth in the term sheet attached hereto as Exhibit C (the “MIP Term Sheet”) and
otherwise acceptable to the Debtors and the Plan Sponsor.  For the avoidance of
doubt, the Plan will provide for the establishment of the Management Incentive
Plan on the Effective Date in a manner acceptable to the Debtors and the Plan
Sponsor.
Employment
Obligations
Each of the Debtors’ “first day” or “second day” motions and proposed orders
relating to wages, compensation, and benefits shall be in form and substance
acceptable to the Debtors and the Plan Sponsor. Wages, compensation and benefit
programs that do not relate to insiders shall be continued after the Effective
Date, unless otherwise agreed by the Debtors and the Plan Sponsor and subject to
the satisfaction and consent of the Plan Sponsor (such consent not to be
unreasonably withheld) following receipt and analysis of satisfactory
information from the Debtors regarding such programs, which information the
Debtors shall provide as promptly as practicable.
 
The Company Parties will enter into amended and restated employment agreements
with senior executives on substantially the same terms as set forth in the
existing agreements, subject to conforming changes associated with the MIP Term
Sheet, including the Change in Control definitions referenced therein.  For the
avoidance of doubt, the reorganization of the Company will not constitute a
Change in Control under the applicable employment agreements.

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Indemnification of
Prepetition
Directors,
Officers,
Managers, et al.
Consistent with applicable law, all indemnification provisions currently in
place (whether in the by-laws, certificates of incorporation or formation,
limited liability company agreements, other organizational documents, board
resolutions, indemnification agreements, employment contracts, or otherwise) for
the current and former directors, officers, managers, employees, attorneys,
accountants, investment bankers, and other professionals of the Debtors, as
applicable, shall be reinstated and remain intact, irrevocable, and shall
survive the effectiveness of the Restructuring on terms no less favorable to
such current and former directors, officers, managers, employees, attorneys,
accountants, investment bankers, and other professionals of the Debtors than the
indemnification provisions in place prior to the Restructuring.
Claims of the
Debtors
The Reorganized Debtors, as applicable, shall retain all rights to commence and
pursue any Causes of Action, other than any Causes of Action released by the
Debtors pursuant to the release and exculpation provisions outlined in this Term
Sheet.

Prior to Consummation, the Debtors shall not settle, compromise or discharge any
Cause of Action that is not agreed to be released pursuant to this Term Sheet
without the consent of the Plan Sponsor.
Additional Plan
Provisions and
Documentation
The Plan shall contain other customary provisions for chapter 11 plans of this
type. The Plan and Confirmation Order and all supporting and implementing
documentation (including all briefs and other pleadings filed in support
thereof, all documents filed as part of the Plan Supplement, and the
Confirmation Order) shall be in form and substance acceptable to the Debtors and
the Plan Sponsor.

Conditions
Precedent to
Restructuring
The following shall be conditions to the Effective Date (the “Conditions
Precedent”):

(a)    the Bankruptcy Court shall have entered the Confirmation Order, which
shall be in form and substance acceptable to the Debtors and the Plan Sponsor,
shall be a Final Order, and shall:

(i)     authorize the Debtors to take all actions necessary to enter into,
implement, and consummate the contracts, instruments, releases, leases,
indentures, and other agreements or documents created in connection with the
Plan;

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(ii)    decree that the provisions of the Confirmation Order and the Plan are
nonseverable and mutually dependent;

(iii)   authorize the Debtors, as applicable/necessary, to: (A) implement the
Restructuring Transactions, including the Rights Offering; (B) distribute the
New Common Stock pursuant to the exemption from registration under the
Securities Act provided by section 1145 of the Bankruptcy Code or other
exemption from such registration or pursuant to one or more registration
statements; (C) make all distributions and issuances as required under the Plan,
including cash and the New Common Stock; and (D) enter into any agreements,
transactions, and sales of property as set forth in the Plan Supplement,
including the Exit Facility, the Equity Backstop Commitment Agreement, the New
Exit Note (if any) and the Management Incentive Plan;

(iv)     authorize the implementation of the Plan in accordance with its terms;
and

(v)      provide that, pursuant to section 1146 of the Bankruptcy Code, the
assignment or surrender of any lease or sublease, and the delivery of any deed
or other instrument or transfer order, in furtherance of, or in connection with
the Plan, including any deeds, bills of sale, or assignments executed in
connection with any disposition or transfer of assets contemplated under the
Plan, shall not be subject to any stamp, real estate transfer, mortgage
recording, or other similar tax.

(b)      the Debtors shall have obtained all authorizations, consents,
regulatory approvals, rulings, or documents that are necessary to implement and
effectuate the Plan;

(c)      the final versions of the Definitive Documentation, the Plan Supplement
and all of the schedules, documents, and exhibits contained therein shall have
been filed in a manner consistent in all material respects with the RSA, this
Term Sheet (including all Exhibits hereto), and the Plan and shall be in form
and substance  acceptable to the Plan Sponsor;

(d)      the RSA shall remain in full force and effect;

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(e)      all conditions precedent to the Exit Facility shall have been satisfied
or waived in accordance with the Exit Facility Term Sheet and definitive
documentation to be entered in connection therewith and satisfactory to the RBL
Agent and the Plan Sponsor, or (in the alternative) all DIP Claims and RBL
Claims will be paid in full in cash;

(f)      if the Exit Facility will not be consummated, all conditions precedent
to an alternative senior secured revolving reserve-based lending credit facility
acceptable to the Plan Sponsor shall have been satisfied or waived in accordance
with the definitive documentation to be entered in connection therewith;

(g)      all conditions precedent to the New Exit Note (if any) shall have been
satisfied or waived in accordance with the terms thereof;

(h)      the Bankruptcy Court shall have entered an order approving the Equity
Backstop Fee and authorizing payment thereof as an Administrative Claim;

(i)      all conditions precedent to (i) the effectiveness of the Equity
Backstop Commitment Agreement and (ii) the occurrence of the Rights Offering
pursuant to the Equity Backstop Commitment Agreement shall, in each case, have
been satisfied or waived in accordance with the Equity Backstop Commitment
Agreement;

(j)       the aggregate amount of the (i) the Funded Revolving Loans (as defined
in the Exit Facility Term Sheet) and any New Term Loans (as defined in the Exit
Facility Term Sheet), in each case on the Effective Date, or if the Exit
Facility is not consummated, the aggregate amount of obligations under any
alternative senior secured revolving reserve-based lending credit facility as of
the Effective Date, plus (ii) the Professional Claim Amount shall not exceed
$455 million (the “Senior Debt Cap”); provided that the Senior Debt Cap shall be
reduced dollar for dollar by the amount of equity financing raised in cash by
the Debtors pursuant to the Plan in excess of $200 million on the Effective
Date;

(k)     all reasonable and documented professional fees and expenses of the
advisors to the Supporting Creditors payable pursuant to the RSA, the Equity
Backstop Commitment Agreement and the DIP Credit Agreement, the Prepetition Term
Loan Agent, the Equity Backstop Parties, the DIP Lenders, the DIP Agent, the
Exit Agent, the Exit Lenders, the RBL Agent and the RBL Lenders shall have been
paid in full; and

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(l)     the Debtors shall have implemented the Restructuring Transactions,
including the Rights Offering, and all transactions contemplated by this Term
Sheet (including all releases and exculpations contemplated herein), in a manner
consistent in all respects with the RSA, this Term Sheet, and the Plan, pursuant
to documentation acceptable to the Debtors and the Plan Sponsor.

Waiver of
Conditions
Precedent to the
Effective Date
The Debtors, with the prior written consent of the Plan Sponsor, may waive any
one or more of the Conditions Precedent to the Effective Date; provided the
Debtors shall waive the Conditions Precedent set forth in clause (i) of the
Conditions Precedent section of this Term Sheet to the extent so requested by
the Plan Sponsor.

CORPORATE GOVERNANCE PROVISIONS/SECTION 1145 EXEMPTION
Governance
The board of directors of the Reorganized Debtors (the “New Board”) shall
consist of at least seven (7) members, consisting of (a) Dan Westcott, CEO of
Legacy Reserves, (b) Kyle Hammond, President and COO of Legacy Reserves, (c)
five (5) other board members, which may include independent directors or current
board members of the Company Parties, to be selected by the Plan Sponsor or, to
the extent applicable with the prior written consent of the Plan Sponsor, a
Partner, and (d) such additional board members as may be appointed from time to
time by the Plan Sponsor that are mutually acceptable to the Plan Sponsor and
the Debtors, including, but not limited to, in connection with any listing
considerations and/or any equity investment by a Partner; provided that, in the
event that Noteholders acquire more than 20% of the New Common Stock (on a fully
diluted basis) as of the Effective Date, the Noteholders shall be entitled to
select one (1) of the five (5) other board members referred to in the foregoing
clause (c).  For the avoidance of doubt, the New Board shall be appointed in
compliance with section 1129(a)(5) of the Bankruptcy Code.

Corporate governance for the Reorganized Debtors, including charters, bylaws,
operating agreements, or other organization documents, as applicable, shall be
consistent with this Term Sheet and section 1123(a)(6) of the Bankruptcy Code
(as applicable) and documentation therefor shall be filed as part of the Plan
Supplement and otherwise in form and substance acceptable to the Debtors and the
Plan Sponsor.

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Equity Listing
Reorganized Legacy Reserves shall be constituted as a C-corporation after the
Effective Date unless otherwise determined by the Plan Sponsor, with prior
notice to and in consultation with the Debtors.
 
The Plan Sponsor, with prior notice to and in consultation with the Debtors,
shall determine the equity listing and reporting status of Reorganized Legacy
Reserves upon emergence (including, without limitation, whether Reorganized
Legacy Reserves will be listed OTC, listed on a national exchange or will emerge
as a private company), and the Debtors and Reorganized Legacy Reserves shall use
their best efforts to effectuate such determination on the Effective Date or as
soon as possible thereafter.  Unless otherwise directed by the Plan Sponsor, the
Debtors agree that Legacy Reserves will remain a public reporting company with
the Securities and Exchange Commission during the pendency of the Chapter 11
Cases.
 
Should the Reorganized Debtors elect on or after the Effective Date to reflect
any ownership of the New Common Stock through the facilities of the DTC, the
Reorganized Debtors need not provide any further evidence other than the Plan or
the Confirmation Order with respect to the treatment of the New Common Stock
under applicable securities laws. Notwithstanding anything to the contrary in
the Plan, no Entity (including, for the avoidance of doubt, DTC) shall be
entitled to require a legal opinion regarding the validity of any transaction
contemplated by the Plan, including, for the avoidance of doubt, whether the New
Common Stock is exempt from registration and/or eligible for DTC book-entry
delivery, settlement, and depository services.  DTC shall be required to accept
and conclusively rely upon the Plan or Confirmation Order in lieu of a legal
opinion regarding whether the New Common Stock is exempt from registration
and/or eligible for DTC book-entry delivery, settlement, and depository
services.
Exemption from
SEC Registration
The issuance of all securities under the Plan will be exempt from SEC
registration under applicable law.
 
Registration rights (including demand and piggyback registration rights) will be
provided to the Plan Sponsor and the Equity Backstop Parties to the extent they
receive any “restricted” or “control” securities under the terms of the Plan or
any agreements entered into in connection with the Plan pursuant to a
registration rights agreement in form and substance acceptable to the Plan
Sponsor and reasonably acceptable to the Debtors (the “Registration Rights
Agreement”).
Shareholders
Agreement
The New Common Equity Pool and all equity interests issued in connection with
the Management Incentive Plan, the Equity Backstop Fee, and the Rights Offering
shall be subject to a shareholders agreement in form and substance acceptable to
the Plan Sponsor and reasonably acceptable to the Debtors (the “Shareholders
Agreement”).

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Exhibit A
 

Definitions
 

Term
Definition
   
Administrative Claim
A Claim for costs and expenses of administration of the Chapter 11 Cases
pursuant to sections 503(b), 507(a)(2), 507(b), or 1114(e)(2) of the Bankruptcy
Code, including: (a) the actual and necessary costs and expenses incurred on or
after the Petition Date until and including the Effective Date of preserving the
Estates and operating the Debtors’ businesses; (b) Allowed Professional Claims;
and (c) all fees and charges assessed against the Estates pursuant to section
1930 of chapter 123 of title 28 of the United States Code.
   
Affiliate
As defined in section 101(2) of the Bankruptcy Code.
   
Allowed
As to a Claim or an Interest, a Claim or an Interest allowed under the Plan,
under the Bankruptcy Code, or by a final order, as applicable. For the avoidance
of doubt, (a) there is no requirement to file a Proof of Claim (or move the
Bankruptcy Court for allowance) to be an Allowed Claim under the Plan, and (b)
the Debtors may affirmatively determine to deem Unimpaired Claims Allowed to the
same extent such Claims would be allowed under applicable nonbankruptcy law.
   
Backstop Commitment
As defined in the Term Sheet.
   
Bankruptcy Code
As defined in the Introduction.
   
Bankruptcy Court
As defined in the Introduction.
   
Cause of Action
Any claims, interests, damages, remedies, causes of action, demands, rights,
actions, suits, obligations, liabilities, accounts, defenses, offsets, powers,
privileges, licenses, liens, indemnities, guaranties, and franchises of any kind
or character whatsoever, whether known or unknown, foreseen or unforeseen,
existing or hereinafter arising, contingent or non-contingent, liquidated or
unliquidated, secured or unsecured, assertable, directly or derivatively,
matured or unmatured, suspected or unsuspected, in contract, tort, law, equity,
or otherwise. Causes of Action also include: (a) all rights of setoff,
counterclaim, or recoupment and claims under contracts or for breaches of duties
imposed by law; (b) the right to object to or otherwise contest Claims or
Interests; (c) claims pursuant to sections 362, 510, 542, 543, 544 through 550,
or 553 of the Bankruptcy Code; and (d) such claims and defenses as fraud,
mistake, duress, and usury, and any other defenses set forth in section 558 of
the Bankruptcy Code.
   

368

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Term
Definition
   
Change in Control
As defined in the MIP Term Sheet.
   
Chapter 11 Cases
As defined in the Introduction.
   
Claim
Any claim, as defined in section 101(5) of the Bankruptcy Code, against any of
the Debtors.
   
Class
A category of holders of Claims or Interests pursuant to section 1122(a) of the
Bankruptcy Code.
   
Company Parties
As defined in the Introduction.
   
Conditions Precedent
As defined in the Term Sheet.
   
Confirmation
Entry of the Confirmation Order on the docket of the Chapter 11 Cases.
   
Confirmation Date
The date on which the Bankruptcy Court enters the Confirmation Order on the
docket of the Chapter 11 Cases within the meaning of Bankruptcy Rules 5003 and
9021
   
Confirmation Hearing
The hearing(s) before the Bankruptcy Court under section 1128 of the Bankruptcy
Code at which the Debtors seek entry of the Confirmation Order.
   
Confirmation Order
The order of the Bankruptcy Court confirming the Plan under section 1129 of the
Bankruptcy Code, which order shall be in form and substance acceptable to the
Debtors and the Plan Sponsor.
   
Consummation
The occurrence of the Effective Date.
   
Convenience Claim
A General Unsecured Claim that is Allowed in an amount less than $100,000.00.
   
Debtors
As defined in the Term Sheet.
   
Definitive Documentation
As defined in the RSA.
   
DIP Agent
That certain administrative agent under the DIP Credit Agreement.
   
DIP Claim
Any Claim held by the DIP Lenders or the DIP Agent arising under or related to
the DIP Credit Agreement or the DIP Orders, including any and all fees, interest
paid in kind, and accrued but unpaid interest and fees arising under the DIP
Credit Agreement.
   

369

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Term

Definition
   
DIP Documents
As defined in the Term Sheet.
   
DIP Facility
As defined in the Term Sheet.
   
DIP Lenders
As defined in the Term Sheet.
   
DIP Credit Agreement
As defined in the Term Sheet.
   
DIP Orders
As defined in the Term Sheet.
   
Disclosure Statement
The disclosure statement for the Plan, including all exhibits and schedules
thereto, which shall be in form and substance acceptable to the Debtors and the
Plan Sponsor.
   
Effective Date
The date that is the first Business Day after the Confirmation Date on which all
Conditions Precedent have been satisfied or waived in accordance with the Plan.
   
Entity
As defined in section 101(15) of the Bankruptcy Code.
   
Equity Backstop Amount
As defined in the Term Sheet.
   
Equity Backstop
Commitment Agreement
As defined in the Term Sheet.
   
Equity Backstop Fee
As defined in the Term Sheet.
   
Equity Backstop Parties
As defined in the Term Sheet.
   
Estate
The estate of any Debtor created under sections 301 and 541 of the Bankruptcy
Code upon the commencement of the applicable Debtor’s Chapter 11 Case.
   

370

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Term

Definition
   
Exculpated Parties
Collectively, and in each case, in its capacity as such: (a) the Debtors, (b)
Reorganized Debtors; (c) any official committees appointed in the Chapter 11
Cases and each of their respective members; (c) such Released Parties that are
fiduciaries to the Debtors’ Estates; and (d) with respect to each of the
foregoing, such Entity and its  current and former affiliates, and such Entity’s
and its current and former affiliates’ current and former equity holders,
subsidiaries, officers, directors, managers, principals, members, employees,
agents, advisors, advisory board members, financial advisors, partners,
attorneys, accountants, investment bankers, consultants, representatives, and
other professionals, each in their capacity as such.
   
Exit Agent
The administrative agent appointed under the Exit Facility.
   
Exit Facility
As defined in the Term Sheet.
   
Exit Lenders
The lenders under the Exit Facility.
   
Final Order
As applicable, an order or judgment of the Bankruptcy Court or other court of
competent jurisdiction with respect to the relevant subject matter that has not
been reversed, stayed, modified, or amended, and as to which the time to appeal
or seek certiorari has expired and no appeal or petition for certiorari has been
timely taken, or as to which any appeal that has been taken or any petition for
certiorari that has been or may be filed has been resolved by the highest court
to which the order or judgment could be appealed or from which certiorari could
be sought or the new trial, reargument, or rehearing shall have been denied,
resulted in no modification of such order, or has otherwise been dismissed with
prejudice.
   
General Unsecured
Claims
Any Claim other than an Administrative Claim, a Professional Claim, a Secured
Tax Claim, an Other Secured Claim, a Priority Tax Claim, an Other Priority
Claim, an RBL Claim, a Term Loan Claim, a Notes Claim, Trade Claim or an
Intercompany Claim.
   
Governmental Unit
As defined in section 101(27) of the Bankruptcy Code
   
GSO
Funds managed or advised by GSO Capital Partners LP.
   
Impaired
With respect to any Class of Claims or Interests, a Class of Claims or Interests
that is impaired within the meaning of section 1124 of the Bankruptcy Code.
   

371

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Term

Definition
   
Incremental Downsize
As defined in the Term Sheet.
   
Incremental Equity
Investment
As defined in the Term Sheet.
   
Incremental
Participation
As defined in the Term Sheet.
   
Intercompany Claim
A Claim held by a Debtor or an Affiliate against a Debtor or an Affiliate.
   
Intercompany Interest
An Interest held by a Debtor or an Affiliate of a Debtor.
   
Interest
Any Equity Security (as defined in section 101(16) of the Bankruptcy Code) in
any Debtor and any other rights, options, warrants, stock appreciation rights,
phantom stock rights, restricted stock units, redemption rights, repurchase
rights, convertible, exercisable or exchangeable securities or other agreements,
arrangements or commitments of any character relating to, or whose value is
related to, any such interest or other ownership interest in any Debtor.
   
Legacy Reserves
As defined in the Introduction.
   
Management Incentive
Plan
As defined in the Term Sheet.
   
Maximum Noteholder
Subscription Amount
As defined in the Term Sheet.
   
New Board
As defined in the Term Sheet.
   
New Common
Equity Pool
100% of the New Common Stock issued and outstanding on the Effective Date to be
distributed in accordance with the Plan, subject to dilution on account of the
Backstop Commitment, the Rights Offering, the Incremental Equity Investment, the
Equity Backstop Fee, and the Management Incentive Plan.
   
New Common Stock
The common stock of Reorganized Legacy Reserves.
   
New Exit Note
As defined in the Term Sheet.
   
Noteholders
As defined in the Term Sheet.
   

372

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Term
Definition
   
Noteholder Subscription
Downsize
As defined in the Term Sheet.
   
Notes Claim
Any Claim arising under, derived from, or based upon the Prepetition Notes
Indentures.
   
Other Priority Claim
Any Claim other than an Administrative Claim or a Priority Tax Claim entitled to
priority in right of payment under section 507(a) of the Bankruptcy Code.
   
Other Secured Claim
Any Secured Claim, including any Secured Tax Claim, other than an RBL Claim, a
Term Loan Claim or a DIP Claim. For the avoidance of doubt, Other Secured Claims
includes any Claim arising under, derived from, or based upon any letter of
credit issued in favor of one or more Debtors, the reimbursement obligation for
which is either secured by a Lien on collateral or is subject to a valid right
of setoff pursuant to section 553 of the Bankruptcy Code.
   
Oversubscription Rights
As defined in the Term Sheet.
   
Petition Date
The date on which the Chapter 11 Cases were commenced.
   
Plan
As defined in the Term Sheet.
   
Plan Sponsor
As defined in the Term Sheet.
   
Plan Supplement
Any compilation of documents and forms of documents, agreements, schedules, and
exhibits to the Plan, which shall be filed by the Debtors no later than ten (10)
days before the Confirmation Hearing or such later date as may be approved by
the Bankruptcy Court on notice to parties in interest, and additional documents
filed with the Bankruptcy Court prior to the Effective Date as amendments to the
Plan Supplement, each of which shall be consistent in all respects with, and
shall otherwise contain, the terms and conditions set forth in the RSA and Term
Sheet, where applicable, and shall be in form and substance acceptable to the
Debtors and the Plan Sponsor.
   
Prepetition Intercreditor
Agreement
That certain Intercreditor Agreement dated as of October 25, 2016, by and among
the Company Parties, Wells Fargo Bank, National Association, as original
priority lien agent, and Cortland Capital Market Services LLC, as original
junior lien agent.
   

373

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Term
Definition
   
Prepetition Notes
Indentures
As defined in the RSA.
   
Prepetition RBL Agent
As defined in the RSA.
   
Prepetition RBL Credit
Agreement
As defined in the RSA.
   
Prepetition Term Loan
Agent
Cortland Capital Market Services LLC, in its capacity as administrative agent
pursuant to the Prepetition Term Loan Documents, its successors, assigns, or any
replacement agent appointed pursuant to the terms of the Prepetition Term Loan
Credit Agreement.
   
Prepetition Term Loan
Credit Agreement
That certain Term Loan Credit Agreement, dated as of October 25, 2016, by and
among the Company Parties, as borrowers and/or guarantors, Cortland Capital
Market Services LLC, as Prepetition Term Loan Agent, and the lenders and other
parties party thereto (as amended, restated, amended & restated, supplemented or
otherwise modified as of the date hereof).
   
Prepetition Term Loan
Documents
Collectively, the Prepetition Term Loan Credit Agreement, each other Term Loan
Document (as defined in the Prepetition Term Loan Credit Agreement), and all
other agreements, documents, and instruments delivered or entered into in
connection therewith (including any guarantee agreements, pledge and collateral
agreements, intercreditor agreements, and other security documents).
   
Priority Tax Claims
Any Claim of a Governmental Unit of the kind specified in section 507(a)(8) of
the Bankruptcy Code.
   
Pro Rata
The proportion that an Allowed Claim or an Allowed Interest in a particular
Class bears to the aggregate amount of Allowed Claims or Allowed Interests in
that Class.
   
Professional Claim
A Claim by a professional seeking an award by the Bankruptcy Court of
compensation for services rendered or reimbursement of expenses incurred through
and including the Confirmation Date under sections 330, 331, 503(b)(2),
503(b)(3), 503(b)(4), or 503(b)(5) of the Bankruptcy Code.
   
Professional Claim
Amount
The aggregate amount of Allowed and estimated Professional Claims and other
Administrative Expenses on account of professionals (including, for the
avoidance of doubt, any transaction fees of financial advisors and/or investment
bankers) incurred upon, and after giving effect to the occurrence of, the
Effective Date to be paid by the Debtors’ estates less the total of any escrowed
or otherwise deposited amounts reserved by the Debtors for payment of such
Professional Claims.
   

374

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Term
Definition
   
Proof of Claim
A proof of Claim filed against any of the Debtors in the Chapter 11 Cases by the
applicable Bar Date.
   
RBL Claim
Any Claim arising under, derived from, or based upon the Prepetition RBL Credit
Agreement.
   
RBL Lenders
The lenders under the Prepetition RBL Credit Agreement.
   
Refinanced DIP Claims
As defined in the Term Sheet.
   
Reinstated
With respect to Claims and Interests, that the Claim or Interest shall be
rendered unimpaired in accordance with section 1124 of the Bankruptcy Code.
   
Released Parties
Collectively, and in each case, in its capacity as such: (a) the Debtors; (b)
the Reorganized Debtors; (c) the Plan Sponsor; (d) the Supporting Creditors; (e)
the Equity Backstop Parties; (f) the Prepetition Term Loan Agent; (g) the DIP
Lenders; (h) the DIP Agent; (i) the Exit Lenders; (j) the Exit Agent; and (k)
with respect to each  of the foregoing entities in clauses (a) through (k), such
Entity’s current and former affiliates and subsidiaries, and such Entities’ and
their current and former affiliates’ and subsidiaries’ current and former
directors, managers, officers, equity holders (regardless of whether such
interests are held directly or indirectly), predecessors, successors, and
assigns, subsidiaries, and each of their respective current and former equity
holders (regardless of whether such interests are held directly or indirectly),
officers, directors, managers, principals, members, employees, agents, advisors,
advisory board members, financial advisors, partners, attorneys, accountants,
investment bankers, consultants, representatives, and other professionals.
   

375

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Term
Definition
   
Releasing Parties
Collectively, (a) the Debtors; (b) the Reorganized Debtors; (c) the Plan
Sponsor, (d) the Supporting Creditors; (e) the Equity Backstop Parties; (f) the
Prepetition Term Loan Agent; (g) the DIP Lenders; (h) the DIP Agent; (i) the
Exit Lenders; (j) the Exit Agent; (k) all holders of Claims or Interests who
either (1) vote to accept or (2)  do not opt out of granting the releases set
forth in Article [●] of the Plan by returning the opt-out election form to be
included with the ballot or notice of non-voting status; and (l) with respect to
each of the foregoing entities in clauses (a) through (k), such Entity’s its
current and former affiliates and subsidiaries, and such Entities’ and their
current and former affiliates’ and subsidiaries’ current and former directors,
managers, officers, equity holders (regardless of whether such interests are
held directly or indirectly), predecessors, successors, and assigns,
subsidiaries, and each of their respective current and former equity holders
(regardless of whether such interests are held directly or indirectly),
officers, directors, managers, principals, members, employees, agents, advisors,
advisory board members, financial advisors, partners, attorneys, accountants,
investment bankers, consultants, representatives, and other professionals, each
in their capacity as such .
   
Reorganized Debtors
A Debtor, or any successor or assign thereto, by merger, consolidation, or
otherwise, on and after the Effective Date.
   
Reorganized Legacy
Reserves
Legacy Reserves, or any successor or assign, by merger, consolidation, or
otherwise, on or after the Effective Date.
   
Restructuring
As defined in the Introduction.
   
Restructuring
Transactions
As defined in the Term Sheet.
   
Rights Offering
As defined in the Term Sheet.
   
Rights Offering
Procedures
The procedures governing the Rights Offering attached as an exhibit to the
Equity Backstop Commitment Agreement.
   
Rights Offering Shares
The shares of New Common Stock distributed pursuant to and in accordance with
the Rights Offering.
   
RSA
As defined in the Term Sheet.
   
SEC
The Securities and Exchange Commission.
   
Secured
When referring to a Claim: (a) secured by a Lien on collateral to the extent of
the value of such collateral, as determined in accordance with section 506(a) of
the Bankruptcy Code or (b) subject to a valid right of setoff pursuant to
section 553 of the Bankruptcy Code.
   
Secured Tax Claim
Any Secured Claim that, absent its Secured status, would be entitled to priority
in right of payment under section 507(a)(8) of the Bankruptcy Code (determined
irrespective of time limitations), including any related Secured Claim for
penalties.
   

376

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Term
Definition
   
Securities Act
The Securities Act of 1933, as amended, 15 U.S.C. §§ 77a-77aa, or any similar
federal, state, or local law.
   
Section 1125(e) Protected
Parties
The Exculpated Parties and such Released Parties that are fiduciaries other than
to the Debtors’ Estates.
   
Senior Debt Cap
As defined in the Term Sheet.
   
Sponsor Equity
Downsize
As defined in the Term Sheet.
   
Subscription Rights
The rights to purchase Rights Offering Shares as set forth in the Rights
Offering Procedures.
   
Supporting Creditors
As defined in the RSA.
   
Term Loan Claim
Any Claim arising under, derived from, or based upon the Prepetition Term Loan
Credit Agreement, including any and all fees, interest paid in kind, and accrued
but unpaid interest and fees arising under the Prepetition Term Loan Credit
Agreement.
   
Term Loan Secured
Parties
Cortland Capital Market Services LLC, as Prepetition Term Loan Agent, and the
lenders under the Prepetition Term Loan Credit Agreement.
   
Term Sheet
As defined in the Introduction.
   
Trade Claims
Claims against the Debtors that are held by an entity (other than operators of
oil and gas properties arising under operating agreements to which a Debtor is a
party) arising on account of labor performed, or services, materials, goods or
equipment furnished with respect to development, drilling, completion,
maintenance, repair, operations or related activity on or with respect to any
lands, material, machinery, supplies, improvements, oil and gas leases, or wells
or pipelines owned, in whole or in part, by one or more of the Debtors.
   
Unimpaired
With respect to a Class of Claims or Interests, a Class of Claims or Interests
that is not Impaired.
   

377

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Exhibit B-1

DIP Credit Agreement

378

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

SENIOR SECURED SUPERPRIORITY
DEBTOR-IN-POSSESSION
CREDIT AGREEMENT
 
DATED AS OF JUNE [●], 2019
 
AMONG
 
LEGACY RESERVES LP,
as a debtor and debtor-in-possession,
as Borrower,
 
the other LOAN PARTIES party hereto,
as debtors and debtors-in-possession,
as Guarantors,
 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent and Collateral Agent,
 
AND
 
THE LENDERS PARTY HERETO
 

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

Sole Lead Arranger and Bookrunner
Wells Fargo Bank, National Association
 

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

 

379

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TABLE OF CONTENTS

 
Page
   
ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS
387

 
 
Section 1.01
Terms Defined Above
387  
Section 1.02
Certain Defined Terms
388  
Section 1.03
Types of Loans and Borrowings
416  
Section 1.04
Terms Generally
416
 
Section 1.05
Accounting Terms and Determinations; GAAP
417
 
Section 1.06
[Reserved]
417
 
Section 1.07
Divisions
417
     

ARTICLE II THE CREDITS
417
 
 
Section 2.01
Commitments
417
 
Section 2.02
Loans and Borrowings
418
 
Section 2.03
Requests for Borrowings
419
 
Section 2.04
Interest Elections
420  
Section 2.05
Funding of Borrowings
421  
Section 2.06
Termination and Reduction of Aggregate Commitments
422  
Section 2.07
[Reserved]
422
 
Section 2.08
Letters of Credit
422
 
Section 2.09
Collateral; Guarantees
427
     

ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
429
 
 
Section 3.01
Repayment of Loans
429
 
Section 3.02
Interest
429
 
Section 3.03
Alternate Rate of Interest
430
 
Section 3.04
Prepayments
431
 
Section 3.05
Fees
432
     

ARTICLE IV PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS.
433
 
 
Section 4.01
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
433  
Section 4.02
Presumption of Payment by the Borrower
434
 
Section 4.03
Payments and Deductions by the Agent; Defaulting Lenders
434      

ARTICLE V INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
437
 
 
Section 5.01
Increased Costs
437

380

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 5.02
Break Funding Payments
438
 
Section 5.03
Taxes
439  
Section 5.04
Designation of Different Lending Office
442
 
Section 5.05
Illegality
442
     

ARTICLE VI CONDITIONS PRECEDENT
443
 
 
Section 6.01
Interim Facility Effective Date
443
 
Section 6.02
Final Facility Effective Date
445  
Section 6.03
Conditions Precedent to Each Borrowing
446
     

ARTICLE VII REPRESENTATIONS AND WARRANTIES
448
 
 
Section 7.01
Organization; Powers
448
 
Section 7.02
Authority; Enforceability
448
 
Section 7.03
Approvals; No Conflicts
449
 
Section 7.04
Financial Position; No Material Adverse Change
449
 
Section 7.05
Litigation
449  
Section 7.06
Environmental Matters
450
 
Section 7.07
Compliance with the Laws and Agreements; No Defaults
451
 
Section 7.08
Investment Company Act
451
 
Section 7.09
Taxes
451
 
Section 7.10
ERISA
451
 
Section 7.11
Disclosure; No Material Misstatements
452  
Section 7.12
Insurance
453
 
Section 7.13
Restriction on Liens
453  
Section 7.14
Subsidiaries
453  
Section 7.15
Location of Business and Offices
453
 
Section 7.16
Properties; Titles, Etc.
454
 
Section 7.17
Maintenance of Properties
455
 
Section 7.18
Gas Imbalances, Prepayments
455
 
Section 7.19
Marketing of Production
455
 
Section 7.20
Swap Agreements
455
 
Section 7.21
Use of Loans and Letters of Credit
456
 
Section 7.22
[Reserved]
456
 
Section 7.23
USA PATRIOT; AML Laws; Anti-Corruption Laws and Sanctions
456

381

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 7.24
International Operations
456  
Section 7.25
Accounts
456
 
Section 7.26
[Reserved]
456
 
Section 7.27
[Reserved]
456
 
Section 7.28
DIP Orders
456
 
Section 7.29
Budget
456
 
Section 7.30
Representations and Warranties of the Parent Guarantors

     

ARTICLE VIII AFFIRMATIVE COVENANTS
457
 
 
Section 8.01
Financial Statements; Other Information
457
 
Section 8.02
Notices of Material Events
460  
Section 8.03
Existence; Conduct of Business
461
 
Section 8.04
Payment of Obligations
461
 
Section 8.05
Performance of Obligations under Loan Documents
462
 
Section 8.06
Operation and Maintenance of Properties
462
 
Section 8.07
Insurance
462
 
Section 8.08
Books and Records; Inspection Rights
463
 
Section 8.09
Compliance with Laws
463
 
Section 8.10
Environmental Matters
463
 
Section 8.11
Further Assurances
464
 
Section 8.12
Reserve Reports
465
 
Section 8.13
Title Information
465
 
Section 8.14
Additional Collateral; Additional Guarantors
466  
Section 8.15
ERISA Compliance
466  
Section 8.16
[Reserved]
467  
Section 8.17
[Reserved]
467
 
Section 8.18
Use of Proceeds
467
 
Section 8.19
[Reserved]
467
 
Section 8.20
[Reserved]
467
 
Section 8.21
Affirmative Covenants of the Parent Guarantors
467
 
Section 8.22
[Reserved]
467
 
Section 8.23
Delivery of Proposed DIP Orders
467
 
Section 8.24
Cash Management
468

382

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TABLE OF CONTENTS
(Continued)

 
Page
   
ARTICLE IX NEGATIVE COVENANTS
468  
 
Section 9.01
Financial Covenants
468  
Section 9.02
Debt
468  
Section 9.03
Liens
469
 
Section 9.04
Dividends, Distributions and Redemptions
470
 
Section 9.05
Investments, Loans and Advances
470
 
Section 9.06
Nature of Business
471  
Section 9.07
[Reserved]
471
 
Section 9.08
Proceeds of Loans; OFAC
472
 
Section 9.09
ERISA Compliance
472
 
Section 9.10
Sale or Discount of Receivables
473
 
Section 9.11
Mergers, Divisions, Etc.
473
 
Section 9.12
Sale of Properties
473
 
Section 9.13
Environmental Matters
474
 
Section 9.14
Transactions with Affiliates
474
 
Section 9.15
Subsidiaries
474
 
Section 9.16
Negative Pledge Agreements; Dividend Restrictions
474
 
Section 9.17
Gas Imbalances, Take-or-Pay or Other Prepayments
474
 
Section 9.18
Swap Agreements
475
 
Section 9.19
Marketing Activities
475
 
Section 9.20
Accounting Changes
475
 
Section 9.21
New Accounts
475
 
Section 9.22
Volumetric Production Payment
476
 
Section 9.23
Passive Holding Company Status of Parent Guarantors
476
 
Section 9.24
Negative Covenants of the Parent Guarantors
476
 
Section 9.25
Key Employee Plans
476  
Section 9.26
[Reserved]
476
 
Section 9.27
Superpriority Claims
476  
Section 9.28
Bankruptcy Orders
476
     

ARTICLE X EVENTS OF DEFAULT; REMEDIES
477  
 
Section 10.01
Events of Default
477
 
Section 10.02
Remedies
480

383

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 10.03
Disposition of Proceeds
481
     

ARTICLE XI THE AGENTS
482
 
 
Section 11.01
Appointment; Powers
482  
Section 11.02
Duties and Obligations of Agent
482
 
Section 11.03
Action by Agent
483
 
Section 11.04
Reliance by Agent
483  
Section 11.05
Subagents
483
 
Section 11.06
Resignation or Removal of Agent
484
 
Section 11.07
Agent and Lenders
484
 
Section 11.08
No Reliance
484
 
Section 11.09
Agent May File Proofs of Claim
485
 
Section 11.10
Authority of Agent to Release Collateral and Liens
485
 
Section 11.11
Secured Cash Management Agreements
486
 
Section 11.12
The Arranger
486
     

ARTICLE XII MISCELLANEOUS
486  
 
Section 12.01
Notices
486  
Section 12.02
Waivers; Amendments
487
 
Section 12.03
Expenses, Indemnity; Damage Waiver
489
 
Section 12.04
Successors and Assigns
495  
Section 12.05
Survival; Revival; Reinstatement
495
 
Section 12.06
Counterparts; Integration; Effectiveness
495
 
Section 12.07
Severability
496
 
Section 12.08
Right of Setoff
496  
Section 12.09
GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS
496
 
Section 12.10
Headings
498
 
Section 12.11
Confidentiality
498
 
Section 12.12
Interest Rate Limitation
499
 
Section 12.13
EXCULPATION PROVISIONS
499  
Section 12.14
Collateral Matters; Secured Swap Agreements; Secured Cash Management Agreements
500
 
Section 12.15
No Third Party Beneficiaries
500

384

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TABLE OF CONTENTS
(Continued)

     
Page
         
Section 12.16
USA PATRIOT Act Notice
500  
Section 12.17
Non-Fiduciary Status
501
 
Section 12.18
Cashless Settlement
501
 
Section 12.19
Joinder of Subsidiaries
501
 
Section 12.20
[Reserved]
501
 
Section 12.21
[Reserved]
501
 
Section 12.22
Acknowledgement and Consent to Bail-In of EEA Financial Institutions
501
 
Section 12.23
Acknowledgement Regarding Any Supported QFCs
502
     

ARTICLE XIII LOAN GUARANTEE
503
 
 
Section 13.01
Guarantee
503
 
Section 13.02
Guarantee of Payment
504
 
Section 13.03
No Discharge or Diminishment of Loan Guarantee
504
 
Section 13.04
Defenses Waived
505  
Section 13.05
Rights of Subrogation
505
 
Section 13.06
Reinstatement; Stay of Acceleration
505
 
Section 13.07
Information
505
 
Section 13.08
Taxes
506
 
Section 13.09
Maximum Liability
506
 
Section 13.10
Contribution
506
 
Section 13.11
Representations and Warranties
507
 
Section 13.12
Subordination of Indebtedness
507
 
Section 13.13
Other Terms
509

Annex I
Refinanced Loan Amounts
Annex II
New Money Loan Commitments
   
Exhibit A
Form of Note
Exhibit B
Form of Borrowing Request
Exhibit C
Form of Compliance Certificate
Exhibit D
Form of Assignment and Assumption
Exhibit E
Interim Order
Exhibit F-1-4
Form of U.S. Tax Compliance Certificates
Exhibit G
Initial Budget

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TABLE OF CONTENTS
(Continued)

 
Page
   
Schedule 1.01
Existing Letters of Credit
Schedule 7.05
Litigation
Schedule 7.14
Subsidiaries
Schedule 7.15
Location of Businesses
Schedule 7.18
Gas Imbalances
Schedule 7.19
Marketing Contracts
Schedule 7.20
Swap Agreements
Schedule 7.25
Accounts
Schedule 9.02(e)
Existing Debt
Schedule 9.02(f)
Debt Related to Oil and Gas Operations
Schedule 9.03(d)
Liens on Property
Schedule 9.05(a)
Investments
Schedule 13.11
Guarantor Corporate Information

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This SENIOR SECURED SUPERPRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as
of June [●], 2019 (this “Agreement”), is among Legacy Reserves LP, as a debtor
and debtor-in-possession, a limited partnership duly formed and existing under
the laws of the State of Delaware (the “Borrower”), the other Loan Parties party
hereto, each of the Lenders from time to time party hereto, and WELLS FARGO
BANK, NATIONAL ASSOCIATION (in its individual capacity, “Wells Fargo”), as
administrative agent and collateral agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Agent”) and as Issuing Bank
under and as defined herein.
 
R E C I T A L S
 
A.        On June [●], 2019 (the “Petition Date”), the Borrower and the
Guarantors (in such capacity, each a “Debtor” and collectively, the “Debtors”)
filed voluntary petitions for relief under Chapter 11 of Title 11 of the United
States Code (the “Bankruptcy Code”) in the Bankruptcy Court;
 
B.         The Borrower has requested that the Lenders provide the Borrower with
a debtor-in-possession, superpriority, senior secured revolving loan credit
facility in an aggregate principal amount of up to $350,000,000 (the “DIP
Facility”) in Commitments and Loans from the Lenders, which shall consist of (x)
a new money revolving loan facility in the aggregate principal amount of up to
$100,000,000, which shall include a sub-facility of up to $1,000,000 for the
issuance of Letters of Credit (together the “New Money Facility”) and (y) an
$87,500,000 term loan upon entry of the Interim Order and a $162,500,000 term
loan upon entry of the Final Order, for a total of $250,000,000, to roll up the
Existing Loans under the Existing Credit Agreement (the “Refinancing Facility”),
in each case to be afforded the liens and priority set forth in the DIP Orders
and as set forth in the other Loan Documents and to be used during the
Bankruptcy Cases for the purposes set forth in Section 7.21, and which New Money
Facility shall be available for borrowings and other extensions of credit as of
the Interim Facility Effective Date, subject in all respects to the terms set
out herein and in the other Loan Documents; and
 
C.         By execution and delivery of this Agreement and the other Loan
Documents and entry of the applicable DIP Order, the Guarantors, as applicable,
agree to guarantee the Obligations, and the Borrower and each Guarantor agrees
to secure all of the Obligations by granting to the Agent, for the benefit of
the Secured Parties, a lien and security interest in respect of, and on,
substantially all of each Debtor’s respective assets, on and subject to the
terms and priorities set forth in the DIP Orders and the other Loan Documents.
 
In consideration of the mutual covenants and agreements herein contained and of
the loans, extensions of credit and commitments hereinafter referred to, the
parties hereto agree as follows:
 
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
 
Section 1.01         Terms Defined Above.  As used in this Agreement, each term
defined above has the meaning indicated above.
 
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Section 1.02        Certain Defined Terms.  Unless otherwise defined in this
Agreement, as used in this Agreement, the following terms have the meanings
specified below:
 
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
 
“Adequate Protection Liens” has the meaning assigned such term in the DIP
Orders.
 
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
 
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Agent.
 
“Affected Loans” has the meaning assigned such term in Section 5.05.
 
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
 
“Aggregate Commitments” at any time, means the sum of the aggregate amount of
the Commitments of all of the New Money Lenders at such time, as the same may be
reduced or terminated pursuant to Section 2.06.
 
“Alternate Base Rate” means, for any day, a rate per annum equal to the highest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the LIBO Rate for a one month
Interest Period on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1%, provided that, in the context of
this definition of Alternate Base Rate and for the avoidance of doubt, the LIBO
Rate for any day shall be based on the rate as quoted at approximately 11:00
a.m. London time on such day to the Agent’s London office for dollar deposits of
$5,000,000 having a one-month maturity.  Any change in the Alternate Base Rate
due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBO
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.
 
“AML Laws” means all laws, rules, and regulations of any jurisdiction applicable
to any Lender or any Debtor from time to time concerning or relating to
anti-money laundering.
 
“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to any Debtor from time to time concerning or relating
to bribery or corruption.
 
“Applicable Margin” means, for any day, (a) with respect to any Refinanced Loan
(which shall be an ABR Loan), 3.50% per annum and (b) with respect to any New
Money Loan (i) that is a Eurodollar Loan, 5.25% per annum and (ii) that is an
ABR Loan, 4.25% per annum.
 
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“Applicable Percentage” means, with respect to any New Money Lender, the
percentage of the Aggregate Commitments represented by such Lender’s Commitment
at such time; provided that, at any time a Defaulting Lender shall exist,
“Applicable Percentage” shall mean the percentage of the Aggregate Commitments
(disregarding any Defaulting Lenders’ Commitment at such time, but subject to
Section 4.03) represented by such Lender’s Commitment.  If the Aggregate
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Aggregate Commitments most recently in effect giving
effect to any assignments.
 
“Approved Counterparty” means (a) any Lender or any Affiliate of a Lender and
(b) any other Person (or any credit support provider of such Person) whose
issuer rating or whose long term senior unsecured debt rating is BBB-/Baa3 by
S&P or Moody’s (or their equivalent) or higher.
 
“Approved Plan of Reorganization” means the “Plan” as defined in the DIP Order.
 
“Arranger” means Wells Fargo, in its capacity as sole lead arranger and sole
bookrunner hereunder.
 
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 12.04(b)), and accepted by the Agent, in the form of Exhibit D or any
other form approved by the Agent.
 
“Availability Period” means the period from the Interim Facility Effective Date,
to, but excluding, the Termination Date.
 
“Available Commitments” means (a) during the Interim Period, the Interim
Facility Cap and (b) during the Final Period, the Aggregate Commitments.
 
“Available Funds” means, as of any date of determination, the amount by which
the Available Commitments on such date exceed the total Revolving Credit
Exposure of all Lenders on such date.
 
“Avoidance Actions” means all claims and causes of action under sections 502(d),
544, 545, 547, 548, 549 and 550 of the Bankruptcy Code.
 
“Avoidance Action Proceeds” means any and all proceeds of any Avoidance Action.
 
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.
 
“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.
 
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“Bankruptcy Cases” means the cases of the Debtors filed under Chapter 11 of the
Bankruptcy Code in the Bankruptcy Court from and after the Petition Date
including any and all proceedings arising in or related to such cases.
 
“Bankruptcy Court” means the United States Bankruptcy Court for the Southern
District of Texas.
 
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule
13d-5 under the Securities Exchange Act, except that in calculating the
beneficial ownership of any particular “person” (as that term is used in Section
13(d)(3) of the Securities Exchange Act), such “person” will be deemed to have
beneficial ownership of all securities that such “person” has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition.  The terms “Beneficially Owns” and “Beneficially Owned” have
correlative meanings.
 
“Beneficial Ownership Certification” shall mean a certification regarding
beneficial ownership as required by the Beneficial Ownership Regulation.
 
“Beneficial Ownership Regulation” shall mean 31 C.F.R. § 1010.230.
 
“Binger” means Binger Operations, LLC, an Oklahoma limited liability company.
 
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.
 
“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.
 
“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03 and substantially in the form of Exhibit B.
 
“Budget” means a thirteen-week rolling operating budget and cash flow forecast,
in form and substance reasonably acceptable to the Agent.
 
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or
required by law to remain closed; and if such day relates to a Borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which
dealings in dollar deposits are carried out in the London interbank market.
 
“Capital Expenditure Budget” means a budget setting forth the projected capital
expenditures of the Loan Parties for the calendar year 2019, in form and
substance reasonably acceptable to the Agent.
 
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“Capital Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as capital leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder.
 
“Carve-Out” has the meaning assigned to such term in the DIP Order.
 
“Cash Collateralize” means, in respect of any obligation, the provision, and
pledge (as a security interest with the priority set forth in the DIP Order) of,
cash collateral in dollars, at a location and pursuant to documentation in form
and substance satisfactory to the Agent and the Issuing Bank (and “Cash
Collateralization” has a corresponding meaning).
 
“Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management services.
 
“Cash Management Order” means one or more orders of the Bankruptcy Court,
including any interim and/or final orders, entered in the Bankruptcy Cases,
together with all extensions, modifications and amendments thereto, in form and
substance reasonably satisfactory to the Agent, which, among other matters,
authorizes the Borrower and the Guarantors to maintain their existing cash
management system.
 
“Cash Receipts” means all cash received by or on behalf of any Debtor, including
without limitation:  (a) amounts payable under or in connection with any Oil and
Gas Properties; (b) cash representing operating revenue earned or to be earned
by any Debtor; (c) proceeds from Loans; and (d) any other cash received by or on
behalf of any Debtor from whatever source (including amounts received in respect
of the liquidation of any Swap Agreement and amounts received in respect of any
disposition of Property).
 
“Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Property of any Debtor having a fair market value in
excess of $250,000 in the aggregate for any calendar year.
 
“Change in Control” means (a) the Parent ceases to (i) be the Beneficial Owner
of 100% of the Equity Interests of Legacy GP, (ii) Control Legacy GP or (iii) be
the Beneficial Owner of 100% of the limited partner Equity Interests in the
Borrower; (b) Legacy GP ceases to be the sole general partner of the Borrower;
(c) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or greater than 50% of the properties or assets
(determined by reference to fair market value of such properties and assets at
the time of such sale, lease, transfer, conveyance or other disposition) of the
Debtors taken as a whole, to any “person” (as that term is used in Section
13(d)(3) of the Securities Exchange Act); or (d) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any “person” (as that term is used in Section 13(d)(3)
of the Securities Exchange Act) becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Equity Interests of the Parent, measured by
voting power rather than number of shares, units or the like.
 
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“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or,
for purposes of Section 5.01(b), by any lending office of such Lender or by such
Lender’s or the Issuing Bank’s holding company, if any) with any request,
guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement; provided
that notwithstanding anything herein to the contrary (i) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith, or in implementation
thereof and (ii) all requests, rules, guidelines or directives concerning
capital adequacy promulgated by the Bank for International Settlements, the
Basel Committee on Banking Regulations and Supervisory Practices (or any
successor similar authority) or the United States financial regulatory
authorities, in each case pursuant to Basel III, shall be deemed to be a “Change
in Law”, regardless of the date enacted, adopted, promulgated, issued or
implemented.
 
“Chapter 11 Milestones” shall have the meaning assigned to such term in the DIP
Orders.
 
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.
 
“Collateral” means all assets and Property of any kind (including all assets
pledged under, and the “Collateral” as defined in, the Existing Security
Instruments) that is subject to a Lien in favor of the Agent to secure the
Obligations or which under the terms of any Loan Document is purported to be
subject to such Lien, which includes, for the avoidance of doubt, all existing
(whether pre- or post-petition) and after-acquired, tangible and intangible,
personal and real property and assets of each of the Loan Parties and any
proceeds thereof and, subject to approval by the Bankruptcy Court pursuant to
the Final Order, any Avoidance Action Proceeds; provided that the Collateral
shall not include the Excluded Assets; provided, further that notwithstanding
anything in this Agreement or any other Loan Document to the contrary, the
Collateral does not include any Building or Manufactured (Mobile) Home (each as
defined in the applicable Flood Insurance Regulations) and no Building or
Manufactured (Mobile) Home will be encumbered by any Loan Document unless and
until the Lenders are given 30 days’ prior written notice thereof and each
Lender confirms within such 30 day period to the Agent that its flood due
diligence has been completed and flood insurance compliances has been confirmed
(including the receipt of evidence of any required flood insurance);
provided, further however, that any Building or Manufactured (Mobile) Home
located at 1760 Anderson County Road 2608, Tennessee Colony, Anderson County,
Texas 75681-0000 shall be included as “Collateral” hereunder.
 
“Commitment” means, with respect to each Lender, the commitment of such Lender
to make New Money Loans and to acquire participations in Letters of Credit
hereunder in an aggregate principal amount at any one time outstanding not to
exceed the amounts set forth opposite such Lender’s name as its “Commitment” on
Annex II (as such Annex II may be amended or modified from time to time in
connection with any reduction or modification to any Commitment or to the
Aggregate Commitments pursuant to this Agreement), expressed as an amount
representing the maximum aggregate amount of such Lender’s Revolving Credit
Exposure hereunder, as such Commitment may be (a) modified from time to time
pursuant to Section 2.06 and (b) modified from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.04(b).
 
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“Commitment Fee Rate” means 1.00% per annum.
 
“Committee” means the statutory official committee of unsecured creditors
appointed in the Bankruptcy Cases.
 
“Commodity Account” has the meaning assigned to such term in the UCC.
 
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute, and any
regulations promulgated thereunder.
 
“Confirmation Order” means an order, in form and substance reasonably
satisfactory to the Agent, confirming the Approved Plan of Reorganization.
 
“Consolidated Subsidiaries” means, (a) with respect to the Borrower, each
Subsidiary of the Borrower (whether now existing or hereafter created or
acquired) the financial statements of which shall be (or should have been)
consolidated with the financial statements of the Borrower in accordance with
GAAP and (b) with respect to the Parent, each Subsidiary of the Parent (whether
now existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of the
Parent in accordance with GAAP.
 
“Continuing Directors” means, as of any date of determination, any member of the
board of directors of the Parent who (a) was a member of such board of directors
on the Petition Date or (b) was nominated for election or elected to such board
of directors with the approval of a majority of the Continuing Directors who
were members of such board of directors at the time of such nomination or
election.
 
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.  For the
purposes of this definition, and without limiting the generality of the
foregoing, any Person that owns directly or indirectly ten percent (10%) or more
of the Equity Interests having ordinary voting power for the election of the
directors or other governing body of a Person will be deemed to “control” such
other Person.  “Controlling” and “Controlled” have meanings correlative thereto.
 
“Debt” means, for any Person, the sum of the following (without duplication): 
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable, accrued expenses, liabilities or other obligations of such
Person, in each such case to pay the deferred purchase price of Property or
services; (d) all obligations under Capital Leases; (e) all obligations under
Synthetic Leases; (f) all Debt (as defined in the other clauses of this
definition) of others secured by (or for which the holder of such Debt has an
existing right, contingent or otherwise, to be secured by) a Lien on any
Property of such Person, whether or not such Debt is assumed by such Person; (g)
all Debt (as defined in the other clauses of this definition) of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the Debt (howsoever such assurance shall be made) to the extent
of the lesser of the amount of such Debt and the maximum stated amount of such
guarantee or assurance against loss; (h) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial position or covenants
of any other Person or to purchase the Debt or Property of any other Person; (i)
obligations to deliver commodities, goods or services, including, without
limitation, Hydrocarbons, in consideration of one or more advance payments,
other than gas balancing arrangements in the ordinary course of business; (j)
obligations to pay for goods or services whether or not such goods or services
are actually received or utilized by such Person; (k) any Debt of a partnership
for which such Person is liable either by agreement, by operation of law or by a
Governmental Requirement but only to the extent of such liability; (l)
Disqualified Capital Stock; and (m) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly
or indirectly received payment.  The Debt of any Person shall include all
obligations of such Person of the character described above to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is not included as a liability of such Person under GAAP.
 
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“Debtor Relief Laws” means the Bankruptcy Code of the United States of America,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States or other
applicable jurisdictions from time to time in effect.
 
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
 
“Defaulting Lender” means any Lender, as determined by the Agent, that has (a)
failed to fund any portion of its Loans or participations in Letters of Credit
within three (3) Business Days of the date required to be funded by it
hereunder, (b) notified the Borrower, the Agent, the Issuing Bank or any Lender
in writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement or under
other agreements in which it commits to extend credit, (c) failed, within three
(3) Business Days after request by the Agent or the Borrower, to confirm that it
will comply with the terms of this Agreement relating to its obligations to fund
prospective Loans and participations in then outstanding Letters of Credit, (d)
otherwise failed to pay over to the Agent or any other Lender any other amount
required to be paid by it hereunder within three (3) Business Days of the date
when due, unless the subject of a good faith dispute, (e) or has a direct or
indirect parent company that has become the subject of a Bail-In Action, or (f)
(i) become or is insolvent or has a parent company that has become or is
insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding,
or has had a receiver, conservator, trustee or custodian appointed for it, or
has taken any action in furtherance of, or indicating its consent to, approval
of or acquiescence in any such proceeding or appointment or has a parent company
that has become the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment; provided that a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority so long as such ownership interest does not
result in or provide such Lender with immunity from the jurisdiction of courts
within the United States or from the enforcement of judgments or writs of
attachment on its assets or permit such Lender (or such Governmental Authority)
to reject, repudiate, disavow or disaffirm any contracts or agreements made with
such Lender.  Any determination by the Agent that a Lender is a Defaulting
Lender under any one or more of clauses (a) through (f) above shall be
conclusive and binding absent manifest error, and such Lender shall be deemed to
be a Defaulting Lender (subject to Section 4.03(f)) upon delivery of written
notice of such determination to the Borrower, the Issuing Bank and the Lenders.
 
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“Deposit Account” has the meaning assigned to such term in the UCC.
 
“Dew Gathering LLC” means Dew Gathering LLC, a Texas limited liability company
and a Wholly-Owned Subsidiary of the Borrower.
 
“DIP Order” means the Interim Order and the Final Order, as applicable.
 
“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible or exchangeable for Debt or
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is one year after the earlier
of (a) the Maturity Date and (b) the date on which there are no Loans, LC
Exposure or other obligations hereunder outstanding and all of the Commitments
are terminated.
 
“dollars” or “$” refers to lawful money of the United States of America.
 
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.
 
“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.
 
“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.
 
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“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.
 
“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety the environment or the preservation or reclamation of
natural resources, in effect in any and all jurisdictions in which any Debtor is
conducting or at any time has conducted business, or where any Property of any
Debtor is located, including without limitation, the Oil Pollution Act of 1990
(“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive
Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as
amended, the Federal Water Pollution Control Act, as amended, the Occupational
Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as
amended, the Toxic Substances Control Act, as amended, the Superfund Amendments
and Reauthorization Act of 1986, as amended, the Hazardous Materials
Transportation Act, as amended, and other environmental conservation or
protection Governmental Requirements.  The term “oil” shall have the meaning
specified in OPA, the terms “hazardous substance” and “release” (or “threatened
release”) have the meanings specified in CERCLA, the terms “solid waste” and
“disposal” (or “disposed”) have the meanings specified in RCRA and the term “oil
and gas waste” shall have the meaning specified in Section 91.1011 of the Texas
Natural Resources Code (“Section 91.1011”); provided, however, that (a) in the
event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply
subsequent to the effective date of such amendment and (b) to the extent the
laws of the state or other jurisdiction in which any Property of any Debtor is
located establish a meaning for “oil,” “hazardous substance,” “release,” “solid
waste,” “disposal” or “oil and gas waste” which is broader than that specified
in either OPA, CERCLA, RCRA or Section 91.1011, such broader meaning shall
apply.
 
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest (other than, prior to conversion into common Equity Interests,
the Existing Convertible Senior Notes).
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.
 
“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with any Debtor would be deemed to be a “single employer” within
the meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or (o)
of section 414 of the Code.
 
“ERISA Event” means (a) a “Reportable Event” described in section 4043 of ERISA
and the regulations issued thereunder, (b) the withdrawal of any Debtor or any
ERISA Affiliate from a Plan during a plan year in which it was a “substantial
employer” as defined in section 4001(a)(2) of ERISA, (c) the filing of a notice
of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under section 4041 of ERISA, (d) the institution of proceedings to
terminate a Plan by the PBGC, (e) receipt of a notice of withdrawal liability
pursuant to Section 4202 of ERISA or (f) any other event or condition which
might constitute grounds under section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan.
 
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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.
 
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.
 
“Event of Default” has the meaning assigned such term in Section 10.01.
 
“Excepted Liens” means (a) Liens for Taxes, assessments or other governmental
charges or levies (i) which are not delinquent; (ii) the nonpayment of which is
permitted or required by the Bankruptcy Code; or (iii) which are being contested
in good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (b) Liens in connection with workers’
compensation, unemployment insurance or other social security, old age pension
or public liability obligations which are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (c) statutory landlord’s liens,
operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’,
suppliers’, workers’, materialmen’s, construction or other like Liens arising by
operation of law in the ordinary course of business or incident to the
exploration, development, operation and maintenance of Oil and Gas Properties
each of which is in respect of obligations that are not delinquent or which are
being contested in good faith by appropriate action and for which the Parent or
any other Debtor, as applicable, maintains adequate reserves in accordance with
GAAP; (d) contractual Liens which arise in the ordinary course of business of
the Debtors under operating agreements, joint venture agreements, oil and gas
partnership agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements,
processing agreements, net profits agreements, development agreements, gas
balancing or deferred production agreements, injection, repressuring and
recycling agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the oil and gas business and are for claims which are not
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP,
provided that any such Lien referred to in this clause does not materially
impair the use of the Property covered by such Lien for the purposes for which
such Property is held by any Debtor or materially impair the value of such
Property subject thereto; (e) Liens arising solely by virtue of any statutory or
common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies and burdening only deposit accounts or other funds
maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account or is subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the Board and no such deposit account is intended by any Debtor
to provide collateral to the depository institution; (f) easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any Property of any Debtor for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines for the removal of
gas, oil, coal or other minerals or timber, and other like purposes, or for the
joint or common use of real estate, rights of way, facilities and equipment, in
each case, incurred in the ordinary course of business, which do not secure any
Debt or other monetary obligations and which do not materially impair the use of
such Property for the purposes of which such Property is held by any Debtor or
materially impair the value of such Property subject thereto; (g) Liens on cash
or securities pledged to secure performance of tenders, surety and appeal bonds,
government contracts, performance and return of money bonds, bids, trade
contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business and to
the extent the Debt in respect thereof is permitted by Section 9.02(f); and (h)
judgment and attachment Liens not giving rise to an Event of Default, provided
that any appropriate legal proceedings which may have been duly initiated for
the review of such judgment shall not have been finally terminated or the period
within which such proceeding may be initiated shall not have expired and no
action to enforce such Lien has been commenced; provided that (i) all such Liens
described in clauses (a) through (e) shall remain “Excepted Liens” only for so
long as no action to enforce such Lien has been commenced (except any such
action that is subject to the automatic stay of Section 362 of the Bankruptcy
Code or as otherwise permitted by a final order of the Bankruptcy Court) and no
intention to subordinate the Liens granted in favor of the Agent and/or the
other Secured Parties is to be hereby implied or expressed by, or as a result
of, the permitted existence of such Excepted Liens; and (ii) the term “Excepted
Liens” shall not include any Lien securing Debt for borrowed money other than
the Obligations.
 
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“Excluded Accounts” means (i) segregated Deposit Accounts, the balance of which
consists exclusively of funds set aside in connection with the payment of tax
obligations, payroll and employee benefits, medical, dental and employee
benefits claims to employees of the Debtors, (ii) zero balance accounts, (iii)
fiduciary accounts the balance of which consists exclusively of amounts held in
trust for unaffiliated third parties in respect of such third parties’ ratable
share of the revenues of Oil and Gas Properties, (iv) escrow accounts the
balance of which consists exclusively of purchase price deposits held in escrow
pursuant to a binding and enforceable purchase and sale agreement with an
unaffiliated third party containing customary provisions regarding the payment
and refunding of such deposits, (v) accounts containing cash collateral
permitted under clause (g) of the definition of “Excepted Liens” and (vi) the
Adequate Assurance Account and Wyoming Escheat Account (each as defined in the
motion approving the Cash Management Order).
 
“Excluded Assets” means (a) Avoidance Actions; (b) the Excepted Liens; (c) the
Excluded Accounts, (d) subject to entry of the Final Order, any amounts
surcharged pursuant to section 506(c) of the Bankruptcy Code; and (e) proceeds
of any of the foregoing, but only to the extent such proceeds would otherwise
independently constitute “Excluded Assets” under clauses (a)-(d); provided that
“Excluded Assets” shall not include any Avoidance Actions Proceeds.
 
“Excluded Swap Obligations” means, with respect to the Borrower or any
Guarantor, (a) as it relates to all or a portion of any guarantee of the
Borrower or such Guarantor, any Secured Swap Obligation if, and to the extent
that, such Secured Swap Obligation (or any guarantee in respect thereof) is or
becomes illegal under the Commodity Exchange Act or any rule, regulation or
order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) by virtue of the Borrower’s or such
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the guarantee of the Borrower or such Guarantor becomes
effective with respect to such Secured Swap Obligation, or (b) as it relates to
all or a portion of the grant by the Borrower or such Guarantor of a security
interest, any Secured Swap Obligation if, and to the extent that, such Secured
Swap Obligation (or such security interest in respect thereof) is or becomes
illegal under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of the Borrower’s or such Guarantor’s
failure for any reason to constitute an “eligible contract participant” as
defined in the Commodity Exchange Act and the regulations thereunder at the time
the security interest of the Borrower or such Guarantor becomes effective with
respect to such Secured Swap Obligation.  If a Secured Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Secured Swap Obligation that is attributable
to swaps for which such guarantee or security interest is or becomes illegal.
 
