Exhibit 10.1

Execution Version

 

 

 

CREDIT AGREEMENT

DATED AS OF DECEMBER 6, 2019

AMONG

CITIZEN ENERGY OPERATING, LLC,

AS BORROWER,

CITIZEN ENERGY HOLDINGS, LLC,

AS HOLDINGS,

JPMORGAN CHASE BANK, N.A.,

AS ADMINISTRATIVE AGENT,

AN ISSUING BANK AND A SWINGLINE LENDER

AND

THE LENDERS PARTY HERETO

 

 

JPMORGAN CHASE BANK, N.A.,

BMO CAPITAL MARKETS CORP.,

TD SECURITIES (USA) LLC

AND

BOFA SECURITIES, INC.,

AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS

 

 

 

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Table of Contents

 

          Page  

ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS

     1  

Section 1.01

   Terms Defined Above      1  

Section 1.02

   Certain Defined Terms      1  

Section 1.03

   Types of Loans and Borrowings      46  

Section 1.04

   Terms Generally; Rules of Construction      46  

Section 1.05

   Accounting Terms and Determinations; GAAP      47  

Section 1.06

   Pro Forma Basis      47  

Section 1.07

   Interest Rates; LIBOR Notification      47  

Section 1.08

   Divisions      48  

ARTICLE II THE CREDITS

     48  

Section 2.01

   Commitments      48  

Section 2.02

   Loans and Borrowings      48  

Section 2.03

   Requests for Borrowings      49  

Section 2.04

   Interest Elections      50  

Section 2.05

   Funding of Borrowings      52  

Section 2.06

   Termination and Reduction of Aggregate Maximum Credit Amounts; Increase,
Reduction, and Termination of Aggregate Elected Commitment Amounts      52  

Section 2.07

   Borrowing Base      57  

Section 2.08

   Letters of Credit      60  

Section 2.09

   Swingline Loans      66  

Section 2.10

   Defaulting Lenders      70  

ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

     72  

Section 3.01

   Repayment of Loans      72  

Section 3.02

   Interest      73  

Section 3.03

   Changed Circumstances      74  

Section 3.04

   Prepayments      76  

Section 3.05

   Fees      78  

Section 3.06

   Extension of Maturity Date      79  

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

     80  

Section 4.01

   Payments Generally; Pro Rata Treatment; Sharing of Set-offs      80  

Section 4.02

   Presumption of Payment by the Borrower      81  

Section 4.03

   Certain Deductions by the Administrative Agent      81  

Section 4.04

   Disposition of Proceeds      82  

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

     82  

Section 5.01

   Increased Costs      82  

 

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Section 5.02

   Break Funding Payments      84  

Section 5.03

   Taxes      84  

Section 5.04

   Mitigation Obligations; Replacement of Lenders      88  

Section 5.05

   Illegality      89  

ARTICLE VI CONDITIONS PRECEDENT

     90  

Section 6.01

   Effective Date      90  

Section 6.02

   Initial Funding Date      91  

Section 6.03

   Each Credit Event      96  

ARTICLE VII REPRESENTATIONS AND WARRANTIES

     97  

Section 7.01

   Organization; Powers      97  

Section 7.02

   Authority; Enforceability      97  

Section 7.03

   Approvals; No Conflicts      97  

Section 7.04

   Financial Condition; No Material Adverse Effect      98  

Section 7.05

   Litigation      98  

Section 7.06

   Environmental Matters      99  

Section 7.07

   Compliance with Laws and Agreements; No Defaults, Event of Default or
Borrowing Base Deficiency      100  

Section 7.08

   Investment Company Act      100  

Section 7.09

   Taxes      100  

Section 7.10

   ERISA      101  

Section 7.11

   Disclosure; No Material Misstatements      102  

Section 7.12

   Insurance      102  

Section 7.13

   Subsidiaries      103  

Section 7.14

   Properties; Titles, Etc.      103  

Section 7.15

   Maintenance of Properties      104  

Section 7.16

   Gas Imbalances; Prepayments      104  

Section 7.17

   Marketing of Production      105  

Section 7.18

   Swap Agreements and Qualified ECP Guarantor      105  

Section 7.19

   Use of Loans and Letters of Credit      105  

Section 7.20

   Solvency      105  

Section 7.21

   Anti-Corruption Laws, Sanctions and PATRIOT Act      106  

Section 7.22

   EEA Financial Institutions      106  

Section 7.23

   Security Instruments      106  

ARTICLE VIII AFFIRMATIVE COVENANTS

     106  

Section 8.01

   Financial Statements; Other Information      107  

Section 8.02

   Notices of Material Events      111  

Section 8.03

   Existence; Conduct of Business      111  

Section 8.04

   Payment of Taxes      111  

Section 8.05

   Operation and Maintenance of Properties      112  

Section 8.06

   Insurance      112  

Section 8.07

   Books and Records; Inspection Rights      113  

Section 8.08

   Compliance with Laws      113  

Section 8.09

   Environmental Matters      113  

Section 8.10

   Further Assurances      114  

 

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Section 8.11

   Reserve Reports      115  

Section 8.12

   Title Information      116  

Section 8.13

   Collateral and Guaranty Agreements      117  

Section 8.14

   ERISA Compliance      118  

Section 8.15

   Commodity Exchange Act Keepwell Provisions      119  

Section 8.16

   Deposit Accounts and Securities Accounts      119  

Section 8.17

   Marketing Activities      119  

Section 8.18

   Gas Imbalances, Take-or-Pay or Other Prepayments      120  

Section 8.19

   Use of Proceeds      120  

Section 8.20

   Post-Initial Funding Date Deliverables      120  

ARTICLE IX NEGATIVE COVENANTS

     121  

Section 9.01

   Financial Covenants      121  

Section 9.02

   Debt      123  

Section 9.03

   Liens      125  

Section 9.04

   Dividends and Distributions and Payments in Respect of Specified Additional
Debt      125  

Section 9.05

   Investments, Loans and Advances      128  

Section 9.06

   Nature of Business; Wholly-Owned Subsidiaries; No International Operations   
  129  

Section 9.07

   ERISA Compliance      130  

Section 9.08

   Mergers, Etc.      130  

Section 9.09

   Sale of Properties and Termination of Swap Agreements      131  

Section 9.10

   Transactions with Affiliates      132  

Section 9.11

   Foreign Subsidiaries      133  

Section 9.12

   Negative Pledge Agreements; Dividend Restrictions      133  

Section 9.13

   Swap Agreements      134  

Section 9.14

   Designation and Conversion of Restricted and Unrestricted Subsidiaries     
135  

Section 9.15

   Organizational Documents      136  

Section 9.16

   Changes in Fiscal Year      136  

ARTICLE IX-A HOLDINGS COVENANT

     136  

ARTICLE X EVENTS OF DEFAULT; REMEDIES

     137  

Section 10.01

   Events of Default      137  

Section 10.02

   Remedies      139  

ARTICLE XI THE AGENTS

     141  

Section 11.01

   Appointment; Powers      141  

Section 11.02

   Duties and Obligations of Administrative Agent      141  

Section 11.03

   Action by Administrative Agent      142  

Section 11.04

   Reliance by Administrative Agent      143  

Section 11.05

   Subagents      143  

Section 11.06

   Resignation of Administrative Agent      144  

Section 11.07

   Agents as Lenders      144  

Section 11.08

   No Reliance      144  

Section 11.09

   Administrative Agent May File Proofs of Claim      145  

 

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Section 11.10

   Authority of Administrative Agent to Release Collateral, Liens and Guarantors
     146  

Section 11.11

   The Arrangers and Agents      146  

Section 11.12

   Certain ERISA Matters      147  

Section 11.13

   Credit Bidding      148  

ARTICLE XII MISCELLANEOUS

     149  

Section 12.01

   Notices      149  

Section 12.02

   Waivers; Amendments      150  

Section 12.03

   Expenses, Indemnity; Damage Waiver      152  

Section 12.04

   Successors and Assigns      155  

Section 12.05

   Survival; Revival; Reinstatement      159  

Section 12.06

   Counterparts; Integration; Effectiveness      159  

Section 12.07

   Severability      160  

Section 12.08

   Right of Setoff      160  

Section 12.09

   GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS      160  

Section 12.10

   Headings      161  

Section 12.11

   Confidentiality      161  

Section 12.12

   Interest Rate Limitation      163  

Section 12.13

   EXCULPATION PROVISIONS      163  

Section 12.14

   Collateral Matters; Swap Agreements      164  

Section 12.15

   No Third Party Beneficiaries      165  

Section 12.16

   USA PATRIOT Act Notice      165  

Section 12.17

   No Advisory or Fiduciary Responsibility      166  

Section 12.18

   Acknowledgement and Consent to Bail-In of EEA Financial Institutions      166
 

Section 12.19

   Acknowledgement Regarding Supported QFCs      167  

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

Annex I

  List of Maximum Credit Amounts and Elected Commitments

Annex II

  List of LC Issuance Limits

Exhibit A-1

  Form of Note

Exhibit A-2

  Form of Swingline Note

Exhibit B

  Form of Borrowing Request

Exhibit C

  Form of Interest Election Request

Exhibit D

  Form of Compliance Certificate

Exhibit E

  Security Instruments as of the Initial Funding Date

Exhibit F

  Form of Guaranty Agreement

Exhibit G-1

  Form of Holdings Pledge Agreement

Exhibit G-2

  Form of Pledge and Security Agreement

Exhibit H

  Form of Assignment and Assumption

Exhibit I

  Form of Elected Commitment Increase Certificate

Exhibit J

  Form of Additional Lender Certificate

Exhibit K-1

  Form of U.S. Tax Compliance Certificate (Foreign Lenders; not partnerships)

Exhibit K-2

  Form of U.S. Tax Compliance Certificate (Foreign Participants; not
partnerships)

Exhibit K-3

  Form of U.S. Tax Compliance Certificate (Foreign Participants; partnerships)

Exhibit K-4

  Form of U.S. Tax Compliance Certificate (Foreign Lenders; partnerships)

Exhibit L

  Form of Mortgage

Exhibit M

  Form of Initial Funding Date Solvency Certificate

Exhibit N

  Form of Reserve Report Certificate

Exhibit O

  Form of Distributable Free Cash Flow Certificate

Schedule 1.02(a)

  Guarantors

Schedule 1.01(b)

  Permitted Holders

Schedule 1.02(c)

  Secured Swap Providers

Schedule 6.02

  Initial Funding Date Swap Agreements

Schedule 7.05

  Litigation

Schedule 7.06

  Environmental Matters

Schedule 7.13

  Subsidiaries and Partnerships

Schedule 7.16

  Gas Imbalances

Schedule 7.17

  Marketing Contracts

Schedule 7.18

  Swap Agreements

Schedule 8.20

  Post-Closing Covenants

Schedule 9.02

  Existing Debt

Schedule (ii)

  Investments

 

 

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THIS CREDIT AGREEMENT dated as of December 6, 2019, among Citizen Energy
Operating, LLC, a Delaware limited liability company (the “Borrower”); Citizen
Energy Holdings, LLC, a Delaware limited liability company (“Holdings”); each of
the Lenders from time to time party hereto; JPMorgan Chase Bank, N.A., as
administrative agent and collateral agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Administrative Agent”), an
Issuing Bank and a Swingline Lender.

R E C I T A L S

A.    Pursuant to that certain Agreement and Plan of Merger, dated as of
October 1, 2019 (including all schedules and exhibits thereto, the “Acquisition
Agreement”), among the Borrower, Citizen Energy Pressburg Inc. (“Merger Sub”),
and Roan Resources, Inc., a Delaware corporation, (“Roan”), and upon the terms
and conditions set forth in the Acquisition Agreement, Roan, will merge with and
into Merger Sub, with Roan continuing as the surviving corporation (the “Roan
Acquisition”).

B.    The Borrower has requested that the Lenders provide certain loans to and
extensions of credit on behalf of the Borrower on and after the Initial Funding
Date.

C.    The Lenders, the Issuing Banks and the Swingline Lenders have agreed to
make such loans and extensions of credit subject to the terms and conditions of
this Agreement.

D.    The proceeds of such loans and extensions of credit will be used by the
Borrower (a) on the Initial Funding Date, for (i) the refinancing of all amounts
currently due under the Existing Credit Agreement and the Roan Credit
Agreements, (ii) to pay the consideration in connection with the Roan
Acquisition and any other consideration required under the Acquisition Agreement
and (iii) the payment of fees and expenses incurred in connection with the
Transactions on the Initial Funding Date and (b) after the Initial Funding Date,
(i) to provide working capital for exploration and production operations,
(ii) for acquisitions of Oil and Gas Properties permitted hereunder and
(iii) for general corporate purposes of the Borrower and its Restricted
Subsidiaries, in each case, subject to the terms and conditions of this
Agreement.

E.     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. 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.

“Acquisition Agreement” has the meaning assigned to such term in the Recitals
hereto.

“Additional Lender” has the meaning set forth in Section 2.06(c)(i).

“Additional Lender Certificate” has the meaning set forth in
Section 2.06(c)(ii)(I).

“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 1.00%) equal to the LIBO Rate for such Interest Period
multiplied by the Statutory Reserve Rate.

“Administrative Agent” has the meaning set forth in the Preamble.

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

“Affected Loans” has the meaning assigned such term in Section 5.05.

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified; provided
that, notwithstanding the foregoing, “Affiliate” shall not include any portfolio
operating companies of Warburg Pincus LLC that are otherwise unrelated to the
Borrower.

“Agency Fee Letter” means that certain Agency Fee Letter, dated as of October 1,
2019, between the Administrative Agent and Holdings.

“Agents” means, collectively, the Administrative Agent and any syndication or
documentation agent hereunder from time to time; and “Agent” means any of such
Agents individually, as the context requires.

“Aggregate Elected Commitment Amounts” means, at any time, an amount equal to
the sum of the Elected Commitments of the Lenders, as the same may be increased,
reduced or terminated pursuant to Section 2.06(c). As of the Effective Date, the
Aggregate Elected Commitment Amounts are zero. As of the Initial Funding Date,
and notwithstanding Section 12.02(b)(i), the Aggregate Elected Commitment
Amounts are $725,000,000.

“Aggregate Equity Amount” has the meaning assigned such term in Section 6.02(r).

“Aggregate Maximum Credit Amounts” at any time shall equal the sum of the
Maximum Credit Amounts, as the same may be reduced, terminated or increased
pursuant to Section 2.06. The Aggregate Maximum Credit Amounts as of the
Effective Date are $1,500,000,000.

 

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“Agreement” means this Credit Agreement, as the same may from time to time be
amended, modified, supplemented or restated.

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on
such day plus 1⁄2 of 1.00%, and (c) the Adjusted LIBO Rate for a one (1) month
Interest Period beginning on such day (or if such day is not a Business Day, the
immediately preceding Business Day) plus 1.00%, provided that, for the avoidance
of doubt, the Adjusted LIBO Rate for any day shall be based on the rate (rounded
upwards, if necessary, to the next 1/100 of 1.00%) at which dollar deposits of
$5,000,000 with a one (1) month maturity are offered by the principal London
office of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time on such day (or the
immediately preceding Business Day if such day is not a day on which banks are
open for dealings in dollar deposits in the London interbank market), subject to
the interest rate floors set forth herein. Any change in the Alternate Base Rate
due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate
shall be effective from and including the effective date of such change in the
Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate, respectively. If the
Alternate Base Rate is being used as an alternate rate of interest pursuant to
Section 3.03 hereof (for the avoidance of doubt, only until any amendment has
become effective pursuant to Section 3.03), then the Alternate Base Rate shall
be the greater of clause (a) and (b) above and shall be determined without
reference to clause (c) above. For the avoidance of doubt, if the Alternate Base
Rate shall be less than 1.00%, such rate shall be deemed to be 1.00% for
purposes of this Agreement.

“Annualized EBITDAX” means, for the purposes of calculating the financial ratio
set forth in Section 9.01(a) for each Rolling Period ending on or prior to the
last day of the third full fiscal quarter after the Initial Funding Date, the
sum of (a) the Borrower’s actual EBITDAX (without giving effect to any Cure
Amount received by the Borrower pursuant to Section 9.01(c) during such Rolling
Period) for such Rolling Period multiplied by the factor determined for such
Rolling Period in accordance with the table below, plus (b) the amount of any
Specified Equity Contribution:

 

Rolling Period Ending

   Factor The last day of the first full fiscal quarter after the Initial
Funding Date    4 The last day of the second full fiscal quarter after the
Initial Funding Date    2 The last day of the third full fiscal quarter after
the Initial Funding Date    4/3

 

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“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to the Borrower or any of its Restricted Subsidiaries
from time to time concerning or relating to bribery or corruption, including the
FCPA.

“Applicable Margin” means for any day, with respect to any ABR Loan or
Eurodollar Loan, or with respect to the commitment fee rate (the “Commitment Fee
Rate”), as the case may be, the rate per annum set forth in the Borrowing Base
Utilization Grid below based upon the Utilization Percentage then in effect:

 

Borrowing Base Utilization Grid

 

Utilization

Percentage

   £25%     >25% and £
50%     >50% and
£75%     >75% and
£90%     >90%  

Eurodollar Loans

     2.00 %      2.25 %      2.50 %      2.75 %      3.00 % 

ABR Loans

     1.00 %      1.25 %      1.50 %      1.75 %      2.00 % 

Commitment Fee Rate

     0.375 %      0.375 %      0.50 %      0.50 %      0.50 % 

Each change in the Applicable Margin and the Commitment Fee Rate shall apply
during the period commencing on the effective date of such change and ending on
the date immediately preceding the effective date of the next such change.

“Applicable Percentage” means, with respect to any Lender, the percentage of the
Aggregate Maximum Credit Amounts represented by such Lender’s Maximum Credit
Amount; provided that in the case of Section 2.10 when a Defaulting Lender shall
exist, “Applicable Percentage” as used in such Section 2.10 shall mean the
percentage of the Aggregate Maximum Credit Amounts (disregarding any Defaulting
Lender’s Maximum Credit Amount) represented by such Lender’s Maximum Credit
Amount.

“Approved Counterparty” means (a) any Person who at the time of entering into a
Swap Agreement, is a Lender or an Affiliate of a Lender and (b) any other Person
who, at the time of entering into a Swap Agreement, has a long term senior
unsecured debt rating (or whose guaranteeing credit support provider has a long
term senior unsecured debt rating) of A-/A3 by S&P or Moody’s (or their
equivalent) or higher.

“Approved Fund” means any Person (other than a natural person or any holding
company, investment vehicle, or trust owned and operated for the primary benefit
of a natural person) that is engaged in making, purchasing, holding or investing
in bank loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.

“Approved Petroleum Engineers” means (a) Netherland, Sewell & Associates, Inc.,
(b) Cawley, Gillespie & Associates, Inc., (c) Ryder Scott Company, L.P., (d)
DeGolyer and MacNaughton and (e) any other regionally or nationally recognized
independent petroleum engineering firms selected by the Borrower and reasonably
acceptable to the Administrative Agent.

 

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“Arrangers” means, JPMorgan Chase Bank, N.A., BMO Capital Markets Corp., TD
Securities (USA), LLC, and BofA Securities, Inc., in their capacities as the
joint lead arrangers and joint bookrunners hereunder.

“ASC” means the Financial Accounting Standards Board Accounting Standards
Codification, as in effect from time to time.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 12.04(b)), and accepted by the Administrative Agent, in the form of
Exhibit H or any other form approved by the Administrative Agent.

“Availability Period” means the period from and including the Initial Funding
Date to but excluding the Termination Date.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of 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.

“Bank Price Deck” means the Administrative Agent’s most recent internal price
deck (or such prior internal price deck as specified herein) on a forward curve
basis for each of oil, natural gas and other Hydrocarbons, as applicable.

“Bank Products” means any of the following bank services: (a) commercial credit
cards and purchase cards, (b) stored value cards, and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).

“Bank Products Provider” means any Lender or Affiliate of a Lender that provides
Bank Products to the Borrower, any Restricted Subsidiary or any Guarantor, in
its capacity as a provider of such Bank Products.

“Bankruptcy Event” means, with respect to any Person, such Person becomes the
subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or
has had a receiver, conservator, trustee, administrator, custodian, assignee for
the benefit of creditors or similar Person charged with the reorganization or
liquidation of its business appointed for it, or, in the good faith
determination of the Administrative Agent, has taken any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any such
proceeding or appointment or has had any order for relief in such proceeding
entered in respect thereof; provided that a Bankruptcy Event shall not result
solely by virtue of any ownership interest, or the acquisition of any ownership
interest, in such Person by a Governmental Authority or instrumentality thereof,
unless such ownership interest results in or provides such Person 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 permits such Person (or
such Governmental Authority or instrumentality) to reject, repudiate, disavow or
disaffirm any contracts or agreements made by such Person.

 

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“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate
(which may be a SOFR-Based Rate) that has been selected by the Administrative
Agent and the Borrower giving due consideration to (i) any selection or
recommendation of a replacement rate or the mechanism for determining such a
rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing
market convention for determining a rate of interest as a replacement to the
LIBO Rate for U.S. dollar-denominated syndicated credit facilities and (b) the
Benchmark Replacement Adjustment; provided that if the Benchmark Replacement as
so determined would be less than zero, the Benchmark Replacement will be deemed
to be zero for the purposes of this Agreement; provided, further, that any such
Benchmark Replacement shall be administratively feasible as determined by the
Administrative Agent in its sole discretion.

“Benchmark Replacement Adjustment” means, the spread adjustment, or method for
calculating or determining such spread adjustment, (which may be a positive or
negative value or zero) that has been selected by the Administrative Agent and
the Borrower giving due consideration to (a) any selection or recommendation of
a spread adjustment, or method for calculating or determining such spread
adjustment, for the replacement of the LIBO Rate with the applicable Unadjusted
Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or
then-prevailing market convention for determining a spread adjustment, or method
for calculating or determining such spread adjustment, for the replacement of
the LIBO Rate with the applicable Unadjusted Benchmark Replacement for U.S.
dollar-denominated syndicated credit facilities at such time (for the avoidance
of doubt, such Benchmark Replacement Adjustment shall not be in form of a
reduction to the Applicable Margin).

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark
Replacement, any technical, administrative or operational changes (including
changes to the definition of “Alternate Base Rate,” the definition of “Interest
Period,” timing and frequency of determining rates and making payments of
interest and other administrative matters) that the Administrative Agent decides
in its reasonable discretion may be appropriate to reflect the adoption and
implementation of such Benchmark Replacement and to permit the administration
thereof by the Administrative Agent in a manner substantially consistent with
market practice (or, if the Administrative Agent decides that adoption of any
portion of such market practice is not administratively feasible or if the
Administrative Agent determines that no market practice for the administration
of the Benchmark Replacement exists, in such other manner of administration as
the Administrative Agent decides is reasonably necessary in connection with the
administration of this Agreement).

“Benchmark Replacement Date” means the earlier to occur of the following events
with respect to the LIBO Rate:

(a)    in the case of clauses (a) or (b) of the definition of “Benchmark
Transition Event,” the later of (i) the date of the public statement or
publication of information referenced therein and (ii) the date on which the
administrator of the LIBO Rate permanently or indefinitely ceases to provide the
LIBO Rate; and

 

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(b)    in the case of clause (c) of the definition of “Benchmark Transition
Event,” the date of the public statement or publication of information
referenced therein.

“Benchmark Transition Event” means the occurrence of one or more of the
following events with respect to the LIBO Rate:

(a)    a public statement or publication of information by or on behalf of the
administrator of the LIBO Rate announcing that such administrator has ceased or
will cease to provide the LIBO Rate, permanently or indefinitely; provided that
at the time of such statement or publication, there is no successor
administrator that will continue to provide the LIBO Rate;

(b)    a public statement or publication of information by the regulatory
supervisor for the administrator of the LIBO Rate, the U.S. Federal Reserve
System, an insolvency official with jurisdiction over the administrator for the
LIBO Rate, a resolution authority with jurisdiction over the administrator for
the LIBO Rate or a court or an entity with similar insolvency or resolution
authority over the administrator for the LIBO Rate, which states that the
administrator of the LIBO Rate has ceased or will cease to provide the LIBO Rate
permanently or indefinitely; provided that at the time of such statement or
publication, there is no successor administrator that will continue to provide
the LIBO Rate; or

(c)    a public statement or publication of information by the regulatory
supervisor for the administrator of LIBO Rate announcing that LIBO Rate is no
longer representative.

“Benchmark Transition Start Date” means (a) in the case of a Benchmark
Transition Event, the earlier of (i) the applicable Benchmark Replacement Date
and (ii) if such Benchmark Transition Event is a public statement or publication
of information of a prospective event, the ninetieth (90th) day prior to the
expected date of such event as of such public statement or publication of
information (or if the expected date of such prospective event is fewer than
ninety (90) days after such statement or publication, the date of such statement
or publication) and (b) in the case of an Early Opt-in Election, the date
specified by the Administrative Agent or the Required Lenders, as applicable, by
notice to the Borrower, the Administrative Agent (in the case of such notice by
the Required Lenders) and the Lenders.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its
related Benchmark Replacement Date have occurred with respect to the LIBO Rate
and solely to the extent that LIBO Rate has not been replaced with a Benchmark
Replacement, the period (a) beginning at the time that such Benchmark
Replacement Date has occurred if, at such time, no Benchmark Replacement has
replaced the LIBO Rate for all purposes hereunder in accordance with
Section 3.03(c) and (b) ending at the time that a Benchmark Replacement has
replaced LIBOR for all purposes hereunder pursuant to Section 3.03(c).

“Beneficial Ownership Certification” means a certification regarding beneficial
ownership as required by the Beneficial Ownership Regulation.

“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

 

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“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA)
that is subject to Title I of ERISA, (b) a “plan” (as defined in and subject to
Section 4975 of the Code), or (c) any Person whose assets include (for purposes
of Section 3(42) of ERISA or otherwise for purposes of Title I of ERISA or
Section 4975 of the Code) the assets of any such “employee benefit plan” or
“plan”.

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

“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.

“Borrower” has the meaning set forth in the Preamble.

“Borrowing” means Loans of the same Type, made, converted or continued on the
same date and, in the case of Eurodollar Loans, as to which a single Interest
Period is in effect.

“Borrowing Base” means at any time an amount equal to the amount determined in
accordance with Section 2.07, as the same may be adjusted from time to time
pursuant to Section 2.07(e), Section 2.07(f) or Section 8.12(c).

“Borrowing Base Deficiency” occurs if at any time (a) the aggregate Revolving
Credit Exposures exceeds (b) the Borrowing Base then in effect. The amount of
the Borrowing Base Deficiency at such time is the amount by which the aggregate
Revolving Credit Exposures of all Lenders at such time exceeds the Borrowing
Base in effect at such time.

“Borrowing Base Properties” means the proved Oil and Gas Properties of the
Credit Parties included in the most recently delivered Engineering Reports and
evaluated for purposes of determining the Borrowing Base then in effect.

“Borrowing Base Value” means, (a) with respect to any Oil and Gas Property
constituting Proved Reserves of a Credit Party, the value the Administrative
Agent attributed to such asset in connection with the most recent determination
of the Borrowing Base hereunder (which value has been approved by the Required
Lenders and may reflect the value attributed to such asset as a result of the
Credit Parties’ ownership of other associated Oil and Gas Properties from time
to time, including midstream assets) and (b) with respect to any Swap Agreement
in respect of commodities, the Swap PV of such Swap Agreement.

“Borrowing Request” means a request by the Borrower for a Borrowing in
accordance with Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or 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
banks are open for dealings in dollar deposits in the London interbank market.

 

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“Cash Equivalents” means: (a) securities issued or fully guaranteed or insured
by the United States Government or any agency thereof and backed by the full
faith and credit of the United States having maturities of not more than twelve
(12) months from the date of acquisition; (b) certificates of deposit, time
deposits, Eurodollar time deposits, or bankers’ acceptances having in each case
a tenor of not more than twelve (12) months from the date of acquisition issued
by any Lender or any U.S. commercial bank or any branch or agency of a non-U.S.
commercial bank licensed to conduct business in the U.S. having combined capital
and surplus of not less than $500,000,000 and having 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; (c) commercial paper of an issuer rated at least A-1
by S&P or P-1 by Moody’s at the time of acquisition, and in either case having a
tenor of not more than twelve (12) months; (d) repurchase obligations with a
term of not more than one-hundred eighty (180) days for underlying securities of
the types described in clauses (a) and (b) entered into with any financial
institution or recognized securities dealer meeting the qualifications specified
in clause (b) above; and (e) deposits in money market funds and investments
investing exclusively in investments described in clauses (a), (b), (c) and
(d) above.

“CERCLA” has the meaning set forth in the definition of “Environmental Laws”.

“Change in Control” means (a) at any time prior to an Initial Public Offering,
the Permitted Holders ceasing to have beneficial ownership, and the power to
vote or direct the voting (directly or indirectly), of at least 50.1% of the
aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the Borrower or (b) at any time on and after an Initial Public
Offering, the acquisition of ownership, directly or indirectly, beneficially or
of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the Effective
Date) other than the Permitted Holders (directly or indirectly, including
through one or more holding companies), of Equity Interests representing more
than (1) 40% of the aggregate ordinary voting power represented by the issued
and outstanding Equity Interests of the Borrower and (2) the percentage of the
aggregate ordinary voting power so held is greater than the percentage of the
aggregate ordinary voting power represented by the Equity Interests of the
Borrower held by the Permitted Holders, unless the Permitted Holders (directly
or indirectly, including through one of more holding companies) otherwise have
the right (pursuant to contract, proxy or otherwise), directly or indirectly, to
designate, nominate or appoint (and do so designate, nominate or appoint) a
majority of the board of directors (or equivalent governing body) of the
Borrower.

“Change in Law” means (a) the adoption or implementation of any law, rule or
regulation after the Effective Date, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the Effective Date or (c) compliance by any Lender or any
Issuing Bank (or, for purposes of Section 5.01(b), by any lending office of such
Lender or by such Lender’s or any 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 Effective Date; provided,
however, for the purposes of this Agreement, the Dodd-Frank Wall Street Reform
and Consumer Protection Act and all requests, guidelines or

 

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directives in connection therewith or promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision or the United States or
foreign regulatory authorities, in each case, pursuant to Basel III, are deemed
to have gone into effect and to have been adopted and implemented after the
Effective Date.

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

“Collateral” means all Property of the Credit Parties, now owned or hereafter
acquired, upon which a Lien is created or purported to be created by any
Security Instrument, including without limitation, the Mortgaged Property, but
excluding any Excluded Property.

“Collateral Coverage Minimum” shall have the meaning set forth in
Section 8.13(a).

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans and to acquire participations in Letters of Credit and Swingline
Loans hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment
may be (a) modified from time to time pursuant to Section 2.06 and (b) modified
from time to time pursuant to assignments by or to such Lender pursuant to
Section 12.04(b). The amount representing each Lender’s Commitment shall at any
time be the least of (i) such Lender’s Maximum Credit Amount, (ii) such Lender’s
Applicable Percentage of the then effective Borrowing Base and (iii) such
Lender’s Elected Commitment.

“Commitment Fee Rate” has the meaning set forth in the definition of “Applicable
Margin”.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute, and any
regulations promulgated thereunder.

“Company Material Adverse Effect” has the meaning assigned to such term in the
Acquisition Agreement as in effect on October 1, 2019.

“Compounded SOFR” means the compounded average of SOFRs for the applicable
Corresponding Tenor, with the rate, or methodology for this rate, and
conventions for this rate (which may include compounding in arrears with a
lookback and/or suspension period as a mechanism to determine the interest
amount payable prior to the end of each Interest Period) being established by
the Administrative Agent in accordance with:

(a)    the rate, or methodology for this rate, and conventions for this rate
selected or recommended by the Relevant Governmental Body for determining
compounded SOFR; provided that:

(b)    if, and to the extent that, the Administrative Agent determines that
Compounded SOFR cannot be determined in accordance with clause (a) above, then
the rate, or methodology for this rate, and conventions for this rate that the
Administrative Agent determines in its reasonable discretion are substantially
consistent with any evolving or then-prevailing market convention for
determining compounded SOFR for U.S. dollar-denominated syndicated credit
facilities at such time;

 

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provided, further, that if the Administrative Agent decides that any such rate,
methodology or convention determined in accordance with clause (a) or clause
(b) is not administratively feasible for the Administrative Agent, then
Compounded SOFR will be deemed unable to be determined for purposes of the
definition of “Benchmark Replacement”.

“Consolidated Interest Expense” means, for any period, the sum (determined
without duplication) of the aggregate gross interest expense of the Borrower and
the Consolidated Restricted Subsidiaries for such period, including to the
extent included in interest expense under GAAP: (a) amortization of debt
discount, (b) capitalized interest and (c) the portion of any payments or
accruals under Finance Leases allocable to interest expense.

“Consolidated Net Income” means with respect to the Borrower and the
Consolidated Restricted Subsidiaries, for any period, the aggregate of the net
income (or loss) of the Borrower and the Consolidated Restricted Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP;
provided that there shall be excluded, without duplication, from such net income
(to the extent otherwise included therein) the following: (a) the net income of
any Person in which the Borrower or any Consolidated Restricted Subsidiary has
an interest (which interest does not cause the net income of such other Person
to be consolidated with the net income of the Borrower and the Consolidated
Restricted Subsidiaries in accordance with GAAP), except to the extent of the
amount of dividends or distributions actually paid in cash during such period by
such other Person to the Borrower or to a Consolidated Restricted Subsidiary, as
the case may be; (b) the net income (but not loss) during such period of any
Consolidated Restricted Subsidiary to the extent that the declaration or payment
of dividends or similar distributions or transfers or loans by that Consolidated
Restricted Subsidiary is not at the time permitted by operation of the terms of
its charter or any agreement, instrument or Governmental Requirement applicable
to such Consolidated Restricted Subsidiary or is otherwise restricted or
prohibited, in each case determined in accordance with GAAP; (c) the net income
(or loss) of any Person acquired in a pooling-of-interests transaction for any
period prior to the date of such transaction; (d) the cumulative effect of a
change in accounting principles during such period to the extent included in
Consolidated Net Income; (e) any net after tax effect on income (or loss) for
such period attributable to the early extinguishment of Indebtedness (other than
hedging obligations); (f) any unrealized income (or loss) for such period
attributable to hedging obligations or other derivative instruments;
(g) accruals and reserves established or adjusted, or other charges required as
a result of, the adoption or modification of accounting policies during such
period; and (h) any gains or losses attributable to writeups or writedowns of
assets.

“Consolidated Restricted Subsidiaries” means any Restricted Subsidiaries that
are Consolidated Subsidiaries.

“Consolidated Subsidiaries” means 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.

 

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“Consolidated Total Leverage Ratio” means, as of the last day of any fiscal
quarter (or any other date of determination for purposes of Sections 9.04(a)(v),
(b), and 9.05(n)), the ratio of Total Debt to EBITDAX (or in the case of the
fiscal quarters ending on or prior to the third full fiscal quarter after the
Initial Funding Date, Annualized EBITDAX) for the Rolling Period then ending.

“Consolidated Unrestricted Subsidiaries” means any Unrestricted Subsidiaries
that are Consolidated Subsidiaries.

“Consolidation” has the meaning assigned such term in Section 9.08.

“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have meanings correlative thereto.

“Control Agreement” has the meaning assigned such term the Pledge and Security
Agreement.

“Controlled Investment Affiliate” means, as to any Person, any other Person,
other than the Sponsor, which directly or indirectly is in control of, is
controlled by, or is under common control with such Person and is organized by
such Person (or any Person controlling such Person) primarily for making direct
or indirect equity or debt investments in the Borrower and/or other companies.

“Corresponding Tenor” with respect to a Benchmark Replacement means a tenor
(including overnight) having approximately the same length (disregarding
business day adjustment) as the applicable tenor for the applicable Interest
Period with respect to the LIBO Rate.

“Covered Entity” means any of the following: (a) a “covered entity” as that term
is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (b) a
“covered bank” as that term is defined in, and interpreted in accordance with,
12 C.F.R. § 47.3(b); or (c) a “covered FSI” as that term is defined in, and
interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Covered Party” has the meaning assigned to such term in Section 12.19.

“Credit Parties” means, collectively, the Borrower and each Guarantor, and
“Credit Party” means any one of the foregoing.

“Cure Amount” shall have the meaning set forth in Section 9.01(c).

“Cure Period” shall have the meaning set forth in Section 9.01(c).

“Current Assets” means, as at any date of determination, without duplication,
the sum of all amounts that would, in conformity with GAAP, be set forth
opposite the caption “total current assets” (or any like caption) on a
consolidated balance sheet of the Borrower and its Consolidated Restricted
Subsidiaries at such date, plus Unused Availability (but only to the extent that
the

 

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Borrower is then permitted to borrow such amount under the terms of this
Agreement, including, without limitation, Section 6.03 hereof), but excluding
(a) all non-cash assets under ASC 815 and (b) assets to the extent resulting
from non-cash gains required under ASC 410.

“Current Liabilities” means, as at any date of determination, without
duplication, the sum of all amounts that would, in conformity with GAAP, be set
forth opposite the caption “total current liabilities” (or any like caption) on
a consolidated balance sheet of the Borrower and its Consolidated Restricted
Subsidiaries on such date, but excluding, without duplication, (a) all non-cash
obligations under ASC 815, (b) the current portion of any Loans and other
long-term Debt, (c) any non-cash liabilities recorded in connection with
stock-based or similar incentive-based compensation awards or arrangements and
(d) non-cash liabilities to the extent resulting from non-cash losses or charges
required under ASC 410.

“Current Ratio” means, as of any date of determination, the ratio of (a) Current
Assets to (b) Current Liabilities.

“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 performance bonds and similar instruments;
(c) all accounts payable and all accrued expenses, liabilities or other
obligations of such Person to pay the deferred purchase price of Property or
services (excluding accounts payable and accrued expenses, liabilities or other
obligations to pay the deferred purchase price of Property or services, from
time to time incurred in the ordinary course of business which are not greater
than ninety (90) days past due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP); (d) all obligations under Finance 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, to the extent of the lesser of (i) the amount of such Debt and (ii) the
fair market value (as determined by the Borrower in good faith) of the Property
of such Person securing such Debt; (g) all Debt (as defined in the other clauses
of this definition) of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the Debt (howsoever such assurance
shall be made) to the extent of the lesser of the amount of such Debt and the
maximum stated amount of such guarantee or assurance against loss; (h) all
obligations or undertakings of such Person to maintain or cause to be maintained
the financial position or covenants of others and, to the extent entered into as
a means of providing credit support for the obligations of others and not
primarily to enable such Person to acquire any such Property, all obligations or
undertakings of such Person to purchase the Debt or Property of others;
(i) obligations to deliver commodities, goods or services, including, without
limitation, Hydrocarbons, in consideration of one or more advance payments,
other than gas balancing arrangements in the ordinary course of business;
(j) obligations to pay for goods or services (even if such goods or services are
not actually received or utilized by such Person), but solely to the extent such
obligations are included as a liability of such Person under GAAP; (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;

 

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(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. Except as explicitly set forth
above, 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. For the avoidance of doubt, customary
obligations associated with firm transport contracts, storage or drilling
contracts and minimum volume commitments entered into in the ordinary course of
business shall not constitute Debt.

“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.

“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.

“Defaulting Lender” means any Lender that (a) has failed, within two
(2) Business Days of the date required to be funded or paid, to (i) fund any
portion of its Loans, (ii) fund any portion of its participations in Letters of
Credit or Swingline Loans or (iii) pay over to the Administrative Agent, any
Issuing Bank, any Swingline Lender or any other Lender any other amount required
to be paid by it hereunder, unless, in the case of clause (i) above, such Lender
notifies the Administrative Agent in writing that such failure is the result of
such Lender’s good faith determination that a condition precedent to funding
(specifically identified and including the particular default, if any) has not
been satisfied; (b) has notified the Borrower or the Administrative Agent, any
Issuing Bank, any Swingline Lender or any other Lender in writing, or has made a
public statement, to the effect that it does not intend or expect to comply with
any of its funding obligations under this Agreement (unless such writing or
public statement indicates that such position is based on such Lender’s good
faith determination that a condition precedent (specifically identified and
including the particular default, if any) or generally under other agreements in
which it commits to extend credit; (c) has failed, within three (3) Business
Days after request by the Administrative Agent or a Credit Party, acting in good
faith, to provide a certification in writing from an authorized officer of such
Lender that it will comply with its obligations (and is financially able to meet
such obligations as of the date of certification) to fund prospective Loans and
participations in then outstanding Letters of Credit and Swingline Loans under
this Agreement; provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon the Administrative Agent’s and such Credit
Party’s receipt of such certification in form and substance satisfactory to it
and the Administrative Agent; or (d) has become the subject of (i) a Bankruptcy
Event or (ii) a Bail-In Action.

“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 ninety-one (91) days after
the earlier of (a) the Maturity Date and (b) the date on which there are no
Loans,

 

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LC Exposure or other obligations hereunder outstanding and all of the
Commitments are terminated; provided that if such Equity Interests are issued
pursuant to any plan for the benefit of future, current or former employees,
directors, officers, members of management or consultants (or their respective
Controlled Investment Affiliates or Immediate Family Members) of the Borrower
(or any direct or indirect parent thereof) or its Subsidiaries or by any such
plan to such employees, directors, officers, members of management or
consultants (or their respective Controlled Investment Affiliates or Immediate
Family Members), such Equity Interests shall not constitute Disqualified Capital
Stock solely because they may be required to be repurchased by the Borrower or
its Restricted Subsidiaries in order to satisfy applicable statutory or
regulatory obligations or as a result of such employee’s, director’s, officer’s,
management member’s or consultant’s termination, death or disability; provided,
further, that any Equity Interests held by any future, current or former
employee, director, officer, member of management or consultant (or their
respective Controlled Investment Affiliates or Immediate Family Members) of the
Borrower, any of its Restricted Subsidiaries, any of its direct or indirect
parent companies or any other entity in which the Borrower or a Restricted
Subsidiary has an Investment and is designated in good faith as an “affiliate”
by the board of directors (or the compensation committee thereof), in each case
pursuant to any stock subscription or shareholders’ agreement, management equity
plan or stock option plan or any other management or employee benefit plan or
agreement shall not constitute Disqualified Capital Stock solely because it may
be required to be repurchased by the Borrower or its Restricted Subsidiaries in
order to satisfy applicable statutory or regulatory obligations or as a result
of such employee’s, director’s, officer’s, management member’s or consultant’s
termination, death or disability.

“Disqualified Institutions” means (a) certain banks, financial institutions and
other institutional lenders, investors and funds (or to their Affiliates that
are clearly identifiable solely on the basis of similarity of their names) that
have been specified in writing to the Administrative Agent and the Arrangers by
the Borrower prior to October 1, 2019 or (b) competitors of the Borrower (or to
their Affiliates that are clearly identifiable solely on the basis of similarity
of their names) that have been specified in writing to the Administrative Agent
by the Borrower prior to October 1, 2019 (which, for the avoidance of doubt,
shall not include any bona fide debt investment fund or entities that invest in
commercial loans in the ordinary course of business); provided that if the
Borrower has consented in writing to an assignment to a Disqualified Institution
under Section 12.04(b), then such entity will not be considered a Disqualified
Institution for the purposes of such assignment.

“Distributable Free Cash Flow” means, as of any time of determination, (a) an
amount equal to the sum of (x) $36,250,000, solely for the period starting on
the Initial Funding Date and ending on the last day of the fourth full fiscal
quarter after the Initial Funding Date, and thereafter $0 and (y) Free Cash Flow
for the most recently completed four (4) fiscal quarter period (or, until four
full fiscal quarters have been completed after the Initial Funding Date, a
period consisting of the number of full fiscal quarters completed commencing
with the fiscal quarter ending December 31, 2019), in each case, for which
financial statements have been delivered for the Borrower pursuant to Sections
8.01(a) or (b), as applicable, beginning with the fiscal quarter ending
December 31, 2019 minus (b) the aggregate amount of Restricted Payments made
prior to and at such time of determination under Section 9.04(a)(v) minus
(c) the aggregate amount of Investments made prior to and at such time of
determination under Section 9.05(n) minus (d) the

 

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aggregate amount of Specified Additional Debt Redeemed prior to and at such time
of determination under Section 9.04(b)(i)(D), in the case of each of clauses
(b), (c) and (d) (each, a “Free Cash Flow Utilization”) that is deemed to have
occurred (as set forth below) since the first day of the relevant period through
and including the time of determination. For purposes of determining
Distributable Free Cash Flow as of any time of determination, any Free Cash Flow
Utilization shall be deemed to have occurred in the earliest fiscal quarter in
the relevant period, to the extent that there was Distributable Free Cash Flow
greater than $0 in such fiscal quarter and such Distributable Free Cash Flow has
not otherwise been utilized for any previous Free Cash Flow Utilizations;
provided that (i) no Free Cash Flow Utilization shall be deemed to occur in any
fiscal quarter ending prior to the Initial Funding Date, (ii) solely for the
period starting on the Initial Funding Date and ending on the last day of the
fourth full fiscal quarter after the Initial Funding Date, the initial Free Cash
Flow Utilizations in such period up to $36,2500,000 shall be deemed to have
occurred on the Initial Funding Date, (iii) for the avoidance of doubt, to the
extent a Free Cash Flow Utilization exceeds the Distributable Free Cash Flow for
the earliest fiscal quarter in such relevant period (after giving effect to any
previous Free Cash Flow Utilizations), it shall be deemed to occur in the
immediately following fiscal quarter to the extent of the lesser of (A) such
excess and (B) Distributable Free Cash Flow in such fiscal quarter (after giving
effect to any previous Free Cash Flow Utilizations) and (iv) for further
clarification, it is the intent of the parties hereto that Distributable Free
Cash Flow and Free Cash Flow Utilizations are applied on a “first in, first out”
basis for each relevant period.

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

“Domestic Subsidiary” means any Restricted Subsidiary that is organized under
the laws of the United States of America or any state or territory thereof or
the District of Columbia.

“DQ List” has the meaning given to such term in Section 12.04(f).

“Early Opt-in Election” means the occurrence of:

(a)(i) a determination by the Administrative Agent or (ii) a notification by the
Majority Lenders to the Administrative Agent (with a copy to the Borrower) that
the Majority Lenders have determined that U.S. dollar-denominated syndicated
credit facilities being executed at such time, or that include language similar
to that contained in Section 3.03(c) are being executed or amended, as
applicable, to incorporate or adopt a new benchmark interest rate to replace
LIBO Rate; and

(b)(i) the election by the Administrative Agent or (ii) the election by the
Majority Lenders to declare that an Early Opt-in Election has occurred and the
provision, as applicable, by the Administrative Agent of written notice of such
election to the Borrower and the Lenders or by the Majority Lenders of written
notice of such election to the Administrative Agent.

