Exhibit 10.1

 

Execution Version

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

dated as of April 11, 2013

 

Among

 

TRIANGLE USA PETROLEUM CORPORATION
as Borrower,

 

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Administrative Agent and Issuing Lender,

 

and

 

THE LENDERS NAMED HEREIN

as Lenders

 

$500,000,000

 

 

WELLS FARGO SECURITIES, LLC

AS ARRANGER AND SOLE BOOKRUNNER

 

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ARTICLE 1

DEFINITIONS AND ACCOUNTING TERMS

1

 

 

 

Section 1.1

Certain Defined Terms

1

Section 1.2

Computation of Time Periods

20

Section 1.3

Accounting Terms; Changes in GAAP

20

Section 1.4

Types of Advances

20

Section 1.5

Miscellaneous

20

 

 

 

ARTICLE 2

CREDIT FACILITIES

21

 

 

 

Section 2.1

Commitments

21

Section 2.2

Borrowing Base

22

Section 2.3

Letters of Credit

26

Section 2.4

Advances

31

Section 2.5

Prepayments

33

Section 2.6

Repayment

35

Section 2.7

Fees

35

Section 2.8

Interest

36

Section 2.9

Illegality

36

Section 2.10

Breakage Costs

37

Section 2.11

Increased Costs

37

Section 2.12

Payments and Computations

39

Section 2.13

Taxes

40

Section 2.14

Replacement of Lenders

42

Section 2.15

Payments and Deductions to a Defaulting Lender

43

 

 

 

ARTICLE 3

CONDITIONS OF LENDING

44

 

 

 

Section 3.1

Conditions Precedent to Initial Borrowing

44

Section 3.2

Conditions Precedent to Each Borrowing and to Each Issuance, Extension or
Renewal of a Letter of Credit

47

Section 3.3

Determinations Under Sections 3.1 and 3.2

48

 

 

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

48

 

 

 

Section 4.1

Organization

48

Section 4.2

Authorization

49

Section 4.3

Enforceability

49

Section 4.4

Financial Condition

49

Section 4.5

Title; Ownership and Liens; Real Property

49

Section 4.6

True and Complete Disclosure

50

Section 4.7

Litigation

50

 

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Section 4.8

Compliance with Agreements

50

Section 4.9

Pension Plans

50

Section 4.10

Environmental Condition

51

Section 4.11

Subsidiaries

52

Section 4.12

Investment Company Act

52

Section 4.13

Taxes

52

Section 4.14

Permits, Licenses, etc.

52

Section 4.15

Use of Proceeds

52

Section 4.16

Condition of Property; Casualties

52

Section 4.17

Insurance

53

Section 4.18

Security Interest

53

Section 4.19

OFAC; Anti-Terrorism

53

Section 4.20

Solvency

53

Section 4.21

Gas Contracts

53

Section 4.22

Liens, Leases, Etc.

53

Section 4.23

Hedging Agreements

53

Section 4.24

Material Agreements

54

 

 

 

ARTICLE 5

AFFIRMATIVE COVENANTS

54

 

 

 

Section 5.1

Organization

54

Section 5.2

Reporting

54

Section 5.3

Insurance

58

Section 5.4

Compliance with Laws

59

Section 5.5

Taxes

60

Section 5.6

New Subsidiaries

60

Section 5.7

Agreement to Pledge; Security

60

Section 5.8

Deposit Accounts

60

Section 5.9

Records; Inspection

60

Section 5.10

Maintenance of Property

60

Section 5.11

Title Evidence and Opinions

61

Section 5.12

Further Assurances; Cure of Title Defects

61

Section 5.13

Leases; Development and Maintenance

61

Section 5.14

Post-Closing Requirements

62

 

 

 

ARTICLE 6

NEGATIVE COVENANTS

62

 

 

 

Section 6.1

Debt

62

Section 6.2

Liens

63

 

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Section 6.3

Investments

64

Section 6.4

Acquisitions

65

Section 6.5

Agreements Restricting Liens

65

Section 6.6

Use of Proceeds; Use of Letters of Credit

65

Section 6.7

Corporate Actions; Accounting Changes

65

Section 6.8

Sale of Assets

66

Section 6.9

Restricted Payments

66

Section 6.10

Affiliate Transactions

67

Section 6.11

Line of Business

67

Section 6.12

Hazardous Materials

67

Section 6.13

Compliance with ERISA

67

Section 6.14

Sale and Leaseback Transactions

68

Section 6.15

Limitation on Hedging

68

Section 6.16

Leverage Ratio

68

Section 6.17

Current Ratio

69

Section 6.18

Operating Leases

69

Section 6.19

Prepayment of Certain Debt and Other Obligations

69

Section 6.20

Gas Imbalances, Take-or-Pay, Other Prepayments

69

 

 

 

ARTICLE 7

DEFAULT AND REMEDIES

69

 

 

 

Section 7.1

Events of Default

69

Section 7.2

Optional Acceleration of Maturity

71

Section 7.3

Automatic Acceleration of Maturity

72

Section 7.4

Set-off

72

Section 7.5

Remedies Cumulative, No Waiver

72

Section 7.6

Application of Payments

72

 

 

 

ARTICLE 8

THE ADMINISTRATIVE AGENT

73

 

 

 

Section 8.1

Appointment, Powers, and Immunities

73

Section 8.2

Reliance by Administrative Agent

74

Section 8.3

Defaults

74

Section 8.4

Rights as Lender

74

Section 8.5

Indemnification

75

Section 8.6

Non-Reliance on Administrative Agent and Other Lenders

75

Section 8.7

Resignation of Administrative Agent and Issuing Lender

76

Section 8.8

Collateral Matters

76

Section 8.9

No Other Duties, etc.

77

 

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ARTICLE 9

MISCELLANEOUS

77

 

 

 

Section 9.1

Costs and Expenses

77

Section 9.2

Indemnification; Waiver of Damages

78

Section 9.3

Waivers and Amendments

79

Section 9.4

Severability

79

Section 9.5

Survival of Representations and Obligations

80

Section 9.6

Binding Effect

80

Section 9.7

Lender Assignments and Participations

80

Section 9.8

Confidentiality

82

Section 9.9

Notices, Etc.

82

Section 9.10

Usury Not Intended

83

Section 9.11

Usury Recapture

83

Section 9.12

Governing Law; Service of Process

84

Section 9.13

Submission to Jurisdiction

84

Section 9.14

Execution in Counterparts

84

Section 9.15

Waiver of Jury

84

Section 9.16

USA Patriot Act

84

Section 9.17

Enduring Security

85

Section 9.18

Keepwell

85

Section 9.19

No Advisory or Fiduciary Responsibility

85

Section 9.20

Amendment and Restatement

86

Section 9.21

Integration

86

 

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EXHIBITS:

 

 

 

 

 

Exhibit A

– Form of Assignment and Acceptance

 

Exhibit B

– Form of Borrowing Base Certificate

 

Exhibit C

– Form of Compliance Certificate

 

Exhibit D

– Form of Guaranty

 

Exhibit E

– Form of Notice of Borrowing

 

Exhibit F

– Form of Notice of Continuation or Conversion

 

Exhibit G

– Form of Pledge and Security Agreement

 

Exhibit H

– Form of Note

 

Exhibit I

– Form of Transfer Letter

 

Exhibit J

– Form of Pledge Agreement

 

 

SCHEDULES:

 

 

 

 

 

Schedule I

– Commitments, Contact Information

 

Schedule II

– Pricing Grid

 

Schedule II

– Additional Conditions and Requirements for New Subsidiaries

 

Schedule 4.1

– Organizational Information

 

Schedule 4.11

– Subsidiaries

 

Schedule 4.16

– Material Real Property

 

Schedule 4.23

– Hedging Agreements

 

Schedule 4.24

– Material Agreements

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT

 

This AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 11, 2013 (the
“Agreement”) is among Triangle USA Petroleum Corporation, a Colorado corporation
(the “Borrower”), the Lenders (as defined below) and Wells Fargo Bank, National
Association as Administrative Agent (as defined below) for the Lenders and as
Issuing Lender (as defined below).

 

RECITALS:

 

A.            Reference is made to the Credit Agreement dated as of April 12,
2012 among the Borrower, Wells Fargo Bank, National Association, as
administrative agent and issuing lender, and the lenders party thereto, as
amended by the Amendment No. 1 to Credit Agreement dated as of August 15, 2012,
the Amendment No. 2 to Credit Agreement dated as of October 1, 2012, and the
Amendment No. 3 to Credit Agreement dated as of February 11, 2013 (as so
amended, the “Existing Credit Agreement”).

 

B.            It is the intention of the parties hereto that this Agreement is
an amendment and restatement of the Existing Credit Agreement and not a new or
substitute credit agreement.

 

In consideration of the mutual covenants and agreements herein contained, the
parties hereto hereby agree as follows:

 

ARTICLE 1
DEFINITIONS AND ACCOUNTING TERMS

 

Section 1.1            Certain Defined Terms.  The following terms shall have
the following meanings (unless otherwise indicated, such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

 

“Acceptable Letter of Credit Maturity Date” has the meaning assigned to it in
Section 2.3(a)(ii) of this Agreement.

 

“Acceptable Security Interest” means a security interest which (a) exists in
favor of the Administrative Agent for its benefit and the ratable benefit of the
Secured Parties, (b) is superior to all other security interests (other than the
Permitted Liens), (c) secures the Secured Obligations, (d) is enforceable
against the Credit Party which created such security interest and (e) is
perfected.

 

“Account Control Agreement” shall mean, as to any deposit account of any Credit
Party held with a bank, an agreement or agreements in form and substance
reasonably acceptable to the Administrative Agent, among the Credit Party owning
such deposit account, the Administrative Agent and such other bank governing
such deposit account.

 

“Acquisition” means the purchase by any Credit Party of any business, division
or enterprise, including the purchase of associated assets or operations or the
Equity Interests of a Person; provided that a merger or consolidation solely
among Credit Parties shall not constitute an Acquisition.

 

“Adjusted Base Rate” means, for any day, the fluctuating rate per annum of
interest equal to the greatest of (a) the Prime Rate in effect on such day,
(b) the Federal Funds Rate in effect on such day plus one half of 1.00%, and
(c) a rate determined by the Administrative Agent to be the Daily One-Month
LIBOR plus 1.00%.  Any change in the Adjusted Base Rate due to a change in the
Prime Rate, Daily

 

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One-Month LIBOR or the Federal Funds Rate shall be effective on the effective
date of such change in the Prime Rate, Daily One-Month LIBOR or the Federal
Funds Rate.

 

“Administrative Agent” means Wells Fargo in its capacity as agent for the
Lenders pursuant to Article 8 and any successor agent pursuant to Section 8.7.

 

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

 

“Advance” means any advance by a Lender to the Borrower as a part of a
Borrowing.

 

“Affiliate” means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person.  The
term “control” (including the terms “controlled by” or “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership, by contract, or otherwise.

 

“Agreement” means this Amended and Restated Credit Agreement among the Borrower,
the Lenders, the Issuing Lenders and the Administrative Agent.

 

“Applicable Margin” means, with respect to each Type of Advance and the Letters
of Credit, the percentage rate per annum set forth in the Pricing Grid based on
the relevant Utilization Level applicable from time to time.  The Applicable
Margin for any Advance or Letter of Credit shall change when and as the relevant
Utilization Level changes.

 

“Arranger” means Wells Fargo Securities, LLC.

 

“Asset Sale” means (a) any sale, lease, transfer, unwind, novation or other
disposition of any Property (including any working interest, overriding royalty
interest, production payments, net profits interest, royalty interest, mineral
fee interest, or Hedging Arrangement), by any Credit Party and (b) any issuance
or sale of any Equity Interests of any Subsidiary of the Borrower, in each case,
to any Person other than a Credit Party.

 

“Assignment and Acceptance” means an assignment and acceptance executed by a
Lender and an Eligible Assignee and accepted by the Administrative Agent, in
substantially the same form as Exhibit A.

 

“Availability” means, as of any date of determination, an amount equal to
(a) the lesser of the then effective Borrowing Base and the aggregate
Commitments minus (b) (i) the outstanding principal amount of all Advances plus
(ii) the Letter of Credit Exposure.

 

“Availability Period” means the period from the Closing Date until the Maturity
Date.

 

“Banking Services” means each and any of the following bank services provided to
any Credit Party by any Lender (other than a Defaulting Lender) or by any
Affiliate of a Lender (other than a Defaulting Lender): (a) commercial credit
cards, (b) purchase cards, (c) stored value cards and (d) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).

 

“Banking Services Obligations” means any and all obligations of the Borrower or
any other Credit Party, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced

 

2

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or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor) in connection with Banking Services.

 

“Banking Services Provider” means any Lender (other than a Defaulting Lender) or
Affiliate of a Lender (other than a Defaulting Lender) that provides Banking
Services to any Credit Party.

 

“Base Rate Advance” means an Advance which bears interest based upon the
Adjusted Base Rate.

 

“BB Deduction Amount” has the meaning set forth in Section 2.2(e).

 

“BB Value” means, (a) as to any Oil and Gas Property, the value, if any,
attributed to such Oil and Gas Property under the then effective Borrowing Base,
as determined by the Administrative Agent subject to the standards set forth in
Section 2.2(d), and (b) as to Hedging Arrangements, the net effect of such
Hedging Arrangements on the amount of the Borrowing Base, as determined by the
Administrative Agent.

 

“Borrower” means Triangle USA Petroleum Corporation, a Colorado corporation.

 

“Borrowing” means a borrowing consisting of simultaneous Advances of the same
Type made by the Lenders pursuant to Section 2.1(a) or Converted by each Lender
to Advances of a different Type pursuant to Section 2.4(b).

 

“Borrowing Base” means at any particular time, the Dollar amount determined in
accordance with Section 2.2 on account of Proven Reserves attributable to Oil
and Gas Properties of the Credit Parties described in the most recent
Independent Engineering Report or Internal Engineering Report, as applicable,
delivered to the Administrative Agent and the Lenders pursuant to Section 2.2.

 

“Borrowing Base Certificate” has the meaning set forth in Section 5.2(c)(vi).

 

“Borrowing Base Deficiency” means the excess, if any, of (a) the sum of the
outstanding principal amount of all Advances plus the Letter of Credit Exposure
over (b) the lesser of (i) aggregate amount of Commitments, and (ii) the
Borrowing Base then in effect.

 

“Business Day” means a day (a) other than a Saturday, Sunday, or other day on
which the Administrative Agent is authorized to close under the laws of, or is
in fact closed in, Denver, Colorado, and (b) if the applicable Business Day
relates to any Eurodollar Advances, on which dealings are carried on by
commercial banks in the London interbank market.

 

“Caliber Agreements” means (a) the Midstream Services Agreement (Crude Oil)
dated as of October 1, 2012 among Caliber North Dakota LLC, a Delaware limited
liability company and Borrower, and (b) Midstream Services Agreement dated as of
October 1, 2012 among Caliber North Dakota LLC, a Delaware limited liability
company and Borrower.

 

“Capital Leases” means, for any Person, any lease of any Property by such Person
as lessee which would, in accordance with GAAP, be required to be classified and
accounted for as a capital lease on the balance sheet of such Person.

 

“Cash Collateral Account” means a cash collateral account pledged to the
Administrative Agent containing cash deposited pursuant to the terms hereof to
be maintained with the Administrative Agent in accordance with Section 2.3(h).

 

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“Casualty Event” means the damage, destruction or condemnation, including by
process of eminent domain or any transfer or disposition of property in lieu of
condemnation, as the case may be, of property of any Person or any of its
Subsidiaries, including by process of eminent domain or any transfer or
disposition of property in lieu of condemnation.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.

 

“Change in Control” means the occurrence of any of the following events:

 

(a)           the Borrower ceases to directly or indirectly own 100% of the
Equity Interest in any Subsidiary other than as a result of transaction
permitted under Section 6.7;

 

(b)           the Parent ceases to directly or indirectly own 100% of the Equity
Interest in the Borrower free and clear of any Lien;

 

(c)           any Person or group of related Persons (other than NGP) shall have
acquired beneficial ownership of more than 35% of the outstanding voting shares
of the Parent (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended, and the applicable rules and regulations
thereunder); or

 

(d)           the NGP Group shall have acquired, in the aggregate, beneficial
ownership of 50% or more of the outstanding voting shares of the Parent (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations thereunder); or

 

(e)           neither Jonathan Samuels nor Peter Hill remains in any of the
three following positions at the Borrower (unless a successor reasonably
acceptable to the Administrative Agent has been appointed within three months
after such predecessor’s ceasing to hold such position): Chief Executive
Officer, Chief Financial Officer and Chairman of the Board.

 

“Change in Law” means the occurrence, after the date of this Agreement (or with
respect to any Lender, if later, the date on which such Lender becomes a
Lender), of any of the following: (a) the adoption or taking effect of any law,
rule, regulation or treaty, (b) any change in any law, rule, regulation or
treaty or in the administration, interpretation, implementation or application
thereof by any Governmental Authority or (c) the making or issuance of any
request, rule, guideline or directive (whether or not having the force of law)
by any Governmental Authority; provided that notwithstanding anything herein to
the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act
and all requests, rules, guidelines or directives thereunder or issued in
connection therewith and (y) all requests, rules, guidelines or directives
promulgated by the Bank for International Settlements, the Basel Committee on
Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, in each case pursuant to Basel III, shall in
each case be deemed to be a “Change in Law”, regardless of the date enacted,
adopted or issued.

 

“Closing Date” means April 11, 2013.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
and published interpretations thereof.

 

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“Collateral” means all property of the Credit Parties which is “Collateral” or
“Mortgaged Property” (as defined in each of the Mortgages or the Security
Agreement, as applicable) or similar terms used in the Security Documents.

 

“Commitment” means, for each Lender, the obligation of each Lender to advance to
Borrower the amount set opposite such Lender’s name on Schedule I as its
Commitment, or if such Lender has entered into any Assignment and Acceptance,
set forth for such Lender as its Commitment in the Register, as such amount may
be reduced pursuant to Section 2.1(c)(i); provided that, after the Maturity
Date, the Commitment for each Lender shall be zero.  The initial aggregate
Commitment on the date hereof is $500,000,000.

 

“Commitment Fee Rate” means the per annum commitment fee rate set forth on the
Pricing Grid applicable from time to time.  The Commitment Fee Rate shall change
when and as the relevant Utilization Level changes.

 

“Commitment Fees” means the fees required under Section 2.7(a).

 

“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.

 

“Compliance Certificate” means a compliance certificate executed by a
Responsible Officer of the Borrower or such other Person as required by this
Agreement in substantially the same form as Exhibit C.

 

“Controlled Group” means all members of a controlled group of corporations and
all businesses (whether or not incorporated) under common control which,
together with the Borrower or any Subsidiary, are treated as a single employer
under Section 414 of the Code.

 

“Convert,” “Conversion,” and “Converted” each refers to a conversion of Advances
of one Type into Advances of another Type pursuant to Section 2.4(b).

 

“Credit Documents” means this Agreement, the Notes, the Letters of Credit, the
Letter of Credit Applications, the Guaranties, the Notices of Borrowing, the
Notices of Conversion, the Security Documents, the Engagement Letter, and each
other agreement, instrument, or document executed at any time in connection with
this Agreement.

 

“Credit Parties” means the Borrower and the Guarantors.

 

“Daily One-Month LIBOR” means, for any day, the rate of interest equal to the
Eurodollar Rate then in effect for delivery for a one (1) month period.

 

“Debt” means, for any Person, without duplication:  (a) indebtedness of such
Person for borrowed money, including the face amount of any letters of credit
supporting the repayment of indebtedness for borrowed money issued for the
account of such Person; (b) to the extent not covered under clause (a) above,
obligations under letters of credit and agreements relating to the issuance of
letters of credit or acceptance financing, including Letters of Credit;
(c) obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments, or upon which interest payments are customarily made;
(d) obligations of such Person under conditional sale or other title retention
agreements relating to any Properties purchased by such Person (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business); (e) obligations of such Person
to pay the deferred purchase price of property or services (including, without
limitation, any contingent

 

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obligations or other similar obligations associated with such purchase, and
including obligations that are non-recourse to the credit of such Person but are
secured by the assets of such Person); (f) obligations of such Person as lessee
under Capital Leases and obligations of such Person in respect of synthetic
leases; (g) obligations of such Person under any Hedging Arrangement (except
that such obligations shall not constitute Debt for purposes of the calculations
for compliance under Sections 6.16 and 6.17); (h) all obligations of such Person
to mandatorily purchase, redeem, retire, defease or otherwise make any payment
in respect of any Equity Interest in such Person or any other Person on a date
certain or upon the occurrence of certain events or conditions; (i) the Debt of
any partnership or unincorporated joint venture in which such Person is a
general partner or a joint venturer, but only to the extent to which there is
recourse to such Person for the payment of such Debt; (j) any obligations of
such Person owing in connection with any volumetric or production prepayments or
take-or-pay arrangements; (k) obligations of such Person under direct or
indirect guaranties in respect of, and obligations (contingent or otherwise) of
such Person to purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of others of the kinds
referred to in clauses (a) through (j) above; (l) indebtedness or obligations of
others of the kinds referred to in clauses (a) through (k) secured by any Lien
on or in respect of any Property of such Person, and (m) all liabilities of such
Person in respect of unfunded vested benefits under any Plan.

 

“Default” means (a) an Event of Default or (b) any event or condition which with
notice or lapse of time or both would, unless cured or waived, become an Event
of Default.

 

“Default Rate” means a per annum rate equal to (a) in the case of principal of
any Advance, 2.00% plus the rate otherwise applicable to such Advance as
provided in Sections 2.8(a) or (b), and (b) in the case of any other Obligation,
2.00% plus the non-default rate applicable to Base Rate Advances as provided in
Section 2.8(a).

 

“Defaulting Lender” means any Lender that (a) has failed to fund any portion of
the Advances or participations in Letter of Credit Obligations required to be
funded by it hereunder within two Business Days of the date required to be
funded by it hereunder unless (i) with the consent of the Administrative Agent
and the Borrower (which consent may be withheld at the sole discretion of the
Administrative Agent and the Borrower), such failure has been cured, or
(ii) such Lender notifies the Administrative Agent and the Borrower in writing
that such failure is the result of such Lender’s determination that one or more
conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in such writing)
has not been satisfied, (b) has indicated to the Administrative Agent, or has
stated publicly, that such Lender will not fund any portion of the Advances or
participations in Letter of Credit Obligations required to be funded by it
hereunder, unless (i) with the consent of the Administrative Agent and the
Borrower (which consent may be withheld at the sole discretion of the
Administrative Agent and the Borrower), such Lender actually funds such Advances
or participations, or (ii) such writing or public statement relates to such
Lender’s obligation to fund a Advance hereunder and states that such position is
based on such Lender’s determination that a condition precedent to funding
(which condition precedent, together with any applicable default, shall be
specifically identified in such writing or public statement) cannot be
satisfied, (c) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within two
Business Days of the date when due, unless the subject of a good faith dispute,
or unless, with the consent of the Administrative Agent (which consent may be
withheld at the sole discretion of the Administrative Agent), such failure has
been cured, (d) as to which a Lender Insolvency Event has occurred and is
continuing with respect to such Lender, or (e) has failed to confirm in writing
to the Administrative Agent, for at least three Business Days, in response to a
written request of the Administrative Agent, that it will comply with its
funding obligations hereunder.  Any determination that a Lender is a Defaulting
Lender will be made by the Administrative Agent in its sole discretion acting in
good faith.

 

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“Dollars” and “$” means lawful money of the United States of America.

 

“EBITDAX” means for the Borrower, on a consolidated basis for any period, the
sum of (a) Net Income for such period, plus (b) without duplication and to the
extent deducted in determining such Net Income (i) Interest Expense for such
period, plus (ii) Income Tax Expense for such period, plus (iii) depreciation,
amortization, depletion and exploration expenses for such period, plus
(iv) non-cash charges resulting from extraordinary, non-recurring events or
circumstances for such period (including any provision for the reduction in the
carrying value of assets recorded in accordance with GAAP and including non-cash
charges resulting from the requirements of ASC 410, 718 and 815), minus (c) to
the extent included in determining Net Income, non-cash income resulting from
extraordinary, non-recurring events or circumstances for such period and all
other non-cash items of income which were included in determining such Net
Income (including non-cash income resulting from the requirements of ASC 410,
718 and 815); provided that such EBITDAX shall be subject to pro forma
adjustments for permitted acquisitions and non-ordinary course asset sales
assuming that such transactions had occurred on the first day of the
determination period, which adjustments shall be made in a manner, and subject
to supporting documentation, set forth by the SEC or otherwise acceptable to the
Administrative Agent.

 

“Effective Date” means the date of this Agreement.

 

“Eligible Assignee” means (a) a Lender (other than a Defaulting Lender), (b) any
Affiliate of a Lender approved by the Administrative Agent, or (c) any other
Person (other than a natural Person) approved by the Administrative Agent and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 9.7, the Borrower, such
approval not to be unreasonably withheld or delayed by the Borrower and such
approval to be deemed given by the Borrower if no objection is received by the
Administrative Agent from the Borrower within five Business Days after notice of
such proposed assignment has been provided to the Borrower; provided, however,
that neither the Borrower nor any Affiliate of the Borrower shall qualify as an
Eligible Assignee.

 

“Engagement Letter” means that certain Engagement Letter dated as of March 4,
2013 among the Borrower and Wells Fargo and Wells Fargo Securities, LLC.

 

“Engineering Report” means either an Independent Engineering Report or an
Internal Engineering Report.

 

“Environment” or “Environmental” shall have the meanings set forth in 42 U.S.C.
9601(8) (1988).