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“Excluded Taxes” means, with respect to the Agent, any Lender, any Issuing Bank
or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or any Guarantor hereunder or under any other Loan
Document, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America or such other jurisdiction under the laws
of which such recipient is organized or in which its principal office is located
or, in the case of any Lender, in which its applicable lending office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which the Borrower or any
Guarantor is located, (c) in the case of a Foreign Lender any U.S. withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Lender’s failure to comply with
Section 5.03(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts with respect to such withholding tax
pursuant to Section 5.03, and (d) any United States withholding Tax that is
imposed under FATCA.
 
“Existing Agent” means Wells Fargo, in its capacity as administrative agent
under the Existing Credit Agreement.
 
“Existing Convertible Senior Notes” means “Convertible Senior Notes” as defined
in the Existing Credit Agreement.
 
“Existing Credit Agreement” means the Third Amended and Restated Credit
Agreement, dated as of April 1, 2014, among the Borrower, the Guarantors (as
defined therein), the Existing Agent, and the Existing Lenders, as amended by
the First Amendment to Third Amended and Restated Credit Agreement, dated as of
April 17, 2014, the Second Amendment to Third Amended and Restated Credit
Agreement, dated as of May 22, 2014, the Third Amendment to Third Amended and
Restated Credit Agreement, dated as of December 29, 2014, the Fourth Amendment
to Third Amended and Restated Credit Agreement, dated as of February 23, 2015,
the Fifth Amendment to Third Amended and Restated Credit Agreement, dated as of
August 5, 2015, the Sixth Amendment to Third Amended and Restated Credit
Agreement, dated as of November 13, 2015, the Seventh Amendment to Third Amended
and Restated Credit Agreement, dated as of February 19, 2016, the Eighth
Amendment to Third Amended and Restated Credit Agreement, dated as of October
25, 2016, the Ninth Amendment to Third Amended and Restated Credit Agreement,
dated as of March 23, 2018, the Tenth Amendment to Third Amended and Restated
Credit Agreement, dated as of September 14, 2018, the Eleventh Amendment to
Third Amended and Restated Credit Agreement, dated as of September 20, 2018, and
the Twelfth Amendment to Third Amended and Restated Credit Agreement, dated as
of March 21, 2019.
 
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“Existing Guaranty Agreement” means the “Guaranty Agreement” as defined in the
Existing Credit Agreement.
 
“Existing Intercreditor Agreement” means that certain Intercreditor Agreement,
dated as of October 25, 2016, between the Existing Agent, as administrative
agent for the Priority Lien Secured Parties (as defined therein), and the
Existing Second Lien Agent, as administrative agent for the Junior Lien Secured
Parties (as defined therein), and acknowledged and agreed by the Borrower and
the Guarantors (as defined in the Existing Credit Agreement), as the same may
from time to time be amended, amended and restated, supplemented or otherwise
modified in accordance with the terms thereof.
 
“Existing Lenders” means the lenders party to the Existing Credit Agreement.
 
“Existing Letters of Credit” means the letters of credit issued and outstanding
as of the date hereof under the Existing Credit Agreement and set forth on
Schedule 1.01.
 
“Existing Loans” means the “Loans” as defined in the Existing Credit Agreement.
 
“Existing Loan Documents” means the “Loan Documents” as defined in the Existing
Credit Agreement.
 
“Existing Obligations” means the “Indebtedness” as defined in the Existing
Credit Agreement.
 
“Existing Second Lien Agent” means Cortland Capital Market Services LLC, a
Delaware limited liability company, together with its successors and assigns in
such capacity under the Existing Second Lien Loan Documents.
 
“Existing Second Lien Credit Agreement” means that certain Term Loan Credit
Agreement, dated as of October 25, 2016, among the Borrower, as borrower, each
of the lenders from time to time party thereto, and the Existing Second Lien
Agent, as in effect on the Petition Date.
 
“Existing Second Lien Loan Documents” means the Existing Second Lien Credit
Agreement and each other “Term Loan Document” as defined in the Existing Second
Lien Credit Agreement, and any other loan documents entered into in connection
therewith, including, without limitation, the Existing Intercreditor Agreement,
any promissory notes, mortgages, deeds of trust, security agreements and
instruments, guarantees, collateral or credit support documents, and any other
agreements, instruments consents or certificates executed by any Debtor in
connection with, or as security for the payment or performance of, any Existing
Second Lien Loans, in each case, as in effect on the Petition Date.
 
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“Existing Second Lien Loans” means the “Loans” as defined in the Existing Second
Lien Credit Agreement, which Debt is intended to be secured on a junior basis by
any collateral securing the Existing Loans.
 
“Existing Security Agreement” means the “Security Agreement” as defined in the
Existing Credit Agreement.
 
“Existing Security Instruments” means the “Security Instruments” as defined in
the Existing Credit Agreement.
 
“Existing Senior Indentures” means the “Senior Indentures” as defined in the
Existing Credit Agreement.
 
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.
 
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Agent from three Federal funds brokers of recognized standing
selected by it; provided that, if the Federal Funds Effective Rate shall be less
than zero, such rate shall be deemed to be zero for purposes of this Agreement.
 
“Fee Letter” means that certain letter agreement dated as of June [__], 2019
from Wells Fargo and acknowledged and agreed to by the Borrower.
 
“Final Facility Effective Date” has the meaning assigned to such term in Section
6.02.
 
“Final Order” shall have the meaning assigned to such term in the Interim Order.
 
“Final Period” means the period from and including the Final Facility Effective
Date to but excluding the Termination Date.
 
“Final Refinanced Loan Amount” means, as to each Refinancing Lender, the amount
set forth opposite such Refinancing Lender’s name on Annex I under the caption
“Final Refinanced Loan Amount”.
 
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“Final Refinanced Loans” has the meaning specified therefor in Section 2.01(b).
 
“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of such Person.  Unless
otherwise specified, all references to a Financial Officer shall mean a
Financial Officer of the Borrower.
 
“Financial Statements” means the financial statement or statements of the
Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a).
 
“Flood Insurance Regulations” shall mean (i) the National Flood Insurance Act of
1968 as now or 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 statute 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.
 
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located.  For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
 
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
 
“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.
 
“Governmental Authority” means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government over any
Debtor, any Properties of a Debtor, any Agent, any Issuing Bank or any Lender.
 
“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement,
whether now or hereinafter in effect, including, without limitation,
Environmental Laws, Flood Insurance Regulations, energy regulations and
occupational, safety and health standards or controls, of any Governmental
Authority.
 
“Guaranteed Obligations” has the meaning set forth in Section 13.01.
 
“Guarantor Claims” has the meaning set forth in Section 13.12.
 
“Guarantors” means (a) Legacy Reserves Operating LP, (b) Legacy Reserves
Operating GP LLC, (c) Legacy Reserves Energy Services LLC, (d) Dew Gathering
LLC, (e) Pinnacle Gas Treating LLC, (f) the Parent Guarantors, (g) Legacy
Reserves Finance Corporation, (h) Legacy Reserves Services LLC, (i) Legacy
Reserves Marketing LLC and (j) each Material Domestic Subsidiary formed or
acquired during the term of this Agreement or any Domestic Subsidiary that is a
party to this Agreement and/or guarantees the Obligations pursuant to Section
8.14.
 
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“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Obligations under
laws applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws
allow as of the date hereof.
 
“Hydrocarbon Interests” means all rights, titles, interests and estates 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” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
products refined or separated therefrom.
 
“Indemnified Taxes” means Taxes other than Excluded Taxes.
 
“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.04.
 
“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one month thereafter; provided
that (a) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day,
(b) any Interest Period pertaining to a Eurodollar Borrowing that commences on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period and (c) no Interest Period may have a term which would extend
beyond the Termination Date. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest
Period.  For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and thereafter shall be the effective date
of the most recent conversion or continuation of such Borrowing.
 
“Interim Period” means the period commencing on the Interim Facility Effective
Date and ending on (but excluding) the earlier to occur of (i) the Final
Facility Effective Date and (ii) the Maturity Date.
 
“Interim Facility Cap” means, as of any date of determination, $35,000,000;
provided that, if as of any such date of determination during the Interim
Period, the Aggregate Commitments are less than $35,000,000, the “Interim
Facility Cap” in effect on such date shall equal the amount of the Aggregate
Commitments in effect on such date.
 
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“Interim Facility Effective Date” has the meaning specified therefor in Section
6.01 .
 
“Interim Order” means the interim order of the Bankruptcy Court approving the
DIP Facility on an interim basis and entered by the Bankruptcy Court in the form
of Exhibit E, as the same may be amended, modified or supplemented from time to
time with the express written joinder or consent of the Agent, the Majority
Lenders and the Borrower.
 
“Interim Refinanced Loan Amount” means, as to each Refinancing Lender, the
amount set forth opposite such Refinancing Lender’s name on Annex I under the
caption “Interim Refinanced Loan Amounts”.
 
“Interim Refinanced Loans” has the meaning specified therefor in Section
2.01(b).
 
“Investment” means, for any Person:  (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person or any agreement to make any such acquisition (including, without
limitation, any “short sale” or any sale of any securities at a time when such
securities are not owned by the Person entering into such short sale); (b) the
making of any deposit with, or advance, loan or capital contribution to,
assumption of Debt of, purchase or other acquisition of any other Debt or equity
participation or interest in, or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding ninety (90) days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business);
(c) the purchase or acquisition (in one or a series of transactions) of Property
of another Person that constitutes a business unit; or (d) the entering into of
any guarantee of, or other contingent obligation (including the deposit of any
Equity Interests to be sold) with respect to, Debt or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person.
 
“Issuing Bank” means (i) as to the Existing Letters of Credit, the issuing
lender thereof on the Petition Date and (ii) Wells Fargo, in its capacity as an
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.08(i).  Any Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of such Issuing
Bank, in which case the term “Issuing Bank” shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
 
“LC Commitment” means, at any time, One Million dollars ($1,000,000).
 
“LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter
of Credit issued by such Issuing Bank.
 
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time.  The LC Exposure of any New Money Lender at any time
shall be its Applicable Percentage of the total LC Exposure at such time.
 
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“Legacy GP” means Legacy Reserves GP, LLC, a Delaware limited liability company.
 
“Legacy Reserves Energy Services LLC” means Legacy Reserves Energy Services LLC,
a Texas limited liability company and a Wholly-Owned Subsidiary of the Borrower.
 
“Legacy Reserves Operating GP LLC” means Legacy Reserves Operating GP LLC, a
Delaware limited liability company, the general partner of Legacy Reserves
Operating LP and a Wholly-Owned Subsidiary of the Borrower.
 
“Legacy Reserves Operating LP” means Legacy Reserves Operating LP, a Delaware
limited partnership and a Wholly-Owned Subsidiary of the Borrower.
 
“Legacy Reserves Services LLC” means Legacy Reserves Services LLC, a Texas
limited liability company and a Wholly-Owned Subsidiary of the Borrower.
 
“Lenders” means, collectively, the New Money Lenders and the Refinancing
Lenders.
 
“Letter of Credit” means the Existing Letters of Credit and any letter of credit
issued pursuant to this Agreement.
 
“Letter of Credit Agreements” means all letter of credit applications and other
agreements (including any amendments, modifications or supplements thereto)
submitted by the Borrower, or entered into by the Borrower, with any Issuing
Bank relating to any Letter of Credit issued by such Issuing Bank.
 
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate per annum determined by the Agent to be the offered rate which
appears on the page of the Reuters Screen which displays the London interbank
offered rate administered by ICE Benchmark Administration Limited (such page
currently being the LIBOR01 page) (or on any successor or substitute page of
such Service, or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such Service,
as determined by the Agent from time to time for purposes of providing
quotations of interest rates applicable to dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, two (2) Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period.  In the event that
such rate is not available at such time for any reason, then the “LIBO Rate”
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate (rounded upwards, if necessary, to the next 1/100th of 1%) at which dollar
deposits of an amount comparable to such Eurodollar Borrowing and for a maturity
comparable to such Interest Period are offered to the principal London office of
the Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two (2) Business Days prior to the
commencement of such Interest Period; provided that, if the LIBO Rate shall be
less than zero, such rate shall be deemed to be zero for the purposes of this
Agreement.
 
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“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of Oil
and Gas Properties.  The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations.  For the
purposes of this Agreement, the Debtors shall be deemed to be the owner of any
Property which they have acquired or hold subject to a conditional sale
agreement, or leases under a financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other Person
in a transaction intended to create a financing.
 
“Loan Documents” means this Agreement, the Notes, the Letter of Credit
Agreements, the Letters of Credit, the Security Instruments, the Fee Letter and
all other agreements, instruments, consents and certificates heretofore and
hereafter executed and delivered by the Borrower, any other Loan Party and any
of their respective Affiliates in connection with this Agreement.
 
“Loan Guarantee” means Article XIII of this Agreement.
 
“Loan Parties” means collectively, the Borrower and each Guarantor.
 
“Loans” means, individually, any New Money Loan or Refinanced Loan made by any
Lender pursuant to this Agreement, and collectively, to New Money Loans and
Refinanced Loans made by the Lenders to the Borrower.
 
“Majority Lenders” means, at any time, Lenders having Loans, LC Exposure and
unused Commitments representing more than 50% of the sum of all Loans
outstanding, LC Exposure and unused Commitments at such time (without regard to
any sale by a Lender of a participation in any Loan under Section 12.04(c));
provided that Loans, LC Exposure and unused Commitment of any Defaulting Lender
at such time shall be disregarded for purposes of making a determination of
Majority Lenders.
 
“Maximum Liability” has the meaning set forth in Section 13.09.
 
“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, operations, Property, liabilities (actual or
contingent)  or condition (financial or otherwise) of the Borrower and its
Guarantors, taken as a whole, other than any change, event or occurrence,
arising individually or in the aggregate, from events that could reasonably be
expected to result from the filing or commencement of the Bankruptcy Cases or
the announcement of the filing or commencement of the Bankruptcy Cases, (b) the
ability of any Debtor to perform any of its obligations under any Loan Document
to which it is a party (including, without limitation, payment and performance
of the Obligations), (c) the validity or enforceability of any Loan Document or
the Obligations or (d) the rights and remedies of, or benefits available to, the
Agent, any other Agent, the Issuing Bank or any Lender under any Loan Document.
 
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“Material Domestic Subsidiary” means, as of any date, any Domestic Subsidiary
that (a) is a Wholly-Owned Subsidiary and (b) together with its Subsidiaries,
owns Property having a fair market value of $2,000,000 or more; provided that,
notwithstanding the foregoing, each Domestic Subsidiary that owns any natural
gas pipelines or any other gathering systems or pipelines or midstream assets
shall be a Material Domestic Subsidiary.
 
“Material Indebtedness” means Debt (other than the Loans, Letters of Credit and
the Loan Guarantee), or obligations in respect of one or more Swap Agreements,
of any one or more of the Debtors in an aggregate principal amount exceeding
$1,000,000.  For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any of its Subsidiaries in respect
of any Swap Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Swap Agreement were terminated at such time.
 
“Material Permian Acreage” means Oil and Gas Properties owned by any Debtor in
Martin, Reeves, Winkler, Midland, Pecos, Howard, Glasscock, Reagan, Upton,
Irion, Crockett, Loving and Andrews Counties, Texas and Lea County, New Mexico
except for any such Oil and Gas Property that the Agent expressly agrees in
writing is not Material Permian Acreage.
 
“Maturity Date” means the earliest of (a) the Scheduled Maturity Date; (b) the
effective date of an Approved Plan of Reorganization; (c) the closing of a sale
of substantially all of the equity or assets of the Debtors (unless consummated
pursuant to an Approved Plan of Reorganization); and (d) the termination of the
DIP Facility during the continuation of an Event of Default, or termination
under this Agreement or the applicable DIP Order.
 
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.
 
“Mortgaged Property” means, as of any date of determination, any Property owned
by the Borrower or any Guarantor, which is subject to a Lien and security
interest in favor of the Agent (or its designee pursuant to any mortgage and/or
any other Loan Document) and existing under the terms of the Existing Security
Instruments to secure the Existing Obligations.
 
“Multiemployer Plan” means a Plan that is a multiemployer plan as defined in
section 3(37) or 4001 (a)(3) of ERISA.
 
“Net Cash Proceeds” means (a) in connection with any issuance or sale of Equity
Interests or Debt securities or instruments or the incurrence of loans, the cash
proceeds received from such issuance or incurrence, net of attorneys’ fees,
investment banking fees, accountants’ fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith or (b) with respect to any disposition, the cash proceeds
(including, without limitation, cash or cash equivalents subsequently received
in respect of noncash consideration initially received), net of (i) direct
selling expenses (including reasonable broker’s fees or commissions, legal,
accounting and investment banking fees and expenses, title insurance premiums,
survey costs, transfer and similar taxes and the Borrower’s good faith estimate
of income taxes paid or payable in connection with such sale), (ii) amounts
provided as a reserve, in accordance with GAAP, against any liabilities under
any indemnification obligations or purchase price adjustment associated with
such disposition (provided that, to the extent and at the time any such amounts
are released from such reserve, such amounts shall constitute Net Cash
Proceeds), (iii) amounts paid in respect of the termination of Swap Agreements
in respect of notional volumes or amounts corresponding to the property subject
of such disposition or any Debt being repaid under clause (iv), (iv) the
principal amount, premium or penalty, if any, interest and other amounts on any
Debt permitted hereunder that is secured by a Lien permitted hereunder (other
than any Lien pursuant to a Security Instrument) on the asset disposed of in
such disposition and required to be repaid with such proceeds (other than any
such Debt assumed by the purchaser of such asset) and (v) the principal amount
(together with interest and other amounts paid thereon) of any Borrowings that
are repaid with such proceeds in order to reduce or eliminate any Revolving
Credit Exposure in excess of the then-effective Available Commitments (and if
the Revolving Credit Exposure exceeds the then-effective Available Commitments
after prepaying all of the Borrowings as a result of any LC Exposure, any cash
collateral paid with such proceeds in order to reduce or eliminate any Revolving
Credit Exposure in excess of the then-effective Available Commitments).

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“New Money Lenders” means the Persons listed on Annex II and any Person that
becomes a party hereto pursuant to an Assignment and Assumption (other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption) with respect to a New Money Loan or a Commitment and, as the context
requires, includes any Issuing Bank and, in each case, includes their respective
successors and permitted assigns.
 
“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting
Lender at such time.
 
“Non-Paying Guarantor” has the meaning set forth in Section 13.10.
 
“Notes” means the promissory notes of the Borrower described in Section 2.02(d)
and being substantially in the form of Exhibit A, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.
 
“Obligated Party” has the meaning set forth in Section 13.10.
 
“Obligations” means any and all amounts owing or to be owing by the Borrower or
any other Debtor (including without limitation, all debts, liabilities,
obligations, covenants and duties of each such Person, 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 Debtor of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding, including:  (a) to the Agent, the Issuing Bank, any Lender or
any other Secured Party under, or in connection with, any Loan Document; (b) all
Secured Swap Obligations; (c) all Secured Cash Management Obligations; and (d)
all renewals, extensions and/or rearrangements of any of the above; provided
that, notwithstanding anything to the contrary herein or in any Loan Document,
“Obligations” shall not include, with respect to any Debtor, any Excluded Swap
Obligations of such Debtor.
 
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“OFAC” means the U.S. Department of the Treasury Office of Foreign Assets
Control.
 
“Oil and Gas Properties” means (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 (including without limitation 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 hereinafter 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,
buildings, structures, separators, liquid extraction, treating and processing
facilities, compressors, pumps, pumping units, field gathering systems, tanks
and tank batteries, fixtures, valves, fittings, machinery and parts, engines,
boilers, meters, apparatus, equipment, appliances, tools, implements, cables,
wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements
and servitudes together with all additions, substitutions, replacements,
accessions and attachments to any and all of the foregoing.  Unless otherwise
indicated herein, each reference to the term “Oil and Gas Properties” shall mean
Oil and Gas Properties of any one or more Debtors, as the context requires.
 
“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or Property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement and any other Loan Document.
 
“Parent” means Legacy Reserves Inc., a Delaware corporation.
 
“Parent Guarantors” means, collectively, the Parent and Legacy GP.
 
“Participant” has the meaning set forth in Section 12.04(c)(i).
 
“Participant Register” has the meaning set forth in Section 12.04(c)(ii).
 
“Paying Guarantor” has the meaning set forth in Section 13.10.
 
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
 
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“Permitted Convertible Note Cash Payments” means (a) any payment in cash of a
conversion incentive in an amount not to exceed one year’s interest that would
otherwise be payable pursuant to and in accordance with the Existing Senior
Indenture governing the Existing Convertible Senior Notes in connection with the
early cashless conversion of such Existing Convertible Senior Notes into common
Equity Interests and (b) any cash payment in lieu of the issuance of fractional
shares pursuant to and in accordance with the Existing Senior Indenture
governing the Existing Convertible Senior Notes in connection with the cashless
conversion of the Existing Convertible Senior Notes into common Equity
Interests.
 
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
 
“Pinnacle Gas Treating LLC” means Pinnacle Gas Treating LLC, a Texas limited
liability company and a Wholly-Owned Subsidiary of the Borrower.
 
“Plan” means any employee pension benefit plan, as defined in section 3(2) of
ERISA, which (a) is currently or hereafter sponsored, maintained or contributed
to by any Debtor or an ERISA Affiliate or (b) was at any time during the six
calendar years preceding the date hereof, sponsored, maintained or contributed
to by any Debtor or an ERISA Affiliate.
 
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by Wells Fargo as its prime rate in effect at its principal office in
New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.  Such
rate is set by Wells Fargo as a general reference rate of interest, taking into
account such factors as Wells Fargo may deem appropriate; it being understood
that many of Wells Fargo’s commercial or other loans are priced in relation to
such rate, that it is not necessarily the lowest or best rate actually charged
to any customer and that Wells Fargo may make various commercial or other loans
at rates of interest having no relationship to such rate.
 
“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.
 
“Proposed Plan” has the meaning set forth in Section 12.02(c).
 
“Proved Developed Producing Properties” means Oil and Gas Properties which are
categorized as “Proved Reserves” that are both “Developed” and “Producing”, as
such terms are defined in the Definitions for Oil and Gas Reserves as
promulgated by the Society of Petroleum Engineers (or any generally recognized
successor) as in effect at the time in question.
 
“Redemption” means with respect to any Debt (including, without limitation, the
Existing Convertible Senior Notes), the repurchase, redemption, prepayment,
repayment or defeasance or any other acquisition or retirement for value (or the
segregation of funds with respect to any of the foregoing) of any such Debt, but
excluding, for the avoidance of doubt, the cashless conversion of the Existing
Convertible Senior Notes into common Equity Interests in accordance with the
terms of the Existing Senior Indenture governing the Existing Convertible Senior
Notes.  For the avoidance of doubt, the cash settlement or any other payment in
cash of any conversion obligation under the Existing Convertible Senior Notes
(whether pursuant to Section 11.02(b) of the Existing Senior Indenture governing
the Existing Convertible Notes or otherwise, but excluding any Permitted
Convertible Note Cash Payments) shall constitute a Redemption of the Existing
Convertible Senior Notes.  “Redeem” has the correlative meaning thereto.
 
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“Refinanced Loan Amount” means, as to each Refinancing Lender, the sum of the
Interim Refinanced Loan Amount and Final Refinanced Loan Amount, as set forth
opposite such Refinancing Lender’s name on Annex I under the caption “Refinanced
Loan Amount”.
 
“Refinancing Lenders” means the Persons listed on Annex I (as updated by the
Agent from time to time on or prior to the Final Facility Effective Date in
accordance Section 2.01(b)) and any Person that becomes a party hereto pursuant
to an Assignment and Assumption (other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption) with respect to a
Refinanced Loan and includes their respective successors and permitted assigns.
 
“Register” has the meaning assigned such term in Section 12.04(b)(iv).
 
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and such
Person’s Affiliates.
 
“Remedial Work” has the meaning assigned such term in Section 8.10(a).
 
“Reporting Date” shall have the meaning assigned to such term in Section
8.01(t)(ii).
 
“Required Lenders” means, Lenders having Loans, LC Exposure and unused
Commitments representing at least sixty-six and two-thirds percent (66-2/3%) of
the sum of all Loans outstanding, LC Exposure and unused Commitments at such
time (without regard to any sale by a Lender of a participation in any Loan
under Section 12.04(c)); provided that Loans, LC Exposure and unused Commitment
of any Defaulting Lender at such time shall be disregarded for purposes of
making a determination of Required Lenders.
 
“Required Refinanced Lenders” has the meaning set forth in Section 12.02(c).
 
“Reserve Report” means a report, in form and substance reasonably satisfactory
to the Agent, setting forth, as of each January 1st or July 1st, the oil and gas
reserves attributable to the Oil and Gas Properties of the Debtors, 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 economic assumptions consistent with the Agent’s lending
requirements at the time.
 
“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such Person.  Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.
 
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“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in any
Debtor, or any payment (whether in cash, securities or other Property),
including any sinking fund or similar deposit, on account of the purchase,
Redemption, retirement, acquisition, cancellation or termination of any such
Equity Interests in such Debtor or any option, warrant or other right to acquire
any such Equity Interests in such Debtor.
 
“Revolving Credit Exposure” means, with respect to any New Money Lender at any
time, the sum of the outstanding principal amount of such New Money Lender’s New
Money Loans and its LC Exposure at such time.
 
“Sanctioned Country” means, at any time, a country or territory which is itself,
or whose government is, the subject or target of any Sanctions broadly
restricting or prohibiting dealing with such country, territory or government
(at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and
Syria).
 
“Sanctioned Person” means, at any time, any Person with whom dealings are
restricted or prohibited under Sanctions, including (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the United States
(including by the Office of Foreign Assets Control of the U.S. Department of the
Treasury, the U.S. Department of State, or the U.S. Department of Commerce), or
by the United Nations Security Council, the European Union or any EU member
state, or Her Majesty’s Treasury, (b) any Person located, operating, organized
or resident in a Sanctioned Country or (c) any Person directly or indirectly
owned or controlled by any such Person or Persons.
 
“Sanctions” means economic or financial sanctions or trade embargoes or
restricted measures 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 European Union or Her
Majesty’s Treasury of the United Kingdom.
 
“Scheduled Maturity Date” means the date that is the eight (8) month anniversary
of the Petition Date.
 
“Secured Cash Management Agreement” means a Cash Management Agreement between
(a) any Debtor and (b) a Secured Cash Management Provider.
 
“Secured Cash Management Obligations” means any and all amounts and other
obligations owing by any Debtor to any Secured Cash Management Provider under
any Secured Cash Management Agreement.
 
“Secured Cash Management Provider” means a Lender, an Affiliate of a Lender, the
Agent or an Affiliate of the Agent; provided that, so long as any Lender is a
Defaulting Lender, such Lender will not be a Secured Cash Management Provider
with respect to any Cash Management Agreement entered into while such Lender was
a Defaulting Lender.
 
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“Secured Obligations” means all Obligations, together with all (a) Secured Cash
Management Obligations and (b) Secured Swap Obligations owing to one or more
Lenders or their respective Affiliates.
 
“Secured Parties” means the Lenders, the Issuing Bank, any Secured Swap Party,
any Secured Cash Management Provider and any other Person holding Obligations
secured by the Liens granted under any Loan Document, including pursuant to the
DIP Orders.
 
“Secured Swap Agreement” means any Swap Agreement between any Debtor and any
Person that is entered into prior to the time, or during the time, that such
Person was, a Lender or an Affiliate of a Lender (including any such Swap
Agreement in existence prior to the date hereof), even if such Person
subsequently ceases to be a Lender (or an Affiliate of a Lender) for any reason
(any such Person, a “Secured Swap Party”); provided that, for the avoidance of
doubt, the term “Secured Swap Agreement” shall not include any Swap Agreement or
transactions under any Swap Agreement entered into after the time that such
Secured Swap Party ceases to be a Lender or an Affiliate of a Lender.
 
“Secured Swap Obligations” means all amounts and other obligations owing to any
Secured Swap Party under any Secured Swap Agreement (other than Excluded Swap
Obligations).
 
“Secured Swap Party” has the meaning assigned to such term in the definition of
Secured Swap Agreement.
 
“Securities Account” has the meaning assigned to such term in the UCC.
 
“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and any regulations promulgated
thereunder.
 
“Security Instruments” means, collectively, each security agreement, the DIP
Orders, the Loan Guarantee, mortgages, deeds of trust and any and all other
agreements, instruments, consents or certificates now or hereafter executed and
delivered by the Borrower or any other Person (other than Secured Cash
Management Agreements, Secured Swap Agreements or participation or similar
agreements between any Lender and any other lender or creditor with respect to
any Obligations pursuant to this Agreement) in connection with, or as security
for the payment or performance of the Obligations, the Notes, this Agreement, or
reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.
 
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.
 
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Agent is subject with respect to the
Adjusted LIBO Rate for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve
percentages shall include those imposed pursuant to such Regulation D. 
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation.  The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
 
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“Subsidiary” means, with respect to any Person (the “parent”), (a) any other
Person (i) of which at least a majority of the outstanding Equity Interests is
at the time directly or indirectly owned by the parent or one or more of its
Subsidiaries or by the parent and one or more of its Subsidiaries or (ii) of
which at least a majority of the outstanding Equity Interests having by the
terms thereof ordinary voting power to elect a majority of the board of
directors, manager or other governing body of such Person (irrespective of
whether or not at the time Equity Interests of any other class or classes of
such Person shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
the parent or one or more of its Subsidiaries or by the parent and one or more
of its Subsidiaries and (b) any partnership of which the parent or any of its
Subsidiaries is a general partner; provided that, for the avoidance of doubt,
the term “Subsidiary” shall exclude Binger.  Unless otherwise indicated herein,
each reference to the term “Subsidiary” shall mean a Subsidiary of the Borrower.
 
“Subsidiary Guarantor” means any Subsidiary of the Borrower that is a Guarantor.
 
“Superpriority Claim” means a superpriority administrative expense claim
pursuant to section 364(c)(1) of the Bankruptcy Code against a Debtor in any of
the Bankruptcy Cases having priority over any or all administrative expense
claims, adequate protection and other diminution claims, priority and other
unsecured claims, and all other claims against a Debtor or its estate, including
claims of the kind specified in, or otherwise arising or ordered under, any
sections of the Bankruptcy Code (including, without limitation, sections 105(a),
326, 328, 330, 331, 503(a), 503(b), 506(c), 507, 546, 552(b), 726, 1113 and/or
1114 thereof), whether or not such claim or expenses may become secured by a
judgment Lien or other non-consensual Lien, levy or attachment.
 
“Swap Agreement” means any agreement with respect to any swap, forward, future
or derivative transaction or option or similar agreement, whether exchange
traded, “over-the-counter” or otherwise, involving, or settled by reference to,
one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions; provided that no phantom stock or similar plan providing
for payments only on account of services provided by current or former
directors, officers, employees or consultants of any Debtor shall be a Swap
Agreement.
 
“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of U.S. federal income taxes, if
the lessee in respect thereof is obligated to either purchase for an amount in
excess of, or pay upon early termination an amount in excess of, 80% of the
residual value of the Property subject to such operating lease upon expiration
or early termination of such lease.
 
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“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges, assessments, fees or withholdings (including backup
withholding) imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.
 
“Termination Date” means the earliest to occur of: (a) the Maturity Date; (b)
the date of the payment in full, in cash, of all Obligations (and the
termination of all Commitments and the LC Commitment in accordance with the
terms hereof); and (c) the date of termination of the Commitments (including the
LC Commitment) and/or the acceleration of all of the Obligations under this
Agreement and the other Loan Documents following the occurrence and continuance
of an Event of Default in accordance with Section 10.02.
 
“Total Proved Reserves” means Oil and Gas Properties which are categorized as
“Proved Reserves”, as such term is defined in the Definitions for Oil and Gas
Reserves as promulgated by the Society of Petroleum Engineers (or any generally
recognized successor) as in effect at the time in question.
 
“Transactions” means, with respect to (a) the Borrower, the execution, delivery
and performance by the Borrower of this Agreement, and each other Loan Document
to which it is a party, borrowing of Loans, the use of the proceeds thereof and
the issuance of Letters of Credit hereunder, and the grant of Liens by the
Borrower on Mortgaged Properties and other Properties pursuant to the Security
Instruments and (b) any Guarantor, the execution, delivery and performance by
such Guarantor of each Loan Document to which it is a party, the guaranteeing of
the Obligations and the other obligations under the Loan Guarantee by such
Guarantor and such Guarantor’s grant of the security interests and provision of
collateral under the Security Instruments, and the grant of Liens by such
Guarantor on Mortgaged Properties and other Properties pursuant to the Security
Instruments.
 
“Type”, when used in reference to any Loan or Borrowing, refers to whether the
rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Alternate Base Rate or the Adjusted LIBO Rate.
 
“UCC” means the Uniform Commercial Code as in effect in the State of Texas.
 
“U.S. Person” means any Person that is a “United States Person” as defined in
Section 7701(a)(30) of the Code.
 
“USA PATRIOT Act” means the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. 107-56), as amended.
 
“Variance Testing Date” shall have the meaning assigned to such term in Section
8.01(t)(iii).
 
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“Variance Testing Period” shall have the meaning assigned to such term in
Section 8.01(t)(iii).
 
“Volumetric Production Payments” means sales of Hydrocarbons in place that
require the Borrower or any Guarantor to deliver Hydrocarbons at some future
time without receipt by such Borrower or Guarantor at such future time of full
payment therefor.
 
“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.
 
“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower or one or
more of the Wholly-Owned Subsidiaries or are owned by the Borrower and one or
more of the Wholly-Owned Subsidiaries.
 
Section 1.03        Types of Loans and Borrowings.  For purposes of this
Agreement, Loans and Borrowings, respectively, may be classified and referred to
by Type (e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).
 
Section 1.04       Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word
“will” shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth in the
Loan Documents herein), (b) any reference herein to any law shall be construed
as referring to such law as amended, modified, codified or reenacted, in whole
or in part, and in effect from time to time, (c) any reference herein to any
Person shall be construed to include such Person’s successors and assigns
(subject to the restrictions contained in the Loan Documents herein), (d) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (e) with respect to the determination of any time period, the
word “from” means “from and including” and the word “to” means “to and
including” and (f) any reference herein to Articles, Sections, Annexes, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Annexes, Exhibits and Schedules to, this Agreement.  No provision of this
Agreement or any other Loan Document shall be interpreted or construed against
any Person solely because such Person or its legal representative drafted such
provision.
 
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Section 1.05       Accounting Terms and Determinations; GAAP.  Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent with the
Financial Statements except for changes in which the Borrower’s independent
certified public accountants concur and which are disclosed to Agent on the next
date on which financial statements are required to be delivered to the Lenders
pursuant to Section 8.01(a); provided that, unless the Borrower and the Majority
Lenders shall otherwise agree in writing, no such change shall modify or affect
the manner in which compliance with the covenants contained herein is computed
such that all such computations shall be conducted utilizing financial
information presented consistently with prior periods.
 
Section 1.06         [Reserved].
 
Section 1.07         Divisions.  For all purposes under the Loan Documents, in
connection with any division or plan of division under Delaware law (or any
comparable event under a different jurisdiction’s laws):  (a) if any asset,
right, obligation or liability of any Person becomes the asset, right,
obligation or liability of a different Person, then it shall be deemed to have
been transferred from the original Person to the subsequent Person, and (b) if
any new Person comes into existence, such new Person shall be deemed to have
been organized on the first date of its existence by the holders of its Equity
Interests at such time.
 
ARTICLE II
THE CREDITS
 
Section 2.01         Commitments.
 
(a)         Subject to the applicable terms and conditions and relying upon the
representations and warranties herein set forth, each New Money Lender agrees to
make new money loans (the “New Money Loans”) to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in: (i) such Lender’s Revolving Credit Exposure exceeding such Lender’s
Commitment, (ii) during the Interim Period, such Lender’s Revolving Credit
Exposure exceeding its Applicable Percentage of the Interim Facility Cap, or
(iii) the total Revolving Credit Exposure of all New Money Lenders exceeding the
then-effective Available Commitments.  Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may borrow, repay and
reborrow the New Money Loans.
 
(b)         On the (i) Interim Facility Effective Date, each Refinancing Lender
shall become entitled to roll up an aggregate principal amount of Existing Loans
held by such Lender equal to such Refinancing Lender’s Interim Refinanced Loan
Amount as set forth opposite such Refinancing Lender’s name on Annex I under
“Interim Refinanced Loan Amount” into roll-up loans hereunder (the “Interim
Refinanced Loans”) and (ii) Final Facility Effective Date, each Refinancing
Lender shall become entitled to roll up an aggregate principal amount of
Existing Loans held by such Lender equal to such Refinancing Lender’s Final
Refinanced Loan Amount as set forth opposite such Refinancing Lender’s name on
Annex I under “Final Refinanced Loan Amount” into roll-up loans hereunder (the
“Final Refinanced Loans” and, together with the Interim Refinanced Loans,
collectively the “Refinanced Loans”).  Subject to the terms and conditions set
forth herein and without any further action by any party to this Agreement, each
Refinancing Lender’s (i) Interim Refinanced Loans shall, from and after the
Interim Facility Effective Date, and (ii) Final Refinanced Loans shall, from and
after the Final Facility Effective Date, be designated as Refinanced Loans and
administered hereunder.  Such designation is not intended to and shall not
constitute a payment on account of or a novation of the applicable Existing
Loans, which shall continue to be outstanding under the Existing Credit
Agreement and administered under this Agreement as Refinanced Loans.  As a
consequence of such designation, and solely to enable the Refinanced Loans to be
administered hereunder, effective with such designation, each Refinanced Loan
that is the subject of such designation shall from and after such designation
constitute a Refinanced Loan hereunder; provided that, for the avoidance of
doubt, until any Existing Loan has been designated as a Refinanced Loan
hereunder and approved by the applicable DIP Order, the Refinanced Loans shall
continue to be guaranteed by the Guarantors under the Existing Guaranty
Agreement and secured by and entitled to the benefits of all Liens and security
interests created and arising under the Existing Security Instruments, which
Liens and security interests shall remain in full force and effect on a
continuous basis, unimpaired, uninterrupted and undischarged, and having the
same perfected status and priority.  Each such designation shall be applied on a
pro rata basis to the Existing Loans held by such Refinancing Lender under the
Existing Credit Agreement to the extent rolled up under this Agreement as set
forth on Annex I.  For the avoidance of doubt, each Refinancing Lender
acknowledges and agrees that, by accepting the benefits of this Agreement, on
the Interim Facility Effective Date and Final Facility Effective Date, as
applicable, each Existing Lender rolling up loans under this Agreement shall
become a party to this Agreement as a Refinancing Lender hereunder by executing
and delivering a counterpart to this Agreement.  Amounts rolled up under this
Section 2.01(b) and repaid or prepaid may not be reborrowed.  The Agent shall
update Annex I on each of the Interim Facility Effective Date and the Final
Facility Effective Date to reflect each Refinancing Lender’s Refinanced Loan
Amount (which Refinanced Loan Amount listed on Annex I shall be conclusive
absent manifest error) and deliver such updated Annex I to the Borrower and the
Refinancing Lenders, whereupon such updated Annex I shall constitute Annex I for
all purposes hereunder.  Notwithstanding anything to the contrary herein, the
Refinanced Loans shall be ABR Loans and shall bear interest at the Alternate
Base Rate plus the Applicable Margin.
 
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Section 2.02         Loans and Borrowings.
 
(a)          Borrowings; Several Obligations.  Each New Money Loan shall be made
as part of a Borrowing consisting of New Money Loans made by the New Money
Lenders ratably in accordance with their respective Commitments.  The failure of
any Lender to make any New Money Loan required to be made by it shall not
relieve any other New Money Lender of its obligations hereunder; provided that
the Commitments are several and no New Money Lender shall be responsible for any
other Lender’s failure to make Loans as required hereunder.
 
(b)         Types of Loans.  Subject to Section 3.03, each Borrowing of New
Money Loans shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrower may request in accordance herewith.  Each New Money Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such New Money Lender to make such New Money Loan; provided that
any exercise of such option shall not affect the obligation of the Borrower to
repay such New Money Loan in accordance with the terms of this Agreement.
 
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(c)         Minimum Amounts; Limitation on Number of Borrowings.  At the
commencement of each Interest Period for any Eurodollar Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $1,000,000; provided that any Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total
Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.08(e).  Borrowings of more than one
Type may be outstanding at the same time; provided that there shall not at any
time be more than a total of eight (8) Eurodollar Borrowings outstanding. 
Notwithstanding any other provision of this Agreement, the Borrower shall not be
entitled to request, or to elect to convert or continue, any Borrowing if the
Interest Period requested with respect thereto would end after the Maturity
Date.
 
(d)         Loans, Obligations and Notes.  The Obligations and credit extensions
made by each Lender shall be evidenced by one or more accounts or records
maintained by such Lender and by the Agent in the ordinary course of business. 
The accounts or records maintained by the Agent and each Lender shall be
conclusive absent manifest error of the amount of the credit extensions made by
such Lender to the Borrower and the interest and payments thereon. In the event
of any conflict between the accounts and records maintained by any Lender and
the accounts and records of the Agent in respect of such matters, the accounts
and records of the Agent shall control in the absence of manifest error.  Upon
the request of any Lender made through the Agent, the Borrower shall execute and
deliver to such Lender (through the Agent) a Note, which shall evidence such
Lender’s Loans in addition to such accounts or records.  Each Lender may attach
schedules to its Note and endorse the date, Type (if applicable), and amount and
maturity of its Loans and payments made with respect thereto.  Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the Obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations.
 
Section 2.03         Requests for Borrowings.  To request a Borrowing of New
Money Loans, the Borrower shall notify the Agent of such request by telephone
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., Houston
time, three (3) Business Days before the date of the proposed Borrowing or (b)
in the case of an ABR Borrowing, not later than 12:00 pm noon, Houston time, on
the Business Day prior to the proposed Borrowing; provided that no such notice
shall be required for any deemed request of a Eurodollar Borrowing to finance
the reimbursement of an LC Disbursement as provided in Section 2.08(e).  Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Agent of a written Borrowing
Request in a form approved by the Agent substantially in the form of Exhibit B
and signed by the Borrower.  Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
 
(a)          the aggregate amount of the requested Borrowing;
 
(b)          the date of such Borrowing, which shall be a Business Day;
 
(c)          whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
 
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(d)          in the case of a Eurodollar Borrowing, the Interest Period to be
applicable thereto, which shall be a period of one month;
 
(e)          the amount of (i) the then-effective Aggregate Commitments, (ii)
the amount of Available Funds and the then-effective Available Commitments, (C)
the current total Revolving Credit Exposures (without regard to the requested
Borrowing) and (D) the pro forma total Revolving Credit Exposures (giving effect
to the requested Borrowing);
 
(f)          the location and number of the Borrower’s account to which funds
are to be disbursed, which shall comply with the requirements of Section 2.05;
 
Each Borrowing Request shall constitute a representation that (a) the amount of
the requested Borrowing shall not cause the total Revolving Credit Exposures to
exceed the total Available Commitments.  Promptly following receipt of a
Borrowing Request in accordance with this Section 2.03, the Agent shall advise
each Lender of the details thereof and of the amount of such Lender’s Loan to be
made as part of the requested Borrowing.
 
Section 2.04         Interest Elections.
 
(a)          Conversion and Continuance.  Except as provided in Section 2.08,
each Borrowing of New Money Loans initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period of one month.  Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing as provided in this Section 2.04.  The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
New Money Loans comprising such Borrowing, and the New Money Loans comprising
each such portion shall be considered a separate Borrowing.
 
(b)          Interest Election Requests.  To make an election pursuant to this
Section 2.04, the Borrower shall notify the Agent of such election by telephone
by the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election.  Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Agent of a written Interest Election Request in a
form approved by the Agent and signed by the Borrower.
 
(c)          Information in Interest Election Requests.  Each telephonic and
written Interest Election Request shall specify the following information in
compliance with Section 2.02:
 
(i)          the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing (in
which case the information to be specified pursuant to Section 2.04(c)(iii) and
(iv) shall be specified for each resulting Borrowing);
 
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(ii)         the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
 
(iii)        whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
 
(iv)       if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which, in
all cases, whether or not so indicated in such Interest Election Request, shall
be a period of one month.
 
If any such Interest Election Request does not specify a Type, then the Borrower
shall be deemed to have selected a Eurodollar Borrowing with an initial Interest
Period of one month.
 
(d)          Notice to New Money Lenders by the Agent.  Promptly following
receipt of an Interest Election Request, the Agent shall advise each New Money
Lender of the details thereof and of such Lender’s portion of each resulting
Borrowing.
 
(e)         Effect of Failure to Deliver Timely Interest Election Request and
Events of Default.  If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be continued as
a Eurodollar Loan having an Interest Period of one month.  Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is
continuing:  (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing (and any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective) and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
 
Section 2.05         Funding of Borrowings.
 
(a)          Funding by Lenders.  Each Lender shall make each New Money Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., Houston time, to the account of the
Agent most recently designated by it for such purpose by notice to the Lenders. 
The Agent will make such New Money Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
and designated by the Borrower in the applicable Borrowing Request; provided
that Eurodollar Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.08(e) shall be remitted by the Agent to the Issuing Bank
that made such LC Disbursement.  Nothing herein shall be deemed to obligate any
Lender to obtain the funds for its New Money Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for its New Money Loan in any particular place or manner.
 
(b)          Presumption of Funding by the Lenders.  Unless the Agent shall have
received notice from a Lender prior to the proposed date of any Borrowing that
such Lender will not make available to the Agent such Lender’s share of such
Borrowing, the Agent may assume that such Lender has made such share available
on such date in accordance with Section 2.05(a) and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.  In such
event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Agent, then the applicable Lender and the Borrower severally
agree to pay to the Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the Agent, at
(i) in the case of a payment to be made by such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of a
payment to be made by the Borrower, the interest rate applicable to ABR Loans. 
If such Lender pays such amount to the Agent, then such amount shall constitute
such Lender’s Loan included in such Borrowing.
 
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Section 2.06         Termination and Reduction of Aggregate Commitments.
 
(a)          Scheduled Termination of Commitments.  Unless previously
terminated, the Commitments shall terminate on the Maturity Date.  If at any
time the Aggregate Commitments is terminated or reduced to zero, then the
Commitments shall terminate on the effective date of such termination or
reduction.
 
(b)          Optional Termination and Reduction of Aggregate Credit Amounts.
 
(i)         The Borrower may at any time terminate, or from time to time reduce,
the Aggregate Commitments; provided that (A) each reduction of the Aggregate
Commitments shall be in an amount that is an integral multiple of $500,000 and
not less than $1,000,000, and (B) the Borrower shall not terminate or reduce the
Aggregate Commitments if, after giving effect to any concurrent prepayment of
the Loans in accordance with Section 3.04(c), the total Revolving Credit
Exposures would exceed the Available Commitments.
 
(ii)        The Borrower shall notify the Agent of any election to terminate or
reduce the Aggregate Commitments under Section 2.06(b)(i) at least three (3)
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof.  Promptly following
receipt of any notice, the Agent shall advise the Lenders of the contents
thereof.  Each notice delivered by the Borrower pursuant to this Section
2.06(b)(ii) shall be irrevocable.  Any termination or reduction of the Aggregate
Commitments shall be permanent and may not be reinstated.  Each reduction of the
Aggregate Commitments shall be made ratably among the Lenders in accordance with
each Lender’s Applicable Percentage.
 
Section 2.07         [Reserved].
 
Section 2.08         Letters of Credit.
 
(a)         General.  On the Interim Facility Effective Date, the Existing
Letters of Credit shall be deemed to have been issued under the New Money
Facility pursuant to, and shall constitute Letters of Credit for all purposes
under, this Agreement.  Subject to the terms and conditions set forth herein,
the Borrower may on and after the Interim Facility Effective Date request any
Issuing Bank to issue Letters of Credit for its own account or for the account
of any Debtor, in a form reasonably acceptable to the Agent and such Issuing
Bank, at any time and from time to time during the Availability Period; provided
that the Borrower may not request the issuance, amendment, renewal or extension
of Letters of Credit hereunder if after giving effect to such issuance,
amendment, renewal or extension the aggregate Revolving Credit Exposures would
exceed the Available Commitments.  In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, an Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
 
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(b)         Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions.  To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
deliver as permitted by Section 12.01(a) (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to any Issuing Bank and the Agent (not less than five (5) Business Days in
advance of the requested date of issuance, amendment, renewal or extension) a
notice:
 
(i)        requesting the issuance of a Letter of Credit or identifying the
Letter of Credit issued by such Issuing Bank to be amended, renewed or extended;
 
(ii)         specifying the date of issuance, amendment, renewal or extension
(which shall be a Business Day);
 
(iii)        specifying the date on which such Letter of Credit is to expire
(which shall comply with Section 2.08(c));
 
(iv)        specifying the amount of such Letter of Credit;
 
(v)        specifying the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend such
Letter of Credit; and
 
(vi)       specifying the current total Revolving Credit Exposures (without
regard to the requested Letter of Credit or the requested amendment, renewal or
extension of an outstanding Letter of Credit) and the pro forma total Revolving
Credit Exposures (giving effect to the requested Letter of Credit or the
requested amendment, renewal or extension of an outstanding Letter of Credit).
 
Each notice shall constitute a representation that after giving effect to the
requested issuance, amendment, renewal or extension, as applicable, (A) the LC
Exposure shall not exceed the LC Commitment and (B) the total Revolving Credit
Exposures shall not exceed the then-effective Available Commitments.
 
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If requested by any Issuing Bank, the Borrower also shall submit a letter of
credit application on such Issuing Bank’s standard form in connection with any
request for a Letter of Credit.
 
(c)         Expiration Date.  Each Letter of Credit shall expire at or prior to
the close of business no later than ten (10) days prior to the Scheduled
Maturity Date.
 
(d)         Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank that issues such Letter of Credit
or the New Money Lenders, each Issuing Bank that issues a Letter of Credit
hereunder hereby grants to each New Money Lender, and each New Money Lender
hereby acquires from such Issuing Bank, a participation in such Letter of Credit
equal to such New Money Lender’s Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit.  In consideration and in
furtherance of the foregoing, each New Money Lender hereby absolutely and
unconditionally agrees to pay to the Agent, for the account of any Issuing Bank
that issues a Letter of Credit hereunder, such New Money Lender’s Applicable
Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed
by the Borrower on the date due as provided in Section 2.08(e), or of any
reimbursement payment required to be refunded to the Borrower for any reason. 
Each New Money Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 2.08(d) in respect of Letters of Credit
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default, aggregate Revolving
Credit Exposures exceeding the Available Commitments or reduction or termination
of the Aggregate Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
 
(e)         Reimbursement.  If any Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit issued by such Issuing Bank, the Borrower shall
reimburse such LC Disbursement by paying to the Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., Houston time, on the third day after such
LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 9:00 a.m., Houston time, on such date, or, if such notice
has not been received by the Borrower prior to such time on such date, then not
later than 1:00 p.m., Houston time, on (i) the third day after the Borrower
receives such notice, if such notice is received prior to 9:00 a.m., Houston
time, on the day of receipt, or (ii) the Business Day immediately following the
third day after the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that if such LC
Disbursement is less than or equal to $1,000,000, the Borrower shall, subject to
the conditions to Borrowing set forth herein, be deemed to have requested, and
the Borrower does hereby request under such circumstances, that such payment be
financed with a Eurodollar Borrowing with an Interest Period of one month in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting Eurodollar
Borrowing.  If the Borrower fails to make such payment when due, the Agent shall
notify each New Money Lender of the applicable LC Disbursement, the payment then
due from the Borrower in respect thereof and such New Money Lender’s Applicable
Percentage thereof.  Promptly following receipt of such notice, each New Money
Lender shall pay to the Agent its Applicable Percentage of the payment then due
from the Borrower, in the same manner as provided in Section 2.05 with respect
to New Money Loans made by such New Money Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the Agent
shall promptly pay to the Issuing Bank that issued such Letter of Credit the
amounts so received by it from the New Money Lenders.  Promptly following
receipt by the Agent of any payment from the Borrower pursuant to this Section
2.08(e), the Agent shall distribute such payment to the Issuing Bank that issued
such Letter of Credit or, to the extent that New Money Lenders have made
payments pursuant to this Section 2.08(e) to reimburse such Issuing Bank, then
to such New Money Lenders and such Issuing Bank as their interests may appear. 
Any payment made by a New Money Lender pursuant to this Section 2.08(e) to
reimburse any Issuing Bank for any LC Disbursement (other than the funding of
Eurodollar Loans as contemplated above) shall not constitute a New Money Loan
and shall not relieve the Borrower of its obligation to reimburse such LC
Disbursement.  Any LC Disbursement not reimbursed by the Borrower or funded as a
New Money Loan prior to 1:00 p.m., Houston time on the date such Disbursement is
made, shall bear interest for each such day such Disbursement is outstanding at
rate per annum then applicable to Eurodollar Loans.
 
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(f)        Obligations Absolute.  The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by any Issuing Bank under a
Letter of Credit issued by such Issuing Bank against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit or
any Letter of Credit Agreement, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section 2.08(f), constitute a legal or equitable
discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder.  Neither the Agent, the New Money Lenders nor any Issuing Bank, nor
any of their Related Parties shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of
the circumstances referred to in the preceding sentence), or any error,
omission, interruption, loss or delay in transmission or delivery of any draft,
notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of any Issuing Bank; provided that the foregoing shall not be
construed to excuse any Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential damages, claims in
respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such Issuing Bank’s
failure to exercise care when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof.  The parties
hereto expressly agree that, in the absence of gross negligence or willful
misconduct on the part of any Issuing Bank (as finally determined by a court of
competent jurisdiction), such Issuing Bank shall be deemed to have exercised all
requisite care in each such determination.  In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank that issued such Letter
of Credit may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment upon
such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.
 
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(g)          Disbursement Procedures.  Each Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit issued by such Issuing Bank.  Such
Issuing Bank shall promptly notify the Agent and the Borrower by telephone
(confirmed by telecopy) of such demand for payment and whether such Issuing Bank
has made or will make an LC Disbursement thereunder; provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse such Issuing Bank and the New Money Lenders with respect
to any such LC Disbursement.
 
(h)        Interim Interest.  If any Issuing Bank shall make any LC
Disbursement, then, until the Borrower shall have reimbursed such Issuing Bank
for such LC Disbursement (either with its own funds or a Borrowing under Section
2.08(e)), the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to Eurodollar Loans.  Interest accrued pursuant to this Section
2.08(h) shall be for the account of such Issuing Bank, except that interest
accrued on and after the date of payment by any New Money Lender pursuant to
Section 2.08(e) to reimburse such Issuing Bank shall be for the account of such
Lender to the extent of such payment.
 
(i)         Replacement of an Issuing Bank.  Any Issuing Bank may be replaced or
resign at any time by written agreement among the Borrower, the Agent, such
resigning or replaced Issuing Bank and, in the case of a replacement, the
successor Issuing Bank.  The Agent shall notify the New Money Lenders of any
such resignation or replacement of an Issuing Bank.  At the time any such
resignation or replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the resigning or replaced Issuing Bank
pursuant to Section 3.05(b).  In the case of the replacement of an Issuing Bank,
from and after the effective date of such replacement, (i) the successor Issuing
Bank shall have all the rights and obligations of the replaced Issuing Bank
under this Agreement with respect to Letters of Credit to be issued thereafter
and (ii) references herein to “Issuing Bank” shall be deemed to refer to such
successor or to any previous Issuing Bank, or to such successor and all previous
Issuing Banks, as the context shall require.  After the resignation or
replacement of an Issuing Bank hereunder, the resigning or replaced Issuing Bank
shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement 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.
 
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(j)          Cash Collateralization.  If (i) any Event of Default shall occur
and be continuing and the Borrower receives notice from the Agent or the
Majority Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(j), (ii) the Borrower is required to pay to the Agent the excess
attributable to an LC Exposure in connection with any prepayment pursuant to
Section 3.04(c), or (iii) the Borrower is required to Cash Collateralize a
Defaulting Lender’s LC Exposure pursuant to Section 4.03(c)(iii)(B), then the
Borrower shall pledge and deposit with or deliver to the Agent (as a first
priority, perfected security interest), for the benefit of the Issuing Bank, at
a location and pursuant to documentation in form and substance satisfactory to
the Agent, an amount in cash in dollars equal to such LC Exposure or excess
attributable to such LC Exposure, as the case may be, as of such date plus any
accrued and unpaid interest thereon.  The Borrower hereby grants to the Agent,
for the benefit of each Issuing Bank and the New Money Lenders, an exclusive
first priority and continuing perfected security interest in and Lien on such
account and all cash, checks, drafts, certificates and instruments, if any, from
time to time deposited or held in such account, all deposits or wire transfers
made thereto, any and all investments purchased with funds deposited in such
account, all interest, dividends, cash, instruments, financial assets and other
Property from time to time received, receivable or otherwise payable in respect
of, or in exchange for, any or all of the foregoing, and all proceeds, products,
accessions, rents, profits, income and benefits therefrom, and any substitutions
and replacements therefor.  The Borrower’s obligation to deposit amounts
pursuant to this Section 2.08(j) shall be absolute and unconditional, without
regard to whether any beneficiary of any such Letter of Credit has attempted to
draw down all or a portion of such amount under the terms of a Letter of Credit,
and, to the fullest extent permitted by applicable law, shall not be subject to
any defense or be affected by a right of set-off, counterclaim or recoupment
which any Debtor may now or hereafter have against any such beneficiary, any
Issuing Bank, the Agent, the New Money Lenders or any other Person for any
reason whatsoever.  Such deposit shall be held as collateral securing the
payment and performance of the Borrower’s and any Guarantor’s obligations under
this Agreement and the other Loan Documents.  The Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account; provided that investments of funds in such account in investments
permitted by Section 9.05(d) or Section 9.05(f) may be made at the option of the
Borrower at its direction, risk and expense.  Interest or profits, if any, on
such investments shall accumulate in such account.  Moneys in such account shall
be applied by the Agent to reimburse, on a pro rata basis, each Issuing Bank for
LC Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated, be applied to satisfy other obligations of the Borrower
and the Guarantors, if any, under this Agreement or the other Loan Documents. 
If the Borrower is required to provide an amount of cash collateral hereunder as
a result of the occurrence of an Event of Default or pursuant to Section
4.03(c)(iii)(B) as a result of a Defaulting Lender, and the Borrower is not
otherwise required to pay to the Agent the excess attributable to an LC Exposure
in connection with any prepayment pursuant to Section 3.04(c), then such amount
(to the extent not applied as aforesaid) shall be returned to the Borrower
within three (3) Business Days after all Events of Default have been cured or
waived or the events giving rise to such Cash Collateralization pursuant to
Section 4.03(c)(iii)(B) have been satisfied or resolved.
 
Section 2.09         Collateral; Guarantees.
 
(a)          Priority and Liens. The parties hereto acknowledge and agree that,
upon entry of the DIP Orders and the delivery and execution of this Agreement,
the Obligations shall at all times be secured and perfected pursuant to, and
have the superpriority claims and liens as set forth in, the DIP Orders and
herein.
 
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(b)          Payment of Obligations. On the Termination Date, the Lenders shall
be entitled to immediate payment of all Obligations without further application
to, or order of, the Bankruptcy Court.
 
(c)          No Discharge; Survival of Claims. Each Debtor agrees that (a) any
Confirmation Order entered in the Bankruptcy Cases shall not discharge or
otherwise affect in any way any of the Obligations, other than after the payment
in full in cash to the Secured Parties of all Obligations (and the Cash
Collateralization of all outstanding Letters of Credit in amount and subject to
documentation satisfactory to the Issuing Bank) and termination of the
Commitments on or before the effective date of an Approved Plan of
Reorganization and (b) to the extent the Obligations are not satisfied in full,
(i) the Obligations shall not be discharged by the entry of a Confirmation Order
(and each Loan Party, pursuant to Section 1141(d)(4) of the Bankruptcy Code,
hereby waives any such discharge) and (ii) the Superpriority Claim granted to
the Agent, the Lenders, the Secured Swap Parties and the Secured Cash Management
Providers pursuant to the DIP Order and the Liens granted to the Agent pursuant
to the DIP Order shall not be affected in any manner by the entry of a
Confirmation Order.
 
(d)       Perfection and Protection of Security Interests and Liens. The Loan
Parties will from time to time deliver to the Agent all financing statements,
amendments, assignments and continuation statements, extension agreements and
other documents, properly completed and executed (and acknowledged when
required) by each Loan Party, as applicable, in form and substance satisfactory
to the Agent, in each case, which the Agent requests for the purpose of
perfecting, confirming, or protecting its lien and security interest in
Collateral for the purpose of securing the Obligations.
 
(e)         Offset. Subject to the terms and conditions set forth in the
applicable DIP Order, to secure the payment and performance of the Obligations,
each Debtor hereby grants the Agent and each Lender a security interest, lien,
and right of offset, each of which shall be in addition to all other interests,
liens, and rights of the Agent at common law, under this Agreement and the other
Loan Documents, or otherwise, and each of which shall be upon and against (i)
any and all monies, securities or other property (and the proceeds therefrom) of
the Debtors now or hereafter held or received by or in transit to the Agent or
any Lender from or for the account of any Debtor, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, any and all deposits
(general or special, time or demand, provisional or final) of any Debtor with
the Agent or any Lender, and (ii) any other credits and claims of any Debtor at
any time existing against the Agent or any Lender, including claims under
certificates of deposit. During the existence of any Event of Default, the Agent
or any Lender is hereby authorized to foreclose upon, offset, appropriate, and
apply, at any time and from time to time, without notice to any Debtor, any and
all items hereinabove referred to against the Obligations then due and payable.
 
(f)        The direct or indirect value of the consideration received and to be
received by such Guarantor in connection herewith is reasonably worth at least
as much as the liability and obligations of each Guarantor hereunder and under
the other Loan Documents, and the incurrence of such liability and obligations
in return for such consideration may reasonably be expected to benefit each
Guarantor, directly or indirectly.
 
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(g)         The Bankruptcy Cases were commenced on the Petition Date in
accordance with applicable law and proper notice thereof and the proper notice
for (i) the motions seeking approval of the Loan Documents and the DIP Facility
and (ii) the hearings for the approval of the Interim Order and the Final Order
were given in each case. The Borrower has given, on a timely basis as specified
in the Interim Order, all notices required to be given on or prior to the date
of this representation to all parties specified in the Interim Order.
 
(h)          All Obligations of the Debtors to the Lenders under the Loan
Documents, including all Loans made under the DIP Facility, shall, subject to
the Carve-Out, at all times:
 
(i)       pursuant to Bankruptcy Code section 364(c)(1), be entitled to joint
and several Superpriority Claim status in the Bankruptcy Case, which claims in
respect of the New Money Facility and the Refinancing Facility shall be pari
passu and shall be senior in priority and payment to the obligations under the
Existing Credit Agreement;
 
(ii)        pursuant to Bankruptcy Code section 364(c)(2), be secured by a
perfected first priority Lien on the Collateral to the extent that such
Collateral is not subject to valid, perfected and non-avoidable liens as of the
Petition Date or liens that were in existence immediately prior to the Petition
Date that are perfected as permitted by Section 546(b) of the Bankruptcy Code;
 
(iii)        pursuant to Bankruptcy Code section 364(c)(3), be secured by a
perfected junior lien on all assets of the Loan Parties, to the extent that such
assets are subject to a valid, perfected and non-avoidable Liens as of the
Petition Date or liens that were in existence immediately prior to the Petition
Date that are perfected as permitted by Section 546(b) of the Bankruptcy Code;
and
 
(iv)       pursuant to Bankruptcy Code section 364(d), be secured by a perfected
superpriority priming Lien on all Collateral to the extent that such Collateral
is subject to valid, perfected and non-avoidable liens in favor of third parties
as of the commencement of the Bankruptcy Case, including, all accounts
receivable, inventory, real and personal property, plant and equipment of the
Loan Parties that secure the obligations of the Loan Parties under the Existing
Credit Agreement and the Existing Second Lien Credit Agreement.
 
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
 
Section 3.01        Repayment of Loans.  The Borrower hereby unconditionally
promises to pay to the Agent for the account of each Lender the then unpaid
principal amount of each Loan on the Termination Date.
 
Section 3.02         Interest.
 
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(a)         ABR Loans.  Each ABR Loan comprising an ABR Borrowing shall bear
interest at the Alternate Base Rate plus the Applicable Margin, but in no event
to exceed the Highest Lawful Rate.
 
(b)         Eurodollar Loans.  Each Eurodollar Loan comprising a Eurodollar
Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period
in effect for such Eurodollar Loan plus the Applicable Margin, but in no event
to exceed the Highest Lawful Rate.
 
(c)          Post-Default Rate.  Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing, or if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower or any Guarantor
hereunder or under any other Loan Document is not paid when due, whether at
stated maturity, upon acceleration or otherwise, then all New Money Loans
outstanding, shall bear interest, after as well as before judgment, at the
Alternate Base Rate or the Adjusted LIBO Rate, as applicable, plus the
Applicable Margin, plus two percent (2%), but in no event to exceed the Highest
Lawful Rate.
 
(d)        Interest Payment Dates.  Accrued interest on each Loan shall be
payable in arrears on, with respect to any ABR Loan or Eurodollar Loan, the last
Business Day of each calendar month and on the Termination Date; provided that
(A) interest accrued pursuant to Section 3.02(c) shall be payable on demand, (B)
in the event of any repayment or prepayment of any Loan (other than an optional
prepayment of an ABR Loan prior to the Termination Date), accrued interest on
the principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment, and (C) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.
 
(e)         Interest Rate Computations.  All interest hereunder shall be
computed on the basis of a year of 360 days, unless such computation would
exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), except that interest
computed by reference to the Alternate Base Rate shall be computed on the basis
of a year of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  The applicable Alternate Base Rate or Adjusted LIBO
Rate shall be determined by the Agent, and such determination shall be
conclusive absent manifest error, and be binding upon the parties hereto.
 