 

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“EBITDAX” means, for any period, Consolidated Net Income for such period:

(a)    increased (without duplication) by the following, in each case (other
than in the case of clause (a)(v) below) to the extent deducted from or
otherwise not included (and not added back) in the determination of Consolidated
Net Income for such period:

(i)    provision for taxes (including Permitted Tax Distributions) based on
income or profits or capital, including federal, state, franchise, excise and
similar taxes (such as the Texas franchise tax), including any penalties and
interest relating to any tax examinations, plus

(ii)    Consolidated Interest Expense for such period (net of interest income of
the Borrower and the Consolidated Subsidiaries for such period) and to the
extent not reflected in Consolidated Interest Expense, any losses on hedging
obligations or other derivative instruments entered into for the purpose of
hedging interest rate risk (net of interest income and gains on such hedging
obligations), bank fees and costs of surety bonds in connection with financing
activities, plus

(iii)    depreciation, depletion and amortization expense, including the
amortization of intangible assets established through purchase accounting and
the, amortization of deferred financing fees for such period, plus

(iv)    any other non-cash charges reducing Consolidated Net Income for such
period (provided that if any such non-cash charges represent an accrual or
reserve for potential cash items in any future period, the cash payment in
respect thereof in such future period shall be subtracted from EBITDAX to such
extent, and excluding amortization of a prepaid cash item that was paid in a
prior period), plus

(v)    cash receipts (or any netting arrangements resulting in reduced cash
expenditures) not representing EBITDAX or Consolidated Net Income in any period
to the extent non-cash gains relating to such income were deducted in the
calculation of EBITDAX pursuant to clause (b) below for any previous period and
not added back, plus

(vi)    (A) Transaction Expenses incurred prior to or on or about the Initial
Funding Date and (B) costs and expenses incurred in connection with any
Investments, acquisitions (or purchases of assets (including those relating to
Oil and Gas Properties)), asset dispositions (including those relating to Oil
and Gas Properties), recapitalizations, mergers, amalgamations, repayment,
refinancing amendment or modification of Debt or similar transactions after the
Initial Funding Date permitted hereunder up to an aggregate amount pursuant to
this clause (B) not to exceed $15,000,000 in any period, plus

(vii)    the amount of any transition services, restructuring charges or
reserves, equity-based or non-cash compensation charges or expenses including
any such charges or expenses arising from grants of stock appreciation or
similar rights, stock options restricted stock or other rights, retention
charges (including charges or expenses in respect of incentive plans), severance
costs, costs relating to initiatives aimed at profitability improvement, costs
or reserves associated with improvements to IT and accounting functions and
integration and facilities opening costs; provided that the aggregate amount of
add backs under this clause (vii) and clause (viii) below shall not exceed 7.50%
of EBITDAX (calculated prior to giving effect to such add-backs) for such
period, plus

 

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(viii)    the amount of “run rate” net cost savings, operating expense
reductions and synergies in connection with, as a result of, or related to, the
Transactions projected by the Borrower in good faith to be realized as a result
of specified actions taken (which cost savings or synergies shall be calculated
on a pro forma basis as though such cost savings, operating expense reductions
or synergies had been realized on the first day of such period), net of the
amount of actual benefits realized during such period from such actions;
provided that (A) such cost savings, operating expense reductions or synergies
are factually supportable and reasonably identified in writing to the
Administrative Agent together with the delivery of a certificate pursuant to
Section 8.01(c), (B) such actions have been taken within twelve (12) months
after the Initial Funding Date and (C) the Borrower reasonably expects to
realize such savings, operating expense reductions or synergies within
twenty-four (24) months after the Initial Funding Date (it is understood and
agreed that “run rate” means the full recurring benefit for a period that is
associated with any action taken, committed to be taken, or expected to be
taken, net of the amount of actual benefits realized during such period from
such actions); provided, further, that the aggregate amount of add backs under
this clause (viii) and clause (vii) above shall not exceed 7.50% of EBITDAX
(calculated prior to giving effect to such add-backs) for such period, plus

(ix)    exploration expenses or costs (to the extent the Borrower adopts the
successful efforts method of accounting), plus

(x)    any net loss from disposed, abandoned or discontinued operations; and

(b)    decreased (without duplication) by the following, in each case to the
extent included in determining Consolidated Net Income for such period:

(i)    non-cash items increasing Consolidated Net Income for such period,
excluding any non-cash items that represent the reversal of an accrual or cash
reserve for any anticipated cash charges in any prior period where such accrual
or cash reserve is no longer required (other than any such accrual or cash
reserve that has been added back to Consolidated Net Income in calculating
EBITDAX in accordance with this definition), plus

(ii)    any net income from disposed, abandoned or discontinued operations, plus

(iii)    any non-cash items with respect to cash actually received in a prior
period unless such cash did not increase EBITDAX in such prior period.

For the purposes of calculating EBITDAX for any Rolling Period, (i) if during
such Rolling Period the Borrower or any Consolidated Restricted Subsidiary shall
have made a Material Disposition, EBITDAX for such Rolling Period shall be
calculated on a Pro Forma Basis, and (ii) if during such Rolling Period the
Borrower or any Consolidated Restricted Subsidiary shall have made a Material
Acquisition, EBITDAX for such Rolling Period shall be calculated on a Pro Forma
Basis.

 

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“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.

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

“Effective Date” means the date on which the conditions specified in
Section 6.01 are satisfied (or waived in accordance with Section 12.02).

“Elected Commitment” means, as to each Lender, the amount set forth opposite
such Lender’s name on Annex I under the caption “Elected Commitment”, as the
same may be increased, reduced or terminated from time to time in connection
with an optional increase, reduction or termination of the Aggregate Elected
Commitment Amounts pursuant to Section 2.06(c).

“Elected Commitment Increase Certificate” has the meaning given to such term in
Section 2.06(c)(ii)(H).

“Engineering Reports” has the meaning assigned such term in Section 2.07(c)(i).

“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health, safety, the environment, the preservation or reclamation of
natural resources, or the management, Release or threatened Release of any
Hazardous Materials, in effect and applicable to the operations of the Borrower
or any Restricted Subsidiary, including, the Oil Pollution Act of 1990 (“OPA”),
as amended, the Clean Air Act, as amended, the Comprehensive Environmental,
Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the
Federal Water Pollution Control Act, as amended, the Occupational Safety and
Health Act of 1970, as amended, the Resource Conservation and Recovery Act of
1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, and the Hazardous Materials Transportation Act.

“Environmental Permit” means any permit, registration, license, notice,
approval, consent, exemption, variance, or other authorization required under or
issued to the Borrower or any Restricted Subsidiary pursuant to applicable
Environmental Laws.

“Equity Contribution” has the meaning assigned such term in Section 6.02(r).

 

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“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.

“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Borrower or a Restricted Subsidiary would be deemed to
be a “single employer” within the meaning of Section 4001(b)(1) of ERISA or
Sections 414(b) or (c) of the Code or, solely for purposes of Section 302 of
ERISA and Section 412 of the Code, under Sections 414 (m) or (o) of the Code.

“ERISA Event” means (a) the occurrence of a “Reportable Event” described in
Section 4043 of ERISA with respect to a Plan subject to Title IV of ERISA (other
than a Multiemployer Plan) other than a Reportable Event as to which the
provision of thirty (30) days’ notice to the PBGC is expressly waived under
applicable regulations, (b) the withdrawal of the Borrower, a Restricted
Subsidiary or any ERISA Affiliate from a Plan subject to Title IV of ERISA
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 subject to Title IV of ERISA (other than a Multiemployer 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) the occurrence of any other event or condition which would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned such term in Section 10.01.

“Excepted Liens” means (a) Liens for Taxes, assessments or other governmental
charges or levies which are not delinquent or which are being contested in good
faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP, or for property taxes on the property that the Borrower
or one of its Subsidiaries has determined to abandon if the sole recourse for
such tax, assessment, charge or claim is to the property (other than with
respect to any Borrowing Base Property); (b) Liens in connection with workers’
compensation, unemployment insurance or other social security, old age pension
or public liability obligations or similar legislation, 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

 

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GAAP; (c) statutory landlord’s liens, operators’, vendors’, carriers’,
warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s,
construction or other like Liens, in each case, 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 adequate reserves have been maintained
in accordance with GAAP; (d) contractual Liens which arise in the ordinary
course of business under operating agreements, joint venture agreements, oil and
gas partnership agreements, oil and gas leases, farm-out agreements, farm-in
agreements, division orders, contracts for the sale, transportation or exchange
of oil and natural gas, unitization and pooling declarations and agreements,
area of mutual interest agreements, overriding royalty 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 or have become 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 any material Property covered by such Lien
for the purposes for which such Property is held by the Borrower or any
Restricted Subsidiary or materially impair the value of any material 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 the Borrower or any of its
Restricted Subsidiaries to provide collateral to the depository institution;
(f) easements, restrictions, servitudes, permits, conditions, covenants,
exceptions or reservations in any Property of the Borrower or any Restricted
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, that do not secure
any monetary obligations and which in the aggregate do not materially impair the
use of such Property for the purposes of which such Property is held by the
Borrower or any Restricted Subsidiary 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 (including indemnification
obligations in respect of surety bonds); (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; (i) encumbrances consisting of deed restrictions,
zoning restrictions, and other similar restrictions on the use of Oil and Gas
Properties, none of which, in the aggregate, materially impairs the use of such
property by the Borrower or any Restricted Subsidiary in the operation of its
business or materially detracts from the value of such properties, and none of
which, in the aggregate, is or

 

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shall be violated in any material respect by existing proposed operations;
(j) purported Liens evidenced by the filing of UCC financing statements solely
as a precautionary measure in connection with operating leases of personal
property; (k) any interest or title of a lessor, sublessor, licensor or
sublicensor or secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s
interest under any lease, sublease, license or sublicense permitted by this
Agreement; (l) Immaterial Title Deficiencies; (m) Liens on cash earnest money
deposited pursuant to the terms of an agreement to acquire assets used in, or
Persons engaged in, the Oil and Gas Business, as permitted by this Agreement and
(n) licenses of intellectual property, none of which, in the aggregate,
materially impair the operation of the business of the Borrower or any
Restricted Subsidiary; provided, further, that no intention to subordinate the
first priority status afforded by the Liens granted in favor of the
Administrative Agent (for the benefit of the Secured Parties, as provided in the
Security Instruments) is to be hereby implied or expressed by the permitted
existence of such Excepted Liens. The parties acknowledge and agree that the
term “Excepted Liens” shall not include any Lien securing Debt for borrowed
money other than the Indebtedness.

“Excluded Accounts” means (a) each account for which all of the deposits consist
of amounts utilized to fund payroll, employee benefit or tax obligations of the
Borrower and its Subsidiaries, (b) escrow, pre-funding, trust and fiduciary
accounts, in each case, solely holding amounts held for the benefit of third
parties in the ordinary course of business (including, without limitation,
escrow accounts in respect of Investments permitted under this Agreement,
including under Section 9.05), (c) “zero balance” accounts, and (d) other
accounts; provided that the aggregate daily maximum balance for all such bank
accounts excluded pursuant to this clause (d) on any day shall not exceed
$5,000,000.

“Excluded Property” has the meaning assigned to such term in the Pledge and
Security Agreement.

“Excluded Subsidiaries” means (a) any Restricted Subsidiary that is prohibited
or restricted by applicable law, rule or regulation or by any contractual
obligation existing on the Initial Funding Date (or, if later, the date it
becomes a Restricted Subsidiary) from guaranteeing the Indebtedness or which
would require governmental (including regulatory) consent, approval, license or
authorization to provide a guarantee unless such consent, approval, license or
authorization has been received and for only so long as such restriction is
outstanding, (b) any Immaterial Subsidiary, (c) any Restricted Subsidiary of the
Borrower acquired pursuant to a permitted acquisition financed with Debt
permitted to be incurred pursuant to Section 9.02(j) and any Restricted
Subsidiary thereof that guarantees such Debt, in each case to the extent such
Debt prohibits such Subsidiary from becoming a Guarantor and only for so long as
such Debt remains outstanding, (d) any other Domestic Subsidiary with respect to
which, in the reasonable judgment of the Administrative Agent and the Borrower,
the cost, burden, difficulty or other consequences of providing a guarantee
outweighs the value to the Secured Parties afforded thereby, and (e) each
Unrestricted Subsidiary; provided that, notwithstanding anything herein to the
contrary, no Subsidiary owning Borrowing Base Properties shall be an Excluded
Subsidiary.

“Excluded Swap Obligation” means, with respect to any Credit Party individually
determined on a Credit Party by Credit Party basis, any Debt in respect of any
Swap Agreement if, and solely to the extent that, all or a portion of the
guarantee by such Credit Party of, or the

 

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grant by such Credit Party of a security interest to secure, such Debt in
respect of any Swap Agreement (or any guarantee thereof) is or becomes illegal
under the Commodity Exchange Act or any rule, regulation or order of the
Commodity Futures Trading Commission (or the application or official
interpretation of any thereof) by virtue of such Credit Party’s failure for any
reason to constitute an “eligible contract participant” as defined in the
Commodity Exchange Act at the time such guarantee or grant of a security
interest becomes effective with respect to such related Debt in respect of any
Swap Agreement. If any Debt in respect of any Swap Agreement arises under a
master agreement governing more than one swap, such exclusion shall apply only
to the portion of such Debt in respect of any Swap Agreement that is
attributable to swaps for which such guarantee or security interest is or
becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient, (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax (or any political subdivision thereof) or
(ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 5.04(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 5.03, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to such Recipient’s failure
to comply with Section 5.03(f) or (g) and (d) any U.S. federal withholding Taxes
imposed under FATCA.

“Existing Credit Agreement” means that certain Credit Agreement, dated as of
January 18, 2019, by and among Wells Fargo Bank, N.A., as administrative agent,
the Borrower, as borrower, and the lenders party thereto from time to time (as
amended prior to the date hereof).

“Existing Credit Parties” means Citizen Mineral, LLC, a Delaware limited
liability company, Citizen Energy III, LLC, a Delaware limited liability
company, Citizen Midstream, LLC, a Delaware limited liability company, EVHI
Exploration, LLC, an Oklahoma limited liability company, Citizen Energy
Management, LLC, a Delaware limited liability company, Citizen Energy
Intermediate, LLC, a Delaware limited liability company.

“Extended Loans” has the meaning assigned to such term in Section 3.06(a).

“Extended Maturity Date” has the meaning assigned to such term in
Section 3.06(c).

“Extending Lenders” has the meaning assigned to such term in Section 3.06(c).

“Extension Effective Date” has the meaning assigned to such term in
Section 3.06(c).

“Extension Request” has the meaning assigned to such term in Section 3.06(a).

 

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“FATCA” means Sections 1471 through 1474 of the Code, as of the Effective Date
(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, and any fiscal or regulatory legislation, rule
or practices adopted pursuant to any intergovernmental agreement, treaty or
convention among Governmental Authorities and implementing such Sections of the
Code.

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

“Federal Funds Effective Rate” means, for any day, the greater of (a) the rate
calculated by the NYFRB based on such day’s federal funds transactions by
depositary institutions (as determined in such manner as shall be set forth on
the Federal Reserve Bank of New York’s Webiste from time to time) and published
on the next succeeding Business Day by the NYFRB as the federal funds effective
rate and (b) zero percent (0.00%).

“Federal Reserve Bank of New York’s Website” means the website of the Federal
Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.

“Fee Letter” means, collectively, (i) that certain letter agreement, dated as of
October 1, 2019, among JPMorgan Chase Bank, N.A., BMO Harris Bank N.A., BMO
Capital Markets Corp., The Toronto Dominion Bank, New York Branch, TD Securities
(USA) LLC, Bank of America, N.A. and BofA Securities Inc. and Holdings, as
amended, restated, supplemented or otherwise modified from time to time,
(ii) the Agency Fee Letter and (iii) any other fee letters that may hereafter be
entered into between the Borrower, Holdings, the Administrative Agent and/or the
Arrangers.

“Finance Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, recorded as finance leases
on the balance sheet of the Person liable (whether contingent or otherwise) for
the payment of rent thereunder; provided that for all purposes hereunder the
amount of obligations under any Finance Lease shall be the amount thereof
accounted for as a liability on the balance sheet of such Person in accordance
with GAAP; provided, further, that for purposes of calculations made pursuant to
the terms of this Agreement, GAAP will be deemed to treat leases in a manner
consistent with its treatment under GAAP applicable to private companies for
fiscal years beginning prior to December 15, 2019, notwithstanding any
modifications or interpretative changes thereto that may occur. For the
avoidance of doubt, (i) any lease that would be characterized as an operating
lease in accordance with GAAP applicable to private companies for fiscal years
beginning prior to December 15, 2019 (whether or not such operating lease was in
effect on such date) shall continue to be accounted for as an operating lease
(and not as a Finance Lease) for purposes of this Agreement regardless of any
change in GAAP applicable to private companies for fiscal years beginning after
December 15, 2019 that would otherwise require such lease to be re-characterized
(on a prospective or retroactive basis or otherwise) as a Finance Lease and
(ii) GAAP will be deemed to not take into account ASU 2016-02.

 

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“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of such Person. Unless
otherwise specified, all references herein to a Financial Officer means a
Financial Officer of the Borrower.

“Flood Insurance Regulations” means (a) the National Flood Insurance Act of 1968
as now or hereafter in effect or any successor statute thereto, (b) the Flood
Disaster Protection Act of 1973 as now or hereafter in effect or any successor
statute thereto, (c) the National Flood Insurance Reform Act of 1994 (amending
42 USC § 4001, et seq.), as the same may be amended or recodified from time to
time, (d) the Flood Insurance Reform Act of 2004 and (e) the Biggert-Waters
Flood Insurance Reform Act of 2012, in each case as now or hereafter in effect
or any successor statute thereto and including any regulations promulgated
thereunder.

“Foreign Lender” means any Lender that is not a U.S. Person.

“Foreign Subsidiary” means any Restricted Subsidiary that is not a Domestic
Subsidiary.

“Free Cash Flow” means, for any fiscal quarter, EBITDAX minus the increase (or
plus the decrease) in non-cash working capital from the previous fiscal quarter
minus the sum, in each case without duplication, of the following amounts for
such period of (a) voluntary and scheduled cash repayments of Debt (other than
the Loans) which cannot be reborrowed pursuant to the terms of such Debt (other
than those made in reliance on Section 9.04(b)(i)(D)), (b) capital expenditures,
(c) interest expense paid in cash, (d) taxes payable in cash, (e) exploration
expenses paid in cash, (f) Restricted Payments made in cash during such period
(other than those made in reliance on Section 9.04(a)(v)) and (g) to the extent
not included in the foregoing and added back in the calculation of EBITDAX, any
other cash charge that reduces the earnings of the Borrower and the Restricted
Subsidiaries.

“Free Cash Flow Utilization” has the meaning set forth in the definition of
“Distributable Free Cash Flow”.

“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the Issuing Banks, such Defaulting Lender’s LC Exposure other than LC
Exposure as to which such Defaulting Lender’s participation obligation has been
reallocated to other Lenders or cash collateralized in accordance with the terms
hereof and (b) with respect to the Swingline Lenders, such Defaulting Lender’s
Swingline Exposure other than Swingline Exposure as to which such Defaulting
Lender’s participation obligation has been reallocated to another Lender or cash
collateralized in accordance with the terms hereof.

“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.

 

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“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, rules of common law, authorization or other
directive or requirement, whether now or hereinafter in effect, of any
Governmental Authority.

“Guarantors” means, collectively, those Persons identified on Schedule 1.02(a)
hereto and each other Material Subsidiary and other Domestic Subsidiary that
guarantees the Indebtedness pursuant to the Guaranty Agreement or as otherwise
required by Section 8.13(b).

“Guaranty Agreement” means an agreement executed by the Guarantors in
substantially the form of Exhibit F absolutely and unconditionally guarantying,
on a joint and several basis, payment of the Indebtedness, as the same may be
amended, modified or supplemented from time to time.

“Hazardous Material” means any substance regulated or as to which liability
might arise under any applicable Environmental Law including: (a) any chemical,
compound, material, product, byproduct, substance or waste defined as or
included in the definition or meaning of “hazardous substance,” “hazardous
material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous
substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar
meaning or import found in any applicable Environmental Law; (b) Hydrocarbons,
petroleum products, petroleum substances, natural gas, oil, oil and gas waste,
crude oil, and any components, factions or derivatives thereof; and
(c) radioactive materials, explosives, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon, infectious or medical wastes.

“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Loans or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws allow as of the Effective Date.

“Holdings” has the meaning set forth in the Preamble.

“Holdings Pledge Agreement” means a Pledge Agreement, between the Administrative
Agent and Holdings in substantially the form of Exhibit G-1 (or otherwise in
form and substance acceptable to the Administrative Agent) granting Liens and
security interests in the Equity Interests of the Borrower directly owned by
Holdings in favor of the Administrative Agent for the benefit of the Secured
Parties to secure the Indebtedness, as the same may be amended, modified,
supplemented or restated from time to time.

“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.

 

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

“Immaterial Subsidiary” means any Restricted Subsidiary that is not a Material
Subsidiary.

“Immaterial Title Deficiencies” means, with respect to Oil and Gas Properties,
defects or clouds on title, discrepancies in reported net revenue and working
interest ownership percentages and other Liens, defects, discrepancies and
similar matters which do not, individually or in the aggregate, affect Oil and
Gas Properties with a value (which, for purposes hereof, shall mean the value
the Administrative Agent attributes to any such Oil and Gas Properties for
purposes of the most recent determination of the Borrowing Base) greater than
three percent (3%) of the value (which, for purposes hereof, shall mean the
value the Administrative Agent attributes to all Oil and Gas Properties for
purposes of the most recent determination of the Borrowing Base) of all such Oil
and Gas Properties.

“Immediate Family Members” means with respect to any individual, such
individual’s child, stepchild, grandchild or more remote descendant, parent,
stepparent, grandparent, spouse, former spouse, qualified domestic partner,
sibling, mother-in-law, father-in-law, son-in-law and daughter-in-law (including
adoptive relationships) and any trust, partnership or other bona fide
estate-planning vehicle the only beneficiaries of which are any of the foregoing
individuals or any private foundation or fund that is controlled by any of the
foregoing individuals or any donor-advised fund of which any such individual is
the donor.

“Indebtedness” means any and all amounts owing or to be owing by the Borrower,
any Restricted Subsidiary or any Guarantor (whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising): (a) to any Agent, any Issuing
Bank, any Swingline Lender or any Lender under any Loan Document, including,
without limitation, all interest on any of the Loans (including any interest
that accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of any Credit Party (or
could accrue but for the operation of applicable bankruptcy or insolvency laws),
whether or not such interest is allowed or allowable as a claim in any such
case, proceeding or other action); (b) to any Secured Swap Provider under any
Swap Agreement including any Swap Agreement in existence prior to the Initial
Funding Date, but excluding any additional transactions or confirmations entered
into (i) after such Secured Swap Provider ceases to be a Lender or an Affiliate
of a Lender or (ii) after assignment by a Secured Swap Provider to a Person that
is not a Lender or an Affiliate of a Lender; (c) to any Bank Products Provider
in respect of Bank Products; and (d) all renewals, extensions and/or
rearrangements of any of the above; provided that solely with respect to any
Credit Party that is not an “eligible contract participant” under the Commodity
Exchange Act, Excluded Swap Obligations of such Credit Party shall in any event
be excluded from “Indebtedness” owing by such Credit Party.

“Indemnified Taxes” means Taxes imposed on or with respect to any payment made
by or on account of any obligation of the Borrower or any Guarantor under any
Loan Document other than (a) Excluded Taxes and (b) Other Taxes.

 

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“Indemnitee” has the meaning set forth in Section 12.03(b).

“Information” has the meaning set forth in Section 12.11.

“Initial Financial Statements” has the meaning set forth in Section 6.02(j).

“Initial Funding Date” means the date on which the conditions specified in
Section 6.02 are satisfied (or waived in accordance with Section 12.02).

“Initial Public Offering” means the issuance by the Borrower or any direct or
indirect parent of the Borrower of its common Equity Interests generating
(individually or in the aggregate together with any prior initial public
offering) gross proceeds exceeding $200,000,000, in an underwritten primary
public offering (other than a public offering pursuant to a registration
statement on Form S-8) pursuant to an effective registration statement filed
with the SEC in accordance with the Securities Act (whether alone or in
connection with a secondary public offering).

“Initial Reserve Report” means, collectively, (a) the internally prepared
reserve report of the Borrower and its Subsidiaries as of August 1, 2019, (b)
the reserve report of Roan and its Subsidiaries covering certain of their
respective Oil and Gas Properties constituting Proved Developed Producing
Reserves prepared by Netherland, Sewell & Associates, Inc. as of August 1, 2019,
and (c) the development case reserve report of Roan and its Subsidiaries
prepared by petroleum engineers who are employees of the Borrower as of
August 1, 2019, in each case, delivered to the Administrative Agent and the
Lenders prior to the Effective Date and used in determining the initial
Borrowing Base hereunder.

“Intercreditor Agreement” means an intercreditor agreement among the
Administrative Agent, the representative on behalf of any Junior Lien Debt
holders, the Borrower, the Guarantors and the other parties party thereto from
time to time, in form and substance reasonably acceptable to the Majority
Lenders and the Borrower.

“Interest Election Request” means a request by the Borrower to convert or
continue a Borrowing in accordance with Section 2.04.

“Interest Payment Date” means (a) with respect to any ABR Loan (other than a
Swingline Loan), the last day of each March, June, September and December,
(b) with respect to any Eurodollar Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurodollar Borrowing with an Interest Period of more than three (3) months’
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three (3) months’ duration after the first day of such Interest
Period, and (c) with respect to any Swingline Loan, the day that such Loan is
required to be repaid.

“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 (1), two (2), three (3) or
six (6) months (or, with the consent of each Lender, twelve (12) months)
thereafter, as the Borrower may elect; provided that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next

 

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succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (b) any Interest Period pertaining to a
Eurodollar Borrowing that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.

“Interim Redetermination” has the meaning assigned such term in Section 2.07(b).

“Interim Redetermination Date” means the date on which a Borrowing Base that has
been redetermined pursuant to an Interim Redetermination becomes effective as
provided in Section 2.07(d).

“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,
guarantee or 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 one hundred twenty (120) days representing
the purchase price of inventory or supplies sold by such Person in the ordinary
course of business); or (c) the purchase or acquisition (in one or a series of
transactions) of Property (other than Equity Interests) of another Person that
constitutes a business unit. For purposes of covenant compliance, the amount of
any Investment at any time shall be the amount actually invested (measured at
the time made), without adjustment for subsequent increases or decreases in the
value of such Investment.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means (a) JPMorgan Chase Bank, N.A. and (b) if requested by the
Borrower and reasonably acceptable to the Administrative Agent, any other Person
who is a Lender at the time of such request and who accepts such appointment in
writing with the Borrower and the Administrative Agent, in their respective
capacities as issuers of Letters of Credit hereunder, and each of their
respective successors in such capacity as provided in Section 2.08(i). Each
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. References herein and in the Loan Documents to the Issuing
Bank shall be deemed to refer to the Issuing Bank in respect of the applicable
Letter of Credit or to all Issuing Banks, as the context requires.

“Junior Lien” means a Lien on the Collateral (other than Liens securing the
Indebtedness) that is subordinated to the Liens granted under the Loan Documents
pursuant to the Intercreditor

 

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Agreement (it being understood that Junior Liens are not required to be pari
passu with other Junior Liens, and that Debt secured by Junior Liens may have
Liens that are senior in priority to, or pari passu with, or junior in priority
to, other Liens constituting Junior Liens).

“LC Commitment” means the lesser of (a) $35,000,000 (or such greater amount as
agreed to by the Issuing Banks) and (b) the Loan Limit.

“LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter
of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.

“LC Issuance Limit” means, with respect to each Issuing Bank, the amount set
forth on Annex II opposite such Issuing Bank’s name.

“Lenders” means the Persons listed on Annex I and any Person that shall have
become a party hereto pursuant to an Assignment and Assumption or any amendment
or modification to this Agreement, and any Person that shall have become a party
hereto as an Additional Lender pursuant to Section 2.06(c), other than, in each
case, any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption. Unless the context otherwise requires, the term “Lenders”
includes the Swingline Lenders and the Issuing Banks.

“Letter of Credit” means any standby 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 the Issuing
Bank relating to any Letter of Credit.

“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen 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 Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 A.M.,
London time, two (2) Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period; provided that, if such rate that appears on such screen or page
shall be less than zero, such rate shall be deemed to be zero for purposes of
this Agreement. Subject to Section 3.03, 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 1/100 of 1.00%) at which dollar deposits of
an amount comparable to such Eurodollar Borrowing and for a maturity comparable
to such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 A.M., London time, two (2) Business Days prior to
the commencement of such Interest Period. Subject to Section 3.03, to the extent
that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR
Borrowing, such rate shall be determined as modified by the definition of
Alternate Base Rate.

 

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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 deed of trust, 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.

“Loan Documents” means this Agreement (and any amendments, supplements,
consents, waivers or modifications hereto), any Fee Letter, the Notes, the
Letter of Credit Agreements, the Letters of Credit, the Security Instruments.

“Loan Limit” means, at any time, the least of (a) the Aggregate Maximum Credit
Amounts, (b) the then effective Borrowing Base, and (c) the then effective
Aggregate Elected Commitment Amounts.

“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement, including the Swingline Loans.

“Majority Lenders” means (a) at any time while no Loans or LC Exposure is
outstanding, Lenders having greater than 50% of the Aggregate Maximum Credit
Amounts; and (b) at any time while any Loans or LC Exposure is outstanding,
Lenders holding greater than 50% of the outstanding aggregate principal amount
of the Loans and participation interests in Letters of Credit (without regard to
any sale by a Lender of a participation in any Loan under Section 12.04(c));
provided that the Maximum Credit Amounts and the principal amount of the Loans
and participation interests in Letters of Credit of the Defaulting Lenders (if
any) shall be excluded from the determination of Majority Lenders.

“Material Acquisition” means any acquisition of Property or series of related
acquisitions of Property that involves the payment of consideration by the
Borrower and its Consolidated Restricted Subsidiaries in excess of $25,000,000.

“Material Adverse Effect” means a material adverse change in, or material
adverse effect on (a) the business, operations, Property or condition (financial
or otherwise) of the Borrower and the Restricted Subsidiaries taken as a whole,
(b) the ability of the Borrower, any Restricted Subsidiary or any Guarantor to
perform any of its material obligations under any Loan Document, (c) the
validity or enforceability of any Loan Document, or (d) the rights and remedies
of or benefits available to the Administrative Agent, any other Agent, any
Issuing Bank or any Lender under any Loan Document.

“Material Debt” means Debt (other than the Loans and Letters of Credit), or
obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Restricted Subsidiaries in an aggregate principal amount
exceeding $25,000,000. For purposes of determining Material Debt, the “principal
amount” of the obligations of the Borrower or any Restricted Subsidiary in
respect of any Swap Agreement at any time shall be the Swap Termination Value of
such Swap Agreement.

 

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“Material Disposition” means any disposition of Property or series of related
dispositions of Property that involves the payment of consideration to the
Borrower and its Consolidated Restricted Subsidiaries in excess of $25,000,000.

“Material Subsidiary” means, as of any date, (a) any Domestic Subsidiary that
(i) is a Subsidiary and (ii) together with its Restricted Subsidiaries, as of
the last day of the fiscal quarter of the Borrower most recently ended, had net
revenues or total assets for such quarter in excess of 2.50% of the consolidated
net revenues or total assets, as applicable, of the Borrower and its Restricted
Subsidiaries for such quarter and (b) any Domestic Subsidiary that owns any
Borrowing Base Properties, or owns any Oil and Gas Properties evaluated in the
Reserve Report most recently delivered to the Administrative Agent and the
Lenders hereunder; provided that in the event that the Immaterial Subsidiaries,
taken together, had as of the last day of the fiscal quarter of the Borrower
most recently ended net revenues or total assets in excess of 5% of the
consolidated revenues or total assets, as applicable, of the Borrower and its
Restricted Subsidiaries for such quarter, the Borrower shall designate one or
more Immaterial Subsidiaries (other than any Subsidiaries constituting “Excluded
Subsidiaries” pursuant to clauses (a), (c), (d) or (e) of the definition
thereof) to be a Material Subsidiary as may be necessary such that the foregoing
5% limit shall not be exceeded, and any such Subsidiary shall thereafter be
deemed to be a Material Subsidiary hereunder, and the Borrower shall cause such
designated Material Subsidiaries to comply with Section 8.13(b); provided
further that the Borrower may re-designate Material Subsidiaries as Immaterial
Subsidiaries so long as Borrower is in compliance with the foregoing after
giving pro forma effect to such designation.

“Maturity Date” means the date that is five (5) years after the Initial Funding
Date.

“Maximum Credit Amount” means, as to each Lender, the amount set forth opposite
such Lender’s name on Annex I under the caption “Maximum Credit Amounts”, as the
same may be (a) reduced or terminated from time to time in connection with a
reduction or termination of the Aggregate Maximum Credit Amounts pursuant to
Section 2.06 or (b) modified from time to time pursuant to any assignment
permitted by Section 12.04(b).

“Merger Sub” has the meaning assigned to such term in the Recitals hereto.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.

“Mortgaged Property” means any Property owned by the Borrower or any Guarantor
which is subject to the Liens existing and to exist under the terms of the
Security Instruments.

“Mortgages” means all mortgages, deeds of trust and similar documents,
instruments and agreements (including amendments and restatements of existing
deeds of trust and similar documents, instruments and agreements) creating,
evidencing, perfecting or otherwise establishing the Liens on Mortgaged Property
to secure payment of the Indebtedness or any part thereof in substantially the
form of Exhibit L (or otherwise in form and substance acceptable to the
Administrative Agent).

 

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

“New Borrowing Base Notice” has the meaning assigned such term in
Section 2.07(d).

“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (a) requires the approval of all affected Lenders or
all Lenders in accordance with the terms of Section 12.02 and (b) has been
approved by the Majority Lenders.

“Non-Extending Lenders” has the meaning assigned to such term in
Section 3.06(c).

“Notes” means (a) 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 and (b) the Swingline Notes.

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective
Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on
such day (or for any day that is not a Business Day, for the immediately
preceding Business Day); provided that if none of such rates are published for
any day that is a Business Day, the term “NYFRB Rate” means the rate for a
federal funds transaction quoted at 11:00 a.m. on such day received to the
Administrative Agent from a Federal funds broker of recognized standing selected
by it; provided, further, that if any of the aforesaid rates shall be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Oil and Gas Business” means: (a) the business of acquiring, exploring,
exploiting, developing, producing, operating and disposing of interests in oil,
natural gas, natural gas liquids, liquefied natural gas and other Hydrocarbons
and mineral properties or products produced in association with any of the
foregoing; (b) the business of gathering, marketing, distributing, treating,
processing, storing, refining, selling and transporting of any production from
interests in oil, natural gas, natural gas liquids, liquefied natural gas and
other Hydrocarbons and mineral properties or products produced in association
therewith; and the marketing of oil, natural gas, natural gas liquids, liquefied
natural gas and other Hydrocarbons and minerals obtained from unrelated Persons;
and (c) any business or activity relating to, arising from, or necessary,
appropriate, incidental or ancillary to the activities described in the
foregoing clauses (a) and (b) of this definition.

“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 agreements, pooling agreements and
declarations of pooled or unitized 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

 

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sharing contracts and agreements, which relate to any of the Hydrocarbon
Interests or the production, sale, purchase, exchange or processing of
Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all
Hydrocarbons in and under and which may be produced and saved or attributable to
the Hydrocarbon Interests, including all oil in tanks, and all rents, issues,
profits, proceeds, products, revenues and other incomes from or attributable to
the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and
Properties in any manner appertaining, belonging, affixed or incidental to the
Hydrocarbon Interests; and (g) all Properties, rights, titles, interests and
estates described or referred to above, including any and all Property, real or
personal, now owned or hereafter acquired and situated upon, used, held for use
or useful in connection with the operating, working or development of any of
such Hydrocarbon Interests or Property (excluding drilling rigs, automotive
equipment, rental equipment or other personal Property which may be on such
premises for the purpose of drilling a well or for other similar temporary uses)
and including any and all midstream assets, oil wells, gas wells, injection
wells or other wells, buildings, structures, fuel separators, liquid extraction
plants, plant compressors, pumps, pumping units, field gathering systems, gas
processing plants and pipeline systems and any related infrastructure to any
thereof, tanks and tank batteries, fixtures, valves, fittings, machinery and
parts, engines, boilers, meters, apparatus, equipment, appliances, tools,
implements, cables, wires, towers, casing, tubing and rods, surface leases,
rights-of-way, easements and servitudes together with all additions,
substitutions, replacements, accessions and attachments to any and all of the
foregoing. Unless otherwise expressly provided herein, all references in this
Agreement to “Oil and Gas Properties” refer to Oil and Gas Properties owned by
the Borrower and its Restricted Subsidiaries, as the context requires.

“Ongoing Hedges” has the meaning assigned such term in Section 9.13(a)(i).

“OPA” has the meaning set forth in the definition of “Environmental Laws.”

“Organizational Documents” means, relative to any Person, its certificate or
articles of organization, formation or incorporation (or comparable document)
and its by-laws, partnership agreement, limited liability company agreement or
operating agreement (or similar arrangements applicable to ownership).

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means any and all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes arising from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.04(b)).

 

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“Overnight Bank Funding Rate” means, for any day, the rate comprised of both
overnight federal funds and overnight Eurodollar borrowings by U.S.-managed
banking offices of depository institutions (as such composite rate shall be
determined by the NYFRB as set forth on the Federal Reserve Bank of New York’s
Website from time to time) and published on the next succeeding Business Day by
the NYFRB as an overnight bank funding rate (from and after such date as the
NYFRB shall commence to publish such composite rate).

“Participant” has the meaning assigned such term in Section 12.04(c)(i).

“Participant Register” has the meaning assigned such term in
Section 12.04(c)(i).

“PATRIOT Act” has the meaning assigned such term in Section 12.16.

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

“Permitted Holders” means, collectively, the Sponsor and the Persons identified
on Schedule 1.02(b) hereto.

“Permitted Swap Actions” has the meaning assigned such term in
Section 12.14(b)(i).

“Permitted Tax Distribution” means, for any taxable period or portion thereof in
which the Borrower is a pass through entity (including a disregarded entity or
partnership) for federal income tax purposes, payments and distributions which
are distributed to the direct or indirect holders of the Equity Interests of the
Borrower on or prior to each estimated payment date as well as each other
applicable due date to enable such holders to timely make payments of federal,
state and local taxes for such taxable period as a result of the operations of
the Borrower not to exceed the product of (a) the net taxable income (which
shall mean the net taxable income of the Borrower and its Subsidiaries required
to be reported to Borrower’s direct or indirect holders for federal income tax
purposes) of the Borrower and its Subsidiaries for such period, less cumulative
net taxable losses from prior taxable years to that extent that such losses are
allowable as a deduction against the current taxable income and of a character
(ordinary or capital) that would permit such losses to be deducted by the direct
or indirect member of the Borrower against the current taxable income of the
Borrower allocable to such members and have not previously been taken into
account in determining tax distributions, and (b) the highest applicable
marginal U.S. federal, state and local tax rates applicable to an individual or,
if higher, a corporation resident in New York City, New York taking into
account, the character of the taxable income (e.g., long-term capital gain,
ordinary income, etc.); provided that the determination of such distributions
shall take into account any basis adjustments under Section 743(b) or
Section 734(b) of the Code.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.

“Plan” means any employee pension benefit plan, as defined in Section 3(2) of
ERISA, which (a) is sponsored, maintained or contributed to by the Borrower, a
Restricted Subsidiary or, solely with respect to a plan subject to Title IV of
ERISA, an ERISA Affiliate or (b) if the Borrower or a Restricted Subsidiary has
liability thereunder, was at any time during the six (6) calendar years
preceding the Effective Date, sponsored, maintained or contributed to by the
Borrower or a Subsidiary or, to which Borrower or a Subsidiary has any
liability, including any liability with respect to a plan subject to Title IV of
ERISA on account of an ERISA Affiliate.

 

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“Pledge and Security Agreement” means a Pledge and Security Agreement among each
Credit Party and the Administrative Agent in substantially the form of Exhibit
G-2 (or otherwise in form and substance acceptable to the Administrative Agent)
granting Liens and security interests in the Equity Interests of the
Subsidiaries directly owned by such Credit Parties and the Credit Parties’ other
personal property constituting Collateral (as defined therein) in favor of the
Administrative Agent for the benefit of the Secured Parties to secure the
Indebtedness, as the same may be amended, modified, supplemented or restated
from time to time.

“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its
principal office in New York, New York; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective. Such rate is set by the Administrative Agent as a general reference
rate of interest, taking into account such factors as the Administrative Agent
may deem appropriate; it being understood that many of the Administrative
Agent’s commercial or other loans are priced in relation to such rate, that it
is not necessarily the lowest or best rate actually charged to any customer and
that the Administrative Agent may make various commercial or other loans at
rates of interest having no relationship to such rate.

“Pro Forma Basis” means, as to the calculation of the Consolidated Total
Leverage Ratio and the Current Ratio, such calculation will be made on a pro
forma basis, including giving pro forma effect to the following events as if
such events occurred on the first date of the then most recently ended period
for which financial statements are available: any Material Acquisition, Material
Disposition or incurrence of Debt that occurred during such period (or
thereafter and through and including the date of such determination, in the case
of determinations made with respect to any action the taking of which hereunder
is subject to compliance with the Consolidated Total Leverage Ratio or the
Current Ratio). Any cash or Cash Equivalents to be received by the Borrower or
any Restricted Subsidiary in connection with the incurrence of Debt shall not be
considered Unrestricted Cash in determining compliance on a “Pro Forma Basis”
with the Consolidated Leverage Ratio for the incurrence of such Debt or any
transaction substantially contemporaneously therewith. Pro forma calculations
made pursuant to the definition of the term “Pro Forma Basis” shall be
determined in good faith by a Responsible Officer of the Borrower and with
supporting documentation reasonably acceptable to the Administrative Agent.

“Projections” has the meaning assigned to such term in Section 8.01(f).

“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 Acquisition” has the meaning assigned such term in Section 9.13(a)(i).

“Proposed Borrowing Base” has the meaning assigned such term in
Section 2.07(c)(i).

 

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“Proposed Borrowing Base Notice” has the meaning assigned such term in
Section 2.07(c)(ii).

“Proved Developed Producing Reserves” means “proved developed producing oil and
gas reserves” as such term is defined in the Definitions for Oil as Gas Reserves
promulgated by the Society of Petroleum Engineers (or any generally recognized
successor) as in effect at the time in question.

“Proved Reserves” means collectively, “proved oil and gas reserves,” “proved
developed producing oil and gas reserves,” “proved developed non-producing oil
and gas reserves” (consisting of proved developed shut-in oil and gas reserves
and proved developed behind pipe oil and gas reserves), and “proved undeveloped
oil and gas reserves,” as such terms are defined in the Definitions for Oil as
Gas Reserves promulgated by the Society of Petroleum Engineers (or any generally
recognized successor) as in effect at the time in question.

“PTE” means a prohibited transaction class exemption issued by the U.S.
Department of Labor, as any such exemption may be amended from time to time.

“Purchase Money Debt” means Debt, the proceeds of which are used to finance the
acquisition, construction, or improvement of inventory, equipment or other
property in the ordinary course of business.

“PV-9” means, with respect to any Proved Reserves expected to be produced from
any Borrowing Base Properties, the net present value, discounted at 9% per
annum, of the future net revenues expected to accrue to the Borrower’s and the
Credit Parties’ collective interests in such reserves during the remaining
expected economic lives of such reserves, calculated in accordance with the Bank
Price Deck.

“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).

“QFC Credit Support” has the meaning assigned to such term in Section 12.19.

“Qualified ECP Guarantor” means, in respect of any Swap Agreement, each Credit
Party that (a) has total assets exceeding $10,000,000 at the time any guaranty
of obligations under such Swap Agreement or grant of the relevant security
interest becomes effective or (b) otherwise constitutes an “eligible contract
participant” under the Commodity Exchange Act and can cause another Person to
qualify as an “eligible contract participant” at such time by entering into a
keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“RCRA” has the meaning set forth in the definition of “Environmental Laws.”

“Recipient” means (a) the Administrative Agent, (b) any Lender or (c) any
Issuing Bank, as applicable.

 

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“Redemption” means with respect to any Debt, the repurchase, redemption,
prepayment, repayment, defeasance or any other acquisition or retirement for
value (or the segregation of funds with respect to any of the foregoing) of such
Debt. “Redeem” has the correlative meaning thereto.

“Redetermination Date” means, with respect to any Scheduled Redetermination or
any Interim Redetermination, the date that the redetermined Borrowing Base
related thereto becomes effective pursuant to Section 2.07(d).

“Register” has the meaning assigned such term in Section 12.04(b)(iv).

“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.

“Related Indemnified Person” means, with respect to an Indemnitee, (a) any
Controlling Person or Controlled Affiliate of such Indemnitee, (b) the
respective directors, officers, or employees of such Indemnitee or any of its
Controlling Persons or Controlled Affiliates and (c) the respective agents and
representatives of such Indemnitee or any of its Controlling Persons or
Controlled Affiliates, in the case of this clause (c), acting at the
instructions of such Indemnitee, Controlling Person or such Controlled
Affiliate.

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

“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.

“Relevant Governmental Body” means the Federal Reserve Board and/or the NYFRB,
or a committee officially endorsed or convened by the Federal Reserve Board
and/or the NYFRB or any successor thereto.

“Remedial Work” has the meaning assigned such term in Section 8.09(a).

“Required Lenders” means, (a) at any time while no Loans, LC Exposure or
Swingline Exposure is outstanding, Lenders having at least sixty-six and
two-thirds percent (662⁄3%) of the Aggregate Maximum Credit Amounts; and (b) at
any time while any Loans or LC Exposure is outstanding, Lenders holding at least
sixty-six and two-thirds percent (662⁄3%) of the outstanding aggregate principal
amount of the Loans and participation interests in Letters of Credit and
Swingline Loans (without regard to any sale by a Lender of a participation in
any Loan under Section 12.04(c)); provided that the Maximum Credit Amounts and
the principal amount of the Loans and participation interests in Letters of
Credit of the Defaulting Lenders (if any) shall be excluded from the
determination of Required Lenders.