 

“Environmental Claim” means any third party (including governmental agencies and
employees) action, lawsuit, claim, demand, regulatory action or proceeding,
order, decree, consent agreement or notice of potential or actual responsibility
or violation (including claims or proceedings under the Occupational Safety and
Health Acts or similar laws or requirements relating to health or safety of
employees) which seeks to impose liability under any Environmental Law.

 

“Environmental Law” means all federal, state, and local laws, rules,
regulations, ordinances, orders, decisions, agreements, and other requirements,
including common law theories, now or hereafter in effect and relating to, or in
connection with the Environment, health, or safety, including without limitation
CERCLA, relating to (a) pollution, contamination, injury, destruction, loss,
protection, cleanup, reclamation or restoration of the air, surface water,
groundwater, land surface or subsurface strata, or other natural resources;
(b) solid, gaseous or liquid waste generation, treatment, processing, recycling,
reclamation, cleanup, storage, disposal or transportation; (c) exposure to
pollutants, contaminants, hazardous, or toxic substances, materials or wastes;
(d) the safety or health of employees; or (e) the

 

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manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous, or toxic substances, materials or wastes.

 

“Environmental Permit” means any permit, license, order, approval, registration
or other authorization under Environmental Law.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.

 

“Equity Interest” means with respect to any Person, any shares, interests,
participation, or other equivalents (however designated) of corporate stock,
membership interests or partnership interests (or any other ownership interests)
of such Person.

 

“Equity Issuance” means any issuance of equity securities or any other Equity
Interests (including any preferred equity securities) by any Credit Party other
than equity securities issued (i) to a Credit Party, and (ii) pursuant to
employee or director and officer stock option plans in the ordinary course of
business.

 

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D
of the Federal Reserve Board as in effect from time to time.

 

“Eurodollar Advance” means an Advance that bears interest based upon the
Eurodollar Rate.

 

“Eurodollar Base Rate” means the rate per annum (rounded upward to the nearest
whole multiple of 1/8th of 1%) equal to the interest rate per annum set forth on
the Reuters Reference LIBOR1 page as the London Interbank Offered Rate, for
deposits in Dollars at 11:00 a.m.  (London, England time) two Business Days
before the first day of the applicable Interest Period and for a period equal to
such Interest Period; provided that, if such quotation is not available for any
reason, then for purposes of this clause (b), Eurodollar Base Rate shall then be
the rate determined by the Administrative Agent to be the rate at which deposits
in Dollars for delivery on the first day of such Interest Period in immediately
available funds in the approximate amount of the Advances being made, continued
or Converted by the Lenders and with a term equivalent to such Interest Period
would be offered by the Administrative Agent’s London Branch (or other branch or
Affiliate of the Administrative Agent, or in the event that the Administrative
Agent does not have a London branch, the London branch of a Lender chosen by the
Administrative Agent) to major banks in the London or other offshore inter-bank
market for Dollars at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of such Interest Period).

 

“Eurodollar Rate” means a rate per annum determined by the Administrative Agent
pursuant to the following formula:

 

Eurodollar Rate =

Eurodollar Base Rate

1.00 – Eurodollar Reserve Percentage

 

Where,

 

“Eurodollar Reserve Percentage” means, as of any day, the reserve percentage
(expressed as a decimal, carried out to five decimal places) in effect on such
day, whether or not applicable to any Lender, under regulations issued from time
to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities.  The Eurodollar

 

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Rate for each outstanding Advance shall be adjusted automatically as of the
effective date of any change in the Eurodollar Reserve Percentage.

 

“Event of Default” has the meaning specified in Section 7.1.

 

“Excluded Swap Obligations” means, with respect to any Credit Party other than
the Borrower, any Swap Obligation if, and to the extent that, all or a portion
of the guarantee of such Credit Party of, or the grant by such Credit Party of a
security interest to secure, such Swap Obligation (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 and the regulations thereunder at the time the
guarantee of such Credit Party or the grant of such security interest becomes
effective with respect to such Swap Obligation. If a Swap Obligation arises
under a master agreement governing more than one swap, such exclusion shall
apply only to the portion of such Swap Obligation that is attributable to swaps
for which such guarantee or security interest is or becomes illegal.

 

“Extraordinary Receipts” means (a) with respect to any Asset Sale, all cash and
Liquid Investments received by a Credit Party from such Asset Sale after payment
of, or provision for, all estimated cash taxes attributable to such Asset Sale
and payable by such Credit Party, and other reasonable out of pocket fees and
expenses actually incurred by such Credit Party directly in connection with such
Asset Sale, (b) with respect to any settlement or litigation proceeding, the
proceeds of such settlement or litigation proceeding after payment of all out of
pocket fees and expenses actually incurred in connection with such settlement or
proceeding, (c) with respect to any Casualty Event, the insurance proceeds or
award or other compensation as a result of a Casualty Event after payment of all
out of pocket fees and expenses actually incurred by the applicable Credit Party
to receive such proceeds, and (d) with respect to any novation, assignment,
unwinding, termination, or amendment of any hedge position or any other Hedging
Arrangement, the sum of the cash and Liquid Investments received by any Credit
Party in connection with such transaction after giving effect to any netting
agreements.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not materially more onerous to comply with), any current or future
regulations or official interpretations thereof and any agreements entered into
pursuant to Section 1471(b)(1) of the Code.

 

“Federal Funds Rate” means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Administrative Agent (in its individual capacity) on such day on such
transactions as determined by the Administrative Agent.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve
System or any of its successors.

 

“GAAP” means United States of America generally accepted accounting principles
as in effect from time to time, applied on a basis consistent with the
requirements of Section 1.3.

 

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“Governmental Authority” means, with respect to any Person, any foreign
governmental authority, the United States of America, any state of the United
States of America, the District of Columbia, and any subdivision of any of the
foregoing, and any agency, department, commission, board, authority or
instrumentality, bureau or court having jurisdiction over such Person.

 

“Guarantors” means (a) the Subsidiaries of the Borrower listed on Schedule 4.11,
(b) each other Subsidiary of the Borrower from time to time, and (c) any other
Person that becomes a guarantor of all or a portion of the Obligations and which
has entered into either a joinder agreement substantially in the form attached
to the Guaranty or a new Guaranty.

 

“Guaranty” means the Amended and Restated Guaranty Agreement executed in
substantially the same form as Exhibit D.

 

“Hazardous Substance” means any substance or material identified as such
pursuant to CERCLA and those regulated under any other Environmental Law,
including without limitation pollutants, contaminants, petroleum, petroleum
products, radionuclides, and radioactive materials.

 

“Hazardous Waste” means any substance or material regulated or designated as
such pursuant to any Environmental Law, including without limitation,
pollutants, contaminants, flammable substances and materials, explosives,
radioactive materials, oil, petroleum and petroleum products, chemical liquids
and solids, polychlorinated biphenyls, asbestos, toxic substances, and similar
substances and materials.

 

“Hedging Arrangement” means a hedge, call, put, swap, collar, floor, cap,
option, forward sale or purchase or other contract or similar arrangement
(including any obligations to purchase or sell any commodity or security at a
future date for a specific price).

 

“Hydrocarbon Hedge Agreement” means a Hedging Arrangement related to the price
of Hydrocarbons.

 

“Hydrocarbons” means oil, gas, coal seam gas, casinghead gas, drip gasoline,
natural gasoline, condensate, distillate, and all other liquid and gaseous
hydrocarbons produced or to be produced in conjunction therewith from a well
bore and all products, by-products, and other substances derived therefrom or
the processing thereof, and all other minerals and substances produced in
conjunction with such substances, including, but not limited to, sulfur,
geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores,
or substances of value and the products and proceeds therefrom.

 

“Independent Engineer” means Cawley, Gillespie and Associates, Inc. or any other
engineering firm acceptable to the Administrative Agent.

 

“Independent Engineering Report” means a report, in form and substance
satisfactory to the Administrative Agent, prepared by an Independent Engineer,
addressed to the Administrative Agent and the Lenders with respect to the Oil
and Gas Properties owned by any Credit Party (or to be acquired by a Credit
Party) which are or are to be included in the Borrowing Base, which report shall
(a) specify the location, quantity, and type of the estimated Proven Reserves
attributable to such Oil and Gas Properties, (b) contain a projection of the
rate of production of such Oil and Gas Properties, (c) contain an estimate of
the net operating revenues to be derived from the production and sale of
Hydrocarbons from such Proven Reserves based on product price and cost
escalation assumptions specified by the Administrative Agent and the Lenders,
and (d) contain such other information as is customarily obtained from and
provided in such reports or is otherwise reasonably requested by the
Administrative Agent or any Lender.

 

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“Income Tax Expense” means for Borrower and its Subsidiaries, on a consolidated
basis for any period, all state and federal income taxes paid or due to be paid
during such period.

 

“Interest Expense” means, for the Borrower and its Subsidiaries, on a
consolidated basis for any period, total cash interest expense, letter of credit
fees and other fees and expenses incurred by such Person in connection with any
Debt (including but not limited to Debt under this Agreement) for such period
(excluding the upfront fees due pursuant to the Engagement Letter to the
Administrative Agent and the Lenders on or prior to the Closing Date), whether
paid or accrued (including that attributable to obligations which have been or
should be, in accordance with GAAP, recorded as Capital Leases), including,
without limitation, all commissions, discounts, and other fees and charges owed
with respect to letters of credit and bankers’ acceptance financing, fees owed
with respect to the Secured Obligations, and net costs under Hedging
Arrangements entered into addressing interest rates, all as determined in
conformity with GAAP.

 

“Interest Hedge Agreement” means a Hedging Arrangement between the Borrower or
another Credit Party and one or more financial institutions providing for the
exchange of nominal interest obligations between the Borrower or such other
Credit Party and such financial institution or the cap of the interest rate on
any Debt of the Borrower.

 

“Interest Period” means for each Eurodollar Advance comprising part of the same
Borrowing, the period commencing on the date of such Eurodollar Advance is made
or deemed made and ending on the last day of the period selected by the Borrower
pursuant to the provisions below and Section 2.4, and thereafter, each
subsequent period commencing on the day following the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and Section 2.4.  The
duration of each such Interest Period shall be one, two, three, or six months,
in each case as the Borrower may select, provided that:

 

(a)           Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;

 

(b)           whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;

 

(c)           any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and

 

(d)           the Borrower may not select any Interest Period for any Advance
which ends after the Maturity Date.

 

“Internal Engineering Report” means a report, in form and substance satisfactory
to the Administrative Agent, prepared by the Borrower and certified by a
Responsible Officer of the Borrower, addressed to the Administrative Agent and
the Lenders with respect to the Oil and Gas Properties owned by any Credit Party
(or to be acquired by a Credit Party) which are or are to be included in the
Borrowing Base, which report shall (a) specify the location, quantity, and type
of the estimated Proven Reserves attributable to such Oil and Gas Properties,
(b) contain a projection of the rate of production of such Oil and Gas
Properties, (c) contain an estimate of the net operating revenues to be derived
from the

 

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production and sale of Hydrocarbons from such Proven Reserves based on product
prices and cost escalation assumptions specified by the Administrative Agent,
and (d) contain such other information as is customarily obtained from and
provided in such reports or is otherwise reasonably requested by the
Administrative Agent or any Lender.

 

“Issuing Lender” means Wells Fargo in its capacity as a Lender that issues
Letters of Credit for the account of any Credit Party pursuant to the terms of
this Agreement.

 

“Leases” means all oil and gas leases, oil, gas and mineral leases, oil, gas and
casinghead gas leases or any other instruments, agreements, or conveyances under
and pursuant to which the owner thereof has or obtains the right to enter upon
lands and explore for, drill, and develop such lands for the production of
Hydrocarbons.

 

“Legal Requirement” means any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or official interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, including, but not limited to, Regulations T, U and X.

 

“Lender Insolvency Event” means that (a) a Lender or its Lender Parent Company
is insolvent, or is generally unable to pay its debts as they become due, or
admits in writing its inability to pay its debts as they become due, or makes a
general assignment for the benefit of its creditors, or (b) such Lender or its
Lender Parent Company is the subject of a bankruptcy, insolvency,
reorganization, liquidation or similar proceeding, or a receiver, trustee,
conservator, intervenor or sequestrator or the like has been appointed for such
Lender or its Lender Parent Company, or such Lender or its Lender Parent Company
has taken any action in furtherance of or indicating its consent to or
acquiescence in any such proceeding or appointment; provided, that a Lender
Insolvency Event shall not be triggered solely as the result of the acquisition
or maintenance of an ownership interest in such Lender or its Lender Parent
Company by a Governmental Authority or an instrumentality thereof so long as
such ownership interest does not result in or provide such Lender with immunity
from the jurisdiction of courts within the United States or from the enforcement
of judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender.

 

“Lender Parent Company” means, with respect to a Lender, the bank holding
company (as defined in Federal Reserve Board Regulation Y), if any, of such
Lender, and/or any Person owning, beneficially or of record, directly or
indirectly, a majority of the shares of such Lender.

 

“Lenders” means the Persons listed on the signature pages hereto as Lenders, any
other Person that shall have become a Lender hereto pursuant to Section 2.14,
and any other Person that shall have become a Lender hereto pursuant to an
Assignment and Acceptance, but in any event, excluding any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance.

 

“Lending Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“Letter of Credit” means any standby letter of credit issued by an Issuing
Lender for the account of a Credit Party pursuant to the terms of this
Agreement, in such form as may be agreed by the Borrower and the Issuing Lender.

 

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“Letter of Credit Application” means the Issuing Lender’s standard form letter
of credit application for standby letters of credit which has been executed by
the Borrower and accepted by such Issuing Lender in connection with the issuance
of a Letter of Credit.

 

“Letter of Credit Documents” means all Letters of Credit, Letter of Credit
Applications and amendments thereof, and agreements, documents, and instruments
entered into in connection therewith or relating thereto.

 

“Letter of Credit Exposure” means, at the date of its determination by the
Administrative Agent, the aggregate outstanding undrawn amount of Letters of
Credit plus the aggregate unpaid amount of all of the Borrower’s payment
obligations under drawn Letters of Credit.

 

“Letter of Credit Maximum Amount” means $15,000,000; provided that, on and after
the Maturity Date, the Letter of Credit Maximum Amount shall be zero.

 

“Letter of Credit Obligations” means any obligations of the Borrower under this
Agreement in connection with the Letters of Credit.

 

“Leverage Ratio” means, as of the end of each fiscal quarter, the ratio of
(a) the consolidated Debt of the Borrower (other than obligations under
permitted Hedging Arrangements) as of the last day of such fiscal quarter to
(b) the consolidated EBITDAX of the Borrower for the four-fiscal quarter period
then ended; provided that for the purposes of calculating the Leverage Ratio,
any Debt consisting of take-or-pay obligations under the RockPile Agreement or
the Caliber Agreements shall be excluded from the consolidated Debt of the
Borrower.

 

“Lien” means any mortgage, lien, pledge, charge, deed of trust, security
interest, or encumbrance to secure or provide for the payment of any obligation
of any Person, whether arising by contract, operation of law, or otherwise
(including the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease, or other title retention agreement).

 

“Liquid Investments” means (a) readily marketable direct full faith and credit
obligations of the United States of America or obligations unconditionally
guaranteed by the full faith and credit of the United States of America;
(b) commercial paper issued by (i) any Lender or any Affiliate of any Lender or
(ii) any commercial banking institutions or corporations rated at least P-1 by
Moody’s or A-1 by S&P; (c) certificates of deposit, time deposits, and bankers’
acceptances issued by (i) any of the Lenders or (ii) any other commercial
banking institution which is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than $250,000,000
and rated Aa by Moody’s or AA by S&P; (d) repurchase agreements which are
entered into with any of the Lenders or any major money center banks included in
the commercial banking institutions described in clause (c) and which are
secured by readily marketable direct full faith and credit obligations of the
government of the United States of America or any agency thereof;
(e) investments in any money market fund which holds investments substantially
of the type described in the foregoing clauses (a) through (d); (f) readily and
immediately available cash held in any money market account maintained with any
Lender; provided that, such money market accounts and the funds therein shall be
unencumbered and free and clear of all Liens and other third party rights other
than a Lien in favor of the Administrative Agent pursuant to the Security
Documents; and (g) other investments made through the Administrative Agent or
its Affiliates and approved by the Administrative Agent.  All the Liquid
Investments described in clauses (a) through (d) above shall have maturities of
not more than 365 days from the date of issue.

 

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“Management Agreement” means the Management Agreement dated as of April 11, 2013
by and among the Borrower and Parent, as amended or otherwise modified from time
to time in accordance with Section 6.9.

 

“Material Adverse Change” means a material adverse change (a) in the business,
assets (including Oil and Gas Properties), condition (financial or otherwise),
or operations of the Borrower, individually or the Credit Parties, taken as a
whole; (b) on any Credit Party’s ability to perform its obligations under this
Agreement, any Note, the Guaranties or any other Credit Document; (c) on the
Credit Parties’ ability, as a whole, to perform their obligations under this
Agreement or any other Credit Document; (d) in any right or remedy of any
Secured Party under any Credit Document; (e) on the validity or enforceability
of this Agreement or any of the other Credit Documents; or (f) on the Acceptable
Security Interest in favor of the Agent with respect to any material portion of
the Collateral.

 

“Maturity Date” means the earlier of (a) April 11, 2018 and (b) the earlier
termination in whole of the Commitments pursuant to Section 2.1(c)(i) or
Article 7.

 

“Maximum Exposure Amount” means, at any time for each Lender, the sum of (a) the
unfunded Commitment held by such Lender at such time; plus (b) the aggregate
unpaid principal amount of the Note held by such Lender at such time, (with the
aggregate amount of such Lender’s risk participation and funded participation in
the Letter of Credit Exposure (including any such Letter of Credit Exposure that
has been reallocated pursuant to Section 2.15) being deemed as unpaid principal
under such Lender’s Note).

 

“Maximum Rate” means the maximum nonusurious interest rate under applicable law.

 

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

 

“Mortgage” means each mortgage or deed of trust in form acceptable to the
Administrative Agent executed by any Credit Party to secure all or a portion of
the Obligations.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA to which the Borrower or any member of the
Controlled Group is making or accruing an obligation to make contributions.

 

“Net Income” means, for any period and with respect to any Person, the net
income for such period for such Person after taxes as determined in accordance
with GAAP, including any cash net gain but excluding, however, (a) extraordinary
items, including (i) any net non-cash gain or loss during such period arising
from the sale, exchange, retirement or other disposition of capital assets (such
term to include all fixed assets and all securities) other than in the ordinary
course of business, and (ii) any write-up or write-down of assets and (b) the
cumulative effect of any change in GAAP.

 

“NGP” means, collectively, NGP Triangle Holdings, LLC, NGP Natural Resources X,
L.P., NGP Natural Resources X Parallel Fund, L.P., and any assignee of the
foregoing reasonably acceptable to the Administrative Agent.

 

“NGP Group” means, collectively, NGP and any group of related Persons (within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations thereunder).

 

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“Non-Consenting Lender” means any Lender that does not approve any consent,
waiver or amendment that (i) requires the approval of all affected Lenders in
accordance with the terms of Section 9.3 and (ii) has been approved by the
Required Lenders.

 

“Non-Defaulting Lender” means any Lender that is not then a Defaulting Lender.

 

“Non-Increasing Lender” means any Lender that does not approve any increase to
the Borrowing Base in accordance with the terms of Section 2.2 that has been
approved by the Required Lenders.

 

“Note” means a promissory note of the Borrower payable to a Lender or its
registered assigns in the amount of such Lender’s Commitment, in substantially
the same form as Exhibit H, evidencing indebtedness of the Borrower to such
Lender resulting from Advances owing to such Lender.

 

“Notes Reduction Amount” has the meaning set forth in Section 2.2(e)(ii).

 

“Notice of Borrowing” means a means a Notice of Borrowing signed by the Borrower
in substantially the same form as Exhibit E.

 

“Notice of Continuation or Conversion” means a notice of continuation or
conversion signed by the Borrower in substantially the same form as Exhibit F.

 

“Obligations” means all principal, interest (including post-petition interest),
fees, reimbursements, indemnifications, and other amounts now or hereafter owed
by any of the Credit Parties to the Lenders, the Issuing Lender, or the
Administrative Agent under this Agreement and the Credit Documents, including,
the Letter of Credit Obligations, and any increases, extensions, and
rearrangements of those obligations under any amendments, supplements, and other
modifications of the documents and agreements creating those obligations.

 

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the
Treasury.

 

“Oil and Gas Properties” means fee mineral interests, term mineral interests,
Leases, subleases, farm-outs, royalties, overriding royalties, net profit
interests, carried interests, production payments and similar mineral interests,
and all unsevered and unextracted Hydrocarbons in, under, or attributable to
such oil and gas Properties and interests.

 

“Other Taxes” has the meaning set forth in Section 2.13(b).

 

“Patriot Act” means the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)).

 

“Parent” means Triangle Petroleum Corporation, a Nevada corporation.

 

“Participant” has the meaning set forth in Section 9.7(d).

 

“Participant Register” has the meaning set forth in Section 9.7(d).

 

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.

 

“PDP Reserves” means the Proven Reserves which are categorized as both
“developed” and “producing” under the definitions for oil and gas reserves
promulgated by the Society of Petroleum

 

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Evaluation Engineers (or any generally recognized successor) as in effect at the
time in question and reasonably acceptable to the Administrative Agent.

 

“Permit” means any approval, certificate of occupancy, consent, waiver,
exemption, variance, franchise, order, permit, authorization, right or license
of or from any Governmental Authority, including without limitation, an
Environmental Permit.

 

“Permitted Asset Sale” means any Asset Sale that is permitted under Section 6.8.

 

“Permitted Debt” has the meaning set forth in Section 6.1.

 

“Permitted Investments” has the meaning set forth in Section 6.3.

 

“Permitted Liens” has the meaning set forth in Section 6.2.

 

“Permitted Notes” has the meaning set forth in Section 6.1(i).

 

“Person” means an individual, partnership, corporation (including a business
trust), joint stock company, trust, limited liability company, limited liability
partnership, unincorporated association, joint venture, or other entity, or a
government or any political subdivision or agency thereof, or any trustee,
receiver, custodian, or similar official.

 

“Plan” means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.

 

“Pledge Agreement” means a Pledge Agreement substantially in the form of
Exhibit J.

 

“Pricing Grid” means the pricing information set forth in Schedule II.

 

“Prime Rate” means the per annum rate of interest established from time to time
by the Administrative Agent at its principal office in San Francisco as its
prime rate, which rate may not be the lowest rate of interest charged by such
Lender to its customers.

 

“Property” of any Person means any property or assets (whether real, personal,
or mixed, tangible or intangible) of such Person.

 

“Pro Rata Share” means, at any time with respect to any Lender, (i) the ratio
(expressed as a percentage) of such Lender’s Commitment at such time to the
aggregate Commitments at such time, or (ii) if all of the Commitments have been
terminated, the ratio (expressed as a percentage) of such Lender’s aggregate
outstanding Advances at such time to the total aggregate outstanding Advances at
such time.

 

“Proven Reserves” means, at any particular time, the estimated quantities of
Hydrocarbons which geological and engineering data demonstrate with reasonable
certainty to be recoverable in future years from known reservoirs attributable
to Oil and Gas Properties included or to be included in the Borrowing Base under
then existing economic and operating conditions (i.e., prices and costs as of
the date the estimate is made).

 

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Credit
Party that has total assets exceeding $10,000,000 at the time the relevant
Guarantee or grant of the relevant security interest becomes effective with
respect to such Swap Obligation or such other person as constitutes an

 

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“eligible contract participant” under the Commodity Exchange Act or any
regulations promulgated thereunder 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.

 

“Register” has the meaning set forth in Section 9.7(b).

 

“Regulations T, U, and X” means Regulations T, U, and X of the Federal Reserve
Board, as each is from time to time in effect, and all official rulings and
interpretations thereunder or thereof.  Each of Regulations T, U, or X may be
referred to individually as Regulation T, Regulation U, or Regulation X herein.

 

“Release” shall have the meaning set forth in CERCLA or under any other
Environmental Law.

 

“Response” shall have the meaning set forth in CERCLA or under any other
Environmental Law.

 

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA
(other than any such event not subject to the provision for 30-day notice to the
PBGC under the regulations issued under such section).

 

“Required Lenders” means (a) other than as provided in clause (b) below, two or
more Lenders holding greater than 66 2/3% of the aggregate Maximum Exposure
Amount, and (b) at any time when there is only one Lender, such Lender; provided
that, if there are two or more Lenders, the Commitment of, and the portion of
the Advances and Letter of Credit Exposure held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders unless all Lenders are Defaulting Lenders.

 

“Responsible Officer” means (a) with respect to any Person that is a
corporation, such Person’s Chief Executive Officer, President, Chief Financial
Officer, or Vice President, (b) with respect to any Person that is a limited
liability company, if such Person has officers, then such Person’s Chief
Executive Officer, President, Chief Financial Officer, Vice President, and if
such Person is managed by members, then a Responsible Officer of such Person’s
managing member, and if such Person is managed by managers, then a manager (if
such manager is an individual) or a Responsible Officer of such manager (if such
manager is an entity), and (c) with respect to any Person that is a general
partnership, limited partnership or a limited liability partnership, the
Responsible Officer of such Person’s general partner or partners.

 

“Restricted Payment” means, with respect to any Person, (a) any direct or
indirect dividend or distribution (whether in cash, securities or other
Property) or any direct or indirect payment of any kind or character (whether in
cash, securities or other Property) made in connection with the Equity Interest
of such Person, including those dividends, distributions and payments made in
consideration for or otherwise in connection with any retirement, purchase,
redemption or other acquisition of any Equity Interest of such Person, or any
options, warrants or rights to purchase or acquire any such Equity Interest of
such Person or (b) principal or interest payments (in cash, Property or
otherwise) on, or redemptions of, subordinated debt of such Person; provided
that the term “Restricted Payment” shall not include any dividend or
distribution payable solely in common Equity Interests of such Person or
warrants, options or other rights to purchase such Equity Interests.