Section 3.03         Alternate Rate of Interest.  If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
 
(a)          the Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate for such Interest Period;
or
 
(b)          the Agent is advised by the Majority Lenders that the Adjusted LIBO
Rate or LIBO Rate, as applicable, for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
 
then the Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
 
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Section 3.04         Prepayments.
 
(a)          Optional Prepayments.  The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to prior notice in accordance with Section 3.04(b) and payment of applicable
breakage costs, if any, under Section 5.02. Notwithstanding the foregoing, no
voluntary prepayment of Refinanced Loans may be made until all New Money Loans
and all other Obligations in respect thereof have been paid in full in cash and
all Commitments have been terminated.
 
(b)         Notice and Terms of Optional Prepayment.  The Borrower shall notify
the Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i)
in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 noon,
Houston time, three (3) Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Borrowing, not later than 12:00 noon, Houston
time, one (1) Business Day before the date of prepayment.  Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid.  Promptly following
receipt of any such notice relating to a Borrowing, the Agent shall advise the
Lenders of the contents thereof.  Each partial prepayment of any Borrowing shall
be in an amount that would be permitted in the case of an advance of a Borrowing
of the same Type as provided in Section 2.02(c).  Each prepayment of a Borrowing
shall be applied ratably to the Loans included in the prepaid Borrowing. 
Prepayments shall be accompanied by accrued interest to the extent required by
Section 3.02 and any payments to the extent required by Section 5.02.
 
(c)          Mandatory Prepayments.
 
(i)          If, after giving effect to any termination or reduction of the
Aggregate Commitments pursuant to Section 2.06(b), or for any other reason, the
total Revolving Credit Exposures exceeds the total Available Commitments, then
the Borrower shall (A) prepay the New Money Loans, to be applied ratably to each
New Money Lender, on the date of such termination or reduction in an aggregate
principal amount equal to such excess, and (B) if any excess remains after
prepaying all of the Borrowings as a result of an LC Exposure, Cash
Collateralize such excess as provided in Section 2.08(j).
 
(ii)         Subject to the payment priorities set forth in the DIP Orders, if
the Debtors (A) sell any Property outside of the ordinary course of business
pursuant to Section 9.12(d) or otherwise sell any Property outside of the
ordinary course of business as not otherwise permitted by this Agreement or (B)
receive any insurance proceeds or condemnation proceeds, in each case, including
when an Event of Default exists, then the Borrower shall prepay the Refinanced
Loans (ratably to each Refinancing Lender) in an aggregate amount equal to the
lesser of (x) 100% of Net Cash Proceeds received from such sale or proceeds and
(y) the aggregate principal amount of Refinanced Loans then outstanding.  The
Borrower shall be obligated to make such prepayment and/or Cash Collateralize
such excess on the date it or any Subsidiary receives cash proceeds; provided
that all payments required to be made pursuant to this Section 3.04(c)(ii) must
be made on or prior to the Termination Date.  Each prepayment pursuant to this
Section 3.04(c)(ii) shall be applied ratably to the Refinanced Loans. 
Prepayments pursuant to this Section 3.04(c)(ii) shall be accompanied by accrued
interest to the extent any interest under such Loans being repaid remains
unpaid.
 
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(d)          No Premium or Penalty.  Prepayments permitted or required under
this Section 3.04 shall be without premium or penalty, except as required under
Section 5.02.
 
(e)          No Effect on Secured Swap Agreements and Secured Cash Management
Agreements.  Prepayments permitted or required under this Section 3.04 shall not
affect the Borrower’s obligation to continue making payments under any Secured
Swap Agreement or Secured Cash Management Agreement, as applicable, each of
which shall remain in full force and effect notwithstanding such prepayment,
subject to the terms of such Secured Swap Agreement or Secured Cash Management
Agreement, as applicable.
 
Section 3.05          Fees.
 
(a)          Commitment Fees.  The Borrower agrees to pay to the Agent for the
account of each New Money Lender (subject to Section 4.03(c)(i) and in
accordance with each such Lender’s Applicable Percentage) a commitment fee,
which shall accrue at the Commitment Fee Rate on the average daily amount of the
unused amount of the Commitment of such New Money Lender during the period from
and including the Interim Facility Effective Date to but excluding the
Termination Date, provided, that, during the Interim Period, the commitment fee
shall be calculated based on the Interim Facility Cap.  Accrued commitment fees
shall be payable monthly in arrears on the last day of each calendar month and
on the Termination Date, commencing on the first such date to occur after the
date hereof. All commitment fees shall be computed on the basis of a year of 360
days, unless such computation would exceed the Highest Lawful Rate, in which
case such commitment fees shall be computed on the basis of a year of 365 days
(or 366 days in a leap year), and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
 
(b)          Letter of Credit Fees.  The Borrower agrees to pay (i) to the Agent
for the account of each Lender (subject to Section 4.03(c)(iii)) a participation
fee with respect to its participations in Letters of Credit, which shall accrue
at the same Applicable Margin used to determine the interest rate applicable to
Eurodollar Loans on the average daily amount of such Lender’s LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date of this Agreement to but excluding
the later of the date on which such Lender’s Commitment terminates and the date
on which such Lender ceases to have any LC Exposure, (ii) to each Issuing Bank a
fronting fee equal to 0.50% per annum on the face amount of each Letter of
Credit issued by such Issuing Bank hereunder, provided that in no event shall
such fee be less than $500 and (iii) to each Issuing Bank, for its own account,
its standard fees with respect to the amendment, renewal or extension of any
Letter of Credit issued by such Issuing Bank or processing of drawings
thereunder.  Participation fees and fronting fees accrued shall be payable in
arrears on the last Business Day of each calendar month, commencing on the first
such date to occur after the date of this Agreement; provided that all such fees
shall be payable on the Termination Date and any such fees accruing after the
Termination Date shall be payable on demand.  Any other fees payable to an
Issuing Bank pursuant to this Section 3.05(b) shall be payable within ten (10)
days after demand.  All participation fees and fronting fees shall be computed
on the basis of a year of 360 days, unless such computation would exceed the
Highest Lawful Rate, in which case such fees shall be computed on the basis of a
year of 365 days (or 366 days in a leap year), and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
 
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(c)        Agent Fees.  The Borrower agrees to pay to the Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Agent.
 
(d)          Up-Front Fees.  The Borrower agrees to pay to the Agent, for the
ratable benefit of each New Money Lender, an up-front fee (the “Up-Front Fee”)
on the Aggregate Commitments of New Money Loans, which shall be earned and due
and payable in the following manner: (i) on the Interim Facility Effective Date,
in an amount equal to 1.75% of the Interim Facility Cap, and (ii) on the Final
Facility Effective Date, in an amount equal to (1) 1.75% of (2) the Aggregate
Commitments less the Interim Facility Cap.
 
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS.
 
Section 4.01         Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
 
(a)         Payments by the Borrower.  The Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 5.01,
Section 5.02, Section 5.03 or otherwise) prior to 1:00 p.m., Houston time, on
the date when due, in immediately available funds, without defense, deduction,
recoupment, set-off or counterclaim.  Fees, once paid, shall be fully earned and
shall not be refundable under any circumstances.  Any amounts received after
such time on any date may, in the discretion of the Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon.  All such payments shall be made to the Agent at its offices
specified in Section 12.01, except payments to be made directly to an Issuing
Bank as expressly provided herein and except that payments pursuant to Section
5.01, Section 5.02, Section 5.03 and Section 12.03 shall be made directly to the
Persons entitled thereto.  The Agent shall distribute any such payments received
by it for the account of any other Person to the appropriate recipient promptly
following receipt thereof.  If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension.  All
payments hereunder shall be made in dollars.
 
(b)          Application of Insufficient Payments.  If at any time insufficient
funds are received by and available to the Agent to pay fully all amounts of
principal, unreimbursed LC Disbursements, interest and fees then due hereunder,
such funds shall be applied (i) first, towards payment of interest and fees then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and unreimbursed LC Disbursements then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal and unreimbursed LC Disbursements then due to such parties.
 
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(c)        Sharing of Payments by Lenders.  If any Lender shall, by exercising
any right of set-off or counterclaim or otherwise, obtain payment in respect of
any principal of or interest on any of its Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and participations in LC Disbursements and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Loans and participations in LC Disbursements of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Loans and
participations in LC Disbursements; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this Section 4.01(c) shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this Section 4.01(c) shall apply).  The Borrower consents to the foregoing
and agrees, to the extent it may effectively do so under applicable law, that
any Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
 
Section 4.02        Presumption of Payment by the Borrower.  Unless the Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Agent for the account of the Lenders or any Issuing Bank
that the Borrower will not make such payment, the Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or such Issuing Bank,
as the case may be, the amount due.  In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or such Issuing Bank, as the
case may be, severally agrees to repay to the Agent forthwith on demand the
amount so distributed to such Lender or such Issuing Bank with interest thereon,
for each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Agent in accordance with banking
industry rules on interbank compensation.
 
Section 4.03         Payments and Deductions by the Agent; Defaulting Lenders.
 
(a)         Certain Deductions by the Agent.  If any Lender shall fail to make
any payment required to be made by it pursuant to Section 2.05(a), Section
2.05(b), Section 2.08(d), Section 2.08(e) or Section 4.02 then the Agent may, in
its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Agent for the account of such Lender to
satisfy such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.
 
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(b)          Payments and Deductions to Defaulting Lenders.
 
(i)         The Borrower shall have the right, to the extent permitted by
applicable law, to setoff any amounts owed to it by any Defaulting Lender or any
of such Defaulting Lender’s Affiliates in respect of deposit liabilities against
amounts due by the Borrower or any Guarantor to such Defaulting Lender or its
Affiliates under this Agreement, provided that the amount of such set-off shall
not exceed the amount of such Defaulting Lender’s Revolving Credit Exposures and
interest.  Further, if any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.05(a), Section 2.08(d), Section 2.08(e) or
Section 4.02 then the Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections
until all such unsatisfied obligations are fully paid in cash.
 
(ii)       If a Defaulting Lender (or a Lender who would be a Defaulting Lender
but for the expiration of the relevant grace period) as a result of the exercise
of a set-off shall have received a payment in respect of its Revolving Credit
Exposure which results in its Revolving Credit Exposure being less than its
Applicable Percentage of the aggregate Revolving Credit Exposures, then no
payments will be made to such Defaulting Lender until such time as all amounts
due and owing to the Lenders have been equalized in accordance with each of the
Lenders respective pro rata share of the Obligations.  Further, if at any time
prior to the acceleration or maturity of the Loans, the Agent shall receive any
payment in respect of principal of a Loan or a reimbursement of an LC
Disbursement while one or more Defaulting Lenders shall be party to this
Agreement, the Agent shall apply such payment first to the Borrowing(s) for
which such Defaulting Lender(s) shall have failed to fund its pro rata share
until such time as such Borrowing(s) are paid in full or each Lender (including
each Defaulting Lender) is owed its Applicable Percentage of all Loans then
outstanding.  After acceleration or maturity of the Loans, subject to the first
sentence of this Section 4.03(b), all principal will be paid ratably as provided
in Section 10.02(c).
 
(c)        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:
 
(i)         Fees shall cease to accrue on the unfunded portion of the Commitment
of such Defaulting Lender pursuant to Section 3.05.
 
(ii)        The Commitment and the Revolving Credit Exposure of such Defaulting
Lender shall not be included in determining whether all Lenders, the Majority
Lenders or the Required Lenders, as applicable, have taken or may take any
action hereunder (including any consent to any amendment or waiver pursuant to
Section 12.02); provided that any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender which affects such Defaulting
Lender differently than other affected Lenders shall require the consent of such
Defaulting Lender.
 
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(iii)        if any LC Exposure exists at the time a Lender becomes a Defaulting
Lender then:
 
(A)         all or any part of the LC Exposure of such Defaulting Lender shall
be reallocated among the Non-Defaulting Lenders in accordance with their
respective Applicable Percentages (for the purposes of such reallocation the
Defaulting Lender’s Commitment shall be disregarded in determining the
Non-Defaulting Lender’s Applicable Percentage) but only to the extent (1) the
sum of all Non-Defaulting Lenders’ Revolving Credit Exposures plus such
Defaulting Lender’s LC Exposure does not exceed the total of all Non-Defaulting
Lenders’ Commitments, (2) the conditions set forth in Section 6.03 are satisfied
at such time and (3) the sum of each Non-Defaulting Lender’s Revolving Credit
Exposure plus its reallocated share of such Defaulting Lender’s LC Exposure does
not exceed such Non-Defaulting Lender’s Commitment; provided that, subject to
Section 12.22, no reallocation hereunder shall constitute a waiver or release of
any claim of any party hereunder against a Defaulting Lender arising from that
Lender having become a Defaulting Lender, including any claim of a
Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased
exposure following such reallocation;
 
(B)       if the reallocation described in Section 4.03(c)(iii)(A) cannot, or
can only partially, be effected, then the Borrower shall within one Business Day
following notice by the Agent Cash Collateralize for the benefit of the Issuing
Bank only the Borrower’s obligations corresponding to such Defaulting Lender’s
LC Exposure (after giving effect to any partial reallocation pursuant to Section
4.03(c)(iii)(A)) in accordance with the procedures set forth in Section 2.08(j)
for so long as such LC Exposure is outstanding and the relevant Defaulting
Lender remains a Defaulting Lender;
 
(C)          if the Borrower Cash Collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to Section 4.03(c)(iii)(B), then the Borrower
shall not be required to pay any fees to such Defaulting Lender pursuant to
Section 3.05(b) with respect to such Defaulting Lender’s LC Exposure during the
period such Defaulting Lender’s LC Exposure is Cash Collateralized;
 
(D)         if the LC Exposure of the Non-Defaulting Lenders is reallocated
pursuant to Section 4.03(c)(iii)(A), then the fees payable to the Lenders
pursuant to Section 3.05(a) and Section 3.05(b) shall be adjusted in accordance
with such Non-Defaulting Lenders’ Applicable Percentages; or
 
(E)         if all or any portion of such Defaulting Lender’s LC Exposure is
neither Cash Collateralized nor reallocated pursuant to Section 4.03(c)(iii)(A)
or Section 4.03(c)(iii)(B), then, without prejudice to any rights or remedies of
the Issuing Bank or any Lender hereunder, all commitment fees that otherwise
would have been payable to such Defaulting Lender (solely with respect to the
portion of such Defaulting Lender’s Commitment that was utilized by such LC
Exposure) and letter of credit fees payable under Section 3.05(b) with respect
to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank
until such LC Exposure is Cash Collateralized and/or reallocated.
 
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(d)         So long as any Lender is a Defaulting Lender, the Issuing Bank shall
not be required to issue, amend or increase any Letter of Credit, unless it is
satisfied that the related exposure and the Defaulting Lender’s then outstanding
LC Exposure will be 100% covered by the Commitments of the Non-Defaulting
Lenders and/or cash collateral will be provided by the Borrower in accordance
with Section 4.03(c)(iii)(B), and participating interests in any such newly
issued or increased Letter of Credit shall be allocated among Non-Defaulting
Lenders in a manner consistent with Section 4.03(c)(iii)(A) (and Defaulting
Lenders shall not participate therein).
 
(e)         If the Issuing Bank has a good faith belief that any Lender has
defaulted in fulfilling its obligations under one or more other agreements in
which such Lender commits to extend credit, the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless the Issuing
Bank shall have entered into arrangements with the Borrower or such Lender,
satisfactory to the Issuing Bank, as the case may be, to defease any risk to it
in respect of such Lender hereunder.
 
(f)          In the event that the Agent, the Borrower and the Issuing Bank each
agrees that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall
be readjusted to reflect the inclusion of such Lender’s Commitment and on such
date such Lender shall purchase at par such of the Loans and/or participations
in Letters of Credit of the other Lenders as the Agent shall determine may be
necessary in order for such Lender to hold such Loans and/or participations in
Letters of Credit in accordance with its Applicable Percentage.
 
ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
 
Section 5.01         Increased Costs.
 
(a)          Eurodollar Changes in Law.  If any Change in Law shall:
 
(i)          impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the Adjusted LIBO Rate);
 
(ii)        subject any Lender or other recipient of any payment under this
Agreement or under any other Loan Document to any Taxes (other than (A)
Indemnified Taxes and (B) Excluded Taxes) on its loans, loan principal, letters
of credit, commitments, or other obligations, or its deposits, reserves, other
liabilities or capital attributable thereto; or
 
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(iii)       impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender for such additional costs incurred or reduction suffered.
 
(b)        Capital Requirements or Liquidity.  If any Lender or any Issuing Bank
determines that any Change in Law regarding capital requirements or liquidity
has or would have the effect of reducing the rate of return on such Lender’s or
such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing
Bank’s holding company, if any, as a consequence of this Agreement or the Loans
made by, or participations in Letters of Credit held by, such Lender, or the
Letters of Credit issued by such Issuing Bank, to a level below that which such
Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding
company could have achieved but for such Change in Law (taking into
consideration such Lender’s or such Issuing Bank’s policies and the policies of
such Lender’s or such Issuing Bank’s holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or such
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or such Issuing Bank or such Lender’s or such Issuing
Bank’s holding company for any such reduction suffered.
 
(c)         Certificates.  A certificate of a Lender or any Issuing Bank setting
forth in reasonable detail the basis of its request and the amount or amounts
necessary to compensate such Lender or such Issuing Bank or its holding company,
as the case may be, as specified in Section 5.01(a) or (b) shall be delivered to
the Borrower and shall be conclusive absent manifest error.  The Borrower shall
pay such Lender or such Issuing Bank, as the case may be, the amount shown as
due on any such certificate within ten (10) days after receipt thereof.
 
(d)        Effect of Failure or Delay in Requesting Compensation.  Failure or
delay on the part of any Lender or any Issuing Bank to demand compensation
pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s or
such Issuing Bank’s right to demand such compensation, provided that no Lender
may make any such demand more than 180 days after the Termination Date, nor for
any amount which has accrued more than 270 days prior to such Lender or Issuing
Bank delivering the certificate required in Section 5.01(c).
 
Section 5.02         Break Funding Payments.  In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan into an ABR Loan other than on the last
day of the Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event.  In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market.
 
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A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 5.02 shall be delivered to the
Borrower and shall be conclusive absent manifest error.  The Borrower shall pay
such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.
 
Section 5.03         Taxes.
 
(a)          Payments Free of Taxes.  Any and all payments by or on account of
any obligation of the Borrower or any Guarantor under any Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower or any Guarantor shall be required to
deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5.03(a)), the Agent, Lender or Issuing Bank (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower or such Guarantor shall make such
deductions and (iii) the Borrower or such Guarantor shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
 
(b)         Payment of Other Taxes by the Borrower.  The Borrower shall pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
law.
 
(c)          Indemnification by the Borrower.  The Borrower shall indemnify the
Agent, each Lender and each Issuing Bank, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Agent, such Lender or such Issuing Bank, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.03) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  A certificate of
the Agent, a Lender or an Issuing Bank as to the basis of such Indemnified Taxes
and Other Taxes and the amount of such payment or liability under this Section
5.03 shall be delivered to the Borrower and shall be conclusive absent manifest
error.
 
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(d)        Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower or a Guarantor to a
Governmental Authority, the Borrower shall deliver to the Agent the original or
a certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Agent.
 
(e)        Status of Lenders.  Any Lender that is entitled to an exemption from
or reduction of withholding Tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement or any other Loan Document shall
deliver to the Borrower (with a copy to the Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate.
 
Without limiting the generality of the foregoing, in the event that the Borrower
is a U.S. Person,
 
(i)         any Lender that is a U.S. Person shall deliver to the Borrower and
the Agent on or prior to the date on which such Lender becomes a Lender under
this Agreement (and from time to time thereafter upon the reasonable request of
the Borrower or the Agent), executed originals of IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding tax;
 
(ii)       any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), whichever of the following is
applicable:
 
(A)         in the case of a Foreign Lender claiming the benefits of an income
tax treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such tax treaty and (y) with respect to
any other applicable payments under any Loan Document, IRS Form W-8BEN
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;
 
(B)          executed originals of IRS Form W-8ECI;
 
(C)        in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code, (x) a
certificate substantially in the form of Exhibit F-1 to the effect that such
Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, a “10 percent shareholder” of the Borrower within the meaning of Section
881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y)
executed originals of IRS Form W-8BEN; or
 
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(D)      to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-2 or
Exhibit F-3, IRS Form W-9, and/or other certification documents from each
beneficial owner, as applicable; provided that if the Foreign Lender is a
partnership and one or more direct or indirect partners of such Foreign Lender
are claiming the portfolio interest exemption, such Foreign Lender may provide a
U.S. Tax Compliance Certificate substantially in the form of Exhibit F-4 on
behalf of each such direct and indirect partner;
 
(iii)      any Foreign Lender shall, to the extent it is legally entitled to do
so, deliver to the Borrower and the Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Borrower or the Agent), executed originals of any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in U.S. federal withholding Tax, duly completed, together with
such supplementary documentation as may be prescribed by applicable law to
permit the Borrower or the Agent to determine the withholding or deduction
required to be made; and
 
(iv)        if a payment made to a Lender under any Loan Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender 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
Lender shall deliver to the Borrower and the Agent at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
or the 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 Agent as may be
necessary for the Borrower and the Agent to comply with their obligations under
FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment.  Solely for purposes of this clause (D), “FATCA” shall include any
amendments made to FATCA after the date of this Agreement.
 
Each of the Lenders, the Agent and the Issuing Bank agrees that if any form or
certification it previously delivered expires or becomes obsolete or inaccurate
in any respect, it shall update such form or certification or promptly notify
the Borrower (and, in the case of the Lenders, the Agent) in writing of its
legal inability to do so.
 
(f)         Refunds. If any party determines, in its sole discretion exercised
in good faith, that it has received a refund of any Taxes as to which it has
been indemnified pursuant to this Section 5.03 (including by the payment of
additional amounts pursuant to this Section 5.03), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this clause (f) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority.  Notwithstanding anything to the contrary
in this clause (f), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this clause (f) the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid.  This clause (f) shall not be construed
to require any indemnified party to make available its Tax returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.
 
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(g)         Indemnification by the Lenders.  Each Lender shall severally
indemnify the Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Borrower has not already indemnified the Agent for such Indemnified Taxes and
without limiting the obligation of the Borrower to do so), (ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of Section
12.04(c)(ii) relating to the maintenance of a Participant Register and (iii) any
Excluded Taxes attributable to such Lender, in each case, that are payable or
paid by the Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or liability
delivered to any Lender by the Agent shall be conclusive absent manifest error.
Each Lender hereby authorizes the Agent to set off and apply any and all amounts
at any time owing to such Lender under any Loan Document or otherwise payable by
the Agent to the Lender from any other source against any amount due to the
Agent under this clause (g).
 
Section 5.04         Designation of Different Lending Office.  If any Lender
requests compensation under Section 5.01, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 5.03, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (a) would eliminate or reduce amounts
payable pursuant to Section 5.01 or Section 5.03, as the case may be, in the
future and (b) would not subject such Lender to any unreimbursed cost or expense
and would not otherwise be disadvantageous to such Lender.  The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
 
Section 5.05        Illegality.  Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its obligation to make or maintain Eurodollar
Loans either generally or having a particular Interest Period hereunder, then
(a) such Lender shall promptly notify the Borrower and the Agent thereof and
such Lender’s obligation to make such Eurodollar Loans shall be suspended (the
“Affected Loans”) until such time as such Lender may again make and maintain
such Eurodollar Loans and (b) all Affected Loans which would otherwise be made
by such Lender shall be made instead as ABR Loans (and, if such Lender so
requests by notice to the Borrower and the Agent, all Affected Loans of such
Lender then outstanding shall be automatically converted into ABR Loans on the
date specified by such Lender in such notice) and, to the extent that Affected
Loans are so made as (or converted into) ABR Loans, all payments of principal
which would otherwise be applied to such Lender’s Affected Loans shall be
applied instead to its ABR Loans.
 
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ARTICLE VI
CONDITIONS PRECEDENT
 
Section 6.01        Interim Facility Effective Date.  The obligations of the
Lenders to enter into and execute this Agreement and make Loans and other
extensions of credit hereunder during the Interim Period, shall commence on the
first Business Day when each of the following conditions precedent shall have
been satisfied (or waived in accordance with Section 12.02) in a manner
satisfactory to the Agent, which day shall be no later than two (2) Business
Days after the entry of the Interim Order (the “Interim Facility Effective
Date”):
 
(a)          the Petition Date shall have occurred;
 
(b)        the Bankruptcy Court shall have entered the Interim Order within five
(5) Business Days following the Petition Date, which Interim Order (i) shall
have been entered on the docket of the Bankruptcy Court, (ii) shall be in full
force and effect and shall not have been vacated, stayed, reversed, modified or
amended in any respect without the prior written consent of the Agent and the
Majority Lenders, and (iii) the Loan Parties shall be in compliance with the
terms of the Interim Order in all respects;
 
(c)        all first-day motions filed by the Loan Parties (including any
motions related to cash management or any critical vendor or supplier motions)
and related orders, including the Cash Management Order, entered by the
Bankruptcy Court in the Bankruptcy Cases shall be in form and substance
reasonably satisfactory to the Agent;
 
(d)         all motions related to the DIP Facility and related orders entered
by the Bankruptcy Court (including the applicable DIP Order) shall be in form
and substance satisfactory to the Agent;
 
(e)          the Agent shall have received (i) duly executed and delivered
counterparts (in such numbers as may be requested by the Agent) of this
Agreement and the other Loan Documents to be executed and delivered on or prior
to such date, from each party hereto or thereto, as applicable, signed on behalf
of such party, in each case in form and substance acceptable to the Agent and
Lenders, and (ii) the duly executed Notes payable to each Lender that requests a
Note in the principal amount equal to such Lender’s Commitment and Loans;
 
(f)          the Agent shall have received a certificate of the Borrower and of
each Guarantor certifying as of the Interim Facility Effective Date (i)
resolutions of the board of directors or other managing body with respect to the
authorization of the Borrower or such Guarantor to execute and deliver the Loan
Documents to which it is a party and to enter into the transactions contemplated
in those documents, (ii) the individuals (A) who are authorized to sign the Loan
Documents to which the Borrower or such Guarantor is a party and (B) who will,
until replaced by another individual duly authorized for that purpose, act as
its representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement and the other Loan
Documents to which it is a party, (iii) specimen signatures of such authorized
individuals, and (iv) the articles or certificate of incorporation or formation
and bylaws, operating agreement or partnership agreement, as applicable, of the
Borrower and each Guarantor, in each case, certified as being true and
complete.  The Agent and the Lenders may conclusively rely on such certificate
until the Agent receives notice in writing from the Borrower to the contrary;
 
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(g)         the Agent shall have received certificates of the appropriate state
agencies with respect to the existence, qualification and good standing of the
Borrower and each Guarantor;
 
(h)        the Agent shall have received a certificate of insurance coverage of
the Borrower evidencing that the Borrower is carrying insurance in accordance
with Section 7.12;
 
(i)          subject to the applicable DIP Order, all reasonable and documented
pre- and post-petition fees, charges and expenses including, without limitation,
(i) the fees, charges and expenses of Orrick, Herrington & Sutcliffe, RPA
Advisors, LLC, and one local counsel to the Agent in each applicable
jurisdiction, in each case pursuant to invoices delivered to the Borrower at
least three (3) Business Days before the Interim Facility Effective Date, (ii)
the applicable Up-Front Fee set forth in Section 3.05(d), (iii) the fees agreed
to in the Fee Letter and (iv) all other amounts due and payable pursuant to
invoices delivered to the Borrower at least three (3) Business Days before the
Interim Facility Effective Date, in each case as required to be paid to the
Agent and Lenders on or before the Interim Facility Effective Date, shall have
been paid;
 
(j)          the Agent shall have received a Budget, containing line items of
sufficient detail to reflect the Loan Parties’ projected receipts and
disbursements for the 13-week period commencing on the Petition Date, in form
and substance acceptable to the Agent and the Majority Lenders and which shall
be attached hereto as Exhibit G (the “Initial Budget”), together with a
certificate of the Borrower stating that such Initial Budget has been prepared
on a reasonable basis and in good faith and is based on assumptions believed by
the Borrower to be reasonable at the time made and from the best information
then available to the Borrower;
 
(k)        the receipt by the Agent of a Borrowing Request in accordance with
Section 2.03, which shall include the intended uses of proceeds in accordance
with the Initial Budget;
 
(l)         there shall not exist any action, suit, investigation, litigation or
proceeding pending or threatened (other than the Bankruptcy Cases) in any court
or before any Governmental Authority or facts or circumstances that, in the
reasonable opinion of the Agent and the Majority Lenders, materially and
adversely affects any of the transactions contemplated hereby, or that has or
could be reasonably likely to result in a Material Adverse Effect;
 
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(m)        the holders of the Existing Obligations shall have received adequate
protection in respect of the Liens securing such Existing Obligations pursuant
to, and on the terms set forth in, the Interim Order;
 
(n)         all Obligations shall be secured by a perfected lien and security
interest on all Collateral of the Loan Parties pursuant to, and such Lien and
security interest shall have the priorities set forth in the Interim Order,
subject only to the Liens permitted by Section 9.03 and all filing and recording
fees and taxes with respect to such Liens and security interests that are due
and payable as of the Interim Facility Effective Date shall have been duly paid;
 
(o)         the Agent shall have received such information as the Agent may
reasonably require, all of which shall be reasonably satisfactory to the Agent
in form and substance, on the title to not less than eighty percent (80%) of the
Oil and Gas Properties evaluated in the most recently delivered Reserve Report;
 
(p)         The Agent shall be reasonably satisfied with the environmental
condition of the Oil and Gas Properties of the Borrower and its Subsidiaries;
 
(q)         The Agent shall have received a certificate of a Responsible Officer
certifying that the Borrower has received all consents and approvals required by
Section 7.03;
 
(r)         the Agent and the Lenders shall have received, and be reasonably
satisfied in form and substance with, all documentation and other information
required by bank regulatory authorities under applicable “know-your-customer”
and anti-money laundering rules and regulations, including but not restricted to
the USA PATRIOT Act, and, if the Borrower qualifies as a “legal entity customer”
under the Beneficial Ownership Regulation, a Beneficial Ownership Certification
in respect of the Borrower;
 
(s)          [Reserved]; and
 
(t)           the Agent shall have received the duly executed Fee Letter.
 
For purposes of determining compliance with the conditions specified in this
Section 6.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Agent shall have received notice from
such Lender prior to the proposed Interim Facility Effective Date specifying its
objection thereto.
 
Section 6.02         Final Facility Effective Date.  The obligation of each
Lender to make its Loans hereunder and the obligation of the Issuing Bank to
issue Letters of Credit hereunder during the Final Period shall commence as of
the Business Day when each of the following conditions precedent shall have been
satisfied or waived in accordance with Section 12.02) in a manner satisfactory
to the Agent (the “Final Facility Effective Date”):
 
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(a)          the Bankruptcy Court shall have entered the Final Order within
thirty-five (35) days (or such later date consented to by the Agent and the
Majority Lenders) following the entry of the Interim Order, which Final Order
shall (i) be in substantially the form of the Interim Order, with only such
modifications thereto as are satisfactory in form and substance to the Agent,
(ii) shall have been entered on the docket of the Bankruptcy Court and (iii)
shall be in full force and effect and shall not have been vacated, stayed,
reversed, modified or amended in any respect without the prior written consent
of the Agent and the Majority Lenders;
 
(b)          the Borrower shall have paid the Up-Front Fee set forth in Section
3.05(d) with respect to the Final Facility Effective Date; and
 
(c)          the Debtors shall be in compliance in all respects with (i) the DIP
Orders and (ii) subject to application of the Permitted Variance, with the
Budget.
 
For purposes of determining compliance with the conditions specified in this
Section 6.02, 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 Agent shall have received notice from
such Lender prior to the proposed Final Facility Effective Date specifying its
objection thereto.
 
Section 6.03       Conditions Precedent to Each Borrowing. The obligation of
each Lender to make a Loan on the occasion of any Borrowing (including the
Refinanced Loans and the initial funding, if any, of New Money Loans on the
Interim Facility Effective Date), and of the Issuing Bank to issue, amend, renew
or extend any Letter of Credit, is subject to the satisfaction of the following
conditions:
 
(a)         at the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Default shall have occurred and be continuing;
 
(b)         at the time of and immediately after giving effect to such Borrowing
or the issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, no Material Adverse Effect shall have occurred;
 
(c)       the Agent shall have received a Borrowing Request in accordance with
Section 2.03 or a request for a Letter of Credit in accordance with Section
2.08(b), as applicable, which shall include the intended uses of proceeds in
accordance with the Budget;
 
(d)       the representations and warranties of the Borrower and the Guarantors
set forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects (except that any representation and warranty
that is qualified as to “materiality” or “Material Adverse Effect” shall be true
and correct in all respects after giving effect to such qualification) on and as
of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, except to the extent any such
representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, such
representations and warranties shall continue to be true and correct in all
material respects as of such specified earlier date (except that any
representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects as of such specified
earlier date after giving effect to such qualification);
 
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(e)         the making of such Loan or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, would not conflict with, or
cause any Lender or the Issuing Bank to violate or exceed, any applicable
Governmental Requirement, and no Change in Law shall have occurred, and no
litigation shall be pending or threatened (other than the Bankruptcy Cases),
which does or, with respect to any threatened litigation, seeks to, enjoin,
prohibit or restrain, the making or repayment of any Loan, the issuance,
amendment, renewal, extension or repayment of any Letter of Credit or any
participations therein or the consummation of the transactions contemplated by
this Agreement or any other Loan Document;
 
(f)          at the time of and immediately after giving effect to each such
Borrowing or the issuance, amendment, renewal or extension of each such Letter
of Credit, or both, as applicable, the aggregate Revolving Credit Exposures for
all Lenders shall not exceed the then-effective Available Commitments;
 
(g)          [Reserved];
 
(h)          DIP Orders.
 
(i)         The Interim Order (A) shall be in full force and effect and shall
not have been vacated, reversed, modified, amended or stayed without the written
consent of the Agent and the Majority Lenders, and (B) shall, without
limitation, approve the Interim Refinanced Loans.
 
(ii)       The Final Order (A) shall be in full force and effect and shall not
have been vacated, reversed, modified, amended or stayed without the written
consent of the Agent and the Majority Lenders, and (B) shall, without
limitation, approve the Refinanced Loans.
 
(iii)        The Loan Parties shall be in compliance with the applicable DIP
Order.
 
(i)         at the time of such Borrowing before giving effect thereto, such
Borrowing shall not trigger a mandatory prepayment under Section 3.04(c);
 
(j)           no trustee or examiner shall have been appointed with respect to
the Loan Parties or their Property; and
 
(k)          subject to the procedures described in any order of the Bankruptcy
Court regarding payments for professional fees and expenses, if any, all
reasonable and documented fees, charges and expenses (including, without
limitation, the fees, charges and expenses of Orrick, Herrington & Sutcliffe,
LLP, RPA Advisors, LLC, one local counsel to the Agent in each applicable
jurisdiction and any other professional advisor, as applicable), in each case
pursuant to invoices delivered to the Borrower at least three (3) Business Days
before the date of such Borrowing, and all other amounts due and payable on or
prior to the date of such Borrowing, required to be paid to the Agent and
Lenders on or before the date of such Borrowing shall have been paid (or will be
paid with the proceeds of the Loan authorized under the Interim Order or the
Final Order, as applicable).
 
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In addition to the other conditions precedent herein set forth, if any Lender
becomes, and during the period it remains, a Defaulting Lender, the Issuing Bank
will not be required to issue any Letter of Credit, or to amend, extend increase
or renew any outstanding Letter of Credit (or increase the face amount thereof,
alter the drawing terms thereunder or extend the expiry date thereof), unless
the Issuing Bank is satisfied that any exposure that would result therefrom is
eliminated or fully covered by the commitments of the Non-Defaulting Lenders or
by Cash Collateralization or a combination thereof satisfactory to the Issuing
Bank in its sole discretion.
 
Each request for a Borrowing and each request for the issuance, amendment,
renewal or extension of any Letter of Credit shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as to the
matters specified in Section 6.03.
 
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
 
The Borrower (and each Parent Guarantor, in the case of Section 7.30) represents
and warrants to the Lenders that:
 
Section 7.01        Organization; Powers.  Subject to any restrictions arising
on account of any Debtor’s status as a “debtor” under the Bankruptcy Code and
entry of the DIP Orders, each Debtor is duly organized, validly existing and, if
applicable, in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority, and has all material
governmental licenses, authorizations, consents and approvals necessary, to own
its assets and to carry on its business as now conducted, and is qualified to do
business in, and is in good standing in, every jurisdiction where such
qualification is required, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications could not
reasonably be expected to have a Material Adverse Effect.
 
Section 7.02       Authority; Enforceability.  Subject to any restrictions
arising on account of any Debtor’s status as a “debtor” under the Bankruptcy
Code and entry of the DIP Order, the Transactions are within the Borrower’s and
each Guarantor’s corporate powers and have been duly authorized by all necessary
corporate and, if required, member action (including, without limitation, any
action required to be taken by any class of directors of the Borrower or any
other Person, whether interested or disinterested, in order to ensure the due
authorization of the Transactions).  When executed and delivered, each Loan
Document to which the Borrower and any Guarantor is a party will have been duly
executed and delivered by the Borrower and such Guarantor and, upon entry of the
Interim Order or the Final Order, as applicable, will constitute a legal, valid
and binding obligation of the Borrower and such Guarantor, as applicable,
enforceable in accordance with its terms, subject to entry of each DIP Order,
and further subject to other applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors’ rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
 
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Section 7.03        Approvals; No Conflicts.  Subject to the entry of the DIP
Order, the Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority
or any other third Person (including the members or any class of directors of
the Borrower or any other Person, whether interested or disinterested), nor is
any such consent, approval, registration, filing or other action necessary for
the validity or enforceability of any Loan Document or the consummation of the
Transactions, except such as have been obtained or made and are in full force
and effect, and except for the filing and recording of Security Instruments to
perfect the Liens as required by this Agreement and the applicable DIP Order,
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of any Debtor or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon any Debtor or its Properties, or give
rise to a right thereunder to require any payment to be made by such Debtor and
(d) will not result in the creation or imposition of any Lien on any Property of
any Debtor (other than the Liens and security interests in favor of the Agent
(or any designee) created by the Loan Documents).
 
Section 7.04         Financial Position; No Material Adverse Change.
 
(a)          The Borrower has heretofore furnished to the Lenders (i) the
audited financial statements of Borrower ended December 31, 2018 and (ii) the
unaudited balance sheet and statements of income, members’ equity and cash flows
as of and for the fiscal quarter ended March 31, 2019.  Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of Borrower and its Consolidated
Subsidiaries as of such date and for such period in accordance with GAAP,
subject to year-end audit adjustments and the absence of footnotes in the case
of the unaudited quarterly financial statements.
 
(b)          Since the Petition Date, (i) there has been no event, development
or circumstance that has had or could reasonably be expected to have a Material
Adverse Effect and (ii) the business of Debtors has been conducted only in the
ordinary course consistent with past business practices.
 
(c)       No Debtor has on the date hereof any material Debt (including
Disqualified Capital Stock), or any contingent liabilities, off-balance sheet
liabilities or partnerships, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the Financial
Statements.
 
Section 7.05        Litigation.  Except as set forth on Schedule 7.05, and other
than the Bankruptcy Cases, there are no actions, suits, investigations or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower or Parent, threatened against or
affecting any Debtor which (a) affect or pertain to the Transactions or this
Agreement or any other Loan Document, or (b) either individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect or is
not otherwise subject to the automatic stay as a result of the Bankruptcy Cases.
 
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Section 7.06         Environmental Matters.  Except as could not be reasonably
expected to have a Material Adverse Effect (or with respect to (c), (d) and (e)
below, where the failure to take such actions could not be reasonably expected
to have a Material Adverse Effect):
 
(a)        neither any Property of any Debtor nor the operations conducted
thereon violate any order or requirement of any court or Governmental Authority
or any Environmental Laws;
 
(b)         no Property of any Debtor nor the operations currently conducted
thereon or, to the knowledge of the Borrower, by any prior owner or operator of
such Property or operation, are in violation of or subject to any existing,
pending or threatened action, suit, investigation, inquiry or proceeding by or
before any court or Governmental Authority or to any remedial obligations under
Environmental Laws;
 
(c)         all notices, permits, licenses, exemptions, approvals or similar
authorizations, if any, required to be obtained or filed in connection with the
operation or use of any and all Property of any Debtor, including, without
limitation, past or present treatment, storage, disposal or release of a
hazardous substance, oil and gas waste or solid waste into the environment, have
been duly obtained or filed or requested, and each Debtor is in compliance with
the terms and conditions of all such notices, permits, licenses and similar
authorizations;
 
(d)         all hazardous substances, solid waste and oil and gas waste, if any,
generated at any and all Property of any Debtor have in the past been
transported, treated and disposed of in accordance with Environmental Laws and
so as not to pose an imminent and substantial endangerment to public health or
welfare or the environment, and, to the knowledge of the Borrower, all such
transport carriers and treatment and disposal facilities have been and are
operating in compliance with Environmental Laws and so as not to pose an
imminent and substantial endangerment to public health or welfare or the
environment, and are not the subject of any existing, pending or threatened
action, investigation or inquiry by any Governmental Authority in connection
with any Environmental Laws;
 
(e)         the Borrower has taken all steps reasonably necessary to determine
and has determined that no oil, hazardous substances, solid waste or oil and gas
waste, have been disposed of or otherwise released and there has been no
threatened release of any oil, hazardous substances, solid waste or oil and gas
waste on or to any Property of any Debtor except in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment;
 
(f)          to the extent applicable, all Property of each Debtor currently
satisfies all design, operation, and equipment requirements imposed by the OPA,
and the Borrower does not have any reason to believe that such Property, to the
extent subject to the OPA, will not be able to maintain compliance with the OPA
requirements during the term of this Agreement; and
 
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(g)         no Debtor has any known contingent liability or Remedial Work in
connection with any release or threatened release of any oil, hazardous
substance, solid waste or oil and gas waste into the environment.
 
Section 7.07         Compliance with the Laws and Agreements; No Defaults.
 
(a)         Each Debtor is in compliance with all Governmental Requirements
applicable to it or its Property and all agreements and other instruments
binding upon it or its Property and, subject to any restrictions arising on
account of any Debtor’s status as a “debtor” under the Bankruptcy Code,
possesses all licenses, permits, franchises, exemptions, approvals and other
authorizations granted by Governmental Authorities necessary for the ownership
of its Property and the present conduct of its business, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
 
(b)          Except to the extent subject to the automatic stay under the
Bankruptcy Cases, no Debtor is (i) in default nor has any event or circumstance
occurred which, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default or would require any
Debtor to Redeem or make any offer to Redeem all or any portion of any Debt
outstanding under any indenture, note, credit agreement or instrument pursuant
to which any Material Indebtedness is outstanding or by which any Debtor or any
of such Debtor’s Properties is bound or (ii) in the actual knowledge of a
Responsible Officer of such Debtor, in material default under any material
contract.
 
(c)          No Default has occurred and is continuing.
 
Section 7.08       Investment Company Act.  No Debtor is an “investment company”
or a company “controlled” by an “investment company,” within the meaning of, or
subject to regulation under, the Investment Company Act of 1940, as amended.
 
Section 7.09         Taxes.  Each Debtor has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are
being contested in good faith by appropriate proceedings and for which such
Debtor has set aside on its books adequate reserves in accordance with GAAP, (b)
to the extent otherwise excused or prohibited by the Bankruptcy Code and not
otherwise authorized by the Bankruptcy Court or (c) to the extent that the
failure to do so could not reasonably be expected to result in a Material
Adverse Effect.
 
Section 7.10         ERISA.
 
Except to the extent excused by the Bankruptcy Court or as a result of the
filing of the Bankruptcy Cases:
 
(a)        Each Debtor and each ERISA Affiliate have complied in all material
respects with ERISA and, where applicable, the Code regarding each Plan, if any.
 
(b)          Each Plan, if any, is, and has been, maintained in substantial
compliance with ERISA and, where applicable, the Code.
 
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(c)        No act, omission or transaction has occurred that could result in
imposition on any Debtor or any ERISA Affiliate (whether directly or indirectly)
of (i) either a civil penalty assessed pursuant to subsections (c), (i) or (l)
of section 502 of ERISA or a tax imposed pursuant to Chapter 43 of Subtitle D of
the Code or (ii) breach of fiduciary duty liability damages under section 409 of
ERISA.
 
(d)          No Plan (other than a defined contribution plan) or any trust
created under any such Plan has been terminated since September 2, 1974.  No
liability to the PBGC (other than for the payment of current premiums which are
not past due) by any Debtor or any ERISA Affiliate has been or is expected by
such Debtor or ERISA Affiliate to be incurred with respect to any Plan.  No
ERISA Event with respect to any Plan has occurred.
 
(e)         Full payment when due has been made of all amounts which any Debtor
or any ERISA Affiliate is required under the terms of each Plan, if any, or
applicable law to have paid as contributions to such Plan as of the date hereof,
and no accumulated funding deficiency (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, exists with respect to any
Plan.
 
(f)           The actuarial present value of the benefit liabilities under each
Plan, if any, which is subject to Title IV of ERISA does not, as of the end of
the Borrower’s most recently ended fiscal year, exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities.  The term “actuarial
present value of the benefit liabilities” shall have the meaning specified in
section 4041 of ERISA.
 
(g)          No Debtor nor any ERISA Affiliate sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by the
Borrower, any of its Subsidiaries or any ERISA Affiliate in its sole discretion
at any time without any material liability.
 
(h)          No Debtor nor any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the six-year period preceding the date
hereof sponsored, maintained or contributed to, any Multiemployer Plan.
 
(i)          No Debtor nor any ERISA Affiliate is required to provide security
under section 401(a)(29) of the Code due to a Plan amendment that results in an
increase in current liability for the Plan.
 
Section 7.11         Disclosure; No Material Misstatements.  None of the
reports, financial statements, certificates or other information furnished by or
on behalf of any Debtor to the Agent or any Lender or any of their Affiliates in
connection with the negotiation of this Agreement or any other Loan Document or
delivered hereunder or under any other Loan Document (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.  There
is no fact peculiar to any Debtor other than as set forth in the DIP Orders that
could reasonably be expected to have a Material Adverse Effect or in the future
is reasonably likely to have a Material Adverse Effect and which has not been
set forth in this Agreement or the Loan Documents or the other documents,
certificates and statements furnished to the Agent or the Lenders by or on
behalf of any Debtor prior to, or on, the date hereof in connection with the
transactions contemplated hereby.  There are no statements or conclusions in any
Reserve Report which are based upon or include misleading information or fail to
take into account material information regarding the matters reported therein.
 
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Section 7.12     Insurance.  The Debtors have, (i) all insurance policies
sufficient for the compliance by each of them with all material Governmental
Requirements and all material agreements and (ii) insurance coverage in at least
amounts and against such risk (including, without limitation, public liability)
that are usually insured against by companies similarly situated and engaged in
the same or a similar business for the assets and operations of the Debtors. 
The Agent and the Lenders have been named as additional insureds in respect of
such liability insurance policies and the Agent has been named as loss payee
with respect to Property loss insurance.
 
Section 7.13        Restriction on Liens.  Subject to any restrictions arising
on account of any Debtor’s status as a “debtor” under the Bankruptcy Code, no
Debtor is a party to any material agreement or arrangement (other than any
Existing Second Lien Loan Documents), or, other than as a result of the
Bankruptcy Cases, subject to any order, judgment, writ or decree, which either
restricts or purports to restrict its ability to grant Liens to the Agent and
the Lenders on or in respect of their Properties to secure the Obligations.
 
Section 7.14       Subsidiaries.  Except as set forth on Schedule 7.14 or as
disclosed in writing from time to time to the Agent (which shall promptly
furnish a copy to the Lenders), which shall be a supplement to Schedule 7.14,
the Borrower has no Subsidiaries.  No Debtor has any Foreign Subsidiaries.  Each
Debtor set forth on Schedule 7.14 (as supplemented from time to time) is a
Wholly-Owned Subsidiary.  The Parent does not directly own any Equity Interests
in any Person other than Equity Interests in the Borrower and Legacy GP, and
Legacy GP does not directly own any Equity Interests in any Person other than
Equity Interests in the Borrower.
 
Section 7.15         Location of Business and Offices.  The Borrower’s
jurisdiction of organization is Delaware; the name of the Borrower as listed in
the public records of its jurisdiction of organization is Legacy Reserves LP,
and the organizational identification number of the Borrower in its jurisdiction
of organization is 4038949 (or as set forth in a notice delivered to the Agent
pursuant to Section 8.01(n)).  The Borrower’s principal place of business and
chief executive offices are located at the address specified in Section 12.01
(or as set forth in a notice delivered pursuant to Section 8.01(n)).  Each
Subsidiary’s jurisdiction of organization, name as listed in the public records
of its jurisdiction of organization, organizational identification number in its
jurisdiction of organization, and the location of its principal place of
business and chief executive office is stated on Schedule 7.15 (or as set forth
in a notice delivered pursuant to Section 8.01(n)).

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Section 7.16         Properties; Titles, Etc.

Except as a result of the filing of the Bankruptcy Cases:

(a)          Each Debtor has good and defensible title to its Oil and Gas
Properties evaluated in the most recently delivered Reserve Report, good and
defensible title to its Oil and Gas Properties comprised of natural gas
pipelines or other gathering systems or pipelines or midstream assets and good
title to all its personal Properties, in each case, free and clear of all Liens
except Liens permitted by Section 9.03. After giving full effect to the Excepted
Liens, the any Debtor specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report, and the ownership of such Properties shall
not in any material respect obligate any Debtor to bear the costs and expenses
relating to the maintenance, development and operations of each such Property in
an amount in excess of the working interest of each Property set forth in the
most recently delivered Reserve Report that is not offset by a corresponding
proportionate increase in any Debtor’s net revenue interest in such Property.

(b)         All material leases and agreements necessary for the present conduct
of the business of the Debtors are valid and subsisting, in full force and
effect, and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases which could reasonably be expected to have a
Material Adverse Effect.

(c)         The rights and Properties presently owned, leased or licensed by the
Debtors including, without limitation, all easements and rights of way, include
all rights and Properties necessary to permit the Debtors to conduct their
business in all material respects in the same manner as its business has been
conducted prior to the date hereof.

(d)        All of the material Properties of the Debtors that are reasonably
necessary for the operation of their businesses are in good working condition
and are maintained in accordance with prudent business standards.

(e)          Each Debtor owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual Property material to its
business, and the use thereof by such Debtor does not infringe upon the rights
of any other Person, except for any such infringements that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.  The Debtors either own or have valid licenses or other rights to use
all databases, geological data, geophysical data, engineering data, seismic
data, maps, interpretations and other technical information used in their
businesses as presently conducted, subject to the limitations contained in the
agreements governing the use of the same, which limitations are customary for
companies engaged in the business of the exploration and production of
Hydrocarbons, with such exceptions as could not reasonably be expected to have a
Material Adverse Effect.

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Section 7.17         Maintenance of Properties.  Except to the extent any
leases, subleases or other contracts are rejected in the Bankruptcy Cases as
part of the Debtors’ exercise of its reasonable business judgment, and except as
could not reasonably be expected to have a Material Adverse Effect, the Oil and
Gas Properties (and Properties unitized therewith) have been maintained,
operated and developed in a good and workmanlike manner and in conformity with
all Government Requirements and in conformity with the provisions of all leases,
subleases or other contracts comprising a part of the Hydrocarbon Interests and
other contracts and agreements forming a part of the Oil and Gas Properties. 
Specifically in connection with the foregoing, except as could not reasonably be
expected to have a Material Adverse Effect, (a) no Oil and Gas Property is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and (b)
none of the wells comprising a part of the Oil and Gas Properties (or Properties
unitized therewith) is deviated from the vertical more than the maximum
permitted by Government Requirements, and such wells are, in fact, bottomed
under and are producing from, and the well bores are wholly within, the Oil and
Gas Properties (or in the case of wells located on Properties unitized
therewith, such unitized Properties).  Subject to any necessary order or
authorization of the Bankruptcy Court, all pipelines, wells, separation,
treating, gas processing plants, compressors, platforms and other material
improvements, fixtures and equipment owned in whole or in part by any Debtor
that are necessary to conduct normal operations are being maintained in a state
adequate to conduct normal operations, and with respect to such of the foregoing
which are operated any Debtor, in a manner consistent with such Debtor’s past
practices (other than those the failure of which to maintain in accordance with
this Section 7.17 could not reasonably be expect to have a Material Adverse
Effect).

Section 7.18       Gas Imbalances, Prepayments.  As of the date hereof, except
as set forth on Schedule 7.18 or on the most recent certificate delivered
pursuant to Section 8.12(c), on a net basis there are no gas imbalances, take or
pay or other prepayments which would require the Debtors to deliver, in the
aggregate, two percent (2%) or more of the monthly production from Hydrocarbons
produced from the Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor.

Section 7.19       Marketing of Production.  Except for contracts listed and in
effect on the date hereof on Schedule 7.19, and thereafter either disclosed in
writing to the Agent or included in the most recently delivered Reserve Report
(with respect to all of which contracts the Borrower represents that it or its
Subsidiaries are receiving a price for all production sold thereunder which is
computed substantially in accordance with the terms of the relevant contract and
are not having deliveries curtailed substantially below the subject Property’s
delivery capacity), no material agreements exist which are not cancelable on 60
days’ notice or less without penalty or detriment for the sale of production
from the Borrower’s or its Subsidiaries’ Hydrocarbons (including, without
limitation, calls on or other rights to purchase, production, whether or not the
same are currently being exercised) that (a) pertain to the sale of production
at a fixed price and (b) have a maturity or expiry date of more than six (6)
months from the date hereof.

Section 7.20        Swap Agreements.  Schedule 7.20, as of the date hereof, and
after the date hereof, each report required to be delivered by the Borrower
pursuant to Section 8.01(f), sets forth, a true and complete summary of all Swap
Agreements of each Debtor, which includes the material terms thereof (including
the type, term and notional amounts or volumes).

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Section 7.21        Use of Loans and Letters of Credit.  The proceeds of the
Loans and Letters of Credit shall be used in accordance with Section 8.18.

Section 7.22         [Reserved].

Section 7.23       USA PATRIOT; AML Laws; Anti-Corruption Laws and Sanctions. 
Each Debtor has implemented and maintains in effect policies and procedures
designed to ensure compliance by such Debtor and its respective directors,
officers, employees and agents with the USA PATRIOT Act, Anti-Corruption Laws,
applicable AML Laws and applicable Sanctions.  None of (a) the Debtors or any of
their respective directors or officers, or, to the knowledge of the Borrower,
any of their respective employees or Affiliates, or (b) to the knowledge of the
Borrower, any agent of any Debtor or other Affiliate that will act in any
capacity in connection with or benefit from the credit facility established
hereby, (i) is a Sanctioned Person or (ii) is in violation of AML Laws,
Anti-Corruption Laws, or Sanctions.  No Borrowing or Letter of Credit, use of
proceeds or other transaction contemplated by this Agreement will cause a
violation of AML Laws, Anti-Corruption Laws or applicable Sanctions by any
Person participating in the transactions contemplated by this Agreement, whether
as lender, borrower, guarantor, agent, or otherwise.  No Debtor, or, to the
knowledge of the Borrower, any other Affiliate has engaged in or intends to
engage in any dealings or transactions with, or for the benefit of, any
Sanctioned Person or with or in any Sanctioned Country.

Section 7.24       International Operations.  None of the Debtors own nor have
any Debtors acquired or made any other material expenditure (whether such
expenditure is capital, operating or otherwise) in or related to, any Oil and
Gas Properties located outside of the geographical boundaries of the United
States or in the offshore federal waters of the United States of America.

Section 7.25       Accounts.  Schedule 7.25 lists all Deposit Accounts,
Securities Accounts and Commodity Accounts maintained by or for the benefit of
any Debtor as of the Interim Facility Effective Date, together with an
indication as to whether each such account is an Excluded Account and the basis
for such determination.

Section 7.26         [Reserved].

Section 7.27         [Reserved].

Section 7.28         DIP Orders. The applicable DIP Order is in full force and
effect and has not been vacated, reversed, modified, amended or stayed without
the prior written consent of the Agent and the Majority Lenders.

Section 7.29     Budget.  The Debtors have not failed to disclose any material
assumptions with respect to the Budget and affirm the reasonableness of the
assumptions in the Budget in all material respects.

Section 7.30       Representations and Warranties of the Parent Guarantors. 
Each of the Parent Guarantors hereby makes each of the representations and
warranties to the Lenders set forth in Section 7.01, Section 7.02, Section 7.03,
Section 7.04, Section 7.05, Section 7.06, Section 7.07, Section 7.08, Section
7.09, Section 7.10, Section 7.11, Section 7.12, Section 7.13, Section 7.14,
Section 7.21 and Section 7.23, as if each reference to “the Borrower” therein
were a reference to “such Parent Guarantor”, and provided that each reference in
each such representation and warranty to the Borrower’s knowledge shall, for the
purposes of this Section 7.30, be deemed to be a reference to such Parent
Guarantor’s knowledge.

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ARTICLE VIII
AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents shall have been paid in full and all Letters of
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower (and each Parent Guarantor, in the case of Section
8.01, Section 8.02 and Section 8.21) covenants and agrees with the Lenders that:

Section 8.01         Financial Statements; Other Information.  The Borrower will
furnish to the Agent and each Lender:

(a)         Annual Financial Statements.  As soon as available, but in any event
not later than ninety (90) days after the end of each fiscal year, the Parent’s
audited consolidated balance sheet and related statements of operations,
shareholders’ equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by independent public accountants of recognized national
standing and reasonably acceptable to the Agent (without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
position and results of operations of the Parent and its Consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied.

(b)          Quarterly Financial Statements.  As soon as available, but in any
event not later than forty-five (45) days after the end of each of the first
three (3) fiscal quarters of each fiscal year of the Parent, its consolidated
balance sheet and related statements of operations, shareholders’ equity and
cash flows as of the end of and for such quarter and the then elapsed portion of
the fiscal year, setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance sheet, as
of the end of) the previous fiscal year, all certified by a Financial Officer of
the Parent as presenting fairly in all material respects the financial position
and results of operations of the Parent and its Consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes.

(c)         Certificate of Financial Officer – Compliance.  Concurrently with
any delivery of financial statements under Section 8.01(a) or Section 8.01(b), a
certificate of a Financial Officer of the Parent and the Borrower in
substantially the form of Exhibit C hereto (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance with
Section 9.01, (iii) stating whether any change in GAAP or in the application
thereof has occurred since the date of the audited financial statements referred
to in Section 7.04 (or, if later, the most recently delivered audited financial
statements pursuant to Section 8.01(a)) and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate and (iv) specifying each Subsidiary.

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(d)        Certificate of Accounting Firm – Defaults.  Concurrently with any
delivery of financial statements under Section 8.01(a), a certificate of the
accounting firm that reported on such financial statements stating whether they
obtained knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines).

(e)          [Reserved].

(f)         Certificate of Financial Officer – Swap Agreements.  Concurrently
with any delivery of financial statements under Section 8.01(a) and Section
8.01(b), a certificate of a Financial Officer, in form and substance
satisfactory to the Agent, setting forth as of the last Business Day of such
calendar month or fiscal year, a true and complete summary of all Swap
Agreements of each Debtor which includes the material terms thereof (including
the type, term and notional amounts or volumes) not listed on Schedule 7.20.

(g)        Certificate of Insurer – Insurance Coverage.  Concurrently with any
delivery of financial statements under Section 8.01(a), a certificate of
insurance coverage from each insurer with respect to the insurance required by
Section 8.07, in form and substance reasonably satisfactory to the Agent, and,
if requested by the Agent or any Lender, all copies of the applicable policies.

(h)        Other Accounting Reports.  Promptly upon receipt thereof, a copy of
each other report or letter submitted to any Debtor by independent accountants
in connection with any annual, interim or special audit made by them of the
books of any such Debtor, and a copy of any response by such Debtor to such
letter or report.

(i)          SEC and Other Filings; Reports to Shareholders.  Promptly after the
same become publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by the Parent, the Borrower or any
Subsidiary with the SEC, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be.

(j)           [Reserved].

(k)        Lists of Purchasers.  Concurrently with the delivery of any Reserve
Report to the Agent pursuant to Section 8.12, a list of all Persons purchasing
Hydrocarbons from any Debtor.

(l)          Notice of Sales of Oil and Gas Properties.  In the event any Debtor
intends to sell, transfer, assign or otherwise dispose of any Oil or Gas
Properties included in the most recently delivered Reserve Report (or any Equity
Interests in any Debtor owning interests in such Oil and Gas Properties), prior
written notice of such disposition, the price thereof, the anticipated date of
closing, and any other details thereof requested by the Agent or any Lender.

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(m)        Notice of Casualty Events.  Prompt written notice, and in any event
within three (3) Business Days, of the occurrence of any Casualty Event or the
commencement of any action or proceeding that could reasonably be expected to
result in a Casualty Event.

(n)         Information Regarding Borrower and Guarantors.  Prompt written
notice (and in any event within thirty (30) days prior thereto) of any change
(i) in the Borrower or any Guarantor’s corporate name or in any trade name used
to identify such Person in the conduct of its business or in the ownership of
its Properties, (ii) in the location of the Borrower or any Guarantor’s chief
executive office or principal place of business, (iii) in the Borrower or any
Guarantor’s identity or corporate structure or in the jurisdiction in which such
Person is incorporated or formed, (iv) in the Borrower or any Guarantor’s
jurisdiction of organization or such Person’s organizational identification
number in such jurisdiction of organization, and (v) in the Borrower or any
Guarantor’s federal taxpayer identification number, if any.

(o)        Production Report and Lease Operating Statements.  On or prior to the
20th Business Day after the end of each month, the Borrower shall deliver to the
Agent, a report setting forth, for each calendar month during the then-current
fiscal year to date, the volume of production and sales attributable to
production (and the prices at which such sales were made and the revenues
derived from such sales) for each such calendar month from the Oil and Gas
Properties, and setting forth the related ad valorem, severance and production
taxes and lease operating expenses attributable thereto and incurred for each
such calendar month.

(p)         Notices of Certain Changes.  Promptly, but in any event within five
(5) Business Days after the execution thereof, copies of any amendment,
modification or supplement to any of the certificate or articles of
incorporation, by-laws, any preferred stock designation or any other organic
document of any Debtor.

(q)         Other Requested Information.  Promptly following any request
therefor, such other information regarding the operations, business affairs and
financial condition of any Debtor (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be filed
under ERISA), or compliance with the terms of this Agreement or any other Loan
Document, as the Agent may reasonably request.

(r)         Property Tax Receipts.  Not later than March 15th of each year,
receipts or other written evidence reasonably satisfactory to the Agent (it
being agreed and understood that independent third party verification shall not
be required to the extent that the Agent’s internal policies allow)
demonstrating the Borrower or the applicable Guarantor has paid in full all of
its property Tax obligations for the previous calendar year with respect to any
improved real Property subject to a Lien of the Security Instruments.

(s)          Material Permian Acreage.  Not later than five (5) Business Days
after the consummation of an acquisition of Material Permian Acreage by any
Debtor, written notice thereof, legal descriptions of the Properties acquired
thereby and such other details as may be reasonably requested by the Agent.

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(t)          Budget Update; Cash Reporting.

(i)          On or prior to the 20th Business Day after the end of each month,
the Borrower shall deliver to the Agent: (i) an updated Capital Expenditure
Budget including a report from a Financial Officer identifying and addressing
any variance of actual performance to the Capital Expenditure Budget for the
prior month and (ii) an updated accounts payable schedule as of the last day of
the immediately prior month.

(ii)        On each Friday following the end of each four-week period, beginning
on July 5, 2019 (each, a “Reporting Date”), the Borrower shall deliver to the
Agent an updated Budget (which shall each be satisfactory to the Agent and
subject to the Agent’s approval in its reasonable discretion; provided that the
Agent shall have five (5) Business Days to approve any revised Budget provided,
further, that if the Agent does not approve any updated Budget by the sixth
(6th) Business Day following receipt thereof, the previously delivered Budget
shall remain in effect for purposes of the variance testing covenant and
reporting).

(iii)        On each Friday immediately following each Reporting Date (such
date, the “Variance Testing Date”), the Borrower shall deliver to the Agent (in
form reasonably satisfactory to the Agent) a variance report tested as of the
most recent Reporting Date for the four-week period ending on such Reporting
Date (each such period, a “Variance Testing Period”) setting forth: (w) the
aggregate disbursements of the Debtors for line items other than capital
expenditures and aggregate receipts during the applicable Variance Testing
Period, (x) any variance (whether positive or negative, expressed as a
percentage) between the aggregate disbursements for line items other than
capital expenditures made during such Variance Testing Period by the Debtors
against the aggregate disbursements for line items other than capital
expenditures for the Testing Period set forth in the applicable Budget, (y) the
aggregate disbursements of the Debtors for capital expenditures during the
applicable Variance Testing Period, and (z) any variance (whether positive or
negative, expressed as a percentage) between the aggregate disbursements for
capital expenditures for the testing Period set forth in the applicable Budget.

(iv)        On the last day of each calendar week, the Borrower shall deliver to
the Agent, a variance report comparing the Debtors’ actual receipts and
disbursements for the prior calendar week and the prior four calendar weeks (on
a cumulative basis) with the projected receipts and disbursements for such week
and the prior four calendar weeks (on a cumulative basis) as reflected in the
applicable Budget for such weeks, which variance report shall include a report
from a Financial Officer of the Debtors identifying and addressing any variance
of actual performance to projected performance for the prior week.