“Reserve Report” means (a) the Initial Reserve Report and (b) (i) any other
subsequent report, in form and substance reasonably satisfactory to the
Administrative Agent and/or (ii) any other engineering data reasonably
acceptable to the Administrative Agent, setting forth, as of the

 

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dates set forth in Section 8.11(a) (or such other date in the event of an
Interim Redetermination) the Proved Reserves attributable to the Oil and Gas
Properties of the Borrower and the Credit Parties, together with a projection of
the rate of production and future net revenues, operating expenses (including
production taxes and ad valorem expenses) and capital expenditures with respect
thereto as of such date, based upon pricing assumptions consistent with SEC
reporting requirements at the time and reflecting Swap Agreements in place with
respect to such production.

“Reserve Report Certificate” means a certificate of a Responsible Officer in
substantially the form of Exhibit N certifying as to the matters in
Section 8.11(c).

“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, the Chief Operating Officer, 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
and/or the general partner of the Borrower.

“Restricted Payment” means (a) any dividend or other distribution (whether in
cash, securities or other Property) with respect to any Equity Interests in the
Borrower or any of its Subsidiaries, or any payment (whether in cash, securities
or other Property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Borrower or any of its Subsidiaries or any
option, warrant or other right to acquire any such Equity Interests in the
Borrower or any of its Subsidiaries and (b) any payment of management fees,
advisory fees or similar fees by the Borrower or any Restricted Subsidiary to
any holders of their Equity Interests or any Affiliates thereof.

“Restricted Subsidiary” means any Subsidiary of the Borrower that is not an
Unrestricted Subsidiary.

“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Loans, its LC Exposure,
and its Swingline Exposure at such time; provided that for purposes of declaring
the Loans to be due and payable pursuant to Article X, and for all purposes
after the Loans become due and payable pursuant to Article X or the Commitments
expire or terminate, then, as to each Lender, clause (a) of the definition of
Swingline Exposure shall only be applicable for purposes of determining its
Revolving Credit Exposure to the extent such Lender shall have funded its
participation in the outstanding Swingline Loans.

“Roan” has the meaning assigned to such term in the Recitals hereto.

“Roan Acquisition” has the meaning assigned to such term in the Recitals hereto.

“Roan Assumed Hedges” has the meaning assigned such term in Section 8.20(b).

“Roan Credit Agreements” means, collectively, (a) that certain Credit Agreement,
dated as of September 5, 2017, among Roan Resources LLC, as the borrower,
Citibank, N.A., as administrative agent and the lenders party thereto, as
amended from time to time prior to the Effective Date and (b) that Credit
Agreement, dated as of June 27, 2019, among Roan Resources, Inc., as the
borrower, Cortland Capital Market Services LLC, as administrative agent and the
lenders party thereto, as amended from time to time prior to the Effective Date.

 

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“Rolling Period” means (a) for the fiscal quarters ending on the last day of the
first full fiscal quarter following the Initial Funding Date, the last day of
the second full fiscal quarter following the Initial Funding Date, and the last
day of the third full fiscal quarter following the Initial Funding Date, the
applicable period commencing on the first day of the first full fiscal quarter
following the Initial Funding Date and ending on the last day of such applicable
fiscal quarter, and (b) for the fiscal quarter ending on the last day of the
fourth full fiscal quarter following the Initial Funding Date, and for each
fiscal quarter thereafter, any period of four (4) consecutive fiscal quarters
ending on the last day of such applicable fiscal quarter.

“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.

“Sanctioned Country” means, at any time, a country, region or territory which is
itself the subject or target of any Sanctions (as of the Effective Date, Crimea,
Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by the Office of Foreign
Assets Control of the U.S. Department of the Treasury, the U.S. Department of
State or by the United Nations Security Council, the European Union, any
European Union member state or Her Majesty’s Treasury of the United Kingdom, or
other relevant sanctions authority, (b) any Person operating, organized or
resident in a Sanctioned Country, (c) any government that is itself the subject
or target of sanctions or (d) any Person owned or controlled by any such Person
or Persons described in the foregoing clauses (a), (b) or (c).

“Sanctions” means economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by 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, the United Nations
Security Council, the European Union, any European Union member state, Her
Majesty’s Treasury or other relevant sanctions authority.

“Scheduled Redetermination” has the meaning assigned such term in
Section 2.07(b).

“Scheduled Redetermination Date” means the date on which a Borrowing Base that
has been redetermined pursuant to a Scheduled Redetermination becomes effective
as provided in Section 2.07(d).

“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.

“Secured Parties” means, collectively, the Agents, the Lenders (including the
Swingline Lenders), the Issuing Banks, the Bank Products Providers and Secured
Swap Providers, and “Secured Party” means any of them individually.

 

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“Secured Swap Provider” means (a) any Person that is a party to a Swap Agreement
with the Borrower or any of its Restricted Subsidiaries that entered into (or
became party to by assignment or novation) such Swap Agreement before or while
such Person was a Lender or an Affiliate of a Lender, whether or not such Person
at any time ceases to be a Lender or an Affiliate of a Lender, as the case may
be, (b) any Person that (i) is a Lender on the Initial Funding Date and (ii) is
a party to a Swap Agreement in existence on the Initial Funding Date with the
Borrower or any of its Restricted Subsidiaries and (c) the Persons listed on
Schedule 1.02(c) party to the Swap Agreements in existence on the Initial
Funding Date and listed on Schedule 1.02(c).

“Securities Act” means the Securities Act of 1933 and the rules and regulations
of the SEC promulgated thereunder.

“Security Instruments” means the Guaranty Agreement, the Pledge and Security
Agreement, the Holdings Pledge Agreement, the Mortgages, the Control Agreements,
and other agreements, instruments or certificates described or referred to in
Exhibit E, and any and all other agreements, instruments, consents or
certificates now or hereafter executed and delivered by the Borrower or any
other Person in connection with, or as security for the payment or performance
of the Indebtedness, 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.

“SOFR” with respect to any day means the secured overnight financing rate
published for such day by the NYFRB, as the administrator of the benchmark, (or
a successor administrator) on the Federal Reserve Bank of New York’s Website.

“SOFR-Based Rate” means SOFR, Compounded SOFR or Term SOFR.

“Specified Acquisition Agreement Representations” means such of the
representations and warranties made by or on behalf of Roan and its subsidiaries
in the Acquisition Agreement as are material to the interests of the Lenders,
but only to the extent that the Borrower or Merger Sub has the right to
terminate its obligations under the Acquisition Agreement, or to decline to
consummate the Roan Acquisition as a result of a breach of such representations
and warranties.

“Specified Additional Debt” means any Junior Lien, unsecured senior or unsecured
senior subordinated Debt of the Borrower incurred after the Initial Funding Date
under Section 9.02(i) or (k), as applicable and any refinancing of such Debt;
provided that any such Debt may be refinanced only to the extent that the
aggregate principal amount of such refinancing Debt does not result in an
increase in the principal amount thereof plus amounts to fund any original issue
discount or upfront fees relating thereto plus amounts to fund accrued interest,
fees, expenses and premiums.

“Specified Equity Contribution” means, at any time, without duplication, (a) the
amount of cash proceeds received by the Borrower as a cash capital contribution
from one or more holders of the Equity Interests of the Borrower during the Cure
Period or (b) the amount of proceeds received from the issuance of common equity
issued by the Borrower (or, on terms reasonably satisfactory to the
Administrative Agent, other forms of equity) to one or more of the holders of
the Equity Interests of the Borrower during the Cure Period (in each case, other
than in connection

 

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with an issuance by the Borrower of Disqualified Capital Stock), which is made
for the purpose of curing a failure to comply with Section 9.01(a) or (b) that
would otherwise occur, pursuant to the exercise of a cure right pursuant to
Section 9.01(c).

“Specified Obligations” has the meaning assigned to such term in
Section 12.14(b).

“Specified Representations” means those representations and warranties of the
Borrower in Sections 7.01 (to the extent relating to the entering into and
performance of the applicable Loan Documents), 7.02, 7.03 (to the extent
relating to the entering into and performance of the applicable Loan Documents),
7.08, 7.11(b), 7.19, 7.20, 7.21 and 7.23.

“Sponsor” means (a) Warburg Pincus LLC and (b) any of its respective Affiliates
and funds or partnerships managed or administered by it or any of its
Affiliates, but not including their respective portfolio companies.

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.

“Subordination Agreement” means a subordination agreement among the
Administrative Agent, the representative on behalf of any holders of unsecured
senior or unsecured senior subordinated Debt of the Borrower incurred after the
Initial Funding Date, the Borrower, the Guarantors and the other parties party
thereto from time to time, in form and substance reasonably acceptable to the
Majority Lenders and the Borrower.

“Subsidiary” means, with respect to any Person (the “Parent”) at any date, any
other Person the accounts of which would be consolidated with those of the
Parent in the Parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other Person (a) of which Equity Interests representing more than 50% of the
equity or more than 50% of the ordinary voting power (irrespective of whether or
not at the time Equity Interests of any other class or classes of such Person
shall have or might have voting power by reason of the happening of any
contingency) or, in the case of a partnership, any general partnership interests
are, as of such date, owned, controlled or held, or (b) the management decisions
of which, as of such date, are otherwise controlled, in each case, directly,
indirectly through one or more intermediaries, or both, by the Parent. Unless
otherwise specified, each reference to “Subsidiary” means a Subsidiary of a
Credit Party.

“Supported QFC” has the meaning assigned to such term in Section 12.19.

 

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“Swap Agreement” means any swap, forward, collar, future or derivative
transaction or option or similar agreement, whether exchange traded,
“over-the-counter” or otherwise (and for the avoidance of doubt, including on a
prepaid or physically settled basis), 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 (including, but not limited to, as the context dictates,
any agreement, contract or transaction that constitutes a “swap” within the
meaning of Section 1a(47) of the Commodity Exchange Act); provided that no
phantom stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or its Restricted Subsidiaries shall be a Swap Agreement.

“Swap PV” means, with respect to any Swap Agreement in respect of commodities,
the present value, discounted at 9% per annum, of the future receipts expected
to be paid to the Borrower or its Restricted Subsidiaries under such Swap
Agreement based on the Administrative Agent’s then current Bank Price Deck;
provided, that the “Swap PV” shall never be less than $0.00.

“Swap Termination Value” means, in respect of any one or more Swap Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Agreements, (a) for any date on or after the
date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined by the
counterparties to such Swap Agreements.

“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be the sum of (a) its Applicable Percentage of the total
Swingline Exposure at such time other than with respect to any Swingline Loans
made by such Lender in its capacity as a Swingline Lender and (b) the aggregate
principal amount of all Swingline Loans made by such Lender as a Swingline
Lender outstanding at such time (less the amount of participations funded by the
other Lenders in such Swingline Loans), in each case, adjusted to give effect to
any reallocation under Section 2.10 of the Swingline Exposures of Defaulting
Lenders in effect at such time.

“Swingline Lenders” means JPMorgan Chase Bank, N.A., in its capacity as provider
of Swingline Loans, any other Lenders that are reasonably acceptable to the
Borrower and the Administrative Agent that agree in writing with the Borrower
and the Administrative Agent to provide Swingline Loans, or any successor
Swingline Lender hereunder. References herein and in the other Loan Documents to
the Swingline Lender shall be deemed to refer to the Swingline Lender in respect
of the applicable Swingline Lenders or to all Swingline Lenders, as the context
requires.

“Swingline Loan” means a Loan made pursuant to Section 2.09.

 

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“Swingline Note” means a promissory note made by the Borrower in favor of a
Swingline Lender evidencing Swingline Loans made by such Swingline Lender,
substantially in the form of Exhibit A-2.

“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
indebtedness for borrowed money for purposes of United States federal income
taxes, if the lessee in respect thereof is obligated to either purchase for an
amount in excess of, or pay upon early termination an amount in excess of, 80%
of the residual value of the Property subject to such operating lease upon
expiration or early termination of such lease.

“Tax” or “Taxes” means any and all present or future taxes, levies, imposts,
duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any
interest, additions to tax or penalties applicable thereto.

“Tax Structure” has the meaning assigned such term in Section 12.11.

“Term SOFR” means the forward-looking term rate based on SOFR that has been
selected or recommended by the Relevant Governmental Body.

“Termination Date” means the earlier of the Maturity Date and the date of
termination of the Commitments.

“Total Debt” means, as of any date of determination, (a) the aggregate amount of
Debt of the Borrower and its Consolidated Restricted Subsidiaries outstanding on
such date, determined on a consolidated basis in accordance with GAAP consisting
only of Debt of the Borrower and its Restricted Subsidiaries for borrowed money,
drawn but unreimbursed obligations under letters of credit, obligations in
respect of Finance Leases and other debt obligations for borrowed money
evidenced by promissory notes or similar instruments, minus (b) the aggregate
amount of the Credit Parties’ Unrestricted Cash on hand as of such date in an
aggregate amount not to exceed $50,000,000.

“Transaction Expenses” means any fees or expenses incurred or paid by the
Borrower or any of its Subsidiaries (or by the Sponsor or any direct or indirect
parent entity of the Borrower and reimbursed by the Borrower) in connection with
the Transactions (including, for the avoidance of doubt, any fees or expenses
incurred or paid by the Borrower, the Sponsor or any of their Subsidiaries or
Affiliates in connection with any due diligence with respect to the Transaction
or in respect of any deliverables to be provided or actions to be taken on a
post-closing basis), this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby.

“Transactions” means (a) with respect to the Borrower, the execution, delivery
and performance by the Borrower of this Agreement and each other Loan Document
to which it is a party, the borrowing of Loans, the use of the proceeds thereof
and the issuance of Letters of Credit hereunder, and the grant of Liens by the
Borrower on its Properties (including Mortgaged Properties pursuant to the
Security Instruments), (b) with respect to each Guarantor, the execution,

 

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delivery and performance by such Guarantor of each Loan Document to which it is
a party, the guaranteeing of the Indebtedness and the other obligations under
the Guaranty Agreement by such Guarantor and such Guarantor’s grant of Liens on
its Properties (including Mortgaged Properties) pursuant to the Security
Instruments, (c) the payment of Transaction Expenses, (d) the consummation of
the Roan Acquisition (including the refinancing of the Existing Credit Agreement
and the Roan Credit Agreements) and (e) the consummation of the Equity
Contribution.

“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 from time to time, of the
state of New York or of any other state the laws of which are required as a
result thereof to be applied in connection with the attachment, perfection or
priority of, or remedies with respect to, the Administrative Agent’s Lien on any
Collateral.

“Unadjusted Benchmark Replacement” means the Benchmark Replacement excluding the
Benchmark Replacement Adjustment; provided that, if the Unadjusted Benchmark
Replacement as so determined would be less than zero, the Unadjusted Benchmark
Replacement will be deemed to be zero for the purposes of this Agreement.

“Unrestricted Cash” means cash or Cash Equivalents of the Borrower or any of its
Restricted Subsidiaries that would not appear as “restricted” on a consolidated
balance sheet of the Borrower or any of its Restricted Subsidiaries; provided
that (a) cash or Cash Equivalents that would appear as “restricted” on a
consolidated balance sheet of the Borrower or any of its Restricted Subsidiaries
solely because such cash or Cash Equivalents are subject to a Control Agreement
in favor of the Administrative Agent shall constitute Unrestricted Cash
hereunder, (b) cash and Cash Equivalents shall be included in the determination
of Unrestricted Cash only to the extent that such cash and Cash Equivalents are
maintained in accounts subject to a Control Agreement for the benefit of the
Administrative Agent, and (c) cash and Cash Equivalents that are maintained in
accounts to the extent required under this Agreement to cash collateralize LC
Exposure or Swingline Exposure shall not be included in Unrestricted Cash.

“Unrestricted Subsidiary” means any Subsidiary of the Borrower designated as
such on Schedule 7.13 or which the Borrower has designated in writing to the
Administrative Agent to be an Unrestricted Subsidiary pursuant to Section 9.14.

“Unused Availability” means at any time an amount equal to (a) the Loan Limit at
such time, minus (b) the aggregate Revolving Credit Exposure of all Lenders at
such time.

“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.

“U.S. Special Resolution Regimes” has the meaning assigned to such term in
Section 12.19.

 

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“U.S. Tax Compliance Certificate” has the meaning assigned to such term in
Section 5.03(f)(ii)(B)(3).

“Utilization Percentage” means, as of any day, the fraction expressed as a
percentage, the numerator of which is the sum of the Revolving Credit Exposures
of the Lenders on such day, and the denominator of which is the Loan Limit in
effect on such day.

“Venture” has the meaning assigned to such term in Section 9.05(g).

“Wholly-Owned Subsidiary” means any Restricted Subsidiary of which all of the
outstanding Equity Interests (other than any directors’ qualifying shares
mandated by applicable law), on a fully-diluted basis, are owned by the 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.

“Withholding Agent” means any Credit Party or the Administrative Agent.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

Section 1.03    Types of Loans and Borrowings. For purposes of this Agreement,
Loans and Borrowings, respectively, may be classified and referred to by Type
(e.g., a “Eurodollar Loan” or a “Eurodollar Borrowing”).

Section 1.04    Terms Generally; Rules of Construction. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” as used in this Agreement shall be deemed to be
followed by the phrase “without limitation”. The word “will” as used in this
Agreement 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, restated or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth in
the Loan Documents), (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), (d) the words “herein”,
“hereof” and “hereunder”, and words of similar import as used in this Agreement,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (e) with respect to the determination of any time
period, the word “from” as used in this Agreement means “from and including” and
the word “to” means “to and including,” and (f) any reference herein to
Articles, Sections, Annexes, Exhibits and Schedules shall be

 

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construed to refer to Articles and Sections of, and Annexes, Exhibits and
Schedules to, this Agreement. No provision of this Agreement or any other Loan
Document shall be interpreted or construed against any Person solely because
such Person or its legal representative drafted such provision.

Section 1.05    Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the first audited financial statements delivered to the Lenders pursuant to
Section 8.01(a) except for changes in which Borrower’s independent certified
public accountants concur and which are disclosed to Administrative 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. Notwithstanding anything
herein to the contrary, for the purposes of calculating any of the ratios tested
under Section 9.01, and the components of each of such ratios, all Unrestricted
Subsidiaries, and their subsidiaries (including their assets, liabilities,
income, losses, cash flows, and the elements thereof) shall be excluded, except
for any cash dividends or distributions actually paid in cash by any
Unrestricted Subsidiary or any of its subsidiaries to the Borrower or any
Restricted Subsidiary, which shall be deemed to be income to the Borrower or
such Restricted Subsidiary when actually received by it.

Section 1.06    Pro Forma Basis. Notwithstanding anything to the contrary
contained herein, the calculation of the Consolidated Total Leverage Ratio and
the Current Ratio pursuant to this Agreement shall be calculated in a manner
prescribed by the definition of “Pro Forma Basis”.

Section 1.07    Interest Rates; LIBOR Notification. The interest rate on
Eurodollar Loans is determined by reference to the LIBO Rate, which is derived
from the London interbank offered rate. The London interbank offered rate is
intended to represent the rate at which contributing banks may obtain short-term
borrowings from each other in the London interbank market. In July 2017, the
U.K. Financial Conduct Authority announced that, after the end of 2021, it would
no longer persuade or compel contributing banks to make rate submissions to the
ICE Benchmark Administration (together with any successor to the ICE Benchmark
Administrator, the “IBA”) for purposes of the IBA setting the London interbank
offered rate. As a result, it is possible that commencing in 2022, the London
interbank offered rate may no longer be available or may no longer be deemed an
appropriate reference rate upon which to determine the interest rate on
Eurodollar Loans. In light of this eventuality, public and private sector
industry initiatives are currently underway to identify new or alternative
reference rates to be used in place of the London interbank offered rate. Upon
the occurrence of a

 

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Benchmark Transition Event or an Early Opt-In Election, Section 3.03(c)(i)
provides a mechanism for determining an alternative rate of interest. The
Administrative Agent will promptly notify the Borrower, pursuant to
Section 3.03(c)(iii), of any change to the reference rate upon which the
interest rate on Eurodollar Loans is based. However, the Administrative Agent
does not warrant or accept any responsibility for, and shall not have any
liability with respect to, the administration, submission or any other matter
related to the London interbank offered rate or other rates in the definition of
“LIBO Rate” or with respect to any alternative or successor rate thereto, or
replacement rate thereof (including, without limitation, (a) any such
alternative, successor or replacement rate implemented pursuant to 3.03(c)(i),
whether upon the occurrence of a Benchmark Transition Event or an Early Opt-in
Election, and (b) the implementation of any Benchmark Replacement Conforming
Changes pursuant to Section 3.03(c)(ii)), including without limitation, whether
the composition or characteristics of any such alternative, successor or
replacement reference rate will be similar to, or produce the same value or
economic equivalence of, the LIBO Rate or have the same volume or liquidity as
did the London interbank offered rate prior to its discontinuance or
unavailability.

Section 1.08    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 and acquired 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. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make Loans to the Borrower during the
Availability Period in an aggregate principal amount that will not result in
(a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment
or (b) the total Revolving Credit Exposures exceeding the Loan Limit then in
effect. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, repay and reborrow the Loans.

Section 2.02    Loans and Borrowings.

(a)    Borrowings; Several Obligations. Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.

 

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(b)    Types of Loans. Subject to Section 3.03, each Borrowing (other than
Borrowings of Swingline Loans) shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender
at its option may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise
of such option shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement. Each Swingline Loan shall
be an ABR Loan.

(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 $100,000 and not less than
$500,000. At the time that each ABR Borrowing is made, such Borrowing shall be
in an aggregate amount that is an integral multiple of $100,000 and not less
than $500,000; provided that an ABR Borrowing may be in an aggregate amount that
is equal to the entire Unused Availability 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 seven (7) 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 Eurodollar Borrowing if the Interest Period requested with respect
thereto would end after the Maturity Date.

(d)    Notes. If requested by a Lender, the Loans made by each Lender shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A-1, dated, in the case of (i) any Lender party hereto as of the
Initial Funding Date, as of the Initial Funding Date, (ii) any Lender that
becomes a party hereto pursuant to an Assignment and Assumption or amendment or
other modification to this Agreement, as of the effective date of the Assignment
and Assumption, amendment or other modification, or (iii) any Additional Lender
that becomes a party hereto in connection with an increase in the Aggregate
Elected Commitment Amounts pursuant to Section 2.06(c), as of the effective date
of such increase, as applicable, payable to such Lender (or its registered
assigns) in a principal amount equal to its Maximum Credit Amount as in effect
on such date, and otherwise duly completed. The Swingline Loans made by the
Swingline Lenders shall be evidenced by a promissory note of the Borrower in
substantially the form of Exhibit A-2. In the event that any Lender’s Maximum
Credit Amount increases or decreases for any reason, the Borrower shall deliver
or cause to be delivered, to the extent such Lender is then holding a Note and
so requests a new Note, on the effective date of such increase or decrease, a
new Note payable to such Lender (or its registered assigns) in a principal
amount equal to its Maximum Credit Amount, after giving effect to such increase
or decrease, and otherwise duly completed. The date, amount, Type, interest rate
and, if applicable, Interest Period of each Loan made by each Lender, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books for its Note(s). Failure to make any such recordation shall
not affect any Lender’s or the Borrower’s rights or obligations in respect of
such Loans or affect the validity of such transfer by any Lender of its Note(s).

Section 2.03    Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the Administrative Agent of such request by telephone (a) in the
case of a Eurodollar Borrowing, not later than 11:00 a.m., Houston, Texas time,
three

 

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(3) Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 11:00 a.m., Houston, Texas time, on the date
of the proposed Borrowing; provided that no such notice shall be required for
any deemed request of an ABR Borrowing to finance the reimbursement of an LC
Disbursement as provided in Section 2.08(e) or any deemed request of an ABR
Borrowing to repay any Swingline Loan as provided in Section 2.09(c). Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or facsimile to the Administrative Agent of a written
Borrowing Request in substantially 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:

(i)    the aggregate amount of the requested Borrowing;

(ii)    the date of such Borrowing, which shall be a Business Day;

(iii)    whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;

(iv)    in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”;

(v)    the amount of the then effective Borrowing Base, the amount of the then
effective Aggregate Elected Commitment Amounts, the current total Revolving
Credit Exposures (without regard to the requested Borrowing), and the total
Revolving Credit Exposures (giving pro forma effect to the requested Borrowing);
and

(vi)    the location and number of the Borrower’s account to which funds are to
be disbursed, which shall comply with the requirements of Section 2.05.

If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one (1) month’s duration. Each Borrowing
Request shall constitute a representation by the Borrower that the amount of the
requested Borrowing shall not cause the total Revolving Credit Exposures to
exceed the Loan Limit.

Promptly following receipt of a Borrowing Request in accordance with this
Section 2.03, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.

Section 2.04    Interest Elections.

(a)    Conversion and Continuance. Each Borrowing (other than Borrowings of
Swingline 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 as specified in such

 

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Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.04. The Borrower may elect different options with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing. This Section 2.04 shall not apply to Swingline Loans, which
may not be converted or continued.

(b)    Interest Election Requests. To make an election pursuant to this
Section 2.04, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or facsimile to the Administrative Agent of
a written Interest Election Request in substantially the form of Exhibit C 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);

(ii)    the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;

(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and

(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one (1) month’s duration.

(d)    Notice to Lenders by the Administrative Agent. Promptly following receipt
of an Interest Election Request, the Administrative Agent shall advise each
Lender, as applicable, of the details thereof and of such Lender’s portion of
each resulting Borrowing.

(e)    Effect of Failure to Deliver Timely Interest Election Request and Events
of Default on Interest Election. If the Borrower fails to deliver a timely
Interest Election Request with respect to a Eurodollar Borrowing prior to the
end of the Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such Borrowing
shall be converted to an ABR Borrowing. Notwithstanding any contrary provision

 

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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 Loan to be made by it
hereunder on the proposed date thereof by wire transfer of immediately available
funds by 1:00 p.m., Houston, Texas time, to the account of the Administrative
Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by
promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent and subject to a Control
Agreement in favor of the Administrative Agent and designated by the Borrower in
the applicable Borrowing Request; provided that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.08(e) shall be
remitted by the Administrative Agent to the applicable Issuing Bank and ABR
Loans to be made for the purpose of refinancing Swingline Loans shall be made by
the Lenders as provided in Section 2.09. Nothing herein shall be deemed to
obligate any Lender to obtain the funds for its Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for its Loan in any particular place or manner.

(b)    Presumption of Funding by the Lenders. Unless the Administrative Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that
such Lender has made such share available on such date in accordance with
Section 2.05(a) and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case of such Lender, the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing.

Section 2.06    Termination and Reduction of Aggregate Maximum Credit Amounts;
Increase, Reduction, and Termination of Aggregate Elected Commitment Amounts.

(a)    Scheduled Termination of Commitments. Unless previously terminated, the
Commitments shall terminate on the Maturity Date. If at any time the Aggregate
Maximum Credit Amounts, the Aggregate Elected Commitment Amounts or the
Borrowing Base is terminated or reduced to zero, then the Commitments shall
terminate on the effective date of such termination or reduction.

 

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(b)    Optional Termination and Reduction of Aggregate Maximum Credit Amounts.

(i)    The Borrower may at any time terminate, or from time to time reduce, the
Aggregate Maximum Credit Amounts; provided that (A) each reduction of the
Aggregate Maximum Credit Amounts shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000, (B) the Borrower shall not
terminate or reduce the Aggregate Maximum Credit Amounts if, (1) after giving
effect to any concurrent prepayment of the Loans in accordance with
Section 3.04(c), the total Revolving Credit Exposures would exceed the Loan
Limit or (2) the Aggregate Maximum Credit Amounts would be less than $10,000,000
(unless, with respect to this clause (2), the Aggregate Maximum Credit Amounts
are reduced to $0), and (C) upon any reduction of the Aggregate Maximum Credit
Amounts that would otherwise result in the Aggregate Maximum Credit Amounts
being less than the Aggregate Elected Commitment Amounts, the Aggregate Elected
Commitment Amounts shall be automatically reduced (ratably among the Lenders in
accordance with each Lender’s Applicable Percentage) so that they equal the
Aggregate Maximum Credit Amounts as so reduced.

(ii)    The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Aggregate Maximum Credit Amounts under
Section 2.06(b)(i) at least three (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 Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section 2.06(b)(ii) shall be irrevocable; provided
that a notice of termination of the Aggregate Maximum Credit Amounts delivered
by the Borrower may state that such notice is conditioned upon the effectiveness
of other credit facilities or a Change in Control, in which case such notice may
be revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied (it being
understood that the failure of such condition to be satisfied shall not relieve
the Borrower of its obligations under Section 5.02). Any termination or
reduction of the Aggregate Maximum Credit Amounts shall be permanent and may not
be reinstated. Each reduction of the Aggregate Maximum Credit Amounts shall be
made ratably among the Lenders in accordance with each Lender’s Applicable
Percentage.

(c)    Optional Increases, Reductions and Terminations of Aggregate Elected
Commitment Amounts.

(i)    Subject to the conditions set forth in Section 2.06(c)(ii), the Borrower
may, from time to time, increase the Aggregate Elected Commitment Amounts then
in effect by increasing the Elected Commitment of a Lender or by causing a
Person that is reasonably acceptable to the Administrative Agent, the Swingline
Lenders, and the Issuing Banks that at such time is not a Lender to become a
Lender (an “Additional Lender”). Notwithstanding anything to the contrary
contained in this Agreement, in no case shall an Additional Lender be the
Borrower, an Affiliate of the Borrower, the Sponsor, or a natural person (or any
holding company, investment vehicle, or trust owned and operated for the primary
benefit of a natural person).

 

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(ii)    Any increase in the Aggregate Elected Commitment Amounts shall be
subject to the following additional conditions:

(A)    such increase shall not be less than $5,000,000 (and shall be in
increments of $1,000,000 above such minimum amount) unless the Administrative
Agent otherwise consents, and no such increase shall be permitted if after
giving effect thereto, the aggregate amount of all such increases after the
Initial Funding Date exceeds the Aggregate Maximum Credit Amount;

(B)    no Event of Default shall have occurred and be continuing on the
effective date of such increase;

(C)    to the extent that there are any Eurodollar Borrowings outstanding, the
effective date of such increase shall be, at the option of the Borrower, either
(x) the last day of the Interest Period in respect of such Eurodollar Borrowings
or (y) such earlier date selected by the Borrower, provided that the Borrower
shall pay compensation as required by Section 5.02;

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

(E)    all of the terms and conditions applicable to such increased Aggregate
Elected Commitment Amounts (and the Loans made pursuant thereto) shall be
identical to the terms and conditions applicable to the existing Commitments and
Loans under this Agreement (other than with respect to any arrangement,
structuring, upfront or other fees or discounts payable in connection with such
increased commitment as may have been agreed to between the Borrower and the
increasing Lender or Additional Lender, as applicable, and/or the Administrative
Agent), provided that if the Applicable Margin of such increased Aggregate
Elected Commitment Amounts is higher than that for the then existing Commitments
and Loans, then the Applicable Margin shall be increased for all existing
Commitments and Loans to be consistent with such increased Applicable Margin;

(F)    after giving effect to any increase in the Aggregate Elected Commitment
Amounts, the Aggregate Elected Commitment Amounts shall not exceed the Borrowing
Base then in effect;

(G)    the consent of each existing Lender shall be required for any increase in
the Aggregate Elected Commitment Amounts pursuant to this Section 2.06(c) and
any increase in the Borrowing Base in connection therewith;

(H)    if the Borrower elects to increase the Aggregate Elected Commitment
Amounts by increasing the Aggregate Elected Commitment Amount of a Lender, the
Borrower and such Lender shall execute and deliver to the Administrative Agent a
certificate substantially in the form of Exhibit I (an “Elected Commitment
Increase Certificate”);

 

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(I)    if the Borrower elects to increase the Aggregate Elected Commitment
Amounts by causing an Additional Lender to become a party to this Agreement,
then the Borrower and such Additional Lender shall execute and deliver to the
Administrative Agent a certificate substantially in the form of Exhibit J (an
“Additional Lender Certificate”), together with an Administrative Questionnaire,
and the Borrower shall (1) if requested by the Additional Lender, deliver a Note
payable to such Additional Lender in a principal amount equal to its Maximum
Credit Amount, and otherwise duly completed and (2) pay any applicable fees as
may have been agreed to between the Borrower and the Additional Lender and, to
the extent applicable, the Administrative Agent; and

(J)    the Borrower shall deliver or cause to be delivered any customary legal
opinions or other documents (including, without limitation, a resolution duly
adopted by the board of directors (or equivalent governing body) of each Credit
Party authorizing such increase in the Aggregate Maximum Credit Amounts)
reasonably requested by Administrative Agent.

(iii)    Subject to acceptance and recording thereof pursuant to
Section 2.06(c)(iv), (A) on the effective date specified in the Elected
Commitment Increase Certificate or the Additional Lender Certificate (or if any
Eurodollar Borrowings are outstanding, then the last day of the Interest Period
in respect of such Eurodollar Borrowings, unless the Borrower has paid any
compensation required by Section 5.02): (1) the amount of the Aggregate Elected
Commitment Amounts shall be increased as set forth therein, and (2) in the case
of an Additional Lender Certificate, any Additional Lender party thereto shall
become a party to this Agreement and have the rights and obligations of a Lender
under this Agreement and the other Loan Documents; and (B) in addition, the
Lender or the Additional Lender, as applicable, shall purchase a pro rata
portion of the outstanding Loans (and participation interests in Letters of
Credit) of each of the other Lenders (and such Lenders hereby agree to sell and
to take all such further action to effectuate such sale) such that each Lender
(including any Additional Lender, if applicable) shall hold its Applicable
Percentage of the outstanding Loans (and participation interests) after giving
effect to the increase in the Aggregate Elected Commitment Amounts (and the
resulting modifications of each Lender’s Maximum Credit Amount pursuant to
Section 2.06(c)(iv) or Section 2.06(c)(v)).

(iv)    Upon its receipt of a duly completed Elected Commitment Increase
Certificate or an Additional Lender Certificate, executed by the Borrower and
the Lender or by the Borrower and the Additional Lender party thereto, as
applicable, the Administrative Questionnaire referred to in Section 2.06(c)(ii),
if applicable, the written consent of the Administrative Agent and the Issuing
Bank to such increase required by Section 2.06(c)(i), and the written consent of
the existing Lenders required by Section 2.06(c)(ii), the Administrative Agent
shall accept such Elected Commitment Increase Certificate or Additional Lender
Certificate and record the information contained therein in the Register
required to be maintained by the Administrative Agent pursuant to
Section 12.04(b)(iv). No increase in the Aggregate Elected Commitment Amounts
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this Section 2.06(c)(iv).

 

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(v)    Upon any increase in the Aggregate Elected Commitment Amounts pursuant to
this Section 2.06(c), (A) each Lender’s Maximum Credit Amount shall be
automatically deemed amended to the extent necessary so that each such Lender’s
Applicable Percentage equals the percentage of the Aggregate Elected Commitment
Amounts represented by such Lender’s Elected Commitment, in each case after
giving effect to such increase, and (B) Annex I to this Agreement shall be
deemed amended to reflect the Elected Commitment of each Lender (including any
Additional Lender) as thereby increased, any changes in the Lenders’ Maximum
Credit Amounts pursuant to the foregoing clause (A), and any resulting changes
in the Lenders’ Applicable Percentages.

(vi)    The Borrower may from time to time terminate or reduce the Aggregate
Elected Commitment Amounts; provided that (A) each reduction of the Aggregate
Elected Commitment Amounts shall be in an amount that is an integral multiple of
$100,000 and not less than $5,000,000 and (B) the Borrower shall not reduce the
Aggregate Elected Commitment Amounts if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 3.04(c), the total Revolving
Credit Exposures would exceed the Aggregate Elected Commitment Amounts as
reduced.

(vii)    The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Aggregate Elected Commitment Amounts under
Section 2.06(c)(vi) at least three (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 Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section 2.06(c)(vii) shall be irrevocable. Any
termination or reduction of the Aggregate Elected Commitment Amounts shall be
permanent and may not be reinstated, except pursuant to Section 2.06(c)(i). Each
reduction of the Aggregate Elected Commitment Amounts shall be made ratably
among the Lenders in accordance with each Lender’s Applicable Percentage.

(viii)    Upon any redetermination or other adjustment in the Borrowing Base
pursuant to this Agreement that would otherwise result in the Borrowing Base
becoming less than the Aggregate Elected Commitment Amounts, the Aggregate
Elected Commitment Amounts shall be automatically reduced (ratably among the
Lenders in accordance with each Lender’s Applicable Percentage) so that they
equal such redetermined Borrowing Base (and Annex I shall be deemed amended to
reflect such amendments to each Lender’s Elected Commitment and the Aggregate
Elected Commitment Amounts).

(ix)    Contemporaneously with any increase in the Borrowing Base pursuant to
this Agreement, if (A) the Borrower elects to increase the Aggregate Elected
Commitment Amounts and (B) each Lender has consented to such increase in its
Elected Commitment, then the Aggregate Elected Commitment Amounts shall be
increased (ratably among the Lenders in accordance with each Lender’s Applicable
Percentage) by the amount requested by the Borrower (subject to the limitations
set forth in Section 2.06(c)(ii)(A) without the requirement that any Lender
deliver an Elected Commitment Increase Certificate or that the Borrower pay any
amounts under Section 5.02), and Annex I shall be deemed amended to reflect such
amendments to each Lender’s Commitment and the Aggregate Maximum Credit Amounts.
The Administrative Agent shall record the information regarding such increases
in the Register required to be maintained by the Administrative Agent pursuant
to Section 12.04(b)(iv).

 

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Section 2.07    Borrowing Base.

(a)    Initial Borrowing Base. For the period from and including the Effective
Date to but excluding the Initial Funding Date, the amount of the Borrowing Base
shall be zero. For the period from and including the Initial Funding Date to but
excluding the first Redetermination Date, and notwithstanding
Section 12.02(b)(ii), the amount of the Borrowing Base shall be $725,000,000.
The Borrowing Base may be subject to adjustments in between Scheduled
Redeterminations from time to time pursuant to Sections 2.07(e), (f) or 8.12(c).

(b)    Scheduled and Interim Redeterminations. The Borrowing Base shall be
redetermined in accordance with this Section 2.07 (a “Scheduled
Redetermination”), and, subject to Section 2.07(d), such redetermined Borrowing
Base shall become effective and applicable to the Borrower, the Administrative
Agent, the Issuing Banks, the Swingline Lenders and the Lenders on a semi-annual
basis on or about March 1st and September 1st of each year (or, in each case,
such date promptly thereafter as reasonably practicable) beginning on March 1,
2020 (or to the extent that the Initial Funding Date has not occurred prior to
March 1, 2020, such redetermination shall be conducted as soon as practicable
following the Initial Funding Date after the Administrative Agent has had a
reasonable opportunity to determine the proposed Borrowing Base). In addition,
(i)(A) the Borrower may, by notifying the Administrative Agent thereof, elect to
cause the Borrowing Base to be redetermined once between any two (2) consecutive
Scheduled Redeterminations (and once prior to the first Scheduled
Redetermination hereunder); and (B) the Administrative Agent may, following the
first Scheduled Redetermination hereunder, at the direction of the Required
Lenders, by notifying the Borrower thereof, elect to cause the Borrowing Base to
be redetermined once between any two (2) consecutive Scheduled Redeterminations
and (ii) the Borrower may elect, by notifying the Administrative Agent of any
acquisition or acquisitions (including in connection with the designation of an
Unrestricted Subsidiary as a Restricted Subsidiary) of Oil and Gas Properties by
the Borrower or any other Credit Party with a PV-9 in the aggregate of at least
seven and one half percent (7.50%) of the then effective Borrowing Base, to
cause the Borrowing Base to be redetermined between two (2) consecutive
Scheduled Redeterminations. Each redetermination of the Borrowing Base pursuant
to the immediately preceding sentence is referred to herein as an “Interim
Redetermination” and shall be effectuated in accordance with this Section 2.07.

(c)    Scheduled and Interim Redetermination Procedure.

(i)    Each Scheduled Redetermination and each Interim Redetermination shall be
effectuated as follows: upon receipt by the Administrative Agent of (A) the
Reserve Report and the Reserve Report Certificate, in the case of a Scheduled
Redetermination, pursuant to Section 8.11(a) and (c), and, in the case of an
Interim Redetermination, pursuant to Section 8.11(b) and (c), and (B) such other
reports, data and supplemental information, including, without limitation, the
information provided pursuant to Section 8.11(c), as may, from time to time, be
reasonably requested by any Lender (the Reserve Report, such Reserve Report
Certificate and such other reports, data and supplemental information being the
“Engineering Reports”), the

 

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Administrative Agent shall evaluate the information contained in the Engineering
Reports and shall, in good faith and its sole discretion, propose a new
Borrowing Base (the “Proposed Borrowing Base”) based upon such information and
such other information (including, without limitation, the status of title
information with respect to the Oil and Gas Properties as described in the
Engineering Reports and the existence of any other Debt, the Credit Parties’
other assets (including midstream assets), liabilities, fixed charges, cash
flow, business, properties, prospects, management and ownership, hedged and
unhedged exposure to price, price and production scenarios, interest rate and
operating cost changes) as the Administrative Agent deems appropriate in its
sole discretion and consistent with its usual and customary oil and gas lending
criteria as it exists at the particular time. In no event shall the Proposed
Borrowing Base exceed the Aggregate Maximum Credit Amounts;

(ii)    The Administrative Agent shall notify the Lenders of the Proposed
Borrowing Base (the “Proposed Borrowing Base Notice”) after the Administrative
Agent has received complete Engineering Reports from the Borrower and has had a
reasonable opportunity to determine the Proposed Borrowing Base in accordance
with Section 2.07(c)(i); and

(iii)    Any Proposed Borrowing Base that would increase the Borrowing Base then
in effect must be approved by all of the Lenders as provided in this
Section 2.07(c)(iii); and any Proposed Borrowing Base that would decrease or
maintain the Borrowing Base then in effect must be approved or be deemed to have
been approved by the Required Lenders as provided in this Section 2.07(c)(iii)
(in each case, in each Lender’s sole discretion consistent with its usual and
customary oil and gas lending criteria as they exist at the particular time).
Upon receipt of the Proposed Borrowing Base Notice, each Lender shall have
fifteen (15) days to agree with the Proposed Borrowing Base or disagree with the
Proposed Borrowing Base by proposing an alternate Borrowing Base. If, in the
case of any Proposed Borrowing Base that would decrease or maintain the
Borrowing Base then in effect, at the end of such fifteen (15) days, any Lender
has not communicated its approval or disapproval in writing to the
Administrative Agent, such silence shall be deemed to be an approval of the
Proposed Borrowing Base. If, in the case of any Proposed Borrowing Base that
would increase the Borrowing Base then in effect, at the end of such fifteen
(15) days, any Lender has not communicated its approval or disapproval in
writing to the Administrative Agent, such silence shall be deemed to be a
disapproval of the Proposed Borrowing Base. If, at the end of such fifteen
(15) day period, all of the Lenders in the case of a Proposed Borrowing Base
that would increase the Borrowing Base then in effect, or the Required Lenders,
in the case of a Proposed Borrowing Base that would decrease or maintain the
Borrowing Base then in effect, have approved or, in the case of a decrease or
reaffirmation, deemed to have approved, as aforesaid, then the Proposed
Borrowing Base shall become the new Borrowing Base, effective on the date
specified in Section 2.07(d). If, however, at the end of such fifteen (15) day
period, all of the Lenders or the Required Lenders, as applicable, have not
approved or, in the case of a decrease or reaffirmation, deemed to have
approved, as aforesaid, then the Administrative Agent shall poll the Lenders to
ascertain the highest Borrowing Base then acceptable to (A) in the case of a
decrease or reaffirmation, a number of Lenders sufficient to constitute the
Required Lenders and (B) in the case of an increase, all of the Lenders, and
such amount shall become the new Borrowing Base, effective on the date specified
in Section 2.07(d) (it being understood that, if a Lender proposes an
alternative Borrowing Base in connection with is disapproval of the Borrowing
Base, the Administrative Agent shall not be required to separately poll such
Lender).

 

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(d)    Effectiveness of a Redetermined Borrowing Base. After a redetermined
Borrowing Base is approved or is deemed to have been approved by all of the
Lenders or the Required Lenders, as applicable, pursuant to
Section 2.07(c)(iii), the Administrative Agent shall notify the Borrower and the
Lenders of the amount of the redetermined Borrowing Base (the “New Borrowing
Base Notice”), and such amount shall become the new Borrowing Base, effective
and applicable to the Borrower, the Administrative Agent, the Issuing Banks, the
Swingline Lenders and the Lenders:

(i)    in the case of a Scheduled Redetermination, (A) if the Administrative
Agent shall have received the Engineering Reports required to be delivered by
the Borrower pursuant to Section 8.11(a) and (c) in a timely and complete
manner, on or about each March 1st or September 1st (beginning on March 1, 2020)
(or, in each case, such date promptly thereafter as reasonably practicable), as
applicable, following such notice, or (B) if the Administrative Agent shall not
have received the Engineering Reports required to be delivered by the Borrower
pursuant to Section 8.11(a) and (c) in a timely and complete manner, then on the
next Business Day succeeding delivery of such notice; and

(ii)    in the case of an Interim Redetermination, on the next Business Day
succeeding delivery of such notice.

Such amount shall then become the Borrowing Base until the next Scheduled
Redetermination Date, the next Interim Redetermination Date or the next
adjustment to the Borrowing Base under Sections 2.07(e), (f) or 8.12(c),
whichever occurs first. Notwithstanding the foregoing, no Scheduled
Redetermination or Interim Redetermination shall become effective until the New
Borrowing Base Notice related thereto is received by the Borrower.

(e)    Automatic Reduction of Borrowing Base upon Sale of Properties or
Termination of Swap Agreements. In addition to the other redeterminations or
adjustments of the Borrowing Base provided for herein, if at any time the sum of
(i)(A) any midstream assets given value in the most recently delivered Reserve
Report, for which the then existing Borrowing Base was determined, and that are
sold, disposed of or subject to a casualty event and (B) the aggregate PV-9
(calculated using the Bank Price Deck in effect at the time of the most recent
redetermination) of Borrowing Base Properties sold, disposed of or subject to a
casualty event and (ii) the Swap PV (calculated using the Bank Price Deck in
effect at the time of the most recent redetermination) of Swap Agreements in
respect of commodities terminated or otherwise monetized (when taken together
with any other Swap Agreements executed by the Credit Parties contemporaneously
with the termination or monetization of such Swap Agreements subsequent to the
last redetermination of the Borrowing Base or adjustment in accordance with this
Section 2.07(e)), in each case pursuant to Section 9.09(d), in any period since
the most recent redetermination of the Borrowing Base or adjustment of the
Borrowing Base pursuant to this Section 2.07(e), exceeds 7.50% of the Borrowing
Base then in effect, then the Borrowing Base shall be automatically reduced by
an amount equal to the Borrowing Base Value (as proposed by the Administrative
Agent and approved by the Required Lenders) of such Properties sold, disposed of
or lost and such Swap Agreements terminated or otherwise monetized and such
reduction of the Borrowing Base shall take into account (x) the value of
concurrent acquisitions of Oil and Gas Properties (1) for which Engineering
Reports and such other information as the Administrative

 

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Agent may have requested have been delivered by the Borrower and (2) which have
been given value by the Administrative Agent and the Required Lenders or (y) any
other Swap Agreements executed by the Credit Parties contemporaneously with the
termination or monetization of such Swap Agreements contemporaneously with the
termination or monetization of such Swap Agreements, and, in each case, the
Borrowing Base as so reduced shall become the new Borrowing Base immediately
upon such sale or disposition (or, in the case of a Swap Agreement, termination
or other monetization), effective and applicable to the Borrower, the
Administrative Agent, the Issuing Banks, the Swingline Lenders and the Lenders
until the next redetermination or other adjustment of the Borrowing Base
pursuant to this Agreement.