 

“RockPile” means RockPile Energy Services, LLC, a Delaware limited liability
company.

 

“RockPile Agreement” means the Master Service Agreement by and between RockPile
Energy Services, LLC a Delaware limited liability company and Borrower,
effective as of April 10, 2012.

 

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“S&P” means Standard & Poor’s Rating Agency Group, a division of McGraw-Hill
Companies, Inc., or any successor thereof which is a national credit rating
organization.

 

“Sanctioned Entity” means (a) a country or a government of a country, (b) an
agency of the government of a country, (c) an organization directly or
indirectly controlled by a country or its government, (d) a Person resident in a
country, in each case, that is subject to a country sanctions program
administered and enforced by OFAC.

 

“Sanctioned Person” means a person named on the list of Specially Designated
Nationals maintained by OFAC.

 

“SEC” means the Securities and Exchange Commission.

 

“Secured Obligations” means (a) the Obligations, (b) the Banking Services
Obligations, and (b) all obligations of any of the Credit Parties owing to Swap
Counterparties under any Hedging Arrangements; provided, however that “Secured
Obligations” shall not include the Excluded Swap Obligations.

 

“Secured Parties” means the Administrative Agent, the Issuing Lender, the
Lenders, the Swap Counterparties and Banking Service Providers.

 

“Security Agreement” means the Amended and Restated Security Agreement among the
Credit Parties and the Administrative Agent in substantially the same form as
Exhibit G.

 

“Security Documents” means, collectively, the Mortgages, Security Agreement, the
Pledge Agreement, the Transfer Letters and any and all other instruments,
documents or agreements, including Account Control Agreements, now or hereafter
executed by any Credit Party or any other Person to secure the Secured
Obligations.

 

“Solvent” means, as to any Person, on the date of any determination (a) the fair
value of the Property of such Person is greater than the total amount of debts
and other liabilities (including without limitation, contingent liabilities) of
such Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts and other liabilities (including, without limitation,
contingent liabilities) as they become absolute and matured, (c) such Person is
able to realize upon its assets and pay its debts and other liabilities
(including, without limitation, contingent liabilities) as they mature in the
normal course of business, (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities (including, without limitation,
contingent liabilities) beyond such Person’s ability to pay as such debts and
liabilities mature, (e) such Person is not engaged in, and is not about to
engage in, business or a transaction for which such Person’s Property would
constitute unreasonably small capital, and (f) such Person has not transferred,
concealed or removed any Property with intent to hinder, delay or defraud any
creditor of such Person.

 

“Subject Lender” has the meaning set forth in Section 2.14.

 

“Subsidiary” means, with respect to any Person (the “holder”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the holder in the
holder’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other
entity, a majority of whose outstanding Voting Securities shall at any time be
owned by the holder or one more Subsidiaries of the holder.  Unless

 

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expressly provided otherwise, all references herein and in any other Credit
Document to any “Subsidiary” or “Subsidiaries” means a Subsidiary or
Subsidiaries of the Borrower.

 

“Swap Counterparty” means a Person who (a) is a Lender or Affiliate of a Lender
on the Effective Date and is a counter party to a Hedging Arrangement with a
Credit Party, which Hedging Arrangement was in effect on the Effective Date, or
(b) was a Lender or an Affiliate of a Lender at the time it entered into a
Hedging Arrangement with a Credit Party as permitted by the terms of this
Agreement; provided that (i) when any Swap Counterparty assigns or otherwise
transfers any interest held by it under any Hedging Arrangement to any other
Person pursuant to the terms of such agreement, the obligations thereunder shall
be secured by Liens under the Credit Documents only if such assignee or
transferee is also then a Lender or an Affiliate of a Lender and (ii) if a Swap
Counterparty ceases to be a Lender hereunder or an Affiliate of a Lender
hereunder, obligations owing to such Swap Counterparty shall be secured by Liens
under the Credit Documents only to the extent such obligations arise from
transactions under such individual Hedging Arrangements (and not the Master
Agreement between such parties) entered into prior to the Effective Date or at
the time such Swap Counterparty was a Lender hereunder or an Affiliate of a
Lender hereunder, without giving effect to any extension, increases, or
modifications thereof which are made after such Swap Counterparty ceases to be a
Lender hereunder or an Affiliate of a Lender hereunder.

 

“Swap Obligation” means, with respect to any Credit Party other than the
Borrower, any obligation to pay or perform under any agreement, contract or
transaction that constitutes a “swap” within the meaning of section 1a(47) of
the Commodity Exchange Act.

 

“Tax Group” has the meaning assigned to it in Section 4.13 of this Agreement.

 

“Taxes” has the meaning set forth in Section 2.13(a).

 

“Termination Event” means (a) a Reportable Event with respect to a Plan, (b) the
withdrawal of the Borrower or any member of the Controlled Group from a Plan
during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under
Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan
by the PBGC, or (e) any other event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan.

 

“Transactions” means, collectively, (a) the initial borrowings and other
extensions of credit under this Agreement and (b) the payment of fees,
commissions and expenses in connection with each of the foregoing.

 

“Transfer Letters” means, collectively, the letters in lieu of transfer orders
in substantially the form of the attached Exhibit I and executed by the
Borrower, any Guarantor or any of their respective Subsidiaries executing a
Mortgage.

 

“Type” has the meaning set forth in Section 1.4.

 

“Unused Commitment Amount” means, with respect to a Lender at any time, the
lesser of (a) such Lender’s Commitment at such time and (b) such Lender’s Pro
Rata Share of the Borrowing Base then in effect at such time minus, in each
case the sum of (i) the aggregate outstanding principal amount of all Advances
owed to such Lender at such time plus (ii) such Lender’s Pro Rata Share of the
aggregate Letter of Credit Exposure at such time.

 

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“Utilization Level” means the applicable category (being Level I, Level II,
Level III, Level IV or Level V) of pricing criteria contained in Schedule II,
which is at any time of its determination based on the percentage obtained by
dividing (a) the outstanding principal amount of the Advances and the Letter of
Credit Exposure at such time by (b) the lesser of the Commitments and the
Borrowing Base at such time.

 

“Voting Securities” means (a) with respect to any corporation, capital stock of
the corporation having general voting power under ordinary circumstances to
elect directors of such corporation (irrespective of whether at the time stock
of any other class or classes shall have or might have special voting power or
rights by reason of the happening of any contingency), (b) with respect to any
partnership, any partnership interest or other ownership interest having general
voting power to elect the general partner or other management of the partnership
or other Person, and (c) with respect to any limited liability company,
membership certificates or interests having general voting power under ordinary
circumstances to elect managers of such limited liability company.

 

“Wells Fargo” means Wells Fargo Bank, National Association.

 

Section 1.2                                    Computation of Time Periods.  In
this Agreement in the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding”.

 

Section 1.3                                    Accounting Terms; Changes in
GAAP.

 

(a)                                 All accounting terms not specifically
defined in this Agreement shall be construed in accordance with GAAP applied on
a consistent basis with those applied in the preparation of the financial
statements of the Parent delivered to the Administrative Agent for the fiscal
year ended January 31, 2011.

 

(b)                                 Unless otherwise indicated, all financial
statements of the Borrower, all calculations for compliance with covenants in
this Agreement, all determinations of the Applicable Margin, and all
calculations of any amounts to be calculated under the definitions in
Section 1.1 shall be based upon the consolidated accounts of the Borrower and
its Subsidiaries in accordance with GAAP and consistent with the principles of
consolidation applied in preparing the financial statements referred to in
Section 4.4.

 

(c)                                  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Credit Document, and either the Borrower or the Required Lenders shall so
request, the Administrative Agent, the Lenders and the Borrower shall negotiate
in good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(ii) the Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

 

Section 1.4                                    Types of Advances.  Advances are
distinguished by “Type”.  The “Type” of an Advance refers to the determination
of whether such Advance is a Base Rate Advance or a Eurodollar Advance.

 

Section 1.5                                    Miscellaneous.  Article, Section,
Schedule, and Exhibit references are to this Agreement, unless otherwise
specified.  All references to instruments, documents, contracts, and agreements
(including this Agreement) are references to such instruments, documents,
contracts, and

 

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agreements as the same may be amended, supplemented, and otherwise modified from
time to time, unless otherwise specified and shall include all schedules and
exhibits thereto unless otherwise specified.  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.  Any reference
herein to any Person shall be construed to include such Person’s successors and
assigns (subject to the restrictions contained herein).  The words “hereof”,
“herein”, and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  The term “including” means “including, without
limitation,”.  Paragraph headings have been inserted in this Agreement as a
matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.

 

ARTICLE 2
CREDIT FACILITIES

 

Section 2.1                                    Commitment for Advances.

 

(a)                                 Advances.  Each Lender severally agrees, on
the terms and conditions set forth in this Agreement, to make Advances to the
Borrower from time to time on any Business Day during the Availability Period;
provided that after giving effect to such Advances, the sum of the aggregate
outstanding amount of all Advances and plus the Letter of Credit Exposure, shall
not exceed the lesser of (i) the Borrowing Base in effect at such time and
(ii) the aggregate Commitments in effect at such time.  Each Borrowing shall,
(A) if comprised of Base Rate Advances, be in an aggregate amount not less than
$250,000 and in integral multiples of $100,000 in excess thereof, (B) if
comprised of Eurodollar Advances, be in an aggregate amount not less than
$500,000 and in integral multiples of $100,000 in excess thereof, and (C) in
each case shall consist of Advances of the same Type made on the same day by the
Lenders ratably according to their respective Commitments.  Within the limits of
each Lender’s Commitment, and subject to the terms of this Agreement, the
Borrower may from time to time borrow, prepay pursuant to Section 2.5, and
reborrow under this Section 2.1.

 

(b)                                 Notes.  The indebtedness of the Borrower to
each Lender resulting from Advances owing to such Lender shall be evidenced by a
Note payable to such Lender or its registered assigns.

 

(c)                                  Reduction of the Commitments.

 

(i)                                     Commitments.  The Borrower shall have
the right, upon at least three Business Days’ irrevocable notice to the
Administrative Agent, to terminate in whole or reduce in part the unused portion
of the Commitments; provided that each partial reduction shall be in a minimum
amount of $500,000 and in integral multiples of $100,000 in excess thereof.  Any
reduction or termination of the Commitments pursuant to this
Section 2.1(c)(i) shall be applied ratably to each Lender’s Commitment and shall
be permanent, with no obligation of the Lenders to reinstate such Commitments,
and the applicable Commitment Fees shall thereafter be computed on the basis of
the Commitments, as so reduced.

 

(ii)                                  Defaulting Lender.  At any time when a
Lender is then a Defaulting Lender, the Borrower, at the Borrower’s election,
may elect to terminate such Defaulting Lender’s Commitment hereunder; provided
that (A) such termination must be of the Defaulting Lender’s entire Commitment,
(B) the Non-Defaulting Lenders shall each have the option to accept an
assignment of the Defaulting Lender’s Commitment pursuant to Section 2.14 in
lieu of a termination of Commitments pursuant to this Section 2.1(c)(ii), (C) to
the extent that the Non-Defaulting Lenders do not take an assignment as provided
in the immediately preceding clause

 

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(B), the Borrower shall pay all amounts owed by the Borrower to such Defaulting
Lender in such Defaulting Lender’s capacity as a Lender under this Agreement and
under the other Credit Documents (including principal of and interest on the
Advances owed to such Defaulting Lender, accrued Commitment Fees (subject to
Section 2.7(a)), and letter of credit fees but specifically excluding any
amounts owing under Section 2.10 as result of such payment of such Advances) and
shall deposit with the Administrative Agent into the Cash Collateral Account
cash collateral in the amount equal to such Defaulting Lender’s ratable share of
the Letter of Credit Exposure (including any such Letter of Credit Exposure that
has been reallocated pursuant to Section 2.15), and (D) a Defaulting Lender’s
Commitment may be terminated by the Borrower under this Section 2.1(c)(ii) if
and only if at such time, the Borrower has elected, or is then electing, to
terminate the Commitments of all then existing Defaulting Lenders.  Upon written
notice to the Defaulting Lender and Administrative Agent of the Borrower’s
election to terminate a Defaulting Lender’s Commitment pursuant to this clause
(ii) and the payment and deposit of amounts required to be made by the Borrower
under clause (B) and (C) above, (1) such Defaulting Lender shall cease to be a
“Lender” hereunder for all purposes except that such Lender’s rights and
obligations as a Lender under Sections 2.11, 2.13, 8.5 and 9.2 shall continue
with respect to events and occurrences occurring before or concurrently with its
ceasing to be a “Lender” hereunder, (2) such Defaulting Lender’s Commitment
shall be deemed terminated, and (3) such Defaulting Lender shall be relieved of
its obligations hereunder as a “Lender” except as to its obligations under
Section 8.5 shall continue with respect to events and occurrences occurring
before or concurrently with its ceasing to be a “Lender” hereunder, provided
that, any such termination will not be deemed to be a waiver or release of any
claim that Borrower, the Administrative Agent, any Issuing Lender or any Lender
may have against such Defaulting Lender.  Notwithstanding anything herein to the
contrary, the Non-Defaulting Lenders’ option to take an assignment as provided
in Section 2.1(c)(ii)(B) may be exercised by a Non-Defaulting Lender in its sole
and absolute discretion and nothing contained herein shall obligate any
Non-Defaulting Lender to take any such assignment.

 

Section 2.2                                    Borrowing Base.

 

(a)                                 Borrowing Base.  The initial Borrowing Base
in effect as of the Effective Date has been set by the Administrative Agent and
the Lenders and acknowledged by the Borrower as $110,000,000.  Such initial
Borrowing Base shall remain in effect until the next redetermination or
reduction made pursuant to this Section 2.2.  The Borrowing Base shall be
determined in accordance with the standards set forth in Section 2.2(d) and is
subject to periodic redetermination pursuant to Sections 2.2(b), and 2.2(c) and
reductions pursuant to Section 2.2(e).

 

(b)                                 Calculation of Borrowing Base.

 

(i)                                     The Borrower shall deliver to the
Administrative Agent on or before July 1, 2013, an Internal Engineering Report
dated effective as of June 1, 2013, and such other information as may be
reasonably requested by any Lender with respect to the Oil and Gas Properties
included or to be included in the Borrowing Base.  Within 30 days after the
Administrative Agent’s receipt of such Internal Engineering Report and other
information, (A) the Administrative Agent shall deliver to each Lender the
Administrative Agent’s recommendation for the redetermined Borrowing Base,
(B) the Administrative Agent and the Lenders shall redetermine the Borrowing
Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall
promptly notify the Borrower in writing of the amount of the Borrowing Base as
so redetermined.

 

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(ii)                                  The Borrower shall deliver to the
Administrative Agent, on or before each October 1, beginning October 1, 2013, an
Internal Engineering Report dated effective as of the immediately preceding
September 1st and such other information as may be reasonably requested by the
Administrative Agent or any Lender with respect to the Oil and Gas Properties
included or to be included in the Borrowing Base.  Within 30 days after the
Administrative Agent’s receipt of such Internal Engineering Report and other
information, (A) the Administrative Agent shall deliver to each Lender the
Administrative Agent’s recommendation for the redetermined Borrowing Base,
(B) the Administrative Agent and the Lenders shall redetermine the Borrowing
Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall
promptly notify the Borrower in writing of the amount of the Borrowing Base as
so redetermined.

 

(iii)                               The Borrower shall deliver to the
Administrative Agent, on or before January 1, 2014, an Internal Engineering
Report dated effective as of December 1, 2013 and such other information as may
be reasonably requested by the Administrative Agent or any Lender with respect
to the Oil and Gas Properties included or to be included in the Borrowing Base. 
Within 30 days after the Administrative Agent’s receipt of such Internal
Engineering Report and other information, (A) the Administrative Agent shall
deliver to each Lender the Administrative Agent’s recommendation for the
redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall
redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the
Administrative Agent shall promptly notify the Borrower in writing of the amount
of the Borrowing Base as so redetermined.

 

(iv)                              The Borrower shall deliver to the
Administrative Agent, on or before each April 1st, beginning April 1, 2014, an
Independent Engineering Report dated effective as of the immediately preceding
March 1st and such other information as may be reasonably requested by the
Administrative Agent or any Lender with respect to the Oil and Gas Properties
included or to be included in the Borrowing Base.  Within 30 days after the
Administrative Agent’s receipt of such Independent Engineering Report and other
information, (A) the Administrative Agent shall deliver to each Lender the
Administrative Agent’s recommendation for the redetermined Borrowing Base,
(B) the Administrative Agent and the Lenders shall redetermine the Borrowing
Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall
promptly notify the Borrower in writing of the amount of the Borrowing Base as
so redetermined.

 

(v)                                 In the event that the Borrower does not
furnish to the Administrative Agent and the Lenders the Independent Engineering
Report, Internal Engineering Report or other information specified in clauses
(i), (ii), (iii), and (iv) above by the date specified therein, the
Administrative Agent and the Lenders may nonetheless redetermine the Borrowing
Base and redesignate the Borrowing Base from time-to-time thereafter in their
sole discretion, with notice of such redetermination promptly provided to the
Borrower in writing.  Upon receipt by the Administrative Agent of the relevant
Independent Engineering Report, Internal Engineering Report, or other
information, as applicable, the Administrative Agent and the Lenders shall
redetermine the Borrowing Base as otherwise specified in this Section 2.2.

 

(vi)                              Each delivery of an Engineering Report by the
Borrower to the Administrative Agent and the Lenders shall constitute a
representation and warranty by the Borrower to the Administrative Agent and the
Lenders that (A) the Credit Parties, own the Oil and Gas Properties specified
therein with at least 80% (by value) of the Proven Reserves covered therein
subject to an Acceptable Security Interest and free and clear of any Liens
(except Permitted Liens), (B) on and as of the date of such Engineering Report
each Oil and Gas Property identified as PDP Reserves therein was developed for
oil and gas, and the wells pertaining to such Oil and Gas Properties that are
described therein as producing wells (“Wells”), were each producing oil and/or

 

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gas in paying quantities, except for Wells that were utilized as water or gas
injection wells, carbon dioxide wells or as water disposal wells (each as noted
in such Engineering Report), (C) the descriptions of quantum and nature of the
record title interests of the Credit Parties, set forth in such Engineering
Report include the entire record title interests of the Credit Parties in such
Oil and Gas Properties, are complete and accurate in all respects, and take into
account all Permitted Liens, (D) there are no “back-in” or “reversionary”
interests held by third parties which could reduce the interests of the Credit
Parties in such Oil and Gas Properties except as set forth in Engineering
Report, (E) no operating or other agreement to which any Credit Party is a party
or by which any Credit Party is bound affecting any part of such Oil and Gas
Properties requires any Credit Party to bear any of the costs relating to such
Oil and Gas Properties greater than the record title interest of any Credit
Party in such portion of such Oil and Gas Properties as set forth in such
Engineering Report, except in the event any Credit Party is obligated under an
operating agreement to assume a portion of a defaulting party’s share of costs,
and (F) the Credit Parties’ ownership of the Hydrocarbons and the undivided
interests in the Oil and Gas Properties as specified in such Engineering Report
(i) will, after giving full effect to all Permitted Liens, afford the Credit
Parties not less than those net interests (expressed as a fraction, percentage
or decimal) in the production from or which is allocated to such Hydrocarbons
specified as net revenue interest in such Engineering Report and (ii) will cause
the Credit Parties to bear not more than that portion (expressed as a fraction,
percentage or decimal), specified as working interest in such Engineering
Report, of the costs of drilling, developing and operating the wells identified
in such Engineering Report or identified in the exhibits to the Mortgages
encumbering such Oil and Gas Properties (except for any increases in working
interest with a corresponding increase in the net revenue interest in such Oil
and Gas Property).

 

(c)                                  Interim Redetermination.  In addition to
the Borrowing Base redeterminations provided for in Section 2.2(b), (i) based on
such information as the Administrative Agent and the Lenders deem relevant (but
in accordance with Section 2.2(d)), the Administrative Agent may, and shall at
the request of the Required Lenders, (A) prior to May 1, 2014, make one
additional redetermination of the Borrowing Base during any year, and (B) after
May 1, 2014, make up to two additional redeterminations of the Borrowing Base
during any year; and (ii) based on such information as the Administrative Agent
and the Lenders deem relevant (but in accordance with Section 2.2(d)), the
Administrative Agent shall at the request of the Borrower, (A) prior to May 1,
2014, make one additional redetermination of the Borrowing Base during any year
and (B) after May 1, 2014, make up to two additional redeterminations of the
Borrowing Base during any year.  For the avoidance of doubt, such additional
redeterminations of the Borrowing Base shall not constitute nor be construed as
a consent to any transaction or proposed transaction that would not be permitted
under the terms of this Agreement.  The party requesting the redetermination
under this paragraph (c) shall give the other party at least 10 days’ prior
written notice that a redetermination of the Borrowing Base pursuant to this
paragraph (c) is to be performed; provided that, no such prior written notice
shall be required for any redetermination made by the Lenders during the
existence of a Default.  In connection with any redetermination of the Borrowing
Base under this Section 2.2(c), the Borrower shall provide the Administrative
Agent and the Lenders with an Internal Engineering Report dated effective as of
a date no more than 30 days prior to the redetermination and such other
information as may be reasonably requested by the Administrative Agent or any
Lender with respect to the Oil and Gas Properties included or to be included in
the Borrowing Base.  The Administrative Agent shall promptly notify the Borrower
in writing of each redetermination of the Borrowing Base pursuant to this
Section 2.2(c) and the amount of the Borrowing Base as so redetermined.

 

(d)                                 Standards for Redetermination.  Each
redetermination of the Borrowing Base by the Administrative Agent and the
Lenders pursuant to this Section 2.2 shall be made (i) in the sole discretion of
the Administrative Agent and the Lenders (but in accordance with the other
provisions of this Section

 

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2.2(d)), (ii) in accordance with the Administrative Agent’s and the Lenders’
customary internal standards and practices for valuing and redetermining the
value of Oil and Gas Properties in connection with reserve based oil and gas
loan transactions, (iii) in conjunction with the most recent Independent
Engineering Report or Internal Engineering Report, as applicable, or other
information received by the Administrative Agent and the Lenders relating to the
Proven Reserves of the Credit Parties, and (iv) based upon the estimated value
of the Proven Reserves owned by the Credit Parties as determined by the
Administrative Agent and the Lenders.  In valuing and redetermining the
Borrowing Base, the Administrative Agent and the Lenders may also consider the
business, financial condition, and Debt obligations of the Credit Parties and
such other factors as the Administrative Agent and the Lenders customarily deem
appropriate, including without limitation, commodity price assumptions,
projections of production, operating expenses, general and administrative
expenses, capital costs, working capital requirements, liquidity evaluations,
dividend payments, environmental costs, and legal costs.  In that regard, the
Borrower acknowledges that the determination of the Borrowing Base contains an
equity cushion (market value in excess of loan value), which is essential for
the adequate protection of the Administrative Agent and the Lenders.  No Proven
Reserves shall be included or considered for inclusion in the Borrowing Base
unless the Administrative Agent shall have received, at the Borrower’s expense,
(A) evidence of title reasonably satisfactory in form and substance to the
Administrative Agent covering at least 80% (by value) of the Proven Reserves and
the Oil and Gas Properties relating thereto, and (B) Mortgages and such other
Security Documents requested by the Administrative Agent to the extent necessary
to cause the Administrative Agent to have an Acceptable Security Interest in at
least 80% (by value) of the Proven Reserves and the Oil and Gas Properties
relating thereto.  At all times after the Administrative Agent has given the
Borrower notification of a redetermination of the Borrowing Base under this
Section 2.2, the Borrowing Base shall be equal to the redetermined amount or
such lesser amount designated by the Borrower and disclosed in writing to the
Administrative Agent and the Lenders until the Borrowing Base is subsequently
redetermined or reduced in accordance with this Section 2.2; provided that the
Borrower shall not request that the Borrowing Base be reduced to a level that
would result in a Borrowing Base Deficiency.  Notwithstanding anything herein to
the contrary, (x) to the extent the redetermined Borrowing Base is less than or
equal to the Borrowing Base in effect prior to such redetermination, such
redetermined Borrowing Base must be approved by the Administrative Agent and the
Required Lenders, and (y) to the extent the redetermined Borrowing Base is
greater than the Borrowing Base in effect prior to such redetermination, such
redetermined Borrowing Base must be approved by the Administrative Agent and all
of the Lenders.

 

(e)                                  Reductions to Borrowing Base.

 

(i)                                     If the aggregate BB Value of (A) Oil and
Gas Properties subject to Asset Sales consummated since the immediately
preceding redetermination of the Borrowing Base plus (B) Hedging Arrangements
subject to Asset Sales consummated since the immediately preceding
redetermination of the Borrowing Base (the sum of clauses (A) and (B) being the
“BB Deduction Amount”) exceeds 5% of the most recently redetermined Borrowing
Base, then, upon the consummation of any such Asset Sale after which the BB
Deduction Amount exceeds 5% of the most recently redetermined Borrowing Base,
the Borrowing Base shall be automatically reduced to an amount equal to the
Borrowing Base in effect as of the previous redetermination, minus the BB
Deduction Amount, minus any Notes Reduction Amount determined under clause
(ii) hereof if Debt in the form of Permitted Notes has been issued since the
most recent redetermination of the Borrowing Base.

 

(ii)                                  Upon the issuance of Debt in the form of
Permitted Notes, the Borrowing Base shall be automatically reduced by an amount
equal to 25% of the principal amount of such Permitted Notes (the “Notes
Reduction Amount”).

 

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Section 2.3                                    Letters of Credit.