Section 8.02       Notices of Material Events.  The Borrower will furnish to the
Agent and each Lender, promptly after the Borrower obtains knowledge thereof,
written notice of the following:

(a)          the occurrence of any Default;
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(b)        other than the Bankruptcy Cases, the filing or commencement of, or
the threat in writing of, any action, suit, investigation, arbitration or
proceeding by or before any arbitrator or Governmental Authority against or
affecting any Debtor, or any material adverse development in any action, suit,
proceeding, investigation or arbitration (whether or not previously disclosed to
the Lenders), that, in either case, if adversely determined, could reasonably be
expected to result in liability in excess of $1,000,000 (not subject to the
automatic stay in the Bankruptcy Cases);

(c)          the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Debtors in an aggregate amount exceeding $1,000,000;

(d)        at least two (2) Business Days prior to filing (or such shorter
period as the Agent may agree), the Borrower shall use commercially reasonable
efforts to provide the Agent copies of all pleadings and motions (other than
“first day” motions and proposed orders, but including the Approved Plan of
Reorganization and any disclosure statement related thereto) to be filed by or
on behalf of the Borrower or any of the other Loan Parties with the Bankruptcy
Court in the Bankruptcy Cases, or to be distributed by or on behalf of the
Borrower or any of the other Loan Parties to any official committee appointed in
the Bankruptcy Cases, which such pleadings shall include the Agent as a notice
party;

(e)          on a timely basis as specified in any DIP Order, all notices
required to be given to all parties specified in such DIP Order, in the manner
specified therefor therein; and

(f)          any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.

Section 8.03         Existence; Conduct of Business.  Each Debtor will do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business and maintain, if necessary,
its qualification to do business in each other jurisdiction in which any of its
Oil and Gas Properties is located or the ownership of its Properties requires
such qualification, except where the failure to so qualify could not reasonably
be expected to have a Material Adverse Effect; provided that the foregoing shall
not prohibit any merger, consolidation, liquidation, dissolution, sale or other
disposition permitted under Section 9.12.

Section 8.04       Payment of Obligations.  Each Debtor will pay its
obligations, including Tax liabilities of such Debtor before the same shall
become delinquent or in default, except (x) to the extent such payment is
excused by, or is otherwise prohibited by the provisions of the Bankruptcy Code
or order of the Bankruptcy Court and (y) where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) such
Debtor has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (c) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.

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Section 8.05         Performance of Obligations under Loan Documents.  Except to
the extent excused by the Bankruptcy Court or as a result of the filing of the
Bankruptcy Cases each Debtor will pay its Obligations in accordance with the
Loan Documents, and each Debtor will do and perform every act and discharge all
of the obligations to be performed and discharged by such Debtor under the Loan
Documents, including, without limitation, this Agreement, at the time or times
and in the manner specified.

Section 8.06         Operation and Maintenance of Properties.  Subject to any
necessary order or authorization of the Bankruptcy Court, each Debtor will:

(a)        operate its Oil and Gas Properties and other material Properties or
cause such Oil and Gas Properties and other material Properties to be operated
in a careful and efficient manner in accordance with the practices of the
industry and in compliance with all applicable contracts and agreements and in
compliance with all Governmental Requirements, including, without limitation,
applicable proration requirements and Environmental Laws, and all applicable
laws, rules and regulations of every other Governmental Authority from time to
time constituted to regulate the development and operation of its Oil and Gas
Properties and the production and sale of Hydrocarbons and other minerals
therefrom, except, in each case, where the failure to comply could not
reasonably be expected to have a Material Adverse Effect;

(b)         keep and maintain all Property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted
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, without limitation, all material
equipment, machinery and facilities;

(c)        promptly pay and discharge, or make reasonable and customary efforts
to cause to be paid and discharged, all delay rentals, royalties, expenses and
indebtedness accruing under the leases or other agreements affecting or
pertaining to its Oil and Gas Properties and will do all other things necessary
to keep unimpaired their rights with respect thereto and prevent any forfeiture
thereof or default thereunder;

(d)          promptly perform or make reasonable and customary efforts to cause
to be performed, in accordance with industry standards and in all material
respects, the obligations required by each and all of the assignments, deeds,
leases, sub-leases, contracts and agreements affecting its interests in its Oil
and Gas Properties and other material Properties; and

(e)         to the extent a Debtor is not the operator of any Property, the
Borrower shall use reasonable efforts to cause the operator to comply with this
Section 8.06.

Section 8.07         Insurance.  Each Debtor will maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.  The loss payable
clauses or provisions in said insurance policy or policies insuring any of the
collateral for the Loans shall be endorsed in favor of and made payable to the
Agent as its interests may appear and such policies shall name the Agent and the
Lenders as “additional insureds” and provide that the insurer will give at least
thirty (30) days prior notice of any cancellation to the Agent.

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Section 8.08         Books and Records; Inspection Rights.  Each Debtor will
keep proper books of record and account in which full, true and correct entries
are made of all dealings and transactions in relation to its business and
activities.  Each Debtor will permit any representatives designated by the Agent
or any Lender, upon reasonable prior notice, to visit and inspect its
Properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested.

Section 8.09         Compliance with Laws.  Subject to any necessary order or
authorization of the Bankruptcy Court, each Debtor will comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its Subsidiaries’ Property.  Each Debtor will maintain in effect and enforce
policies and procedures designed to ensure compliance by such Debtor and its
respective directors, officers, employees and agents with Anti-Corruption Laws,
applicable AML Laws and applicable Sanctions.

Section 8.10         Environmental Matters.

(a)        Subject to any necessary order or authorization of the Bankruptcy
Court, each Debtor shall:  (i) comply, and shall cause its Properties and
operations to comply, with all applicable Environmental Laws, the breach of
which could be reasonably expected to have a Material Adverse Effect; (ii) not
dispose of or otherwise release any oil, oil and gas waste, hazardous substance,
or solid waste on, under, about or from any of such Debtor’s or any other
Property to the extent caused by the Debtor’s operations except in compliance
with applicable Environmental Laws, the disposal or release of which could
reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or
file all notices, permits, licenses, exemptions, approvals, registrations or
other authorizations, if any, required under applicable Environmental Laws to be
obtained or filed in connection with the operation or use of the Debtor’s
Properties, which failure to obtain or file could reasonably be expected to have
a Material Adverse Effect; (iv) promptly commence and diligently prosecute to
completion any assessment, evaluation, investigation, monitoring, containment,
cleanup, removal, repair, restoration, remediation or other remedial obligations
(collectively, the “Remedial Work”) in the event any Remedial Work is required
or reasonably necessary under applicable Environmental Laws because of or in
connection with the actual or suspected past, present or future disposal or
other release of any oil, oil and gas waste, hazardous substance or solid waste
on, under, about or from any of the Debtor’s Properties, which failure to
commence and diligently prosecute to completion could reasonably be expected to
have a Material Adverse Effect; and (v) establish and implement such procedures
as may be reasonably necessary to continuously determine and assure that the
Debtor’s obligations under this Section 8.10(a) are timely and fully satisfied,
which failure to establish and implement could reasonably be expected to have a
Material Adverse Effect.

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(b)         The Borrower will promptly, but in no event later than five (5) days
after the occurrence thereof, notify the Agent and the Lenders in writing of any
threatened action, investigation or inquiry by any Governmental Authority or any
threatened demand or lawsuit by any landowner or other third party against any
Debtor or its Properties of which the Borrower has knowledge in connection with
any Environmental Laws (excluding routine testing and corrective action) if the
Borrower reasonably anticipates that such action will result in liability
(whether individually or in the aggregate) in excess of $1,000,000, not fully
covered by insurance, subject to normal deductibles.

(c)         Each Debtor will provide environmental audits and tests in
accordance with American Society of Testing Materials standards upon request by
the Agent and the Lenders (or as otherwise required to be obtained by the Agent
or the Lenders by any Governmental Authority), in connection with any future
acquisitions of Oil and Gas Properties or other material Properties.

Section 8.11         Further Assurances.

(a)        Each Debtor at its sole expense will promptly execute and deliver to
the Agent all such other documents, agreements and instruments reasonably
requested by the Agent to comply with, cure any defects or accomplish the
conditions precedent, covenants and agreements of such Debtor, as the case may
be, in the Loan Documents, including the Notes, or to further evidence and more
fully describe the collateral intended as security for the Obligations, or to
correct any omissions in this Agreement or the Security Instruments, or to state
more fully the obligations secured therein, or to perfect, protect or preserve
any Liens created pursuant to this Agreement or any of the Security Instruments
or the priority thereof, or to make any recordings, file any notices or obtain
any consents, all as may be reasonably necessary or appropriate, in the sole
discretion of the Agent, in connection therewith.  For the avoidance of doubt,
with respect to any fee-owned or easement real Property of the Borrower or any
Guarantor (other than oil and gas reserves), to the extent reflected in
Borrower’s midstream cash flow projections, upon the reasonable request of the
Agent, the Borrower shall, or shall cause such Guarantor to, promptly upon such
request, provide the Lenders with title insurance and, to the extent available
in the applicable jurisdiction, extended coverage insurance, covering its
interest in such real Property, in an amount equal to the purchase price of such
interest in real Property (or such other lesser amount as shall be reasonably
specified by the Agent), as well as an ALTA survey, which accurately depicts the
current condition thereof, together with a surveyor’s certificate.

(b)         The Borrower hereby authorizes the Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Mortgaged Property without the signature of the Borrower or any
other Guarantor where permitted by law.  A carbon, photographic or other
reproduction of the Security Instruments or any financing statement covering the
Mortgaged Property or any part thereof shall be sufficient as a financing
statement where permitted by law.  The Agent will promptly send the Borrower any
financing or continuation statements it files without the signature of the
Borrower or any other Guarantor and the Agent will promptly send the Borrower
the filing or recordation information with respect thereto.

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Section 8.12         Reserve Reports.

(a)          On or before March 1st and September 1st of each year, the Borrower
shall furnish to the Agent and the Lenders a Reserve Report as of the
immediately preceding December 31st or June 30th, as applicable.  The Reserve
Report as of December 31st of each year shall be prepared by one or more
independent petroleum engineers reasonably acceptable to the Agent and the June
30th Reserve Report of each year shall be prepared by or under the supervision
of the “Manager of Acquisitions and Planning” (or similarly titled position) of
the Borrower who shall certify such Reserve Report to be true and accurate and
to have been prepared in accordance with the procedures used in the immediately
preceding December 31st Reserve Report.

(b)          [Reserved].

(c)       With the delivery of each Reserve Report, the Borrower shall provide
to the Agent and the Lenders a certificate from a Responsible Officer certifying
that in all material respects:  (i) the information contained in the Reserve
Report and any other information delivered in connection therewith is true and
correct, (ii) each applicable Debtor owns good and defensible title to the Oil
and Gas Properties evaluated in such Reserve Report and such Properties are free
of all Liens except for Liens permitted by Section 9.03, (iii) except as set
forth on an exhibit to the certificate, on a net basis there are no gas
imbalances, take or pay or other prepayments in excess of the volume specified
in Section 7.18 with respect to their Oil and Gas Properties evaluated in such
Reserve Report that would require any Debtor to deliver Hydrocarbons either
generally or produced from such Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor, (iv) none of their
Oil and Gas Properties have been sold since the Petition Date except as set
forth on an exhibit to the certificate, which certificate shall list all of its
Oil and Gas Properties sold and in such detail as reasonably required by the
Agent, (v) attached to the certificate is a list of all marketing agreements
entered into subsequent to the later of the date hereof or the most recently
delivered Reserve Report that the Borrower could reasonably be expected to have
been obligated to list on Schedule 7.19 had such agreement been in effect on the
date hereof and (vi) attached thereto is a schedule of the Oil and Gas
Properties evaluated by such Reserve Report that are Mortgaged Properties and
demonstrating the percentage of the present value that such Mortgaged Properties
represent.

Section 8.13         Title Information.

(a)        On or before the delivery to the Agent and the Lenders of each
Reserve Report required by Section 8.12(a), to the extent requested by the
Agent, the Borrower will deliver title information in form and substance
acceptable to the Agent covering enough of the Oil and Gas Properties evaluated
by such Reserve Report that were not included in the immediately preceding
Reserve Report, so that the Agent shall have received together with title
information previously delivered to the Agent, satisfactory title information on
at least 80% of the total value of the Oil and Gas Properties evaluated by such
Reserve Report.

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(b)         If the Borrower has provided title information for additional
Properties under Section 8.13(a), the Borrower shall, within sixty (60) days of
notice from the Agent that title defects or exceptions exist with respect to
such additional Properties, either (i) cure any such title defects or exceptions
(including defects or exceptions as to priority) which are not permitted by
Section 9.03 raised by such information, (ii) substitute acceptable Mortgaged
Properties with no title defects or exceptions except for Excepted Liens (other
than Excepted Liens described in clauses (e), (g) and (h) of such definition)
having an equivalent value or (iii) deliver title information in form and
substance reasonably acceptable to the Agent so that the Agent shall have
received, together with title information previously delivered to the Agent,
satisfactory title information on at least 80% of the value of the Oil and Gas
Properties evaluated by such Reserve Report.

Section 8.14         Additional Collateral; Additional Guarantors.

(a)         The Parent shall, and shall cause each other Debtor to, guarantee
the Obligations pursuant to the Loan Guarantee.  In connection with any such
guarantee, the Parent shall, or shall cause such Debtor to promptly, (A) execute
and deliver this Agreement or a joinder to this Agreement, in form and substance
reasonably acceptable to the Agent (the “Joinder Agreement”), and any other Loan
Document reasonably requested by the Agent, (B) pledge all of the Equity
Interests of such Debtor pursuant to a Security Instrument or other Loan
Document (including, without limitation, delivery of original stock
certificates, if any, evidencing the Equity Interests of such Debtor, together
with appropriate undated stock powers for each certificate duly executed in
blank by the registered owner thereof) and (C) execute and deliver such other
additional closing documents, certificates and legal opinions as shall
reasonably be requested by the Agent.

(b)         Notwithstanding the restrictions in Section 9.06, each Subsidiary of
a Loan Party now existing or created, acquired or coming into existence after
the date hereof, other than the Guarantors party hereto, shall promptly execute
and deliver to the Agent a Joinder Agreement and any Security Instrument or
other Loan Document (or joinder thereto) as may be required by the Agent. Such
Subsidiary shall, and the Parent shall cause such Subsidiary to, deliver to the
Agent, simultaneously with its delivery of such Joinder Agreement and any such
Security Instrument or other Loan Document (or joinder), (x) written evidence
reasonably satisfactory to the Agent that such Subsidiary has taken all
organizational action necessary to duly approve and authorize its execution,
delivery and performance of such Joinder Agreement (including under the Loan
Guarantee), any such Security Instrument and any other documents which it is
required to execute, and (y) such additional closing documents, certificates and
opinions of counsel as the Agent shall reasonably require.

Section 8.15        ERISA Compliance.  The Parent will promptly furnish, and
will cause each other Debtor and any ERISA Affiliate to promptly furnish, to the
Agent (a) promptly after the filing thereof with the United States Secretary of
Labor, the Internal Revenue Service or the PBGC, copies of each annual and other
report with respect to each Plan, if any, or any trust created thereunder, (b)
immediately upon becoming aware of the occurrence of any ERISA Event or of any
“prohibited transaction,” as described in section 406 of ERISA or in section
4975 of the Code, in connection with any Plan or any trust created thereunder, a
written notice signed by the President or the principal Financial Officer of the
Borrower, its Subsidiaries or the ERISA Affiliate, as the case may be,
specifying the nature thereof, what action the Parent, such applicable Debtor or
the ERISA Affiliate is taking or proposes to take with respect thereto, and,
when known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, and (c) immediately upon
receipt thereof, copies of any notice of the PBGC’s intention to terminate or to
have a trustee appointed to administer any Plan.  With respect to each Plan, if
any (other than a Multiemployer Plan), the Parent will, and the Parent will
cause each other Debtor and its ERISA Affiliates to, (i) satisfy in full and in
a timely manner, without incurring any late payment or underpayment charge or
penalty and without giving rise to any lien, all of the contribution and funding
requirements of section 412 of the Code (determined without regard to
subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay,
or cause to be paid, to the PBGC in a timely manner, without incurring any late
payment or underpayment charge or penalty, all premiums required pursuant to
sections 4006 and 4007 of ERISA.

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Section 8.16         [Reserved].

Section 8.17         [Reserved].

Section 8.18       Use of Proceeds.  The proceeds of the Loans and Letters of
Credit shall be used (a) to pay related transaction costs, fees and expenses;
(b) to provide working capital and for other general corporate purposes of the
Debtors in accordance with the Budget; (c) to make adequate protection payments
as authorized by the Bankruptcy Court in the Interim Order or the Final Order,
as applicable; (d) to pay obligations arising from or related to the Carve-Out;
(e) to pay restructuring costs incurred in connection with the Bankruptcy Cases;
and (f) in the case of the Refinancing Facility, to refinance amounts
outstanding under the Existing Credit Agreement, pursuant to the terms set forth
in Article II.  The Borrower and the other Loan Parties are not engaged
principally, or as one of its or their important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock (within the meaning of Regulation T, U or X of
the Board).  No part of the proceeds of any Loan or Letter of Credit will be
used for any purpose which violates the provisions of Regulations T, U or X of
the Board.

Section 8.19         [Reserved].

Section 8.20         [Reserved].

Section 8.21        Affirmative Covenants of the Parent Guarantors.  Each of the
Parent Guarantors hereby covenants and agrees to comply with each of the
covenants set forth in Section 8.03, Section 8.04, Section 8.05, Section 8.07,
Section 8.08, Section 8.09, Section 8.10, Section 8.11 and Section 8.15, as if
each reference to “the Borrower” therein were a reference to “such Parent
Guarantor”.

Section 8.22         [Reserved].

Section 8.23        Delivery of Proposed DIP Orders.  The Borrower will deliver
to the Agent, as soon as practicable in advance of filing with the Bankruptcy
Court, (i) the proposed DIP Orders (which must be in form and substance
satisfactory to the Agent) and (ii) the Approved Plan of Reorganization,
including any proposed disclosure statement related to such Approved Plan of
Reorganization.

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Section 8.24       Cash Management. Each Debtor shall maintain their cash
management system as it existed prior to the Petition Date for the benefit of
the entire DIP Facility, with any changes made pursuant to an order of the
Bankruptcy Court.

ARTICLE IX
NEGATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full and all Letters of
Credit have expired or terminated and all LC Disbursements shall have been
reimbursed, the Borrower (and each Parent Guarantor, in the case of Section
9.01, Section 9.04(a), Section 9.21, Section 9.22 and Section 9.23) covenants
and agrees with the Lenders that:

Section 9.01         Financial Covenants.

(a)         Variance Testing Period.  The Debtors shall not allow, during any
Variance Testing Period, the Debtors’ actual cash expenses and disbursements
during such Variance Testing Period to be more than 115% of the projected cash
expenses and disbursements for such Variance Testing Period, as set forth in the
Budget (the “Permitted Variance”), provided that the cash expenses and
disbursements considered for determining compliance with this covenant shall
exclude (i) disbursements and expenses in respect of professional fees incurred
in the Bankruptcy Cases during such Variance Testing Period, (ii) the Upfront
Fees payable to the RBL Lenders, as set forth in the Exit Term Sheet (as defined
in the Final Order), and (iii) disbursements owed to third parties on account of
royalty interests and working interests and provided, further that the Debtors
may carry forward budgeted but unused disbursements set forth in the Budget for
a Variance Testing Period for use during the immediately succeeding Variance
Testing Period.

Section 9.02         Debt.  No Debtor will incur, create, assume or suffer to
exist any Debt, except:

(a)          the Obligations;

(b)         accounts payable and other accrued expenses, liabilities or other
obligations to pay (for the deferred purchase price of Property or services)
from time to time incurred in the ordinary course of business which are not
greater than ninety (90) days past the date of invoice or delinquent or which
are being contested in good faith by appropriate action and for which adequate
reserves have been maintained in accordance with GAAP;

(c)         unsecured intercompany Debt between Debtors to the extent permitted
by Section 9.05; provided that such Debt is not held, assigned, transferred,
negotiated or pledged to any Person other than a Debtor, and, provided further,
that any such Debt owed by a Debtor shall be subordinated to the Obligations on
terms satisfactory to the Agent, including as set forth in the Loan Guarantee;

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(d)          endorsements of negotiable instruments for collection in the
ordinary course of business;

(e)          debt of the Debtors under Capital Leases entered into prior to the
Petition Date and set forth on Schedule 9.02(e) hereto;

(f)          to the extent set forth on Schedule 9.02(f), Debt of the Debtors in
existence on the Petition Date in respect of performance, bid, surety or similar
bonds or surety obligations for the account of the Debtors, in each case, to the
extent required by any Governmental Requirements applicable to the Debtors and
otherwise in connection with the operation of the Oil and Gas Properties of the
Debtors, together with all replacements, extensions and renewals thereof made in
the ordinary course of business;

(g)          (i) the Existing Senior Indentures, (ii) the Existing Second Lien
Loan Documents and (iii) the Existing Obligations; and

(h)          Debt for borrowed money outstanding on the Petition Date and set
forth on Schedule 9.02(e) hereto.

Section 9.03       Liens.  No Debtor will create, incur, assume or permit to
exist any Lien on any of its Properties (now owned or hereafter acquired),
except:

(a)          Liens securing the payment of any Obligations;

(b)         (i) Excepted Liens on any Property of the Debtors, (ii) Excepted
Liens on any Property (other than the Parent’s right, title and interest in, and
to, any and all Equity Interests issued by any of the direct or indirect
Subsidiaries of the Parent) of the Parent and (iii) inchoate Tax Liens on the
Parent’s right, title and interest in, and to, any and all Equity Interests
issued by any of the direct or indirect Subsidiaries of the Parent;

(c)         Liens on any Property of the Debtors securing Debt arising in
respect of Capital Leases so long as such Debt is permitted under Section
9.02(e); provided that such Liens attach only to the assets acquired with the
proceeds of such Debt and do not cover any Hydrocarbon Interests or Equity
Interests in Persons owning direct or indirect interests in Hydrocarbon
Interests);

(d)         Liens on any Property of the Debtors existing on the Petition Date
and set forth on Schedule 9.03(d); provided that (i) no such Lien shall at any
time be extended to cover any additional Property not subject thereto on the
Petition Date and (ii) the principal amount of the Debt secured by such Liens
shall not be extended, renewed, refunded or refinanced;

(e)          Liens securing Existing Obligations; provided that such Liens are
subject to the terms and conditions of the DIP Order;

(f)          Liens securing obligations under the Existing Second Lien Loan and
the other Existing Second Lien Loan Documents; provided that such Liens are
subject to the terms and conditions of the DIP Order; and

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(g)          Adequate Protection Liens.

Section 9.04         Dividends, Distributions and Redemptions.

(a)         Dividends and Distributions.  The Debtors will not declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, return
any capital to its stockholders or make any distribution of their Property to
their respective Equity Interest holders, except the Debtors (other than Parent)
may declare and pay dividends or distributions ratably with respect to their
Equity Interests.

(b)        Prepayments, Redemptions of Existing Obligations, Existing Second
Lien Loans; Certain Amendments.  The Debtors will not make any Redemption or any
other prepayments of principal, interest or payment of fees on, or in connection
with, the Existing Loan Documents or the Existing Second Lien Loan Documents, in
each case, other than payments expressly provided for herein or pursuant to
orders entered upon pleadings in form and substance reasonably satisfactory to
the Agent. No Debtor shall consent to any amendment, supplement, waiver or other
modification of the terms or provisions contained in any of (i) the Existing
Second Lien Loan Documents, (ii) the Existing Loan Documents or (iii) any other
Debt for borrowed money.

(c)          [Reserved].

Section 9.05        Investments, Loans and Advances.  No Debtor will make or
permit to remain outstanding any Investments in or to any Person, except that
the foregoing restriction shall not apply to:

(a)          Investments in all of the Debtors and Binger in existence on the
Interim Facility Effective Date and set forth in Schedule 9.05(a);

(b)          Investments of the Debtors reflected in the Financial Statements;

(c)          Investments of the Debtors in the form of accounts receivable
arising in the ordinary course of business;

(d)          Investments of the Debtors in the form of direct obligations of the
United States or any agency thereof, or obligations guaranteed by the United
States or any agency thereof, in each case maturing within one year from the
date of creation thereof;

(e)          Investments of the Debtors in the form of commercial paper maturing
within one year from the date of creation thereof rated in the highest grade by
S&P or Moody’s;

(f)         Investments of the Debtors in the form of deposits maturing within
one year from the date of creation thereof with, including certificates of
deposit issued by, any Lender or any office located in the United States of any
other bank or trust company which is organized under the laws of the United
States or any state thereof, has capital, surplus and undivided profits
aggregating at least $250,000,000 (as of the date of such bank or trust
company’s most recent financial reports) and has a short term deposit rating of
no lower than A2 or P2, as such rating is set forth from time to time, by S&P or
Moody’s, respectively;

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(g)        Investments of the Debtors in the form of deposits in money market
funds investing exclusively in Investments described in Section 9.05(d), Section
9.05(e) or Section 9.05(f);

(h)          Investments made by a Debtor in or to any other Debtor;

(i)         Investments made by the Debtors in direct ownership interests in
additional Oil and Gas Properties and gas gathering systems related thereto or
related to farm-out, farm-in, joint operating, joint venture or area of mutual
interest agreements, gathering systems, pipelines or other similar arrangements
which are usual and customary in the oil and gas exploration and production
business located within the geographic boundaries of the United States of
America, and only to the extent an Event of Default does not exist and the total
Revolving Credit Exposures would not exceed the Available Commitments as a
result of making such Investments;

(j)          Investments made by the Debtors in the form of loans or advances to
employees, officers or directors in the ordinary course of business of the
Debtors, in each case only as permitted by applicable law, including Section 402
of the Sarbanes Oxley Act of 2002, but in any event not to exceed $250,000 in
the aggregate at any time;

(k)        Investments in stock, obligations or securities received in
settlement of debts arising from Investments permitted under this Section 9.05
owing to any Debtor as a result of a bankruptcy or other insolvency proceeding
of the obligor in respect of such debts or upon the enforcement of any Lien in
favor of any Debtor; provided that the Borrower shall give the Agent prompt
written notice in the event that the aggregate amount of all investments held at
any one time under this Section 9.05(k) exceeds $250,000;

(l)           [Reserved]; and

(m)         Loans and advances made by the Borrower to the Parent to the extent
any such loan or advance (i) is made in lieu of a Restricted Payment permitted
pursuant to Section 9.04 or otherwise under this Agreement and (ii) if made as a
Restricted Payment, would be permitted pursuant to Section 9.04 or otherwise
under this Agreement.

Section 9.06        Nature of Business.  Subject to any restrictions arising on
account of the Debtors’ status as a “debtor” under the Bankruptcy Code and entry
of the DIP Order, no Debtor will allow any material change to be made (i) in the
character of its business as an independent oil and gas exploration and
production company or (ii) to the Debtor’s identity or corporate structure, the
jurisdiction in which such Person is incorporated or formed, or any
organizational documents of such Debtor. Debtors will not operate its business
outside the geographical boundaries of the United States.

Section 9.07         [Reserved].

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Section 9.08        Proceeds of Loans; OFAC.  The Borrower will not permit the
proceeds of the Loans to be used (i) for any purpose other than those permitted
by Section 8.18.  Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulations T, U or X or any other regulation of the Board
or to violate Section 7 of the Securities Exchange Act or any rule or regulation
thereunder, in each case as now in effect or as the same may hereinafter be in
effect. If requested by the Agent, the Borrower will furnish to the Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 or such other form referred to in Regulation U,
Regulation T or Regulation X of the Board, as the case may be.  No Debtor or its
respective directors, officers, employees, Affiliates and agents shall use,
directly or indirectly, the proceeds of any Borrowing or Letter of Credit, or
lend, contribute or otherwise make available such proceeds to any Subsidiary,
other Affiliate, joint venture partner or other Person, (A) in furtherance of an
offer, payment, promise to pay, or authorization of the payment or giving of
money, or anything else of value, to any Person in violation of any
Anti-Corruption Laws or AML Laws, (B) for the purpose of funding, financing or
facilitating any activities, business or transaction of or with any Sanctioned
Person, or in any Sanctioned Country, or involving any goods originating in or
with a Sanctioned Person or Sanctioned Country, or (C) in any manner that would
result in the violation of any Sanctions by any Person (including any Person
participating in the transactions contemplated hereunder, whether as
underwriter, advisor lender, investor or otherwise).

Section 9.09         ERISA Compliance.  No Debtor will at any time:

(a)        engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which any Debtor or any ERISA Affiliate could be
subjected to either a civil penalty assessed pursuant to subsections (c), (i) or
(l) of section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code;

(b)         terminate, or permit any ERISA Affiliate to terminate, any Plan in a
manner, or take any other action with respect to any Plan, which could result in
any liability of any Debtor or any ERISA Affiliate to the PBGC;

(c)          fail to make, or permit any ERISA Affiliate to fail to make, full
payment when due of all amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, any Debtor or any ERISA Affiliate
is required to pay as contributions thereto;

(d)         permit to exist, or allow any ERISA Affiliate to permit to exist,
any accumulated funding deficiency within the meaning of section 302 of ERISA or
section 412 of the Code, whether or not waived, with respect to any Plan;

(e)          permit, or allow any ERISA Affiliate to permit, the actuarial
present value of the benefit liabilities under any Plan maintained by any Debtor
or any ERISA Affiliate which is regulated under Title IV of ERISA to exceed the
current value of the assets (computed on a plan termination basis in accordance
with Title IV of ERISA) of such Plan allocable to such benefit liabilities.  The
term “actuarial present value of the benefit liabilities” shall have the meaning
specified in section 4041 of ERISA;

(f)          contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any Multiemployer Plan;

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(g)         acquire, or permit any ERISA Affiliate to acquire, an interest in
any Person that causes such Person to become an ERISA Affiliate with respect to
any Debtor or with respect to any ERISA Affiliate of any Debtor if such Person
sponsors, maintains or contributes to, or at any time in the six-year period
preceding such acquisition has sponsored, maintained, or contributed to, (i) any
Multiemployer Plan, or (ii) any other Plan that is subject to Title IV of ERISA
under which the actuarial present value of the benefit liabilities under such
Plan exceeds the current value of the assets (computed on a plan termination
basis in accordance with Title IV of ERISA) of such Plan allocable to such
benefit liabilities;

(h)          incur, or permit any ERISA Affiliate to incur, a liability to or on
account of a Plan under sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA;

(i)          contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any employee welfare benefit plan, as defined in section 3(1) of ERISA,
including, without limitation, any such plan maintained to provide benefits to
former employees of such entities, that may not be terminated by such entities
in their sole discretion at any time without any material liability; or

(j)          amend, or permit any ERISA Affiliate to amend, a Plan resulting in
an increase in current liability such that any Debtor or any ERISA Affiliate is
required to provide security to such Plan under section 401(a)(29) of the Code.

Section 9.10       Sale or Discount of Receivables.  No Debtor will discount or
sell (with or without recourse) any of its notes receivable or accounts
receivable.

Section 9.11       Mergers, Divisions, Etc.  No Debtor will merge into or with
or consolidate with any other Person, or sell, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its Property (whether now owned or hereafter acquired) to any other
Person, or liquidate or dissolve or divide.

Section 9.12         Sale of Properties.  No Debtor will sell, assign, farm-out,
convey or otherwise transfer any Property except for:

(a)          the sale of Hydrocarbons in the ordinary course of business;

(b)        farmouts of undeveloped acreage and assignments in connection with
such farmouts with respect to which a Debtor retains an overriding royalty
interest above a 75% net revenue interest in such disposed Property;

(c)         the sale or transfer of equipment that is no longer necessary for
the business of such Debtor or is replaced by equipment of at least comparable
value and use;

(d)        if no Event of Default then exists or would result as a result
thereof, sales and other dispositions of Property (not otherwise permitted
above) having a fair market value not to exceed $1,000,000; and

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(e)          dispositions of any Property of any Debtor pursuant to an order of
the Bankruptcy Court; provided that such disposition shall be subject to the
prior consent of the Agent and the Majority Lenders.

Section 9.13       Environmental Matters.  No Debtor will violate or permit any
of its Property to be in violation of, or do anything or permit anything to be
done which will subject any such Property to any Remedial Work under any
Environmental Laws, assuming disclosure to the applicable Governmental Authority
of all relevant facts, conditions and circumstances, if any, pertaining to such
Property where such violations or remedial obligations could reasonably be
expected to have a Material Adverse Effect.

Section 9.14        Transactions with Affiliates.  The Borrower will not enter
into any transaction, including, without limitation, any purchase, sale, or
lease or exchange of Property, with any non-Debtor Affiliate, other than
transactions or arrangements in place as of the Petition Date (including
contractual obligations in place at such time) or approved by the Bankruptcy
Court pursuant to an order in form and substance reasonably satisfactory to the
Agent and the Majority Lenders.

Section 9.15        Subsidiaries.  The Borrower shall have no Subsidiaries other
than Wholly-Owned Subsidiaries.  No Debtor will create or acquire any additional
Subsidiary.  No Debtor sell, assign or otherwise dispose of any Equity Interests
in any of its Subsidiaries.  The Borrower shall have no Foreign Subsidiaries.

Section 9.16      Negative Pledge Agreements; Dividend Restrictions.  No Debtor
will create, incur, assume or suffer to exist any contract, agreement or
understanding (other than this Agreement, any other Loan Document, the Existing
Loan Documents, the Existing Senior Indentures or the Existing Second Lien Loan
Documents) that in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property in favor of the Agent
and the Lenders or the secure the Obligations, except restrictions imposed
pursuant to an agreement entered into in connection with a disposition permitted
under Section 9.12.

Section 9.17       Gas Imbalances, Take-or-Pay or Other Prepayments.  No Debtor
will allow gas imbalances, take-or-pay or other prepayments with respect to the
Oil and Gas Properties of any Debtor that would require such Debtor to deliver,
in the aggregate, two percent (2%) or more of the monthly production of
Hydrocarbons at some future time without then or thereafter receiving full
payment therefor.

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Section 9.18         Swap Agreements.  No Debtor will enter into any Swap
Agreements with any Person other than (a) Swap Agreements in respect of
commodities (i) with an Approved Counterparty and (ii) the notional volumes for
which (when aggregated with other commodity Swap Agreements then in effect other
than basis differential swaps on volumes already hedged pursuant to other Swap
Agreements) do not exceed, as of the date such Swap Agreement is executed, 85%
of the reasonably anticipated projected production from Total Proved Reserves
(provided that proved developed non-producing and proved undeveloped reserves
shall not in the aggregate constitute more than 25% of Total Proved Reserves)
for each month during the period during which such Swap Agreement is in effect
for each of crude oil, natural gas and natural gas liquids, each calculated
separately (for purposes of the foregoing, natural gas liquids volumes may be
hedged directly or for crude oil volumes in a 2:1 ratio), for each of the next
five (5) succeeding calendar years, provided that upon the date any Debtor signs
a definitive acquisition agreement for any acquisition of Property or Equity
Interests of any Person not prohibited by this Agreement, Swap Agreements may be
entered into for 85% of the reasonably anticipated projected production from
Proved Developed Producing Properties the subject of such acquisition (provided
that should such acquisition fail to close within sixty (60) days of the date
the Debtor signing such definitive acquisition agreement, such Debtor shall
terminate or unwind such Swap Agreements entered into in respect of such
acquisition such that such Debtor is in compliance with clause (a)(ii) above),
excluding the effect of the provision for pending acquisitions, floor options
may be purchased limited to total notional volumes of all Swap Agreements and
puts options not exceeding 100% of projected production from Proved Developed
Producing Properties as described in (a)(ii) above, and (b) Swap Agreements in
respect of interest rates with an Approved Counterparty, which effectively
convert interest rates from floating to fixed, the notional amounts of which
(when aggregated with all other Swap Agreements of the Debtors then in effect
effectively converting interest rates from floating to fixed) do not exceed 100%
of the then outstanding principal amount of the Borrower’s Debt for borrowed
money which bears interest at a floating rate.  In no event shall any Swap
Agreement contain any requirement, agreement or covenant for any Debtor to post
collateral or margin to secure its obligations under such Swap Agreement or to
cover market exposures.

Section 9.19        Marketing Activities.  No Debtor will engage in marketing
activities for any Hydrocarbons or enter into any contracts related thereto
other than (a) contracts for the sale of Hydrocarbons scheduled or reasonably
estimated to be produced from their proved Oil and Gas Properties during the
period of such contract, (b) contracts for the sale of Hydrocarbons scheduled or
reasonably estimated to be produced from proved Oil and Gas Properties of third
parties during the period of such contract associated with the Oil and Gas
Properties of the Debtors that any Debtor has the right to market pursuant to
joint operating agreements, unitization agreements or other similar contracts
that are usual and customary in the oil and gas business and (c) other contracts
for the purchase and/or sale of Hydrocarbons of third parties (i) which have
generally offsetting provisions (i.e., corresponding pricing mechanics, delivery
dates and points and volumes) such that no “position” is taken and (ii) for
which appropriate credit support has been taken to alleviate the material credit
risks of the counterparty thereto.

Section 9.20         Accounting Changes.  No Debtor will (i) make any
significant change in accounting treatment or reporting practices, except as
required by GAAP, or (ii) change the fiscal year of any Debtor.

Section 9.21        New Accounts.  No Debtor will open or otherwise establish,
or deposit, credit or otherwise transfer any Cash Receipts, securities,
financial assets or any other property into, any Deposit Account, Securities
Account or Commodity Account other than (a) any Deposit Account, Securities
Account or Commodity Account in which the Agent has been granted a
first-priority perfected Lien and that, in each case, is subject to a Security
Instrument or (b) any Excluded Account (solely with respect to amounts referred
to in the definition thereof).

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Section 9.22        Volumetric Production Payment.  No Debtor will sell, grant,
issue or otherwise enter into any Volumetric Production Payment, forward sale
agreement or other sales of Hydrocarbons in place that would require any Debtor
to deliver Hydrocarbons at some future time without receipt by the Debtor of
full payment therefor at such future time or sale of royalty interests or
overriding royalty interests; provided however, without limiting the other
provisions of this Article IX, this Section 9.22 shall not limit the ability of
a Debtor to (i) enter into gas balancing arrangements, (ii) settle gas
imbalances and (iii) (A) perform on take or pay contracts, (B) deliver
Hydrocarbons in accordance with the terms of any Hydrocarbon Lease to a party
thereto, or (C) enter into midstream or marketing contracts in the ordinary
course of business for sale of Hydrocarbons, in the case of clauses (iii)(A),
(iii)(B) and (iii)(C), as and when produced.

Section 9.23       Passive Holding Company Status of Parent Guarantors.  Neither
of the Parent Guarantors shall engage in any operating or business activities or
other transactions other than (i) the ownership and/or acquisition of the Equity
Interests (other than Disqualified Capital Stock) of the Borrower or Legacy GP,
(ii) the maintenance of its legal existence, including the ability to incur
fees, costs and expenses relating to such maintenance, (iii) to the extent
applicable, participating in tax, accounting and other administrative matters as
a member of the consolidated group of the Parent Guarantors and the Borrower and
(iv) the performance of its obligations under and in connection with the Loan
Documents, the Bankruptcy Cases, the Existing Loan Documents, the Existing
Second Lien Loan Documents and any documents relating to other Debt permitted
under Section 9.02.

Section 9.24        Negative Covenants of the Parent Guarantors.  Each of the
Parent Guarantors hereby covenants and agrees to comply with each of the
covenants set forth in Section 9.04(b), Section 9.09, Section 9.14, Section
9.16, and Section 9.21, as if each reference to “the Borrower” were a reference
to “such Parent Guarantor”.

Section 9.25         Key Employee Plans. No Debtor shall (a) enter into any key
employee retention plan and incentive plan, other than such plans in effect as
of the Petition Date or (b) amend or modify any existing key employee retention
plan and incentive plan, unless such plan, amendment or modification, as
applicable, is satisfactory to the Agent and Majority Lenders.

Section 9.26         [Reserved].

Section 9.27         Superpriority Claims. No Debtor will create or permit to
exist any Superpriority Claim other than Superpriority Claims permitted by the
DIP Orders and the orders approving the “first day” motions in respect of the
Bankruptcy Cases.

Section 9.28        Bankruptcy Orders. No Debtor will (a) obtain or seek to
obtain any stay from the Bankruptcy Court on the exercise of the Agent’s or any
Lender’s remedies hereunder or under any other Loan Document, except as
specifically provided in the DIP Order, (b) seek to change or otherwise modify
any DIP Order or other order in the Bankruptcy Court with respect to the DIP
Facility or (c) without the consent of the Majority Lenders, propose, file,
consent, solicit votes with respect to or support any chapter 11 plan or debtor
in possession financing unless (i) such plan or financing would, on the date of
effectiveness, pay in full in cash all Obligations or (ii) such plan is an
Approved Plan of Reorganization.

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ARTICLE X
EVENTS OF DEFAULT; REMEDIES

Section 10.01       Events of Default.  One or more of the following events
shall constitute an “Event of Default”:

(a)         the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b)         the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in Section 10.01(a))
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five (5)
Business Days;

(c)         any representation or warranty made or deemed made by or on behalf
of any Debtor in or in connection with any Loan Document or any amendment or
modification of any Loan Document or waiver under such Loan Document, or in any
report, certificate, financial statement or other document furnished pursuant to
or in connection with any Loan Document or any amendment or modification thereof
or waiver thereunder, shall prove to have been incorrect when made or deemed
made;

(d)          any Debtor shall fail to observe or perform any covenant, condition
or agreement contained in Section 8.01(m), Section 8.01(n), Section 8.02,
Section 8.03 or in Article IX;

(e)         any Debtor shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those specified in Section
10.01(a), Section 10.01(b) or Section 10.01(d)) or any other Loan Document, and
such failure shall continue unremedied for a period of thirty (30) days after
the earlier to occur of (i) notice thereof from the Agent to the Borrower (which
notice will be given at the request of any Lender) or (ii) a Responsible Officer
of any Debtor otherwise becoming aware of such default;

(f)          any event or condition occurs that results in any Material
Indebtedness incurred on or after the Petition Date becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any such Material
Indebtedness or any trustee or agent on its or their behalf to cause any such
Material Indebtedness to become due, or to require the Redemption thereof or any
offer to Redeem to be made in respect thereof, prior to its scheduled maturity
or require any Debtor to make an offer in respect thereof;

(g)        the Loan Documents shall not have been executed and delivered by the
Debtors, the Agent and the Lenders within five (5) business days after the date
of entry of the Interim Order (or shall not have been filed with, and approved
by, the Bankruptcy Court within the times specified and otherwise in accordance
with the Interim Order);

(h)          dismissal of the Bankruptcy Cases or conversion of the Bankruptcy
Cases to a Chapter 7 case;

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(i)          appointment of a Chapter 11 trustee, a responsible officer or an
examiner with enlarged powers (beyond those set forth in Section 1106(a)(3) and
(4) of the Bankruptcy Code) relating to the operation of the business of any
Loan Party in the Bankruptcy Case;

(j)         the Bankruptcy Court’s granting of any superpriority claim or lien
on the Collateral which is pari passu with or senior to the Superpriority Claims
or Liens of the Lenders in the Bankruptcy Case;

(k)         failure of the Final Order to be entered within thirty-five (35)
days (or a later date consented to by the Agent and the Majority Lenders) after
entry of the Interim Order;

(l)          failure of the Interim Order or Final Order to be in full force and
effect, including by the entry of an order reversing, amending, supplementing,
staying for a period in excess of five (5) days, vacating or otherwise modifying
the Interim Order or Final Order in a manner that is adverse to the Agent or the
Lenders;

(m)        after entry of the Final Order, the entry of any final order in the
Bankruptcy Case charging any of the Collateral, including under Section 506(c)
or Section 552(b) of the Bankruptcy Code, or the commencement of any action by
any Loan Party which is adverse to the Lenders or their rights and remedies
under the DIP Facility in the Bankruptcy Case;

(n)          reversal or modification of the Refinancing Facility by the
Bankruptcy Court;

(o)          failure of any Loan Party to comply with the terms of the
applicable DIP Order;

(p)          entry of a final order by the Bankruptcy Court terminating the use
of cash collateral;

(q)         payment by any Loan Party (by way of adequate protection or
otherwise) of any principal or interest or other amount on account of any
prepetition Debt or payables (other than as agreed herein or pursuant to the
consent of the Required Lenders) or as described in the Interim Order, the Final
Order or pursuant to any orders approving any “first day” motions;

(r)          entry of an order or orders granting relief from any stay of
proceeding (including, without limitation, the automatic stay) so as to allow a
third party or third parties to proceed against any assets of any Loan Party
having a value, individually or in the aggregate, in excess of $1,000,000 or to
permit other actions that would have a Material Adverse Effect on any Loan Party
or its estate;

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(s)          if (i) the Existing Intercreditor Agreement shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with its terms
against the Borrower, any party thereto or any holder of the liens subordinated
thereby, or shall be repudiated by any of them, or be amended, modified or
supplemented to cause the liens securing the obligations of the Existing Second
Lien Credit Agreement to be senior or pari passu in priority to the liens
securing the obligations under the Existing Credit Agreement, (ii) the Borrower
takes any action inconsistent with the terms of the Existing Intercreditor
Agreement (other than in connection with an Approved Plan of Reorganization
reasonably acceptable to the Required Lenders), (iii) any Person bound by the
Existing Intercreditor Agreement takes any action inconsistent with the terms
thereof and the Borrower shall fail to promptly take all actions necessary to
oppose such action or (iv) any order of any court of competent jurisdiction is
granted which is materially inconsistent with the terms of the Existing
Intercreditor Agreement;

(t)          (i) subject to Section 12.02(c), unless otherwise agreed by the
Required Lenders or pursuant to the terms of the DIP Orders, the filing or
confirmation of an Approved Plan of Reorganization that does not provide for
termination of the Commitments under the DIP Facility and, except as may be
provided herein with respect to the Refinanced Loans, including under Section
2.01(b), payment in full in cash of all Obligations under the Loan Documents
owed to the Lenders in respect of the DIP Facility on the effective date of such
Approved Plan of Reorganization, or (ii) if any Debtor shall seek, support, or
fail to contest in good faith the filing or confirmation of any plan of
reorganization other than the Approved Plan of Reorganization;

(u)          failure to satisfy any of the Chapter 11 Milestones in accordance
with the terms relating to such Chapter 11 Milestone;

(v)         (i) the entry of the Interim Order shall have not occurred on or
prior to the date that is five (5) days after the Petition Date, (ii) the entry
of the Final Order shall have not occurred prior to or on the date that is
thirty-five (35) days (or a later date consented to by the Agent and the
Majority Lenders) after entry of the Interim Order or (iii) the entry of an
order reversing, amending, supplementing, staying for a period in excess of five
(5) days, vacating or otherwise modifying the Interim Order or Final Order in a
manner that is adverse to the Agent or the Lenders;

(w)         with respect to the Debtors (i) one or more judgments for the
payment of money in an aggregate amount in excess of $5,000,000 (to the extent
not covered by independent third party insurance provided by insurers of the
highest claims paying rating or financial strength as to which the insurer does
not dispute coverage and is not subject to an insolvency proceeding) or (ii) any
one or more non-monetary judgments that have, or could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, shall be
rendered against any Debtor or any combination thereof; and, in case of each of
clause (i) or (ii), the same shall remain undischarged for a period of thirty
(30) consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to attach or levy upon
any assets of any Debtor to enforce any such judgment, and unless, with respect
to any of the foregoing, the same shall be effectively stayed pursuant to the
Bankruptcy Code;

(x)         the Loan Documents after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms
against a Debtor party thereto or shall be repudiated by them, or cease to
create a valid and perfected Lien of the priority required thereby on any of the
Collateral purported to be covered thereby, or any Debtor shall so state in
writing, or any Loan Party shall contest the validity or perfection of the Liens
and security interests securing the Obligations;

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(y)        an ERISA Event shall have occurred that, in the opinion of the
Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of any Debtor in
an aggregate amount exceeding $2,000,000 in any year; and

(z)          any Change in Control shall occur.

Section 10.02       Remedies.

(a)          In the case of an Event of Default, subject in all respects to the
Carve Out, (i) the Agent may, and at the request of the Majority Lenders, shall
(A) deliver a notice to the Borrower of the Event of Default, (B) declare the
termination, reduction, or restriction of the Commitments, and thereupon the
Commitments shall be terminated, reduced, or restricted immediately unless and
until the Majority Lenders and the Agent shall reinstate the same in writing,
(C) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other Obligations), shall become due and payable
immediately, in each case, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other notice of any kind, all of
which are hereby waived by each Loan Party, (D) declare a termination, reduction
or restriction on the ability of the Loan Parties to use any cash collateral
(other than as set forth in clause (iii) below) (E) terminate the DIP Facility
and (F) charge the Default Rate (each of clauses (A) through (F) above, a
“Termination Declaration” and the earliest date to occur of any such Termination
Declaration, the “Termination Declaration Date”), in each case of clauses (A)
through (F) above, without first obtaining relief from the automatic stay under
section 362 of the Bankruptcy Code; (ii) five (5) Business Days after the
Termination Declaration Date, the Loan Parties and/or any Committee shall be
permitted to seek an emergency hearing before the Bankruptcy Court (which they
shall seek on an expedited basis) solely to determine whether an Event of
Default has occurred, provided, however, that (1) if the Loan Parties seek an
expedited emergency hearing within five (5) Business Days, until such time the
Bankruptcy Court has entered an order ruling on whether an Event of Default has
occurred, the Agent shall not be permitted to exercise its rights and remedies
with respect to such Termination Declaration or such Events of Default, and (2)
if the Loan Parties and any Committee do not seek an expedited emergency hearing
within five (5) Business Days after the Termination Declaration Date, the Agent
shall be entitled to exercise all rights and remedies provided for in the Loan
Documents with respect to such Termination Declaration, including the right to
foreclose on, or otherwise exercise its rights with respect to all or any
portion of the Collateral, including by applying the proceeds thereof to the
Obligations; and (iii) the Loan Parties shall not be permitted to use any
proceeds of the Loans, or any other cash collateral, except in accordance with
the Budget (subject to the Permitted Variances).

(b)          In the case of the occurrence of an Event of Default, the Agent and
the Lenders will have all other rights and remedies available at law and equity.

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(c)          All proceeds realized from the liquidation or other disposition of
collateral or otherwise received after maturity of the Loans or the Notes,
whether by acceleration or otherwise, shall be applied:

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

(ii)      second, pro rata to payment or reimbursement of that portion of the
Obligations constituting fees, expenses and indemnities payable to the Lenders;

(iii)      third, pro rata to payment of (i) accrued and unpaid interest on the
New Money Loans and LC Disbursements, (ii) accrued and unpaid interest on the
Refinanced Loans, (iii) fees on each Letter of Credit and (iv) other accrued and
unpaid interest included in the Obligations;

(iv)        fourth, pro rata to (i) payment of principal outstanding on the New
Money Loans, (ii) payment of principal outstanding on the Refinanced Loans,
(iii) Secured Swap Obligations owing to Secured Swap Parties, (iv) Secured Cash
Management Obligations owing to Secured Cash Management Providers, and (v) to
serve as cash collateral to be held by the Agent to secure the LC Exposure;

(v)          fifth, pro rata to any other Obligations; and

(vi)       sixth, any excess, after all of the Obligations shall have been
indefeasibly paid in full in cash, shall be held as required by the Bankruptcy
Court and/or any other Governmental Requirement.

Notwithstanding the foregoing, Secured Cash Management Obligations arising under
any Secured Cash Management Agreement shall be excluded from the application
described above if the Agent has not received written notice thereof, together
with such supporting documentation as the Agent may request, from the applicable
Secured Cash Management Provider. Each Secured Cash Management Provider not a
party to this Agreement that has given the notice contemplated by the preceding
sentence shall, by such notice, be deemed to have acknowledged and accepted the
appointment of the Agent pursuant to the terms of Article XI hereof for itself
and its Affiliates as if a “Lender” party hereto.

Section 10.03     Disposition of Proceeds.  The Security Instruments contain an
assignment by the Borrower and/or the Guarantors unto and in favor of the Agent
for the benefit of the Lenders of all of the Borrower’s or each Guarantor’s
interest in and to production and all proceeds attributable thereto which may be
produced from or allocated to the Mortgaged Property.  The Security Instruments
further provide in general for the application of such proceeds to the
satisfaction of the Obligations and other obligations described therein and
secured thereby.  Notwithstanding the assignment contained in such Security
Instruments, except after the occurrence and during the continuance of an Event
of Default, (a) the Agent and the Lenders 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 Agent or the Lenders, but the Lenders
will instead permit such proceeds to be paid to the Debtors and (b) the Lenders
hereby authorize the Agent to take such actions as may be necessary to cause
such proceeds to be paid to the Debtors.

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ARTICLE XI
THE AGENTS

Section 11.01     Appointment; Powers.  Each of the Lenders and each Issuing
Bank hereby irrevocably appoints the Agent as its agent and authorizes the Agent
to take such actions on its behalf and to exercise such powers as are delegated
to the Agent by the terms hereof and the other Loan Documents, together with
such actions and powers as are reasonably incidental thereto.

Section 11.02      Duties and Obligations of Agent.  The Agent shall have no
duties or obligations except those expressly set forth in the Loan Documents. 
Without limiting the generality of the foregoing, (a) the Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing (the use of the term “agent” herein and
in the other Loan Documents with reference to the Agent is not intended to
connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law; rather, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties), (b) the
Agent shall have no duty to take any discretionary action or exercise any
discretionary powers, except as provided in Section 11.03, and (c) except as
expressly set forth herein, the Agent shall have no duty to disclose, and shall
not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Agent or any of its Affiliates in any capacity.  The Agent shall
be deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Agent by the Borrower or a Lender, and shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement or any
other Loan Document, (ii) the contents of any certificate, report or other
document delivered hereunder or under any other Loan Document or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document, (v) the satisfaction of any condition set forth in
Article VI or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Agent, (vi) the existence, value, perfection or
priority of any collateral security or the financial or other condition of the
Debtors or any other obligor or guarantor, or (vii) any failure by the Borrower
or any other Person (other than itself) to perform any of its obligations
hereunder or under any other Loan Document or the performance or observance of
any covenants, agreements or other terms or conditions set forth herein or
therein.  For purposes of determining compliance with the conditions specified
in Article VI, each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless the Agent shall have received written notice from such Lender
prior to the proposed closing date specifying its objection thereto.

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Section 11.03      Action by Agent.  The Agent shall have no duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Agent is required to exercise in writing as directed by the Majority
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 12.02) and in all cases the Agent
shall be fully justified in failing or refusing to act hereunder or under any
other Loan Documents unless it shall (a) receive written instructions from the
Majority Lenders, the Required Lenders or the Lenders, as applicable, (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02) specifying the action to be taken
and (b) be indemnified to its satisfaction by the Lenders against any and all
liability and expenses which may be incurred by it by reason of taking or
continuing to take any such action.  The instructions as aforesaid and any
action taken or failure to act pursuant thereto by the Agent shall be binding on
all of the Lenders.  If a Default has occurred and is continuing, then the Agent
shall take such action with respect to such Default as shall be directed by the
requisite Lenders in the written instructions (with indemnities) described in
this Section 11.03, provided that, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interests of the Lenders.  In no event,
however, shall the Agent be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement, the Loan Documents
or applicable law.  The Agent shall not be liable for any action taken or not
taken by it with the consent or at the request of the Required Lenders or the
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in Section 12.02), and otherwise the Agent
shall not be liable for any action taken or not taken by it hereunder or under
any other Loan Document or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith INCLUDING
ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or willful
misconduct as determined by a court of competent jurisdiction by a final and
non-appealable judgment.

Section 11.04     Reliance by Agent.  The Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person.  The
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon and each of the Borrower, the Lenders and each
Issuing Bank hereby waives the right to dispute the Agent’s record of such
statement, except in the case of gross negligence or willful misconduct by the
Agent.  The Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.  The Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof permitted
hereunder shall have been filed with the Agent.

Section 11.05     Subagents.  The Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Agent.  The Agent and any such sub-agent may perform any and
all its duties and exercise its rights and powers through their respective
Related Parties.  The exculpatory provisions of the preceding Sections of this
Article XI shall apply to any such sub-agent and to the Related Parties of the
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.

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Section 11.06      Resignation or Removal of Agent.  Subject to the appointment
and acceptance of a successor Agent as provided in this Section 11.06, the Agent
may resign at any time by notifying the Lenders, each Issuing Bank and the
Borrower, and the Agent may be removed at any time with or without cause by the
Majority Lenders.  Upon any such resignation or removal, the Majority Lenders
shall have the right, in consultation with the Borrower, to appoint a
successor.  If no successor shall have been so appointed by the Majority Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation or removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders and each Issuing Bank, appoint a
successor Agent.  Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder.  The fees
payable by the Borrower to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor.  After the Agent’s resignation hereunder, the provisions of this
Article XI and Section 12.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.

Section 11.07       Agent and Lenders.  Each bank serving as an Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not an Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Debtor or other Affiliate thereof as if it were
not an Agent hereunder.

Section 11.08       No Reliance.  Each Lender acknowledges that it has,
independently and without reliance upon the Agent, any other Agent or any other
Lender and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and each
other Loan Document to which it is a party.  Each Lender also acknowledges that
it will, independently and without reliance upon the Agent, any other Agent or
any other Lender and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document,
any related agreement or any document furnished hereunder or thereunder.  The
Agents shall not be required to keep themselves informed as to the performance
or observance by any Debtor of this Agreement, the Loan Documents or any other
document referred to or provided for herein or to inspect the Properties or
books of the Debtors.  Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, no Agent nor the Arranger shall have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrower (or any of its Affiliates) which
may come into the possession of such Agent or any of its Affiliates.  In this
regard, each Lender acknowledges that Orrick, Herrington & Sutcliffe LLP is
acting in this transaction as special counsel to the Agent only, except to the
extent otherwise expressly stated in any legal opinion or any Loan Document. 
Each other party hereto will consult with its own legal counsel to the extent
that it deems necessary in connection with the Loan Documents and the matters
contemplated therein.

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Section 11.09      Agent May File Proofs of Claim.  In case of the pendency of
any proceeding under any Debtor Relief Law or other judicial proceeding relative
to any Debtor, the 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 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, LC Exposure and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Lenders, the Issuing
Bank and the Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the Issuing Bank and the
Agent and their respective agents and counsel and all other amounts due the
Lenders, the Issuing Bank and the Agent under Section 12.03) allowed in such
judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and the Issuing Bank to make such payments to the Agent and, in the
event that the Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Agent and its agents and counsel,
and any other amounts due the Agent under Section 12.03.

Nothing contained herein shall be deemed to authorize the Agent to authorize or
consent to or accept or adopt on behalf of any Lender any chapter 11 plan,
arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or to authorize the Agent to vote in respect of the claim of any
Lender in any such proceeding.

Section 11.10      Authority of Agent to Release Collateral and Liens.  Each
Lender and each Issuing Bank hereby authorizes the Agent to release any
collateral that is permitted to be sold or released pursuant to the terms of the
Loan Documents.  Each Lender and each Issuing Bank hereby authorizes the Agent
to execute and deliver to the Borrower, at the Borrower’s sole cost and expense,
any and all releases of Liens, termination statements, assignments or other
documents reasonably requested by the Borrower in connection with any sale or
other disposition of Property to the extent such sale or other disposition is
permitted by the terms of Section 9.12 or is otherwise authorized by the terms
of the Loan Documents.

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Section 11.11      Secured Cash Management Agreements.  No Secured Cash
Management Provider that obtains the benefits of Section 10.02(c), any Loan
Guarantee or any Collateral by virtue of the provisions hereof or of any Loan
Guarantee, any Security Instrument or any other Loan Document shall have any
right to notice of any action or to consent to, direct or object to any action
hereunder or under any other Loan Document or otherwise in respect of the
Collateral (including the release or impairment of any Collateral) other than in
its capacity as a Lender and, in such case, only to the extent expressly
provided in the Loan Documents. Notwithstanding any other provision of this
Article XI to the contrary, the Agent shall not be required to verify the
payment of, or that other satisfactory arrangements have been made with respect
to, Obligations arising under Secured Cash Management Agreements unless the
Agent has received written notice of such Obligations, together with such
supporting documentation as the Agent may request, from the applicable Secured
Cash Management Provider.

Section 11.12    The Arranger.  The Arranger shall have no duties,
responsibilities or liabilities under this Agreement and the other Loan
Documents other than its duties, responsibilities and liabilities in its
capacity as a Lender hereunder to the extent it is a party to this Agreement as
a Lender.

ARTICLE XII
MISCELLANEOUS

Section 12.01       Notices.

(a)         Except in the case of notices and other communications expressly
permitted to be given by telephone (and subject to Section 12.01(b)), all
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:

(i)          if to any Loan Party, to the Borrower at

Legacy Reserves LP
303 West Wall Street, Suite 1800
Midland, Texas  79701
Attention:  Robert Norris
Email:  rnorris@legacyreserves.com
Phone:  432-689-5217

with a copy to

Legacy Reserves LP
303 West Wall Street, Suite 1800
Midland, Texas  79701
Attention: Bert Ferrara
Email:  bferrara@legacyreserves.com
Phone: 432-221-6363

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(ii)          if to the Agent, to it at

Wells Fargo Bank, National Association
1000 Louisiana Street, 9th Floor
Houston, Texas 77002
Attention: Brett Steele, Director
Facsimile: 713-319-1920
Email: Brett.A.Steele@wellsfargo.com

(iii)       if to any other Lender, in its capacity as such, or any other Lender
in its capacity as an Issuing Bank, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.

(b)        Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Agent; provided that the foregoing shall not apply to notices
pursuant to Article II, Article III, Article IV and Article V unless otherwise
agreed by the Agent and the applicable Lender.  The Agent or the Borrower may,
in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.

(c)        Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto.  All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

Section 12.02       Waivers; Amendments.

(a)          No failure on the part of the Agent, any other Agent, any Issuing
Bank or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege, or any abandonment or
discontinuance of steps to enforce such right, power or privilege, under any of
the Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege under any of the Loan
Documents preclude any other or further exercise thereof or the exercise of any
other right, power or privilege.  The rights and remedies of the Agent, each
other Agent, each Issuing Bank and the Lenders hereunder and under the other
Loan Documents are cumulative and are not exclusive of any rights or remedies
that they would otherwise have.  No waiver of any provision of this Agreement or
any other Loan Document or consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be permitted by Section
12.02(b), and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Agent, any other Agent, any Lender or any Issuing Bank may have had notice
or knowledge of such Default at the time.

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(b)          Neither this Agreement nor any provision hereof nor any Security
Instrument nor any provision thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower
and the Majority Lenders or by the Borrower and the Agent with the consent of
the Majority Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender; (ii) reduce
the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, or reduce any other
Obligations hereunder or under any other Loan Document, without the written
consent of each Lender affected thereby; (iii) postpone the scheduled date of
payment or prepayment of the principal amount of any Loan or LC Disbursement, or
any interest thereon, or any fees payable hereunder, or any other Obligations
hereunder or under any other Loan Document, or reduce the amount of, waive or
excuse any such payment, or postpone or extend the Termination Date or the
Maturity Date without the written consent of each Lender affected thereby; (iv)
change Section 4.01(b) or Section 4.01(c) in a manner that would alter the pro
rata sharing of payments required thereby, without the written consent of each
Lender; (v) waive or amend Section 3.04(c), Section 6.01, Section 6.02, Section
8.14, Section 10.02(c), Section 12.14 or any provisions of this Section 12.02(b)
or change the definition of the terms “Domestic Subsidiary”, “Foreign
Subsidiary”, “Material Domestic Subsidiary” or “Subsidiary”, without the written
consent of each Lender (other than a Defaulting Lender); provided, further, that
any waiver or amendment to the terms of Section 12.14 or this proviso in this
Section 12.02(b)(v) shall also require the written consent of each Secured Swap
Party (unless such Secured Swap Party is a Defaulting Lender), and any amendment
or waiver to the terms of Section 10.02(c) shall also require the written
consent of each Secured Swap Party adversely affected thereby; (vi) amend or
otherwise modify any Security Instrument in a manner that results in the Secured
Swap Obligations secured by such Security Instrument no longer being secured
thereby on an equal and ratable basis with the principal of the Loans, or amend
or otherwise change the definition of “Secured Swap Agreement,” “Secured Swap
Obligations” or “Secured Swap Party” without the written consent of each Secured
Swap Party adversely affected thereby; (vii) release any Guarantor, release all
or substantially all of the collateral (other than as provided in Section
11.10), or reduce the percentage set forth in Section 8.13 to be less than 80%,
without the written consent of each Lender (other than a Defaulting Lender); or
(viii) change any of the provisions of this Section 12.02(b) or the definitions
of “Required Lenders” or “Majority Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or under any other Loan Documents or make any
determination or grant any consent hereunder or any other Loan Documents,
without the written consent of each Lender (other than a Defaulting Lender);
provided further that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Agent, any other Agent or the Issuing Bank
hereunder or under any other Loan Document without the prior written consent of
the Agent, such other Agent or the Issuing Bank, as the case may be and (B)
nothing in this Section 12.02 shall cause any waiver, amendment, modification or
consent to (1) any fee letter between the Borrower and any Lender or the Agent
or the Issuing Bank to require the consent of the Majority Lenders, (2) any
Letter of Credit Agreements between the Borrower or any Subsidiary of the
Borrower and the Issuing Bank to require the consent of the Majority Lenders,
(3) any Letter of Credit issued by the Issuing Bank pursuant to the terms of
this Agreement to require the consent of the Majority Lenders except as
specifically required by Section 2.08, or (4) any Secured Cash Management
Agreement to require the consent of the Majority Lenders.  Notwithstanding the
foregoing, (A) any supplement to Schedule 7.14 (Subsidiaries) shall be effective
simply by delivering to the Agent a supplemental schedule clearly marked as such
and, upon receipt, the Agent will promptly deliver a copy thereof to the
Lenders, (B) any Security Instrument may be supplemented to add additional
collateral or join additional Persons as Guarantors with the consent of the
Agent, and (C) the Borrower and the Agent may amend this Agreement or any other
Loan Document without the consent of the Lenders in order to correct, amend or
cure any ambiguity, inconsistency or defect or correct any typographical error
or other manifest error in any Loan Document.