(f)    Automatic Reduction of Borrowing Base upon Issuance of Specified
Additional Debt. In addition to the other redeterminations of and adjustments to
the Borrowing Base provided for herein, and notwithstanding anything to the
contrary set forth herein, upon the issuance or incurrence of any Specified
Additional Debt, the Borrowing Base shall be automatically reduced by an amount
equal to 25% of the aggregate stated principal amount of such Specified
Additional Debt (without regard to any original issue discount issued at such
time). Such decrease in the Borrowing Base shall occur automatically upon the
incurrence of such Specified Additional Debt on the date of incurrence, without
any vote of the Lenders or action by the Administrative Agent. For the avoidance
of doubt, if such Specified Additional Debt is being incurred in order to
refinance outstanding Specified Additional Debt, then the foregoing automatic
reduction shall only apply to the portion of the newly issued or incurred
Specified Additional Debt that is in excess of the sum of (i) the principal
amount of the Specified Additional Debt so refinanced, (ii) amounts to fund any
original issue discount or upfront fees relating to such newly issued or
incurred Specified Additional Debt and (iii) amounts to fund interest, premium
and expenses thereon. The Borrowing Base so reduced shall become the new
Borrowing Base immediately upon the date of such issuance or incurrence,
effective and applicable to the Borrower, the Administrative Agent, the Issuing
Banks, the Swingline Lenders and the Lenders on such date until the next
redetermination or other adjustment of the Borrowing Base pursuant to this
Agreement. Upon any such reduction in the Borrowing Base, the Administrative
Agent shall promptly deliver a New Borrowing Base Notice to the Borrower and the
Lenders.

(g)    Reduction of Borrowing Base Related to Title. If the Administrative Agent
or Required Lenders have adjusted the Borrowing Base in accordance with
Section 8.12(c), so that, after giving effect to such reduction, the Borrower
will satisfy the requirements of Section 8.12, the new Borrowing Base will
become effective immediately after the receipt of the notice delivered by the
Administrative Agent pursuant to Section 8.12(c).

Section 2.08    Letters of Credit.

(a)    General. Subject to the terms and conditions set forth herein, the
Borrower may request the issuance of dollar denominated Letters of Credit for
its own account or for the account of any of its Restricted Subsidiaries, in a
form reasonably acceptable to the Administrative Agent and the applicable
Issuing Bank, at any time and from time to time during the Availability Period
in an aggregate amount not to exceed the LC Commitment; provided that the
Borrower may not request the issuance, amendment, renewal or extension of
Letters of Credit hereunder if a Borrowing Base Deficiency exists at such time
or would exist as a result thereof. In the event of

 

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any inconsistency between the terms and conditions of this Agreement and the
terms and conditions of any form of letter of credit application or other
agreement submitted by the Borrower to, or entered into by the Borrower with,
the applicable Issuing Bank relating to any Letter of Credit, the terms and
conditions of this Agreement shall control.

(b)    Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To
request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or facsimile (or transmit by electronic communication, if arrangements for doing
so have been approved by the applicable Issuing Bank) to the applicable Issuing
Bank and the Administrative Agent (not less than five (5) Business Days (or such
shorter period agreed to by such Issuing Bank) 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 to be amended, renewed or extended;

(ii)    specifying the date of issuance, amendment, renewal or extension (which
shall be a Business Day);

(iii)    specifying the date on which such Letter of Credit is to expire (which
shall comply with Section 2.08(c));

(iv)    specifying the amount of such Letter of Credit;

(v)    specifying the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit; and

(vi)    specifying the amount of the then effective Borrowing Base and the then
effective Aggregate Elected Commitment Amounts and whether a Borrowing Base
Deficiency exists at such time, the current total Revolving Credit Exposures
(without regard to the requested Letter of Credit or the requested amendment,
renewal or extension of an outstanding Letter of Credit), and the total
Revolving Credit Exposures (giving pro forma 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 and warranty by the Borrower that
after giving effect to the requested issuance, amendment, renewal or extension,
as applicable, (x) the LC Exposure shall not exceed the LC Commitment, (y) each
Issuing Bank’s individual LC Exposure shall not exceed such Issuing Bank’s LC
Issuance Limit and (z) the total Revolving Credit Exposures shall not exceed the
then effective Loan Limit.

No Issuing Bank shall issue any Letters of Credit unless such Issuing Bank shall
have received notice from the Administrative Agent that the conditions to such
issuance have been met, which notice shall be deemed given (i) if such Issuing
Bank has not received notice from the Administrative Agent that the conditions
to such issuance have been met within two (2) Business Days after the date of
the applicable request or (ii) if the aggregate stated amount of Letters of

 

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Credit issued by such Issuing Bank then outstanding does not exceed the amount
theretofore agreed to by the Borrower, the Administrative Agent and such Issuing
Bank, and the Administrative Agent has not otherwise notified such Issuing Bank
that it may no longer rely on clause (1).

If requested by the applicable 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; provided that, in the event of any
conflict between such application or any Letter of Credit Agreement and the
terms of this Agreement, the terms of this Agreement shall control.

(c)    Expiration Date. Each Letter of Credit shall expire at or prior to the
close of business on the earlier of (i) (x) in the case of Letters of Credit
issued in favor of the Texas Railroad Commission, the date that is eighteen
(18) months after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension thereof, eighteen (18) months after such
renewal or extension) or (y) in the case of any other Letters of Credit, the
date that is twelve (12) months after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, twelve (12) months
after such renewal or extension) and (ii) the date that is five (5) Business
Days prior to the Maturity Date. If the Borrower so requests in any applicable
notice given pursuant to Section 2.08(b) and the applicable Issuing Bank agrees
to do so, such Issuing Bank may issue a Letter of Credit that has automatic
renewal provisions; provided, however, that any Letter of Credit that has
automatic renewal provisions must permit the applicable Issuing Bank to prevent
any such renewal at least once in each twelve (12) month period (or, with
respect to Letters of Credit issued to the Texas Railroad Commission, eighteen
(18) month period) (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
in each such twelve (12) month period or such eighteen (18) month period, as
applicable, to be agreed upon by the Borrower and the applicable Issuing Bank at
the time such Letter of Credit is issued and any such Letter of Credit may not
have an expiration date later than the date that is five (5) Business Days prior
to the Maturity Date (except to the extent cash collateralized or backstopped at
least five (5) Business Days prior to the Maturity Date pursuant to arrangements
reasonably acceptable to the applicable Issuing Bank). Once any such Letter of
Credit that has automatic renewal provisions has been issued, the Lenders shall
be deemed to have authorized (but may not require) the applicable Issuing Bank
to permit the renewal of such Letter of Credit at any time to an expiry date not
later than thirty (30) days prior to the Maturity Date; provided, further, that
such Issuing Bank shall not permit any such renewal if (A) such Issuing Bank has
determined that it would have no obligation at such time to issue such Letter of
Credit in its renewed form under the terms hereof, or (B) it has received notice
(which may be by telephone or in writing) on or before the day that is two
(2) Business Days before the date that such Issuing Bank is permitted to send a
notice of non-renewal from the Administrative Agent, any Lender or the Borrower
that one or more of the applicable conditions specified in Section 6.03 is not
then satisfied.

(d)    Participations. By the issuance of a Letter of Credit (including any
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
such Issuing Bank, a participation in such Letter of Credit equal to such
Lender’s Applicable Percentage of the aggregate amount available to be drawn

 

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under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender hereby absolutely and unconditionally agrees to pay to
the Administrative Agent, for the account of such Issuing Bank, such 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 Lender acknowledges and agrees that its obligation to acquire
participations pursuant to this Section 2.08(d) in respect of Letters of Credit
is absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default, the existence of a
Borrowing Base Deficiency or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.

(e)    Reimbursement. If any Issuing Bank shall make any LC Disbursement in
respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement
by paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 12:00 noon, Houston, Texas time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Houston, Texas 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 12:00 noon, Houston, Texas time, on the Business Day
immediately following the day that the Borrower receives such notice; provided
that the Borrower shall, subject to the conditions to Borrowing set forth
herein, be deemed to have requested, and the Borrower does hereby request under
such circumstances, that such payment be financed with an ABR Borrowing in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Borrowing. If the Borrower fails to make such payment when due, the
Administrative Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and such Lender’s
Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in
Section 2.05 with respect to Loans made by such Lender (and Section 2.05 shall
apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the applicable Issuing Bank the
amounts so received by it from the Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
Section 2.08(e), the Administrative Agent shall distribute such payment to such
Issuing Bank or, to the extent that Lenders have made payments pursuant to this
Section 2.08(e) to reimburse such Issuing Bank, then to such Lenders and such
Issuing Bank as their interests may appear. Any payment made by a Lender
pursuant to this Section 2.08(e) to reimburse any Issuing Bank for any LC
Disbursement (other than the funding of ABR Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

(f)    Obligations Absolute. The Borrower’s obligation to reimburse LC
Disbursements as provided in Section 2.08(e) shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement under any and all circumstances whatsoever and irrespective of
(i) any lack of validity or enforceability of any Letter of Credit, any Letter
of Credit Agreement or this Agreement, or any term or provision herein or
therein, (ii) any draft or other document presented under a Letter of Credit
proving to be forged,

 

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fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the applicable Issuing Bank under a
Letter of Credit against presentation of a draft or other document that does not
comply with the terms of such Letter of Credit or any Letter of Credit
Agreement, or (iv) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.08(f), constitute a legal or equitable discharge of, or provide a
right of setoff against, the Borrower’s obligations hereunder. Neither the
Administrative Agent, the Lenders nor the Issuing Banks, 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 the
Issuing Bank; provided that the foregoing shall not be construed to excuse an
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 an
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, each Issuing Bank may, in its sole discretion, either accept
and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or
refuse to accept and make payment upon such documents if such documents are not
in strict compliance with the terms of such Letter of Credit.

(g)    Disbursement Procedures. Each Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. Such Issuing Bank shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by facsimile) 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 any
Issuing Bank and the 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 ABR 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 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.
Annex II shall, notwithstanding anything to the contrary in

 

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Section 12.04, be amended upon the written agreement of the Borrower, the
Administrative Agent and any successor Issuing Bank to set forth such Issuing
Bank’s LC Issuance Limit, and no successor Issuing Bank shall be an “Issuing
Bank” hereunder until such amendment is effective.

(i)    Replacement of an Issuing Bank. Any Issuing Bank may be replaced at any
time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of such Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 3.05(b). From and after the effective date of any such replacement,
(i) the successor Issuing Bank shall have all the rights and obligations of the
Issuing Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of the Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of the Issuing Bank under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit. Annex II shall be amended upon the written
agreement of the Borrower, the Administrative Agent and any successor Issuing
Bank to set forth such Issuing Bank’s LC Issuance Limit, and no successor
Issuing Bank shall be an “Issuing Bank” hereunder until such amendment is
effective.

(j)    Cash Collateralization. If (i) any Event of Default shall occur and be
continuing and the Borrower receives notice from the Administrative Agent or the
Majority Lenders demanding the deposit of cash collateral pursuant to this
Section 2.08(j), (ii) the LC Exposure exceeds the LC Commitment at any time or
(iii) the Borrower is required to pay to the Administrative Agent the excess
attributable to an LC Exposure in connection with any prepayment pursuant to
Section 3.04(c), then the Borrower shall deposit, in the case of clause (i) or
(ii), on demand, or in the case of clause (iii), by the date specified therefor
in Section 3.04(c), in an account with the Administrative Agent, in the name of
the Administrative Agent and for the benefit of the Lenders, an amount in cash
equal to, in the case of an Event of Default, the LC Exposure, in the case of
the LC Exposure exceeding the LC Commitment, the amount of such excess, and in
the case of a payment required by Section 3.04(c), the amount of such excess as
provided in Section 3.04(c), as of such date plus any accrued and unpaid
interest thereon; provided that the obligation to deposit such cash collateral
shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence
of any Event of Default with respect to the Borrower or any Restricted
Subsidiary described in Section 10.01(h) or Section 10.01(i). The Borrower
hereby grants to the Administrative Agent, for the benefit of the Issuing Banks
and the Lenders, an exclusive first priority and continuing perfected security
interest in and Lien on such account and all cash, checks, drafts, certificates
and instruments, if any, from time to time deposited or held in such account,
all deposits or wire transfers made thereto, any and all investments purchased
with funds deposited in such account, all interest, dividends, cash,
instruments, financial assets and other Property from time to time received,
receivable or otherwise payable in respect of, or in exchange for, any or all of
the foregoing, and all proceeds, products, accessions, rents, profits, income
and benefits therefrom, and any substitutions and replacements therefor. The
Borrower’s obligation to deposit

 

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amounts pursuant to this Section 2.08(j) shall be absolute and unconditional,
without regard to whether any beneficiary of any such Letter of Credit has
attempted to draw down all or a portion of such amount under the terms of a
Letter of Credit, and, to the fullest extent permitted by applicable law, shall
not be subject to any defense or be affected by a right of set-off, counterclaim
or recoupment which the Borrower or any of its Subsidiaries may now or hereafter
have against any such beneficiary, the Issuing Banks, the Administrative Agent,
the Lenders or any other Person for any reason whatsoever. Such deposit shall be
held as collateral securing the payment and performance of the Borrower’s and
the Guarantor’s obligations under this Agreement and the other Loan Documents.
The Administrative Agent shall have exclusive dominion and control, including
the exclusive right of withdrawal, over such account. Other than any interest
earned on the investment of such deposits, which investments shall be made at
the option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Banks for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated, be applied to satisfy other obligations of
the Borrower and the Guarantors under this Agreement or the other Loan
Documents. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, and the Borrower
is not otherwise required to pay to the Administrative Agent the excess
attributable to an LC Exposure in connection with any prepayment pursuant to
Section 3.04(c), then such amount (to the extent not applied as aforesaid) shall
be returned to the Borrower within three (3) Business Days after all Events of
Default have been cured or waived.

(k)    LC Exposure Determination. For all purposes of this Agreement, the amount
of a Letter of Credit that, by its terms or the terms of any document related
thereto, provides for one or more automatic increases in the stated amount
thereof shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at the time of determination.

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

Section 2.09    Swingline Loans.

(a)    Availability. Subject to the terms and conditions set forth herein, each
Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time during the Availability Period; provided that after giving effect to any
amount requested, the total Revolving Credit Exposures shall not exceed the then
effective Loan Limit, the aggregate principal amount of all outstanding
Swingline Loans (after giving effect to any amount requested), shall not exceed
the lesser of (x) $30,000,000 and (y) the Loan Limit; and provided, further,
that no Swingline Loan

 

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may be requested to refinance any outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrower may borrow, repay and reborrow the Swingline Loans. Each Swingline Loan
shall be an ABR Loan. Immediately upon the making of a Swingline Loan, each
Lender with a Commitment shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swingline Lenders a risk
participation in such Swingline Loan in an amount equal to the product of such
Lender’s Applicable Percentage times the amount of such Swingline Loan. The
commitments of the Swingline Lenders to make Swingline Loans is part of, and not
in addition to, the Commitments.

(b)    Borrowing Procedures. Each Borrowing of Swingline Loans may be made upon
the Borrower’s irrevocable notice to the applicable Swingline Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the applicable Swingline Lender and the Administrative Agent not
later than 12:00 p.m., Houston, Texas time, on the requested borrowing date, and
shall specify (i) the amount to be borrowed, which shall be a minimum of
$500,000 or a whole multiple of $100,000 in excess thereof and (ii) the
requested borrowing date, which shall be a Business Day. Each such telephonic
notice must be confirmed promptly by delivery to the applicable Swingline Lender
and the Administrative Agent of a written Borrowing Request in substantially the
form of Exhibit B and signed by the Borrower. Promptly after receipt by the
applicable Swingline Lender of any telephonic Borrowing Request, such Swingline
Lender will confirm with the Administrative Agent (by telephone or in writing)
that the Administrative Agent has also received such Borrowing Request and, if
not, the applicable Swingline Lender will notify the Administrative Agent (by
telephone or in writing) of the contents thereof. Subject to the terms and
conditions hereof, the applicable Swingline Lender will, not later than 2:00
p.m., Houston, Texas time, on the borrowing date specified in such Borrowing
Request, make the amount of its Swingline Loan available to the Borrower;
provided that the applicable Swingline Lender shall only make such Swingline
Loan available to the Borrower if (A) the applicable Swingline Lender has
received notice (by telephone or in writing) from the Administrative Agent
(including at the request of any Lender) prior to 2:00 p.m., Houston, Texas
time, on the date of the proposed Borrowing of Swingline Loans that the
limitations set forth in the first proviso to the first sentence of
Section 2.09(a) would not be violated by the making of such Swingline Loan and
(B) the Borrower has certified that each of the applicable conditions specified
in Section 6.03 have been satisfied.

Each Swingline Lender shall not be under any obligation to issue any Swingline
Loan if: (x) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain such Swingline
Lender from making Swingline Loans, or any law applicable to such Swingline
Lender or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over such Swingline Lender shall
prohibit, or request that the Swingline Lender refrain from, the making of
swingline loans generally or the Swingline Loans in particular or shall impose
upon such Swingline Lender with respect to the Swingline Loans any restriction,
reserve or capital requirement (for which the Issuing Bank is not otherwise
compensated hereunder) not in effect on the Effective Date, or shall impose upon
such Swingline Lender any unreimbursed loss, cost or expense which was not
applicable on the Effective Date and which such Swingline Lender in good faith
deems material to it, or (y) the issuance of such Swingline Loans would violate
one or more policies of such Swingline Lender applicable to swingline loans
generally.

 

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(c)    Repayment and Refinancing.

(i)    Any Swingline Lender at any time in its sole discretion may request, on
behalf of the Borrower (which hereby irrevocably authorizes such Swingline
Lender to so request on their behalf), that each Lender make a Loan in an amount
equal to such Lender’s Applicable Percentage of the amount of Swingline Loans
then outstanding. Additionally, if a Swingline Loan is not repaid by Borrower on
or before the date required for such Swingline Loan under Section 3.01, Borrower
shall, subject to the conditions set forth in Section 6.03 herein, be deemed to
have requested, and the Borrower does hereby request under such circumstances,
that such Swingline Loan be refinanced with an ABR Borrowing of Loans in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
repay such Swingline Loan shall be discharged and replaced by the resulting ABR
Borrowing of Loans. If the Borrower does not repay a Swingline Loan when due,
and instead requests (or is deemed to have requested pursuant to the terms
hereof) that such payment be refinanced with a Loan, (A) the Administrative
Agent shall request that each Lender make a Loan in an amount equal to such
Lender’s Applicable Percentage of the amount of such Swingline Loan and
(B) Borrower’s failure to repay such Swingline Loan on the date required by
Section 3.01 shall not constitute a payment Default hereunder. Any such request
hereunder from the Administrative Agent shall be made in writing (which written
request shall be deemed to be a Borrowing Request for purposes hereof) and in
accordance with the requirements of Section 2.03, without regard to the minimum
and multiples specified in Section 2.02(c) for the principal amount of such
Loans, but subject to the conditions set forth in Section 6.03, and provided
that after giving effect to such Borrowing, the total Revolving Credit Exposures
shall not exceed the then effective Loan Limit. The applicable Swingline Lender
shall furnish the Borrower with a copy of the applicable Borrowing Request
promptly after delivering such notice to the Administrative Agent. Each Lender
shall make an amount equal to its Applicable Percentage of the amount specified
in such Borrowing Request available to the Administrative Agent in immediately
available funds (and the Administrative Agent may apply cash collateral
available with respect to the applicable Swingline Loan) for the account of the
Swingline Lenders at the Administrative Agent’s office not later than 1:00 p.m.,
Houston, Texas time, on the day specified in such Borrowing Request, whereupon,
subject to Section 2.09(c)(ii), each Lender that so makes funds available shall
be deemed to have made a Loan to the Borrower in such amount. The Administrative
Agent shall remit the funds so received to the Swingline Lenders.

(ii)    If for any reason any Swingline Loan cannot be refinanced by such a Loan
in accordance with Section 2.09(c)(i), the request for Loans submitted by such
Swingline Lender as set forth herein shall be deemed to be a request by such
Swingline Lender that each of the Lenders fund its risk participation in the
relevant Swingline Loan and each Lender’s payment to the Administrative Agent
for the account of such Swingline Lender pursuant to Section 2.09(c)(i) shall be
deemed payment in respect of such participation.

(iii)    If any Lender fails to make available to the Administrative Agent for
the account of such Swingline Lender any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.09(c) by the time
specified in Section 2.09(c)(i), such Swingline Lender shall be entitled to
recover from such Lender (acting through the Administrative Agent), on demand,
such amount with interest thereon for the period from the date such payment

 

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is required to the date on which such payment is immediately available to such
Swingline Lender at a rate per annum equal to the greater of the Federal Funds
Effective Rate and a rate determined by such Swingline Lender in accordance with
banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by such Swingline Lender in
connection with the foregoing. If such Lender pays such amount (with interest
and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan
included in the relevant Borrowing or funded participation in the relevant
Swingline Loan, as the case may be. A certificate of such Swingline Lender
submitted to any Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv)    Each Lender’s obligation to make Loans or to purchase and fund risk
participations in Swingline Loans pursuant to this Section 2.09(c) shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against any Swingline Lender, the Borrower or any other
Person for any reason whatsoever, (B) the occurrence or continuance of a Default
or an Event of Default, or (C) any other occurrence, event or condition, whether
or not similar to any of the foregoing; provided, however, that each Lender’s
obligation to make Loans pursuant to this Section 2.09(c) is subject to the
conditions set forth in Section 6.03. No such funding of risk participations
shall relieve or otherwise impair the obligation of the Borrower to repay
Swingline Loans, together with interest as provided herein.

(d)    Repayment of Participations.

(i)    At any time after any Lender has purchased and funded a risk
participation in a Swingline Loan, if any Swingline Lender receives any payment
on account of such Swingline Loan, such Swingline Lender will distribute to such
Lender its Applicable Percentage (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s risk
participation was funded) thereof in the same funds as those received by such
Swingline Lender.

(ii)    If any payment received by any Swingline Lender in respect of principal
or interest on any Swingline Loan is required to be returned by such Swingline
Lender under any of the circumstances described in Section 12.05(b) (including
pursuant to any settlement entered into by such Swingline Lender in its
discretion), each Lender shall pay to the applicable Swingline Lender its
Applicable Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such amount is
returned, at a rate per annum equal to the Federal Funds Effective Rate. The
Administrative Agent will make such demand upon the request of any Swingline
Lender. The obligations of the Lenders under this clause shall survive the
payment in full of the Indebtedness and the termination of this Agreement.

(e)    Interest for Account of Swingline Lender. The Swingline Lenders shall be
responsible for invoicing the Borrower for interest on the Swingline Loans.
Until each Lender funds its Loans or risk participation pursuant to this
Section 2.09 to refinance such Lender’s Applicable Percentage of any Swingline
Loan, interest in respect of such Applicable Percentage shall be solely for the
account of the Swingline Lenders.

 

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(f)    Payments Directly to Swingline Lenders. The Borrower shall make all
payments of principal and interest in respect of the Swingline Loans directly to
the Swingline Lenders.

(g)    Resignation of a Swingline Lender. Any Swingline Lender may resign at any
time by giving thirty (30) days’ prior notice to the Administrative Agent, the
Lenders and the Borrower. After the resignation of a Swingline Lender hereunder,
the retiring Swingline Lender shall remain a party hereto and shall continue to
have all the rights and obligations of a Swingline Lender under this Agreement
and the other Loan Documents with respect to Swingline Loans made by it prior to
such resignation, but shall not be required to make any additional Swingline
Loans.

Section 2.10    Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, and any
Fronting Exposure exists at the time a Lender becomes a Defaulting Lender, then
the following provisions shall apply for so long as such Lender is a Defaulting
Lender:

(a)    any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of such Defaulting Lender (whether
voluntary or mandatory, at maturity, pursuant to Section 10.02(c) or otherwise)
or received by the Administrative Agent from a Defaulting Lender pursuant to
Section 12.08 shall be applied at such time or times as may be determined by the
Administrative Agent as follows: first, to the payment of any amounts owing by
such Defaulting Lender to the Administrative Agent hereunder; second, to the
payment on a pro rata basis of any amounts owing by such Defaulting Lender to
any Issuing Bank or Swingline Lender hereunder; third, to cash collateralize the
Issuing Banks’ LC Exposure with respect to such Defaulting Lender in accordance
with this Section 2.10; fourth, as the Borrower may request (so long as no
Default or Event of Default exists), to the funding of any Loan in respect of
which such Defaulting Lender has failed to fund its portion thereof as required
by this Agreement, as determined by the Administrative Agent; fifth, if so
determined by the Administrative Agent and the Borrower, to be held in a deposit
account and released pro rata in order to (i) satisfy such Defaulting Lender’s
potential future funding obligations with respect to Loans under this Agreement
and (ii) cash collateralize the Issuing Banks’ future LC Exposure with respect
to such Defaulting Lender with respect to future Letters of Credit issued under
this Agreement, in accordance with this Section; sixth, to the payment of any
amounts owing to the Lenders, the Issuing Banks or Swingline Lenders as a result
of any judgment of a court of competent jurisdiction obtained by any Lender, the
Issuing Banks or Swingline Lenders against such Defaulting Lender as a result of
such Defaulting Lender’s breach of its obligations under this Agreement or under
any other Loan Document; seventh, so long as no Default or Event of Default
exists, to the payment of any amounts owing to the Borrower as a result of any
judgment of a court of competent jurisdiction obtained by the Borrower against
such Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement or under any other Loan Document; and eighth,
to such Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (i) such payment is a payment of the principal
amount of any Loans or LC Disbursements in respect of which such Defaulting
Lender has not fully funded its appropriate share, and (ii) such Loans were made
or the related Letters of Credit were issued at a time when the conditions set
forth in Section 6.03 were satisfied or waived, such payment shall be applied

 

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solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting
Lenders on a pro rata basis prior to being applied to the payment of any Loans
of, or LC Disbursements owed to, such Defaulting Lender until such time as all
Loans and funded and unfunded participations in the Borrower’s obligations
corresponding to such Defaulting Lender’s LC Exposure and Swingline Loans are
held by the Lenders pro rata in accordance with the Commitments without giving
effect to Section 2.10(c). Any payments, prepayments or other amounts paid or
payable to a Defaulting Lender that are applied (or held) to pay amounts owed by
a Defaulting Lender or to post cash collateral pursuant to this Section 2.10
shall be deemed paid to and redirected by such Defaulting Lender, and each
Lender irrevocably consents hereto;

(b)    the Commitment and Revolving Credit Exposure of such Defaulting Lender
shall not be included in determining whether the Majority Lenders or Required
Lenders have taken or may take any action hereunder (including any consent to
any amendment, waiver or other modification pursuant to Section 12.02); provided
that this clause (b) shall not apply to the vote of a Defaulting Lender in the
case of an amendment, waiver or other modification requiring the consent of such
Lender or each Lender affected thereby;

(c)    if any Swingline Exposure or LC Exposure exists at the time such Lender
becomes a Defaulting Lender then:

(i)    all or any part of such Swingline Exposure or LC Exposure of such
Defaulting Lender (other than the portion of such Swingline Exposure referred to
in clause (b) of the definition of such term) shall automatically be reallocated
among the non-Defaulting Lenders in accordance with their respective Applicable
Percentages but only to the extent any non-Defaulting Lender’s Revolving Credit
Exposure does not exceed its Commitment;

(ii)    if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall, within one (1) Business Day
following notice by the Administrative Agent(A) first, prepay such Defaulting
Lender’s Swingline Exposure and (B) second cash collateralize such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant
to clause (i) above) in accordance with the procedures set forth in
Section 2.08(j) for so long as such LC Exposure is outstanding;

(iii)    if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to clause (ii) above, 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;

(iv)    if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant
to clause (i) above, 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

 

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(v)    if all or any portion of such Defaulting Lender’s LC Exposure is neither
cash collateralized nor reallocated pursuant to clause (i) or (ii) above, then,
without prejudice to any rights or remedies of the Issuing Banks 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) under Section 3.05(a)
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 Banks until such
LC Exposure is cash collateralized and/or reallocated; and

(d)    so long as such Lender is a Defaulting Lender, no Swingline Lenders shall
be required to fund any Swingline Loan and no Issuing Bank shall 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 2.10(c),
and Swingline Exposure related to any newly made Swingline Loan or LC Exposure
related to any newly issued or increased Letter of Credit shall be allocated
among non-Defaulting Lenders in a manner consistent with Section 2.10(c)(i) (and
such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to a Lender Parent
shall occur following the date hereof and for so long as such event shall
continue or (ii) any Swingline Lender or 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, no Swingline
Lender shall be required to fund any Swingline Loan and no Issuing Bank shall be
required to issue, amend or increase any Letter of Credit, unless the Swingline
Lenders or the Issuing Banks, as the case may be, shall have entered into
arrangements with the Borrower or such Lender, satisfactory to such Swingline
Lender or Issuing Bank, as the case may be, to defease any risk to it in respect
of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrower, each Swingline
Lender and each Issuing Bank agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and 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 of the other Lenders (other than Swingline
Loans) as the Administrative Agent shall determine may be necessary in order for
such Lender to hold such Loans in accordance with its Applicable Percentage.

ARTICLE III

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

Section 3.01    Repayment of Loans. The Borrower hereby unconditionally promises
to pay to the Administrative Agent for the account of each Lender the then
unpaid principal amount of each Loan on the Termination Date. The Borrower shall
repay each Swingline Loan (or refinance such Swingline Loan with a Loan pursuant
to Section 2.09(c)) on the earlier to occur of the date that is ten
(10) Business Days after such Swingline Loan is made and the Termination Date.

 

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Section 3.02    Interest.

(a)    ABR Loans. The Loans comprising each ABR Borrowing shall bear interest at
the Alternate Base Rate plus the Applicable Margin, but in no event to exceed
the Highest Lawful Rate.

(b)    Eurodollar Loans. The Loans comprising each Eurodollar Borrowing shall
bear interest at the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin, but in no event to exceed the Highest
Lawful Rate.

(c)    Post-Default Rate. Notwithstanding the foregoing, if any Event of Default
of the type described in Section 10.01(a), (b), (h) or (i) occurs, then (i) all
outstanding overdue principal shall automatically bear interest at the rate that
would otherwise be applicable thereto (including Applicable Margin) plus 2.00%
per annum and (ii) overdue interest, fees, expenses and other amounts under the
Loan Documents shall automatically bear interest at the rate applicable to ABR
Loans as provided in Section 3.02(a) (including Applicable Margin) plus 2.00%
per annum, but in no event to exceed the Highest Lawful Rate. All interest
provided for under this Section 3.02(c) shall be due and payable on demand by
the Administrative Agent (and if no express demand is made, on the dates such
interest or such other amounts are otherwise due under this Agreement). For
purposes of clarity, upon an Event of Default of the type described in
Section 10.01(h) or (i), all outstanding principal shall be deemed overdue for
purposes of this Section 3.02(c).

(d)    Interest Payment Dates. Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan and on the Termination Date;
provided that (i) interest accrued pursuant to Section 3.02(c) shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan (other
than an optional prepayment of an ABR Loan prior to the Termination Date),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment, and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.

(e)    Interest Rate Computations. All interest hereunder shall be computed on
the basis of a year of three hundred sixty (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 three hundred sixty-five (365) days (or three hundred
sixty-six (366) days in a leap year), except that interest computed by reference
to the Alternate Base Rate at times when the Alternate Base Rate is based on the
Prime Rate shall be computed on the basis of a year of three hundred sixty-five
(365) days (or three hundred sixty-six (366) days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted
LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error, and be binding upon the
parties hereto.

 

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Section 3.03    Changed Circumstances.

(a)    Circumstances Affecting LIBO Rate Availability. Subject to clause
(c) below, in connection with any request for a Eurodollar Borrowing or a
conversion to or continuation thereof or otherwise, if for any reason prior to
the occurrence of a Benchmark Transition Event or any Early Opt-in Election
(i) the Administrative Agent shall determine (which determination shall be
conclusive and binding absent manifest error) that dollar deposits are not being
offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such Loan, (ii) the Administrative Agent shall
determine (which determination shall be conclusive and binding absent manifest
error) that reasonable and adequate means do not exist for ascertaining the
Adjusted LIBO Rate or LIBO Rate for such Interest Period with respect to a
proposed Eurodollar Borrowing or (iii) the Majority Lenders shall determine
(which determination shall be conclusive and binding absent manifest error) that
the Adjusted LIBO Rate or LIBO Rate does not adequately and fairly reflect the
cost to such Lenders of making or maintaining such Loans during such Interest
Period, then the Administrative Agent shall promptly give notice thereof to the
Borrower and the Lenders. Thereafter, until the Administrative Agent notifies
the Borrower and the Lenders that such circumstances no longer exist, the
obligations of the Lenders to make Eurodollar Borrowings and the right of the
Borrower to convert any Loan to or continue any Loan as a Eurodollar Borrowing
shall be suspended, and the Borrower shall either (A) repay in full (or cause to
be repaid in full) the then outstanding principal amount of each such Eurodollar
Borrowing together with accrued interest thereon (subject to Section 12.12), on
the last day of the then current Interest Period applicable to such Eurodollar
Borrowing; or (B) convert the then outstanding principal amount of each such
Eurodollar Borrowing to an ABR Borrowing as of the last day of such Interest
Period.

(b)    Laws Affecting LIBO Rate Availability. If, after the date hereof and
prior to the occurrence of a Benchmark Transition Event or an Early Opt-in
Election, the introduction of, or any change in, any applicable law or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any of the Lenders (or any of their
respective lending offices) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective lending offices) to honor its obligations hereunder to make or
maintain any Eurodollar Borrowing, such Lender shall promptly give notice
thereof to the Administrative Agent and the Administrative Agent shall promptly
give notice to the Borrower and the other Lenders. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, (i) the obligations of the Lenders to make Eurodollar Borrowings, and the
right of the Borrower to convert any Loan to a Eurodollar Borrowing or continue
any Loan as a Eurodollar Borrowing shall be suspended and thereafter the
Borrower may select only ABR Borrowings and (ii) if any of the Lenders may not
lawfully continue to maintain a Eurodollar Borrowing to the end of the then
current Interest Period applicable thereto, the applicable Loan shall
immediately be converted to an ABR Borrowing for the remainder of such Interest
Period.

 

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(c)    Effect of Benchmark Transition Event.

(i) Benchmark Replacement. Notwithstanding anything to the contrary herein or in
any other Loan Document, upon the occurrence of a Benchmark Transition Event or
an Early Opt-in Election, as applicable, the Administrative Agent and the
Borrower may amend this Agreement to replace the LIBO Rate with a Benchmark
Replacement. Any such amendment with respect to a Benchmark Transition Event
will become effective at 5:00 P.M. on the fifth Business Day after the
Administrative Agent has posted such proposed amendment to all Lenders and the
Borrower so long as the Administrative Agent has not received, by such time,
written notice of objection to such amendment from Lenders comprising the
Majority Lenders; provided that, with respect to any proposed amendment
containing any SOFR-Based Rate, the Lenders shall be entitled to object only to
the Benchmark Replacement Adjustment contained therein. Any such amendment with
respect to an Early Opt-in Election will become effective on the date that
Lenders comprising the Majority Lenders have delivered to the Administrative
Agent written notice that such Majority Lenders accept such amendment. No
replacement of the Adjusted LIBO Rate or LIBO Rate with a Benchmark Replacement
pursuant to this Section 3.03(c) will occur prior to the applicable Benchmark
Transition Start Date.

(ii) Benchmark Replacement Conforming Changes. In connection with the
implementation of a Benchmark Replacement, the Administrative Agent will have
the right to make Benchmark Replacement Conforming Changes from time to time
and, notwithstanding anything to the contrary herein or in any other Loan
Document, any amendments implementing such Benchmark Replacement Conforming
Changes will become effective without any further action or consent of any other
party to this Agreement.

(iii) Notices; Standards for Decisions and Determinations. The Administrative
Agent will promptly notify the Borrower and the Lenders of (A) any occurrence of
a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its
related Benchmark Replacement Date and Benchmark Transition Start Date, (B) the
implementation of any Benchmark Replacement, (C) the effectiveness of any
Benchmark Replacement Conforming Changes and (D) the commencement or conclusion
of any Benchmark Unavailability Period. Any determination, decision or election
that may be made by the Administrative Agent or Lenders pursuant to this
Section 3.03(c), including any determination with respect to a tenor, rate or
adjustment or of the occurrence or non-occurrence of an event, circumstance or
date and any decision to take or refrain from taking any action, will be
conclusive and binding absent manifest error and may be made in its sole
discretion and without consent from any other party hereto, except, in each
case, as expressly required pursuant to this Section 3.03(c).

(iv) Benchmark Unavailability Period. Upon the Borrower’s receipt of notice of
the commencement of a Benchmark Unavailability Period, the Borrower may revoke
any request for a Eurodollar Borrowing of, conversion to or continuation of
Eurodollar Borrowings to be made, converted or continued during any Benchmark
Unavailability Period and, failing that, the Borrower will be deemed to have
converted any such request into a request for a borrowing of or conversion to
ABR Borrowings. During any Benchmark Unavailability Period, the component of the
Alternate Base Rate based upon the Adjusted LIBO Rate will not be used in any
determination of the Alternate Base Rate.

 

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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).

(b)    Notice and Terms of Optional Prepayment. The Borrower shall notify the
Administrative Agent by telephone (confirmed by facsimile or other electronic
transmission acceptable to the Administrative Agent) of any prepayment hereunder
(i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00
noon, Houston, Texas time, three (3) Business Days before the date of
prepayment, (ii) in the case of prepayment of an ABR Borrowing, not later than
12:00 noon, Houston, Texas time, one (1) Business Day before the date of
prepayment, or (iii) in the case of prepayment of a Swingline Loan, not later
than 12:00 noon, Houston, Texas 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; provided that if a notice of prepayment is given in connection with
a conditional notice of termination of the Commitments as contemplated by
Section 2.06(b), then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.06(b). Promptly following
receipt of any such notice relating to a Borrowing, the Administrative Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 3.02 and any break funding payments required by
Section 5.02.

(c)    Mandatory Prepayments.

(i)    If, after giving effect to any termination or reduction of the Aggregate
Maximum Credit Amounts pursuant to Section 2.06(b) or any reduction in the
Aggregate Elected Commitment Amounts pursuant to Section 2.06(c), the total
Revolving Credit Exposures exceeds the then effective Loan Limit, then the
Borrower shall (A) prepay the Borrowings of Loans 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 of Loans as
a result of an LC Exposure, pay to the Administrative Agent on behalf of the
Lenders an amount equal to such excess to be held as cash collateral as provided
in Section 2.08(j).

(ii)    Upon any redetermination of the Borrowing Base pursuant to
Section 2.07(c) or any adjustment to the amount of the Borrowing Base in
accordance with Section 8.12(c), if the total Revolving Credit Exposures exceed
the Loan Limit after giving effect to the redetermined or adjusted Borrowing
Base, then the Borrower shall, within ten (10) Business Days after written
notice from the Administrative Agent to the Borrower of such Borrowing Base
Deficiency, notify the Administrative Agent of its election to take one or more
of the following actions to cure the Borrowing Base Deficiency and shall take
such actions within the periods specified herein: (A) deliver to the
Administrative Agent within thirty (30) days after receipt of such election,
petroleum engineering information and Mortgages covering additional Oil and Gas

 

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Properties of the Credit Parties not previously included in the immediately
preceding Reserve Report with a value and quality satisfactory to the Lenders in
their sole discretion sufficient to eliminate such Borrowing Base Deficiency
(together with title information acceptable to the Administrative Agent covering
at least 85% of the PV-9 of such Oil and Gas Properties within the earlier of
(x) sixty (60) days after the receipt of such election to cure such Borrowing
Base Deficiency and (y) the period set forth in Section 8.12(a)) or (B) prepay
the Borrowings in an aggregate principal amount equal to such excess, and if any
excess remains after prepaying all of the Borrowings as a result of an LC
Exposure, pay to the Administrative Agent on behalf of the Lenders an amount
equal to such excess to be held as cash collateral as provided in
Section 2.08(j). The Borrower may make such prepayment either, at its election,
(1) in one lump sum payment on or before the date that is thirty (30) days
following such election of the method to cure the Borrowing Base Deficiency or
(2) in six (6) equal payments, the first of which being due on the date that is
thirty (30) days following the date of receipt by the Borrower of the notice
from the Administrative Agent of such Borrowing Base Deficiency and each
subsequent payment being due and payable on the same day in each of the
subsequent calendar months; 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. The Borrower may also undertake a combination of clauses (A) or (B);
provided that the Borrower shall notify the Administrative Agent in writing of
the Borrower’s election in respect of clauses (A) or (B) of the immediately
preceding sentence within ten (10) days following the receipt of the New
Borrowing Base Notice in accordance with Section 2.07(d). Notwithstanding the
foregoing, the failure to make an election within the periods specified herein
shall be deemed to be an election prepay the Borrowing in accordance with
Section 3.04(c)(ii)(B) in one lump sum payment and in the time period specified
in option (1) hereof.

(iii)    Upon any adjustment to the amount of the Borrowing Base in accordance
with Section 2.07(e) or (f), if the total Revolving Credit Exposures exceed the
Borrowing Base after giving effect to such Borrowing Base adjustment, then the
Borrower shall, within two (2) Business Days of the New Borrowing Base Notice,
(A) prepay the Borrowings in an aggregate principal amount equal to such excess
and (B) if any excess remains after prepaying all of the Borrowings as a result
of an LC Exposure, pay to the Administrative Agent on behalf of the Lenders an
amount equal to such excess to be held as cash collateral as provided in
Section 2.08(j). The Borrower shall be obligated to make such prepayment in one
lump sum payment.

(iv)    Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be
applied, first, ratably to any Swingline Loans then outstanding, second, ratably
to any ABR Borrowings then outstanding, and, third, to any Eurodollar Borrowings
then outstanding, and if more than one Eurodollar Borrowing is then outstanding,
to each such Eurodollar Borrowing in order of priority beginning with the
Eurodollar Borrowing with the least number of days remaining in the Interest
Period applicable thereto and ending with the Eurodollar Borrowing with the most
number of days remaining in the Interest Period applicable thereto.

(v)    Each prepayment of Borrowings pursuant to this Section 3.04(c) shall be
applied ratably to the Loans included in the prepaid Borrowings. Prepayments
pursuant to this Section 3.04(c) shall be accompanied by accrued interest to the
extent required by Section 3.02.

 

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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.

Section 3.05    Fees.

(a)    Commitment Fees. The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a commitment fee, which shall accrue at the
applicable Commitment Fee Rate on the average daily amount of the unused amount
of the Commitment of such Lender during the period from and including the
Initial Funding Date to but excluding the Termination Date; provided that the
amount of outstanding Swingline Loans shall not be considered usage of the
Commitments for the purpose of calculating such fee. Accrued commitment fees
shall be payable in arrears on the last day of March, June, September and
December of each year and on the Termination Date, commencing on the first such
date to occur after the Initial Funding Date. All commitment fees shall be
computed on the basis of a year of three hundred sixty (360) days, unless such
computation would exceed the Highest Lawful Rate, in which case commitment fees
shall be computed on the basis of a year of three hundred sixty-five (365) days
(or three hundred sixty-six (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
Administrative Agent for the account of each Lender a participation fee with
respect to its participations in each outstanding Letter 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 Initial Funding Date to
but excluding the later of the date on which such Lender’s Commitment terminates
and the date on which such Lender ceases to have any LC Exposure, (ii) to the
Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum
on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Initial Funding Date to but excluding the later of the date of
termination of the Commitments and the date on which there ceases to be any LC
Exposure; provided that in no event shall such fee be less than $500 during any
fiscal year, and (iii) to the Issuing Bank, for its own account, its standard
fees with respect to the issuance, amendment, renewal or extension of any Letter
of Credit or processing of drawings thereunder. Participation fees and fronting
fees accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following the
last day of such month end, commencing on the first such date to occur after the
Initial Funding Date; provided that all such fees shall be payable on the
Termination Date and any such fees accruing after the Termination Date shall be
payable on demand. Any other fees payable to the Issuing Bank pursuant to this
Section 3.05(b) shall be payable within ten (10) days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of
three hundred sixty (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
three hundred sixty-five (365) days (or three hundred sixty-six (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)    Administrative Agent Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, fees payable in the amounts and at
the times set forth in the Agency Fee Letter or as otherwise agreed upon between
the Borrower and the Administrative Agent.

(d)    Defaulting Lender Fees. Subject to Section 2.10, the Borrower shall not
be obligated to pay the Administrative Agent any Defaulting Lender’s ratable
share of the fees described in Section 3.05(a) and (b) for the period commencing
on the day such Defaulting Lender becomes a Defaulting Lender and continuing for
so long as such Lender continues to be a Defaulting Lender.

Section 3.06    Extension of Maturity Date.

(a)    The Borrower may, upon written notice to the Administrative Agent (an
“Extension Request”), which shall promptly notify the Lenders, request
extensions of the Maturity Date applicable to the Commitments (the “Extended
Loans”) to a date specified in such Extension Request.

(b)    The Extension Request shall specify the date on which the Borrower
proposes that the extension shall be effective, which shall be a date reasonably
satisfactory to the Administrative Agent. Within the time period specified in
such Extension Request, each applicable Lender shall notify the Administrative
Agent whether it consents to such extension (which consent may be given or
withheld in such Lender’s sole and absolute discretion). Any Lender not
responding within the above time period shall be deemed not to have consented to
such extension. The Administrative Agent shall promptly notify the Borrower and
the applicable Lenders of such Lenders’ responses.