 

(a)                                 Commitment for Letters of Credit.  Subject
to the terms and conditions set forth in this Agreement, the Issuing Lender
agrees, in reliance upon the agreements of the other Lenders set forth in this
Section 2.3, from time to time on any Business Day during the period from the
Closing Date until the Maturity Date, to issue, increase or extend the
expiration date of, Letters of Credit for the account of any Credit Party,
provided that no Letter of Credit will be issued, increased, or extended:

 

(i)                                     if such issuance, increase, or extension
would cause the Letter of Credit Exposure to exceed the lesser of (A) the Letter
of Credit Maximum Amount and (B) an amount equal to (1) the lesser of the
Borrowing Base and the aggregate Commitments, in either case, in effect at such
time minus (2) the sum of the aggregate outstanding amount of all Advances;

 

(ii)                                  unless such Letter of Credit has an
expiration date not later than the earlier of (A) one year after its issuance or
extension and (B) five Business Days prior to the Maturity Date (an “Acceptable
Letter of Credit Maturity Date”); provided that, (1) if the Commitments are
terminated in whole pursuant to Section 2.1(c)(i), the Borrower shall either
(A) deposit into the Cash Collateral Account cash in an amount equal to 105% of
the Letter of Credit Exposure for the Letters of Credit which have an expiry
date beyond the date the Commitments are terminated or (B) provide a replacement
letter of credit (or other security) reasonably acceptable to the Administrative
Agent and the Issuing Lender in an amount equal to 105% of the Letter of Credit
Exposure, and (2) any such Letter of Credit with a one-year tenor may expressly
provide for an automatic extension of one additional year so long as such Letter
of Credit expressly allows the Issuing Lender, at its sole discretion, to elect
not to provide such extension; provided that, in any event, such automatic
extension may not result in an expiration date that occurs after the fifth
Business Day prior to the Maturity Date;

 

(iii)                               unless such Letter of Credit is a standby
letter of credit not supporting the repayment of indebtedness for borrowed money
of any Person;

 

(iv)                              unless such Letter of Credit is in form and
substance acceptable to the Issuing Lender in its sole discretion;

 

(v)                                 unless the Borrower has delivered to the
Issuing Lender a completed and executed Letter of Credit Application; provided
that, if the terms of any Letter of Credit Application conflicts with the terms
of this Agreement, the terms of this Agreement shall control;

 

(vi)                              unless such Letter of Credit is governed by
(A) the Uniform Customs and Practice for Documentary Credits (2007
Revision), International Chamber of Commerce Publication No. 600, or (B) the
International Standby Practices (ISP98), International Chamber of Commerce
Publication No. 590, in either case, including any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce and adhered to
by the Issuing Lender;

 

(vii)                           if any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Lender from issuing, increasing or extending such Letter of
Credit, or any Legal Requirement applicable to the Issuing Lender or any request
or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Issuing Lender shall prohibit, or request
that the Issuing Lender refrain from, the issuance, increase or extension of
letters of credit generally or such Letter of Credit in particular or shall
impose upon the Issuing Lender with respect to such Letter

 

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of Credit any restriction, reserve or capital requirement (for which the Issuing
Lender is not otherwise compensated hereunder) not in effect on the Closing
Date, or shall impose upon the Issuing Lender any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and which the Issuing
Lender in good faith deems material to it;

 

(viii)                        if the issuance, increase or extension of such
Letter of Credit would violate one or more policies of the Issuing Lender
applicable to letters of credit generally;

 

(ix)                              if Letter of Credit is to be denominated in a
currency other than Dollars;

 

(x)                                 if any Lender is at such time a Defaulting
Lender hereunder, unless the Issuing Lender has entered into satisfactory
arrangements with the Borrower or such Lender to eliminate the Issuing Lender’s
risk with respect to such Lender; or

 

(xi)                              if such Letter of Credit supports the
obligations of any Person in respect of (x) a lease of real property, or (y) an
employment contract if the Issuing Lender reasonably determines that the
Borrower’s obligation to reimburse any draws under such Letter of Credit may be
limited.

 

(b)                                 Requesting Letters of Credit.  Each Letter
of Credit shall be issued pursuant to a Letter of Credit Application given by
the Borrower to the Administrative Agent and the Issuing Lender by facsimile or
other writing not later than 10:00 a.m. (Denver, Colorado time) on the third
Business Day before the proposed date of issuance for the Letter of Credit. 
Each Letter of Credit Application shall be fully completed and shall specify the
information required therein.  Each Letter of Credit Application shall be
irrevocable and binding on the Borrower.  Subject to the terms and conditions
hereof, the Issuing Lender shall before 1:00 p.m. (Denver, Colorado time) on the
requested issuance date set forth in the Letter of Credit Application issue such
Letter of Credit to the beneficiary of such Letter of Credit.

 

(c)                                  Reimbursements for Letters of Credit;
Funding of Participations.

 

(i)                                     With respect to any Letter of Credit, in
accordance with the related Letter of Credit Application, the Borrower agrees to
pay on demand to the Administrative Agent on behalf of the Issuing Lender an
amount equal to any amount paid by the Issuing Lender under such Letter of
Credit.  Upon the Issuing Lender’s demand for payment under the terms of a
Letter of Credit Application, the Borrower may, with a written notice, request
that the Borrower’s obligations to the Issuing Lender thereunder be satisfied
with the proceeds of an Advance in the same amount (notwithstanding any minimum
size or increment limitations on individual Advances).  If the Borrower does not
make such request and does not otherwise make the payments demanded by the
Issuing Lender as required under this Agreement or the Letter of Credit
Application, then the Borrower shall be deemed for all purposes of this
Agreement to have requested such an Advance in the same amount and the transfer
of the proceeds thereof to satisfy the Borrower’s obligations to the Issuing
Lender, and the Borrower hereby unconditionally and irrevocably authorizes,
empowers, and directs the Lenders to make such Advance, to transfer the proceeds
thereof to the Issuing Lender in satisfaction of such obligations, and to record
and otherwise treat such payments as an Advance to the Borrower.  The
Administrative Agent and each Lender may record and otherwise treat the making
of such Borrowings as the making of a Borrowing to the Borrower under this
Agreement as if requested by the Borrower.  Nothing herein is intended to
release any of the Borrower’s obligations under any Letter of Credit
Application, but only to provide an additional method of payment therefor.  The
making of any Borrowing under this Section 2.3(c) shall not constitute a cure or
waiver of any Default, other than the payment Default which is satisfied by the
application of the amounts deemed advanced

 

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hereunder, caused by the Borrower’s failure to comply with the provisions of
this Agreement or the Letter of Credit Application.

 

(ii)                                  Each Lender (including the Lender acting
as Issuing Lender) shall, upon notice from the Administrative Agent that the
Borrower has requested or is deemed to have requested an Advance pursuant to
Section 2.4 and regardless of whether (A) the conditions in Section 3.2 have
been met, (B) such notice complies with Section 2.4, or (C) a Default exists,
make funds available to the Administrative Agent for the account of the Issuing
Lender in an amount equal to such Lender’s Pro Rata Share of the amount of such
Advance not later than 1:00 p.m. on the Business Day specified in such notice by
the Administrative Agent, whereupon each Lender that so makes funds available
shall be deemed to have made an Advance to the Borrower in such amount.  The
Administrative Agent shall remit the funds so received to the Issuing Lender.

 

(iii)                               If any such Lender shall not have so made
its Advance available to the Administrative Agent pursuant to this Section 2.3,
such Lender agrees to pay interest thereon for each day from such date until the
date such amount is paid at the lesser of (A) the Federal Funds Rate for such
day for the first three days and thereafter the interest rate applicable to the
Advance and (B) the Maximum Rate.  Whenever, at any time after the
Administrative Agent has received from any Lender such Lender’s Advance, the
Administrative Agent receives any payment on account thereof, the Administrative
Agent will pay to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender’s Advance was outstanding and funded), which
payment shall be subject to repayment by such Lender if such payment received by
the Administrative Agent is required to be returned.  Each Lender’s obligation
to make the Advance pursuant to this Section 2.3 shall be absolute and
unconditional and shall not be affected by any circumstance, including (1) any
set-off, counterclaim, recoupment, defense or other right which such Lender or
any other Person may have against the Issuing Lender, the Administrative Agent
or any other Person for any reason whatsoever; (2) the occurrence or continuance
of a Default or the termination of the Commitments; (3) any breach of this
Agreement by any Credit Party or any other Lender; or (4) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.

 

(d)                                 Participations.  Upon the date of the
issuance or increase of a Letter of Credit, the Issuing Lender shall be deemed
to have sold to each other Lender and each other Lender shall have been deemed
to have purchased from the Issuing Lender a participation in the related Letter
of Credit Obligations equal to such Lender’s Pro Rata Share at such date and
such sale and purchase shall otherwise be in accordance with the terms of this
Agreement.  The Issuing Lender shall promptly notify each such participant
Lender by facsimile, telephone, or electronic mail (PDF) of each Letter of
Credit issued or increased and the actual dollar amount of such Lender’s
participation in such Letter of Credit.

 

(e)                                  Obligations Unconditional.  The obligations
of the Borrower under this Agreement in respect of each Letter of Credit shall
be unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances, notwithstanding the
following circumstances:

 

(i)                                     any lack of validity or enforceability
of any Letter of Credit Documents;

 

(ii)                                  any amendment or waiver of or any consent
to departure from any Letter of Credit Documents;

 

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(iii)                               the existence of any claim, set-off, defense
or other right which any Credit Party may have at any time against any
beneficiary or transferee of such Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing Lender, any
Lender or any other person or entity, whether in connection with this Agreement,
the transactions contemplated in this Agreement or in any Letter of Credit
Documents or any unrelated transaction;

 

(iv)                              any statement or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect to the extent the Issuing Lender would not be liable therefor
pursuant to the following paragraph (g);

 

(v)                                 payment by the Issuing Lender under such
Letter of Credit against presentation of a draft or certificate which does not
comply with the terms of such Letter of Credit; or

 

(vi)                              any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing;

 

provided, however, that nothing contained in this paragraph (e) shall be deemed
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit.

 

(f)                                   Prepayments of Letters of Credit.  In the
event that any Letter of Credit shall be outstanding or shall be drawn and not
reimbursed on or prior to the Acceptable Letter of Credit Maturity Date, the
Borrower shall pay to the Administrative Agent an amount equal to 105% of the
Letter of Credit Exposure allocable to such Letter of Credit, such amount to be
due and payable on the Acceptable Letter of Credit Maturity Date, and to be held
in the Cash Collateral Account and applied in accordance with paragraph
(h) below.

 

(g)                                  Liability of Issuing Lender.  The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit.  Neither
the Issuing Lender nor any of its officers or directors shall be liable or
responsible for:

 

(i)                                     the use which may be made of any Letter
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith;

 

(ii)                                  the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged;

 

(iii)                               payment by the Issuing Lender against
presentation of documents which do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the relevant Letter of Credit; or

 

(iv)                              any other circumstances whatsoever in making
or failing to make payment under any Letter of Credit (INCLUDING THE ISSUING
LENDER’S OWN NEGLIGENCE),

 

except that the Borrower shall have a claim against the Issuing Lender, and the
Issuing Lender shall be liable to, and shall promptly pay to, the Borrower, to
the extent of any direct, as opposed to consequential, damages suffered by the
Borrower which the Borrower proves were caused by (A) the Issuing Lender’s
willful misconduct or gross negligence in determining whether documents
presented under a Letter of Credit comply with the terms of such Letter of
Credit or (B) the Issuing Lender’s willful failure to make

 

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lawful payment under any Letter of Credit after the presentation to it of a
draft and certificate strictly complying with the terms and conditions of such
Letter of Credit.   In furtherance and not in limitation of the foregoing, the
Issuing Lender may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.

 

(h)                                 Cash Collateral Account.

 

(i)                                     If the Borrower is required to deposit
funds in the Cash Collateral Account pursuant to Sections 2.3(i), 2.5(c), 2.15,
7.2(b) or 7.3(b) or any other provision under this Agreement, then the Borrower
and the Administrative Agent shall establish the Cash Collateral Account and the
Borrower shall execute any documents and agreements, including the
Administrative Agent’s standard form assignment of deposit accounts, that the
Administrative Agent requests in connection therewith to establish the Cash
Collateral Account and grant the Administrative Agent an Acceptable Security
Interest in such account and the funds therein.  The Borrower hereby pledges to
the Administrative Agent and grants the Administrative Agent a security interest
in the Cash Collateral Account, whenever established, all funds held in the Cash
Collateral Account from time to time, and all proceeds thereof as security for
the payment of the Secured Obligations.

 

(ii)                                  Funds held in the Cash Collateral Account
shall be held as cash collateral for obligations with respect to Letters of
Credit and promptly applied by the Administrative Agent at the request of the
Issuing Lender to any reimbursement or other obligations under Letters of Credit
that exist or occur.  To the extent that any surplus funds are held in the Cash
Collateral Account above the Letter of Credit Exposure during the existence of
an Event of Default the Administrative Agent may (A) hold such surplus funds in
the Cash Collateral Account as cash collateral for the Secured Obligations or
(B) apply such surplus funds to any Secured Obligations in any manner directed
by the Required Lenders.  If no Default exists, the Administrative Agent shall
release any surplus funds held in the Cash Collateral Account above the Letter
of Credit Exposure to the Borrower at the Borrower’s written request.

 

(iii)                               Funds held in the Cash Collateral Account
may be invested in Liquid Investments maintained with, and under the sole
dominion and control of, the Administrative Agent or in another investment if
mutually agreed upon by the Borrower and the Administrative Agent, but the
Administrative Agent shall have no obligation to make any investment of the
funds therein.  The Administrative Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Administrative Agent accords its own
property, it being understood that the Administrative Agent shall not have any
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any such funds.

 

(i)                                     Defaulting Lender.  If, at any time, a
Defaulting Lender exists hereunder, then, at the request of the Issuing Lender
subject to Section 2.15(c), the Borrower shall deposit funds with Administrative
Agent into the Cash Collateral Account an amount equal to such Defaulting
Lender’s pro rata share of the Letter of Credit Exposure.

 

(j)                                    Letters of Credit Issued for Guarantors
or any Subsidiary.  Notwithstanding that a Letter of Credit issued or
outstanding hereunder is in support of any obligations of, or is for the account
of, a Guarantor or any Subsidiary, the Borrower shall be obligated to reimburse
the Issuing Lender hereunder for any and all drawings under such Letter of
Credit issued hereunder by the Issuing Lender.  The Borrower hereby acknowledges
that the issuance of Letters of Credit for the account of any Guarantor,

 

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the Borrower or any Subsidiary inures to the benefit of the Borrower, and that
the Borrower’s business (indirectly or directly) derives substantial benefits
from the businesses of such other Persons.

 

Section 2.4                                    Advances.

 

(a)                                 Notice.  Each Borrowing (other than the
Borrowings to be made on the Closing Date), shall be made pursuant to the
applicable Notice of Borrowing given by Borrower to Administrative Agent not
later than (i) 10:00 a.m. (Denver, Colorado time) on the third Business Day
before the date of the proposed Borrowing, in the case of a Eurodollar Advance
or (ii) 10:00 a.m. (Denver, Colorado time) one Business Day before the date of
the proposed Borrowing in the case of a Base Rate Advance, by the Borrower to
the Administrative Agent, which shall give to each Lender prompt notice of such
proposed Borrowing, by facsimile or telex.  The Borrowings to be made on the
Closing Date shall be made pursuant to the applicable Notices of Borrowing given
not later than 10:00 a.m. (Denver, Colorado time) on the Closing Date by the
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice of such proposed Borrowing, by facsimile or telex.  Each Notice of
Borrowing shall be by facsimile or telex, confirmed promptly by the Borrower
with a hard copy (other than with respect to notice sent by facsimile),
specifying (i) the requested date of such Borrowing, (ii) the requested Type of
Advances comprising such Borrowing, (iii) the aggregate amount of such
Borrowing, and (iv) if such Borrowing is to be comprised of Eurodollar Advances,
the requested Interest Period for each such Advance; provided that, and all
Borrowings to be made on the Closing Date shall consist only of Base Rate
Advance which may, subject to the terms of this Agreement, be thereafter
Converted into Eurodollar Advances.  In the case of a proposed Borrowing
comprised of Eurodollar Advances, the Administrative Agent shall promptly notify
each Lender of the applicable interest rate under Section 2.8(b).  Each Lender
shall, before 11:00 a.m. (Denver, Colorado time) on the date of such Borrowing,
make available for the account of its applicable Lending Office to the
Administrative Agent at its address referred to in Section 9.9, or such other
location as the Administrative Agent may specify by notice to the Lenders, in
same day funds, such Lender’s pro rata share of such Borrowing.  After the
Administrative Agent’s receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article 3, the Administrative Agent will make
such funds available to the Borrower at its account with the Administrative
Agent or as otherwise directed by the Borrower with written notice to the
Administrative Agent.

 

(b)                                 Conversions and Continuations.  In order to
elect to Convert or continue an Advance under this paragraph, the Borrower shall
deliver an irrevocable Notice of Continuation or Conversion to the
Administrative Agent at the Administrative Agent’s office no later than
10:00 a.m. (Denver, Colorado time) (i) on the Business Day before the date of
the proposed conversion date in the case of a Conversion to a Base Rate Advance
and (ii) at least three Business Days in advance of the proposed Conversion or
continuation date in the case of a Conversion to, or a continuation of, a
Eurodollar Advance.  Each such Notice of Conversion or Continuation shall be in
writing or by telex or facsimile confirmed promptly by the Borrower with a hard
copy (other than with respect to notice sent by facsimile), specifying (i) the
requested Conversion or continuation date (which shall be a Business Day),
(ii) the amount and Type of the Advance to be Converted or continued,
(iii) whether a Conversion or continuation is requested and, if a Conversion,
into what Type of Advance, and (iv) in the case of a Conversion to, or a
continuation of, a Eurodollar Advance, the requested Interest Period.  Promptly
after receipt of a Notice of Continuation or Conversion under this paragraph,
the Administrative Agent shall provide each Lender with a copy thereof and, in
the case of a Conversion to or a Continuation of a Eurodollar Advance, notify
each Lender of the applicable interest rate under Section 2.8(b).  The portion
of Advances comprising part of the same Borrowing that are Converted to Advances
of another Type shall constitute a new Borrowing.

 

(c)                                  Certain Limitations.  Notwithstanding
anything in paragraphs (a) and (b) above:

 

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(i)                                     at no time shall there be more than five
Interest Periods applicable to outstanding Eurodollar Advances;

 

(ii)                                  the Borrower may not select Eurodollar
Advances for any Borrowing at any time when a Default has occurred and is
continuing;

 

(iii)                               if any Lender shall, at least one Business
Day before the date of any requested Borrowing, notify the Administrative Agent
that the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful, for such Lender or its applicable Lending
Office to perform its obligations under this Agreement to make Eurodollar
Advances or to fund or maintain Eurodollar Advances,  (A) the obligation of such
Lender to make such Eurodollar Advance as part of the requested Borrowing or for
any subsequent Borrowing shall be suspended until such Lender shall notify the
Borrower that the circumstances causing such suspension no longer exist and such
Lender’s portion of such requested Borrowing or any subsequent Borrowing of
Eurodollar Advances shall be made in the form of a Base Rate Advance, and
(B) such Lender agrees to use commercially reasonable efforts (consistent with
its internal policies and legal and regulatory restrictions) to designate a
different Lending Office if the making of such designation would avoid the
effect of this paragraph and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender;

 

(iv)                              if the Administrative Agent is unable to
determine the Eurodollar Rate for Eurodollar Advances comprising any requested
Borrowing, the right of the Borrower to select Eurodollar Advances for such
Borrowing or for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance;

 

(v)                                 if the Required Lenders shall, at least one
Business Day before the date of any requested Borrowing, notify the
Administrative Agent that the Eurodollar Rate for Eurodollar Advances comprising
such Borrowing will not adequately reflect the cost to such Lenders of making or
funding their respective Eurodollar Advances, as the case may be, for such
Borrowing, the right of the Borrower to select Eurodollar Advances for such
Borrowing or for any subsequent Borrowing shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance; and

 

(vi)                              if the Borrower shall fail to select the
duration or continuation of any Interest Period for any Eurodollar Advances in
accordance with the provisions contained in the definition of Interest Period in
Section 1.1 and paragraph (b) above, the Administrative Agent will forthwith so
notify the Borrower and the Lenders and such Advances will be made available to
the Borrower on the date of such Borrowing as Base Rate Advances or, if an
existing Advance, Convert into Base Rate Advances.

 

(d)                                 Notices Irrevocable.  Each Notice of
Borrowing and Notice of Continuation or Conversion delivered by the Borrower
hereunder, including its deemed request for borrowing made under Section 2.3(c),
shall be irrevocable and binding on the Borrower.

 

(e)                                  Administrative Agent Reliance.  Unless the
Administrative Agent shall have received notice from a Lender before the date of
any Borrowing that such Lender will not make available to the Administrative
Agent such Lender’s applicable pro rata share of any Borrowing, the
Administrative Agent

 

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may assume that such Lender has made its applicable pro rata share of such
Borrowing available to the Administrative Agent on the date of such Borrowing in
accordance with Section 2.4(a), and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrower on such date a
corresponding amount.  If and to the extent that such Lender shall not have so
made its applicable pro rata share of such Borrowing available to the
Administrative Agent, such Lender and the Borrower severally agree to
immediately repay to the Administrative Agent on demand such corresponding
amount, together with interest on such amount, for each day from the date such
amount is made available to the Borrower until the date such amount is repaid to
the Administrative Agent, at (i) in the case of the Borrower, the interest rate
applicable on such day to Advances comprising such Borrowing and (ii) in the
case of such Lender, the lesser of (A) the Federal Funds Rate for such day and
(B) the Maximum Rate.  If such Lender shall repay to the Administrative Agent
such corresponding amount and interest as provided above, such corresponding
amount so repaid shall constitute such Lender’s Advance as part of such
Borrowing for purposes of this Agreement even though not made on the same day as
the other Advances comprising such Borrowing.

 

Section 2.5                                    Prepayments.

 

(a)                                 Right to Prepay; Ratable Prepayment.  The
Borrower shall have no right to prepay any principal amount of any Advance
except as provided in this Section 2.5 and all notices given pursuant to this
Section 2.5 shall be irrevocable and binding upon the Borrower.  Each payment of
any Advance pursuant to this Section 2.5 shall be made in a manner such that all
Advances comprising part of the same Borrowing are paid in whole or ratably in
part other than Advances owing to a Defaulting Lender as provided in
Section 2.15.

 

(b)                                 Optional.  The Borrower may elect to prepay
any of the Advances without penalty or premium except as set forth in
Section 2.10 and after giving by 10:00 a.m. (Denver, Colorado time) (i) in the
case of Eurodollar Advances, at least three Business Days’ or (ii) in case of
Base Rate Advances, one Business Day’s prior written notice to the
Administrative Agent stating the proposed date and aggregate principal amount of
such prepayment.  If any such notice is given, the Borrower shall prepay
Advances comprising part of the same Borrowing in whole or ratably in part in an
aggregate principal amount equal to the amount specified in such notice,
together with accrued interest to the date of such prepayment on the principal
amount prepaid and amounts, if any, required to be paid pursuant to Section 2.10
as a result of such prepayment being made on such date; provided that (A) each
optional prepayment of Eurodollar Advances shall be in a minimum amount not less
than $1,000,000 and in multiple integrals of $500,000 in excess thereof and
(B) each optional prepayment of Base Rate Advances shall be in a minimum amount
not less than $500,000 and in multiple integrals of $100,000 in excess thereof.

 

(c)                                  Borrowing Base Deficiency.

 

(i)                                     Other than as provided in clause (ii) or
clause (iii) below, if a Borrowing Base Deficiency exists, the Borrower shall,
after receipt of written notice from the Administrative Agent regarding such
deficiency, (x) provide written notice to the Administrative Agent within ten
days of the date such deficiency notice is received by the Borrower from the
Administrative Agent, identifying which of the following actions the Borrower
shall take (and in the case of option (D), below, identifying the allocation
between options (B) and (C)), and (y) proceed to take such actions (and the
failure of the Borrower to provide such notice or take such actions to remedy
such Borrowing Base Deficiency shall constitute an Event of Default):

 

(A)                               prepay Advances or, if the Advances have been
repaid in full, make deposits into the Cash Collateral Account to provide cash
collateral for the Letter of Credit Exposure, such that

 

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the Borrowing Base Deficiency is cured within 30 days after the date such
deficiency notice is received by the Borrower from the Administrative Agent;

 

(B)                               pledge as Collateral for the Obligations
additional Oil and Gas Properties acceptable to the Administrative Agent and
each of the Lenders such that the Borrowing Base Deficiency is cured within 30
days after the date such deficiency notice is received by the Borrower from the
Administrative Agent;

 

(C)                               repay the Advances and make deposits into the
Cash Collateral Account to provide cash collateral for the Letters of Credit,
each in three monthly installments equal to one-third of such Borrowing Base
Deficiency with the first such installment due 30 days after the date such
deficiency notice is received by the Borrower from the Administrative Agent and
each following installment due 30 days after the preceding installment;

 

(D)                               combine the options provided in clause (A) and
clause (B) above, to make such prepayment or deposit and deliver such additional
Collateral within the time required under clause (A) and clause (B) above;

 

(E)                                combine the options provided in clause
(A) and clause (C) above, to make such prepayment or deposit and deliver such
additional Collateral within the time required under clause (A) and clause (C);
or

 

(F)                                 combine the options provided in clause
(B) and clause (C) above, to make such three equal consecutive monthly
installments and deliver such additional Collateral within the time required
under clause (B) and clause (C) above.