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(c)          Anything herein to the contrary notwithstanding, if the Debtors’
proposed plan of reorganization (“Proposed Plan”) provides for (in whole or in
part) the refinancing of the Refinanced Loans and the Existing Obligations on
the effective date of an Approved Plan of Reorganization in lieu of repayment in
full in cash of the Refinanced Loans and the Existing Obligations, then, if such
Proposed Plan has been accepted by a class consisting solely of the Existing
Lenders, then the holders of not less than 66 2/3% of the Refinanced Loans (the
“Required Refinanced Lenders”) may (without the consent of any other Refinanced
Lenders or the Agent) agree on behalf of all Refinanced Lenders that the full
amount of the Refinanced Loans will not be required to be repaid in cash on the
Maturity Date, but instead shall be treated in any manner approved by the
Required Refinanced Lenders.  No amendment or waiver shall, unless signed by all
Refinanced Lenders, amend this clause (c) or change the definition of the term
Required Refinanced Lenders or the percentage of Refinanced Lenders which shall
be required for Refinanced Lenders to take any action hereunder, in each case
without the consent of all Refinanced Lenders.

Section 12.03       Expenses, Indemnity; Damage Waiver.

(a)         The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of counsel and other outside
consultants for the Agent, the reasonable travel, photocopy, mailing, courier,
telephone and other similar expenses and, in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation,
execution, delivery and administration (both before and after the execution
hereof and including advice of counsel to the Agent as to the rights and duties
of the Agent and the Lenders with respect thereto) of this Agreement and the
other Loan Documents and any amendments, modifications or waivers of or consents
related to the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all out-of-pocket
costs, expenses, Taxes, assessments and other charges incurred by any Agent or
any Lender in connection with any filing, registration, recording or perfection
of any security interest contemplated by this Agreement or any Security
Instrument or any other document referred to therein, (iii) all reasonable
out-of-pocket expenses incurred by each Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit issued by such
Issuing Bank or any demand for payment thereunder, (iv) all out-of-pocket
expenses incurred by any Agent, any Issuing Bank or any Lender, including the
fees, charges and disbursements of any counsel for any Agent, any Issuing Bank
or any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement or any other Loan Document, including its rights
under this Section 12.03, or in connection with the Loans made or Letters of
Credit issued hereunder, including, without limitation, all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit, and (v) all reasonable out-of-pocket fees,
charges and expenses of one special bankruptcy counsel for each Secured Swap
Party in connection with the structuring and preparation of any Secured Swap
Agreement to be entered into after the Petition Date.

489

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(b)       THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER, EACH ISSUING
BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS
(EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH
INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES AND
RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL
FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT
OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY
OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (ii) THE FAILURE OF ANY DEBTOR TO COMPLY WITH THE TERMS OF ANY LOAN
DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT, (iii)
ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT
OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY
INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION THEREWITH, (iv)
ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM, INCLUDING,
WITHOUT LIMITATION, (A) ANY REFUSAL BY ANY ISSUING BANK TO HONOR A DEMAND FOR
PAYMENT UNDER A LETTER OF CREDIT ISSUED BY SUCH ISSUING BANK IF THE DOCUMENTS
PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS
OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF
CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER
PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH, (v) ANY OTHER
ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS OF THE DEBTORS
BY THE DEBTORS, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO
RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY
ENVIRONMENTAL LAW APPLICABLE TO THE DEBTORS OR ANY OF THEIR PROPERTIES,
INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE,
THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR
TREATMENT OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON
ANY OF THEIR PROPERTIES, (ix) THE BREACH OR NON-COMPLIANCE BY ANY DEBTOR WITH
ANY ENVIRONMENTAL LAW APPLICABLE TO ANY SUCH DEBTOR, (x) THE PAST OWNERSHIP BY
ANY DEBTOR OF ANY OF ITS PROPERTIES OR PAST ACTIVITY ON ANY OF ITS PROPERTIES
WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL,
GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR
ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS
SUBSTANCES ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE ANY DEBTOR OR
ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY
PROPERTY OWNED OR OPERATED BY ANY DEBTOR, (xii) ANY ENVIRONMENTAL LIABILITY
RELATED IN ANY WAY TO ANY DEBTOR, (xiii) ANY OTHER ENVIRONMENTAL, HEALTH OR
SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS, OR (xiv) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE,
WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL
TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT
FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL
NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.

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(c)          To the extent that the Borrower fails to pay any amount required to
be paid by it to any Agent, the Arranger or any Issuing Bank under Section
12.03(a) or (b), each Lender severally agrees to pay to such Agent, the Arranger
or such Issuing Bank, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent, the Arranger or such
Issuing Bank in its capacity as such.

(d)         To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

(e)          All amounts due under this Section 12.03 shall be payable within
ten (10) Business Days of written demand therefor.

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Section 12.04       Successors and Assigns.

(a)        The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any
Letter of Credit), except that (i) neither the Borrower nor any other Loan Party
may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Agent and each Lender, not to be
unreasonably withheld or delayed (and any attempted assignment or transfer by
the Borrower without such consent shall be null and void), (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section 12.04; provided that any such assignment or
participation must comply with any restrictions on assignments or
participations, as applicable, as agreed to by the transferring lender in any
restructuring support agreement and (iii) no Lender may assign to the Borrower,
an Affiliate of the Borrower, a Defaulting Lender or an Affiliate of a
Defaulting Lender all or any portion of such Lender’s rights and obligations
under this Agreement or all or any portion of its Commitments or the Loans owing
to it hereunder.  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
any Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Agent, each Issuing Bank and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)          (i) Subject to the conditions set forth in Section 12.04(b)(ii),
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of the Agent, provided that no
consent of the Agent shall be required for an assignment to an assignee that is
a Lender or any Affiliate of a Lender, immediately prior to giving effect to
such assignment.

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

(A)         Subject to clause (C) below, except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment or Loans, as applicable, the amount
of the Commitment or Loans, as applicable, of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Agent) shall not be less
than $5,000,000 (or a lesser amount if the assigning Lender’s outstanding
Commitment or Loans, as applicable, amounts to less than $5,000,000);

(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)          each assignment of any Lender’s Commitment and/or New Money Loan
(including any portion thereof) shall include an assignment in the same
proportion of such Lenders’ Refinanced Loans;

(D)          the parties to each assignment shall execute and deliver to the
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500;

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(E)          the assignee, if it shall not be a Lender, shall deliver to the
Agent an Administrative Questionnaire; and

(F)          no such assignment shall be made to the Borrower, any Affiliate of
the Borrower, a Defaulting Lender (or any entity who, upon becoming a Lender
hereunder, would constitute a Defaulting Lender), any Affiliate of a Defaulting
Lender or a natural person.

(iii)        Subject to Section 12.04(b)(iv) and the acceptance and recording
thereof, and except in the case of an assignment to an Affiliate of a Lender,
from and after the effective date specified in each Assignment and Assumption
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section 5.01,
Section 5.02, Section 5.03 and Section 12.03).  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this Section 12.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
Section 12.04(c).

(iv)      The Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amount of the Loans and LC
Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”).  The entries in the Register shall be conclusive, and the
Borrower, the Agent, each Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by the Borrower, any
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.  In connection with any changes to the Register, if
necessary, the Agent will reflect the revisions on Annex I and forward a copy of
such revised Annex I to the Borrower, each Issuing Bank and each Lender.

(v)         Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in Section 12.04(b)
and any written consent to such assignment required by Section 12.04(b), the
Agent shall accept such Assignment and Assumption and record the information
contained therein in the Register.  No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this Section 12.04(b).

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(c)          (i) Any Lender may, without the consent of the Borrower the Agent
or any Issuing Bank, sell participations to one or more banks or other entities
(a “Participant”) in all or a portion of such Lender’s rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the
Borrower, the Agent, each Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement.  Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
that (1) increase the commitment of such Participant, (2) reduces or forgives
any principal, interest or fees payable to such Participant, (3) extends the
Maturity Date or the date of payment of interest or fees on the Loans or
commitments with respect to such Participant, (4) release of all or
substantially all of the value of the Loan Guarantee or Collateral, and (5) any
adverse change to the superpriority status of the claims or liens on the
Collateral.  In addition such agreement must provide that the Participant be
bound by the provisions of Section 12.03.  Subject to Section 12.04(c)(ii) the
Borrower agrees that each Participant shall be entitled to the benefits of
Section 5.01, Section 5.02 and Section 5.03 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section 12.04(b)
(subject to the requirements and limitations therein, including the requirements
under Section 5.03(e) (it being understood that the documentation required under
Section 5.03(e) shall be delivered to the participating Lender)).  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 12.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 4.01(c) as though it were a Lender.

(ii)         A Participant shall not be entitled to receive any greater payment
under Section 5.01 or Section 5.03 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.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 5.03 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.03(e) as though it were a Lender.  Each Lender that sells a participation
shall, acting solely for this purpose as a non-fiduciary agent of the Borrower,
maintain a register on which it enters the name and address of each Participant
and the principal amounts (and stated interest) of each Participant’s interest
in the Loans or other obligations under the Loan Documents (the “Participant
Register”). Any such Participant Register shall be available for inspection by
the Agent at any reasonable time and from time to time upon reasonable prior
notice; provided that the applicable Lender shall have no obligation to show
such Participant Register to the Borrower except to the extent such disclosure
is necessary to establish that such Loan, commitment, letter of credit or other
obligation is in registered form under Section 5f.103-1(c) of the Treasury
regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes
of this Agreement notwithstanding any notice to the contrary.

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(d)          Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank or other central bank having jurisdiction over such Lender,
and this Section 12.04(d) 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.

Section 12.05       Survival; Revival; Reinstatement.

(a)         All covenants, agreements, representations and warranties made by
the Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the Agent, any
other Agent, any Issuing Bank or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated. 
The provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and
Article XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the
Commitments or the termination of this Agreement, any other Loan Document or any
provision hereof or thereof.

(b)        To the extent that any payments on the Obligations or proceeds of any
collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent, the Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Agent’s and the Lenders’ Liens, security interests, rights, powers and
remedies under this Agreement and each Loan Document shall continue in full
force and effect.  In such event, each Loan Document shall be automatically
reinstated and the Borrower shall take such action as may be reasonably
requested by the Agent and the Lenders to effect such reinstatement.

Section 12.06       Counterparts; Integration; Effectiveness.

(a)          This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract.

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(b)        This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Agent constitute the entire
contract among the parties relating to the subject matter hereof and thereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof and thereof.  THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

(c)         Except as provided in Section 6.01, this Agreement shall become
effective when it shall have been executed by the Agent and when the Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

Section 12.07      Severability.  Any provision of this Agreement or any other
Loan Document held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08      Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations (of whatsoever
kind, including, without limitations Secured Swap Obligations) at any time owing
by such Lender or Affiliate to or for the credit or the account of any Debtor
against any of and all the obligations of the Debtors owed to such Lender now or
hereafter existing under this Agreement or any other Loan Document, irrespective
of whether or not such Lender shall have made any demand under this Agreement or
any other Loan Document and although such obligations may be unmatured.  The
rights of each Lender under this Section 12.08 are in addition to other rights
and remedies (including other rights of setoff) which such Lender or its
Affiliates may have.

Section 12.09       GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

(a)         THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED
STATES FEDERAL LAW PERMITS ANY LENDER TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE
OR TAKE INTEREST AT THE RATE ALLOWED BY THE LAWS OF THE STATE WHERE SUCH LENDER
IS LOCATED.  CHAPTER 346 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN
REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY
TO THIS AGREEMENT OR THE NOTES.

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(b)         THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR
PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN
CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE AGENT, ANY LENDER, THE ISSUING
BANK, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR
THERETO, IN ANY FORUM OTHER THAN THE BANKRUPTCY COURT AND IF THE BANKRUPTCY
COURT DOES NOT HAVE (OR ABSTAINS FROM) JURISDICTION, THE COURTS OF THE STATE OF
TEXAS SITTING IN HOUSTON, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF
THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION
OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION,
LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH COURTS. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE AGENT,
ANY LENDER OR THE ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE
BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

(c)        EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE
ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED
PURSUANT TO SECTION 12.01 (OR ITS ASSIGNMENT AND ASSUMPTION), SUCH SERVICE TO
BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL
AFFECT THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANOTHER PARTY IN ANY OTHER JURISDICTION.

(d)      EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN, (ii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF
COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED
THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED
IN THIS SECTION 12.09.

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Section 12.10       Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

Section 12.11       Confidentiality.  The Agent, each other Agent, each Issuing
Bank and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement or any other Loan Document, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section 12.11, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement or (ii) any actual or prospective counterparty (or its advisors) to
any Swap Agreement relating to the Borrower or any of its Subsidiaries and their
obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section 12.11 or (ii) becomes available to the Agent, any other Agent, any
Issuing Bank or any Lender on a nonconfidential basis from a source other than
the Borrower.  For the purposes of this Section 12.11, “Information” means all
information received from the Debtors relating to any Debtor and its business,
other than any such information that is available to the Agent, any other Agent,
any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
the Borrower or any of its Subsidiaries; provided that, in the case of
information received from the Borrower, or any of its Subsidiaries after the
date hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to maintain the confidentiality of
Information as provided in this Section 12.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

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Section 12.12       Interest Rate Limitation.  It is the intention of the
parties hereto that each Lender shall conform strictly to usury laws applicable
to it.  Accordingly, if the transactions contemplated hereby would be usurious
as to any Lender under laws applicable to it (including the laws of the United
States of America and the State of Texas or any other jurisdiction whose laws
may be mandatorily applicable to such Lender notwithstanding the other
provisions of this Agreement), then, in that event, notwithstanding anything to
the contrary in any of the Loan Documents or any agreement entered into in
connection with or as security for the Notes, it is agreed as follows:  (a) the
aggregate of all consideration which constitutes interest under law applicable
to any Lender that is contracted for, taken, reserved, charged or received by
such Lender under any of the Loan Documents or agreements or otherwise in
connection with the Notes shall under no circumstances exceed the maximum amount
allowed by such applicable law, and any excess shall be canceled automatically
and if theretofore paid shall be credited by such Lender on the principal amount
of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower); and (b) in the event that the maturity of the Notes is
accelerated by reason of an election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrower).  All sums paid or agreed to be paid to any Lender for the use,
forbearance or detention of sums due hereunder shall, to the extent permitted by
law applicable to such Lender, be amortized, prorated, allocated and spread
throughout the stated term of the Loans evidenced by the Notes until payment in
full so that the rate or amount of interest on account of any Loans hereunder
does not exceed the maximum amount allowed by such applicable law.  If at any
time and from time to time (i) the amount of interest payable to any Lender on
any date shall be computed at the Highest Lawful Rate applicable to such Lender
pursuant to this Section 12.12 and (ii) in respect of any subsequent interest
computation period the amount of interest otherwise payable to such Lender would
be less than the amount of interest payable to such Lender computed at the
Highest Lawful Rate applicable to such Lender, then the amount of interest
payable to such Lender in respect of such subsequent interest computation period
shall continue to be computed at the Highest Lawful Rate applicable to such
Lender until the total amount of interest payable to such Lender shall equal the
total amount of interest which would have been payable to such Lender if the
total amount of interest had been computed without giving effect to this Section
12.12.  To the extent that Chapter 303 of the Texas Finance Code is relevant for
the purpose of determining the Highest Lawful Rate applicable to a Lender, such
Lender elects to determine the applicable rate ceiling under such Chapter by the
weekly ceiling from time to time in effect.  Chapter 346 of the Texas Finance
Code does not apply to the Borrower’s obligations hereunder.

Section 12.13      EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
“CONSPICUOUS.”

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Section 12.14       Collateral Matters; Secured Swap Agreements; Secured Cash
Management Agreements.  The benefit of the Security Instruments and the other
Loan Documents and of the provisions of this Agreement relating to any
Collateral securing the Obligations shall also extend to and be available to
Secured Swap Parties and Secured Cash Management Providers, in each case on a
pro rata basis in respect of Secured Swap Obligations and Secured Cash
Management Obligations.  In addition, it is understood and agreed that the
benefit of the Security Instruments and the provisions of this Agreement
relating to any Collateral securing the Obligations shall also extend to and be
available to such Lenders or their Affiliates as provided herein and in the
Security Instruments notwithstanding that any such Lender (as defined in the
Existing Credit Agreement) is not a Lender hereunder.  Except as set forth in
Section 12.02(b), no Secured Swap Party that is no longer a Lender (or an
Affiliate of a Lender) nor any Secured Cash Management Provider shall have any
voting rights under any Loan Document as a result of the existence of Secured
Swap Obligations or Secured Cash Management Obligations. All Secured Cash
Management Agreements are independent agreements governed by the terms thereof
and will remain in full force and effect, unaffected by any repayment,
prepayment, acceleration, reduction, increase or change in the terms of the
Loans created under this Agreement except as otherwise provided in such Secured
Cash Management Agreements, and any payoff statement from any Lender relating to
this Agreement shall not apply to Secured Cash Management Agreements, except as
otherwise expressly provided in such payoff statement.

Section 12.15      No Third Party Beneficiaries.  This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans and the Issuing Bank
to issue, amend, renew or extend Letters of Credit hereunder are solely for the
benefit of the Borrower, and no other Person (including, without limitation, any
Subsidiary of the Borrower, any obligor, contractor, subcontractor, supplier or
materialsman) shall have any rights, claims, remedies or privileges hereunder or
under any other Loan Document against the Agent, the other Agents, the Issuing
Bank or any Lender for any reason whatsoever.  There are no third party
beneficiaries other than to the extent contemplated by the last sentence of
Section 12.04(a).

Section 12.16      USA PATRIOT Act Notice.  Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act, it is
required to obtain, verify and record information that identifies the Borrower
and the Guarantors, which information includes the name and address of the
Borrower and the Guarantors and other information that will allow such Lender to
identify the Borrower and the Guarantors in accordance with the USA PATRIOT Act.

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Section 12.17     Non-Fiduciary Status.  The arranging and other services
regarding this Agreement provided by the Agent, the Arranger, and the Lenders
are arm’s-length commercial transactions between the Borrower, and its
Affiliates, on the one hand, and the Agent, the Arranger, and the Lenders, on
the other hand.  The Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent it has deemed appropriate.  The
Borrower is capable of evaluating, and understands and accepts, the terms, risks
and conditions of the transactions contemplated hereby and by the other Loan
Documents; the Agent, the Arranger and each Lender is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrower or any of its Affiliates, or any other Person and
neither the Agent, the Arranger nor any Lender has any obligation to the
Borrower, or any of its Affiliates with respect to the transactions contemplated
hereby except those obligations expressly set forth herein and in the other Loan
Documents.  The Agent, the Arranger and the Lenders and their respective
Affiliates may be engaged in a broad range of transactions that involve
interests that differ from those of the Borrower, and its Affiliates, and none
of the Agent, the Arranger, or any Lender has any obligation to disclose any of
such interests to the Borrower or its Affiliates.  To the fullest extent
permitted by law, the Borrower hereby waives and releases any claims that it may
have against the Agent, the Arranger or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

Section 12.18      Cashless Settlement.  Notwithstanding anything to the
contrary contained in this Agreement, any Lender may exchange, continue or
rollover all or a portion of its Loans in connection with any amendment,
repayment, refinancing, incremental, extension, loan modification or similar
transaction permitted by the terms of this Agreement, pursuant to a cashless
settlement mechanism approved by the Borrower, the Agent and such Lender and
such cashless settlement shall be deemed to comply with any requirement
hereunder or any other Loan Document or DIP Order that such payment be made “in
dollars,” in “immediately available funds,” “in cash” or any other similar
concept.

Section 12.19     Joinder of Subsidiaries.  Upon the execution and delivery by a
Subsidiary and the Agent of a Joinder Agreement, and delivery to the Agent of
such other Security Instruments, documents and opinions with respect to such
Subsidiary as may reasonably be requested by the Agent, such Subsidiary shall
become a Guarantor hereunder, with the same force and effect as if originally
named as such herein, and without the consent of any other party hereto.  The
rights and obligations of each Loan Party hereunder and under the other Loan
Documents shall remain in full force and effect notwithstanding the addition of
any Subsidiary as a party to this Agreement.

Section 12.20       [Reserved].

Section 12.21       [Reserved].

Section 12.22      Acknowledgement and Consent to Bail-In of EEA Financial
Institutions.  Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the write-down and conversion powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

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(a)       the application of any Write-Down and Conversion Powers by an EEA
Resolution Authority to any such liabilities arising hereunder which may be
payable to it by any party hereto that is an EEA Financial Institution; and

(b)          the effects of any Bail-in Action on any such liability, including,
if applicable:

(i)          a reduction in full or in part or cancellation of any such
liability;

(ii)        a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Loan Document; or

(iii)        the variation of the terms of such liability in connection with the
exercise of the write-down and conversion powers of any EEA Resolution
Authority.

Section 12.23     Acknowledgement Regarding Any Supported QFCs.  To the extent
that the Loan Documents provide support, through a guarantee or otherwise, for
Swap Agreements or any other agreement or instrument that is a QFC (such
support, “QFC Credit Support” and each such QFC a “Supported QFC”), the parties
acknowledge and agree as follows with respect to the resolution power of the
Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act
and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(together with the regulations promulgated thereunder, the “U.S. Special
Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support
(with the provisions below applicable notwithstanding that the Loan Documents
and any Supported QFC may in fact be stated to be governed by the laws of the
State of New York and/or of the United States or any other state of the United
States):

(a)          In the event a Covered Entity that is party to a Supported QFC
(each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special
Resolution Regime, the transfer of such Supported QFC and the benefit of such
QFC Credit Support (and any interest and obligation in or under such Supported
QFC and such QFC Credit Support, and any rights in property securing such
Supported QFC or such QFC Credit Support) from such Covered Party will be
effective to the same extent as the transfer would be effective under the U.S.
Special Resolution Regime if the Supported QFC and such QFC Credit Support (and
any such interest, obligation and rights in property) were governed by the laws
of the United States or a state of the United States. In the event a Covered
Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding
under a U.S. Special Resolution Regime, Default Rights under the Loan Documents
that might otherwise apply to such Supported QFC or any QFC Credit Support that
may be exercised against such Covered Party are permitted to be exercised to no
greater extent than such Default Rights could be exercised under the U.S.
Special Resolution Regime if the Supported QFC and the Loan Documents were
governed by the laws of the United States or a state of the United States.
Without limitation of the foregoing, it is understood and agreed that rights and
remedies of the parties with respect to a Defaulting Lender shall in no event
affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.

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(b)          As used in this Section 12.23, the following terms have the
following meanings:

“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined
under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.

“Covered Entity” means any of the following:

(i)          a “covered entity” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 252.82(b);

(ii)         a “covered bank” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 47.3(b); or

(iii)        a “covered FSI” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be
interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as
applicable.

“QFC” has the meaning assigned to the term “qualified financial contract” in,
and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

ARTICLE XIII
LOAN GUARANTEE

Section 13.01     Guarantee.  Each Guarantor hereby agrees that it is jointly
and severally liable for, and absolutely, irrevocably and unconditionally
guarantees to the Agent, the Lenders, the Issuing Banks and the other Secured
Parties, the prompt payment and performance when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of the
Secured Obligations and all reasonable costs and expenses including, without
limitation, all court costs and attorneys’ and paralegals’ fees and expenses
paid or incurred by the Agent, the Issuing Banks and the Lenders in endeavoring
to collect all or any part of the Secured Obligations from, or in prosecuting
any action against, the Borrower, any Guarantor or any other guarantor of all or
any part of the Secured Obligations (such costs and expenses, together with the
Secured Obligations, being collectively called the “Guaranteed Obligations”);
provided, that the guarantee of any Subsidiary Guarantor will not apply to any
Secured Swap Obligation if and to the extent that it would be unlawful for such
Subsidiary Guarantor to guarantee such Secured Swap Obligation under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Subsidiary Guarantor’s failure for any reason (and
after giving effect to the guarantees by the other Guarantors of the Secured
Obligations of such Subsidiary Guarantor) to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act at the time the guarantee
of such Subsidiary Guarantor becomes effective with respect to such Secured Swap
Obligation.  Each Guarantor further agrees that the Guaranteed Obligations may
be extended or renewed in whole or in part without notice to or further assent
from it, and that it remains bound upon its guarantee notwithstanding any such
extension or renewal. All terms of this Loan Guarantee apply to and may be
enforced by or on behalf of any domestic or foreign branch or Affiliate of any
Lender that extended any portion of the Guaranteed Obligations.

503

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Section 13.02      Guarantee of Payment.  This Loan Guarantee is a guarantee of
payment and not of collection.  Each Guarantor waives any right to require the
Agent, any Issuing Bank, any Lender or any other Secured Party to sue the
Borrower, any other Guarantor, any other guarantor, or any other Person
obligated for all or any part of the Guaranteed Obligations (each, an “Obligated
Party”), or to enforce its rights against any collateral securing all or any
part of the Guaranteed Obligations.

Section 13.03       No Discharge or Diminishment of Loan Guarantee.

(a)        Except as otherwise provided for herein, the obligations of each
Guarantor hereunder are unconditional and absolute and not subject to any
reduction, limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed Obligations, by operation of
law or otherwise; (ii) any change in the corporate existence, structure or
ownership of the Borrower or any other guarantor of or other Person liable for
any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any Obligated Party or its
assets or any resulting release or discharge of any obligation of any Obligated
Party; or (iv) the existence of any claim, setoff or other right which any Loan
Guarantor may have at any time against any Obligated Party, the Agent, any
Issuing Bank, any Lender, or any other Person, whether in connection herewith or
in any unrelated transaction.

(b)        The obligations of each Guarantor hereunder are not subject to any
defense or setoff, counterclaim, recoupment, or termination whatsoever by reason
of the invalidity, illegality, or unenforceability of any of the Guaranteed
Obligations or otherwise, or any provision of applicable law or regulation
purporting to prohibit payment by any Obligated Party, of the Guaranteed
Obligations or any part thereof.

(c)         Further, the obligations of any Guarantor hereunder are not
discharged or impaired or otherwise affected by: (i) the failure of the Agent,
any Issuing Bank, any Lender or any other Secured Party to assert any claim or
demand or to enforce any remedy with respect to all or any part of the
Guaranteed Obligations; (ii) any waiver or modification of or supplement to any
provision of any agreement relating to the Guaranteed Obligations; (iii) any
release, non-perfection or invalidity of any indirect or direct security for the
obligations of any Borrower for all or any part of the Guaranteed Obligations or
any obligations of any other guarantor of or other Person liable for any of the
Guaranteed Obligations; (iv) any action or failure to act by the Agent, any
Issuing Bank, any Lender or any other Secured Party with respect to any
collateral securing any part of the Guaranteed Obligations; or (v) any default,
failure or delay, willful or otherwise, in the payment or performance of any of
the Guaranteed Obligations, or any other circumstance, act, omission or delay
that might in any manner or to any extent vary the risk of such Guarantor or
that would otherwise operate as a discharge of any Guarantor as a matter of law
or equity (other than the indefeasible payment in full in cash of the Guaranteed
Obligations).

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Section 13.04     Defenses Waived.  To the fullest extent permitted by
applicable law, each Guarantor hereby waives any defense based on or arising out
of any defense of the Borrower or any other Guarantor or the unenforceability of
all or any part of the Guaranteed Obligations from any cause, or the cessation
from any cause of the liability of the Borrower or any other Guarantor, other
than the indefeasible payment in full in cash of the Guaranteed Obligations.
Without limiting the generality of the foregoing, each Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and, to the fullest
extent permitted by law, any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against any
Obligated Party or any other Person.  Each Guarantor confirms that it is not a
surety under any state law and shall not raise any such law as a defense to its
obligations hereunder.  The Agent may, at its election, foreclose on any
Collateral held by it by one or more judicial or nonjudicial sales, accept an
assignment of any such Collateral in lieu of foreclosure or otherwise act or
fail to act with respect to any collateral securing all or a part of the
Guaranteed Obligations, compromise or adjust any part of the Guaranteed
Obligations, make any other accommodation with any Obligated Party or exercise
any other right or remedy available to it against any Obligated Party, without
affecting or impairing in any way the liability of such Guarantor under this
Loan Guarantee except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid in cash.  To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor against any Obligated Party or any security.

Section 13.05     Rights of Subrogation.  No Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Obligated Party, or any
Collateral, until the Borrower and the Guarantors have fully performed all their
obligations to the Agent, the Issuing Banks, the Lenders and the other Secured
Parties.

Section 13.06     Reinstatement; Stay of Acceleration.  If at any time any
payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, each Guarantor’s obligations under
this Loan Guarantee with respect to that payment shall be reinstated at such
time as though the payment had not been made and whether or not the Agent, the
Issuing Banks, the Lenders or the other Secured Parties are in possession of
this Loan Guarantee.  If acceleration of the time for payment of any of the
Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Guarantors forthwith on demand
by the Agent.

Section 13.07    Information.  Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Guarantor assumes and incurs under this Loan Guarantee, and agrees that
none of the Agent, any Issuing Bank or any Lender shall have any duty to advise
any Guarantor of information known to it regarding those circumstances or risks.

505

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Section 13.08     Taxes.  The provisions of Section 5.03 shall apply
mutatis mutandis to all payments by the Guarantors of the Guaranteed
Obligations.

Section 13.09     Maximum Liability.  The provisions of this Loan Guarantee are
severable, and in any action or proceeding involving any state corporate law, or
any state, federal or foreign bankruptcy, insolvency, reorganization or other
law affecting the rights of creditors generally, if the obligations of any
Guarantor under this Loan Guarantee would otherwise be held or determined to be
avoidable, invalid or unenforceable on account of the amount of such Guarantor’s
liability under this Loan Guarantee, then, notwithstanding any other provision
of this Loan Guarantee to the contrary, the amount of such liability shall,
without any further action by the Guarantors or the Lenders, be automatically
limited and reduced to the highest amount that is valid and enforceable as
determined in such action or proceeding (such highest amount determined
hereunder being the relevant Guarantor’s “Maximum Liability”).  This Section
with respect to the Maximum Liability of Loan Guarantor is intended solely to
preserve the rights of the Lenders to the maximum extent not subject to
avoidance under applicable law, and no Guarantor nor any other Person or entity
shall have any right or claim under this Section with respect to such Maximum
Liability, except to the extent necessary so that the obligations of any
Guarantor hereunder shall not be rendered voidable under applicable law. Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Liability of each Guarantor without impairing this
Loan Guarantee or affecting the rights and remedies of the Lenders hereunder;
provided that nothing in this sentence shall be construed to increase any
Guarantor’s obligations hereunder beyond its Maximum Liability.

Section 13.10     Contribution.  In the event any Guarantor (a “Paying
Guarantor”) shall make any payment or payments under this Loan Guarantee or
shall suffer any loss as a result of any realization upon any collateral granted
by it to secure its obligations under this Loan Guarantee, each other Guarantor
(each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an
amount equal to such Non-Paying Guarantor’s Applicable Share of such payment or
payments made, or losses suffered, by such Paying Guarantor.  For purposes of
this Section, each Non-Paying Guarantor’s “Applicable Share” with respect to any
such payment or loss by a Paying Guarantor shall be determined as of the date on
which such payment or loss was made by reference to the ratio of (a) such
Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect
to any right to receive, or obligation to make, any contribution hereunder) or,
if such Non-Paying Guarantor’s Maximum Liability has not been determined, the
aggregate amount of all monies received by such Non-Paying Guarantor from the
Borrower after the Interim Facility Effective Date (whether by loan, capital
infusion or by other means) to (b) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying Guarantor) as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantor, the aggregate amount of all monies received by such
Guarantors from the Borrower after the Interim Facility Effective Date (whether
by loan, capital infusion or by other means).  Nothing in this provision shall
affect any Guarantor’s several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor’s Maximum Liability).  Each of the Guarantors
covenants and agrees that its right to receive any contribution under this Loan
Guarantee from a Non-Paying Guarantor shall be subordinate and junior in right
of payment to the payment in full in cash of the Guaranteed Obligations.  This
provision is for the benefit of the Agent, the Issuing Banks, the Lenders and
the Guarantors and may be enforced by any one, or more, or all of them in
accordance with the terms hereof.

506

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Section 13.11       Representations and Warranties.  Each Guarantor hereby
represents and warrants to the Agent and each Lender that:

(a)          the representations and warranties set forth in Article VII as they
relate to such Guarantor or to the Loan Documents to which such Guarantor is a
party are true and correct in all material respects (except that any
representation and warranty that is qualified as to “materiality” or “Material
Adverse Effect” shall be true and correct in all respects after giving effect to
such qualification), provided that each reference in each such representation
and warranty to the Borrower’s knowledge shall, for the purposes of this clause,
be deemed to be a reference to such Guarantor’s knowledge.

(b)         on the date hereof, the correct legal name of such Guarantor, all
names and trade names that such Guarantor has used in the last five (5) years,
such Guarantor’s jurisdiction of organization and each jurisdiction of
organization of such Guarantor over the last five (5) years, organizational
number, taxpayor identification number, and the location(s) of such Guarantor’s
chief executive office or sole place of business over the last five years are
specified on Schedule 13.11.

(c)         the Borrower is a member of an affiliated group of companies that
includes each Guarantor, and the Borrower and the other Guarantors are engaged
in related businesses.  Each Guarantor agrees that it shall benefit, directly or
indirectly, from the transactions contemplated by this Agreement; and it has
determined that this Loan Guarantee is necessary and convenient to the conduct,
promotion and attainment of the business of such Guarantor and the Borrower.

Section 13.12       Subordination of Indebtedness.

(a)         Subordination of All Guarantor Claims. As used herein, the term
“Guarantor Claims” shall mean all debts and obligations of the Borrower or any
other Guarantor to the Borrower or any other Guarantor, whether such debts and
obligations now exist or are hereafter incurred or arise, or whether the
obligation of the debtor thereon be direct, contingent, primary, secondary,
several, joint and several, or otherwise, and irrespective of whether such debts
or obligations be evidenced by note, contract, open account, or otherwise, and
irrespective of the Person or Persons in whose favor such debts or obligations
may, at their inception, have been, or may hereafter be created, or the manner
in which they have been or may hereafter be acquired by.  After and during the
continuation of an Event of Default, no Guarantor shall receive or collect,
directly or indirectly, from any other obligor in respect thereof any amount
upon the Guarantor Claims.

507

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(b)         Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief, or other insolvency proceedings
involving any Guarantor, the Agent on behalf of the Agent and the Secured
Parties shall have the right to prove their claim in any proceeding, so as to
establish their rights hereunder and receive directly from the receiver, trustee
or other court custodian, dividends and payments which would otherwise be
payable upon Guarantor Claims. Each Guarantor hereby assigns such dividends and
payments to the Agent for the benefit of the Agent and the Secured Parties for
application against the Borrower Obligations as provided under Section 10.02(c)
hereof. Should any Agent or Secured Party receive, for application upon the
Guaranteed Obligations, any such dividend or payment which is otherwise payable
to any Guarantor, and which, as between such Guarantors, shall constitute a
credit upon the Guarantor Claims, then upon payment in full in cash of the
Borrower Obligations, the expiration of all Letters of Credit outstanding under
the Credit Agreement and the termination of all of the Commitments, the intended
recipient shall become subrogated to the rights of the Agent and the Secured
Parties to the extent that such payments to the Agent and the Secured Parties on
the Guarantor Claims have contributed toward the liquidation of the Guaranteed
Obligations, and such subrogation shall be with respect to that proportion of
the Guaranteed Obligations which would have been unpaid if the Agent and the
Secured Parties had not received dividends or payments upon the Guarantor
Claims.

(c)         Payments Held in Trust.  In the event that, notwithstanding clauses
(a) and (b) above, any Guarantor should receive any funds, payments, claims or
distributions which is prohibited by such clauses, then it agrees: (i) to hold
in trust for the Agent and the Secured Parties an amount equal to the amount of
all funds, payments, claims or distributions so received, and (ii) that it shall
have absolutely no dominion over the amount of such funds, payments, claims or
distributions except to pay them promptly to the Agent, for the benefit of the
Secured Parties; and each Guarantor covenants promptly to pay the same to the
Agent.

(d)       Liens Subordinate. Each Guarantor agrees that, until the Obligations
are paid in full in cash, no Letter of Credit shall be outstanding and the
termination of all of the Commitments, any Liens securing payment of the
Guarantor Claims shall be and remain inferior and subordinate to any Liens
securing payment of the Guaranteed Obligations, regardless of whether such
encumbrances in favor of such Guarantor, the Agent or any Secured Party
presently exist or are hereafter created or attach.  Without the prior written
consent of the Agent, no Guarantor, during the period in which any of the
Obligations are outstanding or the Commitments are in effect, shall (i) exercise
or enforce any creditor’s right it may have against any debtor in respect of the
Guarantor Claims, or (ii) foreclose, repossess, sequester or otherwise take
steps or institute any action or proceeding (judicial or otherwise, including
without limitation the commencement of or joinder in any liquidation,
bankruptcy, rearrangement, debtor’s relief or insolvency proceeding) to enforce
any Lien securing payment of the Guarantor Claims held by it.

(e)          Notation of Records.  Upon the request of the Agent, all promissory
notes and all accounts receivable ledgers or other evidence of the Guarantor
Claims accepted by or held by any Guarantor shall contain a specific written
notice thereon that the indebtedness evidenced thereby is subordinated under the
terms of this Loan Guarantee.

508

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Section 13.13       Other Terms.

(a)          Notices. All notices and other communications to any Guarantor
shall be given in the manner and subject to the terms of Section 12.01; provided
that each Guarantor acknowledges and agrees that any such notice, request or
demand to or upon any Guarantor by the Agent, the Lenders or any other Secured
Party may be addressed the Borrower and any notice provided to the Borrower
hereunder shall constitute notice to each Guarantor on the date received by the
Borrower in accordance with Section 12.01.

(b)          Indemnities, Etc.

(i)         Each Guarantor agrees to pay, and to save the Agent and the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all Other Taxes which may be payable or
determined to be payable in connection with any of the transactions contemplated
by this Loan Guarantee.

(ii)       Each Guarantor agrees to pay, and to save the Agent and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Loan Guarantee to the extent the Borrower
would be required to do so pursuant to Section 12.03 hereof.

(c)          Acknowledgments. Each Guarantor hereby acknowledges that:

(i)        it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, including the Loan Guarantee and the other Loan
Documents to which it is a party;

(ii)         neither the Agent nor any Secured Party has any fiduciary
relationship with or duty to any Guarantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Guarantors, on the one hand, and the Agent and Secured Parties, on the other
hand, in connection herewith or therewith is solely that of debtor and creditor;
and

(iii)      no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Secured Parties or among the Guarantors and the Secured Parties.

509

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(iv)        each Guarantor specifically agrees that it has a duty to read this
Agreement, the Security Instruments and the other Loan Documents and agrees that
it is charged with notice and knowledge of the terms of this Agreement, the
Security Instruments and the other Loan Documents; that it has in fact read this
Agreement, the Security Instruments and the other Loan Documents and is fully
informed and has full notice and knowledge of the terms, conditions and effects
thereof; that it has been represented by independent legal counsel of its choice
throughout the negotiations preceding its entry of this Agreement and the
Security Instruments; and has received the advice of its attorney in entering
into this Agreement and the Security Instruments; and that it recognizes that
certain of the terms of this Agreement and the Security Instruments result in
one party assuming the liability inherent in some aspects of the transaction and
relieving the other party of its responsibility for such liability. EACH PARTY
HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR
ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT AND THE SECURITY
INSTRUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH
PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

[SIGNATURES BEGIN NEXT PAGE]

510

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The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.

BORROWER:
LEGACY RESERVES LP, as a debtor and debtor-in-possession
       
By:
Legacy Reserves GP, LLC, its general partner
       
By:
Legacy Reserves Inc., its sole member
       
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

511

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GUARANTORS:
LEGACY RESERVES OPERATING LP
 
as a debtor and debtor-in-possession
       
By:
Legacy Reserves Operating GP LLC, its general partner
       
By:
Legacy Reserves LP, its sole member
       
By:
Legacy Reserves GP, LLC, its general partner
       
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer
       
LEGACY RESERVES OPERATING GP LLC, as a debtor and debtor-in-possession
       
By:
Legacy Reserves LP, its sole member
       
By:
Legacy Reserves GP, LLC, its general partner
       
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

512

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LEGACY RESERVES INC.
 
LEGACY RESERVES ENERGY SERVICES LLC
 
DEW GATHERING LLC
 
PINNACLE GAS TREATING LLC
 
LEGACY RESERVES GP, LLC
 
LEGACY RESERVES SERVICES LLC
 
LEGACY RESERVES FINANCE CORPORATION
 
LEGACY RESERVES MARKETING LLC, each as a debtor and debtor-in-possession
     
By:
     
Name: James Daniel Westcott
   
Title: Chief Executive Officer

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

513

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ADMINISTRATIVE AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent and a Lender
       
By:
     
Name: Brett Steele
   
Title: Director

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]

514

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LENDERS:
[_________________________]
       
By:
     
[Name]
   
[Title]

[Signature Page to Senior Secured Superpriority Debtor-in-Possession Credit
Agreement]
 

515

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Exhibit B-2

Interim DIP Order

516

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

 
§
 
In re:
§
Chapter 11
 
§
 
LEGACY RESERVES INC., et al.,1
§
Case No. 19-_____ (__)
 
§
 

Debtors.
§
Jointly Administered
 
§
 

INTERIM ORDER (I) AUTHORIZING DEBTORS TO OBTAIN
POSTPETITION FINANCING PURSUANT TO SECTION 364 OF
THE BANKRUPTCY CODE, (II) AUTHORIZING THE USE OF
CASH COLLATERAL PURSUANT TO SECTION 363 OF THE
BANKRUPTCY CODE, (III) GRANTING ADEQUATE PROTECTION
TO THE EXISTING RBL SECURED PARTIES AND THE
EXISTING SECOND LIEN SECURED PARTIES PURSUANT TO
SECTIONS 361, 362, 363, AND 364 OF THE BANKRUPTCY CODE,
(IV) GRANTING LIENS AND SUPERPRIORITY CLAIMS, (V) MODIFYING
THE AUTOMATIC STAY, AND (VI) SCHEDULING A FINAL HEARING

Upon the motion, dated June [●], 2019 (the “DIP Motion”), of the DIP Borrower
(as defined below), and the other debtors and debtors-in-possession
(collectively, the “Debtors”), in the above-referenced chapter 11 cases (the
“Cases”), seeking entry of an interim order (this “Interim Order”) pursuant to
section 105, 361, 362, 363(b), 363(c)(2), 364(c)(l), 364(c)(2), 364(c)(3),
364(d)(l), 364(e), 507, and 552 of chapter 11 of title 11 of the United States
Code (as amended, the “Bankruptcy Code”), Rules 2002, 4001, 6004, and 9014 of
the Federal Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), and Rules
2002-1, 4001-1(b), 4002-1(i), and 9013-1 of the Local Rules of the United States
Bankruptcy Court for the Southern District of Texas and the Texas Complex
Chapter 11 Case Procedures (together, the “Local Rules”), that, among other
things:

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

1       The Debtors in these chapter 11 cases, along with the last four digits
of each Debtor’s federal tax identification number, as applicable, are:  Legacy
Reserves Inc. (9553); Legacy Reserves GP, LLC (1065); Legacy Reserves LP (1069);
Legacy Reserves Finance Corporation (1181); Legacy Reserves Services LLC (2710);
Legacy Reserves Operating LP (7259); Legacy Reserves Energy Services LLC (1233);
Legacy Reserves Operating GP LLC (7209); Dew Gathering LLC (4482); Pinnacle Gas
Treating LLC (3711); Legacy Reserves Marketing LLC (7593).  The location of the
Debtors’ service address is:  303 W. Wall St., Suite 1800, Midland, TX 79701.

517

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(i)          authorizes Legacy Reserves LP, a Delaware limited liability company
(“Legacy”) designated as the “Borrower” under, and as defined in, the DIP Credit
Agreement (as defined below) (the “DIP Borrower”) to obtain, and Legacy’s
limited partner, Legacy Reserves Inc., a Delaware corporation (its “Limited
Partner”), and Legacy’s general partner, Legacy Reserves GP, LLC, a Delaware
limited liability company (its “General Partner”, and, together with the Limited
Partner, its “Partners”) and the other guarantors under the DIP Loan Documents
(as defined below) (collectively, the “DIP Guarantors”) to unconditionally
guaranty, jointly and severally, the DIP Borrower’s obligations in respect of,
senior secured priming and superpriority postpetition financing, which if
approved on a final basis would be a revolving loan credit facility (the “DIP
Facility” and the loans thereunder, the “DIP Loans”) in an aggregate principal
amount of up to $350,000,000, consisting of: (a) a new money revolving loan
facility in the aggregate principal amount of $100,000,000 in commitments from
the DIP Lenders (the “Commitments”), inclusive of a sub-facility of up to
$1,000,000 for the issuance of letters of credit (the “DIP LC Sub-Facility”),
which shall reduce availability under the DIP Facility on a dollar-for-dollar
basis (the “New Money Facility” and the loans thereunder, the “New Money
Loans”), and (b)  a refinancing term facility in the aggregate principal amount
of up to $250,000,000 (the “Refinancing Facility” and the loans thereunder, the
“Refinanced Loans”), pursuant to the terms of (x) this Interim Order, (y) that
certain Debtor-in-Possession Credit Agreement (as the same may be amended,
restated, supplemented, or otherwise modified from time to time in accordance
with its terms, the “DIP Credit Agreement”),2 by and among the DIP Borrower,
Wells Fargo Bank, National Association, as administrative agent and collateral
agent (in such capacity, and as administrative agent and collateral agent under
the DIP Facility, collectively, the “DIP Agent”), and other financial
institutions as such may become from time to time party to the DIP Credit
Agreement as “Lenders” under, and as defined in, the DIP Credit Agreement (the
“New Money DIP Lenders,” and together with the Refinancing DIP Lenders (as
defined below), collectively, the “DIP Lenders,” and together with the DIP Agent
and any other party to which DIP Obligations (as defined below) are owed, the
“DIP Secured Parties”), in substantially the form attached to the DIP Motion,
and (z) any and all other Loan Documents (as defined in the DIP Credit
Agreement, and together with the DIP Credit Agreement, collectively, the “DIP
Loan Documents”), to: (a) to pay DIP Facility-related transaction costs, fees
and expenses; (b) to provide working capital for the Debtors and for other
general corporate purposes of the Debtors, all in accordance with the applicable
DIP Budget (as defined below); (c) to pay Adequate Protection (as defined below)
payments as authorized by the Bankruptcy Court in the Interim Order or the Final
Order (each as defined below); (d) to pay obligations arising from or related to
the Carve-Out; (e) to pay restructuring costs incurred in connection with the
Bankruptcy Case; (f) in the case of the Refinancing Facility, convert to DIP
Obligations under the DIP Loan Documents, $250,000,000 of the outstanding
principal amount of the Existing RBL Loans (as defined in the Existing RBL
Credit Facility (as defined below)) held by the Refinancing DIP Lenders (defined
below) ratably in accordance with their respective shares of the New Money
Facility (according to the refinancing mechanics described below) (the
“Refinancing”, and the holders of such refinanced Existing RBL Loans, the
“Refinancing DIP Lenders”, and the Refinancing DIP Lenders together with the DIP
Agent, collectively, the “Refinancing DIP Secured Parties”), and such converted
Existing RBL Loans, the Refinanced Loans); (g) pay certain transaction fees and
other costs and expenses of administration of the Cases; and (h) pay fees and
expenses (including reasonable attorneys’ fees and expenses) and interest and
other payments owed to the DIP Secured Parties under the DIP Loan Documents and
this Interim Order;

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2          Unless otherwise specified herein, all capitalized terms used herein
without definition shall have the respective meanings given to such terms in the
DIP Credit Agreement.  A copy of the DIP Credit Agreement is attached hereto as
Schedule 1.

518

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(ii)         approves the terms of, and authorizes the Debtors to execute and
deliver, and perform under, the DIP Loan Documents and Secured Swap Agreements
(as defined in the DIP Credit Agreement) and authorizes and directs the Debtors
to perform such other and further acts as may be required in connection with the
DIP Loan Documents and this Interim Order;

(iii)        subject to the Carve-Out, grants (x) to the DIP Agent, for the
benefit of itself and the other DIP Secured Parties, Liens (as defined in the
DIP Credit Agreement) on all of the DIP Collateral (as defined below) pursuant
to section 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy Code, which Liens
shall be senior to the Primed Liens (as defined below) and the Adequate
Protection Liens (as defined below), and shall be junior solely to any valid,
enforceable, and non-avoidable Liens (including the Excluded Liens (under and as
defined in the DIP Credit Agreement, attached to this Interim Order as Schedule
1)) that are (A) in existence on the Petition Date (as defined below), (B)
either perfected as of the Petition Date or perfected subsequent to the Petition
Date solely to the extent permitted by section 546(b) of the Bankruptcy Code,
and (C) senior in priority to the Existing RBL Liens and the Existing Second
Liens (each as defined below) to the extent provided under and after giving
effect to any intercreditor or subordination agreement (all such Liens,
collectively in (A), (B), and (C), the “Existing Prior Liens”) and (y) to the
DIP Secured Parties, pursuant to section 364(c)(1) of the Bankruptcy Code,
superpriority administrative claims having recourse to all prepetition and
postpetition property of the Debtors’ estates, now owned or hereafter acquired
and the proceeds of each of the foregoing, including,3 upon entry of this
Interim Order, any Debtor’s rights under section 549 of the Bankruptcy Code and
the proceeds thereof, and upon entry of the Final Order, the proceeds of
Avoidance Actions (as defined below), whether received by judgment, settlement,
or otherwise;

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3          As used herein, the words “including” or “include” and variations
thereof shall not be deemed to be terms of limitation, and shall be deemed to be
followed by the words “without limitation.”

519

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(iv)        authorizes the Debtors to use “cash collateral” as such term is
defined in section 363 of the Bankruptcy Code (the “Cash Collateral”), including
Cash Collateral in which the DIP Secured Parties and/or the Existing RBL Secured
Parties (as defined below) have a Lien or other interest, in each case whether
existing on the Petition Date, arising pursuant to this Interim Order or
otherwise, for the purposes described in the DIP Loan Documents and this Interim
Order;

(v)         vacates the automatic stay imposed by section 362 of the Bankruptcy
Code solely to the extent necessary to implement and effectuate the terms and
provisions of the DIP Loan Documents and this Interim Order;

(vi)       authorizes the DIP Borrower at any time prior to the earlier of June
[●], 2019, and the entry of the Final Order to borrow on a revolving basis in
accordance with the DIP Budget under the New Money Facility in an aggregate
outstanding principal amount that, when taken together with the aggregate face
amount of letters of credit outstanding under the DIP LC Sub-Facility, will not
exceed $35,000,000, and to convert to DIP Obligations (as defined below) under
the DIP Loan Documents each Refinancing DIP Lender’s ratable share of
$87,500,000 of the outstanding principal amount of the Loans (as defined in the
Existing RBL Credit Agreement) as part of the Refinancing, and authorizes the
DIP Guarantors to unconditionally guaranty such obligations jointly and
severally; provided, that any amounts repaid under the New Money Facility may be
reborrowed, subject to the terms of the DIP Loan Documents and this Interim
Order;

520

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(vii)      subject to the Carve-Out, solely to the extent of any diminution in
value of their collateral, grants (x) the Existing RBL Secured Parties, as of
the Petition Date and in accordance with the relative priorities set forth
herein, the Existing RBL Adequate Protection (as defined below), which consists
of, among other things, Existing RBL Adequate Protection Liens (as defined
below), the Existing RBL Adequate Protection Superpriority Claims (as defined
below) and the cash interest described below with respect to the Existing RBL
Loans, and (y) the lenders under the Existing Second Lien Credit Facility (each
as defined in the Existing Second Lien Credit Facility (as defined below)), the
Existing Second Lien Agent (as defined below), and any other parties to whom
obligations may be owed under the Existing Second Lien Credit Facility (as
defined below), as of the Petition Date and in accordance with the relative
priorities set forth herein, the Existing Second Lien Adequate Protection (as
defined below), which consists of, among other things, Second Lien Adequate
Protection Liens (as defined below), the Second Lien Adequate Protection
Superpriority Claims (as defined below) and the cash payments described below
with respect to the Existing Second Lien Loans;

(viii)      schedules a final hearing on the DIP Motion (the “Final Hearing”),
at which, for the avoidance of doubt, the rights of all parties in interest are
fully preserved to present arguments concerning the Final Order, to be held on
June [●], 2019 at [●] [a/p].m. (prevailing Central Time) to consider entry of a
final order that grants all of the relief requested in the DIP Motion on a final
basis and which final order shall be in form and substance (including with
respect to any subsequent modifications to the form or substance made in
response to objections of other creditors4 or this Court) acceptable to the DIP
Secured Parties and the Existing RBL Agent (as defined below) (the “Final
Order”);

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4          Nothing herein permits a creditor to file any objection prohibited by
the Intercreditor Agreement (as defined below).

521

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(ix)        waives, solely upon entry of the Final Order, rights of the Debtors
and their estates to surcharge collateral pursuant to section 506(c) of the
Bankruptcy Code;

(x)       provides that the DIP Secured Parties and the Existing RBL Secured
Parties are entitled to all of the rights and benefits of section 552(b) of the
Bankruptcy Code, and, subject to the entry of the Final Order, the “equities of
the case” exception shall not apply;

(xi)        waives the equitable doctrine of “marshaling” and any other similar
doctrine with respect to any of the DIP Collateral, the Existing RBL Collateral,
or the Existing Second Lien Collateral, as applicable; and

(xii)       provides for the immediate effectiveness of this Interim Order and
waives any applicable stay (including under Bankruptcy Rule 6004) to permit such
immediate effectiveness.

Having considered the DIP Motion, the DIP Credit Agreement, the Declaration of
Kevin M. Cofsky In Support of the Debtors’ [Emergency] Motion for Entry of
Interim and Final Orders (I) Authorizing Debtors to Obtain Postpetition
Financing Pursuant to Section 364 of the Bankruptcy Code, (II) Authorizing the
Use of Cash Collateral Pursuant to Section 363 of the Bankruptcy Code, (III)
Granting Adequate Protection to the Existing RBL Secured Parties and the
Existing Second Lien Secured Parties Pursuant to Sections 361, 362, 363, and 364
of the Bankruptcy Code, (IV) Granting Liens and Superpriority Claims, (V)
Modifying the Automatic Stay, and (VI) Scheduling a Final Hearing (the “Cofsky
Declaration”), the Declaration of James Daniel Westcott in Support of the
Debtors’ Chapter 11 Petitions and First Day Pleadings (the “First Day
Declaration”), and the evidence submitted or proffered at the hearing on this
Interim Order (the “Interim Hearing”); and in accordance with Bankruptcy Rules
2002, 4001(b), 4001(c), 4001(d), and 9014, and all applicable Local Rules,
notice of the DIP Motion and the Interim Hearing having been provided pursuant
to Bankruptcy Rule 4001(b)(1)(C); an Interim Hearing having been held and
concluded on June [●], 2019; and it appearing that approval of the interim
relief requested in the DIP Motion is necessary to avoid immediate and
irreparable harm to the Debtors pending the Final Hearing and otherwise is fair
and reasonable and in the best interests of the Debtors, their creditors, their
estates and all parties in interest, and is essential for the continued
operation of the Debtors’ business and the preservation of the value of the
Debtors’ assets; and it appearing that the Debtors’ entry into the DIP Credit
Agreement and Secured Swap Agreements is a sound and prudent exercise of the
Debtors’ business judgment; and after due deliberation and consideration, and
good and sufficient cause appearing therefor:

522

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THIS COURT MAKES THE FOLLOWING FINDINGS OF FACT AND CONCLUSIONS OF LAW:5

A.         Petition Date.  On June [●], 2019 (the “Petition Date”), each of the
Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy
Code with the United States Bankruptcy Court for the [Southern District of
Texas] (this “Court”).  The Debtors have continued in the management and
operation of their businesses and properties as debtors-in-possession pursuant
to section 1107 and 1108 of the Bankruptcy Code.  No statutory committee of
unsecured creditors (to the extent such committee is appointed, the
“Committee”), trustee, or examiner has been appointed yet in the Cases.

B.          Jurisdiction and Venue.  This Court has core jurisdiction over the
Cases, the DIP Motion and the parties and property affected hereby pursuant to
28 U.S.C. §§ 157(b) and 1334.  Venue for the Cases and proceedings on the DIP
Motion is proper before this Court pursuant to 28 U.S.C. §§ 1408 and 1409.  The
statutory and other predicates for the relief sought herein are sections 105,
361, 362, 363, 364, 507, and 552 of the Bankruptcy Code, Bankruptcy Rules 2002,
4001, 6004, and 9014, and the Local Rules.

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

5          Findings of fact shall be construed as conclusions of law, and
conclusions of law shall be construed as findings of fact, as appropriate,
pursuant to Bankruptcy Rule 7052.

523

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C.          Notice.  The Interim Hearing is being held pursuant to the
authorization of Bankruptcy Rule 4001.  Notice of the Interim Hearing and the
emergency relief requested in the DIP Motion [has been] provided by the Debtors,
whether by facsimile, electronic mail, overnight courier or hand delivery, to
certain parties in interest, including:  (a) the Office of the U.S. Trustee for
the Southern District of Texas (the “United States Trustee”); (b) the holders of
the 30 largest unsecured claims against the Debtors (on a consolidated basis);
(c) the DIP Agent, Secured Swap Parties and their respective counsel thereto;
(d) the Existing RBL Agent and counsel thereto; (e) the Existing RBL Lenders;
(f) the Existing Second Lien Agent and counsel thereto; (g) the Existing Second
Lien Lenders; (h) the United States Attorney’s Office for the Southern District
of Texas; (i) the Internal Revenue Service; (j) the United States Securities and
Exchange Commission; (k) the Environmental Protection Agency and similar state
environmental agencies for states in which the Debtors conduct business; (l) the
state attorneys general for states in which the Debtors conduct business; and
(m) any party that has requested notice pursuant to Bankruptcy Rule 2002.  Under
the circumstances, such notice of the DIP Motion, the relief requested therein
and the Interim Hearing complies with Bankruptcy Rule 4001(b), (c), and (d) and
the Local Rules, and no other notice need be provided for entry of this Interim
Order.

D.         Debtors’ Stipulations Regarding the DIP Facility.  The Debtors, on
their behalf and on behalf of their estates, admit, stipulate, acknowledge, and
agree (the “Debtors’ DIP Stipulations”) as follows:

524

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(i)        Release of Claims.  Upon entry of this Interim Order, each Debtor and
its estate shall be deemed to have forever waived, discharged, and released each
of the DIP Secured Parties and their respective affiliates, assigns, or
successors and the respective members, managers, equity holders, affiliates,
agents, attorneys, financial advisors, consultants, officers, directors,
employees, and other representatives of the foregoing (all of the foregoing,
collectively, the “DIP Secured Party Releasees”), solely in their capacity as
such, from any and all “claims” (as defined in the Bankruptcy Code),
counterclaims, causes of action (including causes of action in the nature of
“lender liability”), defenses, setoff, recoupment, other offset rights, and
other rights of disgorgement or recovery against any and all of the DIP Secured
Party Releasees, whether arising at law or in equity, relating to and/or
otherwise in connection with the DIP Obligations, the DIP Liens, or the
debtor-creditor relationship between any of the DIP Secured Parties, on the one
hand, and any of the Debtors, on the other hand; provided, that nothing herein
shall relieve the DIP Secured Party Releasees from fulfilling their obligations
or commitments under the DIP Facility; provided, further that, the DIP Secured
Party Releases shall be limited to such claims arising prior to or including the
date of the entry of this Order.

E.          Debtors’ Stipulations Regarding the Existing RBL Credit Facility. 
Subject only to the rights of parties in interest that are specifically set
forth in paragraph 6 below, the Debtors, on their behalf and on behalf of their
estates, admit, stipulate, acknowledge, and agree (paragraphs E hereof shall be
referred to herein collectively as the “Debtors’ Existing RBL Stipulations”) as
follows:

525

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(i)          Existing RBL Credit Facility. Pursuant to that certain Third
Amended and Restated Credit Agreement, originally dated as of April 1, 2014  (as
amended, restated, or otherwise modified from time to time, the “Existing RBL
Credit Agreement,” and collectively with any other agreements and documents
executed or delivered in connection therewith, including the “Loan Documents” as
defined therein, each as may be amended, restated, supplemented, or otherwise
modified from time to time, the “Existing RBL Loan Documents”, and including all
exhibits and other ancillary documentation in respect thereof, the “Existing RBL
Credit Facility”), by and among Legacy Reserves LP as Borrower (as defined
therein), Wells Fargo Bank, National Association as Administrative Agent (the
“Existing RBL Agent”) and the financial institutions and other persons or
entities party thereto from time to time as Lenders in such capacities, the
“Existing RBL Lenders” and, together with the Existing RBL Agent and any other
party to which Existing RBL Obligations (as defined below) are owed, the
“Existing RBL Secured Parties”), the Existing RBL Secured Parties agreed to
extend loans and other financial accommodations to, and issue letters of credit
for the account of, the Borrower (as defined in the Existing RBL Credit
Agreement) pursuant to the Existing RBL Loan Documents.  All obligations of the
Debtors arising under the Existing RBL Credit Agreement or the other Existing
RBL Loan Documents (other than such obligations that become Refinancing DIP
Obligations pursuant to this Interim Order or the Final Order) shall
collectively be referred to herein as the “Existing RBL Obligations.”

526

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(ii)        Existing RBL Liens and Existing RBL Collateral.  Pursuant to the
Security Instruments (as defined in the Existing RBL Credit Agreement) (as such
documents were amended, restated, supplemented, or otherwise modified from time
to time, the “Existing RBL Collateral Documents”), by and among Legacy, its
Partners, and its subsidiaries party thereto (collectively, the “Grantors”) and
the Existing RBL Agent, each Grantor granted to the Existing RBL Agent, for the
benefit of the Existing RBL Agent and the other Existing RBL Secured Parties, to
secure the Existing RBL Obligations, a first priority security interest in and
continuing Lien (the “Existing RBL Liens”) on substantially all of such
Grantor’s assets and properties (which, for the avoidance of doubt, includes
Cash Collateral) and all proceeds, products, accessions, rents, and profits
thereof, in each case not including property subject to the Excepted Liens (as
defined in the Existing RBL Credit Agreement) and whether then owned or existing
or thereafter acquired or arising.  All “Collateral” as defined in the Existing
RBL Collateral Documents granted or pledged by such Grantors pursuant to any
Existing RBL Collateral Document or any other Existing RBL Loan Document shall
collectively be referred to herein as the “Existing RBL Collateral.”  As of the
Petition Date, (a) the Existing RBL Liens (I) are legal, valid, binding,
enforceable, and perfected Liens, (II) were granted to, or for the benefit of,
the Existing RBL Secured Parties for fair consideration and reasonably
equivalent value, (III) are not subject to avoidance, recharacterization, or
subordination pursuant to the Bankruptcy Code or applicable non-bankruptcy law
(except for the priming contemplated herein), and (IV) are subject and
subordinate only to (A) the DIP Liens (as defined below), (B) the Carve-Out (as
defined below), (C) the Existing Prior Liens and (D) the Existing RBL Adequate
Protection Liens (as defined below), and (E) for the avoidance of doubt, remain
at all times subject to the Intercreditor Agreement (as defined below), and (b)
(I) the Existing RBL Obligations constitute legal, valid, and binding
obligations of the applicable Debtors, enforceable in accordance with the terms
of the applicable Existing RBL Loan Documents (other than in respect of the stay
of enforcement arising from section 362 of the Bankruptcy Code), (II) no
setoffs, recoupments, offsets, defenses, or counterclaims to any of the Existing
RBL Obligations exist, (III) no portion of the Existing RBL Obligations or any
payments made to any or all of the Existing RBL Secured Parties are subject to
avoidance, disallowance, disgorgement, recharacterization, recovery,
subordination, attack, offset, counterclaim, defense, or “claim” (as defined in
the Bankruptcy Code) of any kind pursuant to the Bankruptcy Code or applicable
non-bankruptcy law, and (IV) the obligations of each Guarantor (as defined in
the Existing RBL Credit Agreement) under that certain Guaranty Agreement, the
Security Instruments, and the other Existing RBL Loan Documents shall continue
in full force and effect to unconditionally guaranty the Existing RBL
Obligations notwithstanding any use of Cash Collateral permitted hereunder or
any financing and financial accommodations extended by the DIP Secured Parties
to the Debtors pursuant to the terms of this Interim Order or the DIP Loan
Documents.