(c)    The maturity date applicable to any Commitments shall be extended only
with respect to such Extended Loans held by such Lenders that have consented
thereto (the Lenders that so consent being the “Extending Lenders” and the
Lenders that declined being the “Non-Extending Lenders”) (it being understood
and agreed that, except for the consents of Extending Lenders no other consents
shall be required hereunder for such extensions). If so extended, the scheduled
maturity date with respect to the Commitments held by the Extending Lenders
shall be extended to the date specified in the Extension Request, which shall
become the maturity date of the applicable Commitments (such date, the “Extended
Maturity Date”). The Administrative Agent shall promptly confirm to the
applicable Extending Lenders and Non-Extending Lenders such extension,
specifying the effective date of such extension (the “Extension Effective Date”)
and the Extended Maturity Date (after giving effect to such extension)
applicable to the Extending Lenders.

(d)    The proposed terms of the Extended Loans to be established shall (i) be
identical as offered to each Lender and (ii) be identical to the existing
Commitments from which such Extended Loans are to be amended, except that:
(A) the maturity date of the Extended Loans shall be later than the maturity
date of the existing Commitments and (B) the Administrative Agent and the
Extending Lenders may receive customary fees in consideration for the extension
of the Extended Loans.

 

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(e)    As a condition precedent to such extension, the Borrower shall deliver or
cause to be delivered any customary legal opinions, certificates or other
documents (including, without limitation, a resolution duly adopted by the board
of directors (or equivalent governing body) of each Credit Party authorizing
such extension) reasonably requested by Administrative Agent and the Extending
Lenders and a certificate stating that before and after giving effect to such
extension, the representations and warranties made by any Credit Party in this
Agreement and the other Loan Documents are true and correct in all respects and
that no Event of Default or Borrowing Base Deficiency exists as of the Extension
Effective Date.

(f)    Notwithstanding the terms of Section 12.02, the Borrower and the
Administrative Agent shall be entitled (without the consent of any other Lenders
except to the extent required under clause (b) above) to enter into any
amendments to this Agreement, in form and substance satisfactory to the
Administrative Agent, that the Administrative Agent believes are necessary to
appropriately reflect, or provide for the integration of, any extension of the
maturity date and other amendments applicable to any Extended Loans pursuant to
this Section 3.06.

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 Sections 5.01,
5.02, 5.03 or otherwise) prior to 12:00 noon, Houston, Texas 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 Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices specified in Section 12.01, except payments
to be made directly to the Issuing Banks or Swingline Lenders as expressly
provided herein and except that payments pursuant to Sections 5.01, 5.02, 5.03
and 12.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.

(b)    Application of Insufficient Payments. If at any time insufficient funds
are received by and available to the Administrative Agent to pay fully all
amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal and unreimbursed LC Disbursements then
due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.

 

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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 and Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
and participations in LC Disbursements and Swingline Loans 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 and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this 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 and Swingline Loans 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
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Bank that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or Issuing Bank with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.

Section 4.03    Certain Deductions by the Administrative Agent. If any Lender
shall fail to make any payment required to be made by it pursuant to Sections
2.05(a), 2.08(d), 2.08(e) or 4.01, or otherwise hereunder, then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any

 

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amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid. If at any time prior to the acceleration
or maturity of the Loans, the Administrative Agent shall receive any payment in
respect of principal of a Loan or a reimbursement of an LC Disbursement while
one or more Defaulting Lenders shall be party to this Agreement, the
Administrative Agent shall apply such payment first to the Borrowing(s) for
which such Defaulting Lender(s) shall have failed to fund its pro rata share
until such time as such Borrowing(s) are paid in full or each Lender (including
each Defaulting Lender) is owed its Applicable Percentage of the Loans then
outstanding, as applicable. After acceleration or maturity of the Loans, all
principal will be paid ratably as provided in Section 10.02(c).

Section 4.04    Disposition of Proceeds. The Security Instruments contain an
assignment by the Borrower and/or the Guarantors unto and in favor of the
Administrative Agent for the benefit of the Secured Parties of all of the
Borrower’s or each Guarantor’s interest in and to production and all proceeds
attributable thereto which may be produced from or allocated to the Mortgaged
Property. The Security Instruments further provide in general for the
application of such proceeds to the satisfaction of the Indebtedness and other
obligations described therein and secured thereby. Notwithstanding the
assignment contained in such Security Instruments, until the occurrence of an
Event of Default, (a) the Administrative 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 Administrative Agent
or the Lenders, but the Lenders will instead permit such proceeds to be paid to
the Borrower and its Restricted Subsidiaries and (b) the Lenders hereby
authorize the Administrative Agent to take such actions as may be necessary to
cause such proceeds to be paid to the Borrower and/or such Restricted
Subsidiaries.

ARTICLE V

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

Section 5.01    Increased Costs.

(a)    Eurodollar Changes in Law. If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender (except any such reserve requirement reflected in the
Adjusted LIBO Rate);

(ii)    subject any Lender to any Taxes (other than (A) Indemnified Taxes, or
(B) Excluded Taxes) on its loans, loan principal, letters of credit,
commitments, or other obligations, or its deposits, reserves, other liabilities
or capital attributable thereto; or

(iii)    impose on any Lender or the London interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender;

 

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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.
Notwithstanding the foregoing, no Lender will be entitled to demand compensation
for any increased cost or reduction set forth in this Section 5.01(a) to the
extent that it is not the general practice and policy of such Lender to demand
such compensation from similarly situated borrowers in similar circumstances
under agreements containing provisions permitting such compensation to be
claimed at such time.

(b)    Capital Requirements. If any Lender or any Issuing Bank determines that
any Change in Law regarding capital or liquidity requirements has or would have
the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s
capital or on the capital of such Lender’s or the Issuing Bank’s holding
company, if any, as a consequence of this Agreement or the Loans made by, or
participations in Letters of Credit held by, such Lender, or the Letters of
Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could
have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the
Issuing Bank’s holding company with respect to capital adequacy and liquidity),
then from time to time the Borrower will pay to such Lender or the Issuing Bank,
as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding
company for any such reduction suffered. Notwithstanding the foregoing, no
Lender will be entitled to demand compensation for any increased cost or
reduction set forth in this Section 5.01(b) to the extent that it is not the
general practice and policy of such Lender to demand such compensation from
similarly situated borrowers in similar circumstances under agreements
containing provisions permitting such compensation to be claimed at such time.

(c)    Certificates. A certificate of a Lender or an Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or such Issuing Bank
or its holding company, or the Administrative Agent, 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 the 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 the Borrower shall not
be required to compensate a Lender or an Issuing Bank pursuant to this
Section 5.01 for any increased costs or reductions incurred more than three
hundred sixty-five (365) days prior to the date that such Lender or such Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender’s or such Issuing
Bank’s intention to claim compensation therefor; provided, further, that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the three hundred sixty-five (365) day period referred to above shall be
extended to include the period of retroactive effect thereof.

 

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Section 5.02    Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default),
(b) the conversion of any Eurodollar Loan into an ABR Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 5.04(b), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the Eurodollar market.

A certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section 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
free and clear of and without deduction or withholding for any Taxes, except as
required by applicable law. If any applicable law (as determined in the good
faith discretion of an applicable Withholding Agent) requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the Borrower or any Guarantor
shall be increased as necessary so that after such deduction or withholding has
been made (including such deductions and withholdings applicable to additional
sums payable under this Section 5.03) the applicable Recipient receives an
amount equal to the sum it would have received had no such deduction or
withholding been made.

 

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(b)    Payment of Other Taxes by the Borrower. The Borrower shall timely pay to
the relevant Governmental Authority in accordance with applicable law, or at the
option of the Administrative Agent, timely reimburse it for the payment of, any
Other Taxes.

(c)    Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, within ten (10) days
after demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section 5.03) payable or paid by such Recipient or required to be withheld or
deducted from a payment to such Recipient and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified 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 the
Borrower (with a copy to the Administrative Agent), or by the Administrative
Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.

(d)    Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within ten (10) days after demand therefor, for (i) any
Indemnified Taxes attributable to such Lender (but only to the extent that
Borrower has not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Borrower to do so),
(ii) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 12.04(c) relating to the maintenance of a Participant
Register, and (iii) any Excluded Taxes attributable to such Lender, in each
case, that are payable or paid by the Administrative Agent in connection with
any Loan Document, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Loan Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this clause (d).

(e)    Evidence of Payments. As soon as practicable after any payment of Taxes
by the Borrower or a Guarantor to a Governmental Authority pursuant to this
Section 5.03, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

(f)    Status of Lenders.

(i) Any Lender that is entitled to an exemption from or reduction of withholding
Tax with respect to payments made under any Loan Document shall deliver to the
Borrower and the Administrative Agent, at the time or times reasonably requested
by the Borrower or the Administrative Agent, such properly completed and
executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably

 

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requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to
backup withholding or information reporting requirements. Notwithstanding
anything to the contrary in the preceding two sentences, the completion,
execution and submission of such documentation (other than such documentation
set forth in Section 5.03(f)(ii)(A), Section 5.03(f)(ii)(B) and Section 5.03(g)
below) shall not be required if in the Lender’s reasonable judgment such
completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or
commercial position of such Lender.

(i)    Without limiting the generality of the foregoing,

(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon the
reasonable request of the Withholding Agent), executed copies of IRS Form W-9
certifying that such Lender is exempt from U.S. federal backup withholding Tax;

(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative 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 and the Administrative
Agent), whichever of the following is applicable:

(1)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed copies of IRS Form W-8BEN or IRS
Form W-8BEN-E (as applicable) establishing an exemption from, or reduction of,
U.S. federal withholding Tax pursuant to the “interest” article of such tax
treaty and (y) with respect to any other applicable payments under any Loan
Document, IRS Form W-8BEN or IRS Form W-8BEN-E (as applicable) establishing an
exemption from, or reduction of, U.S. federal withholding tax pursuant to the
“business profits” or “other income” article of such tax treaty;

(2)    executed copies of IRS Form W-8ECI;

(3)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit K-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” related
to the Borrower as described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN or IRS Form
W-8BEN-E (as applicable); or

 

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(4)    to the extent a Foreign Lender is not the beneficial owner, executed
copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, or
IRS Form W-8BEN-E (as applicable), a U.S. Tax Compliance Certificate
substantially in the form of Exhibits K-2 or K-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 K-4 on behalf of each such direct and indirect partner;
and

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the Administrative 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 and the Administrative
Agent), executed copies of any other form prescribed by applicable law as a
basis for claiming exemption from or a reduction in U.S. federal withholding
tax, duly completed, together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower and the Administrative Agent
to determine the withholding or deduction required to be made.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Withholding Agent in writing of its
legal inability to do so.

(g)    FATCA. If a payment made to a Lender under this Agreement would be
subject to U.S. federal withholding tax imposed by FATCA if such Lender fails to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall deliver to the Borrower and the Administrative Agent, at the time or times
prescribed by law and at such time or times reasonably requested by the Borrower
and the Administrative Agent, such documentation prescribed by applicable law
(including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower and the
Administrative Agent as may be necessary for the Borrower and the Administrative
Agent to comply with their obligations under FATCA, to determine that such
Lender has complied with such Lender’s obligations under FATCA or to determine
the amount, if any, to deduct and withhold from such payment. Solely for
purposes of this Section 5.03(g), “FATCA” shall include any amendments made to
FATCA after the Effective Date.

Each Lender agrees that if any form or certification it previously delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or certification or promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so.

(h)    On or prior to the date of this Agreement, the Administrative Agent shall
(and any successor or replacement Administrative Agent shall, on or before the
date on which it becomes the Administrative Agent hereunder), deliver to the
Borrower two (2) duly executed copies of either (i) IRS Form W-9, or (ii) IRS
Form W-8ECI or IRS Form W-8BEN-E (with respect to any payments to be received on
its own behalf) or IRS Form W-8IMY (for all other

 

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payments), establishing that Borrower can make payments to the Administrative
Agent without deduction or withholding of any Taxes imposed by the United
States, including Taxes imposed under FATCA.

(i)    Treatment of Certain 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, or additional amounts paid, 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 (i) (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 (i), in no event will the indemnified
party be required to pay any amount to an indemnifying party pursuant to this
clause (i) 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 paragraph
shall not be construed to require any indemnified party to make available its
Tax returns (or any other information relating to its Taxes that it deems
confidential) to the indemnifying party or any other Person.

(j)    Survival. Each party’s obligations under this Section 5.03 shall survive
the resignation or replacement of the Administrative Agent or any assignment of
rights by, or the replacement of, a Lender, the termination of the Commitments,
and the repayment, satisfaction or discharge of all obligations under the Loan
Documents.

(k)    Defined Terms. For purposes of this Section 5.03, the term “applicable
law” includes FATCA and the term “Lender” includes any Issuing Bank.

Section 5.04    Mitigation Obligations; Replacement of Lenders.

(a)    Designation of Different Lending Office. If any Lender requests
compensation under Section 5.01, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 5.03, or if any Lender’s obligation to make or
maintain Eurodollar Loans is suspended pursuant to Section 5.05, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Sections 5.01 or 5.03, as the case may be, in the
future or would allow the Lender to make Eurodollar Loans and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

 

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(b)    Replacement of Lenders. 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, or if any Lender’s obligation to make or maintain Eurodollar Loans
is suspended pursuant to Section 5.05, or if any Lender becomes a Defaulting
Lender or Non-Consenting Lender hereunder, then the Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 12.04(b), and each party
hereto agrees that any such assignment or delegation pursuant to this
Section 5.04(b) may be effected without the signature of the assigning Lender),
all its interests, rights and obligations under this Agreement and related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (i) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans and participations in LC Disbursements and Swingline Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts), (iii) in
the case of any such assignment resulting from a claim for compensation under
Section 5.01 or payments required to be made pursuant to Section 5.03, such
assignment will result in a reduction in such compensation or payments and
(iv) in the case of any assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply. Notwithstanding the foregoing, a
Lender shall not be required to make any such assignment and delegation if such
Lender is a Secured Swap Provider with any outstanding Swap Agreements with any
Credit Party (to the extent obligations under such Swap Agreements constitute
Indebtedness), unless on or prior thereto, all such Swap Agreements have been
terminated or novated to another Person and such Lender (or its Affiliate) shall
have received payment of all amounts, if any, payable to it in connection with
such termination or novation.

Section 5.05    Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its obligation to make or maintain Eurodollar
Loans either generally or having a particular Interest Period hereunder, then
(a) such Lender shall promptly notify the Borrower and the Administrative Agent
thereof and such Lender’s obligation to make such Eurodollar Loans shall be
suspended (the “Affected Loans”) until such time as such Lender may again make
and maintain such Eurodollar Loans and (b) all Affected Loans which would
otherwise be made by such Lender shall be made instead as ABR Loans (and, if
such Lender so requests by notice to the Borrower and the Administrative Agent,
all Affected Loans of such Lender then outstanding shall be automatically
converted into ABR Loans on the date specified by such Lender in such notice)
and, to the extent that Affected Loans are so made as (or converted into) ABR
Loans, all payments of principal which would otherwise be applied to such
Lender’s Affected Loans shall be applied instead to its ABR Loans.

 

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ARTICLE VI

CONDITIONS PRECEDENT

Section 6.01    Effective Date. This Agreement shall not become effective until
the date on which each of the following conditions is satisfied (or waived in
accordance with Section 12.02):

(a)    The Administrative Agent shall have received from each party hereto on
the Effective Date counterparts (in such number as may be requested by the
Administrative Agent) of this Agreement signed on behalf of such party.

(b)    The Administrative Agent shall have received a certificate of the
Secretary or an Assistant Secretary of the Borrower and Holdings setting forth
(i) resolutions of its board of directors (or comparable governing body) with
respect to the authorization of the Borrower or Holdings to execute and deliver
the Loan Documents to which it is a party and to enter into the transactions
contemplated in those documents, (ii) the officers of the Borrower or Holdings
(A) who are authorized to sign the Loan Documents to which the Borrower or
Holdings is a party and (B) who will, until replaced by another officer or
officers duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other communications in
connection with this Agreement and the transactions contemplated hereby,
(iii) specimen signatures of such authorized officers, and (iv) the articles or
certificate of formation and limited liability company agreements (or comparable
Organizational Documents for any Credit Parties that are not limited liability
companies) of the Borrower or Holdings, certified as being true and complete as
of the Effective Date. The Administrative Agent and the Lenders may conclusively
rely on such certificate until the Administrative Agent receives notice in
writing from the Borrower to the contrary.

(c)    The Administrative Agent shall have received customary certificates as of
a recent date prior to the Effective Date reasonably satisfactory to the
Administrative Agent of the appropriate State agencies where such entity is
formed or incorporated with respect to the existence, qualification and good
standing of Holdings and the Borrower.

(d)    The Administrative Agent shall have received from Holdings and the
Borrower at least three (3) Business Days prior to the Effective Date, to the
extent reasonably requested in writing by the Lenders party to this Agreement on
the Effective Date or the Administrative Agent at least ten (10) Business Days
prior to Effective Date, all documentation and other information that they
reasonably determine is required by regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including
the PATRIOT Act.

(e)    At least three (3) Business Days prior to the Effective Date, any Lender
party to this Agreement on the Effective Date that has requested, in a written
notice to the Borrower at least ten (10) Business Days prior to the Effective
Date, a Beneficial Ownership Certification in relation to the Borrower or
Holdings, shall have received such Beneficial Ownership Certification.

 

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(f)    The Administrative Agent shall have received an opinion of Sidley Austin
LLP, special counsel to the Borrower and Holdings, in form and substance
acceptable to the Administrative Agent and its counsel.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.

Section 6.02    Initial Funding Date. The obligations of the Lenders to make
Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 12.02):

(a)    The Administrative Agent, the Arrangers and the Lenders shall have
received all commitment, facility and agency fees and all other fees and amounts
due and payable on or prior to the Initial Funding Date, and to the extent
invoiced at least three (3) Business Days prior to the Initial Funding Date,
reimbursement or payment of all reasonable and documented out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder (including, without
limitation, the reasonable and documented fees and expenses of Simpson Thacher &
Bartlett LLP, counsel to the Administrative Agent).

(b)    The Administrative Agent shall have received a certificate of the
Secretary or an Assistant Secretary of the Borrower, Holdings and each Guarantor
setting forth (i) resolutions of its board of directors (or comparable governing
body) with respect to the authorization of the Borrower, Holdings or such
Guarantor to execute and deliver the Loan Documents to which it is a party and
to enter into the transactions contemplated in those documents, (ii) the
officers of the Borrower, Holdings or such Guarantor (A) who are authorized to
sign the Loan Documents to which the Borrower, Holdings or such Guarantor is a
party and (B) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in connection with
this Agreement and the transactions contemplated hereby, (iii) specimen
signatures of such authorized officers, and (iv) the articles or certificate of
formation and limited liability company agreements (or comparable Organizational
Documents for any Credit Parties that are not limited liability companies) of
the Borrower, Holdings and such Guarantor, certified as being true and complete
as of the Initial Funding Date. The Administrative Agent and the Lenders may
conclusively rely on such certificate until the Administrative Agent receives
notice in writing from the Borrower to the contrary.

(c)    The Administrative Agent shall have received customary certificates as of
a recent date prior to the Initial Funding Date reasonably satisfactory to the
Administrative Agent of the appropriate State agencies where such entity is
formed or incorporated with respect to the existence, qualification and good
standing of Holdings, the Borrower and each Guarantor.

 

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(d)    The Administrative Agent shall have received duly executed Notes payable
to each Lender requesting a Note, if any, in a principal amount equal to (i) its
Maximum Credit Amount in the case of the Lenders and (ii) the commitment to make
Swingline Loans in the case of the initial Swingline Lender, in each case, dated
as of the Initial Funding Date.

(e)    The Administrative Agent shall have received from each party thereto duly
executed counterparts (in such number as may be requested by the Administrative
Agent) of the Security Instruments required as of the Initial Funding Date,
including the Guaranty Agreement, the Holdings Pledge Agreement, the Pledge and
Security Agreement, the Mortgages and the other Security Instruments described
on Exhibit E. In connection with the execution and delivery of the Security
Instruments, the Administrative Agent shall:

(i)    have received Security Instruments that will, when properly recorded (or
when the applicable financing statements related thereto are properly filed or
such other actions needed to perfect are taken) create first priority, perfected
Liens (after giving effect to Excepted Liens identified in clauses (a) through
(d) and (f) of the definition thereof, but subject to the provisos at the end of
such definition) on at least 50% of the PV-9 of the Oil and Gas Properties
evaluated in the Initial Reserve Report; and

(ii)    have received certificates, together with undated, blank stock powers
for each such certificate, representing all of the issued and outstanding Equity
Interests of the Borrower and each Subsidiary of the Borrower that is a Material
Subsidiary that are evidenced by certificates.

(f)    The Administrative Agent shall have received (i) an opinion of Sidley
Austin LLP, special counsel to the Borrower, Holdings and the Guarantors and
(ii) an opinion of Conner & Winters LLP, Oklahoma counsel to the Borrower and
the Guarantors and such other local counsel opinions reasonably requested by the
Administrative Agent, in each case, in form and substance acceptable to the
Administrative Agent and its counsel.

(g)    The Administrative Agent shall have received the Initial Reserve Report.

(h)    The Administrative Agent shall have received certificates of insurance
coverage of the Credit Parties evidencing that the Credit Parties are carrying
insurance in accordance with Section 7.12.

(i)    The Administrative Agent shall have received title information (including
usual and customary title opinions in the Borrower’s possession) setting forth
the status of title to at least 50% of PV-9 of the Borrowing Base Properties in
the Initial Reserve Report consistent with usual and customary standards for the
geographic regions in which such Borrowing Base Properties are located.

(j)    The Arrangers shall have received (i) GAAP audited consolidated balance
sheets and related statements of income, stockholders’ equity and cash flows of
Holdings for fiscal years 2017 and 2018 (and the Arrangers confirm that they
have received the consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of Holdings described

 

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in this clause (i)), (ii) unaudited consolidated balance sheets and related
statements of operations, equity and cash flows of the Borrower for each
subsequent fiscal quarter (other than the fourth fiscal quarter of any fiscal
year) ended at least sixty (60) days prior to the Initial Funding Date (in each
case, together with the corresponding period from the prior fiscal year), (iii)
GAAP audited consolidated balance sheets and related statements of income,
stockholders’ equity and cash flows of Roan for the three (3) most recently
completed fiscal years ended at least seventy-five (75) days prior to the
Initial Funding Date, (iv) unaudited consolidated balance sheets and related
statements of operations, stockholders’ equity and cash flows of Roan for each
subsequent fiscal quarter (other than the fourth fiscal quarter of any fiscal
year) ended at least sixty (60) days before the Initial Funding Date (in each
case, together with the corresponding comparative period from the prior fiscal
year) (collectively, the items described in clauses (i) through (iv), the
“Initial Financial Statements”) and (v) a cash flow forecast and budget model
for each fiscal quarter ending after October 1, 2019, and prior to December 31,
2020, and the Arrangers confirm that they have received the cash flow forecast
and budget model set forth in this clause (v). The information provided to the
Arrangers pursuant to the preceding clause (v) need not be prepared in
compliance with GAAP or Regulation S-X of the Securities Act of 1933, as
amended, or include adjustments for purchase accounting (including adjustments
of the type contemplated by ASC 805, Business Combinations (formerly SFAS
141R)).

(k)    The Arrangers shall have received a pro forma unaudited consolidated
balance sheet and related pro forma unaudited consolidated statements of income
of the Borrower, as of and for the twelve (12) month period ending on the last
day of the most recently completed four (4) fiscal quarter period ended at least
seventy-five (75) days prior to the Initial Funding Date for which financial
statements were delivered for both the Borrower and its consolidated
subsidiaries and Roan and its Consolidated Subsidiaries under Section 6.02(j)(i)
through (iv) above, prepared after giving effect to the Transactions as if the
Transactions had occurred as of such date (in the case of such balance sheet) or
at the beginning of such period (in the case of such statement of income).

(l)    The Arrangers shall have received, with respect to both the Borrower and
Roan, monthly production and accounting lease operating statements for (i) the
fourteen (14) months ended June 30, 2019, and the Arrangers confirm that they
have received the monthly production and lease operating statements set forth in
this Section 6.02(l)(i) and (ii) each month ending at least ninety (90) calendar
days prior to the Initial Funding Date.

(m)    The Administrative Agent shall have received customary lien search
results for Holdings, the Borrower and the other Credit Parties in their
respective jurisdictions of formation and in the counties of their respective
chief executive offices.

(n)    The Administrative Agent shall have received a solvency certificate from
the Chief Financial Officer of the Borrower substantially in the form of Exhibit
M.

(o)    The Administrative Agent shall have received from Holdings and the Credit
Parties at least three (3) Business Days prior to the Initial Funding Date, to
the extent reasonably requested in writing by the Lenders or the Administrative
Agent at least ten (10) Business Days prior to Initial Funding Date, all
documentation and other information that they reasonably determine is required
by regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including the PATRIOT Act.

 

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(p)    The Administrative Agent shall have received a certificate from a
Responsible Officer of the Borrower, dated as of the Initial Funding Date,
certifying that the Roan Acquisition shall have been consummated, or shall be
consummated substantially concurrently with the initial Borrowing under this
Agreement and the receipt by the Borrower of the Equity Contribution, in
accordance with the terms of the Acquisition Agreement, in the form provided to
counsel to the Arrangers on October 1, 2019, which Acquisition Agreement shall
not have been amended or waived or otherwise modified, and neither Holdings nor
any of its Affiliates shall have given a material consent thereunder, in each
case, in a manner materially adverse to the Arrangers without the consent of the
Arrangers (such consent not to be unreasonably withheld, delayed or conditioned)
(it being understood that (i) any substantive modification, amendment, consent
or waiver to the definition of Company Material Adverse Effect shall be deemed
to be material and adverse to the interests of the Lenders and the Arrangers,
(ii) any increase in the purchase price of the Roan Acquisition shall be deemed
not to be materially adverse to the Arrangers so long as such increase is funded
by cash on hand or cash equity contributions to or on behalf of the Borrower
(with all contributions to the Borrower to be in the form of common equity or
“qualified preferred” equity reasonably acceptable to the Arrangers) and
(iii) any reduction in the purchase price of the Roan Acquisition shall not be
deemed to be material and adverse to the interests of the Arrangers).

(q)    The Administrative Agent shall have received a certificate from a
Responsible Officer of the Borrower, dated as of the Initial Funding Date,
certifying that the Specified Acquisition Agreement Representations are true and
correct and the Specified Representations are true and correct in all material
respects, except, in each case, to the extent that any such representation or
warranty is already qualified by materiality, material adverse effect or other
similar qualification, in which case such representation or warranty is true and
correct in all respects.

(r)    The Administrative Agent shall have received a certificate from a
Responsible Officer of the Borrower, dated as of the Initial Funding Date,
certifying that the Borrower has directly or indirectly received cash equity
contributions (with all such contributions in the form of common Equity
Interests or “qualified preferred” Equity Interests reasonably acceptable to the
Arrangers) in connection with the Transactions to or on behalf of the Borrower
in an aggregate amount (the “Equity Contribution”) such that (i) the Equity
Contribution is in an amount not less than 45% of the sum (without duplication)
of (A) the aggregate amount payable on the Initial Funding Date pursuant to the
Acquisition Agreement including fees and expenses in connection with the
Transactions and (B) the amounts necessary to consummate the refinancing of
existing third-party indebtedness for borrowed money of Roan and (ii) the Equity
Contribution, when aggregated with all other cash equity contributions that have
been made to the Borrower by the Sponsor, the Permitted Holders and the other
investors of the Borrower prior to October 1, 2019 (such aggregate amount, the
“Aggregate Equity Amount”), is not less than 52.50% of the sum of (x) the
Aggregate Equity Amount and (y) the aggregate amount of Debt of the Borrower
outstanding on the Initial Funding Date after giving effect to the Transactions,
including the initial extensions of credit under this Agreement.

 

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(s)    The Administrative Agent shall have received, or concurrently with the
Initial Funding Date shall receive (i) evidence that all debt for borrowed money
of the Borrower (other than under the Existing Credit Agreement or debt
otherwise permitted to remain outstanding), Roan and their respective
Subsidiaries shall have been paid in full and all commitments to lend terminated
and (ii) reasonably satisfactory duly executed recordable releases and
terminations with respect to any and all Liens not permitted by Section 9.03,
including, without limitation, with respect to any and all liens or security
interests securing the indebtedness under the Existing Credit Agreement and the
Roan Credit Agreements.

(t)    Since October 1, 2019, there has not been any change, event, development,
circumstances, condition, occurrence or effect or combination of the foregoing
that has resulted in, or could reasonably be expected to result in, a Company
Material Adverse Effect.

(u)     No later than October 31, 2019, Roan shall have entered into, and shall
have continuously maintained from such date through and including the Initial
Funding Date, Swap Agreements (by the Borrower or by Roan on the Borrower’s
behalf) with respect to anticipated projected production of Roan attributable to
Proved Developed Producing Reserves of Roan for each of crude oil, natural gas
liquids and natural gas, calculated separately and on a projected revenue basis
as set forth on Schedule 6.02 hereto (it being understood and agreed that such
minimum required Swap Agreements shall have had strike prices not less than 90%
of the forward curve prices for crude oil, natural gas liquids and natural gas
as of the date that such Swap Agreements were entered into).

(v)    The Administrative Agent shall have received a Borrowing Request in
accordance with Section 2.03 and/or a request for a Letter of Credit in
accordance with Section 2.08(b), as applicable.

(w)    After giving effect to the Transactions on the Initial Funding Date
(including the initial Borrowings hereunder and any Letters of Credit issued),
the Borrower shall have a minimum Unused Availability of not less than
$108,750,000.

(x)    A period of fifteen (15) consecutive Business Days shall have passed
following the later of (i) the receipt by the Arrangers of (A) the financial
statements set forth in Sections 6.02(j)(i) and (v), (B) an updated and final
financial model of the Credit Parties, prepared by the Sponsor on a pro forma
basis after giving effect to the Transactions and (C) the monthly production and
accounting lease operating statements set forth in Section 6.02(l)(i) and
(ii) October 1, 2019, and the Arrangers confirm that such fifteen
(15) consecutive Business Day period has passed.

(y)    The Effective Date shall have occurred.

(z)    The Administrative Agent shall have received, at least three (3) Business
Days prior to the Initial Funding Date, Schedules 1.02(a), 1.02(b), 1.02(c),
7.13, 7.16, 7.17, 7.18, 8.20 (which shall be subject to mutual agreement of the
Administrative Agent and the Borrower), 9.02 and 9.05.

 

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Notwithstanding anything to the contrary in this Section 6.02, to the extent any
closing deliverables of Collateral (including the creation or perfection of any
security interest) are not or cannot be provided on the Initial Funding Date
(other than (i) a Lien on Collateral that may be perfected solely by the filing
of a financing statement under the UCC, (ii) the delivery of equity certificates
(and related equity powers) of the Borrower and its material wholly-owned
Restricted Subsidiaries that are part of the Collateral and (iii) delivery of
counterparts of mortgages (with originals to follow promptly after the Initial
Funding Date) covering not less than 50% of the PV-9 of the Oil and Gas
Properties evaluated in the Initial Reserve Report after the Borrower’s use of
commercially reasonable efforts to do so without undue burden or expense (it
being understood that the Borrower shall use its commercially reasonable efforts
to deliver executed Mortgages on the Initial Funding Date encumbering not less
than 85% of the PV-9 of the Oil and Gas Properties evaluated in the Initial
Reserve Report)), then the provision of any such closing deliverables and/or the
provision and/or perfection of such Collateral shall not constitute a condition
precedent to the availability and initial funding of the Loans on the Initial
Funding Date but may instead be delivered and/or perfected within sixty
(60) days (or such longer period as the Administrative Agent may reasonably
agree in its discretion) after the Initial Funding Date pursuant to arrangements
to be mutually agreed by the Administrative Agent and Borrower, each acting
reasonably.

The Administrative Agent shall notify the Borrower and the Lenders of the
Initial Funding Date, and such notice shall be conclusive and binding.

Section 6.03    Each Credit Event. The obligation of each Lender to make a Loan
on the occasion of any Borrowing (other than the initial funding), and of the
Issuing Banks to issue, amend, renew or extend any Letter of Credit (other than
on the Initial Funding Date) 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, Event of Default or Borrowing Base Deficiency shall have
occurred and be continuing.

(b)    The representations and warranties of the Borrower and the Guarantors set
forth in this Agreement and in the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Borrowing or the
date of issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, except to the extent any such representations and warranties (i) 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 or (ii) are already qualified by materiality, Material Adverse
Effect or a similar qualification, in which case, such representations and
warranties shall be true and correct in all respects.

(c)    The receipt by the Administrative Agent of a Borrowing Request in
accordance with Section 2.03 or a request for a Letter of Credit (or an
amendment, extension or renewal of a Letter of Credit) in accordance with
Section 2.08(b), as applicable.

 

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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(a) and (b).

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

Each of the Borrower and Holdings (solely in respect of Sections 7.11, 7.13 and
7.21) represents and warrants to the Lenders on each date specified in this
Agreement for representations and warranties to be made or deemed made that:

Section 7.01    Organization; Powers. Each of the Borrower and the Restricted
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority, and has all material governmental licenses, authorizations, consents
and approvals necessary, to own its assets and to carry on its business as now
conducted, and is qualified to do business in, and is in good standing (if
applicable) in, every jurisdiction where such qualification is required by
Governmental Requirement, except where failure to have such power, authority,
licenses, authorizations, consents, approvals and qualifications or be in good
standing could not reasonably be expected to have a Material Adverse Effect.

Section 7.02    Authority; Enforceability. The Transactions are within the
Borrower’s and each Restricted Subsidiary’s corporate, limited liability company
or partnership powers and have been duly authorized by all necessary corporate,
limited liability company or partnership action, as applicable, and, if
required, stockholder, member or manager action (including, without limitation,
any action required to be taken by any class of directors or managers of the
Borrower or any other Person, whether interested or disinterested, in order to
ensure the due authorization of the Transactions). Each Loan Document to which
the Borrower and each Restricted Subsidiary is a party has been duly executed
and delivered by the Borrower and such Restricted Subsidiary and constitutes a
legal, valid and binding obligation of the Borrower and such Restricted
Subsidiary, as applicable, each enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.

Section 7.03    Approvals; No Conflicts. The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority or any other third Person (including shareholders or any
class of directors or managers, as applicable, whether interested or
disinterested, of the Borrower or any other Person), nor is any such consent,
approval, registration, filing or other action necessary for the validity or
enforceability of any Loan Document or the consummation of the transactions
contemplated thereby, except such as have been obtained or made and are in full
force and effect other than (i) the recording and filing

 

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of the Security Instruments as required by this Agreement and (ii) those third
party approvals or consents which, if not made or obtained, would not cause a
Default hereunder, could not reasonably be expected to have a Material Adverse
Effect or do not have an adverse effect on the enforceability of the Loan
Documents, (b) will not violate any applicable material provision of law or
regulation or the charter, bylaws or other Organizational Documents of the
Borrower or any Restricted Subsidiary or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture in
respect of Material Debt, agreement or other instrument binding upon the
Borrower or any Restricted Subsidiary or any of their Properties, or give rise
to a right thereunder to require any payment to be made by the Borrower or such
Restricted Subsidiary, except for violations that could not individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect,
(d) will not violate or result in a default under any Acquisition Document, and
(e) will not result in the creation or imposition of any Lien on any Property of
the Borrower or any Restricted Subsidiary (other than the Liens created by the
Loan Documents).

Section 7.04    Financial Condition; No Material Adverse Effect.

(a)    The Borrower has heretofore furnished to the Lenders the Initial
Financial Statements. The Initial Financial Statements do not, taken as a whole,
contain any untrue statement of material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not materially misleading.

(b)    Since the Initial Funding Date, there has been no event, development or
circumstance that has had or could reasonably be expected to have a Material
Adverse Effect.

(c)    Neither the Borrower nor any Restricted Subsidiary has on the Initial
Funding Date any Material Debt (including Disqualified Capital Stock) or any
contingent liabilities, off-balance sheet liabilities or partnerships, 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 information delivered pursuant to Section 6.02(j) and as permitted under
this Agreement and adequate reserves for such items have been made in accordance
with GAAP.

Section 7.05    Litigation.

(a)    Except as set forth on Schedule 7.05, there are no actions, suits,
investigations or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened in
writing against the Borrower or any Restricted Subsidiary which are not fully
covered by insurance (except for customary deductibles) and that, if adversely
determined, would reasonably be expected, individually or in the aggregate, to
result in any Material Adverse Effect.

(b)    Since the Effective Date, there has been no change in the status of the
matters disclosed in Schedule 7.05 that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.

 

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Section 7.06    Environmental Matters. Except for such matters as set forth on
Schedule 7.06 or that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect:

(a)    The Borrower and its Restricted Subsidiaries and each of their respective
Properties and respective operations thereon (i) are and have been in compliance
with all applicable Environmental Laws; and (ii) have not received notice of,
any conditions, events, or incidents in connection with any operation at such
Properties that would reasonably be expected to interfere with or prevent such
compliance or continued compliance with Environmental Laws;

(b)    The Borrower and its Restricted Subsidiaries have obtained all
Environmental Permits required for their respective operations and respective
ownership of their Properties, with all such Environmental Permits being
currently in full force and effect, and none of Borrower or its Restricted
Subsidiaries has received any written notice or otherwise has knowledge that any
such existing Environmental Permit will be revoked or that any application for
any new Environmental Permit or renewal of any existing Environmental Permit
will be protested or denied;

(c)    There are no claims, demands, suits, orders, inquiries or proceedings
concerning any violation of, or liability (including as a potentially
responsible party) under, any applicable Environmental Laws pending or, to the
Borrower’s knowledge, threatened against the Borrower or any Subsidiary or, to
the Borrower’s knowledge, any of their respective Properties or as a result of
any operations at such Properties;

(d)    None of the Properties of the Borrower or any Restricted Subsidiary
contain or have contained any: (i) underground storage tanks requiring permits
under Environmental Law; (ii) asbestos-containing materials requiring removal
pursuant to Environmental Law; (iii) landfills or dumps requiring an
Environmental Permit pursuant to Environmental Law; (iv) hazardous waste
management units as defined pursuant to RCRA or any comparable state law or
(v) sites on or nominated for the National Priority List promulgated pursuant to
CERCLA or any state remedial priority list promulgated or published pursuant to
any comparable state law and the Borrower and any Restricted Subsidiary is in
substantial compliance with all applicable financial responsibility requirements
of all Environmental Laws;

(e)    There has been no Release or, to the Borrower’s knowledge, threatened
Release of Hazardous Materials at, on, under or from the Borrower’s or any
Restricted Subsidiary’s Properties in violation of Environmental Law, there are
no investigations, remediations, abatements, removals, or monitorings of
Hazardous Materials required under applicable Environmental Laws at such
Properties and, to the knowledge of the Borrower, none of such Properties are
adversely affected by any Release or threatened Release of a Hazardous Material
originating or emanating from any other real property, and no Borrower or
Restricted Subsidiary has filed or failed to file, any notice required of such
Persons under applicable Environmental Law related to a reportable Release of
Hazardous Materials;

(f)    Neither the Borrower nor any Restricted Subsidiary has received any
written notice asserting an alleged liability or obligation of the Borrower or
any Restricted

 

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Subsidiary under any applicable Environmental Laws with respect to the
investigation, remediation, abatement, removal, or monitoring of any Hazardous
Materials at, under, or Released or threatened to be Released from the
Borrower’s or any Restricted Subsidiary’s Properties or any real properties
offsite the Borrower’s or any Restricted Subsidiary’s Properties, including a
letter or request for information under Section 104(e) of CERCLA (42 U.S.C. §
9604) or any comparable state law, and, to the Borrower’s knowledge, there are
no conditions or circumstances that could reasonably be expected to result in
the receipt of such written notice;

(g)    There has been no exposure of any Person or Property to any Hazardous
Materials as a result of or in connection with the operations and businesses of
Borrower or any Restricted Subsidiary at any of the Borrower’s or its Restricted
Subsidiaries’ Properties that could reasonably be expected to form the basis for
a claim for damages or compensation for which the Borrower or any Restricted
Subsidiary would be liable under Environmental Laws;

(h)    There are no conditions or circumstances associated with any of the
Borrower’s, nor any Restricted Subsidiary’s currently or, to the Borrower’s
knowledge, previously owned or leased real properties that could reasonably be
expected to give rise to the imposition of any material liabilities under any
Environmental Laws against any Credit Party as a result of any of their
operations at such properties; and

(i)    The Borrower and its Restricted Subsidiaries have made available to the
Lenders complete and correct copies of all environmental site assessment
reports, investigations, studies, analyses, and correspondence on environmental
matters (including matters relating to any alleged non-compliance with or
liability under Environmental Laws) requested by the Administrative Agent that
are in any of the Borrower’s or the Restricted Subsidiaries’ possession or
control and relating to their respective Properties or operations thereon.

Section 7.07    Compliance with Laws and Agreements; No Defaults, Event of
Default or Borrowing Base Deficiency.

(a)    Each of the Borrower and each Restricted Subsidiary is in compliance with
all Governmental Requirements applicable to it or its Property and all
agreements and other instruments binding upon it or its Property, and possesses
all licenses, permits, franchises, exemptions, approvals and other governmental
authorizations necessary for the ownership of its Property and the conduct of
its business, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.

(b)    No Default, Event of Default or Borrowing Base Deficiency has occurred
and is continuing.

Section 7.08    Investment Company Act. Neither the Borrower nor any Restricted
Subsidiary is required to be registered as an “investment company” under the
Investment Company Act of 1940, as amended.

Section 7.09    Taxes. Each of the Borrower and its Restricted Subsidiaries 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

 

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(a) Taxes that are being contested in good faith by appropriate proceedings and
for which the Borrower or such Restricted Subsidiary, as applicable, has set
aside on its books adequate reserves in accordance with GAAP or (b) to the
extent that failure to do so could not reasonably be expected to result in a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Borrower and its Restricted Subsidiaries in respect of Taxes and other
governmental charges are, in the reasonable opinion of the Borrower, adequate.
No material Tax Lien (other than Tax Liens that constitute Excepted Liens) has
been filed.

Section 7.10    ERISA. Except for such matters that, individually or in the
aggregate, could not reasonably be expected to have Material Adverse Effect:

(a)    The Borrower, its Restricted Subsidiaries and each ERISA Affiliate have
complied in all material respects with ERISA and, where applicable, the Code
regarding each Plan.

(b)    Each Plan is, and has been, established and maintained in substantial
compliance with its terms, ERISA and, where applicable, the Code.

(c)    No act, omission or transaction has occurred with respect to a Plan which
could reasonably be expected to result in imposition on the Borrower, any
Restricted Subsidiary or any ERISA Affiliate (whether directly or indirectly) of
(i) either a civil penalty assessed pursuant to subsections (c), (i), (l) or
(m) of Section 502 of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under
Section 409 of ERISA.

(d)    Full payment when due has been made of all amounts which the Borrower,
its Restricted Subsidiaries or any ERISA Affiliate is required under the terms
of each Plan or applicable law to have paid as contributions to such Plan as of
the Effective Date.

(e)    No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to have a Material
Adverse Effect.

(f)    Neither the Borrower, its Restricted Subsidiaries nor any ERISA Affiliate
sponsors, maintains, or contributes to an employee welfare benefit plan, as
defined in Section 3(1) of ERISA that provides benefits to former employees of
such entities and that may not be terminated by the Borrower, a Restricted
Subsidiary or any ERISA Affiliate in its sole discretion at any time without any
material liability.

(g)    Neither the Borrower, its Restricted Subsidiaries nor any ERISA Affiliate
sponsors, maintains or contributes to, or has at any time in the six (6) year
period preceding the Effective Date sponsored, maintained or contributed to, any
employee pension benefit plan, as defined in Section 3(2) of ERISA, that is
subject to Title IV of ERISA, Section 302 of ERISA or Section 412 of the Code.

 

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Section 7.11    Disclosure; No Material Misstatements.

(a)    Each of Holdings and the Borrower has disclosed to the Administrative
Agent and the Lenders all agreements, instruments and corporate or other
restrictions to which it or any of its Restricted Subsidiaries is subject, and
all other matters known to it, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of the other
reports, financial statements, certificates or other factual information
furnished by or on behalf of Holdings, the Borrower or any Restricted Subsidiary
in writing to the Administrative 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), taken as a whole, contains any
untrue statement of material 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 materially misleading; provided that, with respect to
projected financial information, each of Holdings and the Borrower represents
only that such information was prepared in good faith based upon assumptions
believed by Holdings or the Borrower to be reasonable at the time it being
understood that (i) any such projected financial information is merely a
prediction as to future events and its not to be viewed as fact, (ii) such
projected financial information is subject to significant uncertainties and
contingencies, many of which are beyond the control of Holdings, the Borrower or
any of its Subsidiaries and (iii) no assurance can be given that any particular
projections will be realized and that actual results during the period or
periods covered by any such projections may differ significantly from the
projected results and such differences may be material. There are no statements
or conclusions in any Reserve Report which are based upon or include materially
misleading information or fail to take into account material information
regarding the matters reported therein, it being understood that projections
concerning volumes attributable to the Oil and Gas Properties of the Borrower
and its Restricted Subsidiaries and production and cost estimates contained in
each Reserve Report are necessarily based upon professional opinions, estimates
and projections and that Holdings, the Borrower and its Restricted Subsidiaries
do not warrant that such opinions, estimates and projections will ultimately
prove to have been accurate.

(b)    As of the Effective Date, to the knowledge of Holdings or the Borrower,
as applicable, the information included in the Beneficial Ownership
Certification provided on or prior to the Effective Date to any Lender in
connection with this Agreement is true and correct in all respects.

Section 7.12    Insurance. The Borrower has, and has caused all of its
Restricted Subsidiaries to have with respect to its business and properties,
(a) all insurance policies sufficient for the compliance by each of them with
all material Governmental Requirements and all material agreements and
(b) insurance coverage in at least amounts and against such risk (including,
without limitation, public liability) that are customarily insured against by
business entities similarly situated and engaged in the same or a similar
business for the assets and operations of the Borrower and its Restricted
Subsidiaries (as determined in the reasonable business judgment of the senior
management of the Borrower). The Administrative Agent and the Lenders have (or
will be substantially concurrently with the Initial Funding Date) been named as
additional insureds in respect of such liability insurance policies and the
Administrative Agent has been named as lender loss payee and mortgagee with
respect to Property loss insurance.

 

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Section 7.13    Subsidiaries. Except as set forth on Schedule 7.13 or as
disclosed in writing to the Administrative Agent (which shall promptly furnish a
copy to the Lenders), which shall be a supplement to Schedule 7.13, Holdings and
the Borrower have no Subsidiaries or Foreign Subsidiaries. Schedule 7.13
identifies each Subsidiary as either a Restricted Subsidiary or Unrestricted
Subsidiary. As of the Initial Funding Date, each Subsidiary listed on
Schedule 7.13 is a Wholly-Owned Subsidiary.

Section 7.14    Properties; Titles, Etc.