 

(ii)                                  If, during the existence of a Borrowing
Base Deficiency, any Credit Party (or the Administrative Agent as loss payee or
assignee) receives Extraordinary Receipts, whether as one payment or a series of
payments, then the Borrower shall, within three Business Days after receipt of
such proceeds, prepay the Borrowings and provide cash collateral for the Letter
of Credit Exposure, in an aggregate amount equal to the lesser of (i) such
Borrowing Base Deficiency and (ii) 100% of such proceeds.

 

(iii)                               Upon each reduction of the Borrowing Base,
if any, resulting from a Borrowing Base redetermination made under
Section 2.2(c) or a Borrowing Base reduction made under Section 2.2(e), if a
Borrowing Base Deficiency exists, then the Borrower shall immediately prepay the
Advances or, if the Advances have been repaid in full, make deposits into the
Cash Collateral Account to provide cash collateral for the Letter of Credit
Exposure, in an amount equal to (A) such portion of the Borrowing Base
Deficiency resulting from such reduction plus (B) if a Borrowing Base Deficiency
exists prior to such reduction, then an amount equal to the lesser of (i) the
net cash proceeds of the transaction that triggered such Borrowing Base
reduction and (ii) such portion of the Borrowing Base Deficiency in existence
immediately prior to such reduction.

 

(iv)                              Each prepayment pursuant to this
Section 2.5(c) shall be accompanied by accrued interest on the amount prepaid to
the date of such prepayment and amounts, if any, required to be paid pursuant to
Section 2.10 (other than prepayments made to a Defaulting Lender) as a result of
such prepayment being made on such date.  Each prepayment under this
Section 2.5(c) shall be applied to the Advances as determined by the
Administrative Agent and agreed to by the Lenders in their sole discretion.  The
failure of the Borrower to provide a notice of its election within the

 

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required 10 days as required in clause (i) above shall be deemed to be an
election by the Borrower to take the actions provided in clause (i)(A) above.

 

(d)                                 Reduction of Commitments.  On the date of
each reduction of the aggregate Commitments pursuant to Section 2.1(c), the
Borrower agrees to make a prepayment in respect of the outstanding amount of the
Advances to the extent, if any, that the aggregate unpaid principal amount of
all Advances plus the Letter of Credit Exposure exceeds the lesser of (A) the
aggregate Commitments, as so reduced and (B) the Borrowing Base.  Each
prepayment pursuant to this Section 2.5(d) shall be accompanied by accrued
interest on the amount prepaid to the date of such prepayment and amounts, if
any, required to be paid pursuant to Section 2.10 as a result of such prepayment
being made on such date.  Each prepayment under this Section 2.5(d) shall be
applied to the Advances as determined by the Administrative Agent and agreed to
by the Lenders in their sole discretion.

 

(e)                                  Illegality.  If any Lender shall notify the
Administrative Agent and the Borrower that any Change in Law makes it unlawful,
or that any central bank or other Governmental Authority asserts that it is
unlawful for such Lender or its Lending Office to perform its obligations under
this Agreement to maintain any Eurodollar Advances of such Lender then
outstanding hereunder, (i) the Borrower shall, no later than 10:00 a.m. 
(Denver, Colorado time) / 9:00 a.m. (Los Angeles, California time) (A) if not
prohibited by law, on the last day of the Interest Period for each outstanding
Eurodollar Advance made by such Lender or (B) if required by such notice, on the
second Business Day following its receipt of such notice, prepay all of the
Eurodollar Advances made by such Lender then outstanding, together with accrued
interest on the principal amount prepaid to the date of such prepayment and
amounts, if any, required to be paid pursuant to Section 2.10 as a result of
such prepayment being made on such date, (ii) such Lender shall simultaneously
make a Base Rate Advance to the Borrower on such date in an amount equal to the
aggregate principal amount of the Eurodollar Advances prepaid to such Lender,
and (iii) the right of the Borrower to select Eurodollar Advances from such
Lender for any subsequent Borrowing shall be suspended until such Lender gives
notice referred to above shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist.

 

(f)                                   No Additional Right; Ratable Prepayment. 
The Borrower shall have no right to prepay any principal amount of any Advance
except as provided in this Section 2.5, and all notices given pursuant to this
Section 2.5 shall be irrevocable and binding upon the Borrower.  Except as
provided in the preceding sentence, each payment of any Advance pursuant to this
Section 2.5 shall be made in a manner such that all Advances comprising part of
the same Borrowing are paid in whole or ratably in part.

 

(g)                                  Interest; Costs.  Each prepayment pursuant
to this Section 2.5 shall be accompanied by accrued interest on the amount
prepaid to the date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.10 as a result of such prepayment being made on such date.

 

Section 2.6                                    Repayment.  The Borrower shall
pay to the Administrative Agent for the ratable benefit of each Lender the
aggregate outstanding principal amount of the Advances on the Maturity Date.

 

Section 2.7                                    Fees.

 

(a)                                 Commitment Fees.  The Borrower agrees to pay
to the Administrative Agent for the account of each Lender a commitment fee
equal to the Commitment Fee Rate on the average daily Unused Commitment Amount
for such period; provided that, no such commitment fee shall accrue on the
Commitment of a Defaulting Lender during the period such Lender remains a
Defaulting Lender.  Such Commitment Fee is due quarterly in arrears on March 31,
June 30, September 30, and December 31 of each year and on the Maturity Date.

 

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(b)                                 Fees for Letters of Credit.  The Borrower
agrees to pay the following:

 

(i)                                     Subject to Section 2.15, to the
Administrative Agent for the pro rata benefit of the Lenders a per annum letter
of credit fee for each Letter of Credit issued hereunder, for the period such
Letter of Credit is to be outstanding, in an amount equal to the greater of
(A) the Applicable Margin for Eurodollar Advances per annum on the face amount
of such Letter of Credit, and (B) $500 per Letter of Credit.  Such fee shall be
due and payable quarterly in arrears on March 31, June 30, September 30, and
December 31 of each year, and on the Maturity Date. Notwithstanding anything to
the contrary contained herein, while any Event of Default exists, all Letter of
Credit fees shall accrue at the Default Rate.

 

(ii)                                  To the Issuing Lender, a fronting fee for
each Letter of Credit equal to the greater of (A) 0.125% per annum on the face
amount of such Letter of Credit and (B) $500.  Such fee shall be due and payable
quarterly in arrears on March 31, June 30, September 30, and December 31 of each
year, and on the Maturity Date.

 

(iii)                               To the Issuing Lender such other usual and
customary fees associated with any transfers, amendments, drawings, negotiations
or reissuances of any Letters of Credit.  Such fees shall be due and payable as
requested by the Issuing Lender in accordance with the Issuing Lender’s then
current fee policy.

 

The Borrower shall have no right to any refund of letter of credit fees
previously paid by the Borrower, including any refund claimed because any Letter
of Credit is canceled prior to its expiration date.

 

(c)                                  Administrative Agent Fee.  The Borrower
agrees to pay the fees to the Administrative Agent as set forth in the
Engagement Letter.

 

Section 2.8                                    Interest.

 

(a)                                 Base Rate Advances.  Each Base Rate Advance
shall bear interest at the Adjusted Base Rate in effect from time to time plus
the Applicable Margin for Base Rate Advances for such period.  The Borrower
shall pay to Administrative Agent for the ratable account of each Lender all
accrued but unpaid interest on such Lender’s Base Rate Advances on each
March 31, June 30, September 30, and December 31 commencing on June 30, 2013,
and on the Maturity Date.

 

(b)                                 Eurodollar Advances.  Each Eurodollar
Advance shall bear interest during its Interest Period equal to at all times the
Eurodollar Rate for such Interest Period plus the Applicable Margin for
Eurodollar Advances for such period.  The Borrower shall pay to the
Administrative Agent for the ratable account of each Lender all accrued but
unpaid interest on each of such Lender’s Eurodollar Advances on the last day of
the Interest Period therefor (provided that for Eurodollar Advances with
Interest Periods of six months or more, accrued but unpaid interest shall also
be due on the day three months from the first day of such Interest Period), on
the date any Eurodollar Advance is repaid, and on the Maturity Date.

 

(c)                                  Default Rate.  Notwithstanding the
foregoing, upon the occurrence and during the continuance of an Event of
Default, all overdue amounts shall bear interest, after as well as before
judgment, at the Default Rate.  Interest accrued pursuant to this
Section 2.8(c) and all interest accrued but unpaid on or after the Maturity Date
shall be due and payable on demand.

 

Section 2.9                                    Illegality.  If any Lender shall
notify the Borrower that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful, for such
Lender or its applicable Lending Office

 

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to perform its obligations under this Agreement to make, maintain, or fund any
Eurodollar Advances of such Lender then outstanding hereunder, (a) the Borrower
shall, no later than 10:00 a.m. (Denver, Colorado time) (i) if not prohibited by
law, on the last day of the Interest Period for each outstanding Eurodollar
Advance or (ii) if required by such notice, on the second Business Day following
its receipt of such notice, prepay all of the Eurodollar Advances of such Lender
then outstanding, together with accrued interest on the principal amount prepaid
to the date of such prepayment and amounts, if any, required to be paid pursuant
to Section 2.10 as a result of such prepayment being made on such date, (b) such
Lender shall simultaneously make a Base Rate Advance to the Borrower on such
date in an amount equal to the aggregate principal amount of the Eurodollar
Advances prepaid to such Lender, and (c) the right of the Borrower to select
Eurodollar Advances from such Lender for any subsequent Borrowing shall be
suspended until such Lender shall notify the Borrower that the circumstances
causing such suspension no longer exist.  Each Lender agrees to use commercially
reasonable efforts (consistent with its internal policies and legal and
regulatory restrictions) to designate a different Lending Office if the making
of such designation would avoid the effect of this paragraph and would not, in
the reasonable judgment of such Lender, be otherwise disadvantageous to such
Lender.

 

Section 2.10                             Breakage Costs.  Upon demand of any
Lender (with a copy to the Administrative Agent) from time to time, the Borrower
shall promptly compensate such Lender for and hold such Lender harmless from any
loss, cost or expense incurred by it as a result of:

 

(a)                                 any continuation, conversion, payment or
prepayment (including any deemed payment or repayment and any reallocated
repayment to Non-Defaulting Lenders provided for in Section 2.12(a) or
Section 2.15) of any Advance other than a Base Rate Advance on a day other than
the last day of the Interest Period for such Advance (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)                                 any failure by the Borrower (for a reason
other than the failure of such Lender to make an Advance) to prepay, borrow,
continue or Convert any Advance other than a Base Rate Advance on the date or in
the amount notified by the Borrower; or

 

(c)                                  any assignment of an Eurodollar Advance on
a day other than the last day of the Interest Period therefor as a result of a
request by the Borrower pursuant to Section 2.14;

 

including any foreign exchange losses and any loss or expense arising from the
liquidation or reemployment of funds obtained by it to maintain such Advance,
from fees payable to terminate the deposits from which such funds were obtained
or from the performance of any foreign exchange contract.  The Borrower shall
also pay any customary administrative fees charged by such Lender in connection
with the foregoing.  For purposes of calculating amounts payable by the Borrower
to the Lenders under this Section 2.10, the requesting Lender shall be deemed to
have funded the Eurodollar Advances made by it at the Eurodollar Base Rate used
in determining the Eurodollar Rate for such Advance by a matching deposit or
other borrowing in the offshore interbank market for Dollars for a comparable
amount and for a comparable period, whether or not such Eurodollar Advance was
in fact so funded.

 

Section 2.11                             Increased Costs.

 

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

 

(i)                                     impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement (other than by way
of imposition or increase of reserve requirements included in the Eurodollar
Rate Reserve Percentage) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, financial
institutions generally,

 

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including any Lender (or its applicable Lending Office), including the
Commitments of such Lender hereunder; or

 

(ii)                                  impose on financial institutions
generally, including such Lender (or its applicable Lending Office), or on the
London interbank market any other condition affecting this Agreement or its
Notes or any of such extensions of credit or liabilities or commitments;

 

and the result of any of the foregoing is to increase the cost to such Lender
(or its applicable Lending Office) of making, Converting into, continuing, or
maintaining any Eurodollar Advances or to reduce any sum received or receivable
by such Lender (or its applicable Lending Office) under this Agreement or its
Notes with respect to any Eurodollar Advances, then the Borrower shall pay to
such Lender within three Business Days after written demand made by such Lender
such amount or amounts as such Lender determines in good faith to be necessary
to  compensate such Lender for such increased cost or reduction.

 

(b)                                 Capital Adequacy.  If, after the Effective
Date, any Lender or the Issuing Lender shall have determined that any Change in
Law affecting such Lender or Issuing Lender or any Lending Office of such Lender
or such Lender’s or Issuing Lender’s holding company, if any, regarding capital
or liquidity requirements has or would have the effect of reducing the rate of
return on the capital of financial institutions generally, including such Lender
or the Issuing Lender or any corporation controlling such Lender or the Issuing
Lender, as a consequence of such Lender’s or the Issuing Lender’s obligations
hereunder, to a level below that which such Lender or the Issuing Lender or such
corporation could have achieved but for such Change in Law (taking into
consideration its policies with respect to capital adequacy), then from time to
time within three Business Days after written demand by such Lender or the
Issuing Lender, as the case may be, the Borrower shall pay to such Lender or the
Issuing Lender such additional amount or amounts as such Lender determines in
good faith to be necessary to compensate such Lender or the Issuing Lender for
such reduction.

 

(c)                                  Mitigation.  Each Lender shall promptly
notify the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the Effective Date, which will entitle such Lender to
compensation pursuant to this Section 2.11 and will designate a different
Lending Office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the reasonable judgment of such Lender,
be otherwise disadvantageous to it.  Any Lender claiming compensation under this
Section 2.11 shall furnish to the Borrower and the Administrative Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be determined by such Lender in good faith and which shall
be conclusive in the absence of manifest error.  In determining such amount,
such Lender may use any reasonable averaging and attribution methods.

 

(d)                                 Delay in Requests.  Failure or delay on the
part of any Lender or Issuing Lender to demand compensation pursuant to this
Section 2.11 shall not constitute a waiver of such Lender’s or such Issuing
Lender’s right to demand such compensation, provided that the Borrower shall not
be required to compensate a Lender or Issuing Lender pursuant to this
Section 2.11 for any increased costs incurred or reductions suffered more than
180 days prior to the date that such Lender or Issuing Lender, as the case may
be, notifies the Borrower and the Administrative Agent of the Change in Law
giving rise to such increased costs or reductions and of such Lender’s or
Issuing Lender’s intention to claim compensation therefor (except that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended to include the
period of retroactive effect thereof).

 

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Section 2.12                             Payments and Computations.

 

(a)                                 Payments.  All payments of principal,
interest, and other amounts to be made by the Borrower under this Agreement and
other Credit Documents shall be made to the Administrative Agent in Dollars and
in immediately available funds, without setoff, deduction, or counterclaim;
provided that, the Borrower may setoff amounts owing to any Lender that is at
such time a Defaulting Lender against Advances that such Defaulting Lender
failed to fund to the Borrower under this Agreement (the “Unfunded Advances”) so
long as (i) the Borrower shall have delivered prior written notice of such
setoff to the Administrative Agent and such Defaulting Lender, (ii) the Advances
made by the non-defaulting Lenders as part of the original Borrowing to which
the Unfunded Advances applied shall still be outstanding, (iii) if such
Defaulting Lender failed to fund Advances under more than one Borrowing, such
setoff shall be applied in a manner satisfactory to the Administrative Agent,
and (iv) upon the application of such setoff, the Unfunded Advances shall be
deemed to have been made by such Defaulting Lender on the effective date of such
setoff.

 

(b)                                 Payment Procedures. The Borrower shall make
each payment under this Agreement and under the Notes not later than 10:00 a.m.
(Denver, Colorado time) on the day when due in Dollars to the Administrative
Agent at the location referred to in the Notes (or such other location as the
Administrative Agent shall designate in writing to the Borrower) in same day
funds.  The Administrative Agent will promptly thereafter, and in any event
prior to the close of business on the day any timely payment is made, cause to
be distributed like funds relating to the payment of principal, interest or fees
ratably (other than amounts payable solely to the Administrative Agent or a
specific Lender pursuant to Sections 2.9, 2.10, 2.11, 2.13, 2.14, and 9.2 and
such other provisions herein which expressly provide for payments to a specific
Lender, but after taking into account payments effected pursuant to Section 9.1)
in accordance with each Lender’s applicable pro rata share to the Lenders for
the account of their respective applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Lender to such Lender
for the account of its applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.  Upon receipt of other amounts due
solely to the Administrative Agent, the Issuing Lender or a specific Lender, the
Administrative Agent shall distribute such amounts to the appropriate party to
be applied in accordance with the terms of this Agreement.

 

(c)                                  Non-Business Day Payments.  Whenever any
payment shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest or
fees, as the case may be; provided that if such extension would cause payment of
interest on or principal of Eurodollar Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.

 

(d)                                 Computations.  All computations of interest
for Base Rate Advances shall be made by the Administrative Agent on the basis of
a year of 365/366 days and all computations of all other interest and fees shall
be made by the Administrative Agent on the basis of a year of 360 days, in each
case for the actual number of days (including the first day, but excluding the
last day) occurring in the period for which such interest or fees are payable. 
Each determination by the Administrative Agent of an amount of interest or fees
shall be conclusive and binding for all purposes, absent manifest error.

 

(e)                                  Sharing of Payments, Etc.  If any Lender
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the Advances made by it in
excess of its ratable share of payments on account of the Advances or Letter of
Credit Obligations obtained by the Lenders (other than as a result of a
termination of a Defaulting Lender’s Commitment under Section 2.1(c)(ii), the
setoff right of the Borrower under clause (a) above, or the non-pro rata
application of payments provided in the last sentence of this clause (e)), such
Lender shall notify the other

 

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Lenders and forthwith purchase from the other Lenders participations in the
Advances made by it or the Letter of Credit Obligations held by it as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with the other Lenders; provided that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
the other Lenders shall be rescinded and each such Lender shall repay to the
purchasing Lender the purchase price to the extent of such Lender’s ratable
share, but without interest.  The Borrower agrees that any Lender so purchasing
a participation from another Lender pursuant to this Section 2.12(e) may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.  If a Lender fails to fund an Advance with respect to a Borrowing
as and when required hereunder and the Borrower subsequently makes a repayment
of any Advances, then, after taking into account any setoffs made pursuant to
Section 2.12(a) above, such payment shall be applied among the Non-Defaulting
Lenders ratably in accordance with their respective Commitment percentages until
each Lender (including any Lender that is at such time a Defaulting Lender) has
its percentage of all of the outstanding Advances and the balance of such
repayment shall be applied among the Lenders in accordance with their Pro Rata
Share.  The provisions of this Section 2.12(e) 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
Advances or participations in Letter of Credit Exposure to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this Section 2.12(e) shall apply).

 

Section 2.13                             Taxes.

 

(a)                                 No Deduction for Certain Taxes.  Any and all
payments by any Credit Party under any of the Credit Documents to the
Administrative Agent, the Issuing Lender, or a Lender shall be made, in
accordance with Section 2.12, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges, or
withholdings, and all liabilities with respect thereto, excluding, in the case
of the Administrative Agent, the Issuing Lender, or a Lender, (i) taxes imposed
on its income and franchise (or margin) taxes imposed on it by the jurisdiction
(or any political subdivision thereof) under (A) the laws of which (or under the
laws of a political subdivision of which) the Administrative Agent, the Issuing
Lender, or such Lender is organized or in which its principal executive office
is located, and (B) in the case of each Lender, the laws of which (or under the
laws of a political subdivision of which) such Lender’s applicable Lending
Office is located; (ii) any taxes imposed by the United States of America by
means of withholding at the source, if and to the extent such United States
withholding taxes are in effect on the date a Lender becomes a Lender hereunder
and (iii) any taxes imposed by the United States of America by means of
withholding at the source under FATCA (all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities being hereinafter
referred to as “Taxes”).  Except as provided in Section 2.13(f), if the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable to the Administrative Agent, the Issuing Lender, or any Lender, (i) the
sum payable shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.13), such Lender receives an amount equal to the sum it
would have received had no such deductions been made; (ii) the Borrower shall
make such deductions; and (iii) the Borrower shall pay the full amount deducted
to the relevant Governmental Authority or other authority in accordance with
applicable law.

 

(b)                                 Other Taxes.  In addition, except as
provided in Section 2.13(f), the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges, or
similar levies which arise from any payment made under any Credit Document or
from the execution, delivery, or registration of, or otherwise with respect to,
this Agreement, the Notes, or the other Credit Documents (hereinafter referred
to as “Other Taxes”).

 

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(c)                                  Indemnification.  EXCEPT AS PROVIDED IN
SECTION 2.13(F), THE BORROWER INDEMNIFIES EACH LENDER, THE ISSUING LENDER, AND
THE ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING,
WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED ON AMOUNTS PAYABLE UNDER
THIS SECTION 2.13) PAID BY SUCH LENDER, THE ISSUING LENDER, OR THE
ADMINISTRATIVE AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING INTEREST
AND EXPENSES) ARISING THEREFROM OR WITH RESPECT THERETO, WHETHER OR NOT SUCH
TAXES OR OTHER TAXES WERE CORRECTLY OR LEGALLY ASSERTED.

 

(d)                                 Evidence of Tax Payments.  As soon as
practicable after any payment of Taxes or Other Taxes by any Credit Party to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of any receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.

 

(e)                                  Foreign Lender Withholding Exemption.  Each
Lender that is not incorporated under the laws of the United States of America
or a state thereof and that is entitled to an exemption from United States
withholding tax with respect to payments under this Agreement under applicable
law or any treaty to which the United States is a party shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
(including Internal Revenue Service Forms W-8BEN or W-8ECI) prescribed by
applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding. In addition, if a payment made to such
a Lender under any Credit Document would be subject to U.S. federal withholding
tax imposed by FATCA if such Lender were to fail to comply with the applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower
and the Administrative Agent at the time or times prescribed by law and at such
time or times reasonably requested by the Borrower or the Administrative Agent
such documentation prescribed by applicable law (including as prescribed by
Section 1471(b)(3)(C)(i) of the Code) and such additional documentation
reasonably requested by the Borrower or the Administrative Agent as may be
necessary for the Borrower and the Administrative Agent to comply with their
obligations under FATCA and to determine that such Lender has complied with such
Lender’s obligations under FATCA or to determine the amount to deduct and
withhold from such payment.  Solely for purposes of the preceding sentence,
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

 

(f)                                   Failure to Provide Forms.  For any period
with respect to which a Lender has failed to provide the Borrower or the
Administrative Agent with the appropriate forms referred to in this
Section 2.13(e) (unless such failure is due to a change in treaty, law or
regulation occurring after the date on which such Lender becomes a Lender
hereunder), such Lender shall not be entitled to indemnification or payment
under Section 2.13(a), (b), or (c) with respect to Taxes imposed by the United
States; provided that if a Lender, that is otherwise exempt from or subject to a
reduced rate of withholding tax, becomes subject to Taxes because of its failure
to deliver a form required under Section 2.13(e), the Borrower shall take such
steps as such Lender shall reasonably request, and at the expense of such
Lender, to assist such Lender to recover such Taxes.

 

(g)                                  Mitigation.  Each Lender shall use
reasonable efforts (consistent with its internal policies and legal and
regulatory restrictions) to select a jurisdiction for its applicable Lending
Office or change the jurisdiction of its applicable Lending Office, as the case
may be, so as to avoid the imposition of any Taxes or Other Taxes or to
eliminate or reduce the payment of any additional sums under this Section 2.13;
provided, that no such selection or change of jurisdiction for its applicable
Lending Office shall be

 

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made if, in the reasonable judgment of such Lender, such selection or change
would be disadvantageous to such Lender.

 

(h)                                 Tax Credits and Refunds.  If the
Administrative Agent, any Lender or the Issuing Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this
Section with respect to the Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of the Administrative Agent, such Lender or
the Issuing Lender, as the case may be, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the Administrative
Agent, such Lender or the Issuing Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or the
Issuing Lender in the event the Administrative Agent, such Lender or the Issuing
Lender is required to repay such refund to such Governmental Authority.  This
subsection shall not be construed to require the Administrative Agent, any
Lender or the Issuing Lender to make available its tax returns (or any other
information relating to its taxes that it deems confidential) to any Borrower or
any other Person.

 

(i)                                     Payment.  If the Administrative Agent or
any Lender becomes entitled to receive payment of Taxes, Other Taxes or
additional sums pursuant to this Section, it shall give notice and demand
thereof to the Borrower, and the Borrower (unless the Administrative Agent or
Lender shall withdraw such notice and demand or the Borrower is not obligated to
pay such amounts) shall pay such Taxes, Other Taxes or additional sums within 30
days after the Borrower’s receipt of such notice and demand.

 

Section 2.14                             Replacement of Lenders.  If (a) the
Borrower is required pursuant to Section 2.11 or 2.13 to make any additional
payment to any Lender, (b) any Lender’s obligation to make or continue, or to
Convert Base Rate Advances into, Eurodollar Advances shall be suspended pursuant
to Section 2.4(c)(iii) or 2.9, or (c) any Lender is a Defaulting Lender, a
Non-Consenting Lender, or a Non-Increasing Lender (any such Lender described in
any of the preceding clauses (a) — (c), being a “Subject Lender”), then (i) in
the case of a Defaulting Lender, the Administrative Agent may, upon notice to
the Subject Lender and the Borrower, require such Defaulting Lender to assign
and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 9.7), all of its
interests, rights and obligations under this Agreement and the related Credit
Documents as a Lender to an Eligible Assignee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment) and
(ii) in the case of any Subject Lender, the Borrower may, upon notice to the
Subject Lender and the Administrative Agent and at the Borrower’s sole cost and
expense, require such Subject Lender to assign and delegate, without recourse
(in accordance with and subject to the restrictions contained in, and consents
required by, Section 9.7), all of its interests, rights and obligations under
this Agreement and the related Credit Documents to an Eligible Assignee that
shall assume such obligations (which Eligible Assignee may be another Lender, if
a Lender accepts such assignment), provided that, in any event:

 

(A)                                                       as to assignments
required by the Borrower, the Borrower shall have paid to the Administrative
Agent the assignment fee specified in Section 9.7;

 

(B)                                                       such Subject Lender
shall have received payment of an amount equal to the outstanding principal of
its applicable Advances and participations in outstanding Letter of Credit
Obligations, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Credit Documents (including any
amounts under Section 2.10) from the assignee (to the extent

 

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of such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);

 

(C)                                                       in the case of any
such assignment resulting from a claim for compensation under Section 2.13, such
assignment will result in a reduction in such compensation or payments
thereafter; and

 

(D)                                                       such assignment does
not conflict with applicable Legal Requirements.