527

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(iii)       Amounts Owed under Existing RBL Loan Documents.  As of the Petition
Date, the applicable Debtors owed the Existing RBL Secured Parties, pursuant to
the Existing RBL Loan Documents, without defense, counterclaim, reduction or
offset of any kind, in respect of loans made, letters of credit issued, and
other financial accommodations made by the Existing RBL Secured Parties, an
aggregate principal amount of not less than $[●]6 on account of the Loans (as
defined in the Existing RBL Credit Agreement) and not less than $[●]7 on account
of the Letters of Credit (as defined in the Existing RBL Credit Agreement), plus
all accrued and hereafter accruing and unpaid interest thereon and any
additional fees, expenses (including any reasonable and documented attorneys’,
accountants’, appraisers’, and financial advisors’ fees and expenses that are
chargeable or reimbursable under the Existing RBL Loan Documents), and other
amounts now or hereafter due under the Existing RBL Loan Documents, which such
amounts shall be reduced upon the entry of this Interim Order and the closing of
the DIP Facility by the amount of the Refinanced Loans approved herein.

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6          [NTD: TBD as of filing.]
7          [NTD: TBD as of filing.]

528

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(iv)      Release of Claims.  Subject to paragraph 6 below and entry of the
Final Order, each Debtor and its estate shall be deemed to have forever waived,
discharged, and released each of the Existing RBL Secured Parties and their
respective affiliates, assigns, or successors and the respective members,
managers, equity holders, affiliates, agents, attorneys, financial advisors,
consultants, officers, directors, employees, and other representatives of the
foregoing (all of the foregoing, collectively, the “Existing RBL Secured Party
Releasees”), solely in their capacity as such, from any and all “claims” (as
defined in the Bankruptcy Code), counterclaims, causes of action (including
causes of action in the nature of “lender liability”), defenses, setoff,
recoupment, other offset rights, and other rights of disgorgement or recovery
against any and all of the Existing RBL Secured Party Releasees, whether arising
at law or in equity, relating to and/or otherwise in connection with the
Existing RBL Obligations, the Existing RBL Liens, or the debtor-creditor
relationship between any of the Existing RBL Secured Parties, on the one hand,
and any of the Debtors, on the other hand, including (a) any recharacterization,
subordination, avoidance, disallowance, or other claim arising under or pursuant
to section 105 or chapter 5 of the Bankruptcy Code or under any other similar
provisions of applicable state law, federal law, or municipal law and (b) any
right or basis to challenge or object to the amount, validity, or enforceability
of the Existing RBL Obligations or any payments or other transfers made on
account of the Existing RBL Obligations, or the validity, enforceability,
priority, or non-avoidability of the Existing RBL Liens securing the Existing
RBL Obligations, including any right or basis to seek any disgorgement or
recovery of payments of cash or any other distributions or transfers previously
received by any of the Existing RBL Secured Party Releasees; provided, that the
Existing RBL Secured Party Releases shall be limited to such claims arising
prior to or including the date of the entry of the Final Order.

529

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(v)        That certain Intercreditor Agreement, dated as of October 25, 2016,
between the Existing RBL Agent and the Existing Second Lien Agent, and
acknowledged and agreed to by Legacy and the Guarantors (as defined in the
Existing RBL Credit Agreement) (as amended, restated, supplemented, or otherwise
modified in accordance with its terms, the “Intercreditor Agreement”), sets
forth subordination and other provisions governing the relative priorities and
rights of the Existing RBL Secured Parties and their respective Existing RBL
Obligations and Existing RBL Liens, on the one hand, and the Existing Second
Lien Secured Parties and their respective Existing Second Lien Obligations (as
defined below) and Existing Second Liens on the other hand, is in full force and
effect as of the Petition Date; provided, for the avoidance of doubt, that this
paragraph does not modify the Intercreditor Agreement.

F.           Debtors’ Stipulations Regarding the Existing Second Lien Credit
Facility.  Subject only to the rights of parties in interest that are
specifically set forth in paragraph 6 below, the Debtors, on their behalf and on
behalf of their estates, admit, stipulate, acknowledge, and agree (paragraphs F
hereof shall be referred to herein collectively as the “Debtors’ Existing Second
Lien Stipulations”) as follows:

(i)        Existing Second Lien Credit Facility. Pursuant to that certain Term
Loan Credit Agreement, dated as of October 25, 2016 (as amended, restated, or
otherwise modified from time to time, the “Existing Second Lien Credit
Agreement,” and collectively with any other agreements and documents executed or
delivered in connection therewith, including the “Loan Documents” as defined
therein, each as may be amended, restated, supplemented, or otherwise modified
from time to time, the “Existing Second Lien Loan Documents”, and including all
exhibits and other ancillary documentation in respect thereof, the “Existing
Second Lien Credit Facility” and collectively with the Existing RBL Loan
Documents, the “Existing Secured Loan Documents”), by and among the Borrower,
Cortland Capital Market Services LLC, the agent for the Existing Second Lien
Secured Parties (as defined below) (the “Existing Second Lien Agent”) and the
financial institutions and other persons or entities party thereto from time to
time as Lenders (in such capacities, the “Existing Second Lien Lenders” and,
together with the Existing Second Lien Agent and any other party to which
Existing Second Lien Obligations (as defined below) are owed, the “Existing
Second Lien Secured Parties”), the Existing Second Lien Secured Parties agreed
to extend loans and provide other financial accommodations to the Borrower (as
defined in the Existing Second Lien Credit Agreement) pursuant to the Existing
Second Lien Loan Documents. All obligations of the Debtors arising under the
Existing Second Lien Credit Agreement or the other Existing Second Lien Loan
Documents shall collectively be referred to herein as the “Existing Second Lien
Obligations.”

530

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(ii)       Existing Second Liens and Existing Second Lien Collateral.  Pursuant
to the Term Loan Security Instruments (as defined in the Existing Second Lien
Credit Agreement) (as such documents were amended, restated, supplemented, or
otherwise modified from time to time, the “Existing Second Lien Collateral
Documents”), by and among Legacy, its Partners, and its subsidiaries party
thereto (collectively, the “Grantors”) and the Existing Second Lien Agent, each
Grantor granted to the Existing Second Lien Agent, for the benefit of the
Existing Second Lien Agent and the other Existing Second Lien Secured Parties,
to secure the Existing Second Lien Obligations, including interest, fees, costs,
expenses, premiums, and other charges thereunder, a security interest in and
continuing Lien (the “Existing Second Liens”) on substantially all of such
Grantor’s assets and properties (which, for the avoidance of doubt, includes
Cash Collateral) and all proceeds, products, accessions, rents, and profits
thereof, in each case not including the property subject to the Excepted Liens
(as defined in the Existing Second Lien Credit Agreement) and whether then owned
or existing or thereafter acquired or arising.  All “Collateral” as defined in
the Existing Second Lien Collateral Documents granted or pledged by such
Grantors pursuant to any Existing Second Lien Collateral Document or any other
Existing Second Lien Loan Document shall collectively be referred to herein as
the “Existing Second Lien Collateral”, and collectively with the Existing RBL
Collateral, the “Existing Collateral”.  As of the Petition Date, (a) the
Existing Second Liens (I) are legal, valid, binding, enforceable, and perfected
Liens, (II) were granted to, or for the benefit of, the Existing Second Lien
Secured Parties for fair consideration and reasonably equivalent value, (III)
are not subject to avoidance, recharacterization, or subordination pursuant to
the Bankruptcy Code or applicable non-bankruptcy law (except for the priming
contemplated herein), and (IV) are subject and subordinate only to (A) the DIP
Liens (as defined below), (B) the Carve-Out (as defined below), (C) the Existing
Prior Liens, (D) the Existing RBL Liens, and (E) the Adequate Protection Liens,
and for the avoidance of doubt, remain at all times subject to the Intercreditor
Agreement (as defined below); and (b) (I) the Existing Second Lien Obligations
constitute legal, valid, and binding obligations of the applicable Debtors,
enforceable in accordance with the terms of the applicable Existing Second Lien
Loan Documents (other than in respect of the stay of enforcement arising from
section 362 of the Bankruptcy Code), (II) no setoffs, recoupments, offsets,
defenses, or counterclaims to any of the Existing Second Lien Obligations exist,
(III) no portion of the Existing Second Lien Obligations or any payments made to
any or all of the Existing Second Lien Secured Parties are subject to avoidance,
disallowance, disgorgement, recharacterization, recovery, subordination, attack,
offset, counterclaim, defense, or “claim” (as defined in the Bankruptcy Code) of
any kind pursuant to the Bankruptcy Code or applicable non-bankruptcy law, and
(IV) the obligations of each Guarantor (as defined in the Existing Second Lien
Credit Agreement) under that certain Guaranty Agreement, the Existing Second
Lien Collateral Documents, and the other Existing Second Lien Loan Documents
shall continue in full force and effect to unconditionally guaranty the Existing
Second Lien Obligations notwithstanding any use of Cash Collateral permitted
hereunder or any financing and financial accommodations extended by the DIP
Secured Parties to the Debtors pursuant to the terms of this Interim Order, the
DIP Loan Documents, or the Secured Swap Agreements.

531

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(iii)       Amounts Owed under Existing Second Lien Loan Documents.  As of the
Petition Date, the applicable Debtors owed the Existing Second Lien Secured
Parties, pursuant to the Existing Second Lien Loan Documents, without defense,
counterclaim, reduction or offset of any kind, in respect of loans made, letters
of credit issued to the extent permitted, and other financial accommodations
made by the Existing Second Lien Secured Parties, an aggregate principal amount
of not less than $[●]8 on account of the Loans (as defined in the Existing
Second Lien Credit Agreement), plus subject in each case to section 506(b) of
the Bankruptcy Code, all accrued and hereafter accruing and unpaid interest
thereon and any additional fees, costs, charges, and other amounts now or
hereafter due under the Existing Second Lien Loan Documents (including any
reasonable and documented attorneys’, accountants’, appraisers’, and financial
advisors’ fees and expenses that are chargeable or reimbursable under the
Existing Second Lien Loan Documents).  The Existing Second Lien Secured Parties
reserve all rights to assert the Applicable Premium (as defined in the Existing
Second Lien Credit Agreement).

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8          [NTD: TBD as of filing.]

532

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(iv)       Release of Claims.  Subject to paragraph 6 below and entry of the
Final Order, each Debtor and its estate shall be deemed to have forever waived,
discharged, and released each of the Existing Second Lien Secured Parties and
their respective affiliates, assigns, or successors and the respective members,
managers, equity holders, affiliates, agents, attorneys, financial advisors,
consultants, officers, directors, employees, and other representatives of the
foregoing (all of the foregoing, collectively, the “Existing Second Lien Secured
Party Releasees”), solely in their capacity as such, from any and all “claims”
(as defined in the Bankruptcy Code), counterclaims, causes of action (including
causes of action in the nature of “lender liability”), defenses, setoff,
recoupment, other offset rights, and other rights of disgorgement or recovery
against any and all of the Existing Second Lien Secured Party Releasees, whether
arising at law or in equity, relating to and/or otherwise in connection with the
Existing Second Lien Obligations, the Existing Second Liens, or the
debtor-creditor relationship between any of the Existing Second Lien Secured
Parties, on the one hand, and any of the Debtors, on the other hand, including
(a) any recharacterization, subordination, avoidance, disallowance, or other
claim arising under or pursuant to section 105 or chapter 5 of the Bankruptcy
Code or under any other similar provisions of applicable state law, federal law,
or municipal law and (b) any right or basis to challenge or object to the
amount, validity, or enforceability of the Existing Second Lien Obligations or
any payments or other transfers made on account of the Existing Second Lien
Obligations, or the validity, enforceability, priority, or non-avoidability of
the Existing Second Liens securing the Existing Second Lien Obligations,
including any right or basis to seek any disgorgement or recovery of payments of
cash or any other distributions or transfers previously received by any of the
Existing Second Lien Secured Party Releasees; provided, that the Existing Second
Lien Secured Party Releases shall be limited to such claims arising prior to or
including the date of the entry of the Final Order.

G.          Cash Collateral.  All of the Debtors’ cash, including any cash in
deposit accounts of the Debtors, wherever located, constitutes Cash Collateral
of the Existing RBL Agent and the other Existing RBL Secured Parties and, to the
extent of the Existing Second Lien Agent and the other Existing Second Lien
Secured Parties interests in such cash, the Existing Second Lien Agent and the
other Existing Second Lien Secured Parties.

533

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H.          Intercreditor Agreement.  Pursuant to section 510(a) of the
Bankruptcy Code, the Intercreditor Agreement and any other applicable
intercreditor or subordination provisions contained in any credit agreement,
security agreement, indenture, or related document, (A) shall remain in full
force and effect, (B) shall continue to govern the relative priorities, rights,
and remedies of the Existing RBL Secured Parties and the Existing Second Lien
Secured Parties (including the relative priorities, rights, and remedies of such
parties with respect to the replacement liens and administrative expense claims
and superpriority administrative expense claims granted, or amounts payable, by
the Debtors under this Interim Order or otherwise and the modification of the
automatic stay), and (C) shall not be amended, altered or modified by the terms
of this Interim Order or the DIP Loan Documents, and for avoidance of doubt, any
acts or omissions by any Existing RBL Secured Party or Existing Second Lien
Secured Party in connection with any chapter 11 plan of reorganization or
liquidation in these Cases (whether confirmed under section 1129(a) or (b) of
the Bankruptcy Code), and any distributions on account of, or other treatment
of, any Existing RBL Obligations or Existing Second Lien Obligations pursuant to
any such plan, shall remain subject to the Intercreditor Agreement (including
its turnover provisions) or any other applicable intercreditor or subordination
provisions; provided, however that the foregoing shall not prejudice the rights
of any party to the Intercreditor Agreement to assert that taking any action or
not taking any action is permitted by or prohibited by, as the case may be, the
Intercreditor Agreement, and all parties’ rights with respect to such assertions
are reserved.

534

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I.            Findings Regarding the DIP Facility.

(i)         Need for Postpetition Financing.  The Debtors have an immediate need
to obtain the DIP Loans and use Cash Collateral to, among other things, permit
the orderly continuation of the operation of their business, to maintain
business relationships with vendors, suppliers, and customers, to make payroll,
to make capital expenditures, to satisfy other working capital and general
corporate purposes of the Debtors (including fees and expenses related to the
Cases), to refinance the Refinance Loans, and to otherwise preserve the value of
the Debtors’ estates.  The Debtors’ access to sufficient working capital and
liquidity through the use of Cash Collateral and borrowing under the DIP
Facility is vital to a successful reorganization and/or to otherwise preserve
the enterprise value of the Debtors’ estates.  Immediate and irreparable harm
will be caused to the Debtors and their estates if immediate financing is not
obtained and permission to use Cash Collateral is not granted, in each case in
accordance with the terms of this Interim Order (including the DIP Budget) and
the DIP Loan Documents.

(ii)         No Credit Available on More Favorable Terms.  The Debtors have been
and continue to be unable to obtain financing on more favorable terms from
sources other than the DIP Secured Parties under the DIP Loan Documents and this
Interim Order.  The Debtors are unable to obtain unsecured credit allowable
under section 503(b)(1) of the Bankruptcy Code as an administrative expense or
secured credit allowable only under sections 364(c)(1), 364(c)(2), or 364(c)(3)
of the Bankruptcy Code.  The Debtors are unable to obtain secured credit under
section 364(d)(1) of the Bankruptcy Code without (a) granting to the DIP Secured
Parties the rights, remedies, privileges, benefits, and protections provided
herein and in the DIP Loan Documents, including the DIP Liens and the DIP
Superpriority Claims (as defined below), (b) allowing the DIP Secured Parties to
provide the loans, letters of credit, and other financial accommodations under
the DIP Facility (including, subject to entry of the Final Order, the completion
of the Refinancing) on the terms set forth herein and in the DIP Loan Documents,
(c) granting to the Existing RBL Secured Parties the rights, remedies,
privileges, benefits, and protections provided herein and in the DIP Loan
Documents, including the Existing RBL Adequate Protection and the conversion of
certain Existing RBL Obligations into DIP Obligations through the Refinancing,
and (d) granting to the Existing Second Lien Secured Parties the rights,
remedies, privileges, benefits, and protections provided herein, including the
Existing Second Lien Adequate Protection (all of the foregoing described in
clauses (a), (b), (c), and (d) above, collectively, the “DIP Protections”).

535

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(iii)       Entering into the Refinancing Facility is appropriate because (i)
the aggregate value of the Existing RBL Collateral securing the Existing RBL
Obligations substantially exceeds the aggregate amount of the Refinanced Loans;
(ii) the Refinancing of the Existing RBL Loans into the Refinanced Loans will
provide the Debtors significant savings on account of interest that otherwise
would or could accrue on the Existing RBL Loans at the rate applicable
thereunder during the course of these Cases; and (iii) the Existing RBL Lenders
would not otherwise consent to the use of their Cash Collateral or the
subordination of their liens to the DIP Liens, and the DIP Agent and the
Refinancing DIP Lenders would not be willing to provide the New Money Facility
or extend credit to the Debtors thereunder without the inclusion of the
Refinancing Facility within the DIP Facility.

(iv)      The terms of the DIP Loans pursuant to the DIP Loan Documents and the
use of the Existing Collateral (including the Cash Collateral) pursuant to this
Order are fair and reasonable, reflect the Debtors’ exercise of prudent business
judgment consistent with their fiduciary duties and constitute reasonably
equivalent value and fair consideration.

J.          Interim Financing.  During the Interim Period (as defined below),
the DIP Secured Parties and, as applicable, the Existing RBL Secured Parties and
the Existing Second Lien Secured Parties (together, the “Existing Secured
Parties”) are willing to provide financing to the Debtors and/or consent, or be
deemed to consent, to the use of Cash Collateral by the Debtors, subject to (i)
the entry of this Interim Order and (ii) the terms and conditions of the DIP
Loan Documents.

536

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K.          Adequate Protection for Existing Secured Parties.  The Existing
Secured Parties have agreed to permit the Debtors’ continued use of the Existing
RBL Collateral and the Existing Second Lien Collateral, including the Cash
Collateral, during the Interim Period, subject to the terms and conditions set
forth herein, including the protections afforded a party acting in “good faith”
under section 364(e) of the Bankruptcy Code.  In addition, the DIP Facility
contemplated hereby provides for a priming of the Existing Prior Liens pursuant
to section 364(d) of the Bankruptcy Code.  The Existing Secured Parties are
entitled to the adequate protection as set forth herein, including pursuant to
section 361, 362, 363, and 364 of the Bankruptcy Code.  Based on the DIP Motion
and on the record presented to this Court at the Interim Hearing, the terms of
the proposed adequate protection arrangements, use of the Cash Collateral, and
the DIP Facility contemplated hereby are fair and reasonable, reflect the
Debtors’ prudent exercise of business judgment consistent with their fiduciary
duties, and constitute reasonably equivalent value and fair consideration for
the consent of the Existing Secured Parties.  The Existing RBL Secured Parties
and the Existing Second Lien Secured Parties consent to, or are deemed to
consent to, or if not either of the foregoing, the Court hereby approves the
relief set forth herein over the absence of such consent or lack thereof,
pursuant to the Existing Secured Loan Documents, and, in any event, the
prepetition Liens and security interests of such parties are adequately
protected pursuant to the terms of this Interim Order.  Notwithstanding anything
to the contrary herein, the Existing Secured Parties’ consent to the DIP
Facility and to the priming of the Existing RBL Liens and the Existing Second
Liens by the DIP Liens is expressly limited to the present DIP Facility and the
DIP Liens securing same and shall not be applicable to any other
debtor-in-possession credit facility, even if it contains substantially the same
economic terms as this DIP Facility.

537

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L.          Section 552.  In light of the subordination of their Liens and
superpriority administrative claims to (i) the Carve-Out, in the case of the DIP
Secured Parties, and (ii) the Carve-Out and the DIP Liens, in the case of the
Existing RBL Secured Parties, each of the DIP Secured Parties and the Existing
Secured Parties is entitled to all of the rights and benefits of section 552(b)
of the Bankruptcy Code, and, subject to the entry of the Final Order, the
“equities of the case” exception shall not apply.

M.          Business Judgment and Good Faith Pursuant to Section 364(e).

(i)         The DIP Secured Parties have indicated a willingness to provide
postpetition secured financing, and related hedging, via the DIP Facility to the
Debtors in accordance with the DIP Loan Documents, the Secured Swap Agreements,
and this Interim Order.

(ii)        The terms and conditions of the DIP Facility (including the
Refinancing) as set forth in the DIP Loan Documents and this Interim Order, and
the fees, expenses, and other charges paid and to be paid thereunder or in
connection therewith, are fair, reasonable, and the best available under the
circumstances, and the Debtors’ agreement to the terms and conditions of the DIP
Loan Documents and the Secured Swap Agreements and to the payment of such fees
reflect the Debtors’ exercise of prudent business judgment consistent with their
fiduciary duties.  Such terms and conditions are supported by reasonably
equivalent value and fair consideration.

538

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(iii)       The DIP Secured Parties, the Existing RBL Secured Parties, the
Existing Second Lien Secured Parties and the Debtors, with the assistance and
counsel of their respective advisors, have acted in good faith and at
arm’s-length in, as applicable, negotiating, consenting to, and/or agreeing to,
the DIP Facility (including the Refinancing), the Debtors’ use of the DIP
Collateral, the Existing RBL Collateral, the Existing Second Lien Collateral
(including Cash Collateral), the DIP Loan Documents, and the DIP Protections
(including the Existing RBL Adequate Protection and the Existing Second Lien
Adequate Protection).  The DIP Obligations (including all advances that are made
at any time to the Debtors under the DIP Loan Documents and including the
Refinanced Loans) and the Debtors’ use of the DIP Collateral, the Existing RBL
Collateral, and the Existing Second Lien Collateral (including Cash Collateral)
shall be deemed to have been extended and/or consented to by the DIP Secured
Parties, the Existing RBL Secured Parties, and the Existing Second Lien Secured
Parties for valid business purposes and uses and in good faith, as that term is
used in section 364(e) of the Bankruptcy Code, and in express and good faith
reliance upon the protections offered by section 364(e) of the Bankruptcy Code
and this Interim Order, and, accordingly, the DIP Liens, the DIP Superpriority
Claims, the Existing RBL Adequate Protection, Existing Second Lien Adequate
Protection and the other DIP Protections shall be entitled to the full
protection of section 364(e) of the Bankruptcy Code in the event this Interim
Order or any provision hereof or thereof is vacated, reversed, amended, or
modified on appeal or otherwise.

N.         Relief Essential; Best Interest.  The Debtors have requested
immediate entry of this Interim Order pursuant to Bankruptcy Rules 4001(b)(2)
and 4001(c)(2) and the Local Rules.  Absent granting the relief set forth in
this Interim Order, the Debtors’ estates, their businesses and properties, and
their ability to successfully reorganize or otherwise preserve the enterprise
value of the Debtors’ estates will be immediately and irreparably harmed. 
Consummation of the DIP Facility and authorization of the use of Cash Collateral
in accordance with this Interim Order, the DIP Loan Documents and the Secured
Swap Agreements is therefore in the best interests of the Debtors’ estates and
consistent with their fiduciary duties.  Based on all of the foregoing,
sufficient cause exists for immediate entry of the Interim Order pursuant to
Bankruptcy Rules 4001(b)(2) and 4001(c)(2) and the applicable Local Rules.

539

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NOW, THEREFORE, based on the DIP Motion, the Cofsky Declaration, the First Day
Declaration, and the record before this Court with respect to the DIP Motion,
and with the consent of the Debtors, the Existing RBL Agent, and the requisite
Existing RBL Secured Parties (on behalf of all of the Existing RBL Secured
Parties), and the DIP Agent (on behalf of all of the DIP Secured Parties), and
the consent of the Existing Second Lien Secured Parties, or deemed consent of
the Existing Second Lien Secured Parties pursuant to the terms of the
Intercreditor Agreement, in each case, to the form and entry of this Interim
Order, and good and sufficient cause appearing therefor,

IT IS ORDERED that:

1.          Motion Granted.  The DIP Motion is hereby granted in accordance with
the terms and conditions set forth in this Interim Order and the DIP Loan
Documents.  Any objections, reservations of rights, and/or other statements with
respect to the DIP Motion with respect to the entry of this Interim Order that
have not been withdrawn, waived, or settled, and all reservations of rights
included therein, are hereby denied and overruled.

540

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2.           DIP Loan Documents and DIP Protections.

(a)        Approval of DIP Loan Documents and the Secured Swap Agreements.  The
Debtors are expressly and immediately authorized to enter into the DIP Facility,
to execute, deliver, and perform under the DIP Loan Documents, the Secured Swap
Agreements and this Interim Order, to incur the DIP Obligations (as defined
below), inclusive of $87,500,000 of Refinanced Loans upon entry of this Interim
Order and the remaining $162,500,000 of Refinanced Loans subject to entry of the
Final Order, with each Refinancing DIP Lender’s ratable share based on the ratio
of such Refinancing DIP Lender’s share of the New Money Facility, including the
DIP LC Sub-Facility), in accordance with, and subject to, the terms of this
Interim Order and the DIP Loan Documents, and to execute, deliver, and perform
under all other instruments, certificates, agreements, and documents that may be
required or necessary for the performance by the applicable Debtors under the
DIP Loan Documents the Secured Swap Agreements and the creation and perfection
of the DIP Liens described in, and provided for, by this Interim Order and the
DIP Loan Documents.  The Debtors are hereby authorized and directed to do and
perform all acts and pay the principal, interest, fees, expenses, and other
amounts described in the DIP Loan Documents the Secured Swap Agreements as such
become due pursuant to the DIP Loan Documents the Secured Swap Agreements and
this Interim Order, including all closing fees, administrative fees, commitment
fees, and reasonable and documented attorneys’, financial advisors’, and
accountants’ fees, and disbursements arising under the DIP Loan Documents, the
Secured Swap Agreements and this Interim Order, which amounts shall not be
subject to further approval of this Court and shall be nonrefundable and not
subject to challenge in any respect; provided, that the payment of the fees and
expenses of the Lender Professionals (as defined below) shall be subject to the
provisions of paragraph 23(b).  Upon their execution and delivery, the DIP Loan
Documents the Secured Swap Agreements shall represent the legal, valid, and
binding obligations of the applicable Debtors enforceable against such Debtors
in accordance with their terms.  Each officer of a Debtor acting singly is
hereby authorized to execute and deliver each of the DIP Loan Documents, such
execution and delivery to be conclusive evidence of such officer’s respective
authority to act in the name of and on behalf of the Debtors.

541

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(b)        DIP Obligations.  For purposes of this Interim Order, the term “DIP
Obligations” shall mean all amounts and other obligations and liabilities owing
by the respective Debtors under the DIP Credit Agreement and other DIP Loan
Documents (including all “Obligations” as defined in the DIP Credit Agreement),
including the Refinancing DIP Obligations (as defined below), and shall include
the principal of, interest on, and fees, costs, expenses, premiums, and other
charges owing in respect of, such amounts (including any reasonable and
documented attorneys’, accountants’, financial advisors’, and other fees, costs,
and expenses that are chargeable or reimbursable under the DIP Loan Documents,
the Secured Swap Agreements and/or this Interim Order), and any obligations in
respect of indemnity claims, whether contingent or otherwise.  Notwithstanding
anything to the contrary herein, the relative rights and priorities of the DIP
Secured Parties in respect of the DIP Collateral shall be as provided in this
Interim Order (and, with respect to the Refinancing DIP Secured Parties, as
provided in this Interim Order as to the portion of the Refinancing to be
effectuated with respect to the first $35,000,000 advanced under the New Money
Facility, and upon entry of the Final Order, as provided in such Final Order as
to the portion of the Refinancing to be effectuated with respect to the
remaining $65,000,000 advanced under the New Money Facility) and the other DIP
Loan Documents.

542

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(c)         Authorization to Incur DIP Obligations and Use Cash Collateral.  To
enable the Debtors to continue to operate their business and preserve and
maximize the value of their estates, during the period from the entry of this
Interim Order through and including the earliest to occur of (i) the entry of
the Final Order, or (ii) a Termination Event (as defined below), in each case
unless extended by written agreement of the DIP Agent and the Existing RBL Agent
(the period from the entry of this Interim Order through and including such
earliest date, the “Interim Period”), the DIP Borrower is hereby authorized (x)
to use Cash Collateral, (y) to borrow and obtain letters of credit under the DIP
Facility and (z) to enter into Secured Swap Agreements with Secured Swap
Parties; provided, that (I) the aggregate amount of New Money Loans to be made
available for all such borrowings and letters of credit made during this period
shall not exceed $35,000,000 under the New Money Facility; (II) the Existing RBL
Loans held by Refinancing DIP Lenders will be as part of the Refinancing
converted to Refinanced Loans under the Refinancing Facility, such amount of
Refinanced Loans to be calculated based on each such Refinancing DIP Lender’s
pro rata share of its Commitments to the New Money Facility and otherwise
consistent with the refinancing mechanics described above; (III) any amounts
repaid under the New Money Facility may be reborrowed subject to the terms of
the DIP Loan Documents and this Interim Order; (IV) any proposed use of the
proceeds of DIP Loans or use of Cash Collateral shall be consistent with the
terms and conditions of this Interim Order and the DIP Loan Documents, including
the DIP Budget (as defined below) and the Budget Covenants, subject to any
applicable Permitted Variance, as defined and contained in paragraph 2(f) below;
and (V) any Secured Swap Agreements shall only be entered into with Secured Swap
Parties in accordance with and subject to the limitations set forth in the DIP
Credit Agreement.  Following the entry of the Final Order, the DIP Borrower’s
authority to incur further DIP Obligations, if any, and use further Cash
Collateral will be governed by the terms of such Final Order and the DIP Loan
Documents.  All DIP Obligations shall be unconditionally guaranteed, on a joint
and several basis, by the DIP Guarantors, as further provided in the DIP Loan
Documents.

543

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(d)        Refinancing.  Upon entry of (i) this Interim Order, each Refinancing
DIP Lender’s ratable share of $87,500,000 of the outstanding principal amount of
the Loans (as defined in the Existing RBL Credit Agreement) and (ii) the Final
Order, each Refinancing DIP Lender’s ratable share of an additional $162,500,000
(in each case, with each Refinancing DIP Lender’s ratable share based on the
ratio of such Refinancing DIP Lender’s share of Commitments to the New Money
Facility, including the DIP LC Sub-Facility) will be immediately, automatically,
and irrevocably (upon entry of the Interim Order or the Final Order, as
applicable), deemed to have been converted into Refinancing DIP Obligations (as
defined below) and, except as otherwise provided in the Final Order and the DIP
Loan Documents, shall be entitled to all the priorities, privileges, rights, and
other benefits afforded to the other DIP Obligations under the Final Order and
the DIP Loan Documents.  The conversion of the Refinancing DIP Obligations as
described in this paragraph 2(d) shall be authorized as compensation for, in
consideration for, as a necessary inducement for, and on account of the
agreement of the Refinancing DIP Lenders to fund amounts under the New Money
Facility and not as payments under, adequate protection for, or otherwise on
account of, any Existing RBL Obligations. As used herein, the term “Refinancing
DIP Obligations” shall mean the Refinanced Loans and all interest accrued and
accruing thereon and all other amounts owing by the respective Debtors in
respect thereof.

544

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(e)         Budget.  Attached hereto as Schedule 2 is the Debtors’ initial
13-week cash flow forecast (the “Initial 13-Week Cash Flow Forecast”), which
shall be consistent in all material respects with the applicable period covered
by the initial DIP Budget, attached hereto as Schedule 3, including amounts
required to be paid with respect to the DIP Facility (the “Initial DIP Budget”),
that reflects on a line-item basis the Debtors’ (i) weekly projected cash
receipts (including from non-ordinary course assets sales), (ii) weekly
projected disbursements (including ordinary course operating expenses,
bankruptcy-related expenses under the Cases, capital expenditures, issuances of
any letter of credit, including the fees relating thereto, and estimated fees
and expenses of the DIP Agent (including counsel and financial advisors
therefor), the Existing RBL Agent (including counsel and financial advisors
therefor), the Existing Second Lien Agent (including counsel and financial
advisors therefor), and any other fees and expenses relating to the DIP
Facility), and certain funds managed by GSO Capital Partners LP, which are
lenders under the Existing Second Lien Loan Documents (the “Existing Required
Second Lien Lenders”), (iii) the sum of weekly unused availability under the DIP
Facility plus unrestricted cash on hand (collectively, “Aggregate Liquidity”),
and (iv) the weekly outstanding principal balance of the loans made and letters
of credit issued under the DIP Facility (including the principal amount of the
Refinanced Loans).  Commencing on June 28, 2019 (the “Initial Reporting Date”)
and continuing on every fourth Friday (each, a “Subsequent Reporting Date” and,
each such Subsequent Reporting Date together with the Initial Reporting Date, a
“Reporting Date”), the Debtors shall prepare and deliver to the DIP Agent, the
Existing RBL Agent and the Existing Required Second Lien Lenders (i) an updated
“rolling” 13-week cash flow forecast (the “Proposed 13-Week Cash Flow Forecast”)
and (ii) and an updated DIP Budget (as defined below) (a “Proposed DIP Budget”),
which each shall be in form and substance reasonably satisfactory to the DIP
Agent and subject to the DIP Agent’s approval in its reasonable discretion,
provided, that the DIP Agent shall have five (5) Business Days to approve any
Proposed 13-Week Cash Flow Forecast and Proposed DIP Budget, and provided,
further that if the DIP Agent does not approve any Proposed 13-Week Cash Flow
Forecast and/or Proposed DIP Budget by the sixth Business Day following receipt
thereof, the previously delivered 13-Week Cash Flow Forecast (as defined below)
and DIP Budget (as defined below) shall remain in effect for purposes of
variance testing and reporting described in paragraph 2(f) below), and that the
13-Week Cash Flow Forecast shall at all times be consistent with the DIP Budget.
For the avoidance of doubt, unless the DIP Agent has approved in writing the
Proposed 13-Week Cash Flow and Proposed DIP Budget, or any other proposed
modification to the Initial 13-Week Cash Flow Forecast or Supplemental 13-Week
Cash Flow Forecast, and the Initial DIP Budget or Supplemental DIP Budget, as
applicable, then in effect, the Debtors shall continue to be subject to and be
governed by the terms of the Initial 13-Week Cash Flow Forecast or Supplemental
13-Week Cash Flow Forecast (as defined below), and the Initial DIP Budget or
Supplemental DIP Budget (as defined below), as applicable, then in effect, in
accordance with this Interim Order, and the DIP Secured Parties and the Existing
RBL Secured Parties shall, as applicable, have no obligation to fund under any
such Proposed 13-Week Cash Flow Forecast or Proposed DIP Budget or otherwise
fund any amounts not otherwise provided for in the Initial 13-Week Cash Flow
Forecast or Supplemental 13-Week Cash Flow Forecast, nor the Initial DIP Budget
or Supplemental DIP Budget, as applicable, or permit the use of Cash Collateral
with respect thereto, as applicable.  Once the Proposed 13-Week Cash Flow
Forecast and Proposed DIP Budget have each been approved in writing by the DIP
Agent, each shall supplement and replace the Initial 13-Week Cash Flow Forecast
or the Supplemental 13-Week Cash Flow Forecast (as defined below), and the
Initial DIP Budget or the Supplemental DIP Budget (as defined below), as
applicable, then in effect (each such Proposed 13-Week Cash Flow Forecast and
Proposed DIP Budget that has been approved in writing by the DIP Agent pursuant
to the terms of this Interim Order, respectively a “Supplemental 13-Week Cash
Flow Forecast” and a “Supplemental DIP Budget”) without further notice, motion,
or application to, order of, or hearing before, this Court (the Initial 13-Week
Cash Flow Forecast, as modified by all Supplemental 13-Week Cash Flow Forecast,
shall constitute the “13-Week Cash Flow Forecast”, and the Initial DIP Budget,
as modified by all Supplemental DIP Budgets, shall constitute the “DIP Budget”).

545

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(f)         Budget Covenants.  The Debtors shall only incur DIP Obligations and
expend Cash Collateral and other DIP Collateral proceeds in accordance with the
DIP Budget (and, in the case of the costs and expenses of the DIP Agent and the
Existing RBL Agent, in accordance with the DIP Loan Documents and this Interim
Order without being limited by the DIP Budget), subject to the Permitted
Variances set forth in this paragraph, which shall be tested on each Friday (or,
if such Friday is not a Business Day, the immediately preceding Business Day)
immediately following each Reporting Date (such date, the “Variance Testing
Date”).  On or before 5:00 p.m. (prevailing Eastern Time) on each Variance
Testing Date, the Debtors shall prepare and deliver, which shall be certified by
a financial officer of the Debtors and in form and substance reasonably
satisfactory to the DIP Agent, the Existing RBL Agent and the Existing Required
Second Lien Lenders, a variance report tested as of the most recent Reporting
Date for the four-week period ending on such Reporting Date (each such period, a
“Variance Testing Period”, and each such report, a “Variance Report”) setting
forth: (i) the aggregate disbursements of the Debtors for line items other than
capital expenditures and aggregate receipts during the applicable Variance
Testing Period, (ii) any variance (whether positive or negative, expressed as a
percentage) between the aggregate disbursements for line items other than
capital expenditures made during such Variance Testing Period by the Debtors
against the aggregate disbursements for line items other than capital
expenditures for the Testing Period set forth in the applicable 13-Week Cash
Flow Forecast and DIP Budget, (iii) the aggregate disbursements of the Debtors
for capital expenditures during the applicable Variance Testing Period, and (iv)
any variance (whether positive or negative, expressed as a percentage) between
the aggregate disbursements for capital expenditures for the testing Period set
forth in the applicable 13-Week Cash Flow Forecast and DIP Budget; and (e) on
the last calendar day of each week, the Debtors shall deliver to the DIP Agent,
the Existing RBL Agent and the Existing Required Second Lien Lenders a variance
report comparing the Debtors’ actual receipts and disbursements for the prior
calendar week and the prior four calendar weeks (on a cumulative basis) with the
projected receipts and disbursements for such week and the prior four calendar
weeks (on a cumulative basis) as reflected in the applicable DIP Budget for such
weeks (the “Cumulative Variance Report”), which Cumulative Variance Report shall
include a report from the Debtors identifying and addressing any variance of
actual performance to projected performance for the prior week.  The Debtors
shall not allow, during any Variance Testing Period,  the Debtors’ actual cash
expenses and disbursements during such Variance Testing Period to be more than
115% of the projected cash expenses and disbursements for such Variance Testing
Period, as set forth in the DIP Budget (the “Permitted Variance”), provided,
that the cash expenses and disbursements considered for determining compliance
with this covenant shall exclude (i) disbursements and expenses in respect of
professional fees incurred in the Bankruptcy Cases during such Variance Testing
Period and (ii) disbursements owed to third parties on account of royalty
interests and working interests and provided, further that the Debtors may carry
forward budgeted but unused disbursements set forth in the DIP Budget for a
Variance Testing Period for use during the immediately succeeding Variance
Testing Period.

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(g)         Interest, Fees, Costs, Indemnities, and Expenses.  The DIP
Obligations shall bear interest at the rates, and be due and payable (and paid),
as set forth in, and in accordance with the terms and conditions of, this
Interim Order and the DIP Loan Documents, in each case without further notice,
motion, or application to, order of, or hearing before, this Court.  The Debtors
shall pay within two Business Days (as defined in the DIP Credit Agreement) all
fees, costs, indemnities, expenses (including reasonable and documented
out-of-pocket legal and other professional fees and expenses of the DIP Agent
and the Secured Swap Parties to the extent provided in the DIP Credit
Agreement), and other charges payable under the terms of the DIP Loan Documents
and the Secured Swap Agreements.  All such fees, costs, indemnities, expenses,
and disbursements, whether incurred, paid or required to be paid prepetition or
postpetition and whether or not budgeted in the DIP Budget, are hereby affirmed,
ratified, authorized, and payable (and any funds held by the DIP Agent and/or
its professionals as of the Petition Date for payment of such fees, costs,
indemnities, expenses, and disbursements may be applied for payment) as
contemplated in this Interim Order and the DIP Loan Documents, and, subject to
the provisions of paragraph 23(b) with respect to the fees and expenses of the
Lender Professionals, shall be non-refundable and not subject to challenge in
any respect and shall be payable without need to obtain further Court approval.

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(h)        Use of DIP Facility and Proceeds of DIP Collateral.  The DIP Borrower
shall apply the proceeds of all DIP Collateral solely in accordance with this
Interim Order, the DIP Loan Documents, and the DIP Budget (subject to any
applicable Permitted Variance).  Without limiting the foregoing, the Debtors
shall not be permitted to make any payments (from the DIP Collateral, the
proceeds of DIP Loans, or otherwise) on account of any prepetition debt or
obligation prior to the effective date of a confirmed chapter 11 plan or plans
with respect to any of the Debtors, except (i) with respect to the Existing RBL
Obligations or the Refinanced Loans, as set forth in this Interim Order and a
Final Order; (ii) as provided in the orders entered by the Court in the Cases
(other than this Interim Order) (the “First Day Orders”) pursuant to motions and
applications filed by the Debtors within ten (10) days after the Petition Date,
which First Day Orders shall be in form and substance reasonably acceptable to
the DIP Agent with respect to any provisions that affect the rights or duties of
the DIP Secured Parties or the Existing RBL Secured Parties; (iii) as expressly
provided in other motions, orders, and requests for relief, each in form and
substance reasonably acceptable to the DIP Secured Parties and the Existing RBL
Agent prior to such motion, order, or request for such relief being filed; or
(iv) as otherwise expressly provided in the DIP Credit Agreement, without giving
effect to any amendment or waiver thereof to which the Existing RBL Agent has
not consented in writing.

548

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(i)        Conditions Precedent.  The DIP Secured Parties and Existing RBL
Secured Parties each have no obligation to extend credit under the DIP Facility
or permit use of any DIP Collateral or Existing RBL Collateral or any proceeds
thereof, including Cash Collateral, as applicable, during the Interim Period
unless and until all conditions precedent to the extension of credit and/or use
of DIP Collateral, Existing RBL Collateral, or proceeds thereof under the DIP
Loan Documents and this Interim Order have been satisfied in full or waived in
writing by the DIP Secured Parties and the Existing RBL Agent in accordance with
the DIP Loan Documents or Existing RBL Credit Agreement, as applicable, and this
Interim Order.

(j)         DIP Liens.  Subject to the Carve-Out, as security for the DIP
Obligations, effective as of the Petition Date, the following security interests
and Liens, which shall immediately and without any further action by any Person
be valid, binding, perfected, continuing, enforceable, and non-avoidable upon
the entry of this Interim Order, are hereby granted by the Debtors to the DIP
Agent, for itself and the other DIP Secured Parties (all such security interests
and Liens granted to the DIP Agent for the benefit of all the DIP Secured
Parties pursuant to this Interim Order and the DIP Loan Documents, the “DIP
Liens”), on all assets and property of any kind (including all assets pledged
under, and the “Collateral” as defined in, the Existing RBL Loan Documents) that
is subject to a lien in favor of the DIP Agent to secure the DIP Obligations or
which under the terms of any DIP Loan Document is purported to be subject to
such lien, which includes, for the avoidance of doubt, all existing (whether
pre- or post-petition) and after-acquired, tangible and intangible, personal and
real property and assets of each of the Debtors and any proceeds thereof
(including, upon entry of the Final Order, the proceeds of Avoidance Actions (as
defined below), whether received by judgment, settlement, or otherwise)
(collectively, the “DIP Collateral”) provided, that such DIP Collateral shall
not include (a) the Excluded Assets (as defined in the DIP Credit Agreement)
(collectively, the “Excluded Assets”); or (b) any Building or Manufactured
(Mobile) Home (each as defined in the applicable Flood Insurance Regulations),
unless and until (A) the DIP Lenders have determined, pursuant to the DIP Loan
Documents, that such Building or Manufactured (Mobile) Home is not covered by
and does not require flood insurance or (B) flood insurance in form and
substance satisfactory to the DIP Lenders has been obtained; except that the DIP
Collateral shall include any Building or Manufactured (Mobile) Home located at
1760 Anderson County Road 2608, Tennessee Colony, Anderson County, Texas
75681-0000; provided, that the Avoidance Actions themselves shall not be DIP
Collateral; provided, further, that the DIP Liens on the proceeds of Avoidance
Actions shall be subject to the entry of the Final Order:

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(A)       pursuant to section 364(c)(2) of the Bankruptcy Code, a perfected,
binding, continuing, enforceable, and non-avoidable first priority Lien on and
security interest in all DIP Collateral that is not otherwise subject to a
valid, perfected, and enforceable security interest or Lien in existence as of
the Petition Date or a valid Lien perfected (but not granted) after the Petition
Date (to the extent that such perfection in respect of a prepetition claim is
expressly permitted under the Bankruptcy Code) including, subject to the entry
of the Final Order, any proceeds or property recovered, unencumbered or
otherwise under sections 502(d), 544, 545, 547, 548, 549, 550, and 553 of the
Bankruptcy Code and any other avoidance or similar action under the Bankruptcy
Code or similar state or municipal law (collectively, the “Avoidance Actions”),
whether received by judgment, settlement, or otherwise;

(B)       pursuant to section 364(c)(3) of the Bankruptcy Code, a perfected,
binding, continuing, enforceable, and non-avoidable Lien on and security
interest in all DIP Collateral that is subject solely to the Existing Prior
Liens, which DIP Lien shall be junior only to such Existing Prior Liens and the
Carve-Out; and

(C)       pursuant to Bankruptcy Code section 364(d), a perfected, binding,
continuing, enforceable, and non-avoidable first priority, senior priming Lien
on and security interest in all other DIP Collateral, including Cash Collateral,
all accounts receivable, inventory, real and personal property, plant and
equipment of the Debtors that secure the obligations of the Debtors under the
Existing RBL Credit Facility and the Existing Second Lien Credit Facility
(collectively, the “Existing Primed Secured Facilities”; the lenders, holders
and agents under the Existing Primed Secured Facilities, the “Existing Primed
Secured Parties”), to the extent that such DIP Collateral is subject to valid,
perfected and non-avoidable liens in favor of third parties as of the
commencement of the Bankruptcy Case; which Priming Liens (as defined below)
shall be senior to the Adequate Protection Liens and senior and priming to (A)
the Existing RBL Liens and (B) any Liens that are junior to the Existing RBL
Liens or the Existing RBL Adequate Protection Liens, after giving effect to any
intercreditor or subordination agreements (the Liens referenced in clauses (A)
and (B), collectively, the “Priming Liens”).

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(k)        Enforceable Obligations.  The DIP Loan Documents and the Secured Swap
Agreements shall constitute and evidence the valid and binding DIP Obligations
of the Debtors, which DIP Obligations shall be enforceable against the Debtors,
their estates, and any successors thereto (including any trustee or other estate
representative in any Successor Case (as defined below), and their creditors and
other parties-in-interest, in accordance with their terms.  Subject to the
provisions of paragraph 2(d) hereof with respect to the Refinancing DIP
Obligations, no obligation, payment, transfer, or grant of security under the
DIP Credit Agreement, the other DIP Loan Documents, or this Interim Order shall
be stayed, restrained, voidable, avoidable, disallowable, or recoverable under
the Bankruptcy Code or under any applicable law (including under section 502(d),
544, 547, 548, or 549 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, or similar
statute or common law), or subject to any avoidance, reduction, setoff,
surcharge, recoupment, offset, recharacterization, subordination (whether
equitable, contractual, or otherwise), counterclaim, cross-claim, defense, or
any other challenge under the Bankruptcy Code or any applicable law or
regulation by any person or entity.

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(l)         Superpriority Administrative Claim Status.  In addition to the DIP
Liens granted herein, effective immediately upon entry of this Interim Order,
(i) all of the DIP Obligations and (ii) the Secured Swap Obligations (as defined
in the DIP Credit Agreement) owing to any DIP Lender or its Affiliate (as
defined in the DIP Credit Agreement) under any Secured Swap Agreement shall
constitute allowed superpriority administrative claims pursuant to section
364(c)(1) of the Bankruptcy Code, which shall have priority, subject only to the
payment of the Carve-Out (as defined below) in accordance with this Interim
Order, over all administrative expense claims, adequate protection and other
diminution claims (including the Existing RBL Adequate Protection Superpriority
Claims (as defined below) and the Second Lien Adequate Protection Superpriority
Claims (as defined below)), priority and other unsecured claims, and all other
claims against the Debtors or their estates, now existing or hereafter arising,
of any kind or nature whatsoever, including administrative expenses or other
claims of the kinds specified in section 105, 326, 328, 330, 331, 503(a),
503(b), 506(c) (subject to the entry of the Final Order to the extent provided
in paragraph 8), 507(a), 507(b), 546, 726, 1113, and 1114, whether or not such
expenses or claims may become secured by a judgment Lien or other non-consensual
Lien, levy, or attachment (the “DIP Superpriority Claims”), which such claims
arising in respect of the New Money Facility and the Refinancing Facility shall
be pari passu.  The DIP Superpriority Claims shall, for purposes of section
1129(a)(9)(A) of the Bankruptcy Code, be considered administrative expenses
allowed under section 503(b) of the Bankruptcy Code, shall be against each
Debtor on a joint and several basis, and shall be payable from and have recourse
to all prepetition and postpetition property of the Debtors and all proceeds
thereof, including, subject to entry of the Final Order, the proceeds of
Avoidance Actions, whether received by judgment, settlement, or otherwise. 
Other than with respect to the Carve-Out, no costs or expenses of
administration, including professional fees allowed and payable under section
328, 330, or 331 of the Bankruptcy Code, or otherwise, that have been or may be
incurred in these proceedings or in any Successor Cases, and no priority claims
are, or will be, senior to, prior to, or on a parity with the DIP Superpriority
Claims.  For the avoidance of doubt, the DIP Superpriority Claims granted to the
Refinancing DIP Secured Parties shall rank pari passu with the DIP Superpriority
Claims of the other DIP Secured Parties.

552

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(m)       Priority of DIP Liens and DIP Superpriority Claims.  Subject in all
respects to the Carve-Out (as defined herein), the DIP Liens and the DIP
Superpriority Claims: (i) shall not be subject to section 510, 549, 550, or 551
of the Bankruptcy Code or, subject to entry of the Final Order, section 506(c)
of the Bankruptcy Code or the “equities of the case” exception of section 552 of
the Bankruptcy Code, (ii) shall not be subordinate to, or pari passu with (A)
any Lien that is avoided and preserved for the benefit of the Debtors and their
estates under section 551 of the Bankruptcy Code or otherwise or (B) any Liens
or claims of any Debtor or any direct or indirect subsidiary thereof against any
Debtor or any of such Debtor’s property, (iii) shall be valid and enforceable
against any trustee or any other estate representative elected or appointed in
the Cases, upon the conversion of any of the Cases to a case under chapter 7 of
the Bankruptcy Code or in any other proceedings related to any of the foregoing
(each, a “Successor Case”), and/or upon the dismissal of any of the Cases, and
(iv) notwithstanding anything to the contrary in any First Day Order of this
Court in any of the Cases, shall be senior to any administrative claims arising
under any such First Day Order.

3.           Adequate Protection for Existing RBL Secured Parties.  With respect
to all Existing RBL Loans that have not been converted to Refinanced Loans, in
consideration for the use of the Existing RBL Collateral (including Cash
Collateral) and the priming of the Existing RBL Liens, the Existing RBL Agent,
for the benefit of the Existing RBL Secured Parties, shall receive the following
adequate protection (collectively, the “Existing RBL Adequate Protection”):

553

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(a)        Existing RBL Loans Interest Payments.  The Existing RBL Lenders shall
be entitled to payment of all interest accruing on their pro rata share of the
Existing RBL Facility regardless of whether such interest accrued before or
after the Petition Date, which shall be paid in cash at the rate of ABR plus 4%
per annum on the last day of each month (or, if such day is not a Business Day,
the next Business Day) and on the Maturity Date.

(b)        Existing RBL Adequate Protection Liens.  To the extent there is a
diminution in value of the interests of the Existing RBL Secured Parties in the
Existing RBL Collateral (including Cash Collateral) from and after the Petition
Date, the Existing RBL Agent, for the benefit of all the Existing RBL Secured
Parties, is hereby granted, subject to the terms and conditions set forth below,
pursuant to section 361, 363(e), and 364 of the Bankruptcy Code, replacement
Liens upon all of the DIP Collateral, including, subject to the entry of the
Final Order, the proceeds of Avoidance Actions, whether received by judgment,
settlement, or otherwise (such adequate protection replacement Liens, the
“Existing RBL Adequate Protection Liens”), which Existing RBL Adequate
Protection Liens on such DIP Collateral shall be subject and subordinate only to
the DIP Liens, the Existing Prior Liens and the Carve-Out.

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(c)       Existing RBL Adequate Protection Superpriority Claims.  To the extent
of any diminution in value of the Existing RBL Collateral from and after the
Petition Date, the Existing RBL Secured Parties are hereby further granted
allowed superpriority administrative claims (such adequate protection
superpriority claims, the “Existing RBL Adequate Protection Superpriority
Claims”), pursuant to section 507(b) of the Bankruptcy Code, with priority over
all administrative expense claims and priority and other unsecured claims
against the Debtors or their estates, now existing or hereafter arising, of any
kind or nature whatsoever, including administrative expenses of the kind
specified in section 105, 326, 328, 330, 331, 503(a), 503(b), 506(c) (subject to
the entry of the Final Order to the extent provided in paragraph 8), 507(a),
507(b), 546(c), 546(d), 726 , 1113, 1114, junior only to the DIP Superpriority
Claims and the Carve-Out to the extent provided herein, and payable from and
having recourse to all prepetition and postpetition property of the Debtors and
all proceeds thereof (including, subject to entry of the Final Order, all
proceeds of Avoidance Actions, whether received by judgment, settlement, or
otherwise); provided, that the Existing RBL Secured Parties shall not receive or
retain any payments, property, or other amounts in respect of the Existing RBL
Adequate Protection Superpriority Claims unless and until all DIP Obligations
have been Paid in Full. Subject to the relative priorities set forth above, the
Existing RBL Adequate Protection Superpriority Claims against each Debtor shall
be allowed and enforceable against each Debtor and its estate on a joint and
several basis.  For purposes of this Interim Order, the terms “Paid in Full,”
“Repaid in Full,” “Repay in Full,” “Pay in Full,” and “Payment in Full” shall
mean, with respect to any referenced DIP Obligations and/or Existing RBL
Obligations, (i) the indefeasible payment in full in cash of such obligations,
and (ii) the termination or cash collateralization, in accordance with the DIP
Loan Documents or Existing RBL Loan Documents, as applicable, of all undrawn
letters of credit outstanding thereunder, and (iii) the termination of all
credit commitments under the DIP Loan Documents and/or Existing RBL Loan
Documents, as applicable.

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(d)        Priority of Existing RBL Adequate Protection Liens and Existing RBL
Adequate Protection Superpriority Claims.  Subject in all respects to the
Carve-Out, the Existing RBL Adequate Protection Liens and the Existing RBL
Adequate Protection Superpriority Claims (i) shall not be subject to section
510, 549, 550, or 551 of the Bankruptcy Code or, subject to entry of the Final
Order, section 506(c) of the Bankruptcy Code or the “equities of the case”
exception of section 552 of the Bankruptcy Code, (ii) shall not be subordinate
to, or pari passu with (A) any Lien that is avoided and preserved for the
benefit of the Debtors and their estates under section 551 of the Bankruptcy
Code or otherwise or (B) any Liens or claims of any Debtor or any direct or
indirect subsidiary thereof against any Debtor or any of such Debtor’s property,
(iii) shall be valid, binding, perfected, and enforceable against any trustee or
any other estate representative elected or appointed in the Cases or any
Successor Cases, and/or upon the dismissal of any of the Cases, and (iv)
notwithstanding anything to the contrary in any First Day Order of this Court in
any of the Cases, shall be senior to any administrative claims arising under any
such First Day Order.

(e)        Professional Fees of Existing RBL Secured Parties.  Subject to
paragraph 23(b) herein, as further adequate protection, and without limiting any
rights of the Existing RBL Agent and the other Existing RBL Secured Parties
under section 506(b) of the Bankruptcy Code, which rights are hereby preserved,
and in consideration, and as a requirement, for obtaining the consent of those
Existing RBL Secured Parties that have so consented to the entry of this Interim
Order and the Debtors’ consensual use of Cash Collateral as provided herein, the
Debtors shall pay or reimburse in cash the Existing RBL Secured Parties for any
and all reasonable and documented fees, expenses, and charges to the extent, and
at the times, payable under the Existing RBL Loan Documents, including any
unpaid fees and expenses accrued prior to or after the Petition Date within five
(5) Business Days after the presentment of any such invoices to the Debtors.

(f)        The Debtors shall deliver to the Existing RBL Agent and Existing
Required Second Lien Lenders all information, reports, documents, and other
material that the Debtors provide to the DIP Secured Parties pursuant to the DIP
Loan Documents.

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(g)        Notwithstanding the Payment in Full of the DIP Obligations and the
termination of the DIP Loan Documents, this Interim Order or Final Order, as
applicable, shall continue in full force and effect for the benefit of the
Existing RBL Agent and the Existing RBL Secured Parties, and may be enforced by
the Existing RBL Agent until such time as the Existing RBL Secured Obligations
are Paid in Full.  Unless otherwise expressly set forth herein or in the DIP
Loan Documents, any consent or approval rights or similar rights granted or
referenced in this Interim Order or in the DIP Loan Documents in favor of any or
all of the DIP Agent, the other DIP Secured Parties, the Existing RBL Agent, and
the other Existing RBL Secured Parties may be exercised (or not exercised) in
the sole discretion of such party.

(h)        Right to Seek Additional Adequate Protection.  The Existing RBL
Agent, on behalf of the Existing RBL Secured Parties, may request Court approval
for additional or alternative adequate protection, without prejudice to any
objection of the Debtors or any other party in interest to the grant of any
additional or alternative adequate protection (consistent with the Intercreditor
Agreement); provided, that any such additional or alternative adequate
protection shall at all times be subordinate and junior to the Carve-Out and the
claims and liens of the DIP Secured Parties granted under this Interim Order and
the DIP Loan Documents; provided, further, that nothing in this paragraph shall
authorize the Existing RBL Agent or Existing RBL Secured Parties to deny the
Debtors access to Cash Collateral or DIP Loans in accordance with the DIP Budget
(including any Permitted Variances) pursuant to the terms of this Interim Order
during the pendency of such request for additional or alternative adequate
protection.

4.           Adequate Protection for Existing Second Lien Secured Parties.  In
consideration for the use of the Existing Second Lien Collateral (including Cash
Collateral) and the priming of the Existing Second Liens, the Existing Second
Lien Agent, for the benefit of the Existing Second Lien Secured Parties, shall
receive, subject to the Carve-Out and the terms of the Intercreditor Agreement,
the following adequate protection (collectively, the “Existing Second Lien
Adequate Protection” and, together with the Existing RBL Adequate Protection,
the “Existing Secured Party Adequate Protection”):

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(a)       Second Lien Adequate Protection Liens.  To the extent there is a
diminution in value of the interests of the Existing Second Lien Secured Parties
in the Existing Second Lien Collateral (including Cash Collateral) from and
after the Petition Date, the Existing Second Lien Agent, for the benefit of all
the Existing Second Lien Secured Parties, is hereby granted, subject to the
terms and conditions set forth below, pursuant to section 361, 363(e), and 364
of the Bankruptcy Code, replacement Liens upon all of the DIP Collateral,
including, subject to the entry of the Final Order, the proceeds of Avoidance
Actions, whether received by judgment, settlement, or otherwise (such adequate
protection replacement Liens, the “Second Lien Adequate Protection Liens” and,
together with the Existing RBL Adequate Protection Liens, the “Adequate
Protection Liens”), which Second Lien Adequate Protection Liens on such DIP
Collateral shall be subject and subordinate only to the DIP Liens, the Existing
Prior Liens, the Existing RBL Adequate Protection Liens, the Existing RBL Liens,
and the Carve-Out; provided that, the Adequate Protection Liens shall attach
automatically to DIP Collateral upon entry of this Interim Order.  The Second
Lien Adequate Protection Liens (i) shall not be subject to sections 510, 549,
550, or 551 of the Bankruptcy Code or, subject to entry of the Final Order,
section 506(c) of the Bankruptcy Code or the “equities of the case” exception of
section 552 of the Bankruptcy Code, (ii) shall not be subordinate to, or pari
passu with (A) any Lien that is avoided and preserved for the benefit of the
Debtors and their estates under section 551 of the Bankruptcy Code or otherwise
or (B) any Liens or claims of any Debtor or any direct or indirect subsidiary
thereof against any Debtor or any of such Debtor’s property, (iii) shall be
valid, binding, perfected, and enforceable against any trustee or any other
estate representative elected or appointed in the Cases or any Successor Cases,
and/or upon the dismissal of any of the Cases, and (iv) notwithstanding anything
to the contrary in any First Day Order of this Court in any of the Cases, shall
be senior to any administrative claims arising under any such First Day Order. 
For the avoidance of doubt, the Second Lien Adequate Protection Liens shall at
all times remain subject to the Intercreditor Agreement.

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(b)        Enforceable in Successor Cases.  The Second Lien Adequate Protection
Liens shall be valid, binding, perfected, and enforceable against any trustee or
any other estate representative elected or appointed in the Cases or any
Successor Cases, and/or upon the dismissal of any of the Cases.  For the
avoidance of doubt, the Second Lien Adequate Protection Liens shall at all times
remain subject to the Intercreditor Agreement.

(c)        Second Lien Adequate Protection Superpriority Claims.  To the extent
of Diminution in Existing Second Lien Collateral Value, the Existing Second Lien
Secured Parties are hereby further granted allowed superpriority administrative
claims (such adequate protection superpriority claims, the “Second Lien Adequate
Protection Superpriority Claims”), pursuant to section 507(b) of the Bankruptcy
Code, with priority over all administrative expense claims and priority and
other unsecured claims against the Debtors or their estates, now existing or
hereafter arising, of any kind or nature whatsoever, including administrative
expenses of the kind specified in section 105, 326, 328, 330, 331, 503(a),
503(b), 506(c) (subject to the entry of the Final Order to the extent provided
in paragraph 8), 507(a), 507(b), 546(c), 546(d), 726 , 1113, 1114, junior only
to the DIP Superpriority Claims, the Existing RBL Adequate Protection
Superpriority Claims, and the Carve-Out to the extent provided herein, and
payable from and having recourse to all prepetition and postpetition property of
the Debtors and all proceeds thereof (including, subject to the entry of the
Final Order, the proceeds of Avoidance Actions, whether received by judgment,
settlement, or otherwise); provided, that the Existing Second Lien Secured
Parties shall not receive or retain any payments, property, or other amounts in
respect of the Second Lien Adequate Protection Superpriority Claims unless and
until all DIP Obligations, Existing RBL Obligations, and the Existing RBL
Adequate Protection Superpriority Claims have been Paid in Full.  Subject to the
relative priorities set forth above, the Second Lien Adequate Protection
Superpriority Claims against each Debtor shall be allowed and enforceable
against each Debtor and its estate on a joint and several basis.  The Second
Lien Adequate Protection Superpriority Claims granted to the Existing Second
Lien Secured Parties may be impaired pursuant to any chapter 11 plan of
reorganization in the Cases with the vote of the applicable class of the holders
of such claims that satisfies the requirements of section 1126 of the Bankruptcy
Code, in which case, Payment in Full (or any of the other variants of this
phrase referenced above) would occur upon consummation of such plan.

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(d)        Postpetition Accrual of Interest.  Subject to the terms of this
Interim Order and the terms of the Intercreditor Agreement, the Existing Second
Lien Obligations shall accrue interest under the Existing Second Lien Credit
Facility on a payment-in-kind basis to the extent determined to be allowable by
the Bankruptcy Court under section 506(b) of the Bankruptcy Code.

(e)       Consent to Priming and Adequate Protection.  The Existing Second Lien
Agent, on behalf of the Existing Second Lien Secured Parties, consents, or
pursuant to the Intercreditor Agreement, is deemed to consent, to the Existing
Second Lien Adequate Protection and the priming provided for herein; provided,
that such consent of the Existing Second Lien Agent to the priming of the
Existing Second Liens and the use of Cash Collateral is expressly conditioned
upon the entry of this Interim Order.

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(f)         Professional Fees of Existing Second Lien Secured Parties.  Subject
to paragraph 23(b) hereof and the terms of the Intercreditor Agreement, as
further adequate protection, and without limiting any rights of the Existing
Second Lien Agent and the other Existing Second Lien Secured Parties, which
rights are hereby preserved, and in consideration, and as a requirement, for
obtaining the consent of those Existing Second Lien Secured Parties that have so
consented to the entry of this Interim Order and the Debtors’ consensual use of
Cash Collateral as provided herein, the Debtors shall pay or reimburse in cash
the Existing Second Lien Secured Parties for any and all reasonable and
documented fees and expenses (including, without limitation, those of Latham &
Watkins LLP, PJT Partners, and Porter Hedges as local counsel) to the extent,
and at the times, payable under the Existing Second Lien Loan Documents,
including any unpaid fees and expenses accrued prior to or after the Petition
Date within five (5) Business Days after the presentment of any such invoices to
the Debtors.

(g)       The Debtors shall deliver to the Existing Required Second Lien Lenders
all information, reports, documents, and other material that the Debtors provide
to the DIP Secured Parties and the Existing RBL Agent pursuant to the DIP Loan
Documents.