(a)    Except for Immaterial Title Deficiencies, each of the Borrower and the
Restricted Subsidiaries has good and defensible title to the Oil and Gas
Properties evaluated in the most recently delivered Reserve Report (except for
those Oil and Gas Properties that have been disposed of since the date of such
Reserve Report in accordance with this Agreement or leases which have expired in
accordance with their terms) and valid title to all its material personal
Properties, in each case, free and clear of all Liens except Liens permitted by
Section 9.03. After giving full effect to the Excepted Liens, the Borrower or
the Restricted Subsidiary specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most
recently delivered Reserve Report (except for those Oil and Gas Properties that
have been disposed of since the date of such Reserve Report in accordance with
this Agreement or leases which have expired in accordance with their terms), and
the ownership of such Properties shall not in the aggregate in any material
respect obligate the Borrower or such Restricted Subsidiary to bear the costs
and expenses relating to the maintenance, development and operations of each
such Property in an amount in excess of the working interest of each Property
set forth in the most recently delivered Reserve Report that is not offset by a
corresponding proportionate increase in the Borrower’s or such Restricted
Subsidiary’s net revenue interest in such Property.

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

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

(d)    All of the Properties of the Borrower and its Restricted Subsidiaries
which are reasonably necessary for the operation of their businesses are in good
working condition and are maintained in accordance with prudent business
standards.

(e)    The Borrower and each Restricted Subsidiary owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and such
Subsidiary does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could

 

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not reasonably be expected to result in a Material Adverse Effect. The Borrower
and its Restricted Subsidiaries 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.

Section 7.15    Maintenance of Properties. Except for such acts or failures to
act as could not be reasonably expected to have a Material Adverse Effect, the
Oil and Gas Properties (and Properties unitized therewith) of the Borrower and
its Restricted Subsidiaries have been maintained, operated and developed in a
good and workmanlike manner and in conformity with all Governmental Requirements
and in conformity with the provisions of all leases, subleases or other
contracts comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties of the Borrower and its
Restricted Subsidiaries. Specifically in connection with the foregoing, except
for those as could not be reasonably expected to have a Material Adverse Effect,
(a) no Oil and Gas Property of the Borrower or any Restricted Subsidiary is
subject to having allowable production reduced below the full and regular
allowable (including the maximum permissible tolerance) because of any
overproduction (whether or not the same was permissible at the time) and
(b) none of the wells comprising a part of the Oil and Gas Properties (or
Properties unitized therewith) of the Borrower or any Restricted Subsidiary is
deviated from the vertical more than the maximum permitted by Governmental
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) of the Borrower or such Restricted Subsidiary. All pipelines, wells,
gas processing plants, platforms and other material improvements, fixtures and
equipment owned in whole or in part by the Borrower or any of its Restricted
Subsidiaries that are necessary to conduct normal operations are being
maintained in a state adequate to conduct normal operations, and with respect to
such of the foregoing which are operated by the Borrower or any of its
Restricted Subsidiaries, in a manner consistent with the Borrower’s or its
Restricted Subsidiaries’ past practices (other than those the failure of which
to maintain in accordance with this Section 7.15 could not reasonably be
expected to have a Material Adverse Effect).

Section 7.16    Gas Imbalances; Prepayments. Except as set forth on
Schedule 7.16 and thereafter either disclosed in writing to the Administrative
Agent and the Lenders or included in the most recent Reserve Report Certificate
or as disclosed in writing to the Administrative Agent and the Lenders, on a net
basis there are no imbalances, take or pay or other prepayments which would
require the Borrower or any of its Restricted Subsidiaries to deliver
Hydrocarbons produced from their Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor other than
imbalances, take-or-pay or other prepayments and balancing rights incurred in
the ordinary course of business and which imbalances, take-or-pay, or other
prepayments and balancing rights, in the aggregate, do not exceed one half bcf
of gas (on an mcf equivalent basis) in the aggregate.

 

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Section 7.17    Marketing of Production. On the Initial Funding Date, except as
set forth on Schedule 7.17, no material agreements exist (which are not
cancelable on one hundred twenty (120) days’ notice or less without penalty or
detriment) for the sale of production of the Credit Parties’ Hydrocarbons at a
fixed non-index price (including, without limitation, calls on or other rights
to purchase, production, whether or not the same are currently being exercised)
that (a) represent in respect of such agreements 2.50% or more of the Credit
Parties’ average monthly production of Hydrocarbon volumes and (b) have a
maturity or expiry date of longer than six (6) months from the effective date of
such agreement.

Section 7.18    Swap Agreements and Qualified ECP Guarantor. Schedule 7.18, as
of the Initial Funding Date, and thereafter either disclosed in writing to the
Administrative Agent and the Lenders or included in the most recently delivered
report required to be delivered by the Borrower pursuant to Section 8.01(e), as
of the date thereof, sets forth, a true and complete list of all Swap Agreements
of the Borrower and each Restricted Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net mark to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied) and the
counterparty to each such agreement. The Borrower is a Qualified ECP Guarantor.

Section 7.19    Use of Loans and Letters of Credit. The proceeds of the Loans
and the Letters of Credit shall be used (a) on the Initial Funding Date, for
(i) the refinancing of all amounts currently due under the Existing Credit
Agreement and the Roan Credit Agreements, (ii) to pay the consideration in
connection with the Roan Acquisition and any other consideration required under
the Acquisition Agreement and (iii) the payment of fees and expenses incurred in
connection with the Transactions on the Initial Funding Date and (b) after the
Initial Funding Date, (i) to provide working capital for exploration and
production operations, (ii) for acquisitions of Oil and Gas Properties permitted
hereunder and (iii) for general corporate purposes of the Borrower and its
Restricted Subsidiaries. The Borrower and its Restricted Subsidiaries are not
engaged principally, or as one of its or their important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of
Regulation T, U or X of the Board). No part of the proceeds of any Loan or
Letter of Credit will be used for any purpose which violates the provisions of
Regulations T, U or X of the Board.

Section 7.20    Solvency. Immediately after giving effect to the transactions
contemplated hereby (including, without limitation, each Borrowing or the
issuance, increase, or extension of each Letter of Credit hereunder) (a) the sum
of the Debt (including contingent liabilities) of the Borrower and its
Subsidiaries, on a consolidated basis, does not exceed the present fair saleable
value of the present assets of the Borrower and its Subsidiaries, on a
consolidated basis, (b) the capital of the Borrower

 

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and its Subsidiaries, on a consolidated basis, is not unreasonably small in
relation to their business, (c) the Borrower and its Subsidiaries, on a
consolidated basis, have not incurred and do not intend to incur, or believe
that they will incur, debts including current obligations, beyond their ability
to pay such debts as they become due (whether at maturity or otherwise), and
(d) the Borrower and its Subsidiaries, on a consolidated basis, are “solvent”
within the meaning given to that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances.

Section 7.21    Anti-Corruption Laws, Sanctions and PATRIOT Act. Each of
Holdings and each Credit Party has implemented and maintains in effect such
policies and procedures, if any, as it reasonably deems appropriate, in light of
its business and international activities (if any), to ensure compliance by
Holdings, the Credit Parties and their respective directors, officers, employees
and agents with Anti-Corruption Laws and applicable Sanctions, and Holdings, the
Credit Parties and their respective officers, directors and employees, to the
knowledge of Holdings, the Credit Parties and their respective officers,
directors and employees and agents, are in compliance with Anti-Corruption Laws
and applicable Sanctions in all material respects. None of (a) Holdings, the
Credit Parties or any of their respective directors, officers or employees, or
(b) to Holdings’ and the Borrower’s direct knowledge, any agent of Holdings or
the Credit Parties that will act in any capacity in connection with or benefit
from the credit facility established hereby, is a Sanctioned Person. No
Borrowing or Letter of Credit, direct use of proceeds or other transaction by
Holdings or the Credit Parties contemplated by this Agreement will unlawfully
violate any Anti-Corruption Law or applicable Sanctions. Holdings, the Borrower
and each of its Subsidiaries is in compliance in all material respects with the
PATRIOT Act.

Section 7.22    EEA Financial Institutions. No Credit Party is an EEA Financial
Institution.

Section 7.23    Security Instruments. The Security Instruments are effective to
create in favor of the Administrative Agent, for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral and
proceeds thereof, subject, in the case of enforceability, to applicable
bankruptcy, insolvency or similar laws affecting creditors’ rights generally and
to general principles of equity and principles of good faith and fair dealing.
Subject to the post-Initial Funding Date delivery periods set forth herein, the
Indebtedness is and shall be at all times secured by legal, valid and
enforceable, perfected first priority Liens in favor of the Administrative
Agent, covering and encumbering the Collateral (subject only to permitted Liens
under Section 9.03).

ARTICLE VIII

AFFIRMATIVE COVENANTS

Commencing on the Initial Funding Date and 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 (other than

 

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contingent indemnity obligations for which no claim has been made) and all
Letters of Credit shall have expired or terminated and all LC Disbursements
shall have been reimbursed, the Borrower covenants and agrees with the Lenders
that:

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

(a)    Annual Financial Statements. (i) Not later than (A)(I) if the Initial
Funding Date has occurred on or prior to December 31, 2019, one hundred fifty
(150) days after the end of the fiscal year of the Borrower ending December 31,
2019 or (II) if the Initial Funding Date has not occurred on or prior to
December 31, 2019, one hundred twenty (120) days after the end of the fiscal
year of the Borrower ending December 31, 2019 and (B) one hundred twenty
(120) days after the end of each fiscal year of the Borrower ending on or after
December 31, 2020, its audited consolidated balance sheet and related statements
of operations, members’ 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 (except for the fiscal year ending December 31, 2019, for
which no comparison shall be required to be delivered), all reported on by
independent public accountants of recognized national standing (without a “going
concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit other than (x) a “going concern” or
other qualification that results solely from the Maturity Date being scheduled
to occur within one year from the time such opinion is delivered or (y) from any
potential inability to satisfy any covenant in Section 9.01 or any other
financial covenant in any Debt document on a future date or in a future period),
without qualification as to scope of audit to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its Consolidated
Subsidiaries and Holdings and its Subsidiaries, in each case on a consolidated
basis in accordance with GAAP consistently applied. (ii) Not later than
March 31, 2020, if the Initial Funding Date occurs on or after January 1, 2020
and on or prior to March 31, 2020, consolidated balance sheet and related
statements of operations, members’ equity and cash flows as of the end of and
for the fiscal year ending December 31, 2019 of Roan (which, to the extent
available, shall be audited).

(b)    Quarterly Financial Statements. Not later than (i) ninety (90) days after
the first fiscal quarter ending after the Initial Funding Date and (ii) sixty
(60) days after the end of each of the first three (3) fiscal quarters of each
fiscal year of the Borrower for each fiscal quarter ending thereafter, its
consolidated balance sheet and related statements of operations, members’ equity
and cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower 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 (b), a certificate of
a Financial Officer in substantially the form of Exhibit D hereto (i) certifying
as to whether a Default has occurred and,

 

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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 and
(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 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate.

(d)    Certificate of Financial Officer – Consolidating Information. If, at any
time, all of the Consolidated Subsidiaries of the Borrower are not Consolidated
Restricted Subsidiaries, then concurrently with any delivery of financial
statements under Section 8.01(a) or (b), a certificate of a Financial Officer
setting forth consolidating spreadsheets that show all Consolidated Unrestricted
Subsidiaries and the eliminating entries, in such form as would be presentable
to the auditors of the Borrower.

(e)    Certificate of Financial Officer – Swap Agreements. Concurrently with any
delivery of financial statements under Section 8.01(a) and (b), a certificate of
a Financial Officer, in form and substance satisfactory to the Administrative
Agent, setting forth as of a recent date, a true and complete list of all Swap
Agreements of the Borrower and each Restricted Subsidiary, the material terms
thereof (including the type, term, effective date, termination date and notional
amounts or volumes), the net mark-to-market value therefor, any new credit
support agreements relating thereto not listed on Schedule 7.18, any margin
required or supplied under any credit support document, and the counterparty to
each such agreement.

(f)    Projections. With each Reserve Report delivered in connection with a
Scheduled Redetermination, a reasonably detailed consolidated budget for the
following twelve (12) months (including a projected consolidated balance sheet
of the Borrower and its Subsidiaries as of the end of such twelve (12) month
period, the related quarterly consolidated statements of projected cash flow,
capital expenditures and income and a summary of the material underlying
assumptions applicable thereto) (collectively, the “Projections”), which
Projections shall have been prepared in good faith on the basis of the
assumptions stated therein, which assumptions were believed to be reasonable at
the time of preparation of such Projections, it being recognized by the
Administrative Agent and the Lenders that such Projections are as to future
events and are not to be viewed as facts, the Projections are subject to
significant uncertainties and contingencies, many of which are beyond the
control of the Borrower and the Subsidiaries, that no assurance can be given
that any particular Projections will be realized and that actual results during
the period or periods covered by any such Projections may differ from the
projected results and such differences may be material.

(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 8.06, in form and substance reasonably satisfactory to the
Administrative Agent, and, if requested by the Administrative 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 the Borrower or any of its Subsidiaries by
independent

 

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accountants (other than customary and standard correspondence) in connection
with any annual, interim or special audit made by them of the books of the
Borrower or any such Subsidiary, and a copy of any response by the Borrower or
any such Subsidiary, or the board of directors (or comparable governing body) of
the Borrower or any such Subsidiary, to such letter or report.

(i)    Lists of Purchasers. If requested by the Administrative Agent,
concurrently with the delivery of any Reserve Report to the Administrative
Agent, a list of all Persons purchasing Hydrocarbons from the Borrower or any
Restricted Subsidiary which account for greater than 10% of the revenues
resulting from the sale of all Hydrocarbons from the Borrower or any Subsidiary
during the fiscal year for which such financial statements relate.

(j)    Notice of Sales of Oil and Gas Properties and Termination of Swap
Agreements. In the event the Borrower or any Subsidiary intends to sell,
transfer, assign or otherwise dispose of (including pursuant to a casualty
event) any Oil and Gas Properties (including any midstream assets given value in
the most recently delivered Reserve Report for which the then existing Borrowing
Base was determined, but other than Hydrocarbons in the ordinary course of
business) or any Equity Interests in any Subsidiary in accordance with
Section 9.09(d), written notice of such disposition no later than two
(2) Business Days after the date of consummation of any such disposition (but in
the case of any disposition (other than a casualty event) that would result in a
Borrowing Base reduction pursuant to Section 2.07(e), no later than three
(3) Business Days prior to such disposition), the price thereof and any other
details thereof reasonably requested by the Administrative Agent. In the event
that the Borrower or any Subsidiary receives any notice of early termination of
any material Swap Agreement to which it is a party from any of its
counterparties, or any material Swap Agreement to which the Borrower or any
Subsidiary is a party is terminated, prompt written notice of the receipt of
such early termination notice or such termination, as the case may be, together
with a reasonably detailed description thereof and any other details thereof
reasonably requested by the Administrative Agent.

(k)    Information Regarding Borrower and Guarantors. Prompt written notice (and
in any event within three (3) Business Days thereafter, or such later date as
the Administrative Agent may agree in its sole discretion) of any change (i) in
the Borrower’s or any Guarantor’s organizational name, (ii) in the location of
the Borrower’s or any Guarantor’s chief executive office or principal place of
business, (iii) in the Borrower’s or any Guarantor’s identity or organizational
structure or in the jurisdiction in which such Person is incorporated or formed,
(iv) in the Borrower’s or any Guarantor’s organizational identification number
in such jurisdiction of organization, and (v) in the Borrower’s or any
Guarantor’s federal taxpayer identification number.

(l)    Incurrence of Specified Additional Debt. In the event the Borrower or any
Restricted Subsidiary intends to incur Specified Additional Debt, at least three
(3) Business Days’ (or such later date as the Administrative Agent may agree in
its sole discretion) prior written notice of such intended incurrence, the
intended principal amount thereof and the anticipated date of closing.

 

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(m)    Notices of Certain Changes. Promptly, but in any event within five (5)
Business Days after the execution thereof (or such later date as the
Administrative Agent may agree in its sole discretion), copies of any material
amendment, modification or supplement to the certificate or articles of
incorporation or formation, bylaws, certificate or articles of organization,
regulations or limited liability company agreement, any preferred stock
designation or any other Organizational Document of the Borrower or any
Restricted Subsidiary.

(n)    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 Borrower or any Restricted
Subsidiary with the SEC, or with any national securities exchange, or
distributed by the Borrower to its equityholders generally, as the case may be.

(o)    Beneficial Ownership Certification. Promptly, but in no event later than
five (5) Business Days of the occurrence of such change, written notice of any
change in the information provided in the Beneficial Ownership Certification
delivered to any Lender that would result in a change to the list of beneficial
owners identified in such certification.

(p)    Free Cash Flow Utilizations. In the event the Borrower or any Restricted
Subsidiary intends to effect a Free Cash Flow Utilization, at least two
(2) Business Days’ (or such later date as the Administrative Agent may agree in
its sole discretion) prior written notice of such intended Free Cash Flow
Utilization, including the details thereof and a certificate of a Financial
Officer in substantially the form of Exhibit O hereto setting forth reasonably
detailed calculations of Distributable Free Cash Flow (both before and after
giving effect to such Free Cash Flow Utilization) for each of the four (4) most
recently ended fiscal quarters (or, until four full fiscal quarters have been
completed after the Initial Funding Date, a period consisting of the number of
full fiscal quarters completed commencing with the fiscal quarter ending
December 31, 2019), in each case, for which financial statements have been
delivered for the Borrower pursuant to Sections 8.01(a) or (b).

(q)    Other Requested Information. Promptly following any request therefor,
(i) such other information regarding the operations, business affairs and
financial condition of the Borrower or any Subsidiary (including, without
limitation, any Plan sponsored by the Borrower or a Subsidiary and any reports
or other information required to be filed with respect thereto under the Code or
under ERISA), or compliance with the terms of this Agreement or any other Loan
Document, as the Administrative Agent or any Lender may reasonably request; or
(ii) information and documentation reasonably requested by the Administrative
Agent or any Lender for purposes of compliance with applicable “know your
customer” requirements under the PATRIOT Act, other applicable anti-money
laundering laws or the Beneficial Ownership Regulation.

Notwithstanding the foregoing, the obligations in Section 8.01(a) and (b) may be
satisfied with respect to financial information of the Borrower and the
Subsidiaries by furnishing (A) the applicable financial statements of the
Borrower (or Holdings or any other direct or indirect parent of the Borrower) or
(B) the Borrower’s (or Holdings or any other direct or indirect parent thereof),
as applicable, Form 10-K or 10-Q, as applicable, filed with the SEC; provided
that, with respect to the foregoing clauses (A) and (B), to the extent such
information relates to Holdings or a parent of the Borrower, such information is
accompanied by consolidating information that explains in reasonable detail the
differences between the information relating to the Borrower (or Holdings or
such parent), on the one hand, and the information relating to the Borrower and
the Restricted Subsidiaries on a stand-alone basis, on the other hand.

 

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Section 8.02    Notices of Material Events. Promptly (and in any event within
three (3) Business Days) after a Responsible Officer of the Borrower or any
Subsidiary obtains knowledge thereof, the Borrower will furnish to the
Administrative Agent (which shall make such information available to the
Lenders) written notice of the following:

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

(b)    the filing or commencement of, or the threat in writing of, any action,
suit, proceeding, investigation or arbitration by or before any arbitrator or
Governmental Authority against or affecting the Borrower or any Restricted
Subsidiary not previously disclosed in writing to the Lenders or any material
adverse development in any action, suit, proceeding, investigation or
arbitration (whether or not previously disclosed to the Lenders) that, in either
case, if adversely determined, could reasonably be expected to result in a
Material Adverse Effect;

(c)    the occurrence of any ERISA Event that results in, or could reasonably be
expected to result in, a Material Adverse Effect; and

(d)    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. The Borrower will, and will
cause each Restricted Subsidiary to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence in a
jurisdiction of the United States 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
its Oil and Gas Properties are located or the ownership of its Properties
requires such qualification, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 9.08.

Section 8.04    Payment of Taxes. The Borrower will, and will cause each
Restricted Subsidiary to, pay all Tax liabilities of the Borrower and all of its
Restricted Subsidiaries before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings and the Borrower or such Restricted Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP or (b) the failure to make payment could not reasonably be expected to
result in a Material Adverse Effect or result in the seizure or levy of any
Property of the Borrower or any Restricted Subsidiary.

 

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Section 8.05    Operation and Maintenance of Properties. Except, in each case,
where the failure to comply could not reasonably be expected to have a Material
Adverse Effect, the Borrower, at its own expense, will, and will cause each
Restricted Subsidiary to:

(a)    operate its Oil and Gas Properties and other material Properties or cause
such Oil and Gas Properties and other 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 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.

(b)    maintain and keep in good repair, working order and efficiency (ordinary
wear and tear excepted) all of its Oil and Gas Properties and other Properties.

(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, 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.

(e)    to the extent the Borrower is not the operator of any Property, the
Borrower shall use commercially reasonable efforts to cause the operator to
comply with this Section 8.05.

Section 8.06    Insurance. The Borrower will, and will cause each Restricted
Subsidiary to, maintain, with financially sound and reputable insurance
companies (at the time the relevant coverage is placed or renewed), insurance
(a) 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 and (b) in accordance with all Governmental Requirements. 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 Administrative Agent as its interests may appear and such
policies shall name the Administrative Agent and the Lenders as “additional
insureds” (and mortgagee, if applicable) and Administrative Agent as lender loss
payee and provide that the insurer will endeavor to give at least thirty
(30) days’ prior notice of any cancellation to the Administrative Agent.

 

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Section 8.07    Books and Records; Inspection Rights. The Borrower will, and
will cause each Restricted Subsidiary to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each Restricted Subsidiary to, permit any representatives designated
by the Administrative Agent or any Lender, upon reasonable prior notice, to
visit and inspect its Properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested; provided that so long as no Event of Default has
occurred and is continuing and no Borrowing Base Deficiency exists, the Borrower
and its Restricted Subsidiaries shall not be required to reimburse the
Administrative Agent for more than one (1) inspection during any fiscal year.

Section 8.08    Compliance with Laws.

(a)    The Borrower will, and will cause each Restricted Subsidiary to, comply
with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its Property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.

(b)    The Borrower will, and will cause each of its Subsidiaries to, maintain
in effect and enforce such policies and procedures designed to ensure compliance
by the Borrower and its Subsidiaries and each of their respective directors,
officers, employees and agents with Anti-Corruption Laws, applicable Sanctions
and the PATRIOT Act.

Section 8.09    Environmental Matters.

(a)    The Borrower shall: (i) comply, and shall cause its Properties and
operations and each Restricted Subsidiary and each Restricted Subsidiary’s
Properties and operations to comply, with all applicable Environmental Laws,
except where the failure to so comply could not be reasonably expected to have a
Material Adverse Effect; (ii) handle, store, and prevent any Release or
threatened Release of, and shall cause each Restricted Subsidiary to handle,
store and prevent any Release or threatened Release of, any Hazardous Material
on, under, about or from any of the Borrower’s or its Restricted Subsidiaries’
Properties or any other property offsite the Property to the extent caused by
the Borrower’s or any of its Restricted Subsidiaries’ operations in compliance
with applicable Environmental Laws, except in each case, where the failure to do
so could not reasonably be expected to have a Material Adverse Effect;
(iii) timely obtain or file, and shall cause each Restricted Subsidiary to
timely obtain or file, all Environmental Permits, if any, required under
applicable Environmental Laws to be obtained or filed in connection with its
operation or use of the Borrower’s or its Restricted Subsidiaries’ Properties,
except, in each case, where the failure to obtain or file could not reasonably
be expected to have a Material Adverse Effect; (iv) promptly commence and
diligently prosecute to completion, and shall cause each Restricted Subsidiary
to promptly commence and diligently prosecute to completion, any assessment,
evaluation, investigation, monitoring, containment, cleanup, removal, repair,
restoration, remediation or other remedial obligations to the extent required
Environmental Law (collectively, the “Remedial Work”) in the event any Remedial

 

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Work is required or reasonably necessary under applicable Environmental Laws
because of or in connection with the actual or suspected past, present or future
Release or threatened Release of any Hazardous Material on, under, about or from
any of the Borrower’s or its Restricted Subsidiaries’ Properties, which failure
to commence and diligently prosecute to completion could reasonably be expected
to have a Material Adverse Effect; (v) conduct, and cause its Restricted
Subsidiaries to conduct, their respective operations and businesses in a manner
that will not expose any Property or Person to Hazardous Materials in violation
of Environmental Law, if such exposure could reasonably be expected to have a
Material Adverse Effect; and (vi) establish and implement, and shall cause each
Restricted Subsidiary to establish and implement, such procedures as may be
necessary to regularly determine and assure that the Borrower’s and its
Restricted Subsidiaries’ obligations under this Section 8.09(a) are timely and
fully satisfied, which failure to establish and implement could reasonably be
expected to have a Material Adverse Effect.

(b)    The Borrower will promptly, but in no event later than fifteen (15) days
after the Borrower obtains knowledge thereof, notify the Administrative Agent
and the Lenders in writing of any threatened (in writing) action, investigation
or inquiry by any Governmental Authority or any threatened demand (in writing)
or lawsuit by any Person against the Borrower or its Restricted Subsidiaries or
their Properties of which the Borrower has knowledge in connection with any
Environmental Laws if the Borrower could reasonably anticipate that such action
will result in liability (whether individually or in the aggregate), if not
covered by insurance, to the extent such liability could reasonably be expected
to have a Material Adverse Effect.

(c)    The Borrower will, and will cause each Restricted Subsidiary to, provide
environmental assessments, audits and tests obtained by the Borrower or any
Restricted Subsidiary in connection with any future acquisition of Oil and Gas
Properties or other Properties to the Administrative Agent, other than an
acquisition of additional interests in Oil and Gas Properties in which the
Borrower or any Restricted Subsidiary previously held an interest.

Section 8.10    Further Assurances.

(a)    The Borrower at its sole expense will, and will cause each Restricted
Subsidiary to, promptly execute and deliver to the Administrative Agent all such
other documents, agreements and instruments reasonably requested by the
Administrative Agent to comply with, cure any defects or accomplish the
conditions precedent, covenants and agreements of the Borrower or any Restricted
Subsidiary, as the case may be, in the Loan Documents, including the Notes, or
to further evidence and more fully describe the Collateral (which shall, for the
avoidance of doubt, not include any Excluded Property) intended as security for
the Indebtedness, or to correct any omissions in this Agreement or the Security
Instruments, or to state more fully the obligations secured therein, or to
perfect, protect or preserve any Liens created pursuant to this Agreement or any
of the Security Instruments or the priority thereof, or to make any recordings,
file any notices or obtain any consents, all as may be reasonably necessary or
appropriate, in the sole discretion of the Administrative Agent, in connection
therewith.

 

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(b)    The Borrower hereby authorizes the Administrative Agent to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Mortgaged Property 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 Borrower acknowledges and agrees that any
such financing statement may describe the collateral as “all assets” or “all
assets of Debtor, whether now owned or hereafter acquired and wherever located”
of the applicable Credit Party or words of similar effect as may be required by
the Administrative Agent.

Section 8.11    Reserve Reports.

(a)    On or before February 1st and August 1st of each year, commencing
February 1, 2020 (or, to the extent that the Initial Funding Date has not
occurred on or prior to February 1, 2020, promptly following the Initial Funding
Date), the Borrower shall furnish to the Administrative Agent and the Lenders a
Reserve Report evaluating, as of December 31 (for each February delivery) and
June 30 (for each August delivery), the Proved Reserves of the Borrower and the
Credit Parties located within the geographic boundaries of the United States of
America. The Reserve Report as of December 31 (for each February delivery) of
each year starting with December 31, 2019 shall be prepared by one or more
Approved Petroleum Engineers, and the Reserve Report as of June 30 (for each
August delivery) of each year (beginning June 30, 2020), shall be prepared by or
under the supervision of the chief engineer or qualified agent of the Borrower
who shall, in each case, certify such Reserve Report to be true and accurate in
all material respects and to have been prepared in accordance with the
procedures used (x) with respect to each February delivery, the Reserve Report
as of December 31, 2019 and (y) with respect to each August delivery, the
immediately preceding December 31 Reserve Report.

(b)    In the event of an Interim Redetermination, the Borrower shall furnish to
the Administrative Agent and the Lenders a Reserve Report prepared, at the
election of the Borrower, (i) by one or more Approved Petroleum Engineers or
(ii) by or under the supervision of the chief engineer or qualified agent of the
Borrower who shall certify such Reserve Report to be true and accurate in all
material respects and to have been prepared in accordance with the procedures
used in the immediately preceding December 31 Reserve Report. For any Interim
Redetermination requested by the Administrative Agent or the Borrower pursuant
to Section 2.07(b), the Borrower shall provide such Reserve Report with an “as
of” date as required by the Administrative Agent as soon as possible, but in any
event no later than thirty (30) days following the receipt of such request.

(c)    With the delivery of each Reserve Report, the Borrower shall provide to
the Administrative Agent and the Lenders a Reserve Report 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, it being understood by the
Administrative Agent and the Lenders that projections concerning volumes and
production and cost estimates contained in each Reserve Report are necessarily
based upon opinions, estimates and projections and that neither the Borrower nor
such Responsible Officer warrants that such opinions, estimates and projections
will ultimately prove to have been accurate, (ii) the Borrower or another Credit
Party has good and defensible title to the Oil and Gas Properties evaluated in
such Reserve Report (other than those (x) disposed of since the date of such
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permitted in accordance with the terms hereof, and (y) leases that have expired
in accordance with their terms) and such Oil and Gas Properties are free (or
will be at the time of the acquisition thereof) of all Liens except for Liens
permitted by Section 9.03, (iii) except as set forth on an exhibit to the
certificate or previously disclosed to the Administrative Agent in writing, on a
net basis there are no gas imbalances, take or pay or other prepayments, the
value of which exceed the volume threshold specified in Section 7.16, with
respect to the Credit Parties’ Oil and Gas Properties evaluated in such Reserve
Report which would require the Borrower or any other Credit Party to deliver
Hydrocarbons either generally or produced from such Oil and Gas Properties at
some future time without then or thereafter receiving full payment therefor,
(iv) none of the Borrowing Base Properties have been sold since the date of the
last Borrowing Base determination except (A) those Borrowing Base Properties
listed on such certificate as having been disposed, or (B) as previously
disclosed to the Administrative Agent in writing, (v) attached to the
certificate is a list of all material marketing agreements (which are not
cancellable on one hundred twenty (120) days’ notice or less without penalty or
detriment) entered into subsequent to the later of the Effective Date or the
most recently delivered Reserve Report which the Borrower could reasonably be
expected to have been obligated to list on Schedule 7.17 had such agreement been
in effect on the Effective Date, and (vi) attached thereto is a schedule
demonstrating compliance (calculated at the time of delivery of such Reserve
Report) with the Collateral Coverage Minimum.

Section 8.12    Title Information.

(a)    Subject to Section 8.12(d), on or before the delivery to the
Administrative Agent and the Lenders of each Reserve Report required by
Section 8.11(a), the Borrower will deliver title information in form and
substance reasonably acceptable to the Administrative Agent covering enough of
the Oil and Gas Properties evaluated by such Reserve Report that were not
included in the immediately preceding Reserve Report, so that the Administrative
Agent shall have received together with title information previously delivered
to the Administrative Agent, reasonably satisfactory title information on at
least 85% on the PV-9 of the Oil and Gas Properties evaluated by such Reserve
Report.

(b)    If the Borrower has provided title information for additional Properties
under Section 8.12(a), the Borrower shall, within forty-five (45) days after
notice from the Administrative 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 having an equivalent value, or (iii) deliver title information in form and
substance reasonably acceptable to the Administrative Agent so that the
Administrative Agent shall have received, together with title information
previously delivered to the Administrative Agent, reasonably satisfactory title
information on at least 85% of the PV-9 of the Oil and Gas Properties evaluated
by such Reserve Report.

(c)    If the Borrower is unable to cure any title defect requested by the
Administrative Agent or the Lenders to be cured within the forty-five (45) day
period or the Borrower does not comply with the requirements to provide
acceptable title information covering 85% of the PV-9 of the Oil and Gas
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default shall not be a Default, but instead the Administrative Agent and/or the
Required Lenders shall have the right to exercise the following remedy in their
sole discretion from time to time, and any failure to so exercise this remedy at
any time shall not be a waiver as to future exercise of the remedy by the
Administrative Agent or the Lenders. To the extent that the Administrative Agent
or the Required Lenders are not reasonably satisfied with title to any Mortgaged
Property after the forty-five (45) day period has elapsed, such unacceptable
Mortgaged Property shall not count towards the 85% requirement, and the
Administrative Agent may send a notice to the Borrower and the Lenders that the
then outstanding Borrowing Base shall be reduced by an amount as determined by
the Required Lenders to cause the Borrower to be in compliance with the
requirement to provide reasonably acceptable title information on 85% of the
PV-9 of the Oil and Gas Properties. This new Borrowing Base shall become
effective immediately after receipt of such notice.

(d)    Notwithstanding anything to the contrary herein, no later than the date
that is sixty (60) days after the Initial Funding Date (or such later date as
the Administrative Agent may agree in its sole discretion), the Borrower will
deliver title information in form and substance acceptable to the Administrative
Agent covering enough of the Oil and Gas Properties evaluated by the Initial
Reserve Report so that the Administrative Agent shall have received together
with title information previously delivered to the Administrative Agent,
reasonably satisfactory title information on at least 85% of the PV-9 of the Oil
and Gas Properties evaluated by the Initial Reserve Report.

Section 8.13    Collateral and Guaranty Agreements.

(a)    In connection with each redetermination (but not any adjustment) of the
Borrowing Base, the Borrower shall review the applicable Reserve Report, if any,
and the list of current Mortgaged Properties (as described in Section 8.11(c))
to ascertain whether the Mortgaged Properties represent (x) from the Initial
Funding Date up to the date that is sixty (60) days following the Initial
Funding Date, at least 50% of the PV-9 of the Oil and Gas Properties evaluated
in the Initial Reserve Report and (y) from the date that is sixty (60) days
following the Initial Funding Date (or such later date as agreed to by the
Administrative Agent in its sole discretion) and thereafter, at least 85% of the
PV-9 of the Oil and Gas Properties evaluated in the most recently completed
Reserve Report (the “Collateral Coverage Minimum”). In the event that the PV-9
of the Mortgaged Properties (calculated at the time of redetermination) does not
satisfy the Collateral Coverage Minimum, then the Borrower shall, and shall
cause its Restricted Subsidiaries to, grant, within thirty (30) days of delivery
of the certificate required under Section 8.11(c) (or such longer period as the
Administrative Agent may agree in its sole discretion, but not to extend beyond
a total of ninety (90) days following the delivery of such certificate), to the
Administrative Agent as security for the Indebtedness a first-priority Lien
interest subject to Liens permitted under Section 9.03 on additional Oil and Gas
Properties of the Credit Parties not already subject to a Lien of the Security
Instruments such that after giving effect thereto, the PV-9 of the Mortgaged
Properties (calculated at the time of such redetermination) meets the Collateral
Coverage Minimum. All such Liens will be created and perfected by and in
accordance with the provisions of deeds of trust, mortgages, security agreements
and financing statements or other Security Instruments, all in form and
substance reasonably satisfactory to the Administrative Agent and in sufficient
executed (and acknowledged where necessary or appropriate) counterparts for
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purposes. In order to comply with the foregoing, if any Restricted Subsidiary
places a Lien on its Oil and Gas Properties and such Restricted Subsidiary is
not a Guarantor, then it shall become a Guarantor and comply with
Section 8.13(b).

(b)    In the event that (i) the Borrower or any other Credit Party creates or
acquires any Restricted Subsidiary, (ii) the Borrower determines that any
Restricted Subsidiary is a Material Subsidiary, or (iii) any Domestic Subsidiary
incurs or guarantees any Debt, the Borrower shall, within thirty (30) days from
the date of such creation, acquisition, determination, incurrence, or guarantee
(or such later date as the Administrative Agent may agree in its sole
discretion), cause such Restricted Subsidiary to execute and deliver the
Guaranty Agreement and the Pledge and Security Agreement (or a supplement to
such documents, as applicable) pursuant to which such Restricted Subsidiary
shall guaranty the Indebtedness and grant a security interest in such Restricted
Subsidiary’s Collateral; provided that such Domestic Subsidiary will not own any
Borrowing Base Properties until delivery of such Guaranty Agreement or Pledge
and Security Agreement (or a supplement to such documents, as applicable);
provided, further, that notwithstanding the foregoing, Excluded Subsidiaries
shall not be required to become Guarantors or pledge any Collateral. In the
event that the Borrower or any other Credit Party creates or acquires any
Restricted Subsidiary, the Credit Party that owns the Equity Interests in such
new Restricted Subsidiary shall execute and deliver a supplement to the Pledge
and Security Agreement, pursuant to which such Credit Party will ratify the
pledge of all of the Equity Interests of such new Restricted Subsidiary to
secure the Indebtedness. In connection with the foregoing, the Credit Parties
shall deliver original certificates, if any, evidencing the Equity Interests of
such new Restricted Subsidiary, together with appropriate undated stock powers
for each certificate duly executed in blank by the registered owner thereof and
execute and deliver such other additional closing documents, certificates and
legal opinions as shall reasonably be requested by the Administrative Agent.

(c)    Notwithstanding any provision in any of the Loan Documents to the
contrary, in no event is any Building (as defined in the applicable Flood
Insurance Regulations) or Manufactured (Mobile) Home (as defined in the
applicable Flood Insurance Regulations) owned by any Credit Party included in
the Mortgaged Property and no Building or Manufactured (Mobile) Home shall be
encumbered by any Security Instrument; provided that (i) the applicable Credit
Party’s interests in all lands and Hydrocarbons situated under any such Building
or Manufactured (Mobile) Home shall be included in the Mortgaged Property and
shall be encumbered by the Security Instruments and (ii) the Borrower shall not,
and shall not permit any of its Restricted Subsidiaries to, permit to exist any
Lien on any Building or Manufactured (Mobile) Home except Liens permitted by
Section 9.03.

Section 8.14    ERISA Compliance. The Borrower will promptly furnish and will
cause the Restricted Subsidiaries to promptly furnish to the Administrative
Agent if specifically requested by the Administrative Agent, promptly after the
filing thereof with the United States Secretary of Labor or the Internal Revenue
Service, copies of each annual report (Form 5500 series) with respect to each
Plan sponsored by the Borrower or a Restricted Subsidiary or any trust created
thereunder.

 

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Section 8.15    Commodity Exchange Act Keepwell Provisions. The Borrower hereby
guarantees the payment and performance of all Indebtedness of each Credit Party
(other than the Borrower) and absolutely, unconditionally and irrevocably
undertakes to provide such funds or other support as may be needed from time to
time by each Credit Party (other than the Borrower) in order for such Credit
Party to honor its obligations under its respective Guaranty Agreement including
obligations with respect to Swap Agreements (provided, however, that the
Borrower shall only be liable under this Section 8.15 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 8.15, or otherwise under this Agreement or any Loan Document,
as it relates to such other Credit Parties, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount). The obligations of the Borrower under this Section 8.15 shall
remain in full force and effect until all Indebtedness is paid in full (other
than contingent indemnity obligations for which no claims have been made) to the
Lenders, the Administrative Agent and all other Secured Parties, and all of the
Lenders’ Commitments are terminated. The Borrower intends that this Section 8.15
constitute, and this Section 8.15 shall be deemed to constitute, a “keepwell,
support, or other agreement” for the benefit of each other Credit Party for all
purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

Section 8.16    Deposit Accounts and Securities Accounts. The Borrower shall (at
its own expense), and shall cause each of the other Credit Parties to, maintain
each of their primary operating and treasury deposit accounts with JPMorgan
Chase Bank, N.A. and shall cause each of such deposit accounts and each of its
securities accounts to be subject to Control Agreement in favor of the
Administrative Agent; provided, (a) no such Control Agreement shall be required
for Excluded Accounts and (b) with respect to primary operating and treasury
deposit accounts and securities accounts maintained by (x) the Existing Credit
Parties, such Existing Credit Parties shall have until the date that is one
hundred and eighty (180) days following the Initial Funding Date (as such date
may be extended by the Administrative Agent in its sole discretion) to deliver
Control Agreements covering such accounts and (y) the Credit Parties as of the
Initial Funding Date (other than the Existing Credit Parties), such Credit
Parties shall have until the date that is sixty (60) days following the Initial
Funding Date (as such date may be extended by the Administrative Agent in its
sole discretion) to deliver Control Agreements covering such accounts.

Section 8.17    Marketing Activities. The Borrower shall (at its own expense),
and shall cause each of the other Credit Parties to, only engage in the
following marketing activities for any Hydrocarbons or enter into any contracts
related thereto: (a) contracts for the sale of Hydrocarbons scheduled or
reasonably estimated to be produced from their Oil and Gas Properties
constituting Proved Reserves during the period of such contract and
(b) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to
be produced from Oil and Gas Properties constituting Proved Reserves of third
parties during the period of such contract associated with the Oil and Gas
Properties of the Borrower and its Restricted Subsidiaries that the Borrower or
one of its Restricted Subsidiaries has the right or obligation to market
pursuant to joint

 

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operating agreements, unitization agreements or other similar contracts (or
contracts executed in connection therewith) that are usual and customary in the
Oil and Gas Business.

Section 8.18    Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower
shall, and shall cause each of the other Credit Parties, only allow gas
imbalances, take-or-pay or other prepayments with respect to the Oil and Gas
Properties of the Borrower or any Restricted Subsidiary that would require the
Borrower or such Restricted Subsidiary to deliver Hydrocarbons at some future
time without then or thereafter receiving full payment therefor to not exceed
one half bcf of gas (on an mcf equivalent basis) in the aggregate.

Section 8.19    Use of Proceeds.

(a)    The proceeds of the Loans and the Letters of Credit will be used only to
finance expenses incurred in connection with the Transactions and for working
capital needs, the acquisition, development and exploration of Oil and Gas
Properties and other general corporate purposes of the Borrower and its
Subsidiaries. No part of the proceeds of any Loan and no Letter of Credit will
be used, whether directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X.

(b)    The Borrower will not request any Borrowing or Letter of Credit, and no
Borrower shall use, and the Borrower shall procure that its Subsidiaries and its
and their respective directors, officers, employees and agents shall not use,
the proceeds of any Borrowing or Letter of Credit (i) in furtherance of an
offer, 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, (ii) for the purpose of funding, financing or facilitating
any activities, business or transaction of or with any Sanctioned Person, or in
any Sanctioned Country, to the extent that such activities, businesses or
transaction would be prohibited by Sanctions if conducted by a corporation
incorporated in the U.S. or the European Union, or (iii) in any manner that
would result in the violation of any Sanctions applicable to any party hereto.

Section 8.20    Post-Initial Funding Date Deliverables.

(a)    On or prior to the date that is sixty (60) days following the Initial
Funding Date (or such later date as the Administrative Agent may agree in its
sole discretion):

(i)    To the extent not delivered on the Initial Funding Date, the Borrower
shall deliver to the Administrative Agent (A) Mortgages and other Security
Instruments sufficient to create first priority, perfected Liens (subject only
to Excepted Liens identified in clauses (a) through (d) and (f) of the
definition thereof, but subject to the provisos at the end of such definition)
to comply with the Collateral Coverage Minimum and (B) corresponding opinions of
counsel covering the Mortgages and Security Instruments delivered pursuant to
Section 8.20(a)(i)(A); provided that the Borrower shall not be required to
deliver opinions of counsel covering Mortgages encumbering Borrowing Base
Properties delivered pursuant to

 

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Section 8.20(a)(i)(A) for the relevant jurisdiction in which such Borrowing Base
Properties are being encumbered to the extent that the Borrower has previously
delivered opinions of counsel for such relevant jurisdictions; and

(ii)    To the extent not delivered on the Initial Funding Date, the Borrower
shall deliver to the Administrative Agent title information setting forth the
status of title to at least 85% of the PV-9 of the Borrowing Base Properties
consistent with usual and customary standards for the geographic regions in
which such Borrowing Base Properties are located.

(b)    Subject to Section 9.13, on or prior to the date that is thirty
(30) calendar days following the Initial Funding Date (or such later date as the
Administrative Agent may agree in its sole discretion), the Borrower shall enter
into Swap Agreements (which, for the avoidance of doubt, shall include put and
floor options, in each case, with strike prices of not less than 90% of the
lesser of the forward curve prices for crude oil, natural gas liquids and
natural gas, as applicable, at the time of incurrence of such Swap Agreement),
in each case with an Approved Counterparty in respect of each of crude oil,
natural gas liquids and natural gas, calculated separately on a projected
revenue basis and entered into not for speculative purposes the notional volumes
for which (when aggregated with the notional volumes of other Swap Agreements in
respect of commodities then in effect, other than the notional volumes of basis
differential swaps) that, as of the date of the latest hedging transaction of
such Swap Agreement, have the minimum hedging set forth on Part A of Schedule
8.20, which hedges shall include the assumption of the hedging assumptions of
Roan listed on Part B of Schedule 8.20 (such hedging agreements of Roan, the
“Roan Assumed Hedges”); provided that (i) any Roan Assumed Hedges that have not
been assumed by the Borrower may be replaced by replacement Swap Agreements no
worse than the Roan Assumed Hedges that such Swap Agreement replaces and (ii) at
the request of the Borrower, the Arrangers will (A) use commercially reasonable
efforts to enter into novations of such Roan Assumed Hedges or (B) if any such
Roan Assumed Hedges have not been novated pursuant to clause (A), use
commercially reasonable efforts to enter into other such replacement Swap
Agreements.

ARTICLE IX

NEGATIVE COVENANTS

Commencing on the Initial Funding Date and until the Commitments have expired or
terminated and the principal of and interest on each Loan and all fees payable
hereunder and all other amounts payable under the Loan Documents have been paid
in full (other than contingent indemnity obligations for which no claims have
been made) and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:

Section 9.01    Financial Covenants.

(a)    Consolidated Total Leverage Ratio. The Borrower will not, as of the last
day of any fiscal quarter (commencing with first full fiscal quarter after the
Initial Funding Date), permit its Consolidated Total Leverage Ratio for the
Rolling Period then ending to be greater than 3.5 to 1.0.

 

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(b)    Current Ratio. The Borrower will not permit the Current Ratio as of the
last day of any fiscal quarter (commencing with first full fiscal quarter after
the Initial Funding Date) to be less than 1.0 to 1.0.