 

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower or the Administrative Agent to require such
assignment and delegation cease to apply.  Solely for purposes of effecting any
assignment involving a Defaulting Lender under this Section 2.14 and to the
extent permitted under applicable Legal Requirements, each Lender hereby
designates and appoints the Administrative Agent as true and lawful agent and
attorney-in-fact, with full power and authority, for and on behalf of and in the
name of such Lender to execute, acknowledge and deliver the Assignment and
Acceptance required hereunder if such Lender is a Defaulting Lender and such
Lender shall be bound thereby as fully and effectively as if such Lender had
personally executed, acknowledged and delivered the same.  In lieu of the
Borrower or the Administrative Agent replacing a Defaulting Lender as provided
in this Section 2.14, the Borrower may terminate such Defaulting Lender’s
applicable Commitment as provided in Section 2.1(c)(ii).

 

Section 2.15                             Payments and Deductions to a Defaulting
Lender.

 

(a)                                 If any Lender shall fail to make any payment
required to be made by it pursuant to Section 2.1(a), Section 2.3, or
Section 2.12 then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid in cash.

 

(b)                                 If a Defaulting Lender as a result of the
exercise of a set-off shall have received a payment in respect of its
outstanding applicable Advances or Pro Rata Share of Letter of Credit Exposure
which results in its outstanding applicable Advances and Pro Rata Share of
Letter of Credit Exposure being less than its pro rata share of the aggregate
outstanding applicable Advances and Letter of Credit Exposure, then no payments
will be made to such Defaulting Lender until such time as all amounts due and
owing to the Lenders have been equalized in accordance with each Lender’s
respective pro rata share of the aggregate outstanding applicable Advances and
Letter of Credit Exposure.  Further, if at any time prior to the acceleration or
maturity of the Advances, the Administrative Agent shall receive any payment in
respect of principal attributable to an applicable Advance or Letter of Credit
Obligations while one or more Defaulting Lenders shall be party to this
Agreement, the Administrative Agent shall apply such payment first to the
Borrowings 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 pro rata share of all Advances
then outstanding.  After acceleration or maturity of the Advances, subject to
the first sentence of this Section 2.15(b), all principal will be paid ratably
as provided in Section 2.12(e).

 

(c)                                  If any Letter of Credit Exposure exists at
the time a Lender becomes a Defaulting Lender then:

 

(i)                                     such Letter of Credit Exposure shall be
automatically reallocated among the Non-Defaulting Lenders in accordance with
their respective Pro Rata Share of such Defaulting

 

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Lender’s Pro Rata Share of the Letter of Credit Exposure (and each Lender is
deemed to have purchased and assigned such participation interest in such
reallocated portion of the Letter of Credit Exposure) but only to the extent
that (A) the sum of each Non-Defaulting Lender’s outstanding Advances plus its
share of the Letter of Credit Exposure, after giving effect to the reallocation
provided herein, does not exceed the lesser of such Non-Defaulting Lender’s Pro
Rata Share of the Borrowing Base and such Non-Defaulting Lender’s Commitment,
and (B) the conditions set forth in Section 3.2 are satisfied at such time;
provided that, such reallocation shall not constitute a waiver or release of any
claim the Borrower, the Administrative Agent, the Issuing Lender or any other
Lender may have against such Defaulting Lender or cause such Defaulting Lender
to be a Non-Defaulting Lender;

 

(ii)                                  if the reallocation described in clause
(i) above cannot, or can only partially, be effected, then the Borrower shall,
within one Business Day following notice by the Administrative Agent, cash
collateralize such Defaulting Lender’s share of the Letter of Credit Exposure
(after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.3(h) for so long as
such Letter of Credit Exposure is outstanding;

 

(iii)                               if the Borrower cash collateralizes any
portion of such Defaulting Lender’s Letter of Credit Exposure pursuant to this
Section 2.15 then the Borrower shall not be required to pay any fees to such
Defaulting Lender pursuant to Section 2.7(b)(i) or (iii) with respect to such
Defaulting Lender’s Letter of Credit Exposure during the period such Defaulting
Lender’s Letter of Credit Exposure is cash collateralized;

 

(iv)                              if the Letter of Credit Exposure of the
Non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the
fees payable to the Lenders pursuant to Section 2.7(b)(i) and (iii) shall be
adjusted in accordance with such Non-Defaulting Lenders’ Pro Rata Share;

 

(v)                                 if any Defaulting Lender’s share of the
Letter of Credit Exposure is neither cash collateralized nor reallocated
pursuant to the preceding provisions, then, without prejudice to any rights or
remedies of the Issuing Lender or any Lender hereunder, all letter of credit
fees payable under Section 2.7(b)(i) and (iii) with respect to such Defaulting
Lender’s share of the Letter of Credit Exposure shall be payable to the Issuing
Lender until such Letter of Credit Exposure is cash collateralized and/or
reallocated.

 

In the event that the Administrative Agent, the Borrower and the Issuing Lender
each agrees that a Defaulting Lender has adequately remedied all matters that
caused such Lender to be a Defaulting Lender, then (i) the Letter of Credit
Exposure of the Lenders shall be readjusted to reflect the inclusion of such
Lender’s Commitment and on such date such Lender shall be deemed to have
purchased at par such of the Advances or participations in Letters of Credit of
the other Lenders as the Administrative Agent shall determine may be necessary
in order for such Lender to hold such Advances and Letter of Credit Exposure in
accordance with its Pro Rata Share, and (ii) if no Default exists, then any cash
collateral posted by the Borrower pursuant to clause (c)(ii) above with respect
to such Lender shall be returned to the Borrower.

 

ARTICLE 3

CONDITIONS OF LENDING

 

Section 3.1                                    Conditions Precedent to Initial
Borrowing.  The obligations of each Lender to make the initial Advance and of
the Issuing Lender to make issue the initial Letters of Credit, shall be subject
to the conditions precedent that:

 

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(a)                                 Documentation.  The Administrative Agent
shall have received the following, duly executed by all the parties thereto, in
form and substance reasonably satisfactory to the Administrative Agent and the
Lenders:

 

(i)                                     this Agreement and all attached Exhibits
and Schedules and the Notes, if requested by the applicable Lenders, payable to
each applicable Lender or its registered assigns;

 

(ii)                                  the Guaranty executed by all Subsidiaries
of the Borrower existing on the Closing Date;

 

(iii)                               the Security Agreement executed by each
Credit Party, together with appropriate UCC-1 financing statements, if any,
necessary or desirable for filing with the appropriate authorities and any other
documents, agreements, or instruments necessary to create, perfect or maintain
an Acceptable Security Interest in the Collateral described in the Security
Agreement;

 

(iv)                              the Mortgages encumbering at least 80% by
value of the Credit Parties’ Proven Reserves described in the initial
Independent Engineer’s Report;

 

(v)                                 certificates of insurance naming the
Administrative Agent as loss payee with respect to property insurance, or
additional insured with respect to liability insurance, and covering the
Borrower’s or its Subsidiaries Properties with such insurance carriers, for such
amounts and covering such risks that are acceptable to the Administrative Agent;

 

(vi)                              a certificate from an authorized officer of
the Borrower dated as of the Effective Date stating that as of such date (A) all
representations and warranties of the Borrower set forth in this Agreement are
true and correct in all material respects (except that such materiality
qualifier shall not be applicable to any representations and warranties that
already are qualified or modified by materiality in the text thereof) on such
date, except that any representation and warranty which by its terms is made as
of a specified date shall be required to be true and correct only as of such
specified date, (B) no Default has occurred and is continuing; and (C) all
conditions precedent set forth in this Section 3.1 have been met;

 

(vii)                           a secretary’s certificate from each Credit Party
certifying such Person’s (A) officers’ incumbency, (B) authorizing resolutions,
(C) organizational documents, and (D) governmental approvals, if any, with
respect to the Credit Documents to which such Person is a party;

 

(viii)                        certificates of good standing for each Credit
Party in each state in which each such Person is organized or qualified to do
business, which certificate shall be (A) dated a date not earlier than 30 days
prior to Effective Date or (B) otherwise effective on the Closing Date;

 

(ix)                              a legal opinion of Vinson & Elkins L.L.P. as
outside counsel to the Credit Parties, in form and substance reasonably
acceptable to the Administrative Agent;

 

(x)                                 a legal opinion of Davis Graham & Stubbs as
local Colorado counsel to the Credit Parties, in form and substance reasonably
acceptable to the Administrative Agent;

 

(xi)                              a legal opinion of Beatty & Wozniak, P.C. as
local North Dakota counsel to the Credit Parties, in form and substance
reasonably acceptable to the Administrative Agent;

 

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(xii)                           the initial Independent Engineer’s Report dated
effective as of a date acceptable to the Administrative Agent;

 

(xiii)                        a certificate from the Borrower certifying a copy
of the Management Agreement, including any amendments, modifications or side
letters with respect thereto, as in full force and effect as of the Closing
Date;

 

(xiv)                       the Pledge Agreement executed by the Borrower,
together with any pledged stock or membership interest certificates and
instruments of transfer in form and substance acceptable to the Administrative
Agent and granting the Administrative Agent an Acceptable Security Interest in
such certificated Equity Interests; and

 

(xv)                          such other documents, governmental certificates,
agreements, and lien searches as the Administrative Agent or any Lender may
reasonably request.

 

(b)                                 Consents; Authorization; Conflicts.  The
Borrower shall have received any consents, licenses and approvals required in
accordance with applicable law, or in accordance with any document, agreement,
instrument or arrangement to which the Borrower or any Subsidiary is a party, in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement and the other Credit Documents.  In addition,
the Borrower and the Subsidiaries shall have all such material consents,
licenses and approvals required in connection with the continued operation of
the Borrower and the Subsidiaries, and such approvals shall be in full force and
effect, and all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose adverse conditions on this Agreement and the actions
contemplated hereby.

 

(c)                                  Representations and Warranties.  The
representations and warranties contained in Article 4 and in each other Credit
Document shall be true and correct in all material respects (except to the
extent that such representation or warranty is qualified by materiality, in
which case such representation or warranty shall be true and correct in all
respects) on and as of the Closing Date before and after giving effect to the
initial Borrowings or issuance (or deemed issuance) of Letters of Credit and to
the application of the proceeds from such Borrowing, as though made on and as of
such date.

 

(d)                                 Engagement Letter.  The Borrower shall have
executed and delivered the Engagement Letter.

 

(e)                                  Other Proceedings.  No action, suit,
investigation or other proceeding (including without limitation, the enactment
or promulgation of a statute or rule) by or before any arbitrator or any
Governmental Authority shall be threatened or pending and no preliminary or
permanent injunction or order by a state or federal court shall have been
entered (i) in connection with this Agreement, any other credit agreement, or
any transaction contemplated hereby or thereby or (ii) which in the judgment of
the Administrative Agent could reasonably be expected to result in a Material
Adverse Change.

 

(f)                                   Other Reports.  The Administrative Agent
shall have received, in form and substance reasonably satisfactory to it, all
environmental reports (including all available (i) Phase I Environmental Site
Assessment Reports and (ii) Phase II Environmental Site Assessment Reports), and
such other reports, audits or certifications as it may reasonably request.

 

(g)                                  Material Adverse Change.  Since January 31,
2011, there shall not have occurred any event, development or circumstance that
has or could reasonably be expected to result in a Material Adverse Change.

 

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(h)                                 No Default.  No Default shall have occurred
and be continuing.

 

(i)                                     Solvency.  The Administrative Agent
shall have received a certificate in form and substance reasonably satisfactory
to the Administrative Agent from a senior financial officer or such other
officer acceptable to the Administrative Agent of the Borrower and each
Guarantor certifying that, before and after giving effect to the initial
Borrowings made hereunder on the Closing Date, the Borrower and its Subsidiaries
are Solvent (assuming with respect to each Guarantor, that the fraudulent
conveyance savings language contained in the Guaranty applicable to such
Guarantor will be given full effect).

 

(j)                                    Delivery of Financial Statements.  The
Administrative Agent shall have received true and correct copies of
(i) satisfactory consolidated financial statements for the Borrower and its
Subsidiaries for the fiscal year 2011, and interim unaudited financial
statements for the Borrower and its Subsidiaries for each fiscal quarter ended
since the last audited financial statements, and (ii) projections prepared by
management of balance sheets, income statements and cashflow statements of the
Borrower and its Subsidiaries, covering the first full year after the Closing
Date, on a quarterly basis.

 

(k)                                 Title.  The Administrative Agent shall be
satisfied in its sole discretion with the title to the Oil and Gas Properties
included in the Borrowing Base and that such Oil and Gas Properties constitute
at least 80% of the present value of the Proven Reserves of the Credit Parties
as determined by the Administrative Agent in its sole discretion.

 

(l)                                     Borrowing Base Certificate.  The
Administrative Agent shall have received a completed Borrowing Base Certificate
duly executed by a financial officer of the Borrower, dated as of the Closing
Date.

 

(m)                             Notices of Borrowing.  The Administrative Agent
shall have received Notices of Borrowing from the Borrower, with appropriate
insertions and executed by a duly appointed Responsible Officer of the Borrower.

 

(n)                                 USA Patriot Act.  The Administrative Agent
shall have received all documentation and other information that is required by
regulatory authorities under applicable “know your customer” and
anti-money-laundering rules and regulations, including, without limitation, the
Patriot Act.

 

(o)                                 Capital Structure.  The capital and
ownership structure and the equityholder arrangements of the Borrower and its
Subsidiaries (and all agreements relating thereto) will be reasonably
satisfactory to the Administrative Agent.

 

(p)                                 Due Diligence.  The Administrative Agent
shall have completed and be satisfied in its sole discretion with the corporate
(or other organizational), environmental and financial due diligence of the
Credit Parties and its Affiliates.

 

(q)                                 Liens.  The Administrative Agent shall have
received evidence satisfactory to it that there are no Liens encumbering (i) any
of the Credit Parties’ respective Property other than Permitted Liens, and
(ii) the Equity Interests in the Borrower.

 

(r)                                    Payment of Fees.  The Borrower shall have
paid the fees and expenses required to be paid as of the Closing Date by
Sections 2.7(d) and 9.1 or any other provision of a Credit Document.

 

Section 3.2                                    Conditions Precedent to Each
Borrowing and to Each Issuance, Extension or Renewal of a Letter of Credit.  The
obligation of each Lender to make an Advance on the occasion of each Borrowing
(including the initial Borrowing), the obligation of each Issuing Lender to
issue, increase,

 

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renew or extend a Letter of Credit (including the deemed issuance of Letters of
Credit) and of any reallocation of Letter of Credit Exposure provided in
Section 2.15, shall be subject to the further conditions precedent that on the
date of such Borrowing or such issuance, increase, renewal or extension:

 

(a)                                 Representations and Warranties.  As of the
date of the making of any Advance or issuance, increase, renewal or extension of
any Letter of Credit or the reallocation of the Letter of Credit Exposure, the
representations and warranties made by any Credit Party or any officer or
employee of any Credit Party contained in the Credit Documents shall be true and
correct in all material respects (except that such materiality qualifier shall
not be applicable to any representations and warranties that already are
qualified or modified by materiality in the text thereof) on such date, except
that any representation and warranty which by its terms is made as of a
specified date shall be required to be true and correct only as of such
specified date and each request for the making of any Advance or issuance,
increase, renewal or extension of any Letter of Credit, or the reallocation of
the Letter of Credit Exposure and the making of such Advance or the issuance,
increase, renewal or extension of such Letter of Credit or the reallocation of
the Letter of Credit Exposure shall be deemed to be a reaffirmation of such
representations and warranties.  Each of: (i) the giving of the applicable
Notice of Borrowing or Letter of Credit Application, (ii) the acceptance by the
Borrower of the proceeds of such Borrowing, (iii) the issuance, increase, or
extension of such Letter of Credit, and (iv) the reallocation of the Letter of
Credit Exposure, shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing, such issuance, increase, or extension of
such Letter of Credit or such reallocation, as applicable, that the foregoing
condition precedent has been met.

 

(b)                                 Event of Default.  As of the date of the
making of any Advance, the issuance, increase, renewal or extension of any
Letter of Credit, or the reallocation of the Letter of Credit Exposure, as
applicable, no Default or Event of Default shall exist, and the making of such
Advance or issuance, increase, renewal or extension of such Letter of Credit, or
the reallocation of the Letter of Credit Exposure would not cause a Default or
Event of Default.  Each of: (i) the giving of the applicable Notice of Borrowing
or Letter of Credit Application, (ii) the acceptance by the Borrower of the
proceeds of such Borrowing, (iii) the issuance, increase, or extension of such
Letter of Credit, and (iv) the reallocation of the Letter of Credit Exposure,
shall constitute a representation and warranty by the Borrower that on the date
of such Borrowing, such issuance, increase, or extension of such Letter of
Credit or such reallocation, as applicable, that the foregoing condition
precedent has been met.

 

Section 3.3                                    Determinations Under Sections
3.1, and 3.2.  For purposes of determining compliance with the conditions
specified in Sections 3.1 and 3.2 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 the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Credit Documents shall have
received written notice from such Lender prior to the Borrowings hereunder
specifying its objection thereto and such Lender shall not have made available
to the Administrative Agent such Lender’s ratable portion of such Borrowings.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

 

Each Credit Party hereto represents and warrants as follows:

 

Section 4.1                                    Organization.  Each Credit Party
is duly and validly organized and existing and in good standing under the laws
of its jurisdiction of incorporation or formation.  Each Credit Party is
authorized to do business and is in good standing in all jurisdictions in which
such qualifications or authorizations are necessary except where the failure to
be so qualified or authorized could not reasonably

 

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be expected to result in a Material Adverse Change.  As of the Effective Date,
each Credit Party’s type of organization and jurisdiction of incorporation or
formation are set forth on Schedule 4.1.

 

Section 4.2                                    Authorization.  The execution,
delivery, and performance by each Credit Party of each Credit Document to which
such Credit Party is a party and the consummation of the transactions
contemplated thereby (a) are within such Credit Party’s powers, (b) have been
duly authorized by all necessary corporate, limited liability company or
partnership action, (c) do not contravene any articles or certificate of
incorporation or bylaws, partnership or limited liability company agreement
binding on or affecting such Credit Party, (d) do not contravene any law or any
contractual restriction binding on or affecting such Credit Party except where
such contravention could not reasonably be expected to result in a Material
Adverse Change, (e) do not result in or require the creation or imposition of
any Lien prohibited by this Agreement, and (f) do not require any authorization
or approval or other action by, or any notice or filing with, any Governmental
Authority other than those that have been obtained.  At the time of each Advance
or the issuance, renewal, extension or increase of each Letter of Credit, such
Advance and the use of the proceeds of such Advance or the issuance, renewal,
extension or increase of such Letter of Credit are within the Borrower’s
corporate powers, have been duly authorized by all necessary action and do not
contravene (i) the Borrower’s certificate of incorporation or by-laws, or
(ii) any Legal Requirement or any contractual restriction binding on or
affecting the Borrower, will not result in or require the creation or imposition
of any Lien prohibited by this Agreement, and do not require any authorization
or approval or other action by, or any notice or filing with, any Governmental
Authority other than those that have been obtained or provided.

 

Section 4.3                                    Enforceability.  The Credit
Documents have each been duly executed and delivered by each Credit Party that
is a party thereto and each Credit Document constitutes the legal, valid, and
binding obligation of each Credit Party that is a party thereto enforceable
against such Credit Party in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws
at the time in effect affecting the rights of creditors generally and by general
principles of equity whether applied by a court of law or equity.

 

Section 4.4                                    Financial Condition.

 

(a)                                 The Borrower has delivered to the
Administrative Agent audited consolidated financial statements for the Parent
and its Subsidiaries dated as of January 31, 2011 for the fiscal year ended
thereon.  The financial statements referred to in the preceding sentence fairly
present, in all material respects, the financial condition of the Parent, the
Borrower and its Subsidiaries on the date thereof and the results of their
operations and cash flows for the periods then ended, have been prepared in
accordance with GAAP and do not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.  As of the date of the aforementioned financial statements, there
were no material contingent obligations, liabilities for taxes, unusual forward
or long-term commitments, or unrealized or anticipated losses of the applicable
Persons, except as disclosed therein and adequate reserves for such items have
been made in accordance with GAAP.

 

(b)                                 Since the Closing Date, after giving pro
forma effect to all Advances made hereunder on the Closing Date, no event or
condition has occurred that could reasonably be expected to result in a Material
Adverse Change.

 

Section 4.5                                    Title; Ownership and Liens; Real
Property.  Each Credit Party (a) has good and defensible title to all of its Oil
and Gas Properties in all material respects, free and clear of all Liens except
for Permitted Liens, and (b) has good and indefeasible title to all of its other
material Properties,

 

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free and clear of all Liens except for Permitted Liens. None of the Property
owned by a Credit Party is subject to any Lien except Permitted Liens.

 

Section 4.6                                    True and Complete Disclosure. 
All written factual information (whether delivered before or after the date of
this Agreement) prepared by or on behalf of the Borrower and its Subsidiaries
and furnished to the Administrative Agent or the Lenders for purposes of or in
connection with this Agreement, any other Credit Document or any transaction
contemplated hereby or thereby does not contain any material misstatement of
fact or omits to state any material fact necessary to make the statements
therein not misleading.  There is no fact known to any officer of any Credit
Party on the date of this Agreement that has not been disclosed to the
Administrative Agent that could reasonably be expected to result in a Material
Adverse Change.  All projections, estimates, budgets, and pro forma financial
information furnished by or on behalf of any Credit Party, were prepared on the
basis of assumptions, data, information, tests, or conditions (including current
and reasonably foreseeable business conditions) believed to be reasonable at the
time such projections, estimates, and pro forma financial information were
furnished.

 

Section 4.7                                    Litigation.  There are no
actions, suits, or proceedings pending or, to any Credit Party’s knowledge,
threatened against any Credit Party, at law, in equity, or in admiralty, or by
or before any Governmental Authority, which could reasonably be expected to
result in a Material Adverse Change.  Additionally, except as disclosed in
writing to the Administrative Agent and the Lenders, there is no pending or, to
the knowledge of any Credit Party, threatened action or proceeding instituted
against any Credit Party which seeks to adjudicate any Credit Party as bankrupt
or insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
Property.

 

Section 4.8                                    Compliance with Agreements.

 

(a)                                 No Credit Party is a party to any indenture,
loan or credit agreement or any lease or any other types of agreement or
instrument or subject to any charter or corporate restriction or provision of
applicable law or governmental regulation the performance of or compliance with
which could reasonably be expected to cause a Material Adverse Change.  No
Credit Party is in default under or with respect to any contract, agreement,
lease or any other types of agreement or instrument to which any Credit Party is
a party and which could reasonably be expected to cause a Material Adverse
Change.  To the best knowledge of the Credit Parties, no Credit Party is in
default under, or has received a notice of default under, any contract,
agreement, lease or any other document or instrument to which the Borrower or
its Subsidiaries is a party which is continuing and which, if not cured, could
reasonably be expected to cause a Material Adverse Change.

 

(b)                                 No Default has occurred and is continuing.

 

Section 4.9                                    Pension Plans.  (a) Except for
matters that could not reasonably be expected to result in a Material Adverse
Change, all Plans are in compliance with all applicable provisions of ERISA,
(b) no Termination Event has occurred with respect to any Plan that would result
in an Event of Default under Section 7.1(i), and, except for matters that could
not reasonably be expected to result in a Material Adverse Change, each Plan has
complied with and been administered in accordance with applicable provisions of
ERISA and the Code, (c) no “accumulated funding deficiency” (as defined in
Section 302 of ERISA) has occurred with respect to any Plan, and for plan years
after December 31, 2007, no unpaid minimum required contribution exists with
respect to any Plan, and there has been no excise tax imposed under Section 4971
of the Code with respect to any Plan, (d) the present value of all benefits
vested under

 

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each Plan (based on the assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed the value of the assets of
such Plan allocable to such vested benefits in an amount that could reasonably
be expected to result in a Material Adverse Change, (e) no Credit Party nor any
member of the Controlled Group has had a complete or partial withdrawal from any
Multiemployer Plan for which there is any unsatisfied withdrawal liability that
could reasonably be expected to result in a Material Adverse Change or an Event
of Default under Section 7.1(j), and (f) except for matters that could not
reasonably result in a Material Adverse Change, as of the most recent valuation
date applicable thereto, no Credit Party nor any member of the Controlled Group
would become subject to any liability under ERISA if the Borrower or any
Subsidiary has received notice that any Multiemployer Plan is insolvent or in
reorganization.  Based upon GAAP existing as of the date of this Agreement and
current factual circumstances, no Credit Party has any reason to believe that
the annual cost during the term of this Agreement to the Borrower or any
Subsidiary for post-retirement benefits to be provided to the current and former
employees of the Borrower  or any Subsidiary under Plans that are welfare
benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate,
reasonably be expected to cause a Material Adverse Change.