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5.           Automatic Postpetition Lien Perfection.  This Interim Order shall
be sufficient and conclusive evidence of the validity, enforceability,
perfection, and priority of the DIP Liens and the Adequate Protection Liens
without the necessity of (a) filing or recording any financing statement, deed
of trust, mortgage, security agreement, pledge agreement, control agreement, or
other instrument or document that may otherwise be required under the law of any
jurisdiction, (b) obtaining “control” (as defined in any applicable Uniform
Commercial Code or other law) over any DIP Collateral (and the DIP Agent, and,
after Payment in Full of the DIP Obligations, the Existing RBL Agent, shall be
deemed, without any further action, to have control over all the Debtors’
deposit accounts, securities accounts, and commodities accounts within the
meaning of such Uniform Commercial Code and other law), or (c) taking any other
action to validate or perfect the DIP Liens and the Adequate Protection Liens or
to entitle the DIP Liens and the Adequate Protection Liens to the priorities
granted herein.  Notwithstanding the foregoing, each of the DIP Agent, the
Existing RBL Agent (solely with respect to the Existing RBL Adequate Protection
Liens), and the Existing Second Lien Agent (solely with respect to the Existing
Second Lien Adequate Protection Liens) may, each in their sole discretion, enter
into and file, as applicable, financing statements, mortgages, security
agreements, notices of Liens, and other similar documents, and is hereby granted
relief from the automatic stay of section 362 of the Bankruptcy Code in order to
do so, and all such financing statements, mortgages, security agreements,
notices, and other agreements or documents shall be deemed to have been entered
into, filed, or recorded as of the Petition Date.  The applicable Debtors shall
execute and deliver to the DIP Agent, the Existing RBL Agent and/or the Existing
Second Lien Agent, as applicable, all such financing statements, mortgages,
notices, and other documents as such parties may reasonably request to evidence
and confirm the contemplated validity, perfection, and priority of the DIP
Liens, the Existing RBL Adequate Protection Liens, and the Second Lien Adequate
Protection Liens as applicable, granted pursuant hereto.  Without limiting the
foregoing, each of the DIP Agent, the Existing RBL Agent, and the Existing
Second Lien Agent may, in its discretion, file a photocopy of this Interim Order
as a financing statement with any recording officer designated to file financing
statements or with any registry of deeds or similar office in any jurisdiction
in which any Debtor has real or personal property, and in such event, the
subject filing or recording officer shall be authorized and hereby is directed
to file or record such copy of this Interim Order.  Subject to the entry of the
Final Order, any provision of any lease, loan document, easement, use agreement,
proffer, covenant, license, contract, organizational document, or other
instrument or agreement that requires the payment of any fees or other monetary
obligations to any governmental entity or non-governmental entity in order for
the Debtors to pledge, grant, mortgage, sell, assign, or otherwise transfer any
fee or leasehold interest or the proceeds thereof or other DIP Collateral is and
shall be deemed to be inconsistent with the provisions of the Bankruptcy Code,
and shall have no force or effect with respect to the Liens on such leasehold
interests or other applicable DIP Collateral or the proceeds of any assignment
and/or sale thereof by any Debtor, in favor of the DIP Secured Parties in
accordance with the terms of the DIP Loan Documents and this Interim Order or in
favor of the Existing Secured Parties in accordance with this Interim Order.  To
the extent that the Existing RBL Agent is the secured party under any security
agreement, mortgage, leasehold mortgage, landlord waiver, financing statement,
or account control agreements, listed as loss payee or additional insured under
any of the Debtors’ insurance policies, or is the secured party under any of the
Existing RBL Loan Documents, the DIP Agent shall also be deemed to be the
secured party under such account control agreements, loss payee or additional
insured under the Debtors’ insurance policies, and the secured party under each
such Existing RBL Loan Document, shall have all rights and powers attendant to
that position (including rights of enforcement), and shall act in that capacity
and distribute any proceeds recovered or received first, for the benefit of the
DIP Secured Parties in accordance with the DIP Loan Documents and second,
subsequent to Payment in Full of all DIP Obligations, for the benefit of the
Existing RBL Secured Parties.  The Existing RBL Agent shall serve as agent for
the DIP Agent for purposes of perfecting the DIP Agent’s Liens on all DIP
Collateral that, without giving effect to the Bankruptcy Code and this Interim
Order, is of a type such that perfection of a Lien therein may be accomplished
only by possession or control by a secured party.

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6.          Reservation of Certain Third Party Rights and Bar of Challenges and
Claims.  The Debtors’ DIP Stipulations shall be binding upon the Debtors, their
estates, and each other party in interest, including the Committee, in all
circumstances upon entry of this Interim Order.  The Debtors’ Existing RBL
Stipulations and the Debtors’ Existing Second Lien Stipulations shall be binding
upon each party in interest (other than the Debtors), including the Committee,
if any, and any chapter 11 trustee (or if the Cases are converted to cases under
chapter 7 prior to the expiration of the Challenge Period (as defined below),
the chapter 7 trustee in such Successor Case), except to the extent and only to
the extent such party in interest with standing  first, commences, by the
earlier of (x) forty-five (45) calendar days after the Petition Date, (y) with
respect to any Committee, within the earlier of (i) sixty (60) calendar days of
the formation of any Committee and (ii) seventy-five (75) days from the Petition
Date, which in each case shall be referred to as the “Challenge Period,” and the
date that is the next calendar day after the termination of the Challenge Period
in the event that either (i) no Challenge (as defined below) is properly raised
during the Challenge Period or (ii) with respect only to those parties who
properly file a Challenge, such Challenge is fully and finally adjudicated,
shall be referred to as the “Challenge Period Termination Date”), (A) a
contested matter or adversary proceeding challenging or otherwise objecting to
the admissions, stipulations, findings, or releases included in the Debtors’
Existing RBL Stipulations and/or the Debtors’ Existing Second Lien Stipulations,
as applicable, or (B) a contested matter or adversary proceeding against any or
all of the Existing RBL Secured Parties and/or the Existing Second Lien Secured
Parties, as applicable, in connection with or related to the Existing RBL
Obligations and/or the Existing Second Lien Obligations, as applicable, or the
actions or inactions of any of the Existing RBL Secured Parties and/or the
Existing Second Lien Secured Parties, as applicable, arising out of or related
to the Existing RBL Obligations and/or the Existing Second Lien Obligations, as
applicable, the Existing RBL Loan Documents and/or the Existing Second Lien Loan
Documents, as applicable, including any claim against any or all of the Existing
RBL Secured Parties and/or the Existing Second Lien Secured Parties, as
applicable, in the nature of a “lender liability” cause of action, setoff,
counterclaim, or defense to the Existing RBL Obligations and/or the Existing
Second Lien Obligations, as applicable (including those under section 506, 544,
547, 548, 549, 550, and/or 552 of the Bankruptcy Code or by way of suit against
any of the Existing RBL Secured Parties and/or any of the Existing Second Lien
Secured Parties, as applicable) (clauses (A) and (B) collectively, the
“Challenges” and, each individually, a “Challenge”), and second, obtains a
final, non-appealable order in favor of such party in interest sustaining any
such Challenge in any such timely-filed contested matter, adversary proceeding,
or other action (any such Challenge timely brought for which such a final and
non-appealable order is so obtained, a “Successful Challenge”).  If a chapter 7
trustee or a chapter 11 trustee is appointed or elected during the Challenge
Period, then the Challenge Period Termination Date with respect to such trustee
only, shall be the later of (i) the last day of the Challenge Period and (ii)
the date that is twenty (20) days after the date on which such trustee is
appointed or elected.  Except as otherwise expressly provided herein, from and
after the Challenge Period Termination Date and for all purposes in these Cases
and any Successor Cases (and after the dismissal of these Cases or any Successor
Cases), (i) all payments made to or for the benefit of the Existing RBL Secured
Parties and/or the Existing Second Lien Secured Parties, as applicable, pursuant
to, or otherwise authorized by, this Interim Order (whether made prior to, on,
or after the Petition Date) shall be indefeasible and not be subject to
counterclaim, set-off, subordination, recharacterization, defense, disallowance,
recovery, or avoidance, (ii) any and all such Challenges by any party in
interest shall be deemed to be forever released, waived, and barred, (iii) all
of the Existing RBL Obligations and/or the Existing Second Lien Obligations, as
applicable, shall be deemed to be fully allowed claims within the meaning of
section 506 of the Bankruptcy Code (which claims and Liens shall have been
deemed satisfied to the extent the Existing RBL Obligations are converted into
Refinancing DIP Obligations as provided herein), and (iv) the Debtors’ Existing
RBL Stipulations and/or the Debtors’ Existing Second Lien Stipulations, as
applicable, including the release provisions therein, shall be binding on all
parties in interest in these Cases or any Successor Cases, including any
Committee or chapter 11 or chapter 7 trustee.  Notwithstanding the foregoing, to
the extent any Challenge is timely asserted, the Debtors’ Existing RBL
Stipulations and/or the Debtors’ Existing Second Lien Stipulations, as
applicable, and the other provisions in clauses (i) through (iv) in the
immediately preceding sentence shall nonetheless remain binding and preclusive
on any Committee and on any other party in interest from and after the Challenge
Period Termination Date, except to the extent that such Debtors’ Existing RBL
Stipulations and/or the Debtors’ Existing Second Lien Stipulations, as
applicable, or the other provisions in clauses (i) through (iv) of the
immediately preceding sentence were expressly challenged in such Challenge and
such Challenge becomes a Successful Challenge.  The Challenge Period may be
extended only with the written consent of the Existing RBL Agent in its sole
discretion with respect to Challenges made in connection with the Existing RBL
Obligations, and only with the written consent of the Existing Second Lien Agent
in its sole discretion (at the direction of the Existing Second Lien Lenders in
accordance with the Existing Second Lien Credit Agreement) with respect to
Challenges made in connection with the Existing Second Lien Obligations. 
Notwithstanding any provision to the contrary herein, nothing in this Interim
Order shall be construed to grant standing on or authority to any party in
interest, including any Committee, to pursue or bring any cause of action,
including any Challenge, on behalf of the Debtors or their Debtors’ estates. 
The failure of any party in interest, including any Committee, to obtain an
order of this Court prior to the Challenge Period Termination Date granting
standing to bring any Challenge on behalf of the Debtors’ estates shall not be a
defense to failing to commence a Challenge prior to the Challenge Period
Termination Date as required under this paragraph 6 or to require or permit an
extension of the Challenge Period Termination Date.  For the avoidance of doubt,
as to the Debtors, upon entry of this Interim Order, all Challenges, and any
right to assert any Challenge, are hereby irrevocably waived and relinquished as
of the Petition Date, and the Debtors’ Existing RBL Stipulations and/or the
Debtors’ Existing Second Lien Stipulations, as applicable, shall be binding in
all respects on the Debtors irrespective of the filing of any Challenge.

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7.            Carve-Out.

(a)        Carve-Out.  As used in this Interim Order, the “Carve-Out” means the
sum of (i) all fees required to be paid to the Clerk of the Court and to the
Office of the United States Trustee under section 1930(a) of title 28 of the
United States Code plus interest at the statutory rate (without regard to the
notice set forth in (iii) below); (ii) all reasonable fees and expenses up to
$50,000 incurred by a trustee under section 726(b) of the Bankruptcy Code
(without regard to the notice set forth in (iii) below); (iii) to the extent
allowed at any time, whether by interim order, procedural order, or otherwise,
all unpaid fees and expenses (the “Allowed Professional Fees”) incurred or
accrued by persons or firms retained by the Debtors pursuant to section 327,
328, or 363 of the Bankruptcy Code (the “Debtor Professionals”) and any
Committee pursuant to section 328 or 1103 of the Bankruptcy Code (the “Committee
Professionals” and, together with the Debtor Professionals, the “Professional
Persons”) at any time before or on the first business day following the day on
which a Carve-Out Trigger Notice (as defined below) is given by the DIP Agent to
the Debtors with a copy to counsel to the Committee (the day on which a
Carve-Out Trigger Notice is so given, the “Trigger Notice Date”); and (iv)
Allowed Professional Fees of Professional Persons in an aggregate amount not to
exceed $2,750,000 incurred after the first business day following the Trigger
Notice Date, to the extent allowed at any time, whether by interim order,
procedural order, or otherwise (the amount set forth in this clause (iv) being
the “Carve-Out Cap”).  Such Carve-Out Cap may be incurred on behalf of the
Debtor Professionals in an amount not to exceed $2,500,000 and on behalf of any
Committee Professionals in an amount not to exceed $250,000 (other than any such
fees and disbursements incurred in connection with the initiation or prosecution
of any claims, causes of action, adversary proceedings or other litigation
against the agents or lenders under the Existing RBL Credit Facility, the
Existing Second Lien Credit Facility, or the DIP Facility).  For purposes of the
foregoing, “Carve-Out Trigger Notice” shall mean a written notice delivered by
the DIP Agent to the Debtors and their counsel, the Existing Second Lien Secured
Parties and their counsel, the U.S. Trustee, and lead counsel to any Committee,
which notice may be delivered following the occurrence and during the
continuation of an Event of Default (as defined in the DIP Credit Agreement)
expressly stating that the Carve-Out Cap is invoked.  No portion of the
Carve-Out, any cash collateral or proceeds of the DIP Facility may be used for
or in connection with (i) preventing, hindering or delaying the DIP Agent’s or
other DIP Secured Parties’ enforcement or realization upon the DIP Collateral
once an Event of Default has occurred and is continuing, (ii) using or seeking
to use Cash Collateral or selling or otherwise disposing of the DIP Collateral
without the consent of the Required DIP Lenders (as defined in the DIP Credit
Agreement), (iii) using or seeking to use any insurance proceeds related to the
DIP Collateral without the consent of the DIP Agent or (iv) incurring
indebtedness other than the DIP Facility or in accordance with the DIP Budget;
provided, that, the Debtors shall be permitted to use the proceeds of the DIP
Facility or Cash Collateral as necessary to contest an Event of Default alleged
by the DIP Agent or any DIP Lender; and provided, further that a Committee may
incur up to $50,000 in the aggregate in investigating the Existing RBL Credit
Facility, Existing RBL Liens, Existing Second Lien Credit Facility or Existing
Second Liens to the extent such Committee brings any Challenge before the
Challenge Period Termination Date.  For the avoidance of doubt, nothing
contained herein shall be deemed a waiver of the any party’s right to object to
any fees of the Professional Persons.

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(b)       Payment of Allowed Professional Fees Prior to Trigger Notice Date. 
Any payment or reimbursement made prior to the occurrence of the Trigger Notice
Date in respect of any Allowed Professional Fees shall not reduce the
Carve-Out.  Prior to the occurrence of the Trigger Notice Date, the Debtors
shall be permitted to pay allowed fees and expenses of the Debtor Professionals
and the Committee Professionals subject to this Interim Order, the Bankruptcy
Code, the Bankruptcy Rules, the Local Rules, and any interim compensation
procedures order entered by this Court.

(c)        No Direct Obligation to Pay Professional Fees; No Waiver of Right to
Object to Fees.  None of the DIP Secured Parties, the Existing RBL Secured
Parties, or the Existing Second Lien Secured Parties shall be responsible for
the payment or reimbursement of any fees or disbursements of any Professional
Person incurred in connection with the Cases or any successor cases under any
chapter of the Bankruptcy Code.  Nothing in this Interim Order or otherwise
shall be construed to obligate any DIP Secured Party, any Existing RBL Secured
Party, or any Existing Second Lien Secured Party in any way, to pay compensation
to, or to reimburse expenses of, any Professional Person or to guarantee that
the Debtors have sufficient funds to pay such compensation or reimbursement. 
Nothing herein shall be construed as consent to the allowance of any
professional fees or expenses of any of the Debtors, the Committee, any other
official or unofficial committee in these Cases or any Successor Cases, or of
any person or entity, or shall affect the right of any party to object to the
allowance and payment of any such fees and expenses.

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(d)         Funding of Carve-Out a DIP Obligation.  Any funding of the Carve-Out
shall be added to, and made a part of, the DIP Obligations secured by the DIP
Collateral and shall be otherwise entitled to the protections granted under this
Interim Order, the DIP Loan Documents, the Bankruptcy Code, and applicable law.

8.           Waiver of 506(c) Claims.  Subject to the entry of the Final Order,
as a further condition of (i) the DIP Facility and any obligation of the DIP
Secured Parties to make credit extensions pursuant to the DIP Loan Documents
(and the consent of the DIP Secured Parties and the Existing Secured Parties to
the payment of the Carve-Out to the extent provided herein) and (ii) the
Debtors’ use of Cash Collateral pursuant to this Interim Order and a Final
Order, (a) no costs or expenses of administration of the Cases or any Successor
Cases shall be charged against or recovered from or against any or all of the
DIP Secured Parties and/or the Existing Secured Parties, the Existing
Collateral, the DIP Collateral, and the Cash Collateral, in each case pursuant
to section 506(c) of the Bankruptcy Code or otherwise, without the prior written
consent of the DIP Agent, the Existing RBL Agent, and the Existing Required
Second Lien Lenders, (b) no such consent shall be implied from any other action,
inaction, or acquiescence of any or all of the DIP Secured Parties and the
Existing Secured Parties, and (c) the exercise prior to the entry of the Final
Order of any rights under section 506(c) of the Bankruptcy Code or otherwise to
charge any costs or expense of administration of the Cases or any Successor
Cases from or against the Existing RBL Secured Parties or their Existing RBL
Liens on or other interests in any or all of the DIP Collateral, the Existing
RBL Collateral, and the Cash Collateral, or the Existing Second Lien Secured
Parties or their Existing Second Liens on or other interests in any or all of
the DIP Collateral, the Existing Second Lien Collateral, and the Cash
Collateral, shall not impair and shall be subject to, and junior to, the DIP
Liens on and the DIP Secured Parties’ other interests in the DIP Collateral, the
Existing Collateral, and the Cash Collateral and the other DIP Protections
accorded the DIP Secured Parties.

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9.         After-Acquired Property.  Except as otherwise expressly provided in
this Interim Order, pursuant to section 552(a) of the Bankruptcy Code, all
property acquired by the Debtors on or after the Petition Date is not, and shall
not be, subject to any Lien of any person or entity resulting from any security
agreement entered into by the Debtors prior to the Petition Date, except to the
extent that such property constitutes proceeds of property of the Debtors that
is subject to a valid, enforceable, perfected, and unavoidable Lien as of the
Petition Date (or a valid, enforceable, and unavoidable Lien that is perfected
subsequent to the Petition Date solely to the extent permitted by section 546(b)
of the Bankruptcy Code) that is not subject to subordination or avoidance under
the Bankruptcy Code or other provisions or principles of applicable law.  If the
Debtors engage in any “land swap” transactions, the DIP Liens, Existing RBL
Liens, Existing RBL Adequate Protection Liens, Existing Second Liens, and Second
Lien Adequate Protection Liens shall attach to assets acquired in such “land
swap” transactions as proceeds of property subject to such Liens.

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10.          Protection of DIP Secured Parties’ and Existing RBL Secured
Parties’ Rights.

Unless the requisite DIP Secured Parties under the DIP Loan Documents and the
Secured Swap Agreements and the requisite Existing RBL Secured Parties under the
Existing RBL Loan Documents shall have provided their prior written consent or
all DIP Obligations and Existing RBL Obligations have been Paid in Full, there
shall not be entered in any of these Cases or any Successor Cases any order
(including any order confirming any plan of reorganization or liquidation) that
authorizes any of the following:  (i) the obtaining of credit or the incurring
of indebtedness that is secured by a security, mortgage, or collateral interest
or other Lien on all or any portion of the DIP Collateral or Existing RBL
Collateral and/or that is entitled to administrative priority status, other than
the Carve-Out, in each case that is superior to or pari passu with the DIP
Liens, the DIP Superpriority Claims, the Existing RBL Liens, the Existing Prior
Liens, the Existing RBL Adequate Protection Liens, the Existing RBL Adequate
Protection Superpriority Claims, and/or the other DIP Protections; (ii) the use
of Cash Collateral for any purpose other than to Pay in Full the DIP Obligations
and the Existing RBL Obligations or as otherwise permitted in the DIP Loan
Documents and this Interim Order, (iii) the return of goods pursuant to section
546(h) of the Bankruptcy Code (or other return of goods on account of any
prepetition indebtedness) to any creditor of any Debtor, or (iv) any material
modification of any of the DIP Secured Parties’ or the Existing RBL Secured
Parties’ rights under this Interim Order, the DIP Loan Documents, or the
Existing RBL Loan Documents with respect to any DIP Obligations.

11.          Proceeds of Subsequent Financing.  Without limiting the provisions
and protections of the Carve-Out and paragraph 10 above, if at any time prior to
the Payment in Full of all the DIP Obligations (including subsequent to the
confirmation of any chapter 11 plan or plans with respect to any of the
Debtors), the Debtors’ estates, any trustee, any examiner with enlarged powers,
or any responsible officer subsequently appointed shall obtain credit or incur
debt pursuant to section 364(b), 364(c), 364(d), or any other provision of the
Bankruptcy Code in violation of this Interim Order or the DIP Loan Documents,
then all of the cash proceeds derived from such credit or debt and all Cash
Collateral shall immediately be turned over to the DIP Agent for application to
the DIP Obligations until Paid in Full.

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12.        Cash Collection.  From and after the date of the entry of this
Interim Order, all collections and proceeds of any DIP Collateral or Existing
RBL Collateral or services provided by any Debtor and all Cash Collateral that
shall at any time come into the possession, custody, or control of any Debtor,
or to which any Debtor is now or shall become entitled at any time, shall be
promptly deposited in the same lock-box and/or deposit accounts into which the
collections and proceeds of the Existing RBL Collateral (the “Existing
Collateral Accounts”) were deposited under the Existing RBL Loan Documents (or
in such other accounts of the Debtors as are designated by the DIP Agent from
time to time) (collectively, the “Cash Collection Accounts”), which accounts
shall be subject to the sole dominion and control of the DIP Agent and the
Existing RBL Agent (and the funds in such accounts may be used by the Debtors to
the extent provided in this Interim Order and the DIP Loan Documents).  Upon the
direction of the DIP Agent or, following Payment in Full of the DIP Obligations,
the Existing RBL Agent, at any time after the occurrence of a Termination Event
and subject in all instances to the provisions of paragraph 7 and paragraph 15,
all proceeds in the Cash Collection Accounts shall be remitted to the DIP Agent
for application to the DIP Obligations until Payment in Full, and then to the
Existing RBL Agent for application to the Existing RBL Adequate Protection
Claims until Payment in Full of such claims.  The Debtors are authorized to
incur obligations and liabilities for treasury, depositary, or cash management
services, including overnight overdraft services, controlled disbursement,
automated clearinghouse transactions, return items, overdrafts, and interstate
depository network services provided on a postpetition basis by any financial
institution at which any Cash Collection Account is maintained; provided,
however, that, except to the extent otherwise required by this Court, nothing
herein shall require any DIP Secured Party or Existing RBL Secured Party to
incur any overdrafts or provide any such services or functions to the Debtors.

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13.          Disposition of DIP Collateral; Credit Bid.

(a)       Unless the DIP Obligations and the Existing RBL Obligations are Paid
in Full upon the closing of a sale or other disposition of the DIP Collateral or
Existing RBL Collateral, the Debtors shall not sell, transfer, lease, encumber,
or otherwise dispose of any portion of the DIP Collateral or any Existing RBL
Collateral (or enter into any binding agreement to do so) (other than the sale
of crude oil, natural gas, or other hydrocarbons in the ordinary course of
business with respect to recurring revenues) without the prior written consent
of the DIP Agent and, solely with respect to the Existing RBL Collateral, the
Existing RBL Agent (and no such consent shall be implied from any other action,
inaction, or acquiescence by any DIP Secured Party or Existing RBL Secured Party
or any order of this Court), except as permitted in the DIP Loan Documents
and/or the Existing RBL Loan Documents, as applicable, and this Interim Order. 
Except to the extent otherwise expressly provided in the DIP Loan Documents, all
proceeds from the sale, transfer, lease, encumbrance, or other disposition of
any DIP Collateral (other than the sale of crude oil, natural gas, or other
hydrocarbons in the ordinary course of business) shall be remitted to the DIP
Agent for application to the DIP Obligations until such DIP Obligations are Paid
in Full in accordance with the terms of this Interim Order and the DIP Loan
Documents, and then to the Existing RBL Agent for application to the Existing
RBL Adequate Protection Claims until Payment in Full of such claims.  In
addition, the Debtors are authorized and directed to enter into such blocked
account agreements (with cash dominion, if the DIP Agent so elects) with the DIP
Agent and such financial institutions as the DIP Agent may require, and, if it
so elects, the DIP Agent shall be entitled to enjoy the benefit of all control
agreements to which the Existing RBL Agent is a party without the need to enter
into new blocked account agreements.

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(b)        Subject to any Successful Challenge and the Intercreditor Agreement,
(i) so long as the DIP Obligations have been or will be repaid in full in cash,
the Existing RBL Agent (or one or more of its designees, affiliates, or
assignees) shall have the right to credit bid up to the full amount of any
Existing RBL Obligations in any sale of the Existing RBL Collateral (or any DIP
Collateral subject to any Existing RBL Adequate Protection Liens) under or
pursuant to (A) section 363 of the Bankruptcy Code, (B) any plan of
reorganization or plan of liquidation under section 1129 of the Bankruptcy Code
to the extent any sale contemplated thereunder does not result in Payment in
Full of all of the DIP Obligations on the effective date of such plan, or (C)
section 725 of the Bankruptcy Code and (ii) so long as the DIP Obligations and
the Existing RBL Obligations have been or will be repaid in full in cash, the
Existing Second Lien Agent (or one or more of its designees, affiliates, or
assignees) shall have the right to credit bid up to the full amount of any
Existing Second Lien Obligations in any sale of the Existing Second Lien
Collateral (or any DIP Collateral subject to any Second Lien Adequate Protection
Liens) under or pursuant to (A) section 363 of the Bankruptcy Code, (B) any plan
of reorganization or plan of liquidation under section 1129 of the Bankruptcy
Code to the extent any sale contemplated thereunder does not result in Payment
in Full of all of the DIP Obligations on the effective date of such plan, or
(iii) section 725 of the Bankruptcy Code; provided, however, that any credit bid
by the Existing Second Lien Agent (on behalf of the Existing Second Lien Secured
Parties) shall include a sufficient cash purchase price to Pay in Full the DIP
Obligations and the Existing RBL Obligations on the closing date of any such
sale or otherwise satisfy the requirements of the Intercreditor Agreement.  The
Debtors, on behalf of themselves and their estates, stipulate and agree that (i)
any sale of all or part of the Existing RBL Collateral (or any DIP Collateral
subject to any Existing RBL Adequate Protection Liens) that does not include the
right to credit bid up to the full amount of the Existing RBL Obligations would
mean that the Existing RBL Agent and the other Existing RBL Secured Parties will
not receive the indubitable equivalent of their claims and interests, and (ii)
any sale of all or part of the Existing Second Lien Collateral (or any DIP
Collateral subject to the Existing Second Lien Adequate Protection Liens) that
does not include the right to credit bid up to the full amount of the Existing
Second Lien Obligations, subject to the Intercreditor Agreement, would mean that
the Existing Second Lien Agent and the other Existing Second Lien Secured
Parties will not receive the indubitable equivalent of their claims and
interests.  The DIP Agent (or one or more of its designees, affiliates, or
assignees) shall have the unqualified right to credit bid any or all of the DIP
Obligations under or pursuant to (i) section 363 of the Bankruptcy Code, (ii)
any plan of reorganization or plan of liquidation under section 1129 of the
Bankruptcy Code, or (iii) section 725 of the Bankruptcy Code.  If the DIP Agent,
the Existing RBL Agent, or the Existing Second Lien Agent or their respective
designees, affiliates, or assignees make a credit bid in connection with any
auction or other sale process relating to the sale or other disposition of any
DIP Collateral, Existing RBL Collateral, or Existing Second Lien Collateral then
for purposes of such auction or sale process or any applicable order of this
Court, the DIP Agent, the Existing RBL Agent, and/or the Existing Second Lien
Agent shall be automatically deemed to be a qualified bidder and its bid shall
be automatically deemed to constitute a qualified bid, regardless of whether the
qualified bidder or qualified bid requirements are satisfied.

571

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14.         Termination Events.  The following shall constitute a termination
event under this Interim Order, the DIP Loan Documents and the Secured Swap
Agreements unless waived in writing by each of the DIP Agent and the Existing
RBL Agent (each, a “Termination Event”):

(a)      The occurrence of an “Event of Default” under the DIP Credit Agreement,
as set forth therein (a “DIP Default Termination Event”), including, for
avoidance of doubt, the failure to obtain entry of the Final Order, in form and
substance acceptable to the DIP Secured Parties and the Existing RBL Agent, on
or before the date that is thirty-five (35) days following entry of the Interim
Order.

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(b)         Any other breach, default, or other violation by any of the Debtors
of the terms and provisions of this Interim Order.

(c)         The Debtors’ failure to (i) enter into a restructuring support
agreement (the “RSA”) in form and substance acceptable to the DIP Lenders and
the Existing RBL Lenders by the date that is no later than 45 days after the
Petition Date, and (ii) if required as a term of such RSA and not waived, (x)
file a motion seeking approval to enter into the RSA by the date that is no
later than 30 days after the Petition Date and (y) obtain an order from the
Bankruptcy Court authorizing the entry into the RSA by the date that is no later
than 60 days after the Petition Date.

(d)        The Debtors’ failure to file a chapter 11 plan (the “Plan”) and a
disclosure statement for the Plan (the “Disclosure Statement”) that provides for
Payment in Full of the DIP Obligations and the Existing RBL Obligations in
accordance with the RSA, or, is otherwise in form and substance reasonably
acceptable to the Required DIP Lenders, or, after the DIP Obligations have been
Paid in Full, the “Majority Lenders” under the Existing RBL Credit Agreement, in
each case, by the date that is no later than 150 days after the Petition Date.

(e)         The Disclosure Statement not being approved by the Bankruptcy Court
by the date that is no later than 180 days after the Petition Date.

(f)        The Bankruptcy Court not entering an order confirming the Plan by the
date that is no later than 210 days after the Petition Date; provided, that, the
DIP Agent with the consent of the requisite DIP Lenders, or, after Payment in
Full of the DIP Obligations, the Existing RBL Agent with the consent of the
requisite Existing RBL Lenders under the Existing RBL Credit Agreement, may
extend the time by which the Debtors may satisfy the milestones described in
provisions (c)-(f) (together, the “Chapter 11 Milestones”)  without further
order of this Court.

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15.          Rights and Remedies upon Termination Event.

(a)        Subject to the provisions of this paragraph 15, immediately upon the
occurrence and continuation of a Termination Event, the DIP Agent may exercise
all rights and remedies under this Interim Order, the DIP Loan Documents, and/or
applicable non-bankruptcy law, including the right to (A) declare all DIP
Obligations to be immediately due and payable, (B) declare the termination,
reduction, or restriction of any further commitment to extend credit to the
Debtors, to the extent any such commitment remains, and/or (C) terminate the DIP
Facility and any other DIP Loan Documents as to any future liability or
obligation of the DIP Agent and the other DIP Secured Parties, but without
affecting any of the DIP Obligations or the DIP Liens securing the DIP
Obligations.

(b)        Subject to the provisions of this paragraph 15, immediately upon the
occurrence and continuation of a Termination Event, the DIP Agent or the
Existing RBL Agent may declare a termination, reduction, or restriction on the
ability of the Debtors to use any Cash Collateral (any such declaration under
any of clauses 15(a) or 15(b) shall be made to the respective lead counsel to
the Debtors, counsel to any Committee, counsel to the Existing Second Lien
Secured Parties, and the United States Trustee, and shall be referred to herein
as a “Termination Declaration” and the date that is the earliest to occur of any
such Termination Declaration being herein referred to as the “Termination”).

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(c)        Upon the making of a Termination Declaration, the Debtors and all
parties in interest shall have five (5) Business Days to seek an emergency
hearing (the “Termination Hearing Period”) before this Court for the sole
purpose of contesting whether a Termination Event has occurred, and section 105
of the Bankruptcy Code may not be invoked by the Debtors, the Committee, or any
other party in interest in an effort to restrict or preclude any DIP Secured
Party and/or Existing Secured Party from exercising any rights or remedies set
forth in this Interim Order, the DIP Loan Documents, or the Existing RBL Loan
Documents.  During the Termination Hearing Period, the Debtors may not use Cash
Collateral or any amounts previously or thereafter advanced under the DIP
Facility except in accordance with the DIP Budget (subject to the Permitted
Variances); provided, that, if the Termination Hearing Period ends prior to the
occurrence of the hearing contemplated thereby, for the period between the last
day of the Termination Hearing Period and the day of such hearing, the Debtors
may not use Cash Collateral, request any additional Borrowings (as defined in
the DIP Credit Agreement) or use any amounts previously advanced under the DIP
Facility.

(d)       Subject in all respects to the Carve-Out, following the conclusion of
the Termination Hearing Period (unless prior to such time this Court determines
that a Termination Event has not occurred and/or is not continuing), (i) the DIP
Agent is hereby granted relief from the automatic stay, without further notice,
hearing, motion, order, or other action of any kind, to foreclose on, or
otherwise enforce and realize on, its DIP Liens on all or any portion of the DIP
Collateral, including by collecting accounts receivable and applying the
proceeds thereof to the DIP Obligations or Existing Secured Party Adequate
Protection and by occupying the Debtors’ premises to sell or otherwise dispose
of the DIP Collateral and (ii) each Secured Swap Party is hereby granted relief
from the automatic stay, without further notice, hearing, motion, order, or
other action of any kind, to exercise all rights under any Secured Swap
Agreement (including, without limitation, the suspension, termination,
liquidation, withholding of performance, or acceleration thereof, and the
setoff, netting, and application of any payment, settlement payment, termination
values, termination payments, and any other amounts that such Secured Swap Party
would be entitled to receive from or otherwise be obligated to pay to any Debtor
under any Secured Swap Agreement in accordance with the terms of each such
Secured Swap Agreement).

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(e)        Subject in all respects to the Carve-Out, upon the effectiveness of
any relief from the automatic stay with respect to the DIP Facility pursuant to
paragraph 15(d) hereof, the Existing RBL Agent shall have relief from the
automatic stay as against the Existing RBL Collateral to the same extent as the
DIP Agent, and without further notice, hearing, motion, order, or other action
of any kind, to foreclose on, or otherwise enforce and realize on its Existing
RBL Liens and the Existing RBL Adequate Protection Liens on, all or any portion
of the Existing RBL Collateral (including by collecting accounts receivable and
applying the proceeds thereof to the Existing RBL Obligations, and by occupying
the Debtors’ premises to sell or otherwise dispose of the Existing RBL
Collateral) or otherwise exercise remedies against the Existing RBL Collateral
permitted by this Interim Order, the Existing RBL Loan Documents, and/or
applicable non-bankruptcy law; provided, however, that any such foreclosure or
other enforcement by the Existing RBL Agent of any Existing RBL Liens or any
Existing RBL Adequate Protection Liens or any other such exercise of remedies by
the Existing RBL Agent against the Existing RBL Collateral shall not interfere
with or otherwise be inconsistent with any foreclosure or other enforcement by
the DIP Agent of any DIP Liens or other DIP Protections or any other exercise of
remedies by the DIP Agent, and any proceeds received by the Existing RBL Agent
in connection with such foreclosure, enforcement, or other exercise of remedies
shall be turned over to the DIP Agent for application to the DIP Obligations
until Paid in Full.

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(f)       Subject to the provisions of paragraphs 6 and 15(c) hereof, and
subject to the Carve-Out, the Existing Prior Liens, and the terms of the
Intercreditor Agreement, all proceeds realized in connection with the exercise
of the rights and remedies of the DIP Secured Parties or the Existing RBL
Secured Parties shall be turned over first to the DIP Agent for application to
the DIP Obligations under, and in accordance with the provisions of, the DIP
Loan Documents and this Interim Order (which provides, first, for application to
the outstanding New Money Loans, and then, to the Refinanced Loans) until
Payment in Full of all of the DIP Obligations and then to the Existing RBL Agent
for application to the Existing RBL Obligations under, and in accordance with
the provisions of, the Existing RBL Loan Documents and this Interim Order until
Payment in full of the Existing RBL Obligations and then to the Existing Second
Lien Agent for application to the Existing Second Lien Obligations under, and in
accordance with the provisions of, the Existing Second Lien Loan Documents and
this Interim Order until Payment in Full of the Existing Second Lien
Obligations.

577

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16.        Restriction on Use of Proceeds.  Notwithstanding anything herein to
the contrary, no loans and/or proceeds from the DIP Facility, DIP Collateral,
Cash Collateral (including any retainer held by any professionals for the
below-referenced parties), Existing RBL Collateral, Existing Second Lien
Collateral, or any portion of the Carve-Out may be used by (a) any Debtor,
Committee, or trustee or other estate representative appointed in the Cases or
any Successor Cases, or any other person, party, or entity (including any of the
Debtor Professionals, the Committee Professionals, or the members of any
Committee (“Committee Members”)) to investigate or prosecute any Challenge
(including any litigation or other action) in connection with the value of the
DIP Collateral, the Existing RBL Collateral, or the Existing Second Lien
Collateral (or to pay any professional fees and disbursements incurred in
connection therewith) at any time; or (b) any Debtor, any Committee, or any
trustee or other estate representative appointed in the Cases or any Successor
Cases, or any other person, party, or entity (including any of the Debtor
Professionals, the Committee Professionals, or the Committee Members) to (or to
pay any professional fees and disbursements incurred in connection therewith): 
(i) request authorization to obtain postpetition loans or other financial
accommodations pursuant to section 364(c) or 364(d) of the Bankruptcy Code, or
otherwise, other than from the DIP Secured Parties, or to seek any modification
to this Interim Order not approved by the DIP Agent (after having obtained the
approval of the requisite DIP Secured Parties under the DIP Credit Agreement)
and, to the extent such modification would affect the rights of any of the
Existing RBL Secured Parties, the Existing RBL Agent (after obtaining the
approval of the requisite Existing RBL Secured Parties under the Existing RBL
Credit Agreement); (ii) investigate (except as set forth below), assert, join,
commence, support, or prosecute any action for any claim, counterclaim, action,
proceeding, application, motion, objection, defense, or other contested matter
seeking any order, judgment, determination, or similar relief against, or
adverse to the interests of, in any capacity, any or all of the DIP Secured
Parties, the Existing RBL Secured Parties, the Existing Second Lien Secured
Parties, their respective affiliates, assigns, or successors and the respective
officers, directors, employees, agents, attorneys, representatives, and other
advisors of the foregoing, with respect to any transaction, occurrence,
omission, action, or other matter (including formal or informal discovery
proceedings in anticipation thereof), including (A) any Challenges and any
Avoidance Actions or other actions arising under chapter 5 of the Bankruptcy
Code; (B) any action with respect to the validity, enforceability, priority, and
extent of the DIP Obligations, the Existing RBL Obligations and/or the Existing
Second Lien Obligations, or the validity, extent, and priority of the DIP Liens,
the Existing RBL Liens, the Existing RBL Adequate Protection Liens, the Existing
Second Liens, and/or the Existing Second Lien Adequate Protection Liens; (C) any
action seeking to invalidate, set aside, avoid, or subordinate, in whole or in
part, the DIP Liens, the other DIP Protections, the Existing RBL Liens, the
Existing RBL Adequate Protection Liens, the other Existing RBL Adequate
Protection, the Existing Second Liens, the Existing Second Lien Adequate
Protection Liens, or the other Existing Second Lien Adequate Protection; (D) any
“lender liability” cause of action; (E) except to contest in good faith the
occurrence or continuance of any Termination Event as permitted in paragraph 15,
any action seeking, or having the effect of, preventing, hindering, or otherwise
delaying any or all of the DIP Secured Parties’, and, after the Payment in Full
of the DIP Obligations, the Existing RBL Secured Parties’, assertion,
enforcement, or realization on the Cash Collateral, the DIP Collateral, or the
Existing RBL Collateral in accordance with the DIP Loan Documents or the
Existing RBL Loan Documents, as applicable, or this Interim Order); and/or (F)
any action seeking to modify any of the rights, remedies, priorities,
privileges, protections, and benefits granted to any or all of the DIP Secured
Parties, the Existing RBL Secured Parties, and the Existing Second Lien Secured
Parties hereunder or under the DIP Loan Documents, the Existing RBL Loan
Documents, or the Existing Second Lien Loan Documents, as applicable, or any
payments made thereunder or in respect thereof; provided, however, that up to
$50,000 in the aggregate of the Carve-Out, any DIP Collateral, any Existing RBL
Collateral, any Existing Second Lien Collateral, any Cash Collateral, and
proceeds of the DIP Facility may be used by the Committee (to the extent such
Committee is appointed) to investigate (but not to prosecute) the claims and/or
Liens of the Existing RBL Agent and the other Existing RBL Secured Parties under
the Existing RBL Loan Documents and the claims and/or Liens of the Existing
Second Lien Agent and the other Existing Second Lien Secured Parties under the
Existing Second Lien Loan Documents (but not the claims and/or Liens of the DIP
Agent and the other DIP Secured Parties) so long as such investigation occurs
and any Challenge is brought within the Challenge Period; provided, further,
that the Debtors shall be permitted to use the proceeds of the DIP Facility or
Cash Collateral as necessary to contest an Event of Default alleged by the DIP
Agent or any DIP Lender.; (iii) pay any fees or similar amounts to any person
(other than the Existing RBL Secured Parties) who has proposed or may propose to
purchase interests in any of the Debtors without the prior written consent of
the DIP Agent and the Existing RBL Agent; (iv) use or seek to use any insurance
proceeds related to any DIP Collateral, any Existing RBL Adequate Protection
Collateral, any Existing RBL Collateral or any Cash Collateral without the
consent of the DIP Agent; (v) incur or seek to incur indebtedness other than the
DIP Facility or in accordance with the DIP Budget; (vi) use or seek to use Cash
Collateral or (vii) sell or otherwise dispose of DIP Collateral or Existing RBL
Collateral, unless otherwise permitted hereby, without the prior written consent
of the DIP Agent and the Existing RBL Agent, as applicable.

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17.        Proofs of Claim.  Neither the Existing RBL Secured Parties nor the
Existing Second Lien Secured Parties will be required to file proofs of claim in
any of the Cases or Successor Cases for any claim allowed herein.  The Debtors’
Existing RBL Stipulations shall be deemed to constitute a timely filed proof of
claim for the Existing RBL Secured Parties in respect of all Existing RBL
Obligations and the Debtors’ Existing Second Lien Stipulations shall be deemed
to constitute a timely filed proof of claim for the Existing Second Lien Secured
Parties in respect of all Existing Second Lien Obligations.  In addition, the
Existing RBL Secured Parties, the DIP Secured Parties, and the Existing Second
Lien Secured Parties will not be required to file any request for allowance
and/or payment of any administrative expenses, and this Order shall be deemed to
constitute a timely filed request for allowance and/or payment of any Existing
RBL Obligations and Existing Second Lien Obligations constituting administrative
expenses or any DIP Obligations, as applicable.  Notwithstanding any order
entered by this Court in relation to the establishment of a bar date in any of
the Cases or Successor Cases to the contrary, each of the Existing RBL Agent,
for the benefit of itself and the other Existing RBL Secured Parties, the
Existing Second Lien Agent, for the benefit of itself and the other Existing
Second Lien Secured Parties, and the DIP Agent, for the benefit of itself and
the other DIP Secured Parties, is hereby authorized and entitled, in its sole
discretion, but not required, to file (and amend and/or supplement, in its
discretion) in each of the Cases or Successor Cases (i) in the case of Existing
RBL Agent, a proof of claim and/or aggregate proofs of claim in respect of any
Existing RBL Obligations, (ii) in the case of each of the Existing RBL Agent and
the DIP Agent, a request or aggregate requests for allowance and/or payment of
any portion of the Existing RBL Obligations constituting administrative expenses
or any DIP Obligations, as applicable, and (iii) in the case of the Existing
Second Lien Agent, a proof of claim and/or aggregate proofs of claim in respect
of any Existing Second Lien Obligations.  This paragraph 17 shall in all regards
remain subject to the Intercreditor Agreement.

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18.         Preservation of Rights Granted Under the Interim Order.

(a)      No Non-Consensual Modification or Extension of Interim Order.  The
Debtors irrevocably waive any right to seek any amendment, modification, or
extension of this Interim Order (including through any chapter 11 plan of
reorganization) without the prior written consent of the DIP Agent and the
Existing RBL Agent, and no such consent shall be implied by any other action,
inaction, or acquiescence of the DIP Secured Parties or any of the Existing RBL
Secured Parties.  In the event any or all of the provisions of this Interim
Order are hereafter modified, amended, or vacated by a subsequent order of this
Court or any other court, such modification, amendment, or vacatur shall not
affect the validity, perfection, priority, allowability, enforceability, or
non-avoidability of any advances, payments, or use of cash authorized or made
hereby or pursuant to the DIP Loan Documents or Secured Swap Agreements, or
Lien, claim, priority, or other DIP Protections authorized or created hereby or
pursuant to the DIP Loan Documents or Secured Swap Agreements.  Based on the
findings set forth in this Interim Order and in accordance with section 364(e)
of the Bankruptcy Code, which is applicable to the DIP Facility, in the event
any or all of the provisions of this Interim Order are hereafter reversed,
modified, vacated, or stayed by a subsequent order of this Court or any other
court, the DIP Secured Parties and the Existing Secured Parties shall be
entitled to the protections provided in section 364(e) of the Bankruptcy Code,
and notwithstanding any such reversal, modification, vacatur, or stay, any use
of Cash Collateral or any DIP Obligations or any DIP Protections (including the
Existing Secured Party Adequate Protection) incurred or granted by the Debtors
prior to the actual receipt of written notice by the DIP Agent, the Existing RBL
Agent, or the Existing Second Lien Agent, as applicable, of the effective date
of such reversal, modification, vacatur, or stay shall remain in full force and
effect and be binding on all parties in interest and be governed in all respects
by the original provisions of this Interim Order (and shall maintain their
respective priorities as provided by this Interim Order), and the DIP Secured
Parties, the Existing RBL Secured Parties, and the Existing Second Lien Secured
Parties shall be entitled to all of the DIP Protections (including the Existing
Secured Party Adequate Protection) and all other rights, remedies, Liens,
priorities, privileges, protections, and benefits granted pursuant to section
364(e) of the Bankruptcy Code, this Interim Order, or the DIP Loan Documents.

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(b)       Dismissal.  If any order dismissing any of the Cases under section
1112 of the Bankruptcy Code or otherwise is at any time entered, then
notwithstanding any such dismissal, (i) the DIP Protections (including the
Existing Secured Party Adequate Protection) and all other rights, remedies,
Liens, priorities, privileges, protections, and benefits granted to any or all
of the DIP Secured Parties and the Existing Secured Parties, respectively, shall
remain in full force and effect and be binding on all parties in interest and be
governed in all respects by the provisions of this Interim Order (and shall
maintain their respective priorities as provided by this Interim Order) until
all DIP Obligations and all Existing RBL Adequate Protection Claims have been
Paid in Full, and such order of dismissal shall so provide (in accordance with
section 105 and 349 of the Bankruptcy Code), and (ii) this Court shall retain
jurisdiction, notwithstanding such dismissal, for the purposes of enforcing such
DIP Protections (including the Existing Secured Party Adequate Protection) and
all other rights, remedies, Liens, priorities, privileges, protections, and
benefits granted to any or all of the DIP Secured Parties and the Existing
Secured Parties, respectively.

(c)        Survival of Interim Order.  The provisions of this Interim Order, the
DIP Loan Documents and the Secured Swap Agreements any actions taken pursuant
hereto or thereto, and all of the DIP Protections (including the Existing
Secured Party Adequate Protection), and all other rights, remedies, Liens,
priorities, privileges, protections, and benefits granted to any or all of the
DIP Secured Parties and the Existing Secured Parties, respectively, shall
survive, and shall not be modified, impaired, or discharged by, the entry of any
order confirming any plan of reorganization in any Case or Successor Case,
converting any Case to a case under chapter 7, dismissing any of the Cases,
withdrawing of the reference of any of the Cases or any Successor Cases or
providing for abstention from handling or retaining of jurisdiction of any of
the Cases or any Successor Case in this Court, or terminating the joint
administration of these Cases or any Successor Case or by any other act or
omission.  The terms and provisions of this Interim Order, including all of the
DIP Protections (including the Existing Secured Party Adequate Protection) and
all other rights, remedies, Liens, priorities, privileges, protections, and
benefits granted to any or all of the DIP Secured Parties and the Existing
Secured Parties, respectively, shall continue in full force and effect and be
binding on all parties in interest notwithstanding the entry of any such order,
and such DIP Protections (including the Existing Secured Party Adequate
Protection), and such other rights, remedies, Liens priorities, privileges,
protections, and benefits, shall continue in full force and effect in these
proceedings and in any Successor Cases and after dismissal of any thereof, and
shall maintain their respective priorities as provided by this Interim Order.
Subject to the provisions of paragraph 2(d) of this Interim Order with respect
to the treatment of the Refinancing DIP Obligations, the DIP Obligations shall
not be discharged by the entry of an order confirming any such chapter 11 plan,
the Debtors having waived such discharge pursuant to section 1141(d)(4) of the
Bankruptcy Code.

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19.         Insurance Policies.  Upon entry of this Interim Order, the DIP Agent
shall be deemed to be, without any further action or notice, named as additional
insureds and loss payees, as applicable, on each insurance policy maintained by
the Debtors that in any way covers the DIP Collateral, and the Debtors shall
take such actions as are reasonably requested by the DIP Agent, the Existing RBL
Agent, or the Existing Second Lien Agent from time to time to evidence or
effectuate the foregoing.

20.        Preservation of Prepetition Priorities and Interests.  Nothing in
this Interim Order is intended to change or otherwise modify the prepetition
priorities among secured creditors of the Debtors (including under the
Intercreditor Agreement), including any sureties’, operators’, or nonoperators’
recoupment rights to the extent their rights are valid, enforceable,
nonavoidable, and perfected, and nothing in this Interim Order shall be deemed
to have changed or modified such prepetition priorities, all of which are hereby
expressly preserved; provided, however, that the Debtors, the Committee, the DIP
Secured Parties, and all other parties in interest reserve all rights to object
to any of the foregoing claims or liens.

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21.         Surety Bonds.  Notwithstanding anything to the contrary in the
Debtors’ Emergency Motion for Interim and Final Authority to (I) Continue
Insurance Policies and Surety Bond Program, (II) Pay All Obligations With
Respect Thereto, (III) Authorizing Financial Institutions to Honor and Process
Related Checks and Transfers, and (II) Granting Related Relief (the “Insurance
and Surety Bond Motion”) and any order approving the relief sought therein in
the ordinary course of business, the Debtors may only (a) renew, amend, modify,
supplement, and extend their existing Surety Bond Program, (b) obtain new or
replacement surety bonds, (c) post new or additional collateral, or issue
letters of credit, (d) execute other agreements in connection with the Surety
Bond Program (as defined in the Insurance and Surety Bond Motion), and (e)
continue to perform under the Surety Indemnity Agreements (as defined in the
Insurance and Surety Bond Motion), in each case of (a)-(e), with the consent of
the DIP Agent, not to be unreasonably withheld.

22.         Postpetition Hedging Arrangement.  For the avoidance of doubt, (a)
any Secured Swap Agreement (as defined in the DIP Credit Agreement) must be with
an Approved Counterparty (as defined in the DIP Credit Agreement) and otherwise
subject to the limitations provided in the DIP Credit Agreement, and (b) any
Secured Swap Obligations will be granted DIP Superpriority Claims, DIP Liens,
automatic stay relief, and the other DIP Protections afforded by this Interim
Order and the Final Order in respect of each such transaction until the Secured
Swap Obligations are indefeasibly paid in full in cash, or as otherwise provided
by this Interim Order and the Final Order, as applicable.  The relief and
protections provided by this Interim Order and the Final Order, as applicable,
to any such Secured Swap Party with respect to such Secured Swap Obligations
shall not be subject to discharge or impairment, except as otherwise provided by
this Interim Order and the Final Order, as applicable.

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23.         Other Rights and Obligations.

(a)       Expenses.  As provided in the DIP Loan Documents (and without limiting
the Debtors’ respective obligations thereunder), the applicable Debtors will pay
all reasonable and documented expenses incurred by the DIP Agent (including the
reasonable fees and disbursements of all counsel for the DIP Agent, any Secured
Swap Party to the extent provided in the DIP Credit Agreement, and any internal
or third-party appraisers, consultants, advisors, and auditors engaged by or for
the benefit of the DIP Agent and/or its counsel) in connection with the Cases,
including the preparation, execution, delivery, and administration of the DIP
Loan Documents, the Secured Swap Agreements, this Interim Order, the Final
Order, and any other agreements, instruments, pleadings, or other documents
prepared or reviewed in connection with any of the foregoing, whether or not any
or all of the transactions contemplated hereby or by the DIP Loan Documents are
consummated.

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(b)        Notice of Professional Fees.  Professionals for the DIP Agent, the
Secured Swap Parties, the Existing RBL Agent and the Existing Second Lien
Secured Parties (including professionals engaged by counsel to the DIP Agent,
the Existing RBL Agent, or the Existing Second Lien Secured Parties, as
applicable) (collectively, the “Lender Professionals”) shall not be required to
comply with the United States Trustee fee guidelines or submit invoices to this
Court, United States Trustee, any Committee or any other party in interest. 
Copies of summary invoices submitted to the Debtors by such Lender Professionals
shall be forwarded by the Debtors to the United States Trustee, counsel for any
Committee, and such other parties as this Court may direct.  The summary
invoices shall be sufficiently detailed to enable a determination as to the
reasonableness of such fees and expenses; provided, however, that such summary
invoices may be redacted to the extent necessary to delete any information
subject to the attorney-client privilege, any information constituting attorney
work product, or any other confidential information, and the provision of such
summary invoices shall not constitute any waiver of the attorney-client
privilege or of any benefits of the attorney work product doctrine or other
applicable privilege; and provided, further that to the extent DIP Agent and
Existing RBL Agent are the same and have a single set of advisors, such advisors
may submit a single combined invoice for their aggregated services.  If the
Debtors, United States Trustee, or any Committee object to the reasonableness of
the fees and expenses of any of the Lender Professionals and cannot resolve such
objection within ten (10) days of receipt of such invoices, then the Debtors,
United States Trustee, or the Committee, as the case may be, shall file with
this Court and serve on such Lender Professionals an objection (the “Fee
Objection”) limited to the issue of the reasonableness of such fees and
expenses, and any failure by any such party to file a Fee Objection within such
ten (10) day period shall constitute a waiver of any right of such party to
object to the applicable invoice.  Notwithstanding any provision herein to the
contrary, any objection to, and any hearing on an objection to, payment of any
fees and expenses set forth in a professional fee invoice in respect of Lender
Professionals shall be limited to the reasonableness of the particular items or
categories of the fees and expenses that are the subject of such objection.  The
Debtors shall timely pay in accordance with the terms and conditions of this
Interim Order (a) the undisputed fees, and expenses reflected on any invoice to
which a Fee Objection has been timely filed and (b) all fees, costs, and
expenses on any invoice to which no Fee Objection has been timely filed.  All
such unpaid fees, costs, expenses, and charges of the DIP Agent, the Secured
Swap Parties, Existing RBL Agent and/or Existing Second Lien Secured Parties, as
applicable, that have not been disallowed by this Court on the basis of an
objection filed by the Debtor, the United States Trustee, or the Committee (or
any subsequent trustee of the Debtors’ estates) in accordance with the terms
hereof shall constitute DIP Obligations, Existing RBL Obligations and/or
Existing Second Lien Obligations, as applicable, and shall be secured by the DIP
Collateral, Existing RBL Collateral and/or Existing Second Lien Collateral, as
applicable, as specified in this Interim Order.  Any and all fees and expenses
paid prior to the Petition Date by any Debtor to the DIP Secured Parties, the
Existing RBL Secured Parties and/or the Existing Second Lien Secured Parties in
connection with or with respect to the DIP Facility, the DIP Credit Agreement,
or the other DIP Loan Documents and Secured Swap Agreements are hereby approved
in full and non-refundable and shall not otherwise be subject to any Challenge. 
All fees, costs, expenses and charges paid to the Existing Second Lien Agent
and/or Existing Second Lien Secured Parties pursuant to this paragraph 23(a)
shall be subject to the Intercreditor Agreement and section 506(b) of the
Bankruptcy Code in all regards.

585

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(c)         Information Rights.  The Debtors shall substantially
contemporaneously provide the advisors to the Committee, the United States
Trustee, the advisors to the Existing RBL Secured Parties, and the advisors to
the Existing Second Lien Secured Parties with all required written financial
reporting and other periodic reporting that is required to be provided to the
DIP Agent or the other DIP Secured Parties under the DIP Loan Documents and the
DIP Orders; provided, that, to the extent such information constitutes material
non-public information, such information will be shared either (i) with the
advisors to the Committee, the advisors to the Existing RBL Secured Parties and
the advisors to the Existing Second Lien Secured Parties on a professionals’
eyes only basis or (ii) with the advisors to the Committee, the advisors to the
Existing RBL Secured Parties, and the advisors to the Existing Second Lien
Secured Parties for distribution to the members of the Committee, the Existing
RBL Secured Parties, and the Existing Second Lien Secured Parties pursuant to a
confidentiality agreement in form and substance reasonably satisfactory to the
Debtors; provided, further, that for the avoidance of doubt, the United States
Trustee, the members of the Committee, the Existing RBL Secured Parties, and the
Existing Second Lien Secured Parties shall not be entitled to any consent right
granted to the DIP Agent and/or any of the other DIP Secured Parties with
respect to such written financial reporting and other periodic reporting.

586

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(d)       Binding Effect.  Subject only to paragraph 6 above, the provisions of
this Interim Order, including all findings herein, and the DIP Loan Documents
and the Secured Swap Agreements shall be binding upon all parties in interest in
these Cases and any Successor Cases, including the DIP Secured Parties, the
Existing Secured Parties, any Committee, and the Debtors and their respective
estates, successors, and assigns (including any chapter 7 or chapter 11 trustee
hereinafter appointed or elected for the estate of any of the Debtors, an
examiner appointed pursuant to section 1104 of the Bankruptcy Code, or any other
fiduciary or responsible person appointed as a legal representative of any of
the Debtors or with respect to the property of the estate of any of the
Debtors), whether in any of the Cases, in any Successor Cases, or upon dismissal
of any such Case or Successor Case; provided, however, that the DIP Secured
Parties and the Existing Secured Parties shall have no obligation to permit the
use of Cash Collateral or to extend any financing to any chapter 7 or chapter 11
trustee or other responsible person appointed for the estates of the Debtors in
any Case or Successor Case.

587

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(e)        No Waiver.  The failure of the Existing Secured Parties or the DIP
Secured Parties to seek relief or otherwise exercise their rights and remedies
under this Interim Order, the Existing Loan Documents, the DIP Loan Documents,
the Secured Swap Agreements, or otherwise (or any delay in seeking or exercising
same) shall not constitute a waiver of any of such parties’ rights hereunder,
thereunder, or otherwise.  Nothing contained in this Interim Order (including
the authorization of the use of any Cash Collateral) shall impair or modify any
rights, claims, or defenses available in law or equity to any Existing Secured
Party or any DIP Secured Party, including rights of a party to a Secured Swap
Agreement (as defined in the DIP Credit Agreement), securities contract,
commodity contract, forward contract, or repurchase agreement with a Debtor to
assert rights of setoff or other rights with respect thereto as permitted by law
(or the right of a Debtor to contest such assertion).  Except as prohibited by
this Interim Order, the entry of this Interim Order is without prejudice to, and
does not constitute a waiver of, expressly or implicitly, or otherwise impair,
any right or ability of the Existing Secured Parties or the DIP Secured Parties
under the Bankruptcy Code or under non-bankruptcy law to (i) request conversion
of the Cases or any Successor Cases to cases under chapter 7, dismissal of the
Cases or any Successor Cases, or the appointment of a trustee or examiner in the
Cases or any Successor Cases, or to oppose the use of Cash Collateral in any
Successor Case or on terms other than those set forth in this Interim Order,
(ii) propose, subject to the provisions of section 1121 of the Bankruptcy Code,
any chapter 11 plan or plans with respect to any of the Debtors or seek early
termination of the Debtors’ exclusive rights to propose a plan under the
Bankruptcy Code, or (iii) except as expressly provided herein, exercise any of
the rights, claims, or privileges (whether legal, equitable, or otherwise) of
the DIP Secured Parties or the Existing Secured Parties, respectively, under the
DIP Loan Documents and the Secured Swap Agreements, or the Existing Loan
Documents, the Bankruptcy Code, or otherwise.  Except to the extent otherwise
expressly provided in this Interim Order or by law, neither the commencement of
the Cases nor the entry of this Interim Order shall limit or otherwise modify
the rights and remedies of the Existing Secured Parties under the Existing Loan
Documents or with respect to any non-Debtor entities or their respective assets,
whether such rights and remedies arise under the Existing Loan Documents,
applicable law, or equity.

588

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

(f)         No Third Party Rights.  Except as explicitly provided for herein or
in any DIP Loan Document, this Interim Order does not create any rights for the
benefit of any third party, creditor, equity holder, or direct, indirect, or
incidental beneficiary.  In determining to make any loan (whether under the DIP
Credit Agreement or otherwise) or to permit the use of Cash Collateral or in
exercising any rights or remedies as and when permitted pursuant to this Interim
Order or the DIP Loan Documents, the DIP Secured Parties and the Existing
Secured Parties shall not (i) be deemed to be in control of the operations of
the Debtors or to be acting as a “responsible person” or “owner or operator”
with respect to the operation or management of the Debtors (as such terms, or
any similar terms, are used in the United States Comprehensive Environmental
Response, Compensation and Liability Act, as amended, or any similar federal,
state or local statute or regulation) or (ii) owe any fiduciary duty to the
Debtors, their respective creditors, shareholders, or estates.

(g)        No Marshaling.  Neither the DIP Secured Parties, the Existing RBL
Secured Parties, nor the Existing Second Lien Secured Parties shall be subject
to the equitable doctrine of “marshaling” or any other similar doctrine with
respect to any of the DIP Collateral, the Existing RBL Collateral, or the
Existing Second Lien Collateral, as applicable.

589

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(h)        Amendments.  The Debtors are authorized and empowered, without
further notice and hearing or approval of this Court, to amend, modify,
supplement, or waive any provision of the DIP Loan Documents or Secured Swap
Agreements in accordance with the provisions thereof, in each case unless such
amendment, modification, supplement, or waiver (i) increases the interest rate
(other than as a result of the imposition of the default rate), (ii) increases
the aggregate lending commitments of all of the DIP Lenders in respect of the
DIP Facility, (iii) shortens the Maturity Date (as defined in the DIP Credit
Agreement), or (iv) adds or amends (in any respect unfavorable to the Debtors)
any Event of Default.  No waiver, modification, or amendment of any of the
provisions of the DIP Loan Documents or Secured Swap Agreements shall be
effective unless set forth in writing, signed by or on behalf of all the Debtors
and the DIP Agent (after having obtained the approval of the requisite DIP
Secured Parties under the DIP Credit Agreement) and, except as provided herein,
approved by this Court. Notwithstanding the foregoing, no waiver, modification
or amendment of any of the provisions of this Interim Order or the DIP Loan
Documents that would directly and adversely affect the rights or interests of
the Existing RBL Secured Parties or the Existing Second Lien Secured Parties, as
applicable, shall be effective unless also consented to in writing by the
Existing RBL Agent on behalf of the Existing RBL Secured Parties, and/or the
Existing Second Lien Agent on behalf of the Existing Second Lien Secured
Parties, as applicable (after obtaining the approval of the requisite Existing
RBL Secured Parties under the Existing RBL Credit Agreement, and/or of the
requisite Existing Second Lien Secured Parties under the Existing Second Lien
Credit Agreement, as applicable).

(i)         Inconsistency.  In the event of any inconsistency between the terms
and conditions of the DIP Loan Documents and of this Interim Order, the
provisions of this Interim Order shall govern and control.  In the event of any
inconsistency between the terms or conditions of this Interim Order and the
terms or conditions of any other order entered by this Court in the nature of a
First Day Order, the provisions of this Interim Order shall govern and control.

(j)         Enforceability.  This Interim Order shall constitute findings of
fact and conclusions of law pursuant to the Bankruptcy Rule 7052 and shall take
effect and be fully enforceable nunc pro tunc to the Petition Date immediately
upon execution hereof.  Notwithstanding Bankruptcy Rules 4001(a)(3), 6004(h),
6006(d), 7062, or 9024 or any other Bankruptcy Rule, any Local Rule, or Rule
62(a) of the Federal Rules of Civil Procedure, this Interim Order shall be
immediately effective and enforceable upon its entry, and there shall be no stay
of execution or effectiveness of this Interim Order.

590

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

(k)         Reservation of Rights.  Nothing in this Interim Order shall be
deemed to constitute the consent of the DIP Secured Parties or the Existing
Secured Parties, and each of the foregoing expressly reserve the right, subject
to the Intercreditor Agreement, to object, to entry of any order of the Court
that provides for the sale or other disposition of all or substantially all of
the assets of the Debtors (or any other sale or other disposition of assets of
any of the Debtors outside the ordinary course of business) to any party unless,
in connection and concurrently with any such event, the proceeds of such sale
are or will be sufficient to Pay in Full the DIP Obligations, the Existing RBL
Obligations, the Existing RBL Adequate Protection, the Existing Second Lien
Obligations, and the Existing Second Lien Adequate Protection, as applicable.