(c)    Right to Cure. In the event the Borrower fails to comply with the
requirements of Section 9.01(a) or (b), beginning on the first date after the
last day of the fiscal quarter for which the financial covenants in
Section 9.01(a) and (b) are being tested, until the expiration of the tenth
Business Day subsequent to the date the compliance certificate for calculating
the Consolidated Total Leverage Ratio and the Current Ratio is required to be
delivered pursuant to Section 8.01(c) (the “Cure Period”), the Borrower shall be
permitted to cure such failure to comply by requesting that the Consolidated
Total Leverage Ratio and/or the Current Ratio be recalculated by increasing
EBITDAX, Annualized EBITDAX for such Rolling Period or Current Assets as of such
last day of such fiscal quarter, as the case may be, by an amount up to the
proceeds received by the Borrower from a Specified Equity Contribution during a
Cure Period (such amount, a “Cure Amount”); provided that (i) the Borrower
delivers written notice to the Administrative Agent on or prior to the date of a
timely delivered certificate required by Section 8.01(c) that it has elected to
cure the failure to comply and clearly setting forth such Specified Equity
Contribution in the computation required by Section 8.01(c)(ii); (ii) the amount
of the Cure Amount added to EBITDAX, Annualized EBITDAX, or Current Assets as
applicable, shall not be greater than the amount required to cause the Borrower
to be in compliance with Section 9.01(a) or (b) and shall be without duplication
of any other Cure Amount during the same Cure Period (it being understood that,
for the avoidance of doubt, different Cure Amounts would be required to cure the
two (2) separate financial covenants during the same Cure Period); (iii) any
such increase pursuant to this Section 9.01(c) to EBITDAX, Annualized EBITDAX,
or Current Assets, as applicable, in or as of the end of any fiscal quarter
shall be applied solely for the purpose of determining compliance or
non-compliance with Section 9.01(a) or (b) as of the last day of any Rolling
Period that includes such fiscal quarter or as of the last day of such fiscal
quarter and not for any other purpose under any Loan Document (including any
determination of pro forma compliance with the Consolidated Total Leverage Ratio
for the purposes of incurring any Specified Additional Debt or making any
Restricted Payment or any other purpose (even if the proceeds of any Specified
Equity Contribution are actually used to reduce Debt or Current Liabilities));
(iv) the Borrower may not cure any Consolidated Total Leverage Ratio or Current
Ratio default by an equity cure more than (A) two (2) times during any period of
four (4) consecutive fiscal quarters or (B) five (5) times prior to the Maturity
Date (provided that, if the Borrower exercises its cure right prior to the date
financial statements are required to be delivered for a relevant fiscal quarter
solely with respect to an anticipated Consolidated Total Leverage Ratio or
Current Ratio default and the Cure Amount associated therewith is insufficient
to cure a Consolidated Total Leverage Ratio or Current Ratio default with
respect to such quarter, any subsequent exercise of a cure right prior to the
expiration of the applicable Cure Period to “top-up” such Cure Amount shall not
count as an additional exercise of the cure right). Such increase in the
Borrower’s EBITDAX or Annualized EBITDAX, as applicable, shall be taken into
account in calculating the Consolidated Total Leverage Ratio for the purpose of
determining compliance or noncompliance with Section 9.01(a) of the last day of
any Rolling Period that includes the last fiscal quarter of the four (4) quarter
period with respect to which such cure right was exercised; provided that, for
the purposes of calculating Annualized EBITDAX, any Cure Amount shall be taken
into account after multiplying EBITDAX by the applicable factor pursuant to the
definition of Annualized

 

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EBITDAX, if any, and shall be disregarded for purposes of annualizing EBITDAX;
(v) any cure of more than one of the Consolidated Total Leverage Ratio default
and Current Ratio default in one fiscal quarter shall count as a single
Specified Equity Contribution; and (vi) no Lender or Issuing Bank shall be
required to make any extension of credit hereunder during the Cure Period, until
the Borrower has received the Cure Amount. If after giving effect to the
foregoing recalculations, the Borrower would then be in compliance with
Section 9.01(a) or (b), the Borrower shall be deemed to have satisfied the
requirements of Section 9.01(a) or (b) as of the relevant earlier required date
of determination with the same effect as though there had been no failure to
comply therewith at such date, and the applicable breach or default of any such
covenant that had occurred shall be deemed cured for the purpose of this
Agreement and the other Loan Documents. Neither the Administrative Agent nor any
Lender shall exercise the right to accelerate the Loans or terminate the
Commitments and none of Administrative Agent, any Lender or any Secured Party
shall exercise any right to foreclose on or take possession of the Collateral or
exercise any other remedy pursuant to Section 10.02, the other Loan Documents or
applicable law prior to the end of the applicable Cure Period solely on the
basis of an Event of Default having occurred and continuing under
Section 9.01(a) or (b) (except to the extent that the Borrower has confirmed in
writing that it does not intend to provide a Specified Equity Contribution).

Section 9.02    Debt. The Borrower will not, and will not permit any Restricted
Subsidiary to, incur, create, assume or suffer to exist any Debt, except:

(a)    the Notes or other Indebtedness arising under the Loan Documents or any
guaranty of or suretyship arrangement for the Notes or other Indebtedness
arising under the Loan Documents.

(b)    Debt of the Borrower and its Restricted Subsidiaries existing on the
Initial Funding Date that is reflected on Schedule 9.02.

(c)    Debt under Finance Leases and Purchase Money Debt not to exceed the
greater of (i) $40,000,000 and (ii) 5% of the Borrowing Base in the aggregate at
any one time outstanding.

(d)    Debt associated with bonds, guarantees, letters of credit or surety
obligations required by Governmental Requirements or incurred in the ordinary
course of business, in each case in connection with the operation of the Oil and
Gas Properties and not in connection with money borrowed, or Debt associated
with guarantees or surety obligations delivered by the Borrower to any provider
of such bonds.

(e)    intercompany Debt between the Borrower and any Restricted Subsidiary or
between Restricted Subsidiaries to the extent permitted by Section 9.05(d);
provided that such Debt is not held, assigned, transferred, negotiated or
pledged to any Person other than the Borrower or one of its Restricted
Subsidiaries, and, provided, further, that any such Debt owed by either the
Borrower or a Guarantor shall be subordinated to the Indebtedness on terms set
forth in the Guaranty Agreement.

 

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(f)    endorsements of negotiable instruments for collection in the ordinary
course of business.

(g)    Debt constituting a guarantee by any Credit Party of any Debt incurred by
another Credit Party so long as the incurrence of such Debt by such other Credit
Party is otherwise permitted by this Section 9.02.

(h)    Debt arising under Swap Agreements permitted by Section 9.13.

(i)    unsecured Specified Additional Debt; provided that (i) after giving
effect to the incurrence of such Debt, (A) no Event of Default shall have
occurred and be continuing and (B) the Borrower is in compliance on a Pro Forma
Basis with Section 9.01(a) and (b) for the Rolling Period or fiscal quarter, as
applicable, most recently ended for which financial statements have been
delivered pursuant to Section 8.01(a) or (b), (ii) such Debt does not have any
scheduled principal payments until the date that is one hundred eighty
(180) days following the Maturity Date, (iii) on the same day as the incurrence
of such Debt, the Borrowing Base shall be adjusted to the extent required by
Section 2.07(f) and prepayment is made to the extent required by
Section 3.04(c)(iii) and no Borrowing Base Deficiency would then exist after
giving effect to such adjustment and prepayment, (iv) to the extent such Debt is
expressly subordinated in right of payment to the Indebtedness, such Debt shall
be subject to a Subordination Agreement and (v) the Borrower shall have provided
the notice required by Section 8.01(l).

(j)    Debt of any Person that becomes a Restricted Subsidiary of the Borrower
after the Initial Funding Date, which Debt is existing at the time such Person
becomes a Restricted Subsidiary of the Borrower (other than Debt incurred in
contemplation of such Person’s becoming a Restricted Subsidiary of the
Borrower); provided that the aggregate principal amount of all such Debt shall
not exceed the greater of (i) $40,000,000 and (ii) 5% of the Borrowing Base in
the aggregate at any one time outstanding.

(k)    Specified Additional Debt in the form of Junior Lien Debt in an aggregate
principal amount not to exceed $125,000,000; provided that (i) after giving
effect to the incurrence of such Debt, (A) no Event of Default shall have
occurred and be continuing and (B) the Borrower is in compliance on a Pro Forma
Basis with Section 9.01(a) and (b) for the Rolling Period or fiscal quarter, as
applicable, most recently ended for which financial statements have been
delivered pursuant to Section 8.01(a) or (b), (ii) such Debt does not have any
scheduled principal payments until the date that is one hundred eighty
(180) days following the Maturity Date, (iii) on the same day as the incurrence
of such Debt, the Borrowing Base shall be adjusted to the extent required by
Section 2.07(f) and prepayment is made to the extent required by
Section 3.04(c)(iii) and no Borrowing Base Deficiency would then exist after
giving effect to such adjustment and prepayment, (iv) such Debt is subject to an
Intercreditor Agreement, which agreement shall provide that the Liens securing
such Debt shall rank junior to the Lien securing the Indebtedness and (v) the
Borrower shall have provided the notice required by Section 8.01(l).

(l)    other Debt not otherwise permitted pursuant to this Section 9.02 not to
exceed the greater of (i) $15,000,000 and (ii) 2.50% of the Borrowing Base in
the aggregate at any one time outstanding.

 

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Section 9.03    Liens. The Borrower will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or permit to exist any Lien on any of its
Properties (now owned or hereafter acquired), except:

(a)    Liens securing the Indebtedness.

(b)    Excepted Liens.

(c)    Liens securing Finance Leases or Purchase Money Debt permitted by
Section 9.02(c) but only on the Property under lease or the Property purchased,
constructed or improved with such Purchase Money Debt, as applicable.

(d)    Liens securing Specified Additional Debt incurred pursuant to
Section 9.02(k); provided that such Liens are Junior Liens on the Collateral and
subject to the Intercreditor Agreement.

(e)    Liens on Property not constituting Collateral and not otherwise permitted
by the foregoing clauses of this Section 9.03; provided that the aggregate
principal or face amount of all Debt secured under this Section 9.03(e) shall
not exceed the greater of (i) $15,000,000 and (ii) 1% of the Borrowing Base at
any time.

(f)    (i) non-recourse Liens on Equity Interests of Unrestricted Subsidiaries
securing capital contributions to or obligations of such Persons and
(ii) customary rights of first refusal and tag, drag or similar rights in joint
venture agreements and agreements with respect to Subsidiaries that are not
Wholly-Owned Subsidiaries.

Notwithstanding the foregoing, (i) none of the Liens permitted pursuant to this
Section 9.03 (other than Excepted Liens and Liens securing the Indebtedness) may
at any time attach to any Borrowing Base Properties and (ii) no intent to
subordinate the first priority status afforded by the Liens granted in favor of
the Administrative Agent (for the benefit of the Secured Parties, as provided in
the Security Instruments) is to be hereby implied or expressed by the permitted
existence of the Liens permitted pursuant to this Section 9.03.

Section 9.04    Dividends and Distributions and Payments in Respect of Specified
Additional Debt.

(a)    The Borrower will not, and will not permit any of its Restricted
Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, return any capital to its Equity Interest
holders, or make any distribution of its Property to its Equity Interest
holders, except that:

(i)    the Borrower may declare and pay dividends with respect to its Equity
Interests payable solely in additional shares of its Equity Interests (other
than Disqualified Capital Stock);

 

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(ii)    Restricted Subsidiaries may declare and pay dividends ratably with
respect to their Equity Interests and pay management, advisory or similar fees
to Guarantors or the Borrower;

(iii)    the Borrower may make Restricted Payments pursuant to and in accordance
with, and may repurchase Equity Interests issued to former employees under,
stock option plans or other benefit plans for management or employees of the
Borrower and its Restricted Subsidiaries so long as any such Restricted Payments
paid in cash do not exceed $5,000,000 in the aggregate in any fiscal year;

(iv)    the Borrower may make Permitted Tax Distributions; provided that if the
aggregate Permitted Tax Distributions for any tax year exceed the actual annual
tax amount for such tax year (based on the calculation in the definition of
Permitted Tax Distributions), such excess shall be deducted from the next
distribution(s) to occur after such U.S. federal income tax filing; and if the
actual annual tax amount for any tax year (based on the calculation in the
definition of Permitted Tax Distributions) exceeds the aggregate Permitted Tax
Distribution for such tax year, such excess shall be added to the next
distribution;

(v)    on or after the later of (x) the date the Borrower first delivers a
compliance certificate for the period ending at least one full fiscal quarter
after the Initial Funding Date in accordance with Section 8.01(c) or (y) the
completion of the first Scheduled Redetermination pursuant to Section 2.07(b),
the Borrower may make Restricted Payments to the holders of its Equity Interests
in an aggregate amount not to exceed 100% of the Borrower’s Distributable Free
Cash Flow so long as the Borrower shall have provided the notice and certificate
required by Section 8.01(p) and, after giving pro forma effect to such
Restricted Payment, (A) no Default or Event of Default is continuing or would
result from such Restricted Payment, (B) Unused Availability is not less than
20% of the Loan Limit then in effect and (C) the Borrower is in compliance with
a Consolidated Total Leverage Ratio, on a Pro Forma Basis (including any
incurrence of Debt in connection with such Restricted Payment), for the Rolling
Period most recently ended for which financial statements have been delivered
pursuant to Section 8.01(a) or (b), as applicable, of less than 2.50 to 1.00;
provided, if a Scheduled Redetermination is to occur in a fiscal quarter, then
the Borrower shall not make any Restricted Payments under this clause (v) during
the period beginning with the first day of such fiscal quarter and ending on the
day such Scheduled Redetermination has been completed;

(vi)    the Borrower and its Restricted Subsidiaries may make Restricted
Payments in cash to Holdings the proceeds of which shall be used by Holdings to
pay (or to make Restricted Payments to allow any direct or indirect parent of
Holdings to pay):

(A)    its operating expenses incurred in the ordinary course of business and
other corporate overhead costs and expenses (including administrative, legal,
accounting and similar expenses payable to third parties) that are reasonable
and customary and incurred in the ordinary course of business and in each case
that are solely attributable to the Borrower and its Restricted Subsidiaries,
and franchise and similar Taxes, and other reasonable and customary fees and
expenses, required to maintain Holdings’ corporate or other legal existence,

 

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(B)    any reasonable and customary indemnification claims made by members of
the board of directors (or equivalent governing body) or officers, employees,
directors, managers, consultants or independent contractors of Holdings (or any
parent thereof) solely attributable to the ownership or operations of the
Borrower and its Restricted Subsidiaries, and

(C)    amounts that would otherwise be permitted to be paid pursuant to
Section 9.10(f);

(vii)    the Borrower and its Restricted Subsidiaries may make any Restricted
Payment permitted to be paid pursuant to Section 9.10;

provided, that, notwithstanding anything to the contrary in
Section 9.04(a)(iii), Section 9.04(a)(v) and Section 9.04(a)(vi) (with respect
to Restricted Payments made with respect to the Borrower’s equity), no cash
Restricted Payments made in respect of the Borrower’s equity shall be permitted
until on or after the later of (x) the date the Borrower first delivers a
compliance certificate for the period ending at least one full fiscal quarter
after the Initial Funding Date in accordance with Section 8.01(c) and (y) the
completion of the first Scheduled Redetermination pursuant to Section 2.07(b).

(b)    Redemption or Amendment of Specified Additional Debt.

(i)    The Borrower will not, and will not permit any Restricted Subsidiary to
call, make or offer to make any optional or voluntary Redemption of, or
otherwise optionally or voluntarily Redeem (whether in whole or in part), any
Specified Additional Debt, provided that the Borrower may voluntarily Redeem
Specified Additional Debt (A) with cash proceeds from any incurrence of
Specified Additional Debt so long as such Redemption occurs substantially
contemporaneously with, and in any event within three (3) Business Days
following, the receipt of such proceeds, (B) with cash proceeds of an offering
of Equity Interests in the Borrower, Holdings or a direct or indirect parent
company of the Borrower, so long as, in the case of the foregoing clause (B), no
Event of Default or Borrowing Base Deficiency has occurred and is continuing
both before and after giving effect to such Redemption and such Redemption
occurs substantially contemporaneously with, and in any event within one hundred
twenty (120) days following, the receipt of such proceeds, (C) by converting
such Specified Additional Debt into common Equity Interests of the Borrower or a
direct or indirect parent company of the Borrower, and (D) with cash on hand in
an aggregate amount not to exceed 100% of the Borrower’s Distributable Free Cash
Flow, so long as, in the case of the foregoing clause (D), (I) no Default or
Event of Default has occurred and is continuing both before and after giving
effect to such Redemption, (II) Unused Availability is not less than 20% of the
Loan Limit then in effect, (III) the Borrower is in compliance with a
Consolidated Total Leverage Ratio for the Rolling Period most recently ended for
which financial statements have been delivered pursuant to Section 8.01(a) or
Section 8.01(b), as applicable, of less than 2.50 to 1.00 and (IV) the Borrower
shall have provided the notice and certificate required by Section 8.01(p).

 

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(ii)    The Borrower will not, and will not permit any Restricted Subsidiary to
amend or modify, or consent or agree to any amendment or modification to, any of
the terms governing any Specified Additional Debt, if the effect of such
amendment or modification is (A) to cause such Specified Additional Debt to have
any scheduled principal payments prior to the date that is one hundred eighty
(180) days following the Maturity Date, (B) to reduce the weighted average life
to maturity of such Debt, (C) to make the covenants, events of default and
guarantees more materially restrictive on the Borrower and each of its
Restricted Subsidiaries than the terms of such Specified Additional Debt (as in
effect at the time of such amendment or modification) when taken as a whole,
(D) to add an additional Subsidiary of the Borrower (other than a Guarantor or
Person who becomes a Guarantor in connection therewith) as an obligor under such
Specified Additional Debt or (E) otherwise materially adverse to the Lenders.

Section 9.05    Investments, Loans and Advances. The Borrower will not, and will
not permit any Restricted Subsidiary to, make or permit to remain outstanding
any Investments in or to any Person, except that the foregoing restriction shall
not apply to:

(a)    Investments as of the Initial Funding Date which are disclosed to the
Lenders in Schedule (ii);

(b)    accounts receivable arising in the ordinary course of business;

(c)    Investments in Cash Equivalents;

(d)    Investments (i) made by the Borrower in or to the Guarantors (including
any new Restricted Subsidiary that becomes a Guarantor in compliance herewith
substantially contemporaneously with such Investment being made), (ii) made by
any Guarantor in or to the Borrower or any other Guarantor and (iii) made by any
Restricted Subsidiary in or to the Borrower or the Guarantors;

(e)    subject to the limits in Section 9.06 (and without duplication of
Investments permitted under clause (g) below), Investments of the type described
in clause (c) of the definition thereof 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 or have become usual and customary in the oil and gas exploration and
production business located within the geographic boundaries of the United
States of America;

(f)    Investments in stock, obligations or securities received in settlement of
debts arising from Investments permitted under this Section 9.04(b)(ii) and
accounts receivable owing to the Borrower or any Restricted Subsidiary 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 the Borrower or
any of its Restricted Subsidiaries;

(g)    subject to the limits in Section 9.06, Investments (including, without
limitation, capital contributions) in general or limited partnerships or other
types of entities (each a “Venture”) formed or incorporated, as the case may be,
under applicable state law, by the Borrower or any Restricted Subsidiary, on the
one hand, and any other Person, on the other hand,

 

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in the ordinary course of business; provided that (i) any such Venture is
engaged exclusively in oil and gas exploration, development, production,
processing and related activities, including transportation, (ii) the interest
in such Venture is acquired in the ordinary course of business and on fair and
reasonable terms, and (iii) such Venture interests acquired and capital
contributions made (valued as of the date such interest was acquired or the
contribution made) do not exceed, in the aggregate at any time outstanding, an
amount equal to $25,000,000;

(h)    loans or advances to employees, officers or directors of the Borrower or
any of its Restricted Subsidiaries, 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 $5,000,000 in the aggregate at any time outstanding;

(i)    (i) guarantees of Debt permitted by Section 9.02 and (ii) guarantees by
the Borrower or any Restricted Subsidiary for the performance or payment
obligations of the Borrower or any Wholly-Owned Subsidiary, which obligations
were incurred in the ordinary course of business and do not constitute Debt;

(j)    Investments pursuant to Swap Agreements otherwise permitted under this
Agreement;

(k)    Investments in Unrestricted Subsidiaries, provided that (i) the aggregate
amount of all such Investments at any one time shall not exceed $17,500,000 (or
its equivalent in other currencies as of the date of Investment) and (ii) the
Unused Availability is at least 15% of the Loan Limit immediately before and
immediately after giving effect to such Investment;

(l)    Investments consisting of non-cash consideration received in connection
with dispositions or transfers permitted pursuant to Section 9.09;

(m)    other Investments not otherwise permitted pursuant to this
Section 9.04(b)(ii) not to exceed $20,000,000 in the aggregate; and

(n)    so long as no Default or Event of Default is continuing or would result
therefrom, other Investments in an aggregate amount not to exceed 100% of the
Borrower’s Distributable Free Cash Flow so long as, the Borrower shall have
provided the notice and certificate required by Section 8.01(p) and after giving
pro forma effect to such Investment, (i) no Default or Event of Default is
continuing or would result therefrom, (ii) Unused Availability is not less than
20% of the Loan Limit and (iii) the Borrower is in compliance with the
Consolidated Total Leverage Ratio, on a Pro Forma Basis (including any
incurrence of Debt in connection with such Investment), for the Rolling Period
most recently ended for which financial statements have been delivered pursuant
to Section 8.01(a) or (b), as applicable, of less than 2.50 to 1.00.

Section 9.06    Nature of Business; Wholly-Owned Subsidiaries; No International
Operations. The Borrower will not, and will not permit any Restricted Subsidiary
to, (i) allow any material change to be made in the character of its business as
an independent oil and gas exploration and production company, or (ii) allow any
Guarantor to cease to be a Wholly-Owned Subsidiary of the Borrower other than as
a result of a sale of all of the Equity Interests of such Guarantor or a merger
of such

 

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Guarantor permitted under Sections 9.08 or 9.09. From and after the Initial
Funding Date, the Borrower and its Domestic Subsidiaries will not acquire or
make any other expenditure (whether such expenditure is capital, operating or
otherwise) in or related to, any Oil and Gas Properties not located within the
geographical boundaries of the United States. The Borrower shall at all times
remain organized under the laws of the United States of America or any State
thereof or the District of Columbia.

Section 9.07    ERISA Compliance. The Borrower will not, and will not permit any
Restricted Subsidiary to, at any time:

(a)    engage in, or permit any ERISA Affiliate to engage in, any transaction in
connection with which the Borrower, a Restricted Subsidiary or any ERISA
Affiliate could reasonably be expected to be subjected to either a civil penalty
assessed pursuant to subsections (c), (i), (l) or (m) of Section 502 of ERISA or
a tax imposed by Chapter 43 of Subtitle D of the Code with respect to a Plan
that, in either case, could reasonably be expected to result in a Material
Adverse Effect.

(b)    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, the Borrower, a Restricted Subsidiary or any
ERISA Affiliate is required to pay as contributions thereto, if a Material
Adverse Effect would result.

(c)    contribute to or assume an obligation to contribute to any employee
welfare benefit plan, as defined in Section 3(1) of ERISA that provides benefits
to former employees of such entities other than as required by applicable law
and that may not be terminated by such entities in their sole discretion at any
time without resulting in a Material Adverse Effect.

Section 9.08    Mergers, Etc. The Borrower will not, and will not permit any
Restricted Subsidiary to, merge into or with or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its Property to any other
Person (whether now owned or hereafter acquired) (any such transaction, a
“Consolidation”), or liquidate or dissolve; provided that (a) any Restricted
Subsidiary may participate in a Consolidation with the Borrower or any Guarantor
(provided that the Borrower shall be the continuing or surviving entity in any
such transaction involving the Borrower, and a Guarantor shall be the continuing
or surviving entity of any such transaction not involving the Borrower), (b) any
Guarantor may participate in a Consolidation with another Guarantor, (c) any
Restricted Subsidiary that is not a Guarantor may consolidated into any other
Restricted Subsidiary that is not a Guarantor, (d) any Restricted Subsidiary may
liquidate or dissolve so long as its assets (if any) are distributed to the
Borrower or another Guarantor prior to such liquidation or dissolution or
(e) any Restricted Subsidiary that is not a Guarantor may liquidate or dissolve
itself.

 

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Section 9.09    Sale of Properties and Termination of Swap Agreements. The
Borrower will not, and will not permit any Restricted Subsidiary to, sell,
assign, farm-out, convey or otherwise transfer any Property or to terminate or
otherwise monetize any Swap Agreement in respect of commodities (including, in
each case, as a result of the designation of any Restricted Subsidiary as an
Unrestricted Subsidiary in accordance with Section 9.14) except for:

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

(b)    farm-outs of undeveloped acreage and assignments in connection with such
farm-outs;

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

(d)    the sale or other disposition (including casualty events resulting in the
transfer of any Borrowing Base Property or any interest therein) of (i) any
Borrowing Base Property or any interest therein or any Restricted Subsidiary
owning Borrowing Base Properties, (ii) any midstream assets given value in the
most recently delivered Reserve Report for which the then existing Borrowing
Base was determined, and (iii) the termination or monetization of any Swap
Agreement in respect of commodities; provided that:

(i)    no Event of Default or Borrowing Base Deficiency exists or results from
such sale or disposition of Property or the termination or monetization of any
Swap Agreement in respect of commodities (after giving effect to the
substantially concurrent use of proceeds therefrom);

(ii)    either (A) not less than 75% of the consideration received in respect of
such sale or other disposition or termination shall be cash or (B) if less than
75% of such consideration is cash, Unused Availability, after giving effect to
any resulting reduction in the Borrowing Base pursuant to Section 2.07(e) and
any application of proceeds of such sale or other disposition or termination is
not less than 25% of the Borrowing Base; and

(iii)    if the aggregate PV-9 (calculated using the Bank Price Deck in effect
at the time of the most recent redetermination) of the Borrowing Base Properties
sold or disposed of and Swap PV (calculated using the Bank Price Deck in effect
at the time of the most recent redetermination) of Swap Agreements terminated or
otherwise monetized pursuant to this clause (d) in any period since the most
recent determination of the Borrowing Base exceeds 7.50% of the Borrowing Base
then in effect, the Borrowing Base shall be subject to reduction pursuant to,
and to the extent required by, Section 2.07(e);

(e)    dispositions and sales of Oil and Gas Properties that are not Borrowing
Base Properties or midstream properties that are not midstream assets given
value in the most recently delivered Reserve Report and dispositions of Equity
Interests in Restricted Subsidiaries that do not own (i) any Borrowing Base
Properties or (ii) any Equity Interests in other Restricted Subsidiaries that
own Borrowing Base Properties; provided that no Event of Default or Borrowing
Base Deficiency exists or results from such sale or disposition of Property;

 

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(f)    licenses of intellectual property, none of which, in the aggregate,
materially impair the operation of the business of the Borrower or any
Restricted Subsidiary;

(g)    the abandonment of intellectual property that is no longer material to
the operation of the business of the Borrower or any Restricted Subsidiary;

(h)    other dispositions and sales of Properties (other than Oil and Gas
Properties or midstream assets given value in the most recently developed
Reserve Reports) not otherwise permitted pursuant to this Section 9.09 having a
fair market value not to exceed $30,000,000 in the aggregate for all
dispositions and sales of Properties pursuant to this clause (h) for the term of
this Agreement; provided that no Event of Default or Borrowing Base Deficiency
exists or results from such sale or disposition of Property;

(i)    Equity Interests of any Restricted Subsidiary of the Borrower transferred
to any Credit Party;

(j)    assets of any Credit Party to another Credit Party; and

(k)    any issuance or sale of Equity Interests in, or sale of Debt or other
securities of, an Unrestricted Subsidiary (or a Restricted Subsidiary which owns
an Unrestricted Subsidiary so long as such Restricted Subsidiary owns no assets
other than the Equity Interests of such Unrestricted Subsidiary).

Section 9.10    Transactions with Affiliates. The Borrower will not, and will
not permit any Restricted Subsidiary to, enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of Property or the
rendering of any service, with any Affiliate unless such transactions are not
prohibited under this Agreement and are upon fair and reasonable terms no less
favorable to it than it would obtain in a comparable arm’s length transaction
with a Person not an Affiliate, other than (a) transactions by and among the
Borrower and the Restricted Subsidiaries, (b) any Restricted Payment permitted
by Section 9.04(a), (c) Investments permitted under Sections 9.05(d), (e) and
(h), (d) the performance of employment, equity award, equity option or equity
appreciation agreements, plans or other similar compensation or benefit plans or
arrangements (including vacation plans, health and insurance plans, deferred
compensation plans and retirement or savings plans) entered into by the Borrower
or any Restricted Subsidiary in the ordinary course of its business with its
employees, officers and directors, (e) fees and compensation to, and indemnity
provided on behalf of, officers, directors, and employees of Holdings (or any
direct or indirect parent thereof), the Borrower or any Restricted Subsidiary in
their capacity as such, to the extent such fees and compensation are customary
and attributable to the business of Holdings, the Borrower or such Restricted
Subsidiary, (f) the payment of fees and expenses related to the Transactions,
(g) the payment of the fees to the Permitted Holders permitted by Section
9.04(a)(vi)(D) and (h) issuances of Equity Interests of the Borrower to the
extent otherwise permitted by this Agreement.

 

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Section 9.11    Foreign Subsidiaries. Neither the Borrower nor any Restricted
Subsidiary shall have or create any Foreign Subsidiaries.

Section 9.12    Negative Pledge Agreements; Dividend Restrictions. The Borrower
will not, and will not permit any Restricted Subsidiary to, create, incur,
assume or suffer to exist any contract, agreement or understanding (other than
(a) this Agreement and the Security Instruments, (b) agreements or arrangements
evidencing Liens permitted by Section 9.03 to the extent such restriction
applies only to the property subject to such Lien, (c) customary restrictions
and conditions with respect to the sale or disposition of Property or Equity
Interests permitted under Section 9.09 pending the consummation of such sale or
disposition, (d) any leases or licenses or similar contracts as they affect any
Property or Lien subject to a lease or license and customary prohibitions on
assignment contained in software license agreements, (e) agreements and
understandings contained in joint venture agreements or other similar agreements
entered into in the ordinary course of business in respect to the disposition or
distribution of assets of such joint venture, (f) any restrictions or conditions
set forth in any agreement in effect at any time any Person becomes a Restricted
Subsidiary (but not any modification or amendment expanding the scope of any
such restriction or condition), provided that such agreement was not entered
into in contemplation of such Person becoming a Restricted Subsidiary and the
restriction or condition set forth in such agreement does not apply to the
Borrower or any Restricted Subsidiary, (g) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest (other than
any Oil and Gas Property) of the Borrower or any Restricted Subsidiary,
(h) purchase money obligations for property acquired in the ordinary course of
business and obligations under Finance Leases that impose restrictions on
transferring the property so acquired, (i) restrictions on cash and other
deposits or net worth imposed by customers under contracts entered into in the
ordinary course of business, (j) prohibitions or restrictions imposed by any
Governmental Requirement, (k) provisions relating to any Lien, so long as
(i) such Lien is permitted under the Loan Documents and such restrictions or
conditions related only to the specific asset subject to such Lien and (ii) such
restrictions and conditions are not created for the purpose of avoiding the
restrictions imposed by this Section 9.12) and (l) encumbrances or restrictions
imposed by any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (a) through (k) above;
provided that such amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings are, in the good faith
judgment of the Borrower’s board of directors, no more restrictive in any
material respect with respect to such encumbrance and other restrictions taken
as a whole than those prior to such amendment, modification, restatement,
renewal, increase, supplement, refunding, replacement or refinancing which in
any way prohibits or restricts the granting, conveying, creation or imposition
of any Lien on any of its Property in favor of the Administrative Agent and the
Secured Parties or restricts any Restricted Subsidiary from paying dividends or
making distributions to the Borrower or any Guarantor, or which requires the
consent of or notice to other Persons in connection therewith.

 

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Section 9.13    Swap Agreements.

(a)    The Borrower will not, and will not permit any Restricted Subsidiary to,
enter into any Swap Agreements with any Person other than:

(i)    Swap Agreements with an Approved Counterparty in respect of commodities
entered into not for speculative purposes the notional volumes for which (when
aggregated with the notional volumes of other commodity Swap Agreements then in
effect, other than the notional volumes of (A) puts, options, or floors with
respect to which neither the Borrower nor any Restricted Subsidiaries have any
payment obligation other than premiums and other charges (it being understood
that the payment of such obligations may be deferred but that the total amount
of which are fixed and known at the time such transaction is entered into) and
(B) basis differential swaps on volumes already hedged pursuant to other Swap
Agreements for Hydrocarbons) do not exceed, as of the date such Swap Agreement
is entered into, for the sixty (60) month period (and for each fiscal quarter
during such period) from the date such Swap Agreement is created, up to 85% of
the reasonably anticipated projected production (measured on an MMBtu basis with
respect to natural gas and a Bbl basis with respect to crude oil, as applicable,
and not, for the avoidance of doubt, on an Mcf or volumetric basis) from the
Credit Parties’ Oil and Gas Properties constituting Proved Reserves (as set
forth in the most recent Reserve Report delivered pursuant to the terms of this
Agreement) of crude oil, natural gas and natural gas liquids, calculated
separately; provided, however, that such Swap Agreements shall not, in any case,
have a tenor of greater than sixty (60) months (the “Ongoing Hedges”). In
addition to the Ongoing Hedges, in connection with a proposed or pending
acquisition (a “Proposed Acquisition”), the Credit Parties may also enter into
Swap Agreements with respect to the Credit Parties’ reasonably anticipated
projected production from the Oil and Gas Properties subject of such proposed
acquisition constituting Proved Reserves as forecast based upon the most recent
Reserve Report having notional volumes not in excess of 15% of the Credit
Parties’ existing projected production from Proved Reserves prior to the
consummation of such Proposed Acquisition (such that the aggregate shall not be
more than 100% of the reasonably anticipated projected production prior to the
consummation of such Proposed Acquisition) for a period not exceeding thirty-six
(36) months from the date such Swap Agreement is created during the period
between (x) the date on which such Credit Party signs a definitive acquisition
agreement in connection with a Proposed Acquisition and (y) the earliest of
(I) the date such Proposed Acquisition is consummated, (II) the date such
proposed acquisition is terminated and (III) ninety (90) days after such
definitive acquisition agreement was executed (or such longer period as to which
the Administrative Agent may agree). If such proposed acquisition is terminated,
all such Swap Agreements entered into with respect to a proposed acquisition
must be terminated or unwound within ninety (90) days following the date such
proposed acquisition is terminated. It is understood that (i) commodity Swap
Agreements that may, from time to time, “hedge” the same commodity volumes but
different elements of commodity risk thereof, shall not be aggregated together
(i.e., only the Swap Agreement hedging the same element of commodity risk being
entered into shall be counted) when calculating the foregoing limitations on
notional volumes and (ii) commodity Swap Agreements that may, from time to time,
“hedge” the same commodity volumes and offset one another shall both be ignored
to the extent of such offset when calculating the foregoing limitations on
notional volumes; and

 

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(ii)    Swap Agreements in respect of interest rates with an Approved
Counterparty, as follows:

(A)    Swap Agreements effectively converting interest rates from fixed to
floating, the notional amounts of which (when aggregated with all other Swap
Agreements of the Borrower and its Restricted Subsidiaries then in effect
effectively converting interest rates from fixed to floating) do not exceed 75%
of the anticipated outstanding principal amount of the Credit Parties’ Debt for
borrowed money which bears interest at a fixed rate, and which Swap Agreements
shall not, in any case, have a tenor beyond the maturity date of such Debt, and

(B)    Swap Agreements effectively converting interest rates from floating to
fixed, the notional amounts of which (when aggregated with all other Swap
Agreements of the Borrower and its Restricted Subsidiaries then in effect
effectively converting interest rates from floating to fixed) do not exceed 75%
of the anticipated outstanding principal amount of the Credit Parties’ Debt for
borrowed money which bears interest at a floating rate, and which Swap
Agreements shall not, in any case, have a tenor beyond the maturity date of such
Debt.

(b)    In no event shall any Swap Agreement contain any requirement, agreement
or covenant for the Borrower or any Restricted Subsidiary to post collateral,
credit support (including in the form of letters of credit) or margin to secure
their obligations under such Swap Agreement or to cover market exposures (other
than pursuant to the Security Instruments).

(c)    For purposes of entering into or maintaining Swap Agreement trades or
transactions under Section 9.13(a), forecasts of reasonably anticipated
production from the Borrower’s and its Restricted Subsidiaries’ Oil and Gas
Properties constituting Proved Reserves as set forth on the most recent Reserve
Report delivered pursuant to the terms of this Agreement shall be revised to
account for any increase or decrease therein anticipated because of information
obtained by the Borrower or any of its Restricted Subsidiaries and delivered to
the Administrative Agent subsequent to the publication of such Reserve Report
including the Borrower’s or any of its Restricted Subsidiaries’ internal
forecasts of production decline rates for existing wells and additions to or
deletions from anticipated future production from new wells and completed
acquisitions coming on stream or failing to come on stream.

Section 9.14    Designation and Conversion of Restricted and Unrestricted
Subsidiaries.

(a)    Unless designated as an Unrestricted Subsidiary on Schedule 7.13 as of
the Initial Funding Date or thereafter, assuming compliance with Section 9.14(b)
below, any Person that becomes a Subsidiary of the Borrower or any of its
Restricted Subsidiaries shall be classified as a Restricted Subsidiary.

(b)    The Borrower may designate by written notification thereof to the
Administrative Agent, any Restricted Subsidiary, including a newly formed or
newly acquired Subsidiary, as an Unrestricted Subsidiary if (i) immediately
prior, and immediately after giving effect, to such designation (including the
effect of any repayments of Revolving Credit Exposure occurring
contemporaneously therewith), no Event of Default nor any Borrowing Base
Deficiency

 

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shall have occurred and be continuing and (ii) such designation is deemed to be
an Investment in an Unrestricted Subsidiary in an amount equal to the fair
market value as of the date of such designation of the Borrower’s direct and
indirect ownership interest in such Subsidiary and such Investment would be
permitted to be made at the time of such designation under Section 9.04(b)(ii).
Except as provided in this Section 9.14(b), no Restricted Subsidiary may be
redesignated as an Unrestricted Subsidiary.

(c)    The Borrower may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary if after giving effect to such designation, (i) the representations
and warranties of the Borrower and its Restricted Subsidiaries contained in each
of the Loan Documents are true and correct on and as of such date as if made on
and as of the date of such redesignation (or, if stated to have been made
expressly as of an earlier date, were true and correct as of such date), (ii) no
Event of Default would exist, and (iii) the Borrower complies with the
requirements of Sections 8.13, 8.16 and 9.11. Any such designation shall be
treated as a cash dividend in an amount equal to the lesser of the fair market
value of the Borrower’s direct and indirect ownership interest in such
Subsidiary or the amount of the Borrower’s cash investment previously made for
purposes of the limitation on Investments under Section 9.04(b)(ii).

(d)    The Borrower will cause the management, business and affairs of each of
the Borrower and its Restricted Subsidiaries to be conducted in such a manner
(including, without limitation, by keeping separate books of account, furnishing
separate financial statements of Unrestricted Subsidiaries to creditors and
potential creditors thereof and by not permitting Properties of the Borrower and
its respective Restricted Subsidiaries to be commingled) so that each
Unrestricted Subsidiary that is a corporation will be treated as a corporate
entity separate and distinct from Borrower and the Restricted Subsidiaries.

Section 9.15    Organizational Documents. Neither the Borrower nor any
Restricted Subsidiary shall amend, modify or change its Organizational
Documents, including the operating agreement, in any manner materially adverse
to the rights or interests of the Lenders.

Section 9.16    Changes in Fiscal Year. The Borrower shall not, and shall not
permit any Restricted Subsidiary to have its fiscal year end on a date other
than December 31 or change its method of determining fiscal quarters.

ARTICLE IX-A

HOLDINGS COVENANT

Commencing on the Initial Funding Date and until the Commitments have expired or
terminated and the principal of and interest on each Loan and all fees payable
hereunder and all other amounts payable under the Loan Documents have been paid
in full (other than contingent indemnity obligations for which no claims have
been made) and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, Holdings covenants and agrees with the
Lenders that it will not create, incur, assume or suffer to exist any Debt or
Lien other than Liens securing the Indebtedness, nor will it engage at any time
in any business or business activity other than (a) the ownership of Equity
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of its obligations under and in connection with the Loan Documents, (c) issuing,
selling and redeeming its Equity Interests, (d) paying Taxes, (e) holding
directors’ and shareholders’ meetings, preparing corporate and similar records
and other activities (including the ability to incur fees, costs and expenses
relating to such maintenance) required to maintain its corporate or other legal
structure or to participate in tax, accounting or other administrative matters
as a member of the consolidated group of the Borrower and its Subsidiaries,
(f) preparing reports to, and preparing and making notices to and filings with,
Governmental Authorities and to its holders of Equity Interests, (g) receiving,
and holding proceeds of, Restricted Payments from the Borrower and the
Subsidiaries and distributing the proceeds thereof to the extent not prohibited
by Sections 9.04 and 9.10, (h) providing indemnification to officers and
directors, (i) activities permitted hereunder or as otherwise required by
Governmental Requirements and (j) activities incidental to the business or
activities described in each foregoing clauses of this Article IX-A. Holdings
shall at all times pledge all of the Equity Interests of the Borrower
(including, if such Equity Interests are certificated, by delivering original
stock certificates evidencing the Equity Interests of the Borrower, together
with appropriate undated stock powers for each certificate duly executed in
blank by Holdings).

ARTICLE X

EVENTS OF DEFAULT; REMEDIES

Section 10.01    Events of Default. After the Initial Funding Date, one or more
of the following events shall constitute an “Event of Default”:

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

(b)    the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount (other than an amount referred to in Section 10.01(a)) payable
under any Loan Document, when and as the same shall become due and payable, and
such failure shall continue unremedied for a period of three (3) Business Days.

(c)    any representation or warranty made or deemed made by or on behalf of
Holdings, the Borrower or any Restricted Subsidiary in or in connection with any
Loan Document or any amendment or modification of any Loan Document or waiver
under such Loan Document, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to have
been incorrect in any material respect when made or deemed made (or if already
qualified by materiality or Material Adverse Effect, incorrect in any respect
when made or deemed made).

(d)    (i) the Borrower or any Restricted Subsidiary shall fail to observe or
perform any covenant, condition or agreement contained in Sections 8.01(k),
8.02, 8.03 (solely in respect of the Borrower), 8.13 or Article IX or
(ii) Holdings shall fail to observe or perform any covenant, condition or
agreement contained in Article IX-A.

 

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

(f)    the Borrower or any Restricted Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Debt, when and as the same shall become due and payable and such
failure continues beyond any applicable grace period.

(g)    any event or condition occurs (other than the termination of any Swap
Agreement with any Approved Counterparty described in clause (a) of such defined
term prior to its scheduled maturity as a result of an “Event of Default” or
“Termination Event” (as such terms are defined in the relevant Swap Agreement)
with respect to which the Approved Counterparty is the sole “Defaulting Party”
or sole “Affected Party” (as such terms are defined in the relevant Swap
Agreement)) that results in any Material Debt becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of
notice, the lapse of time or both) the holder or holders of any Material Debt or
any trustee or agent on its or their behalf to cause any Material Debt to become
due (other than by a regularly scheduled required prepayment), or to require the
Redemption thereof or any offer to Redeem to be made in respect thereof, prior
to its scheduled maturity or require the Borrower or any Restricted Subsidiary
to make an offer in respect thereof (other than any event requiring prepayment
pursuant to customary asset sale or change of control provisions).

(h)    an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Restricted Subsidiary that is a Material
Subsidiary as of such date or its debts, or of a substantial part of its assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any Restricted Subsidiary that is a Material Subsidiary as of such
date or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for sixty (60) days or an
order or decree approving or ordering any of the foregoing shall be entered.

(i)    the Borrower or any Restricted Subsidiary that is a Material Subsidiary
as of such date shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or petition described in
Section 10.01(h), (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any Restricted Subsidiary that is a Material Subsidiary as of such
date or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, or (vi) take any
action for the purpose of effecting any of the foregoing.

 

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(j)    (i) one or more judgments for the payment of money in an aggregate amount
in excess of $25,000,000 (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 the Borrower, any
Restricted Subsidiary or any combination thereof and the same shall remain
undischarged for a period of thirty (30) consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any
Restricted Subsidiary to enforce any such judgment.

(k)    the Loan Documents after delivery thereof shall for any reason, except to
the extent permitted by the terms thereof, cease to be in full force and effect
and valid, binding and enforceable in accordance with their terms against the
Borrower or a Guarantor party thereto or shall be repudiated by any of them, or
cease to create a valid and perfected Lien of the priority required thereby in
favor of the Administrative Agent on any material portion of the Collateral
purported to be covered thereby, except to the extent permitted by the terms of
this Agreement, or the Borrower or any Restricted Subsidiary or any of their
Affiliates shall so state in writing.

(l)    a Change in Control shall occur.

(m)    an ERISA Event shall have occurred that, when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Restricted Subsidiaries in an aggregate amount
exceeding $25,000,000 that is 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.

Section 10.02    Remedies.

(a)    In the case of an Event of Default other than one described in
Section 10.01(h) or (i), and, to the extent any such Event of Default arises
from Section 9.01(a) or (b), subject to Section 9.01(c), at any time thereafter
during the continuance of such Event of Default, the Administrative Agent may,
and at the request of the Majority Lenders, shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Notes and the Loans then outstanding to be due
and payable in whole (or in part, in which case any principal not so declared to
be due and payable may thereafter be declared to be due and payable), and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
and the Guarantors accrued hereunder and under the Notes and the other Loan
Documents (including, without limitation, the payment of cash collateral to
secure the LC Exposure as provided in Section 2.08(j)), shall become due and
payable immediately, without presentment, demand,

 

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protest, notice of intent to accelerate, notice of acceleration or other notice
of any kind, all of which are hereby waived by the Borrower and each Guarantor;
and in case of an Event of Default described in Section 10.01(h) or (i), the
Commitments shall automatically terminate and the Notes and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and
the other obligations of the Borrower and the Guarantors accrued hereunder and
under the Notes and the other Loan Documents (including, without limitation, the
payment of cash collateral to secure the LC Exposure as provided in
Section 2.08(j)), shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower and each Guarantor.