 

Section 4.10                             Environmental Condition.

 

(a)                                 Permits, Etc.  Each Credit Party (i) has
obtained all material Environmental Permits necessary for the ownership and
operation of its Properties and the conduct of its businesses; (ii)  has at all
times been and is in material compliance with all terms and conditions of such
Environmental Permits and with all other material requirements of applicable
Environmental Laws; (iii) has not received written notice of any material
violation or alleged material violation of any Environmental Law or
Environmental Permit; and (iv) is not subject to any actual or contingent
Environmental Claim which could reasonably be expected to cause a Material
Adverse Change.

 

(b)                                 Certain Liabilities.  To the Credit Parties’
best knowledge, none of the present or previously owned or operated Property of
any Credit Party or of any Subsidiary thereof, wherever located, (i) has been
placed on or proposed to be placed on the National Priorities List, the
Comprehensive Environmental Response Compensation Liability Information System
list, or their state or local analogs, or have been otherwise investigated,
designated, listed, or identified as a potential site for removal, remediation,
cleanup, closure, restoration, reclamation, or other response activity under any
Environmental Laws; (ii) is subject to a Lien, arising under or in connection
with any Environmental Laws, that attaches to any revenues or to any Property
owned or operated by any Credit Party, wherever located, which could reasonably
be expected to cause a Material Adverse Change; or (iii) has been the site of
any Release of Hazardous Substances or Hazardous Wastes from present or past
operations which has caused at the site or at any third-party site any condition
that has resulted in or could reasonably be expected to result in the need for
Response that could cause a Material Adverse Change.

 

(c)                                  Certain Actions.  Without limiting the
foregoing, (i) all necessary material notices have been properly filed, and no
further action is required under current applicable Environmental Law as to each
Response or other restoration or remedial project undertaken by the Borrower,
any of its Subsidiaries or any of the Borrower’s or such Subsidiary’s former
Subsidiaries on any of their presently or formerly owned or operated Property,
except for (x) such failure to properly file notices and (y) such failure to
take further action which, in each case (x) and (y), could not be reasonably
expected to cause a Material Adverse Change, and (ii) the present and, to the
Credit Parties’ best knowledge, future liability, if any, of the Borrower or of
any Subsidiary which could reasonably be expected to arise in connection with
requirements under Environmental Laws will not result in a Material Adverse
Change.

 

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Section 4.11                             Subsidiaries.  As of the Effective
Date, the Borrower has no Subsidiaries other than those listed on Schedule
4.11.  Each Subsidiary of the Borrower (including any such Subsidiary formed or
acquired subsequent to the Effective Date) has complied with the requirements of
Section 5.6.

 

Section 4.12                             Investment Company Act.  No Credit
Party is an “investment company” or a company “controlled” by an “investment
company” within the meaning of the Investment Company Act of 1940, as amended. 
No Credit Party is subject to regulation under any Federal or state statute,
regulation or other Legal Requirement which limits its ability to incur Debt.

 

Section 4.13                             Taxes.  Proper and accurate (in all
material respects), federal, state, local and foreign tax returns, reports and
statements required to be filed (after giving effect to any extension granted in
the time for filing) by each Credit Party or any member of the Affiliated Group
as defined under Section 1504 of the Code (hereafter collectively called the
“Tax Group”) have been filed with the appropriate Governmental Authorities, and
all taxes (which are material in amount) and other impositions due and payable
have been timely paid prior to the date on which any fine, penalty, interest,
late charge or loss may be added thereto for non-payment thereof except where
contested in good faith by appropriate proceeding and for which adequate
reserves have been established in compliance with GAAP.  Neither the Borrower
nor any member of the Tax Group has given, or been requested to give, a waiver
of the statute of limitations relating to the payment of any federal, state,
local or foreign taxes or other impositions.  None of the Property owned by the
Borrower or any other member of the Tax Group is Property which the Borrower or
any member of the Tax Group is required to treat as being owned by any other
Person pursuant to the provisions of Section 168(f)(8) of the Code.  Proper and
accurate amounts have been withheld by the Borrower and all other members of the
Tax Group from their employees for all periods to comply in all material
respects with the tax, social security and unemployment withholding provisions
of applicable federal, state, local and foreign law.

 

Section 4.14                             Permits, Licenses, etc.  Each Credit
Party possesses all permits, licenses, patents, patent rights or licenses,
trademarks, trademark rights, trade names rights, and copyrights which are
material to the conduct of its business.  Each Credit Party manages and operates
its business in accordance with all applicable Legal Requirements except where
the failure to so manage or operate could not reasonably be expected to result
in a Material Adverse Change; provided that this Section 4.14 does not apply
with respect to Environmental Permits.

 

Section 4.15                             Use of Proceeds.  The proceeds of the
Advances will be used by the Borrower  for the purposes described in
Section 6.6.  No Credit Party is engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U).  No proceeds of any Advance will be used to purchase or carry any
margin stock in violation of Regulation  T, U or X.

 

Section 4.16                             Condition of Property; Casualties.  The
material Properties used or to be used in the continuing operations of Credit
Parties, are in good working order and condition, normal wear and tear
excepted.  Neither the business nor the Oil and Gas Properties or material
Properties of the Credit Parties has been affected as a result of any fire,
explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of such Property or
cancellation of contracts, permits or concessions by a Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy. The
Credit Parties own no real property (other than Oil and Gas Properties) which
either (x) is material to the operations of the Credit Parties or (y) has a fair
market value in excess of $2,000,000, except as (a) is set forth on Schedule
4.16. (b) is disclosed on a schedule to the Borrowing Base Certificate delivered
pursuant to Section 5.2(c)(vi), or (c) has been acquired since the delivery of
the previous Borrowing Base Certificate.

 

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Section 4.17                             Insurance.  Each of the Credit Parties
carries insurance (which may be carried by the Borrower on a consolidated basis)
with reputable insurers in respect of such of their respective Properties, in
such amounts and against such risks as is customarily maintained by other
Persons of similar size engaged in similar businesses.

 

Section 4.18                             Security Interest.  Each Credit Party
has authorized the filing of financing statements sufficient when filed to
perfect the Lien created by the Security Documents.  When such financing
statements are filed in the offices noted therein, the Administrative Agent will
have a valid and perfected security interest in all Collateral that is capable
of being perfected by filing financing statements.

 

Section 4.19                             OFAC; Anti-Terrorism.  No Credit Party
is in violation of any of the country or list based economic and trade sanctions
administered and enforced by OFAC.  No Credit Party (a) is a Sanctioned Person
or a Sanctioned Entity, (b) has its assets located in Sanctioned Entities, or
(c) derives revenues from investments in, or transactions with Sanctioned
Persons or Sanctioned Entities.  No proceeds of any Advance will be used to fund
any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Entity.

 

Section 4.20                             Solvency.  Before and after giving
effect to the making of each Advance and the issuance, increase, or amendment of
each Letter of Credit, the Borrower and its consolidated Subsidiaries are, when
taken as a whole, Solvent.

 

Section 4.21                             Gas Contracts.  No Credit Party, as of
the date hereof or as disclosed to the Administrative Agent in writing, (a) is
obligated in any material respect by virtue of any prepayment made under any
contract containing a “take-or-pay” or “prepayment” provision or under any
similar agreement to deliver Hydrocarbons produced from or allocated to any of
the Borrower’s and its Subsidiaries’ Oil and Gas Properties at some future date
without receiving full payment therefor at the time of delivery or (b) except as
has been disclosed to the Administrative Agent, has produced gas, in any
material amount, subject to balancing rights of third parties or subject to
balancing duties under Legal Requirements.

 

Section 4.22                             Liens, Leases, Etc.  None of the
Property of any Credit Party is subject to any Lien other than Permitted Liens. 
On the date of this Agreement, all governmental actions and all other filings,
recordings, registrations, third party consents and other actions which are
necessary to create and perfect the Liens provided for in the Security Documents
will have been made, obtained and taken in all relevant jurisdictions.  Other
than to the extent such could not reasonably be expected to cause a Material
Adverse Change, (i) all leases and agreements for the conduct of business of the
Borrower and its Subsidiaries are valid and subsisting, in full force and effect
and there exists no default or event of default or circumstance which with the
giving of notice or lapse of time or both would give rise to a default by the
Borrower or any Subsidiary, or to the Borrower’s knowledge, by any of the other
parties thereto, under any such leases or agreements.  Neither the Borrower nor
any of its Subsidiaries is a party to any agreement or arrangement (other than
this Agreement and the Security Documents), or subject to any order, judgment,
writ or decree, that either restricts or purports to restrict its ability to
grant Liens to secure the Obligations against their respective Properties.

 

Section 4.23                             Hedging Agreements.  Schedule 4.23 sets
forth, as of the date hereof, a true and complete list of all Interest Hedge
Agreements, Hydrocarbon Hedge Agreements, and Hedging Arrangements of the Credit
Parties, 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.

 

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Section 4.24                             Material Agreements.  Schedule 4.24
sets forth a complete and correct list of all material agreements, leases,
indentures, purchase agreements, obligations in respect of letters of credit,
guarantees, joint venture agreements, and other instruments in effect or to be
in effect as of the date hereof (other than the agreements set forth in Schedule
4.23) providing for, evidencing, securing or otherwise relating to any Debt of
the Credit Parties in excess of $250,000 individually or in the aggregate, and
all obligations of the Credit Parties to issuers of surety or appeal bonds
issued for account of any Credit Party, and such list correctly sets forth the
names of the debtor or lessee and creditor or lessor with respect to the Debt or
lease obligations outstanding or to be outstanding and the Property subject to
any Lien securing such Debt or lease obligation.  Also set forth on Schedule
4.24 hereto is a complete and correct list, as of the date of this Agreement, of
all material agreements and other instruments of the Borrower and its
Subsidiaries relating to the purchase, transportation by pipeline, gas
processing, marketing, sale and supply of natural gas and other Hydrocarbons and
which either (a) has a term longer than 6 months or (b) provides for liabilities
of the Credit Parties in excess of $500,000.  The Borrower has heretofore
delivered to the Administrative Agent a complete and correct copy of all such
material credit agreements, indentures, purchase agreements, contracts, letters
of credit, guarantees, joint venture agreements, or other instruments, including
any modifications or supplements thereto, as in effect on the date hereof.

 

ARTICLE 5

AFFIRMATIVE COVENANTS

 

So long as any Obligation shall remain unpaid, any Lender shall have any
Commitment hereunder, or there shall exist any Letter of Credit Exposure, each
Credit Party agrees to comply with the following covenants.

 

Section 5.1                                    Organization.  Each Credit Party
shall, and shall cause each of its respective Subsidiaries to, preserve and
maintain its partnership, limited liability company or corporate existence,
rights, franchises and privileges in the jurisdiction of its organization, and
qualify and remain qualified as a foreign business entity in each jurisdiction
in which qualification is necessary in view of its business and operations or
the ownership of its Properties and where failure to qualify could reasonably be
expected to cause a Material Adverse Change; provided, however, that nothing
herein contained shall prevent any transaction permitted by Section 6.7.

 

Section 5.2                                    Reporting.

 

(a)                                 Annual Financial Reports.  The Borrower
shall provide, or shall cause to be provided, to the Administrative Agent, as
soon as available, but in any event within 90 days after the end of each fiscal
year of the Borrower (commencing with the fiscal year ended January 31, 2013), a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year, and the related consolidated and
consolidating statements of income or operations, shareholders’ equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with SEC guidelines and GAAP, such consolidated statements to be
audited and accompanied by a report and opinion of an independent certified
public accountant of nationally recognized standing reasonably acceptable to the
Administrative Agent, which report and opinion shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
“going concern” or like qualification or exception or any qualification or
exception as to the scope of such audit, and such consolidating statements to be
certified by the chief executive officer or chief financial officer of the
Borrower, to the effect that (i) such statements fairly present, in all material
respects, the financial condition, results of operations, shareholders’ equity
and cash flows of the Borrower and its Subsidiaries in accordance with SEC
guidelines and GAAP and do not contain any untrue statement of a material fact
or omit to state a

 

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material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading, and
(ii) there were no material contingent obligations, liabilities for taxes,
unusual forward or long-term commitments, or unrealized or anticipated losses of
the Borrower and its Subsidiaries, except as disclosed therein and adequate
reserves for such items have been made in accordance with SEC guidelines and
GAAP;

 

(b)                                 Quarterly Financials.  The Borrower shall
provide, or shall cause to be provided, to the Administrative Agent, as soon as
available, but in any event within 45 days after the end of each fiscal quarter
of each fiscal year of the Borrower (commencing with the fiscal quarter ending
April 30, 2013), (i) consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal quarter, and the
related consolidated and consolidating statements of income or operations,
shareholder’s equity and cash flows for such fiscal quarter and for the portion
of the Borrower’s fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year and the corresponding portion of the previous fiscal year,
all in reasonable detail, such consolidated statements to be certified by the
chief executive officer or the chief financial officer of the Borrower as
(A) fairly presenting, in all material respects the financial condition, results
of operations, shareholders’ equity and cash flows of the Borrower and its
Subsidiaries in accordance with SEC guidelines and GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes, and do not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading, and (B) showing that there were no
material contingent obligations, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses of the Borrower and
its Subsidiaries, except as disclosed therein and adequate reserves for such
items have been made in accordance with SEC guidelines and GAAP, and (ii) a copy
of the management discussion and analysis with respect to such financial
statements;

 

Documents required to be delivered pursuant to Section 5.2(a) or (b) (to the
extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to
have been delivered on the date (1) on which the Borrower posts such documents,
or provides a link thereto, on the Borrower’s website on the Internet at
www.trianglepetroleum.com or (2) on which such documents are posted on the
Borrower’s behalf on an Internet or intranet website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that: (i) upon request, the Borrower shall deliver paper copies of such
documents to the Administrative Agent or any Lender until a written request to
cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent and, upon
request, each Lender (by telecopier or electronic mail) of the posting of any
such documents and, upon request, provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.

 

(c)                                  Oil and Gas Reserve Reports. The Borrower
shall provide, or shall cause to be provided, to the Administrative Agent:

 

(i)                                     As soon as available but in any event on
or before July 1, 2013, an Internal Engineering Report dated effective as of
June 1, 2013;

 

(ii)                                  As soon as available but in any event on
or before October 1 of each year, an Internal Engineering Report dated effective
as of the immediately preceding September 1st;

 

(iii)                               As soon as available but in any event on or
before January 1, 2014, an Internal Engineering Report dated effective as of
December 1, 2013;

 

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(iv)                              As soon as available but in any event on or
before April 1 of each year an Independent Engineering Report dated effective as
of the immediately preceding March 1st;

 

(v)                                 Such other information as may be reasonably
requested by the Administrative Agent or any Lender with respect to the Oil and
Gas Properties included or to be included in the Borrowing Base;

 

(vi)                              With the delivery of each Engineering Report,
a certificate from a Responsible Officer (a “Borrowing Base Certificate”) of the
Borrower certifying that, to the best of his knowledge and in all material
respects: (A) the information contained in the Engineering Report and any other
information delivered in connection therewith is true and correct, (B) except as
set forth on an exhibit to the certificate, on a net basis there are no gas
imbalances, take-or-pay or other prepayments with respect to its Oil and Gas
Properties evaluated in such Engineering Report which would require the Borrower
or any of its Subsidiaries to deliver Hydrocarbons produced from such Oil and
Gas Properties at some future time without then or thereafter receiving full
payment therefor, (C) none of its Oil and Gas Properties have been sold since
the date of the last Borrowing Base determination except as set forth on an
exhibit to the certificate, which certificate shall list all of its Oil and Gas
Properties sold and in such detail as reasonably required by the Required
Lenders, (D) attached to the certificate is a list of its Oil and Gas Properties
added to and deleted from the immediately prior Engineering Report and a list
showing any change in working interest or net revenue interest in its Oil and
Gas Properties occurring and the reason for such change, (E) attached to the
certificate is a list of all Persons disbursing proceeds to the Borrower or to
its Subsidiary, as applicable, from its Oil and Gas Properties, (F) except as
set forth on a schedule attached to the certificate, all of the Oil and Gas
Properties evaluated by such Engineering Report are pledged as Collateral for
the Obligations, (G) attached to the certificate is a quarterly cash flow budget
for the four quarters following the delivery of such certificate setting forth
the Borrower’s projections for production volumes, revenues, expenses, taxes and
budgeted capital expenditures during such period, and (H) attached to the
certificate is a list of any real property other than Oil and Gas Properties
acquired since the delivery of the previous Engineering Report which is either
(i) material to the operations of the Credit Parties, or (ii) has a fair market
value in excess of $2,000,000.

 

(d)                                 Production and Hedging Reports.  As soon as
available and in any event within 45 days after the end of each quarter,
commencing with the quarter ending April 30, 2013, a report certified by the
chief executive officer or chief financial officer of the Borrower in form and
substance satisfactory to the Administrative Agent prepared by the Borrower
(i) covering each of the Oil and Gas Properties of the Borrower and its
Subsidiaries and detailing on a quarterly basis (A) the production, revenue, and
price information and associated operating expenses for each such quarter,
(B) any changes to any producing reservoir, production equipment, or producing
well during each such quarter, which changes could reasonably be expected to
cause a Material Adverse Change, and (C) any sales of the Borrower’s or any
Subsidiaries’ Oil and Gas Properties during each such quarter, (ii) setting
forth a true and complete list of all Hedging Arrangements of the Borrower and
its Subsidiaries and detailing 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; provided that, such required listing shall, in no event, be construed
as permitting such credit supports which are not permitted under the terms of
this Agreement; and (iii) certifying the Borrower’s compliance with Section 5.13
hereof;

 

(e)                                  Compliance Certificate.  Concurrently with
the delivery of the financial statements referred to in Section 5.2(a) and
(b) above, the Borrower shall provide to the Administrative Agent a duly

 

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completed Compliance Certificate signed by the chief executive officer or chief
financial officer of the Borrower, commencing with the fiscal year ended
January 31, 2013.

 

(f)                                   Annual Budget.  As soon as available and
in any event within 90 days after the end of each fiscal year of the Borrower,
the Borrower shall provide to the Administrative Agent an annual operating,
capital and cash flow budget for the immediately following fiscal year and
detailed on a quarterly basis;

 

(g)                                  Defaults.  The Credit Parties shall provide
to the Administrative Agent promptly, but in any event within five Business Days
after the occurrence thereof, a notice of each Default or Event of Default known
to the Responsible Officer of the Borrower or to any of its Subsidiaries,
together with a statement of a Responsible Officer of the Borrower setting forth
the details of such Default or Event of Default and the actions which the Credit
Parties have taken and proposes to take with respect thereto;

 

(h)                                 Other Creditors.  The Credit Parties shall
provide to the Administrative Agent promptly after the giving or receipt
thereof, copies of any default notices given or received by the Borrower or by
any of its Subsidiaries pursuant to the terms of any indenture, loan agreement,
credit agreement, or similar agreement, including any notice of cancellation or
similar notice under the RockPile Agreement, whether or not a formal notice
default;

 

(i)                                     Litigation.  The Credit Parties shall
provide to the Administrative Agent promptly after the commencement thereof, and
in any event no later than 5 days after, notice of all actions, suits, and
proceedings before any Governmental Authority, affecting the Borrower or any of
its Subsidiaries or any of their respective assets that has a claim for damages
in excess of $1,000,000 or that could otherwise result in a cost, expense or
loss to the Borrower or any of its Subsidiaries in excess of $1,000,000;

 

(j)                                    Environmental Notices.  Promptly upon,
and in any event no later than 5 days after, the receipt thereof, or the
acquisition of knowledge thereof, by any Credit Party, the Credit Parties shall
provide the Administrative Agent with a copy of any form of request, claim,
complaint, order, notice, summons or citation received from any Governmental
Authority or any other Person, (i) concerning violations or alleged violations
of Environmental Laws, which seeks to impose liability therefore in excess of
$1,000,000, (ii) concerning any action or omission on the part of any of the
Credit Parties or any of their former Subsidiaries in connection with Hazardous
Waste or Hazardous Substances which could reasonably result in the imposition of
liability in excess of $1,000,000 or requiring that action be taken to respond
to or clean up a Release of Hazardous Substances or Hazardous Waste into the
environment and such action or clean-up could reasonably be expected to exceed
$1,000,000, including without limitation any information request related to, or
notice of, potential responsibility under CERCLA, or (iii) concerning the filing
of a Lien upon, against or in connection with the Borrower, any Subsidiary, or
any of their respective former Subsidiaries, or any of their material leased or
owned Property, wherever located;

 

(k)                                 Material Adverse Changes.  The Credit
Parties shall provide to the Administrative Agent prompt written notice of any
event, development or circumstance that has had or would reasonably be expected
to give rise to a Material Adverse Change;

 

(l)                                     Termination Events.  As soon as possible
and in any event (i) within 30 days after the Borrower or any member of the
Controlled Group knows or has reason to know that any Termination Event
described in clause (a) of the definition of Termination Event with respect to
any Plan has occurred, and (ii) within 10 days after the Borrower or any member
of the Controlled Group knows or has reason to know that any other Termination
Event with respect to any Plan has occurred, the Credit Parties shall provide to
the Administrative Agent a statement of an authorized officer of the Borrower
describing such

 

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Termination Event and the action, if any, which the Borrower or any Affiliate of
the Borrower proposes to take with respect thereto;

 

(m)                             Termination of Plans.  Promptly and in any event
within 10 Business Days after receipt thereof by the Borrower or any member of
the Controlled Group from the PBGC, the Credit Parties shall provide to the
Administrative Agent copies of each notice received by the Borrower or any such
member of the Controlled Group of the PBGC’s intention to terminate any Plan or
to have a trustee appointed to administer any Plan;

 

(n)                                 Other ERISA Notices.  Promptly and in any
event within 10 Business Days after receipt thereof by the Borrower or any
member of the Controlled Group from a Multiemployer Plan sponsor, the Credit
Parties shall provide to the Administrative Agent a copy of each notice received
by the Borrower or any member of the Controlled Group concerning the imposition
or amount of withdrawal liability imposed on the Borrower or any member of the
Controlled Group pursuant to Section 4202 of ERISA;

 

(o)                                 Other Governmental Notices.  Promptly and in
any event within five Business Days after receipt thereof by a Credit Party, the
Credit Parties shall provide to the Administrative Agent a copy of any notice,
summons, citation, or proceeding seeking to modify in any material respect,
revoke, or suspend any material contract, license, permit, or agreement with any
Governmental Authority;

 

(p)                                 Disputes; etc.  The Credit Parties shall
provide to the Administrative Agent prompt written notice of (i) any claims,
legal or arbitration proceedings, proceedings before any Governmental Authority,
or disputes, or to the knowledge of any Credit Party, any such actions
threatened, or affecting the Borrower or any Subsidiary, which, if adversely
determined, could reasonably be expected to cause a Material Adverse Change, or
any material labor controversy of which a Credit Party has knowledge resulting
in or reasonably considered to be likely to result in a strike against the
Borrower or any Subsidiary, and (ii) any claim, judgment, Lien or other
encumbrance (other than a Permitted Lien) affecting any Property of the Borrower
or any Subsidiary, if the value of the claim, judgment, Lien, or other
encumbrance affecting such Property shall exceed $1,000,000;

 

(q)                                 Management Letters; Other Accounting
Reports.  Promptly upon receipt thereof, a copy of each other report or letter
submitted to the Borrower or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the books
of the Borrower and its Subsidiaries, and a copy of any response by the Borrower
or any Subsidiary of the Borrower, or the board of directors or managers (or
other applicable governing body) of the Borrower or any Subsidiary of the
Borrower, to such letter; and

 

(r)                                    Other Information.  Promptly upon
request, the Credit Parties shall provide to the Administrative Agent such other
information respecting the business, operations, or Property of the Borrower  or
any Subsidiary, financial or otherwise, as any Lender through the Administrative
Agent may reasonably request.

 

Section 5.3                                    Insurance.

 

(a)                                 Each Credit Party shall, and shall cause
each of its Subsidiaries to, carry and maintain all such other insurance in such
amounts and against such risks as is customarily maintained by other Persons of
similar size engaged in similar businesses and acceptable to the Administrative
Agent and with reputable insurers acceptable to the Administrative Agent.

 

(b)                                 Copies of all policies of insurance or
certificates thereof covering the property or business of the Credit Parties,
and endorsements and renewals thereof, certified as true and correct copies

 

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of such documents by a Responsible Officer of the Borrower shall be delivered by
Borrower to and retained by the Administrative Agent.  All policies of property
insurance with respect to the Collateral either shall have attached thereto a
lender’s loss payable endorsement in favor of the Administrative Agent for its
benefit and the ratable benefit of the Secured Parties or name the
Administrative Agent as loss payee for its benefit and the ratable benefit of
the Secured Parties, in either case, in form reasonably satisfactory to the
Administrative Agent, and all policies of liability insurance shall name the
Administrative Agent for its benefit and the ratable benefit of the Secured
Parties as an additional insured.  All policies or certificates of insurance
shall set forth the coverage, the limits of liability, the name of the carrier,
the policy number, and the period of coverage.  All such policies shall contain
a provision that notwithstanding any contrary agreements between the Borrower,
its Subsidiaries, and the applicable insurance company, such policies will not
be canceled or allowed to lapse without renewal without at least 30 days’ (or
such shorter period as may be accepted by the Administrative Agent) prior
written notice to the Administrative Agent.

 

(c)                                  If at any time the area in which any
improved real property constituting Collateral is located is designated a “flood
hazard area” in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), the Borrower shall, and shall cause
each of its Subsidiaries to, obtain flood insurance in such total amount as
required by Regulation H of the Federal Reserve Board, as from time to time in
effect and all official rulings and interpretations thereunder or thereof, and
otherwise comply with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as it may be amended from time to time.