(l)         No Requirement to Accept Title to Collateral.  The DIP Secured
Parties and the Existing Secured Parties shall not be obligated to accept title
to any portion of the DIP Collateral or the Existing Collateral in payment of
any of the DIP Obligations or Existing Obligations, as applicable, in lieu of
payment in cash or cash equivalents, nor shall the DIP Secured Parties and the
Existing Secured Parties be obligated to accept payment in cash or cash
equivalents that is encumbered by any interest of any person or entity other
than the DIP Secured Parties or the Existing Secured Parties, as applicable.

(m)       Headings.  Paragraph headings used herein are for convenience only and
are not to affect the construction of, or to be taken into consideration in,
interpreting this Interim Order.

591

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24.          Final Hearing.

(a)        The Final Hearing to consider entry of the Final Order and final
approval of the DIP Facility is scheduled for June [●], 2019, at [●] [a/p].m.
(prevailing Central Time) at the United States Bankruptcy Court for the Southern
District of Texas.

(b)        Final Hearing Notice.  As soon as reasonably practicable following
entry of this Interim Order, the Debtors shall serve (i) notice of the entry of
this Interim Order and of the Final Hearing (the “Final Hearing Notice”) and
(ii) a copy of this Interim Order on the parties having been given notice of the
Interim Hearing and to any other party that has filed a request for notices with
this Court and to any Committee after the same has been appointed, or Committee
counsel, if the same shall have been appointed.  The Final Hearing Notice shall
state that any party in interest objecting to the entry of the proposed Final
Order shall file written objections with the Clerk of the United States
Bankruptcy Court for the Southern District of Texas no later than June [●],
2019, at [●] [a/p].m. (prevailing Central Time) which objections shall be served
so that the same are received on or before such date by:  (a) proposed counsel
to the Debtors, Sidley Austin LLP, 1000 Louisiana St. #6000, Houston TX 77002
(Attn:  Duston McFaul, Brian Minyard and Charles Persons; dmcfaul@sidley.com;
bminyard@sidley.com; and cpersons@sidley.com); (b) counsel to the DIP Agent and
the Existing RBL Agent, (i) Orrick, Herrington & Sutcliffe LLP, 51 West 52nd
Street, New York, NY 10019-6142 (Attn: Raniero D’Aversa and Laura Metzger;
rdaversa@orrick.com and lmetzger@orrick.com) and (ii) Orrick, Herrington &
Sutcliffe LLP, 609 Main Street, 40th Floor, Houston Texas 77002-3106 (Attn:
[name], [email]); (c) counsel to any Committee appointed in these cases; (d)
[the Existing Second Lien Agent, 251 Little Falls Drive, Wilmington, DE 19808];
(e) counsel to the Existing Second Lien Agent, Latham & Watkins LLP, 885 3rd
Avenue, New York, NY 10022 (Attn: George Davis and Adam J. Goldberg,
george.davis@lw.com and adam.goldberg@lw.com); (f) counsel to the Ad Hoc Group
of Senior Noteholders, Davis Polk & Wardwell LLP, 450 Lexington Avenue New York,
NY 10017, (Attn:  [name], [name], and [name]; [email], [email], and [email])];
(g) the Office of the United States Trustee for the Southern District of Texas;
and (h) any other party that has filed a request for notices with this Court,
and such objections shall be filed with the Clerk of the United States
Bankruptcy Court for the Southern District of Texas, in each case to allow
actual receipt of the foregoing no later than June [●], 2019, at [●] [a/p].m.
(prevailing Central time).

592

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25.          Retention of Jurisdiction.  This Court has and will retain
jurisdiction to enforce this Interim Order according to its terms.

Signed:  June [●], 2019

     
[●]
 
UNITED STATES BANKRUPTCY JUDGE

593

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SCHEDULE 1

DIP Credit Agreement

594

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

Annex I

 
Name of Lender
Applicable
Percentage
New Money DIP Loan
Commitment
1.
     
2.
     
3.
     
4.
     
5.
     
6.
     
7.
     
8.
     

595

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SCHEDULE 2

Initial 13-Week Cash Flow Forecast

596

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

SCHEDULE 3

Initial DIP Budget

597

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

Exhibit C

MIP Term Sheet

598

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

EXECUTION VERSION

LEGACY RESERVES, INC.

MANAGEMENT INCENTIVE PLAN

The following term sheet (this “Term Sheet”) summarizes the principal terms of a
Management Incentive Plan (the “Plan”) to be sponsored by Legacy Reserves, Inc.
(the “Company”) and its subsidiaries (collectively, the “Company Group”) and of
grants to be made at Emergence under the Plan to management employees of the
Company Group (each, an “Employee”), including executive employees (each, an
“Executive”).  Capitalized terms used in this Term Sheet but not defined herein
shall have the meanings given to them in the Restructuring Term Sheet.

Company
Capital
Structure:

The Plan of Reorganization contemplates a minimum initial equity value of $[TBD]
million, which for purposes hereof will consist of [TBD] 1 million shares
(“Initial Share Count”) at $10 per share; such equity value and Initial Share
Count would be adjusted based on the amount of new equity funded on Emergence.

Incentive
Compensation:

There will be reserved, exclusively for Employees, a pool of equity (such
reserve, the “MIP Pool”) having a value equal to:

(i)   5.0% of the Initial Share Count granted as soon as administratively
practicable (but in no event more than 60 days following Emergence) in
accordance with this Term Sheet (the “Emergence Awards”) in the following form:
(A) 2.5% of the Initial Share Count in Restricted Stock Units (“RSUs”), and (B)
2.5% of the Initial Share Count in stock options with a strike price of $10.00
per share (“Options”);

(ii)  5.0% of the Initial Share Count will be reserved for potential future
issuance as determined by the new board of directors.2

Notwithstanding the foregoing, unless otherwise approved by the Plan Sponsor,
for purposes of the MIP Pool, the Initial Share Count will not include any: i)
shares issued in excess of [70] million shares (i.e. for shares issued in
respect of equity capitalization in excess of $[700] million) or ii) shares
issued to Plan Sponsor in respect of its new money funding in excess of 20
million shares (i.e. for shares issued to Plan Sponsor in excess of $200 million
funded).

Vesting:

Normal Vesting. Subject to an Employee’s continued employment through each
applicable vesting date, Emergence Awards will vest 25% on each of the first
four (4) anniversaries of the Emergence Date.

RSUs will be settled as soon as practicable following vesting.

Accelerated Vesting Prior to a Change in Control. If the Employee is terminated 
by the Company without Cause, by the Employee for Good Reason or due to death or
Disability, and such termination occurs outside of the Change in Control period
described below, the Employee will become vested in the Emergence Awards that
would have vested if the Employee’s employment had continued for an additional
12 months.

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

1 NTD: To be equal to the number of shares with aggregate value equal to plan
value.

2 NTD:  We will ensure that options will not have exercise prices lower than the
fair market value on the grant date, but we do not want to commit to getting
independent 409A valuations. We will get independent 409A valuations at the time
of grant if we think necessary.

599

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

 

Accelerated Vesting Upon a Change in Control.  Upon a Change in Control (as will
be defined in the applicable equity plan and excluding any acquisition of the
Company by Plan Sponsor and any of its affiliates) following which the Employee
is terminated by the Company without Cause or by the Employee for Good Reason
within 24 months following the Change in Control, 100% of an Employee’s unvested
Emergence Awards will accelerate and vest.

The definitions of “Cause,” “Without Cause,” “Good Reason” and “Disability” will
be on customary terms for similar management arrangements.

Forfeiture:

100% of any unvested Options or unvested RSUs (determined after giving effect to
any accelerated vesting set forth above) will be forfeited for no consideration
upon any termination of employment and, subject to the next sentence, the
Employee will be entitled to retain any vested Options that are not yet
exercised or any vested RSUs that are not yet settled, and any shares previously
received upon exercise of Options or settlement of RSUs, subject to the exercise
of the repurchase rights (discussed below).  All Options, whether or not vested,
will be forfeited for no consideration upon a termination for Cause.

Other Terms:

The option grants will be subject to customary adjustments with regard to any
extraordinary dividends paid.  The Options will expire on the earlier of (a) the
tenth (10th) anniversary of the Emergence Date or (b) 180 days following the
Employee’s termination of employment (other than for Cause) or one year
following his or her Death or Disability.  Unvested RSUs will be entitled to
dividends on a pro rata basis with outstanding shares and such dividend payments
will be retained and will be subject to vesting provisions set forth above.

Upon the exercise of an Option or the settlement of RSUs, Employees may elect to
pay the exercise price and tax withholding through the withholding of shares by
the Company.

If the Company is not publicly traded on a national securities exchange or over
the counter market, the Company will agree to provide fair market valuations to
facilitate the exercise of Options.

Executive
Investments:

The Executives will have the opportunity to invest in the common stock in a
manner to be agreed by the Executives, the Company and Plan Sponsor.

Employment
Agreements:

The Company will enter into amended and restated employment agreements with
Executives on the same terms as set forth in the existing agreements, subject to
conforming changes associated with this MIP and Change in Control definitions. 
For the avoidance of doubt, the reorganization of the Company will not
constitute a Change in Control under the applicable employment agreements.

600

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

Company
Repurchase
Rights:

•     The Company shall have the right to repurchase, upon an Employee’s
termination of employment and for Fair Market Value, any common shares acquired
upon exercise of the Options or in settlement of the RSUs.  The repurchase right
will expire on the 12-month anniversary of the Employee’s termination of
employment or in connection with an initial public offering or other listing on
a national securities exchange.

•      The repurchase price will be paid in cash unless otherwise prohibited by
the terms of any loan agreement or other financing agreement or instrument to
which the Company is a party, in which case, in lieu of cash payment, the
Company may at its discretion issue to the Executive a promissory note bearing
simple interest at the prime rate and containing such other reasonable terms and
conditions as may be determined by the Company.

•     “Fair Market Value” means the fair market value of the applicable security
as of the Employee’s termination of employment, as determined by the new board
of directors in good faith and without applying any discounts for minority
interest, illiquidity or other similar factors.

Allocations

•      Allocations among individual Employees to be determined by mutual
agreement of Plan Sponsor and the Company.

 
601

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

Exhibit D

Exit Facility Term Sheet

602

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

LEGACY RESERVES INC.

$500,000,000 RBL EXIT FACILITY
$[___] NEW TERM LOAN FACILITY
SUMMARY OF TERMS AND CONDITIONS

This Summary of Terms and Conditions (this “Term Sheet”) is for discussion
purposes only and does not include descriptions of all of the terms, conditions,
covenants, representations, warranties and other provisions that are to be
contained in the definitive documentation relating to the transactions described
below.  This Term Sheet is delivered to you with the understanding that it is
subject to the confidentiality terms governing information received by you in
connection with the Existing Loan Documents. This Term Sheet is non-binding and
does not indicate a commitment to amend the Existing Credit Agreement or enter
into any transaction.  Consequently, this Term Sheet is entitled to protection
from any use or disclosure to any person or entity pursuant to Federal Rule of
Evidence 408 and any other rules or laws of similar import.  Any amendments to
the Existing Credit Agreement or any other transactions are subject to the
approval (including credit approval) of the Existing Agent and the Existing
Lenders in all regards and to definitive documentation in connection with the
Facilities.  The Borrower should not consider any discussions or course of
dealings that the Existing Agent, any Existing Lender or any of their respective
affiliates had or may have with the Borrower or any of its affiliates as a
forbearance, waiver or modification of the Existing Credit Agreement.  Those
matters that are not addressed in this Term Sheet and all other terms,
conditions, covenants, representations, warranties and other provisions are
subject to the mutual agreement of the parties thereto.  (For purposes of this
Term Sheet, “Definitive Documentation” means all documents related to the
Facilities (as defined below) and the Plan, including, without limitation, the
Disclosure Statement, the Plan, and the Confirmation Order). No party shall be
entitled to rely on any statement or representation made by any other party or
its representatives except as ultimately set forth in final, executed Definitive
Documentation, if any. Capitalized terms used but not defined herein shall have
the meaning set forth in the Existing Credit Agreement or the DIP Credit
Agreement (each as defined below), as applicable.

This Term Sheet and the information contained in this Term Sheet shall remain
strictly confidential and may not be shared with any person or entity (other
than the Loan Parties, the Lenders and their respective professionals and
advisors), unless otherwise consented to by the Borrower or the Lenders, as
applicable.

Parent:
TBD
   
Borrower:
Legacy Reserves Inc., a Delaware corporation (the “Borrower”), as reorganized
pursuant to the Plan and Confirmation Order.
   
Guarantors:
The obligations of (a) the Borrower under the Facilities, (b) any Loan Party
under any hedging agreements entered into between such Loan Party and any
counterparty that is a Lender (as defined below) (or any affiliate thereof), and
(c) any Loan Party under any cash management arrangements between such Loan
Party and a Lender (or any affiliate thereof) (such obligations, collectively,
the “Obligations”) will be unconditionally guaranteed, on a joint and several
basis, by each other Loan Party (other than, with respect to obligations under
clause (a), the Borrower) and each other wholly-owned direct or indirect
subsidiary of the Borrower (as reorganized through the Plan and Confirmation
Order) other than Unrestricted Subsidiaries (as defined below) (collectively,
such subsidiaries the “Restricted Subsidiaries” or the “Guarantors” and,
collectively with the Borrower, the “Loan Parties”; and such guarantee being
referred to as the “Guarantee”).  All Guarantees shall be guarantees of payment
and not of collection.

603

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

 
The Borrower will be permitted to designate any existing or subsequently
acquired or organized subsidiary as an “Unrestricted Subsidiary” and
subsequently re-designate any such unrestricted subsidiary as a Restricted
Subsidiary; provided that (i) after giving effect to any such designation or
re-designation and any related transaction, all representations and warranties
are true and correct in all material respects, no event of default shall have
occurred and be continuing, Borrower shall be in compliance with the Financial
Covenants on a pro forma basis, and such designation or re-designation will be
made with respect to all Specified Additional Debt (as defined below), and (ii)
the fair market value of such subsidiary at the time it is designated as an
Unrestricted Subsidiary shall be treated as an investment by the Borrower at
such time.  Unrestricted Subsidiaries will not be subject to the representations
and warranties, affirmative or negative covenants or event of default provisions
of the Definitive Documentation and the results of operations and indebtedness
of Unrestricted Subsidiaries will not be taken into account for purposes of
determining compliance with the Financial Covenants contained in the Definitive
Documentation.
   
Sole Lead Arranger
and Bookrunner
Wells Fargo Securities, LLC
   
Administrative
Agent, Collateral
Agent and Issuing
Bank:
Wells Fargo Bank, National Association, acting through one or more of its
branches or affiliates (“Wells Fargo”) will act as (i) sole administrative agent
for the Facilities described below (in such capacity, the “Administrative
Agent”), (ii) sole collateral agent for the Facilities described below (in such
capacity, the “Collateral Agent”) for a syndicate of banks, financial
institutions and other institutional lenders (together with Wells Fargo, the
“Lenders”), and (iii) an Issuing Bank pursuant to the RBL Exit Facility (in such
capacity, together with any other Lender agreed to by such Lender, the
Administrative Agent and the Borrower, collectively, the “Issuing Bank”) and
will perform the duties customarily associated with each such role.
   
Lenders:
Initially, the Lenders in the RBL Exit Facility (as defined below) will be
(i) each Existing Lender holding Existing Loans and electing, pursuant to the
Plan, to participate in the RBL Exit Facility, and (ii) each holder of
Refinanced Loans (as defined in the DIP Credit Agreement) under the DIP Credit
Agreement that has not been repaid in cash pursuant to the Plan (collectively,
and together with any party that becomes a lender by assignment, the “Lenders”).
   
Prior Facilities
(a)  The Third Amended and Restated Credit Agreement dated as of April 1, 2014
(as amended, supplemented or otherwise modified prior to the Petition Date, and
including all exhibits and other ancillary documentation in respect thereof, as
amended, amended and restated, modified or supplemented from time to time, the
“Existing Credit Agreement” and the loans thereunder, the “Existing Loans”),
among Legacy Reserves, LP, as the borrower (the “Existing Borrower”), Wells
Fargo as the administrative agent (in such capacity, the “Existing Agent”), the
other agents and other entities party thereto, and the financial institutions
and other persons or entities party thereto as lenders (the “Existing Lenders”).

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(b)  The Senior Secured Superpriority Debtor-in-Possession Credit Agreement to
be entered into in connection with the Bankruptcy Cases (as amended, amended and
restated, modified or supplemented from time to time, the “DIP Credit Agreement”
and the “Refinanced Loans” (as defined therein), the “DIP Loans”) among the
Existing Borrower (together with its affiliated Chapter 11 debtors, the
“Debtors”), Legacy Reserves Inc., a Delaware corporation (the “Parent”), as
parent guarantor, Wells Fargo as administrative agent and collateral agent
thereunder and as defined therein (in such capacity, the “DIP Agent”), and the
lenders party thereto (the “DIP Lenders”).

(c)  The Term Loan Credit Agreement, dated as of October 25, 2016, among the
Existing Borrower, each of the lenders from time to time party thereto, and
Cortland Capital Market Services LLC, as the administrative agent (the “Existing
Second Lien Agent” as amended, supplemented or otherwise modified prior to the
Petition Date, and including all exhibits and other ancillary documentation in
respect thereof, the “Existing Second Lien Credit Facility”).

(d)  The 8.00% Senior Notes due 2020 (the “Existing 2020 Senior Notes”).

(e)  The 6.625% Convertible Senior Notes due 2021 (the “Existing 2021 Senior
Notes”).

(e)  The 8.00% Convertible Senior Notes due 2023 (the “Existing 2023 Convertible
Senior Notes” and, together with the Existing 2020 Senior Notes and the Existing
2021 Senior Notes, collectively, the “Existing Senior Notes”).
   
Chapter 11 Plan:
The Debtors shall seek confirmation of a chapter 11 plan (the “Plan”) in
connection with the voluntary cases commenced by the Debtors on June [14], 2019
(the “Petition Date”) in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division (the “Bankruptcy Court”), which Plan shall
(a) be filed no later than seventy-five (75) days after the Petition Date,
(b) be consistent in all material respects with the Restructuring Support
Agreement, the Restructuring Term Sheet, and this Term Sheet, and (c) give
effect to the transactions contemplated by this Term Sheet.
   
Facilities:
A senior secured, amended and restated facilities consisting of the RBL Exit
Facility and the New Term Loan Facility, each as described below (collectively,
the “Facilities”), in each case, as more fully described below and which shall
become effective on the effective date of the Plan, which shall occur no later
than 240 days following the Petition Date (the “Plan Effective Date”).

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(a)  RBL Exit Facility.  Pursuant to the Plan, and subject to adjustment for
Non-Electing Lenders (as defined and described below) and as part of the
treatment of their Obligations under the Plan, each Existing Lender that is a
holder of Existing Loans and elects to become an RBL Lender and each DIP Lender
under the DIP Credit Agreement with Refinanced Loans that have not been paid in
cash on the Plan Effective Date (each, an “Electing Lender”) shall become
revolving lenders (collectively, the “RBL Lenders”) on the Plan Effective Date
by agreeing to provide a lending commitment in respect of a senior secured first
lien reserve-based revolving credit facility (each such RBL Lender’s commitment,
as reduced from time to time in accordance with the terms hereof, its “Revolving
Commitment” and such revolving facility, the “RBL Exit Facility” and the loans
under such RBL Exit Facility, the “Revolving Loans”) in an amount equal to such
RBL Lender’s pro rata share of an aggregate $500 million (the aggregate
revolving commitments for all RBL Lenders, as reduced from time to time in
accordance with the terms hereof, the “Maximum Revolving Commitments”), $455
million of which shall be deemed funded (the “Funded Revolving Loans”) on the
Plan Effective Date and the balance of $45 million (the “Initial Availability
Amount”) shall be immediately available in accordance with the terms hereof
(subject to adjustment and approval as provided in Annex A hereto), after giving
effect to the transactions contemplated hereby and under the Plan.  Each RBL
Lender shall also receive, as part of the treatment of its Obligations under the
Plan, a pro rata share of cash in an amount equal to the Initial Availability
Amount on the Plan Effective Date (in addition to, and not in lieu of, any other
cash payments provided in the Plan).  In accordance with the Plan, the RBL Exit
Facility shall be secured pari passu with, but senior in payment priority to the
New Term Loan Facility (as defined below).

The Maximum Revolving Commitments, the Borrowing Base (as defined below) and the
Funded Revolving Loans (but not the Initial Availability Amount) are subject to
proportionate reduction in the event less than 100% of the Existing Lenders
elect to become RBL Lenders.  For the avoidance of doubt, the aggregate
outstanding Maximum Revolving Commitments and New Term Loans shall not exceed
$500 million on the Plan Effective Date.

(b)  New Term Loan Facility.  A first lien term loan facility in an aggregate
principal amount equal to $[__] million (the “New Term Loan Facility,” the loans
thereunder, the “New Term Loans” and the lenders thereunder, the “New Term Loan
Lenders”).  Pursuant to the Plan, each Existing Lender that is a holder of
Existing Loans and declines to participate in the RBL Exit Facility
(collectively, the “Non-Electing Lenders”), as part of the treatment of their
obligations under the Plan, shall become New Term Loan Lenders on the Plan
Effective Date in respect of New Term Loans deemed made by such New Term Loan
Lenders on the Plan Effective Date as “take-back” paper (or similar) in an
amount equal to such New Term Loan Lender’s pro rata share of the amount of the
New Term Loan Facility.  The New Term Loan Facility shall be secured pari
passu with the other Obligations on a “last-out” basis with respect to the
payment priority.

Without limiting the payment priority set forth in the mandatory and optional
prepayment provisions below, all proceeds of Collateral (as defined below) after
the occurrence and during the continuance of an Event of Default shall be
allocated first, pro rata to pay (i) all amounts outstanding under the RBL Exit
Facility (including, without limitation, interest, principal, fees and
cash-collateralization of Letters of Credit (as defined below)), (ii) hedging
agreements constituting Obligations and (iii) cash management obligations
constituting Obligations and second, to pay amounts outstanding under the New
Term Loan Facility.

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Letter of Credit
Sublimit:
The RBL Exit Facility will include a sub-facility for standby letters of credit
(each, a “Letter of Credit”) in the aggregate principal amount not to exceed
$5 million.
   
Amortization:
There shall be no amortization of the Revolving Loans or the New Term Loans.
   
Borrowing Base and
Borrowing Base
Redetermination:
Availability under the RBL Exit Facility shall be subject to a borrowing base
(the “Borrowing Base”), which shall be initially determined and periodically
redetermined in a customary manner (and, for the avoidance of doubt, giving
effect to hedging agreements constituting Obligations) (each such
redetermination, a “Borrowing Base Redetermination”) and as set forth below.

Initial Borrowing Base.  On the Plan Effective Date, the initial Borrowing Base
shall be $500 million.  Thereafter, until the First Scheduled Redetermination
Date (as defined below), the Borrowing Base shall be the amount during the
corresponding period as set forth in the table below:

   
Date
Borrowing Base
   
February 1, 2020 – February 29, 2020
$494 million
   
March 1, 2020 – March 31, 2020
$488 million
   
April 1, 2020 – April 30, 2020
$482 million
   
May 1, 2020 – May 31, 2020
$476 million
   
June 1, 2020
$470 million (subject to redetermination)

 
Scheduled Borrowing Base Redeterminations.  The first Scheduled Borrowing Base
Redetermination shall occur on June 1, 2020 (the “First Scheduled
Redetermination Date”) and on each April 1 and October 1 thereafter, commencing
on October 1, 2020.
     
Interim Borrowing Base Redeterminations.  Interim Borrowing Base
Redeterminations may be implemented after the First Scheduled Redetermination
Date (a) upon the request of the Administrative Agent or the Majority Lenders
(each, a “Lender Redetermination”), or (b) upon the request of the Borrower
(each, a “Borrower Redetermination” and, together with Lender Redeterminations,
collectively the “Interim Redeterminations”); provided that there shall be no
more than one Lender Redetermination and one Borrower Redetermination between
each Scheduled Borrowing Base Redeterminations.
     
Borrowing Base Deficiency.  If, at any time, the sum of total outstanding
balance of the Revolving Loans and other revolving credit exposure plus the New
Term Loans is greater than the then-effective Borrowing Base (such excess, a
“Borrowing Base Deficiency”) as a result of a Borrowing Base Redetermination, an
Interim Redetermination, or the adjustment in the Borrowing Base described
below, the Borrower shall, within 120 days after the later of (i) notice of such
Borrowing Base Deficiency or (ii) the date of such adjustment, repay the
Borrowing Base Deficiency in a single lump sum for application to the Revolving
Loans and other revolving credit exposure until there are no outstanding
Revolving Loans and Revolving Commitments, and then to the New Term Loans;
provided that such payment shall be made before the Revolving Loan Maturity Date
or New Term Loan Maturity Date, as applicable, together with the interest
accrued thereunder.

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Borrowing Base
Reductions:
Sale or Disposition Reduction.  Any sale or disposition of any Oil and Gas
Properties (as defined in the Existing Credit Agreement), including the net
effect of early terminations of hedges, the Borrowing Base value (as determined
in good faith by the Administrative Agent) of which exceeds five percent (5%) of
the then applicable Borrowing Base, shall result in a redetermination of the
Borrowing Base on a pro forma basis after giving effect to such sale,
disposition or early termination.  Any such redetermination shall not
constitute, and shall be in addition to, any Interim Redetermination which the
Majority Lenders may otherwise elect.
     
Issuance or Refinancing Reduction.  The Borrowing Base will also be
automatically reduced by 25% (or a lower percentage approved by the Required
Lenders) of each of (i) the stated principal amount of any permitted senior note
issuance (without regard to any OID) or (ii) the excess of the stated principal
amount from the original principal amount of any permitted refinancing debt.
   
Closing Date:
The Plan Effective Date (the “Closing Date”).  For the avoidance of doubt,
conditions to effectiveness of the RBL Exit Facility shall include the
following: (x) the conditions under the headings “Conditions to Closing” and
“Conditions to All Extensions of Credit” below; and (y) entry of an order by the
Bankruptcy Court confirming the Plan, which shall be in form and substance
reasonably satisfactory to the Administrative Agent (the “Confirmation Order”).

   
Use of Proceeds:
The proceeds of the Revolving Loans and other extensions of credit made from
time to time under the RBL Exit Facility shall be used to refinance, in part,
the Existing Loans and to fund ongoing working capital requirements and other
general corporate purposes of the Borrower and the other Loan Parties.  The
proceeds of the New Term Loans shall be used to refinance, in part, the Existing
Loans.
   
Definitive
Documentation;
Documentation
Principles:
The Facilities will be documented on loan documents that are based on the
Existing Credit Agreement; provided that (i) such documentation shall contain
the terms and conditions (a) set forth in this Term Sheet and (b) as may be
mutually agreed by the Borrower and the Administrative Agent, and (ii) in the
event that the New Term Loan Facility shall be documented in a separate credit
facility, (a) such documentation shall be on terms no more restrictive than
those of the RBL Exit Facility and (b) subject to a collateral agency agreement
whereby the Collateral Agent is appointed to act as secured party and hold
collateral for the benefit of all Facilities (and the principles described
therein, the “Documentation Principles”).

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Collateral:
The Obligations will be secured by valid and perfected first-priority security
interests in and liens on all of the following (collectively, the “Collateral”):
     
(a) 100% of the equity interests of all present and future Restricted
Subsidiaries of any Loan Party (other than equity interests of non-wholly owned
Restricted Subsidiaries to the extent a lien in favor of the Collateral Agent
cannot be granted without the consent of one or more third parties (other than
the Parent, its Restricted Subsidiaries and their respective affiliates));
     
(b) substantially all of the tangible and intangible personal property and
assets of the Loan Parties (including, without limitation, all equipment,
inventory and other goods, accounts, licenses, contracts, intercompany loans,
intellectual property and other general intangibles, deposit accounts,
securities accounts and other investment property and cash); and
     
(c) Oil and Gas Properties representing at least 95% of the total value of all
Oil and Gas Properties of the Loan Parties included in the most recent reserve
report, in each case, subject to customary exceptions to be agreed.
     
All such security interests in personal property and all liens on Oil and Gas
Properties and other real property will be created pursuant to the Definitive
Documentation and otherwise subject to the Documentation Principles.
   
Interest Rates:
At the Borrower’s option, the Revolving Loans will bear interest based on the
Base Rate or LIBOR, plus the applicable Revolving Interest Margin (as defined
below).
     
The interest margin for Revolving Loans (the “Revolving Interest Margin”) shall
be based upon utilization of the Borrowing Base (expressed as a percentage of
outstanding loans and Letters of Credit under the RBL Exit Facility divided by
the Borrowing Base) according to the following grid:
     
(a)  in the case of the RBL Exit Facility, based upon utilization of the
Borrowing Base (expressed as a percentage of outstanding Revolving Loans and
Letters of Credit under the RBL Exit Facility divided by the Borrowing Base) an
interest margin according to the following grid:

 
Utilization
Revolving Interest Margin
Commitment
Fee
 
Base Rate
LIBOR
 
≥ 90%
300 bps
400 bps
50.0 bps
 
< 90% but ≥ 75%
275 bps
375 bps
50.0 bps
 
< 75% but ≥ 50%
225 bps
325 bps
50.0 bps
 
< 50% but ≥ 25%
175 bps
275 bps
37.5 bps
 
< 25%
150 bps
250 bps
37.5 bps

 
(b) the New Term Loans will bear interest based on LIBOR, plus 200 bps.

“Base Rate” means the highest of (a) the rate of interest publicly announced by
Wells Fargo as its prime rate in effect at its principal office in New York
City, (b) the NYFRB Rate (defined as the greater of the federal funds effective
rate and the overnight bank funding rate) from time to time (but not less than
zero) plus 0.5% and (c) the one-month LIBO Rate plus 1.00%.

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“LIBOR” means the rate (but not less than zero) at which eurodollar deposits in
the London interbank market for one, two, three or six months (or, with the
consent of each RBL Lender, twelve months), as selected by the Borrower, are
quoted on the applicable Reuters screen.  The Definitive Documentation will
contain customary language that provides for the replacement of LIBOR with an
alternate rate of interest.
   
Default Rate:
At any time an event of default has occurred and is continuing (i) all
outstanding Base Rate Loans and LIBOR Loans under the Facilities shall bear
interest at 2.00% per annum above the rate applicable to Base Rate Loans or
LIBOR Loans, as applicable, and (ii) all other outstanding, overdue amounts
under the Facilities shall bear interest at 2.00% per annum above the rate
applicable to Base Rate Loans.
   
Fees:
(a)   Commitment Fee. The Borrower shall pay to the Administrative Agent, for
the account of the RBL Lenders, a commitment fee (the “Commitment Fee”) in
an amount per annum equal to the rate set forth in the preceding grid on the
average daily unused portion of the Maximum Revolving Commitments, payable
quarterly in arrears.

All accrued Commitment Fees will be fully earned and due and
payable quarterly in arrears for the account of the RBL Lenders (other than any
defaulting lenders) under the RBL Exit Facility and will accrue from and after
the Closing Date.

(b)   Upfront Fees. The Borrower shall pay to Wells Fargo, for the pro rata
account of each of the RBL Lenders as provided herein, upfront fees as follows:
(i) for each RBL Lender that executes the Restructuring Support Agreement prior
to entry of the Final DIP Order (as defined in the DIP Credit Agreement), an
aggregate amount equal to 15 bps of the aggregate amount of the RBL Exit
Facility, which shall be fully earned and will be due and payable in full in
cash on the date of entry of the Final DIP Order, and (ii) an aggregate amount
equal to 40 bps of the aggregate amount of the RBL Exit Facility, which shall be
fully earned and will be due and payable in full in cash to each RBL Lender
under the RBL Exit Facility on the Closing Date (the “Upfront Fees”).

(c)   Letter of Credit Fees. The Borrower shall pay to the Administrative Agent
for the account of the RBL Lenders a Letter of Credit fee (due quarterly) equal
to the product of the LIBOR Margin and the undrawn amount of each Letter of
Credit.  In addition, Borrower shall pay to the Administrative Agent for the
account of any Issuing Bank a fronting fee equal to the product of 0.50% and the
undrawn amount of each Letter of Credit; provided that each such fee shall be no
less than $500.

(d)   Other Fees. Such other fees set forth in any fee letter (or similar)
between the Administrative Agent, Collateral Agent and/or Lead Arranger and the
Borrower.

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Maturity Date:
(a)   RBL Exit Facility. The final maturity of the RBL Exit Facility will occur
on the two year anniversary of the Closing Date (the “RBL Exit Maturity Date”).

(b)   New Term Loan Facility. The final maturity of the New Term Loan Facility
will occur on the 42 month anniversary of the Closing Date (the “New Term Loan
Maturity Date”).
   
Mandatory
Prepayments (RBL
Exit Facility):
(a)   Borrowing Base Deficiency. The Borrower shall prepay any Borrowing Base
Deficiency as provided in the paragraph titled “Borrowing Base Deficiency” in
the “Borrowing Base and Borrowing Base Redetermination” section.

(b)   Excess Revolving Credit Exposure.  If, at any time, the revolving credit
exposure exceeds the total Revolving Commitments as a result of any reduction or
termination of Revolving Commitments, the Borrower shall make a prepayment in an
amount no less than such excess.

(c)   Adjustment of Borrowing Base.  If there is any adjustment to the Borrowing
Base that results in the revolving credit exposure exceeding the total Revolving
Commitments, including in connection with any permitted note issuance or
permitted refinancing debt (see Borrowing Base Reductions – Issuance or
Refinancing Reduction) the Borrower shall make a prepayment in an amount no less
than such excess.

(d)   Asset Sales or Disposition.  If any Loan Party sells or disposes of any
Oil and Gas Property (other than in the ordinary course of business) while a
Borrowing Base Deficiency or an Event of Default exists, the Borrower or such
other Loan Party shall promptly make a prepayment in an amount equal to the (i)
in the case of a Borrowing Base Deficiency, the amount of net proceeds from such
sale so that no Borrowing Base Deficiency exists, or (ii) if there is an Event
of Default, all net proceeds of such sale, in each case no later than the next
succeeding Business Day after the net cash proceeds therefor are received by
such Loan Party.

(e)   Consolidated Cash Balance.  If, as of the end of any Business Day, the
Consolidated Cash Balance of the Loan Parties exceeds $20 million, the Loan
Parties shall, within one Business Day thereof, pay such amounts to be applied
in accordance with the terms hereof.

All mandatory prepayments will be applied to prepay outstanding Revolving Loans
(without a permanent reduction to the Maximum Revolving Commitments), including
any accrued and unpaid interest of such Revolving Loans being prepaid, and, in
the case of clauses (a) through (d) above, to cash-collateralize Letters of
Credit outstanding under the RBL Exit Facility.
   
Mandatory
Prepayments (New
Term Loan Facility):
None, while Revolving Commitments remain outstanding.

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Optional
Prepayments and
Commitment
Reductions (RBL
Exit Facility):
Revolving Loans under the RBL Exit Facility may be prepaid at any time, in whole
or in part, at the option of the Borrower, upon notice to the Administrative
Agent and in minimum principal amounts and in multiples to be agreed upon with
the Administrative Agent, without premium or penalty (except LIBOR breakage
costs).  Any optional prepayment of the RBL Exit Facility will be applied to
prepay outstanding Revolving Loans and cash-collateralize Letters of Credit
outstanding under the RBL Exit Facility (except as otherwise set forth herein,
without a permanent reduction in Maximum Revolving Commitments unless so elected
by the Loan Parties).

The unutilized portion of the Maximum Revolving Commitments may be terminated,
in whole or in part, at the option of the Borrower, upon notice to the
Administrative Agent and in minimum principal amounts and in multiples to be
agreed upon with the Administrative Agent.
   
Optional
Prepayments (New
Term Loan Facility):
The New Term Loans may be prepaid, in whole or in part, at the option of the
Borrower, upon prior notice and in minimum principal amounts and in multiples to
be agreed upon, without premium or penalty (except LIBOR breakage costs), to the
extent such prepayments are permitted by the Definitive
Documentation; provided that the RBL Exit Facility shall have been indefeasibly
repaid in full and all Revolving Commitments thereunder have terminated prior to
such prepayment.
   
Conditions to
Closing:
See Annex A.
   
Conditions to All
Extensions of Credit:
Each extension of credit under the Facilities will be subject to satisfaction of
the following: (a) all of the representations, warranties, and covenants in the
Definitive Documentation shall be true and correct in all material respects (or
if qualified by materiality or material adverse effect, in all respects) as of
the date of such extension of credit, or if such representation speaks as of an
earlier date, as of such earlier date; (b) no default or event of default under
the Facilities shall have occurred and be continuing or would result from such
extension of credit; (c) delivery of a customary borrowing notice; and (d) the
Loan Parties shall be in compliance with the Consolidated Cash Balance
limitation, both before and after giving effect to such extension of credit.
   
Cash Management:
The Loan Parties shall maintain their cash management system as it existed prior
to the Closing Date, with such changes as may be mutually agreed by the
Administrative Agent and the Borrower.  Each Loan Party will make all such Loan
Party’s deposit accounts subject to an account control agreement other than
Excluded Accounts (as defined below) (such deposit accounts, collectively,
“Controlled Accounts”).  Each Controlled Account shall be subject to a control
agreement, in form and substance satisfactory to the Administrative Agent, which
agreement shall transfer control of such account to the Collateral Agent upon
delivery of notice by the Collateral Agent to the financial institution
maintaining such account.

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As used herein, “Excluded Accounts” means with respect to the Borrower or any
other Loan Party, each deposit account that is not required to be subject to an
account control agreement, to the extent such deposit account is solely (a) a
payroll account containing a balance not exceeding the amount of payroll
expenses for one payroll period at any time, (b) a tax withholding account,
(c) zero balance accounts (other than lockbox accounts, to the extent account
control agreements are permitted by the applicable depository bank), (d) de
minimis accounts containing a balance not exceeding $50,000 per account at any
time and not to exceed $250,000 for all such accounts in the aggregate, or (e) a
customary fiduciary or trust accounts holding royalty payment and working
interest payments solely to the extent constituting property of a third party.
   
Representations and
Warranties:
Subject to the Documentation Principles, the Definitive Documentation will
contain representations and warranties subject to exceptions are customary for
transactions of this type as mutually agreed (which will be applicable to the
Loan Parties).
   
Affirmative
Covenants:
Subject to the Documentation Principles, the Definitive Documentation will
contain affirmative covenants subject to limitations and modifications as are
customary for transactions of this type as mutually agreed (which will be
applicable to the Loan Parties).

On or before March 1 and September 1 of each year, commencing with the first
such date to occur after the Closing Date, the Borrower shall furnish to the
Administrative Agent and the Lenders a reserve report evaluating the proved Oil
and Gas Properties of the Loan Parties as of the immediately preceding January 1
and July 1. The reserve report as of January 1 of each year shall be prepared by
one or more approved petroleum engineers. The July 1 reserve report of each year
shall be prepared by or under the supervision of the “Manager of Acquisitions
and Planning” (or similarly titled position) of the Borrower and such reserve
report shall be accompanied by customary certifications of such chief engineer
and a responsible officer of the Borrower.

Within fifteen (15) Business Days of the Closing Date (subject to a five (5)
Business Day extension by the Administrative Agent in its sole discretion), the
Loan Parties shall have maintained or entered into hedging transactions with
respect to at least seventy-five percent (75%) of the Loan Parties’ PDP reserves
through September 30, 2022, in form and substance reasonably acceptable to the
Administrative Agent.  For the avoidance of doubt, hedging transactions entered
into prior to the Closing Date may be maintained in satisfaction of this
covenant, subject to consent of the applicable hedge counterparty.
   
Negative Covenants:
Subject to the Documentation Principles, the Definitive Documentation will
contain negative covenants subject to exceptions, limitations, baskets and
modifications as are reasonably acceptable to the Administrative Agent,
including the following:
     
(a) limitation on liens, including exceptions for (i) capital lease or purchase
money indebtedness to the extent permitted under clause (e)(i), (ii) junior
liens to the extent permitted under clause (e)(iv), and (iii) other liens and
(iii) other liens securing indebtedness not to exceed the greater of $10 million
or 1.00% of consolidated total assets (“CTA”);

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(b) limitation on disposition of assets, other than (i) customary ordinary
course dispositions for the energy industry, (ii) any asset sale consisting of
Oil and Gas Properties (including the net unwinding of hedging transactions),
subject to the Borrowing Base redetermination right described in the paragraph
titled Borrowing Base Reductions if the Borrowing Base value of such Oil and Gas
Properties (as determined in good faith by the Administrative Agent) exceeds 5%
of the Borrowing Base, and (iii) other asset sales up to $10 million; provided
that any asset sale permitted hereunder shall be made for (1) fair value and
(2) at least 75% cash consideration;

(c) limitation on consolidations, mergers dissolutions and divisions;

(d) subject to customary permitted investments, limitation on loans, investments
and acquisitions of property, other than (i) investments in partnerships up to
$5 million, (ii) investments in Unrestricted Subsidiaries up to $5 million,
subject to minimum liquidity (unrestricted cash and availability under the RBL
Exit Facility) of at least 15% of the Borrowing Base, (iii) other investments up
to $10 million, and (iv) other investments subject to pro forma liquidity
(unrestricted cash and availability under the RBL Exit Facility) of at least 15%
of the Borrowing Base and pro-forma Total Leverage Ratio does not exceed 2.75 to
1.00, subject to cash netting up to $20 million;

(e) limitations on indebtedness, including exceptions for (i) capital leases or
purchase money indebtedness up to the greater of $30 million and 1.00% of CTA,
(ii) unsecured indebtedness up to $400 million, subject to a 25%
dollar-for-dollar reduction in the Borrowing Base and pro forma compliance with
Financial Covenants, (iii) acquisition indebtedness up to the greater of $30
million and 1.00% of CTA, (iv) subordinated secured or junior lien indebtedness
up to $50 million, subject to a 25% dollar-for-dollar reduction in the Borrowing
Base and pro forma compliance with Financial Covenants (the indebtedness
described in this clause (iv) and clause (ii) above, the “Specified Additional
Debt”), (v) earn-out indebtedness up to $15 million, and (vi) any other
indebtedness up to the greater of $30 million and 1.00% of CTA;

(f) limitations on transactions with affiliates;

(g) limitations on margin stock;

(h) limitations on contingent obligations;

(i) limitations on restricted debt payments (including prohibition against any
redemption of Specified Additional Debt during the term of the RBL Exit
Facility);

(j) limitations on restricted payments (including any dividends during the term
of the RBL Exit Facility) other than (i) permitted tax distributions,
(ii) restricted payments under management or employee stock plans not to exceed
$5 million in any fiscal year and (iii) for general corporate purposes not to
exceed $1 million in any fiscal year;

(k) limitations on derivative contracts (as set forth in greater detail below);

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(l) limitations on change in business nature, amendments to organization
documents, documents governing material indebtedness and corporate structure;

(m) limitations on accounting changes;

(n) ERISA compliance; and

(o) limitations on restrictions affecting the ability of Restricted Subsidiaries
to guarantee the loans, grant liens securing the loans or make distributions to
the Borrower.
 

Hedging
Requirements:
All hedging agreements shall be entered into, on a secured basis, with a Lender
(or an affiliate thereof), as the hedging counterparty, or on an unsecured basis
with counterparties reasonably acceptable to the Administrative
Agent; provided that no Borrowing Base value shall be given to any such
unsecured hedging agreements.  The Loan Parties shall not enter into any hedging
transaction which (i) extends more than twelve (12) months after the RBL Exit
Maturity Date, and (ii) together with all other hedging transactions, exceeds
ninety-five percent (95%) of the Loan Parties’ PDP reserves, as set forth in the
most recently delivered reserve report.  Other hedging requirements to be
mutually agreed.

Financial Covenants
(RBL Exit Facility):
The RBL Exit Facility will contain the following financial covenants, calculated
as of each fiscal quarter :

First Lien Leverage Ratio: First Lien Debt to EBITDA may not exceed 3.0 to 1.0
as of the last day of any fiscal quarter, subject to cash netting up to $20
million. EBITDA shall be calculated at the end of each fiscal quarter using the
results of the twelve month period ending with that fiscal quarter end.

Total Leverage Ratio: Total Debt to EBITDA for the four fiscal quarters then
ending, to be greater than 3.75 to 1.00, subject to cash netting up to $20
million.

Current Ratio: Consolidated Current Assets divided by Consolidated Current
Liabilities may not be less than 1.0 to 1.0 on a fiscal quarter basis.

Maximum Capital Expenditures:  If (i) the Total Leverage Ratio (subject to cash
netting up to $20 million) for the four fiscal quarters most recently ended is
greater than 2.0 to 1.0 and (ii) liquidity (the sum of unrestricted cash and
availability under the RBL Exit Facility) is less than $50 million, then the
Borrower will not initiate any drilling or completion activity of any wells or
similar material Capital Expenditures during such fiscal quarter if the sum of
(x) the aggregate amount of Capital Expenditures for the three fiscal quarters
most recently ended plus (y) Capital Expenditures to be made during such fiscal
quarter would exceed $175 million.

Any reference to EBITDA in this Term Sheet shall include adjustments for among
other things, extraordinary and non-recurring items including any items related
to the restructuring (i.e., retention payments, professional fees, etc.).

615

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Financial Covenants
(New Term Loan
Facility):
The New Term Loan Facility will contain the following financial covenant,
calculated on a quarterly basis:

Consolidated Total Leverage Ratio: Total Debt to EBITDA for the four fiscal
quarters then ending, to be greater than 4.25 to 1.00, subject to cash netting
up to $20 million.
   
Equity Cure Rights
In the event the Borrower fails to comply with the requirements of the Financial
Covenants, Parent will have the right to issue common equity securities for cash
or otherwise receive cash contributions to the capital of Parent  (in each case,
on terms reasonably satisfactory to the Administrative Agent) (any such equity
issuance or contribution, a “Specified Equity Contribution”), and contribute any
such cash to the capital of the Borrower, and apply the amount of the proceeds
thereof to increase on a dollar-for-dollar basis EBITDA (to be defined in a
manner to be mutually agreed) solely for purposes of determining compliance with
Financial Covenants (including, for the avoidance of doubt, determining if
Maximum Capital Expenditures is applicable) with respect to the then ended
fiscal quarter and any subsequent period that includes such fiscal quarter (the
“Cure Right”); provided that (i) the Cure Right will not be exercised more than
five (5) times during the term of the RBL Exit Facility, and (ii) the Cure Right
many not be exercised more than two (2) times in any four (4) consecutive fiscal
quarters.

Any amounts used to exercise a Cure Right will be disregarded in calculating
EBITDA for all other purposes, including calculation of basket levels and other
items governed by reference to EBITDA and will not result in any pro forma
indebtedness reduction (other than the indebtedness under the RBL Exit Facility
that is actually prepaid with such Cure Amount) or an increase in cash.
   
Events of Default:
Subject to the Documentation Principles, substantially similar to the events of
default in the Existing Credit Agreement, except as mutually agreed with the
Administrative Agent and as otherwise set forth in this Term Sheet, each subject
to limitations and modifications as are customary for transactions of this type
as mutually agreed (which will be applicable to the Loan Parties).
   
Amendments and
Waivers:
Amendments and waivers of the Definitive Documentation will require the approval
of the Lenders holding more than 50% of the applicable Facility, except that the
consent of (a) RBL Lenders holding more than 66-2/3% of the Aggregate
Commitments of the RBL Lenders shall be required to decrease or maintain the
Borrowing Base (and such other matters consistent with the Existing Credit
Agreement), (b) each Lender under the applicable Facility shall be required in
connection with (i) changing any provision specifying the number or percentage
of Lenders required to amend or waive any Definitive Documentation in respect of
the matters described in this clause (b) and clause (c) below and (ii) releasing
any guarantor (except in connection with a permitted transaction) or all or
substantially all of the Collateral, and (c) each affected Lender shall be
required in connection with (i) any increase or extension of its commitment,
(ii) the postponement of any scheduled date for payment of principal, interest,
fees or other amount payable to such Lender, and (iii) any reduction in the
principal amount of any loan, interest rate, fee or other amount payable to such
Lender.

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Assignments:
Customary for facilities of this type.

Expenses and
Indemnification:
Subject to the Documentation Principles, customary for facilities of this type.

Governing Law and
Forum:
Texas

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ANNEX A
Conditions to Closing

In addition to the conditions set forth in the section titled “Conditions to All
Extensions of Credit”, the closing of the Facilities will be subject to
satisfaction of typical and customary conditions precedent, consistent with the
Existing Credit Agreement and including, without limitation, the following:

1.          the Plan, the Confirmation Order, and any related order of the
Bankruptcy Court (and any amendments or modifications to any of the foregoing)
shall be consistent with the Restructuring Support Agreement, the Restructuring
Term Sheet and this Term Sheet and be in form and substance reasonably
satisfactory to the Administrative Agent, including approval of the Facilities
and releases and exculpations;

2.         the Confirmation Order shall be Final and in full force and effect
(as used herein, “Final” shall mean an order or judgement of the Bankruptcy
Court, or other court of competent jurisdiction with respect to the subject
matter, which has not been reversed, stayed, modified or amended, and as to
which (i) the time to appeal, petition for certiorari, or move for reargument or
rehearing (other than a request for a rehearing under Federal Rule of Civil
Procedure 60(b), which shall not be considered for purposes of this definition)
has expired and no appeal or petition for certiorari has been timely taken, or
(ii) any timely appeal that has been taken or any petition for certiorari that
has been or may be timely filed has been resolved by the highest court to which
the order or judgment was appealed or from which certiorari was sought or has
otherwise been dismissed with prejudice;

3.          any Order approving the Restructuring Support Agreement and
Restructuring Term Sheet shall not have been stayed, reversed, vacated or
otherwise modified in a manner materially adverse to interests of the
Administrative Agent and the RBL Lenders or otherwise contrary to this Term
Sheet or the Definitive Documentation and all conditions to effectiveness of the
Definitive Documentation shall have occurred or been waived by the respective
parties thereto having the authority to waive such conditions;

4.         the Plan Effective Date shall have occurred, all conditions precedent
to the confirmation and effectiveness of the Plan, as set forth in the Plan
(other than the effectiveness of the Facilities, which shall occur
contemporaneously with the Plan Effective Date), shall have been fulfilled or
waived as permitted therein, including, without limitation, all transactions
contemplated in the Plan or in the Confirmation Order to occur on the Plan
Effective Date shall have been substantially consummated in accordance with the
terms thereof and in compliance with applicable law, Bankruptcy Court and
regulatory approvals;

5.          the Administrative Agent and the Collateral Agent shall have
received satisfactory evidence as to the payment in full on the Plan Effective
Date of all material administrative expense claims, priority claims and other
claims required to be paid upon the Plan Effective Date;

6.         there shall have been no material adverse change in, or a material
adverse effect upon, the operations, business, properties or financial condition
of the Loan Parties taken as a whole (other than as a result of the events
leading up to, directly arising from or direct effects of the commencement or
continuance of the bankruptcy proceedings) from the date of the execution and
delivery by the DIP Lenders of the DIP Credit Agreement through the Closing
Date;

7.         (a) execution and delivery of the Definitive Documentation, and (b)
the Administrative Agent, the Collateral Agent, the New Term Loan Lenders, and
the RBL Lenders will have received (i) customary legal opinions as to the Loan
Parties and the Definitive Documentation (including, without limitation,
customary opinions of local counsel), (ii) customary evidence of authority and
incumbency, customary officers’ certificates, good standing certificates, in
each case with respect to the Borrower and the Guarantors, and a solvency
certificate for the Borrower and the other Loan Parties on a consolidated basis
after giving effect to the transactions contemplated by this Term Sheet and the
Plan on the Closing Date, and (iii) flood hazard diligence and documentation as
required by the federal Flood Disaster Protection Act of 1973 or otherwise in a
manner satisfactory to the Lenders;

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8.          all documents and filings required to perfect or evidence the
Collateral Agent’s first priority security interest in and liens on the
Collateral (including, without limitation, all certificates evidencing pledged
capital stock or membership or partnership interests, as applicable, with
accompanying executed stock powers, all UCC financing statements to be filed in
the applicable government UCC filing offices, all deposit account and securities
account control agreements and all mortgages, deeds of trust and real property
filings) shall have been executed and/or delivered and, to the extent
applicable, be in proper form for filing;

9.          all New Money Loans (as defined in the DIP Credit Agreement), shall
have been indefeasible paid in full in cash, and the Commitments shall have been
terminated thereunder;

10.        the Existing Lenders, including, without limitation, the Existing
Loans, shall receive the treatment outlined in this Term Sheet, the DIP Credit
Agreement, the Restructuring Support Agreement, the Restructuring Term Sheet,
and the Plan, and the DIP Lenders shall have received the treatment under the
Plan and the commitments thereunder shall have been terminated, and all security
interests related thereto shall have either (a) been terminated or (b) been
amended and restated to secure the Obligations under the Facilities, in either
case concurrently with the Closing Date;

11.        the class of Existing Lenders entitled to vote on the Plan shall have
accepted the Plan; and the DIP Lenders holding not less than 66 2/3% of the
outstanding DIP Loans under the DIP Credit Agreement have elected to become
Electing Lenders;

12.        the Administrative Agent and the Collateral Agent shall have received
an ACORD evidence of insurance certificate evidencing customary coverage of the
Loan Parties and naming the Collateral Agent in such capacity for the Lenders as
additional insured on all liability policies and loss payee on all property
insurance policies;

13.        all required governmental and third party consents and approvals
shall have been obtained and shall be in full force and effect;

14.       all fees and, to the extent invoiced at least one (1) business day
prior to the Closing Date, out-of-pocket expenses, required to be paid on the
Closing Date under the Plan in connection with the Facilities, including the
reasonable fees and expenses of one primary counsel, one local counsel in each
appropriate jurisdiction, and financial advisors to the Administrative Agent,
and any audit and appraisal fees and expenses, shall have been paid in full in
cash;

15.       Debtors shall have paid to the DIP Lenders holding DIP Loans all other
payments as provided for in any final orders entered in connection with the DIP
Credit Agreement and/or use of cash collateral, and the Plan, which amounts
shall be applied to the repayment of the DIP Obligations in accordance with the
Plan;

16.        the Administrative Agent and the Collateral Agent shall be in receipt
of one or more collateral agency agreements, which shall, subject to the
Documentation Principles, contain terms and provisions satisfactory to the
Administrative Agent, the Collateral Agent and the Borrower in their discretion,
duly executed and delivered by the Loan Parties, the Collateral Agent and the
Administrative Agent;

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17.        the Administrative Agent shall have received an updated business plan
for the Borrower and the other Loan Parties after giving effect to the
transactions contemplated hereby and under the Plan on the Closing Date;

18.        the Borrower shall have received a cash equity contribution of no
less than $200 million;

19.        if the Borrower shall have received a senior unsecured loan (the “New
Exit Loan”) as contemplated in the Restructuring Support Agreement, then such
New Exit Loan shall (i) have an aggregate principal amount not to exceed $50
million, (ii) have a maturity date no earlier than twenty-four (24) months after
the RBL Exit Maturity Date, (iii) not permit any cash payments (whether
principal (amortization), cash interest, fees or otherwise), until the RBL Exit
Facility has been paid in full in cash and the Revolving Commitments thereunder
shall have terminated, (iv) otherwise be reasonably acceptable to the Required
RBL Lenders, and (v) not be included in the calculation of the “Senior Debt Cap”
(as such term is defined in the Restructuring Term Sheet);

20.        the Total Leverage Ratio as of the Closing Date shall not be greater
than 2.75 to 1.00;

21.        the Existing Second Lien Facility and the Existing Senior Notes shall
have been fully converted and/or exchanged into equity interests and shall have
been released, discharged and/or terminated;

22.        the Borrower shall have conducted a refinancing process for the
obligations under the Existing Credit Agreement and all proposals received shall
have been delivered to the financial advisor of the Administrative Agent (on an
advisor-only basis) as evidence of such process; and

23.       the Initial Availability Amount shall not be less than $45 million;
provided that upon the approval of the Required RBL Lenders (RBL Lenders holding
66 2/3% or more of the Maximum Revolving Commitments), the Initial Availability
Amount may be reduced to no less than $35 million.

620

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Exhibit E

Backstop Commitment Agreement

621

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EXHIBIT B

Form of Joinder Agreement

622

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CONFIDENTIAL

Joinder Agreement

[          ], 2019

The undersigned (“Transferee”) hereby acknowledges that it has read and
understands the Restructuring Support Agreement, dated as of [___], 2019, a copy
of which is attached hereto as Annex I (as it may be amended, supplemented, or
otherwise modified from time to time, the “Restructuring Support Agreement”),11
by and among the Company Parties and the Supporting Creditors.

1.          Agreement to be Bound. The Transferee hereby agrees to be bound by
all of the terms of the Restructuring Support Agreement.  The Transferee shall
hereafter be deemed to be a “Supporting Creditor” and a “Party” for all purposes
under the Restructuring Support Agreement.

2.          Representations and Warranties. With respect to the aggregate
principal amount of Holdings Credit Agreement Claims set forth below its name on
the signature page hereof, the Transferee hereby makes the representations and
warranties of the Supporting Creditors set forth in Section 4.04 of the
Restructuring Support Agreement to each other Party.

3.          Governing Law. This joinder agreement (the “Joinder Agreement”) to
the Restructuring Support Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
any conflicts of law provisions which would require the application of the law
of any other jurisdiction.

* * * * *

[Remainder of Page Intentionally Left Blank]

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1 Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in the Restructuring Support Agreement.
623

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624

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IN WITNESS WHEREOF, the Transferee has caused this Joinder Agreement to be
executed as of the date first written above.

Name of Transferor:

 

Name of Transferee:

By:

   
 
Name:

   
 
Title:

 

Principal Amount of Term Loan Transferred: $

Principal Amount of Revolving Loan Transferred: $

Notice Address:
             

Fax:

 

Attention:

     
With a copy to:

 
 
 

Fax:

Attention:

625

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EXHIBIT C

Supporting Term Lender Termination Events upon Noteholder Termination

626

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7.01.      Supporting Creditor Termination Events.

(a)          Supporting Term Lender Termination Events. This Agreement may be
terminated as between the Supporting Term Lenders and the other Parties by the
delivery to the Company Parties, and counsel to the other Supporting Creditors,
of a written notice in accordance with Section 10.09 hereof by the Required
Supporting Term Lenders, upon the occurrence and continuation of any of the
following events:

(i)          any Company Party, as applicable, materially breaches its
obligations under this Agreement and such breach has not been cured (if
susceptible to cure) within five (5) business days after the receipt by the
Company Parties of written notice of such breach;

(ii)       any Company Party publicly announces or informs the Supporting
Creditors of its intention to pursue one or more restructuring transactions
(including a chapter 11 plan and/or asset sale process under section 363 of the
Bankruptcy Code) that contains terms and conditions that: (A) do not provide the
Supporting Creditors with the economic recovery set forth in the Restructuring
Term Sheet or (B) are not otherwise consistent with this Agreement and the
Restructuring Term Sheet in any respect;

(iii)        the breach in any material respect (without giving effect to any
“materiality” qualifiers set forth therein) by any Company Party of its
representations, warranties, or covenants set forth in this Agreement that (if
susceptible to cure), in each case, with respect to the Term Loan Claims of the
Required Supporting Term Lenders, remains uncured for a period of five (5)
business days after the receipt by the Company Parties of written notice of such
breach;

(iv)        the (A) occurrence of a material breach of this Agreement by any
Supporting RBL Lender that has not been cured (if susceptible to cure) within
five (5) business days after the receipt by the Company Parties and the
Supporting RBL Lenders of written notice of such breach or (B) termination of
this Agreement by the Supporting RBL Lenders;

(v)       the issuance by any governmental authority, including any regulatory
authority or court of competent jurisdiction, of any injunction, judgment,
decree, charge, ruling, or order enjoining, the consummation of a material
portion of the Restructuring, or materially adversely affecting the recovery of
the Supporting Creditors contemplated by this Agreement; provided, however, that
the Company Parties shall have five (5) business days after issuance of such
injunction, judgment, decree, charge, ruling, or order to obtain relief that
would allow consummation of the Restructuring that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Required Supporting Term Lenders;

(vi)        entry of an order by the Bankruptcy Court appointing a trustee,
receiver, or examiner with expanded powers beyond those set forth in section
1106(a)(3) and (4) of the Bankruptcy Code in any of the Chapter 11 Cases;

(vii)       any Company Party files any motion or pleading with the Bankruptcy
Court that is materially inconsistent with this Agreement and such motion or
pleading has not been withdrawn or is not otherwise denied by the Bankruptcy
Court within three (3) calendar days of receipt of notice by such Party that
such motion or pleading is inconsistent with this Agreement;

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(viii)      any Company Party announces or otherwise provides notice of, without
the prior written consent of the Plan Sponsor, its intention to pursue an asset
sale outside of the ordinary course of business or any other transaction that is
not consistent with the Restructuring;

(ix)        the entry of a ruling or order by the Bankruptcy Court that would
prevent consummation of the Restructuring; provided, however, that the Debtors
shall have five (5) business days after the date of such ruling or order to seek
a stay of such ruling or order and shall have ten (10) calendar days after
issuance of such ruling or order to obtain relief that (i) does not prevent or
diminish in a material way compliance with the terms of this Agreement or (ii)
is otherwise reasonably acceptable to the Required Supporting Term Lenders;

(x)         the conversion or dismissal of the Chapter 11 Cases;

(xi)        any of the Definitive Documentation shall have been modified without
the prior written consent of the Required Supporting Term Lenders (such consent
not to be unreasonably withheld);

(xii)      the occurrence of any Event of Default (as defined in the DIP Credit
Agreement) under the DIP Facility unless such Event of Default (other than a
payment event of default) has been waived no later than three (3) business days
following the occurrence thereof; provided that such waiver period shall not
restrict termination under this Section 7.01(a)(xii) if the DIP Lenders earlier
enforce or take steps to enforce remedies under the DIP Credit Agreement;

(xiii)     the occurrence of the Maturity Date (as defined in the DIP Credit
Agreement), or the acceleration of the obligations under the DIP Credit
Agreement;

(xiv)     the Bankruptcy Court enters an order in the Chapter 11 Cases
terminating, or modifying without the prior written consent of the Required
Supporting Term Lenders, the Debtors’ exclusive right to file a plan or plans of
reorganization pursuant to section 1121 of the Bankruptcy Code;

(xv)     any Company Party executes or files with the Bankruptcy Court any
Definitive Documentation that does not conform to the Restructuring Term Sheet
or is otherwise not reasonably acceptable to the Required Supporting Term
Lenders;

(xvi)      the Bankruptcy Court enters a ruling or order that would preclude the
Parties’ ability to comply with any of the Milestones;

(xvii)    the Bankruptcy Court grants relief terminating, annulling, or
modifying the automatic stay (as set forth in section 362 of the Bankruptcy
Code) that would have a material adverse effect on the Restructuring, without
the written consent of the Required Supporting Term Lenders;

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(xviii)   either (A) any Company Party files with the Bankruptcy Court a motion,
application, or adversary proceeding (or any Company Party supports any such
motion, application, or adversary proceeding filed or commenced by any third
party (including by consent to derivative standing on behalf of any Company
Party’s estate for a third party to file such motion, application, or adversary
proceeding, except for any such consent that may be set forth in the Interim DIP
Order or the Final DIP Order)) (1) challenging the validity, enforceability, or
priority of, or seeking avoidance or subordination of, any Term Loan Claims,
Notes Claims, or any liens or other security interests securing the Term Loan
Claims or (2) asserting any other cause of action against the Supporting
Creditors or (B) the Bankruptcy Court enters an order providing relief against
any Supporting Creditor with respect to any of the foregoing causes of action or
proceedings filed by any Company Party;

(xix)      the Sponsor Backstop Commitment Agreement shall have been terminated;

(xx)       failure by any Debtor to comply with any terms of the Backstop Order
(as defined below), the Disclosure Statement Order, and/or the Confirmation
Order, unless such failure has been cured within five (5) Business Days thereof;

(xxi)      any Debtor makes a payment or other transfer outside of the ordinary
course of business, without the prior written consent of the Plan Sponsor, to
any insider of any Debtor that is inconsistent with the terms of the Debtors’
existing insider compensation plans (including retention and incentive plans);

(xxii)     the Chapter 11 Cases are not commenced before the Bankruptcy Court by
June 18, 2019;

(xxiii)   an order approving the Sponsor Backstop Commitment Agreement
(including, without limitation, the amount and form of the Sponsor Backstop Fee
and the payment thereof as an Administrative Expense) in form and substance
acceptable to the Sponsor Backstop Parties (the “Backstop Order”) has not been
entered within forty (40) calendar days of the Noteholder Termination;

(xxiv)    the Interim DIP Order has not been entered by the Bankruptcy Court
within five (5) calendar days of the Noteholder Termination;

(xxv)     the Final DIP Order has not been entered by the Bankruptcy Court
within thirty-five (35) calendar days of entry of the Interim DIP Order;

(xxvi)   the Plan and Disclosure Statement have not been filed with the
Bankruptcy Court within thirty (30) calendar days of the Noteholder Termination;

(xxvii)  the Disclosure Statement Order has not been entered by the Bankruptcy
Court within seventy-five (75) calendar days of the Noteholder Termination;

(xxviii) an order scheduling the confirmation hearing and related discovery has
not been entered by the Bankruptcy Court within seventy-five (75) calendar days
of the Noteholder Termination;

(xxix)   the Confirmation Order has not been entered by the Bankruptcy Court
within fifty-five (55) calendar days of entry of the Disclosure Statement Order;
and

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(xxx)    the Plan Effective Date has not occurred within twenty-one (21)
calendar days following the date of entry of the Confirmation Order (together
with the milestones set forth in the foregoing clauses (xxii) to (xxix),
collectively, the “Milestones”).

The Milestones may be extended with the prior written consent of the Required
Supporting Term Lenders.

630

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