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

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

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

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

(iii)    third, pro rata to payment of accrued interest on the Loans;

(iv)    fourth, pro rata to payment of principal outstanding on the Loans, LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower
at such time, and Indebtedness referred to in clause (b) of the definition of
Indebtedness owing to Secured Swap Providers and Indebtedness referred to in
clause (c) of the definition of Indebtedness owing to the Bank Products
Providers;

(v)    fifth, pro rata to any other Indebtedness;

(vi)    sixth, to serve as cash collateral to be held by the Administrative
Agent to secure the remaining LC Exposure; and

(vii)    seventh, any excess, after all of the Indebtedness shall have been
indefeasibly paid in full in cash (other than contingent indemnity obligations
for which no claims have been made), shall be paid to the Borrower or as
otherwise required by any Governmental Requirement.

Notwithstanding the foregoing, amounts received from the Borrower or any
Guarantor that is not an “eligible contract participant” under the Commodity
Exchange Act shall not be applied to any Excluded Swap Obligations (it being
understood, that in the event that any amount is applied to Indebtedness other
than Excluded Swap Obligations as a result of this clause, the Administrative
Agent shall make such adjustments as it determines are appropriate to
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clause (iv) above from amounts received from “eligible contract participants”
under the Commodity Exchange Act to ensure, as nearly as possible, that the
proportional aggregate recoveries with respect to Indebtedness described in
clause (iv) above by the holders of any Excluded Swap Obligations are the same
as the proportional aggregate recoveries with respect to other Indebtedness
pursuant to clause (iv) above).

ARTICLE XI

THE AGENTS

Section 11.01    Appointment; Powers. Each of the Lenders and the Issuing Banks
hereby irrevocably appoints the Administrative Agent as its agent and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof and the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto. Each Secured Party hereby authorizes and directs the
Administrative Agent to enter into the Security Instruments on behalf of such
Secured Party as needed to effectuate the transactions permitted by this
Agreement and agrees that the Administrative Agent may take such actions on its
behalf as is contemplated by the terms of such applicable Security
Instrument. Without limiting the provisions of Sections 11.02 and 12.03, each
Secured Party hereby consents to the Administrative Agent and any successor
serving in such capacity and agrees not to assert any claim (including as a
result of any conflict of interest) against the Administrative Agent, or any
such successor, arising from the role of the Administrative Agent or such
successor under the Loan Documents so long as it is either acting in accordance
with the terms of such documents and otherwise has not engaged in gross
negligence or willful misconduct.

Section 11.02    Duties and Obligations of Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing (the use of the term “agent” herein and in the other Loan
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law; rather, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties), (b) the Administrative
Agent shall have no duty to take any discretionary action or exercise any
discretionary powers, except as provided in Section 11.03, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall be deemed not to have knowledge of
any (x) notice of any of the events or circumstances set forth or described in
Section 8.02 unless and until written notice thereof stating that it is a
“notice under Section 8.02” in respect of this Agreement and identifying the
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Administrative Agent by the Borrower or a Lender or (y) Default or Event of
Default unless and until written notice thereof is given to the Administrative
Agent by the Borrower or a Lender, and shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Loan Document,
(ii) the contents of any certificate, report or other document delivered
hereunder or under any other Loan Document or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement, any other Loan Document or any other agreement, instrument or
document, (v) the satisfaction of any condition set forth in Article VI or
elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent or as to those conditions precedent
expressly required to be to the Administrative Agent’s satisfaction, (vi) the
existence, value, perfection or priority of any collateral security or the
financial or other condition of the Borrower and its Subsidiaries or any other
obligor or guarantor, or (vii) any failure by the Borrower or any other Person
(other than itself) to perform any of its obligations hereunder or under any
other Loan Document or the performance or observance of any covenants,
agreements or other terms or conditions set forth herein or therein. The
Administrative Agent shall not be responsible or have any liability for, or have
any duty to ascertain, inquire into, monitor or enforce, compliance with the
provisions hereof relating to Disqualified Institutions. Without limiting the
generality of the foregoing, the Administrative Agent shall not (A) be obligated
to ascertain, monitor or inquire as to whether any Lender or Participant or
prospective Lender or Participant is a Disqualified Institution or (B) have any
liability with respect to or arising out of any assignment or participation of
Loans, or disclosure of confidential information, to any Disqualified
Institution. For purposes of determining compliance with the conditions
specified in Article VI, each Lender shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
written notice from such Lender prior to the proposed Effective Date or the
proposed Initial Funding Date and, in either case, specifying its objection
thereto.

Section 11.03    Action by Administrative Agent. The Administrative Agent shall
have no duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Majority Lenders (or such other number,
percentage or class of the Lenders as shall be necessary under the circumstances
as provided in Section 12.02) and in all cases the Administrative Agent shall be
fully justified in failing or refusing to act hereunder or under any other Loan
Documents unless it shall (a) receive written instructions from the Majority
Lenders or the Lenders, as applicable, (or such other number, percentage or
class of the Lenders as shall be necessary under the circumstances as provided
in Section 12.02) specifying the action to be taken and (b) be indemnified to
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which may be incurred by it by reason of taking or continuing to take any such
action. The instructions as aforesaid and any action taken or failure to act
pursuant thereto by the Administrative Agent shall be binding on all of the
Lenders. If a Default has occurred and is continuing, then the Administrative
Agent shall take such action with respect to such Default as shall be directed
by the requisite Lenders in the written instructions (with indemnities)
described in this Section 11.03, provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interests of the Lenders. In no event, however, shall the
Administrative Agent be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to this
Agreement, the Loan Documents or applicable law. If a Default has occurred and
is continuing, no Arranger nor any Agent (other than the Administrative Agent)
shall have any obligation to perform any act in respect thereof. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Majority Lenders or the Lenders (or
such other number, percentage or class of the Lenders as shall be necessary
under the circumstances as provided in Section 12.02), and otherwise the
Administrative Agent shall not be liable for any action taken or not taken by it
hereunder or under any other Loan Document or under any other document or
instrument referred to or provided for herein or therein or in connection
herewith or therewith INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own
gross negligence or willful misconduct.

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

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

Section 11.06    Resignation of Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided in this
Section 11.06, the Administrative Agent may resign at any time by notifying the
Lenders, any Issuing Bank and the Borrower. Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Borrower, and
with the consent of the Borrower if no Event of Default has occurred and is then
continuing, to appoint a successor. If no successor shall have been so appointed
by the Majority Lenders and shall have accepted such appointment within thirty
(30) days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and any Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent’s resignation hereunder, the provisions of this Article XI
and Section 12.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.

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

Section 11.08    No Reliance. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and each other Loan Document to which it is a party. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document, any related agreement or any
document furnished hereunder or thereunder. The Agents shall not be required to
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by the Borrower or any of its Subsidiaries of this Agreement, the Loan Documents
or any other document referred to or provided for herein or to inspect the
Properties or books of the Borrower or its Subsidiaries. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Administrative Agent hereunder, no Agent or Arranger shall
have any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower (or any of its Affiliates) which may come into the possession of such
Agent or any of its Affiliates. In this regard, each Lender acknowledges that
Simpson Thacher & Bartlett LLP is acting in this transaction as special counsel
to the Administrative Agent only, except to the extent otherwise expressly
stated in any legal opinion or any Loan Document. Each other party hereto will
consult with its own legal counsel to the extent that it deems necessary in
connection with the Loan Documents and the matters contemplated therein.

Section 11.09    Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any of its Subsidiaries, the
Administrative Agent (irrespective of whether the principal of any Loan shall
then be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

(a)    to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans and all other Indebtedness
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders and the
Administrative Agent under Section 12.03) allowed in such judicial proceeding;
and

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

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

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

 

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Section 11.10    Authority of Administrative Agent to Release Collateral, Liens
and Guarantors. Each Secured Party hereby authorizes the Administrative Agent to
release (a) any Collateral that is permitted to be sold or released pursuant to
the terms of the Loan Documents (including, without limitation, any Collateral
owned by a Restricted Subsidiary that is redesignated as an Unrestricted
Subsidiary in accordance with Section 9.14(b)), (b) any Guarantor if 100% of the
Equity Interests in such Guarantor are sold, or if such Guarantor is
redesignated as an Unrestricted Subsidiary, in each case in a transaction
permitted under the Loan Documents and (c) all Collateral and Guarantors upon
termination of this Agreement, termination of all Swap Agreements secured by the
Security Instruments (other than such Swap Agreements as to which arrangements
satisfactory to the applicable counterparty in its sole discretion have been
made), termination of all Letters of Credit (other than Letters of Credit as to
which arrangements satisfactory to such Issuing Bank in its sole discretion have
been made), and the payment in full in cash of all outstanding Loans, LC
Disbursements, all other Indebtedness, and all other obligations payable under
this Agreement and under any other Loan Document. Each Lender and each Issuing
Bank hereby authorizes the Administrative 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 9.09 or is otherwise authorized by the terms of the Loan Documents.
If any of the Collateral shall be sold, transferred or otherwise disposed of by
any Loan Party in a transaction permitted by the Loan Documents, or in the event
that all the Equity Interests of such Loan Party shall be sold, and such
Collateral or Equity Interests shall no longer constitute or be required to be
Collateral under the Loan Documents, then the Administrative Agent, at the
request and sole expense of the Borrower and the applicable Loan Party, shall
promptly execute and deliver to such Loan Party all releases or other documents
reasonably necessary or desirable for the release of the Liens created by the
applicable Security Instrument on such Collateral; provided that the Borrower
shall have delivered to the Administrative Agent, at the Administrative Agent’s
reasonable request, on or prior to the date of the proposed release, (or such
other time period as the Administrative Agent may agree), a certification by the
Borrower stating (i) that such transaction is in compliance with this Agreement
and the other Loan Documents and (ii) the Borrower has complied with its
obligations under Section 8.01(j), if applicable.

Section 11.11    The Arrangers and Agents. The Arrangers and the Agents (other
than the Administrative Agent) shall have no duties, responsibilities or
liabilities under this Agreement and the other Loan Documents other than their
duties, responsibilities and liabilities in their capacity as Lenders hereunder.

 

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Section 11.12    Certain ERISA Matters.

(a)    Each Lender (x) represents and warrants, as of the date such Person
became a Lender party hereto, to, and (y) covenants, from the date such Person
became a Lender party hereto to the date such Person ceases being a Lender party
hereto, for the benefit of, the Administrative Agent, and not, for the avoidance
of doubt, to or for the benefit of the Borrower or any other Credit Party, that
at least one of the following is and will be true:

(i)    such Lender is not using “plan assets” (within the meaning of
Section 3(42) of ERISA or otherwise) of one or more Benefit Plans with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments or this
Agreement;

(ii)    the transaction exemption set forth in one or more PTEs, such as PTE
84-14 (a class exemption for certain transactions determined by independent
qualified professional asset managers), PTE 95-60 (a class exemption for certain
transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate
accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain
transactions determined by in-house asset managers), is applicable with respect
to such Lender’s entrance into, participation in, administration of and
performance of the Loans, the Letters of Credit, the Commitments and this
Agreement;

(iii)    (A) such Lender is an investment fund managed by a “Qualified
Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B)
such Qualified Professional Asset Manager made the investment decision on behalf
of such Lender to enter into, participate in, administer and perform the Loans,
the Letters of Credit, the Commitments and this Agreement, (C) the entrance
into, participation in, administration of and performance of the Loans, the
Letters of Credit, the Commitments and this Agreement satisfies the requirements
of subsections (b) through (g) of Part I of PTE 84-14 and (D) to the best
knowledge of such Lender, the requirements of subsection (a) of Part I of PTE
84-14 are satisfied with respect to such Lender’s entrance into, participation
in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement; or

(iv)    such other representation, warranty and covenant as may be agreed in
writing between the Administrative Agent, in its sole discretion, and such
Lender.

(b)    In addition, unless either (1) Section 11.12(a)(i) is true with respect
to a Lender or (2) such Lender has provided another representation, warranty and
covenant in accordance with Section 11.12(a)(iv), such Lender further
(x) represents and warrants, as of the date such Person became a Lender party
hereto, to, and (y) covenants, from the date such Person became a Lender party
hereto to the date such Person ceases being a Lender party hereto, for the
benefit of the Administrative Agent, and not, for the avoidance of doubt, to or
for the benefit of the Borrower or any other Credit Party, that the
Administrative Agent is not a fiduciary with respect to the assets of such
Lender involved in such Lender’s entrance into, participation in, administration
of and performance of the Loans, the Letters of Credit, the Commitments and this
Agreement (including in connection with the reservation or exercise of any
rights by the Administrative Agent under this Agreement, any Loan Document or
any documents related hereto or thereto).

 

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Section 11.13    Credit Bidding. The Secured Parties hereby irrevocably
authorize the Administrative Agent, at the direction of the Majority Lenders, to
credit bid all or any portion of the Indebtedness (including by accepting some
or all of the Collateral in satisfaction of some or all of the Indebtedness
pursuant to a deed in lieu of foreclosure or otherwise) and in such manner
purchase (either directly or through one or more acquisition vehicles) all or
any portion of the Collateral (a) at any sale thereof conducted under the
provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of
the Bankruptcy Code, or any similar laws in any other jurisdictions to which a
Credit Party is subject, or (b) at any other sale, foreclosure or acceptance of
collateral in lieu of debt conducted by (or with the consent or at the direction
of) the Administrative Agent (whether by judicial action or otherwise) in
accordance with any applicable law. In connection with any such credit bid and
purchase, the Indebtedness owed to the Secured Parties shall be entitled to be,
and shall be, credit bid by the Administrative Agent at the direction of the
Majority Lenders on a ratable basis (with Indebtedness with respect to
contingent or unliquidated claims receiving contingent interests in the acquired
assets on a ratable basis that shall vest upon the liquidation of such claims in
an amount proportional to the liquidated portion of the contingent claim amount
used in allocating the contingent interests) for the asset or assets so
purchased (or for the Equity Interests or debt instruments of the acquisition
vehicle or vehicles that are issued in connection with such purchase). In
connection with any such bid, (i) the Administrative Agent shall be authorized
to form one or more acquisition vehicles and to assign any successful credit bid
to such acquisition vehicle or vehicles, (ii) each of the Secured Parties’
ratable interests in the Indebtedness which were credit bid shall be deemed
without any further action under this Agreement to be assigned to such vehicle
or vehicles for the purpose of closing such sale, (iii) the Administrative Agent
shall be authorized to adopt documents providing for the governance of the
acquisition vehicle or vehicles (provided that any actions by the Administrative
Agent with respect to such acquisition vehicle or vehicles, including any
disposition of the assets or Equity Interests thereof, shall be governed,
directly or indirectly, by, and the governing documents shall provide for,
control by the vote of the Majority Lenders or their permitted assignees under
the terms of this Agreement or the governing documents of the applicable
acquisition vehicle or vehicles, as the case may be, irrespective of the
termination of this Agreement and without giving effect to the limitations on
actions by the Majority Lenders contained in Section 12.02 of this Agreement),
(iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles
shall be authorized to issue to each of the Secured Parties, ratably on account
of the relevant Indebtedness that was credit bid, interests, whether as equity,
partnership interests, limited partnership interests or membership interests, in
any such acquisition vehicle and/or debt instruments issued by such acquisition
vehicle, all without the need for any Secured Party or acquisition vehicle to
take any further action, and (v) to the extent that Indebtedness that is
assigned to an acquisition vehicle are not used to acquire Collateral for any
reason (as a result of another bid being higher or better, because the amount of
Indebtedness assigned to the acquisition vehicle exceeds the amount of
Indebtedness credit bid by the acquisition vehicle or otherwise), such
Indebtedness shall automatically be reassigned to the Secured Parties pro rata
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interest in such Indebtedness and the Equity Interests and/or debt instruments
issued by any acquisition vehicle on account of such Indebtedness shall
automatically be cancelled, without the need for any Secured Party or any
acquisition vehicle to take any further action. Notwithstanding that the ratable
portion of the Indebtedness of each Secured Party are deemed assigned to the
acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured
Party shall execute such documents and provide such information regarding the
Secured Party (and/or any designee of the Secured Party which will receive
interests in or debt instruments issued by such acquisition vehicle) as the
Administrative Agent may reasonably request in connection with the formation of
any acquisition vehicle, the formulation or submission of any credit bid or the
consummation of the transactions contemplated by such credit bid.

ARTICLE XII

MISCELLANEOUS

Section 12.01    Notices.

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

(i)    if to the Borrower, to it at Citizen Energy Operating, LLC, 320 S. Boston
Ave, Suite 900, Tulsa, OK 74103, Attention of Tim Helms, Chief Financial
Officer;

(ii)    if to the Administrative Agent or the Issuing Bank, to it at JPMorgan
Chase Bank, N.A., 712 Main Street, 5th Floor South, Houston, TX 77002,
Attention: Justin Crawford; and

(iii)    if to any other Lender, to it at its address (or facsimile number) set
forth in its Administrative Questionnaire.

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

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

 

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Section 12.02    Waivers; Amendments.

(a)    No failure on the part of the Administrative Agent, any other Agent, the
Issuing Banks, the Swingline Lenders or any Lender to exercise and no delay in
exercising, and no course of dealing with respect to, any right, power or
privilege, or any abandonment or discontinuance of steps to enforce such right,
power or privilege, under any of the Loan Documents shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under any of the Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies of the Administrative Agent, any other Agent, the Issuing Banks, the
Swingline Lenders 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 Administrative
Agent, any other Agent, any Lender, the Swingline Lenders or the Issuing Banks
may have had notice or knowledge of such Default at the time.

(b)    Neither this Agreement nor any provision hereof nor other Loan Document
nor any provision thereof may be waived, amended or modified except pursuant to
an agreement or agreements in writing entered into by the Borrower and the
Majority Lenders or by the Borrower and the Administrative Agent with the
consent of the Majority Lenders; provided that no such agreement shall
(i) increase the Commitment, Elected Commitment or the Maximum Credit Amount of
any Lender without the written consent of such Lender, (ii) increase the
Borrowing Base without the written consent of each Lender, decrease or maintain
the Borrowing Base without the consent of the Required Lenders, or modify
Section 2.07 in any manner that results in an increase in the Borrowing Base
without the consent of each Lender (other than any Defaulting Lender); provided
that any Scheduled Redetermination may be postponed with the consent of the
Required Lenders, (iii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, or reduce any other Indebtedness hereunder or under any other Loan
Document, without the written consent of each Lender affected thereby,
(iv) 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 Indebtedness hereunder or under any other Loan
Document, or reduce the amount of, waive or excuse any such payment, or postpone
or extend the Maturity Date without the written consent of each Lender affected
thereby; provided that any mandatory prepayment required by Section 3.04(c) may
be postponed or waived with the consent of the Required Lenders, (v) change
Section 4.01(b) or (c) in a manner that would alter the pro rata sharing of
payments required thereby, without the written consent of each Lender affected
thereby, (vi) waive or amend Sections 3.04(c) (subject to the proviso in
Section 12.02(b)(iv)), 6.01, 6.02, 8.13, 10.02(c) (or amend any of the defined
terms in such Section if the result would be to alter the priority of payments
in respect of Collateral proceeds) or 12.14 or change the definition of the
terms “Applicable Percentage”, “Domestic Subsidiary”, “Foreign Subsidiary”,
“Material Subsidiary” or “Subsidiary”, without the written consent of each
Lender (other than any Defaulting Lender);

 

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provided, that any amendment or modification to Sections 10.02(c) (or any of the
defined terms in such Section if the result would be to alter the priority of
payments in respect of Collateral proceeds), Section 12.14 or this proviso in
this Section 12.02(b)(vi) shall also require the consent of each Secured Swap
Provider adversely affected thereby, in each case, if the effect of such
amendment or modification would be disproportionately adverse to such Secured
Swap Provider relative to its effect on the other Secured Parties, (vii) release
any Guarantor (except as set forth in Section 11.10 or in the Guaranty
Agreement), release all or substantially all of the Collateral, or reduce the
percentage set forth in Section 8.13(a) to less than 85%, without the written
consent of each Lender (other than any Defaulting Lender), or (viii) change any
of the provisions of this Section 12.02(b) or the definition of the terms
“Majority Lenders”, “Required Lenders”, or any other provision hereof specifying
the number, percentage or class of Lenders required to waive, amend or modify
any rights hereunder or under any other Loan Documents or make any determination
or grant any consent hereunder or any other Loan Documents, without the written
consent of each Lender (other than any Defaulting Lender); provided, further,
that no such agreement shall amend, modify or otherwise affect the rights or
duties of the Administrative Agent, any other Agent, the Swingline Lenders or
the Issuing Banks hereunder or under any other Loan Document without the prior
written consent of the Administrative Agent, such other Agent, the Swingline
Lenders or the Issuing Banks, as the case may be. Notwithstanding the foregoing,
(A) (I) any Schedules provided by the Borrower after the Effective Date and
prior to the Initial Funding Date pursuant to Section 6.01(z) shall be effective
on the Initial Funding Date and (II) any supplement to Schedule 7.13
(Subsidiaries) shall be effective simply by delivering to the Administrative
Agent a supplemental schedule clearly marked as such and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the Lenders,
(B) the Borrower and the Administrative 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, and (C) the
Administrative Agent and the Borrower (or other applicable Credit Party) may
enter into any amendment, modification or waiver of this Agreement or any other
Loan Document or enter into any agreement or instrument to effect the granting,
perfection, protection, expansion or enhancement of any security interest in any
Mortgaged Property or Property to become Mortgaged Property to secure the
Indebtedness for the benefit of the Lenders or as required by any Governmental
Requirement to give effect to, protect or otherwise enhance the rights or
benefits of any Lender under the Loan Documents without the consent of any
Lender. Notwithstanding the foregoing, Annex II may be amended to add an Issuing
Bank, remove an Issuing Bank or modify the LC Issuance Limit of any Issuing Bank
with the consent solely of the Borrower, the Administrative Agent and such
Issuing Bank (and the consent of the Majority Lenders or any other class of
Lenders shall not be required). Notwithstanding anything herein to the contrary,
the Administrative Agent may, without the consent of any party thereto, enter
into amendments or modifications to this Agreement or any of the other Loan
Documents, or enter into additional Loan Documents as the Administrative Agent
reasonably deems appropriate, in order to implement any Benchmark Replacement or
otherwise effectuate the terms of Section 3.03 in accordance with the terms of
Section 3.03.

 

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Section 12.03    Expenses, Indemnity; Damage Waiver.

(a)    The Borrower shall pay (i) all reasonable and documented out-of-pocket
expenses incurred by the Administrative Agent and its Affiliates, including,
without limitation, the reasonable and documented fees, charges and
disbursements of counsel and other outside consultants for the Administrative
Agent, the reasonable travel, photocopy, mailing, courier, telephone and other
similar expenses, in connection with the syndication of the credit facilities
provided for herein, the preparation, negotiation, execution, delivery and
administration (both before and after the execution hereof and including advice
of counsel to the Administrative Agent as to the rights and duties of the
Administrative Agent and the Lenders with respect thereto) of this Agreement and
the other Loan Documents and any amendments, modifications or waivers of or
consents related to the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) (it being
understood that for purposes of this clause (i), legal fees and expenses shall
be limited to the fees and expenses of Simpson Thacher & Bartlett LLP and one
local counsel as reasonably necessary in any relevant jurisdiction (and solely
in the case of any actual conflict of interest, one additional counsel and (if
reasonably necessary) one local counsel in each relevant jurisdiction to the
affected Indemnitees similarly situated)), (ii) all 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 and documented out-of-pocket expenses
incurred by the Issuing Banks in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, (iv) reasonable and documented out-of-pocket expenses incurred by
the Swingline Lenders in connection with the issuance, amendment, renewal or
extension of any Swingline Lender, (v) all reasonable and documented
out-of-pocket expenses incurred by any Agent, the Issuing Banks, the Swingline
Lenders or any Lender, including the fees, charges and disbursements of any
counsel for any Agent, the 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,
except in the case of out-of-pocket expenses described in this Section 12.03(a)
to the extent that Section 12.03(b) expressly provides that the Borrower or any
other Credit Party shall not indemnify such party for such out-of-pocket
expenses.

(b)    THE BORROWER SHALL INDEMNIFY EACH AGENT, EACH ARRANGER, THE ISSUING
BANKS, THE SWINGLINE LENDERS AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF
THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST,
AND DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS,
DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES (INCLUDING ALL RESPECTIVE
LEGAL FEES AND EXPENSES, WHICH SHALL BE LIMITED TO THE REASONABLE AND DOCUMENTED
FEES AND EXPENSES OF ONE COUNSEL TO ALL INDEMNITEES TAKEN AS A WHOLE AND ONE
LOCAL COUNSEL IN EACH RELEVANT JURISDICTION (AND SOLELY IN THE CASE OF AN ACTUAL
CONFLICT OF INTEREST, ONE ADDITIONAL COUNSEL TO THE AFFECTED INDEMNITEES, TAKEN
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WHOLE AND (IF REASONABLY NECESSARY) ONE LOCAL COUNSEL, IN ANY RELEVANT
JURISDICTION)), INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF,
IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO ANY
OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (ii) THE FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO COMPLY WITH THE
TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL
REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY
WARRANTY OR COVENANT OF THE BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE
LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN
CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE
PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY THE
ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE
DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH
THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER ANY
LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER
IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH,
(v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS
OF THE BORROWER AND ITS SUBSIDIARIES BY THE BORROWER AND ITS SUBSIDIARIES,
(vii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS
RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS, (viii) ANY LIABILITY UNDER
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY OR ANY OF THEIR
PROPERTIES OR OPERATIONS, INCLUDING, THE PRESENCE, GENERATION, STORAGE, RELEASE,
THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR
TREATMENT OF HAZARDOUS MATERIALS ON OR AT ANY OF THEIR PROPERTIES, (ix) THE
BREACH OR NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE PAST
OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR PAST
ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE
AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (xi) THE PRESENCE, USE, RELEASE,
STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT,
ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS ON
OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY
OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM
ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY OF ITS SUBSIDIARIES,
(xii) ANY ENVIRONMENTAL LIABILITY ARISING UNDER ENVIRONMENTAL LAWS OF THE
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OF ITS SUBSIDIARIES, OR (xiii) 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 (A) ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS
NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT OF ANY INDEMNITEE OR ANY OF ITS
RELATED INDEMNIFIED PERSONS OR FROM A BREACH OF A MATERIAL OBLIGATION OF SUCH
INDEMNITEE OR ITS OBLIGATIONS UNDER ANY LOAN DOCUMENT, OR (B) RESULT FROM A
PROCEEDING SOLELY BETWEEN OR AMONG INDEMNITEES THAT DOES NOT INVOLVE ANY ACTION
OR OMISSION BY THE BORROWER OR ANY OTHER CREDIT PARTY, OTHER THAN CLAIMS AGAINST
ANY OF THE ADMINISTRATIVE AGENT OR THE LENDERS OR ANY OF THEIR AFFILIATES IN ITS
CAPACITY OR IN FULFILLING ITS ROLE AS THE ADMINISTRATIVE AGENT, ISSUING BANKS,
SWINGLINE LENDERS, AN ARRANGER, AN AGENT OR ANY SIMILAR ROLE UNDER THIS
AGREEMENT. THIS SECTION 12.03(b) SHALL NOT APPLY WITH RESPECT TO TAXES OTHER
THAN ANY TAXES THAT REPRESENT LOSSES, CLAIMS, DAMAGES, ETC. ARISING FROM ANY
NON-TAX CLAIM.

(c)    To the extent that the Borrower fails to pay any amount required to be
paid by it to any Agent, the Arrangers, the Swingline Lenders or the Issuing
Banks under Section 12.03(a) or (b), each Lender severally agrees to pay to such
Agent, the Arrangers, the Swingline Lenders or the Issuing Banks, as the case
may be, such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against such Agent, the Arrangers, the Swingline Lenders or the Issuing
Banks in their capacities 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 promptly after
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 the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with
this Section 12.04. Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), Participants (to the extent
provided in Section 12.04(c)) and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b)    (i) Subject to the conditions set forth in Section 12.04(b)(ii) below,
any Lender may assign to one or more assignees (other than the Borrower, any
Affiliate of the Borrower, any Disqualified Institution, any Defaulting Lender
or any natural person (or any holding company, investment vehicle, or trust
owned and operated for the primary benefit of a natural person)) 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, conditioned or
delayed) of:

(A)    the Borrower, provided that no consent of the Borrower shall be required
if such assignment is to an existing Lender, an Affiliate of an existing Lender
of similar creditworthiness, an Approved Fund or, if any Event of Default of the
type described in Section 10.01(a), (b), (h) or (i) has occurred and is
continuing, is to any other assignee; and

(B)    the Administrative Agent, each Issuing Bank and each Swingline Lender,
provided that no consent of the Administrative Agent shall be required for an
assignment to an assignee that is a Lender immediately prior to giving effect to
such assignment.

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

(A)    except in the case of an assignment to a Lender or an Affiliate of a
Lender or an Approved Fund or an assignment of the entire remaining amount of
the assigning Lender’s Commitment or Loans, the amount of the Commitment or
Loans of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000 unless
each of the Borrower and the Administrative Agent otherwise consent, provided
that no such consent of the Borrower shall be required if an Event of Default
has occurred and is continuing;

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

 

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(C)    each total assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement,
including, without limitation, its Commitment, Maximum Credit Amount, LC
Exposure, participations in Letters of Credit and outstanding Loans;

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

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

(F)    in no event may any Lender assign all or a portion of its rights and
obligations under this Agreement to Holdings, any Affiliate of Holdings, the
Borrower, any Affiliate of the Borrower, the Sponsor, any Defaulting Lender any
natural person (or any holding company, investment vehicle, or trust owned and
operated for the primary benefit of a natural person); and

(G)    the Applicable Percentage of the Maximum Credit Amount and of the Elected
Commitment assigned are equal.

(iii)    Subject to Section 12.04(b)(iv) and the acceptance and recording
thereof, 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 Sections 5.01,
5.02, 5.03 and 12.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 12.04
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with
Section 12.04(c).

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

 

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

(c)    (i) Any Lender may, at any time, without the consent of, or notice to,
the Borrower, the Administrative Agent, any Swingline Lender or any Issuing
Bank, sell participations to one or more banks or other Persons (other than the
Borrower, any Affiliate of the Borrower, any Disqualified Institution, any
Defaulting Lender or any natural person (or any holding company, investment
vehicle, or trust owned and operated for the primary benefit of a natural
person)) (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 Administrative Agent, any Swingline Lender, any
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 described in clauses (i), (ii),
(iv), (v) and (vi) of the proviso to Section 12.02(b) that affects such
Participant and for which such Lender has a consent right. 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 Sections 5.01, 5.02 and 5.03 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 12.04(b). To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 12.08 as though it
were a Lender, provided such Participant agrees to be subject to Section 4.01(c)
as though it were a Lender. Each Lender that sells a participation shall, acting
solely for this purpose as a non-fiduciary agent of the Borrower, maintain a
register on which it enters the name and address of each Participant and the
principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letters of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letter of credit or other obligation is
in registered form under Section 5f.103-1(c) of the United States Treasury
Regulations or Section 1.163-5(b) of the United States Proposed Treasury
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case, any amended or successor version). The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participation for all purposes of this Agreement notwithstanding any notice to
the contrary. For the avoidance of doubt, the Administrative Agent (in its
capacity as Administrative Agent) shall have no responsibility for maintaining a
Participant Register.

(i)    Each Participant agrees (A) to be subject to the provisions of
Section 5.03 (subject to the requirements and limitations therein, including the
requirements under Section 5.03(f) (it being understood that the documentation
required under Section 5.03(f) shall be delivered to the participating Lender))
as if it were an assignee under clause (b) of this Section; and (B) that it
shall not be entitled to receive any greater payment under Sections 5.01 or
5.03, with respect to any participation, than its participating Lender would
have been entitled to receive, except to the extent such entitlement to receive
a greater payment results from a Change in Law that occurs after the Participant
acquired the applicable participation.

(d)    Any Lender may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of such
Lender, including, without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank or other central bank having jurisdiction
over such Lender, and this Section 12.04 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

(e)    Notwithstanding any other provisions of this Section 12.04, no transfer
or assignment of the interests or obligations of any Lender or any grant of
participations therein shall be permitted if such transfer, assignment or grant
would require the Borrower and the Guarantors to file a registration statement
with the SEC or to qualify the Loans under the “Blue Sky” laws of any state.

(f)    The Administrative Agent shall have the right, and the Borrower hereby
expressly authorizes the Administrative Agent, to (i) post the list of
Disqualified Institutions provided by the Borrower (the “DQ List”) and/or
(ii) provide the DQ List to each Lender requesting the same.

(g)    If any assignment or participation is made to any Disqualified
Institution without the Borrower’s prior written consent in violation of this
Section 12.04, the Borrower may, at its sole expense and effort, upon notice to
the applicable Disqualified Institution and the Administrative Agent,
(i) terminate the Commitment of such Disqualified Institution and repay all
obligations of the Borrower owing to such Disqualified Institution in connection
with such Commitment and/or (ii) require such Disqualified Institution to
assign, without recourse (in accordance with and subject to the restrictions
contained in this Section 12.04), all of its interest, rights and obligations
under this Agreement to one or more Persons eligible to be an assignee under
this Section 12.04 at the lesser of (A) the principal amount thereof and (B) the
amount that such Disqualified Institution paid to acquire such interests, rights
and obligations, in each case plus accrued interest, accrued fees and all other
amounts (other than principal amounts) payable to it hereunder.

 

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Section 12.05    Survival; Revival; Reinstatement.

(a)    All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement or any other Loan Document shall
be considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, any other Agent, any Swingline Lender, 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
Sections 5.01, 5.02, 5.03, 12.03 and Article XI shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the Letters
of Credit and the Commitments or the termination of this Agreement, any other
Loan Document or any provision hereof or thereof.

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

Section 12.06    Counterparts; Integration; Effectiveness.

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

(b)    This Agreement, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
thereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof and thereof. THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT WITH RESPECT TO THE
SUBJECT MATTER CONTAINED HEREIN AND THEREIN AMONG THE PARTIES HERETO AND

 

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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 and Section 6.02, this Agreement shall
become effective when it shall have been executed by the Administrative Agent
and when the Administrative Agent shall have received counterparts hereof which,
when taken together, bear the signatures of each of the other parties hereto,
and thereafter shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile or other
electronic transmission (e.g., .pdf) shall be effective as delivery of a
manually executed counterpart of this Agreement.

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

Section 12.08    Right of Setoff. Subject to Section 12.14(b), 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, after
obtaining the prior written consent of the Administrative Agent, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations (of whatsoever kind, including, without limitations obligations
under Swap Agreements) at any time owing by such Lender or Affiliate to or for
the credit or the account of the Borrower or any Restricted Subsidiary against
any of and all the obligations of the Borrower or any Restricted Subsidiary owed
to such Lender now or hereafter existing under this Agreement or any other Loan
Document, irrespective of whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations
may be unmatured. 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 NEW YORK.

(b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS SHALL
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EITHER CASE LOCATED IN NEW
YORK COUNTY, NEW YORK, AND,

 

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BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY ACCEPTS FOR
ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH
ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO
JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING
JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.

(c)    EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (iv) ACKNOWLEDGES THAT IT
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.09; PROVIDED THAT THE
FOREGOING SHALL NOT LIMIT THE INDEMNITY AND REIMBURSEMENT OBLIGATIONS TO THE
EXTENT SET FORTH IN SECTION 12.03(b) IN RESPECT OF ANY THIRD PARTY CLAIMS
ALLEGING SUCH SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES.

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

Section 12.11    Confidentiality. Each of the Administrative Agent, the Issuing
Banks, the Swingline Lenders and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and 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
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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 Restricted Subsidiary and
their obligations (it being understood that the DQ List may be disclosed to any
assignee or Participant in reliance on this clause (f)), (g) with the consent of
the Borrower, (h) to any nationally recognized rating agency that requires
access to information about a Lender’s investment portfolio in connection with
ratings issued with respect to such Lender or to any collector of market data or
(i) to the extent such Information (x) becomes publicly available other than as
a result of a breach of this Section 12.11 or (y) becomes available to the
Administrative Agent, any Issuing Bank, any Swingline Lender or any Lender on a
nonconfidential basis from a source other than the Borrower; provided that no
disclosure shall be made to any Disqualified Institution). For the purposes of
this Section 12.11, “Information” means all information received from the
Borrower or any Restricted Subsidiary relating to the Borrower or any Restricted
Subsidiary and their businesses, other than any such information that is
available to the Administrative Agent, any Issuing Bank, any Swingline Lender or
any Lender on a nonconfidential basis prior to disclosure by the Borrower or a
Restricted Subsidiary; provided that, in the case of information received from
the Borrower or any Restricted Subsidiary after the Effective Date, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section 12.11 shall be considered to have complied with its obligation to
do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information. Notwithstanding anything herein to the contrary,
“Information” shall not include, and the Borrower, the Borrower’s Restricted
Subsidiaries, the Administrative Agent, each Lender and the respective
Affiliates of each of the foregoing (and the respective partners, directors,
officers, employees, agents, advisors and other representatives of the
aforementioned Persons), and any other party, may disclose to any and all
Persons, without limitation of any kind (A) any information with respect to the
United States federal and state income tax treatment of the transactions
contemplated hereby and any facts that may be relevant to understanding the
United States federal or state income tax treatment of such transactions (“Tax
Structure”), which facts shall not include for this purpose the names of the
parties or any other person named herein, or information that would permit
identification of the parties or such other persons, or any pricing terms or
other nonpublic business or financial information that is unrelated to such tax
treatment or Tax Structure, and (B) all materials of any kind (including
opinions or other tax analyses) that are provided to the Borrower, the
Administrative Agent or such Lender relating to such tax treatment or Tax
Structure.

 

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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 New York 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 Loans, 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 Loans
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrower); and (b) in the event that the maturity of the Loans is accelerated by
reason of an election of the holder thereof resulting from any Event of Default
under this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to any Lender may never include more than the maximum amount allowed
by such applicable law, and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically by such Lender as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the Indebtedness shall have been or would
thereby be paid in full, refunded by such Lender to the Borrower). All sums paid
or agreed to be paid to any Lender for the use, forbearance or detention of sums
due hereunder shall, to the extent permitted by law applicable to such Lender,
be amortized, prorated, allocated and spread throughout the stated term of the
Loans evidenced by the Loan Documents 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.

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

Section 12.14    Collateral Matters; Swap Agreements; Action by Secured Parties.

(a)    The benefit of the Security Instruments and of the provisions of this
Agreement relating to (i) any Collateral securing the Indebtedness shall also
extend to and be available to the (A) Secured Swap Providers under any Swap
Agreement including any Swap Agreement in existence prior to the Initial Funding
Date, but excluding any additional transactions or confirmations entered into
(1) after such Secured Swap Provider ceases to be a Lender or an Affiliate of a
Lender or (2) after assignment by a Secured Swap Provider to a Person that is
not a Lender or an Affiliate of a Lender and (B) the Bank Product Providers in
respect of Bank Products. No Lender or any Affiliate of a Lender shall have any
voting or consent rights under any Loan Document as a result of the existence of
obligations owed to it under any such Swap Agreements or with respect to Bank
Products.

(b)    Without limiting the provisions of Section 12.08, each Lender, in its
capacity as a Lender and in its capacity as a Secured Swap Provider and/or a
Bank Products Provider, as applicable, and each other Secured Swap Provider and
Bank Products Provider, by its acceptance of the benefits of the Security
Instruments creating Liens to secure the Indebtedness, agrees that:

(i)    it will not, without the prior written consent of the Administrative
Agent, exercise any right to set off or apply any deposits of any kind, or any
other obligations owing by it to or for the order of the Borrower or any of its
Restricted Subsidiaries, against any Indebtedness described in clauses (b) or
(c) of the definition thereof (the “Specified Obligations”) or any other amounts
secured by Liens on Collateral; provided that nothing contained in this Section
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right of any Secured Swap Provider to declare an early termination date in
respect of any Swap Agreements, or to undertake payment or close-out netting or
to otherwise setoff trades or transactions then existing under such Swap
Agreements (such actions described in this proviso to Section 12.14(b)(i), the
“Permitted Swap Actions”);

(ii)    it will not transfer any portion of its rights in respect of any Swap
Agreement, Bank Products, or Specified Obligation, unless (x) the assignee
agrees in writing to be bound by the terms of this Section 12.14(b) and a copy
of such writing is delivered to the Administrative Agent or (y) the assignee is
a Lender or Affiliate of a Lender; and

(iii)    if it exercises any right of setoff or takes any other action in
contravention of this Section 12.14(b) or in contravention of Section 12.08 (in
each case, other than the Permitted Swap Actions) it shall indemnify the
Administrative Agent and each other Lender, each Issuing Bank, each Secured Swap
Provider and Bank Products Provider, from any and all losses, expenses and
damages (including attorneys’ fees and costs) it shall suffer or incur by reason
of such setoff or other action, including losses, expenses and damages
(including attorneys’ fees and costs) caused by or resulting from the release,
loss or waiver of any Collateral or any Lien thereon securing the Indebtedness,
or the unenforceability of any Security Instrument or Loan Document or any
assertions that any Collateral or Lien securing the Indebtedness thereon was
released, lost or waived.

(c)    The provisions of this Section 12.14 shall apply to each Issuing Bank,
all Lenders, all Secured Swap Providers and all Bank Products Providers and
their respective successors and assigns. The provisions of this Section 12.14
are solely for the benefit of the Administrative Agent, any Issuing Bank, the
Lenders, the Secured Swap Providers and the Bank Products Providers, and neither
the Borrower nor any Subsidiary shall have rights as a third party beneficiary
of any such provisions.

Section 12.15    No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans (including any
Swingline Lender to make Swingline Loans) and each 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 Administrative Agent, any other Agent, any
Swingline Lender, any Issuing Bank or any Lender for any reason whatsoever.
There are no third party beneficiaries.

Section 12.16    USA PATRIOT Act Notice. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “PATRIOT Act”), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the PATRIOT Act.

 

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Section 12.17    No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), the Borrower acknowledges and agrees, and acknowledges its
Subsidiaries’ understanding, that: (a)(i) no fiduciary, advisory or agency
relationship between the Borrower and its Subsidiaries and the Administrative
Agent or any Lender is intended to be or has been created in respect of the
transactions contemplated hereby or by the other Loan Documents, irrespective of
whether the Administrative Agent or any Lender has advised or is advising the
Borrower or any Subsidiary on other matters; (ii) the arranging and other
services regarding this Agreement provided by the Administrative Agent and the
Lenders are arm’s-length commercial transactions between the Borrower and its
Subsidiaries, on the one hand, and the Administrative Agent and the Lenders, on
the other hand; (iii) the Borrower has consulted its own legal, accounting,
regulatory and tax advisors to the extent that it has deemed appropriate; and
(iv) the Borrower is capable of evaluating, and understands and accepts, the
terms, risks and conditions of the transactions contemplated hereby and by the
other Loan Documents; and (b)(i) the Administrative Agent and the Lenders each
is and has been acting solely as a principal and, except as expressly agreed in
writing by the relevant parties, has not been, is not, and will not be acting as
an advisor, agent or fiduciary for the Borrower or any of its Subsidiaries, or
any other Person; (ii) neither the Administrative Agent nor the Lenders has any
obligation to the Borrower or any of its Subsidiaries with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Loan Documents; and (iii) the Administrative Agent and
the Lenders and their respective Affiliates may be engaged, for their own
accounts or the accounts of customers, in a broad range of transactions that
involve interests that differ from those of the Borrower and its Subsidiaries,
and neither the Administrative Agent nor the Lenders has any obligation to
disclose any of such interests to the Borrower or its Subsidiaries. To the
fullest extent permitted by law, the Borrower hereby waives and releases any
claims that it may have against the Administrative Agent and the Lenders with
respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.

Section 12.18    Acknowledgement and Consent to Bail-In of EEA Financial
Institutions. Notwithstanding anything to the contrary in any Loan Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any EEA Financial
Institution arising under any Loan Document, to the extent such liability is
unsecured, may be subject to the Write-Down and Conversion Powers of an EEA
Resolution Authority and agrees and consents to, and acknowledges and agrees to
be bound by:

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

 

166

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(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 12.19    Acknowledgement Regarding Supported QFCs. To the extent that
the Loan Documents provide support, through a guarantee or otherwise, for any
Swap Agreement 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
United States or any 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 that such 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 the extent to which such Default Rights could be exercised under the
U.S. Special Resolution Regime if such 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 the 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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167

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

 

BORROWER:     CITIZEN ENERGY OPERATING, LLC     By:  

/s/ Tim Helms

    Name:   Tim Helms     Title:   Chief Financial Officer

 

 

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HOLDINGS:     CITIZEN ENERGY HOLDINGS, LLC     By:  

/s/ Tim Helms

    Name:   Tim Helms         Title:   Chief Financial Officer

 

 

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ADMINISTRATIVE AGENT, ISSUING       BANK, SWINGLINE LENDER       AND A LENDER:  
  JPMORGAN CHASE BANK, N.A.,     as Administrative Agent, Issuing Bank,
Swingline Lender and a Lender     By:  

/s/ Robert Mendoza

    Name:   Robert Mendoza     Title:   Authorized Officer

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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LENDERS:    

 

BMO HARRIS BANK N.A., as a Lender By:  

/s/ Patrick Johnston

Name:   Patrick Johnston Title:   Director

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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THE TORONTO-DOMINION BANK, NEW YORK BRANCH, as a Lender By:  

/s/ Peter Kuo

Name:   Peter Kuo Title:   Authorized Signatory

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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BANK OF AMERICA, N.A.,

as a Lender

By:

 

/s/ Victor F. Cruz

Name:

 

Victor F. Cruz

Title:

 

Vice President

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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BRANCH BANKING AND TRUST, COMPANY,

as a Lender

By:

 

/s/ Parul June

Name:

 

Parul June

Title:

 

Senior Vice President

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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FIFTH THIRD BANK, NATIONAL ASSOCIATION, as a Lender By:  

/s/ Dan Condley

Name:   Dan Condley Title:   Managing Director

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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KEYBANK NATIONAL ASSOCIATION, as a Lender By:  

/s/ David M. Bornstein

Name:   David M. Bornstein Title:   Senior Vice President

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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SOCIETE GENERALE, as a Lender By:  

/s/ Elena Robciuc

Name:   Elena Robciuc Title:   Managing Director

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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U.S. BANK NATIONAL ASSOCIATION, as a Lender By:  

/s/ Nicholas T. Hanford

Name:   Nicholas T. Hanford Title:   Vice President

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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ZIONS BANCORPORATION, N.A. DBA AMEGY BANK, as a Lender By:  

/s/ John G. Murray

Name:   John G. Murray Title:   Senior Vice President – Amegy Bank Division

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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COMERICA BANK, as a Lender By:  

/s/ Garrett R. Merrell

Name:   Garrett R. Merrell Title:   Assistant Vice President

 

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]

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CIT BANK, N.A., as a Lender By:  

/s/ Katya Evseev

Name:   Katya Evseev Title:   Director

 

[SIGNATURE PAGE TO CREDIT AGREEMENT]