 

(d)                                 Notwithstanding Section 2.5(c)(ii) of this
Agreement, after the occurrence and during the continuance of an Event of
Default, all proceeds of insurance, including any casualty insurance proceeds,
property insurance proceeds, proceeds from actions, and any other proceeds,
shall be paid directly to the Administrative Agent and if necessary, assigned to
the Administrative Agent, to be applied in accordance with Section 7.6 of this
Agreement, whether or not the Secured Obligations are then due and payable.

 

(e)                                  In the event that any insurance proceeds
are paid to any Credit Party in violation of clause (d), such Credit Party shall
hold the proceeds in trust for the Administrative Agent, segregate the proceeds
from the other funds of such Credit Party, and promptly pay the proceeds to the
Administrative Agent with any necessary endorsement.  Upon the request of the
Administrative Agent, each of the Borrower and its Subsidiaries shall execute
and deliver to the Administrative Agent any additional assignments and other
documents as may be necessary or desirable to enable the Administrative Agent to
directly collect the proceeds as set forth herein.

 

Section 5.4                                    Compliance with Laws.  Each
Credit Party shall, and shall cause each of its Subsidiaries to, comply with all
federal, state, and local laws and regulations (including Environmental Laws)
which are applicable to the operations and Property of any Credit Party and
maintain all related permits necessary for the ownership and operation of each
Credit Party’s Property and business, except in any case where the failure to so
comply could not reasonably be expected to result in a Material Adverse Change.
Without limitation of the foregoing, the Borrower shall, and shall cause each of
its Subsidiaries to, (a) maintain and possess all authorizations, Permits,
licenses, trademarks, trade names, rights and copyrights which are necessary to
the conduct of its business, except where the failure to so comply could not
reasonably be expected to result in a Material Adverse Change, and (b) obtain,
as soon as practicable, all consents or approvals required from any states of
the United States (or other Governmental Authorities) necessary to grant the
Administrative Agent an Acceptable Security Interest in at least 80% by value
(or if an Event of Default exists and is continuing, 100% by value) of the
Proven reserves attributable to  the Borrower’s and its Subsidiaries’ Oil and
Gas Properties.

 

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Section 5.5                                    Taxes.  Each Credit Party shall,
and shall cause each of its Subsidiaries to pay and discharge all material
taxes, assessments, and other charges and claims related thereto imposed on the
Borrower or any of its Subsidiaries prior to the date on which penalties attach
other than any tax, assessment, charge, or claims which is being contested in
good faith and for which adequate reserves have been established in compliance
with GAAP.

 

Section 5.6                                    New Subsidiaries.  The Borrower
shall deliver to the Administrative Agent each of the items set forth in Part A
of Schedule III attached hereto with respect to each Subsidiary of the Borrower
created after the Closing Date and within the time requirements set forth in
Schedule III.

 

Section 5.7                                    Agreement to Pledge; Security. 
Each Credit Party agrees that at all times before the termination of this
Agreement, payment in full of the Obligations, the termination and return of all
Letters of Credit (other than Letters of Credit as to which arrangements
satisfactory to the Issuing Lender in its sole discretion have been made) and
termination in full of the Commitments, the Administrative Agent shall have an
Acceptable Security Interest in the Collateral to secure the performance and
payment of the Secured Obligations.  Each Credit Party shall, and shall cause
each of its Subsidiaries to, grant to the Administrative Agent a Lien in any
Property of such Credit Party or such Subsidiary now owned or hereafter acquired
(other than owned or leased real property unless otherwise requested by the
Administrative Agent) promptly and to take such actions as may be required under
the Security Documents to ensure that the Administrative Agent has an Acceptable
Security Interest in such Property; provided that so long as no Default or Event
of Default has occurred and is continuing, the Administrative Agent shall not be
permitted to request or the Borrower be required to grant an Acceptable Security
Interest in any Oil and Gas Properties that exceeds 80% by value of all of the
Credit Parties’ Proven Reserves.  Notwithstanding the foregoing, the Borrower
shall, and shall cause each Subsidiary to take such actions, including execution
and delivery of any Security Documents necessary to create, perfect and maintain
an Acceptable Security Interest in favor of the Administrative Agent in 100% of
Equity Interests issued by any Subsidiaries which are owned by the Borrower or
any Subsidiary.

 

Section 5.8                                    Deposit Accounts.  Each Credit
Party shall, and shall cause each of its Subsidiaries to maintain their
principal operating accounts and other deposit accounts with a Lender so long as
such accounts with any Lender (other than the Lender serving as the
Administrative Agent) are subject to Account Control Agreements.

 

Section 5.9                                    Records; Inspection.  Each Credit
Party shall, and shall cause each of its Subsidiaries to maintain proper,
complete and consistent books of record with respect to such Person’s
operations, affairs, and financial condition.  From time to time upon reasonable
prior notice, each Credit Party shall permit any Lender and shall cause each of
its Subsidiaries to permit any Lender, at such reasonable times and intervals
and to a reasonable extent and under the reasonable guidance of officers of or
employees delegated by officers of such Credit Party or such Subsidiary, to,
subject to any applicable confidentiality considerations, examine and copy the
books and records of such Credit Party or such Subsidiary, to visit and inspect
the Property of such Credit Party or such Subsidiary, and to discuss the
business operations and Property of such Credit Party or such Subsidiary with
the officers and directors thereof.

 

Section 5.10                             Maintenance of Property.  Each Credit
Party shall, and shall cause each of its Subsidiaries to, maintain their owned,
leased, or operated Property in good condition and repair, normal wear and tear
excepted; and shall abstain from, cause each of its Subsidiaries to abstain
from, and conduct due diligence with respect to any Properties to be acquired to
confirm that the seller has abstained from, knowingly or willfully permitting
the commission of waste or other injury, destruction, or loss of natural
resources, or the occurrence of pollution, contamination, or any other condition
in, on or about the owned

 

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or operated Property involving the Environment that could reasonably be expected
to result in Response activities and that could reasonably be expected to cause
a Material Adverse Change.

 

Section 5.11                             Title Evidence and Opinions.  The
Borrower shall from time to time upon the reasonable request of the
Administrative Agent, take such actions and execute and deliver such documents
and instruments as the Administrative Agent shall require to ensure that the
Administrative Agent shall, at all times, have received satisfactory title
evidence, which title evidence shall be in form and substance acceptable to the
Administrative Agent in its sole reasonable discretion and shall include
information regarding the before payout and after payout ownership interests
held by the Borrower and the Borrower’s Subsidiaries, for all wells located on
the Oil and Gas Properties, covering at least 80% of the present value of the
Proven Reserves of the Borrower and its Subsidiaries as determined by the
Administrative Agent.

 

Section 5.12                             Further Assurances; Cure of Title
Defects.  The Borrower shall, and shall cause each Subsidiary to, cure promptly
any defects in the creation and issuance of the Notes and the execution and
delivery of the Security Documents, this Agreement and the other Credit
Documents.  The Borrower hereby authorizes the Administrative Agent to file any
financing statements without the signature of the Borrower or such Subsidiary,
as applicable, to the extent permitted by applicable law in order to perfect or
maintain the perfection of any security interest granted under any of the Credit
Documents.  The Borrower at its expense will, and will cause each Subsidiary to,
promptly execute and deliver to the Administrative Agent upon request all such
other documents, agreements and instruments to comply with or accomplish the
covenants and agreements of the Borrower or any Subsidiary, as the case may be,
in the Security Documents and this Agreement, or to further evidence and more
fully describe the collateral intended as security for the Obligations, or to
correct any omissions in the Security Documents, or to state more fully the
security obligations set out herein or in any of the Security Documents, or to
perfect, protect or preserve any Liens created pursuant to any of the Security
Documents, or to make any recordings, to file any notices or obtain any
consents, all as may be necessary or appropriate in connection therewith or to
enable the Administrative Agent to exercise and enforce its rights and remedies
with respect to any Collateral.  Within 30 days after (a) a request by the
Administrative Agent or the Lenders to cure any title defects or exceptions
which are not Permitted Liens raised by such information or (b) a notice by the
Administrative Agent that the Borrower has failed to comply with Section 5.11
above, the Borrower shall (i) cure such title defects or exceptions which are
not Permitted Liens or substitute acceptable Oil and Gas Properties with no
title defects or exceptions except for Permitted Liens covering Collateral of an
equivalent value and (ii) deliver to the Administrative Agent satisfactory title
evidence (including supplemental or new title opinions meeting the foregoing
requirements) in form and substance acceptable to the Administrative Agent in
its reasonable business judgment as to the Borrower’s and its Subsidiaries’
ownership of such Oil and Gas Properties and the Administrative Agent’s Liens
and security interests therein as are required to maintain compliance with
Section 5.11.

 

Section 5.13                             Leases; Development and Maintenance. 
The Borrower shall, and shall cause its Subsidiaries to, (a) pay and discharge
promptly, or cause to be paid and discharged promptly, all rentals, delay
rentals, royalties, overriding royalties, payments out of production and other
indebtedness or obligations accruing under, and perform or cause to be performed
each and every act, matter or thing required by each and all of, the oil and gas
leases and all other agreements and contracts constituting or affecting the Oil
and Gas Properties of the Borrower and its Subsidiaries (except where the amount
thereof is being contested in good faith by appropriate proceedings), (b) do all
other things necessary to keep unimpaired its rights thereunder and prevent any
forfeiture thereof or default thereunder, and operate or cause to be operated
such Properties as a prudent operator would in accordance with industry standard
practices and in compliance with all applicable proration and conservation Legal
Requirements and any other Legal Requirements of every Governmental Authority,
whether state, federal, municipal or other jurisdiction, from time to time
constituted to regulate the development and operations of oil and gas

 

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properties and the production and sale of oil, gas and other Hydrocarbons
therefrom, and (c) maintain (or cause to be maintained) the Leases, wells, units
and acreage to which the Oil and Gas Properties of the Borrower and its
Subsidiaries pertain in a prudent manner consistent with industry standard
practices.

 

Section 5.14                             Post-Closing Covenant.  On or before
April 16, 2013 (or such later date as the Administrative Agent may approve in
its sole discretion), the Borrower shall deliver to the Administrative Agent
insurance endorsements corresponding to the requirements set forth in
Section 5.3 in form and substance satisfactory to the Administrative Agent.

 

ARTICLE 6
NEGATIVE COVENANTS

 

So long as any Obligation shall remain unpaid, any Lender shall have any
Commitment hereunder, or there shall exist any Letter of Credit Exposure, each
Credit Party agrees to comply with the following covenants.

 

Section 6.1                                    Debt.  No Credit Party shall, nor
shall it permit any of its Subsidiaries to, create, assume, incur, suffer to
exist, or in any manner become liable, directly, indirectly, or contingently in
respect of, any Debt other than the following (collectively, the “Permitted
Debt”):

 

(a)                                 the Obligations;

 

(b)                                 intercompany Debt incurred in the ordinary
course of business owed by any Credit Party to any other Credit Party; provided
that, if applicable, such Debt as an investment is also permitted in
Section 6.3;

 

(c)                                  Debt consisting of sureties or bonds
provided to any Governmental Authority or other Person and assuring payment of
contingent liabilities of a Credit Party in connection with the operation of its
Oil and Gas Properties, including with respect to plugging, facility removal and
abandonment of its Oil and Gas Properties;

 

(d)                                 purchase money indebtedness or Capital
Leases in an aggregate principal amount not to exceed $2,000,000 at any time;
provided no Credit Party may enter into additional indebtedness of the type
described in this clause (d) if a Default is continuing or entering into the
additional indebtedness could reasonably be expected to cause a Default;

 

(e)                                  Hedging Arrangements to the extent not
prohibited under Section 6.15;

 

(f)                                   Debt in the form of accounts payable to
trade creditors for goods or services and current operating liabilities (other
than for borrowed money) which in each case is not more than 90 days past due,
in each case incurred in the ordinary course of business, as presently
conducted, unless contested in good faith by appropriate proceedings and
adequate reserves for such items have been made in accordance with GAAP;

 

(g)                                  Debt consisting of take-or-pay obligations
under the RockPile Agreement; provided that the RockPile Agreement shall not be
amended in any way that adversely affects the Borrower, including (i) to
increase the amount due to RockPile upon a cancellation of the RockPile
Agreement by the Borrower or (ii) to extend the tenor of the RockPile Agreement;

 

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(h)                                 Debt consisting of take-or-pay obligations
under the Caliber Agreements; provided that the Caliber Agreements shall not be
amended in any way that adversely affects the Borrower, including increasing any
amounts owed by the Borrower thereunder or any extension of the term thereunder;

 

(i)                                     Debt consisting of senior unsecured
notes issuances (the “Permitted Notes”); provided that:

 

(i)                                     the Borrower is in pro forma compliance
with Sections 6.16 and 6.17 after giving effect to any such issuance;

 

(ii)                                  such Debt is not secured by any Lien;

 

(iii)                               no principal amount of such Debt matures
earlier than six months after the Maturity Date;

 

(iv)                              no Default or Event of Default is occurring at
the time of, or would occur as a result of, any such issuance;

 

(v)                                 the agreement or indenture governing any
such Debt shall have covenants and restrictions that are no more restrictive
than those set forth in the Credit Documents;

 

(vi)                              the agreement or indenture governing any such
debt shall not have any restriction on the ability of the Borrower or any of its
Subsidiaries to guarantee the Secured Obligations or to pledge assets as
Collateral for the Secured Obligations; and

 

(vii)                           upon the issuance of any such Debt, the
Borrowing Base shall be automatically reduced in accordance with Section 2.2(e);
and

 

(j)                                    unsecured Debt not otherwise permitted
under the preceding provisions of this Section 6.1; provided that, the aggregate
principal amount thereof shall not exceed $1,000,000 at any time.

 

Section 6.2                                    Liens.  No Credit Party shall,
nor shall it permit any of its Subsidiaries to, create, assume, incur, or suffer
to exist any Lien on the Property of any Credit Party or any Subsidiary, whether
now owned or hereafter acquired, or assign any right to receive any income,
other than the following (collectively, the “Permitted Liens”):

 

(a)                                 Liens securing the Secured Obligations
pursuant to the Security Documents;

 

(b)                                 Liens imposed by law, such as materialmen’s,
mechanics’, carriers’, workmen’s and repairmen’s liens, and other similar liens
arising in the ordinary course of business securing obligations which are not
overdue for a period of more than 30 days or are being contested in good faith
by appropriate procedures or proceedings and for which adequate reserves have
been established;

 

(c)                                  Liens for taxes, assessment, or other
governmental charges which are not yet due and payable or which are being
actively contested in good faith by appropriate proceedings and adequate
reserves for such items have been made in accordance with GAAP;

 

(d)                                 Liens securing purchase money debt or
Capital Lease obligations permitted under Section 6.1(d); provided that each
such Lien encumbers only the Property purchased in connection with the creation
of any such purchase money debt or the subject of any such Capital Lease, and
all proceeds thereof (including insurance proceeds), and the amount secured
thereby is not increased;

 

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(e)                                  encumbrances consisting of minor easements,
zoning restrictions, or other restrictions on the use of real property that do
not (individually or in the aggregate) materially affect the value of the assets
encumbered thereby or materially impair the ability of any Credit Party to use
such assets in its business, and none of which is violated in any material
aspect by existing or proposed structures or land use;

 

(f)                                   judgment and attachment Liens not giving
rise to an Event of Default, provided that (i) 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 (ii) no action to enforce such Lien has
been commenced;

 

(g)                                  Liens in favor a banking institution
arising by operation of law encumbering deposits in accounts that are not
subject to Account Control Agreements and that are not required to be subject to
Account Control Agreements in accordance with the terms hereof held by such
banking institution incurred in the ordinary course of business and which are
within the general parameters customary in the banking industry;

 

(h)                                 Liens arising under operating agreements,
unitization and pooling agreements and orders, farmout agreements, gas balancing
agreements, and other agreements, in each case that are customary in the oil,
gas and mineral production business and that are entered into by any Credit
Party in the ordinary course of business provided that (i) such Liens are taken
into account in computing the net revenue interests and working interests of the
Borrower or any of its Subsidiaries warranted in the Security Documents or this
Agreement, (ii) such Liens do not secure borrowed money, (iii) such Liens secure
amounts that are not yet due or are being contested in good faith by appropriate
proceedings, if such reserve as may be required by GAAP shall have been made
therefor and (iv) such Liens are limited to the assets that are the subject of
such agreements; and

 

(i)                                     royalties, overriding royalties, net
profits interests, production payments, reversionary interests, calls on
production, preferential purchase rights and other burdens on or deductions from
the proceeds of production, that do not secure Debt for borrowed money and that
are taken into account in computing the net revenue interests and working
interests of the Credit Parties warranted in the Security Documents or in this
Agreement.

 

Section 6.3                                    Investments.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, make or hold any direct
or indirect investment in any Person, including capital contributions to the
Person, investments in or the acquisition of the debt or equity securities of
the Person, or any loans, guaranties, trade credit, or other extensions of
credit to any Person, other than the following (collectively, the “Permitted
Investments”):

 

(a)                                 investments in the form of trade credit to
customers of a Credit Party arising in the ordinary course of business and
represented by accounts from such customers;

 

(b)                                 Liquid Investments;

 

(c)                                  loans, advances and equity contributions by
a Credit Party to any other Credit Party;

 

(d)                                 creation of any additional Subsidiaries
domiciled in the U.S. in compliance with Section 5.6 and Schedule III; and

 

(e)                                  investments (i) in direct ownership
interests in additional Oil and Gas Properties and gas gathering systems related
thereto or (ii) related to farm-out, farm-in, joint operating, joint venture or
area

 

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of mutual interest agreements, gathering systems, pipelines or other similar
arrangements which are usual and customary in the oil and gas exploration and
production business located within the geographic boundaries of the United
States of America; provided that if requested by the Administrative Agent, such
assets are pledged as Collateral pursuant to Section 5.7.

 

Section 6.4                                    Acquisitions.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, make any Acquisition
(other than any action that would otherwise be permitted by Section 6.3 to the
extent such action constitutes an Acquisition) without the consent of the
Required Lenders.

 

Section 6.5                                    Agreements Restricting Liens.  No
Credit Party shall, nor shall it permit any of its Subsidiaries to, create,
incur, assume or permit to exist any contract, agreement or understanding (other
than (i) this Agreement, the Security Documents, (ii) agreements governing Debt
permitted by Sections 6.1(d) to the extent such restrictions govern only the
asset financed pursuant to such Debt, and (iii) any prohibition or limitation
that exists pursuant to applicable requirements of a Governmental Authority)
which in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property, whether now owned or hereafter
acquired, to secure the Secured Obligations or restricts any Subsidiary from
paying Restricted Payments to the Borrower, or which requires the consent of or
notice to other Persons in connection therewith.

 

Section 6.6                                    Use of Proceeds; Use of Letters
of Credit.  No Credit Party shall, nor shall it permit any of its Subsidiaries
to: (a) use the proceeds of the Advances or the Letters of Credit for any
purposes other than (i) working capital purposes of any Credit Party,
(ii) capital expenditures of any Credit Party, or (iii) other general corporate
purposes of any Credit Party.  No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, use any part of the proceeds of
Advances or Letters of Credit for any purpose which violates, or is inconsistent
with, Regulations T, U, or X.

 

Section 6.7                                    Corporate Actions; Accounting
Changes.

 

(a)                                 No Credit Party shall, nor shall it permit
any of its Subsidiaries to, merge or consolidate with or into any other Person,
except that the Borrower may merge with any of its wholly-owned Subsidiaries,
and any Credit Party may merge or be consolidated with or into any other Credit
Party; provided that (i) in any merger involving the Borrower, the Borrower
shall be the surviving entity, and (ii) at the time of any such merger or
consolidation and immediately after giving effect thereto, no Default, Event of
Default or Borrowing Base Deficiency shall have occurred and the Administrative
Agent shall continue to have an Acceptable Security Interest in the Collateral.

 

(b)                                 No Credit Party shall, nor shall it permit
any of its Subsidiaries to, (i) without 30 days prior written notice to the
Administrative Agent, change its name, change its state of incorporation,
formation or organization, change its organizational identification number or
reorganize in another jurisdiction, (ii) create or suffer to exist any
Subsidiary not existing on the date of this Agreement, provided that, the
Borrower may create or acquire a new Subsidiary if the Credit Parties and such
new Subsidiary complies with Section 5.6 and Schedule III, and such transactions
otherwise comply with the terms of this Agreement, (iii) sell or otherwise
dispose of any of its ownership interest in any of its Subsidiaries, or in any
manner rearrange its business structure as it exists on the date of this
Agreement (except as would be permitted by Section 6.7(a) or Section 6.8),
(iv) without prior written notice to, and prior consent of, the Administrative
Agent, amend, supplement, modify or restate its articles or certificate of
incorporation or formation, limited partnership agreement, bylaws, limited
liability company agreements, or other equivalent organizational documents, or
(v) change its method of accounting employed in the preparation of the financial
statements referred to in Section 4.4 or change the fiscal year end of the
Borrower unless required to conform to GAAP or approved in writing by the
Administrative Agent.

 

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Section 6.8                                    Sale of Assets.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, sell, convey, or
otherwise transfer any of its Property (including, without limitation, any
working interest, overriding royalty interest, production payments, net profits
interest, royalty interest, or mineral fee interest) other than, so long as no
Default exists or would result therefrom:

 

(i)                                     the sale of Hydrocarbons or Liquid
Investments in the ordinary course of business,

 

(ii)                                  Asset Sales of equipment that is
(A) obsolete, worn out or uneconomic and disposed of in the ordinary course of
business, (B) no longer necessary for the business of such Person or
(C) contemporaneously replaced by equipment of at least comparable value and
use,

 

(iii)                               Asset Sales of Property between or among
Credit Parties;

 

(iv)                              Asset Sales of Oil and Gas Properties which
are not attributable to Proven Reserves and which is not Collateral or which is
not otherwise required pursuant to the terms of this Agreement to be Collateral;

 

(v)                                 the Asset Sale of Oil and Gas Properties
which are attributable to Proven Reserves; provided that, (A) the consideration
received by the Credit Party in respect of such Asset Sale shall be cash, cash
equivalents, or shall be attributable to Oil and Gas Properties classified as
Proven Reserves, (B) the consideration received in respect of such Asset Sale
shall be equal to or greater than the fair market value of such Oil and Gas
Properties, interest therein or Subsidiary subject of such Asset Sale (as
reasonably determined by the board of directors or the equivalent governing body
of the Borrower and, if requested by the Administrative Agent, the Borrower
shall deliver a certificate of a Responsible Officer of the Borrower certifying
to that effect), (C) if any such Asset Sale is of a Subsidiary owning Oil and
Gas Properties, such Asset Sale shall include all the Equity Interests of such
Subsidiary; and (D) if the BB Deduction Amount exceeds 5% of the most recently
redetermined Borrowing Base, then the Borrowing Base shall be reduced in
accordance with Section 2.2(e);

 

(vi)                              the Asset Sale of Hedging Arrangements;
provided that, (A) 100% of the consideration received in respect of such Asset
Sale shall be cash or cash equivalents or other Hedging Arrangements, (B) the
consideration received in respect of such Asset Sale shall be equal to or
greater than the fair market value of such Hedging Arrangements; and (C) if the
BB Deduction Amount exceeds 5% of the most recently redetermined Borrowing Base,
then the Borrowing Base shall be reduced in accordance with Section 2.2(e); and

 

(vii)                           Asset Sales of other Property (other than Oil
and Gas Properties or Hedging Arrangements) not to exceed $1,000,000 during any
fiscal year.

 

Section 6.9                                    Restricted Payments.  No Credit
Party shall make, nor shall it permit any of its Subsidiaries to make any
Restricted Payments except that (a) so long as no Default, Event of Default or
Borrowing Base Deficiency exists or would result therefrom (i) the Subsidiaries
of the Borrower may make Restricted Payments to the Borrower or any other Credit
Party that is a Subsidiary of the Borrower, and (ii) the Credit Parties may make
Restricted Payments in respect of subordinated Debt permitted pursuant to
Section 6.1(b) or (h), and (b) the Borrower and any Subsidiary may pay any
management fee or similar fee to any Affiliate of the Borrower or its
Subsidiaries pursuant to the Management Agreement; provided that any amendments,
modifications, or side letters with respect to the Management Agreement after
the Closing Date are acceptable to the Administrative Agent.

 

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Section 6.10                             Affiliate Transactions.  No Credit
Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction or series of
transactions (including, but not limited to, the purchase, sale, lease or
exchange of Property, the making of any investment, the giving of any guaranty,
the assumption of any obligation or the rendering of any service) with any of
its Affiliates which are not Credit Parties unless such transaction or series of
transactions is on terms no less favorable to the Borrower or any Subsidiary, as
applicable, than those that could be obtained in a comparable arm’s length
transaction with a Person that is not such an Affiliate except the restrictions
in this Section 6.10 shall not apply to: (a) the Restricted Payments permitted
under Section 6.9, if any, (b) Investments by a Credit Party in the form of
Equity Interests of another Credit Party, and (c) reasonable and customary
director, officer and employee compensation (including bonuses), indemnification
and other benefits (including retirement, health, stock option and other benefit
plans).

 

Section 6.11                             Line of Business.  No Credit Party
shall, and shall not permit any of its Subsidiaries to, engage to any material
extent in any business other than businesses of the type conducted by the
Borrower and its Subsidiaries on the Effective Date and businesses reasonably
related thereto.

 

Section 6.12                             Hazardous Materials.  No Credit Party
(a) shall, nor shall it permit any of its Subsidiaries to, create, handle,
transport, use, or dispose of any Hazardous Substance or Hazardous Waste, except
in the ordinary course of its business and except in compliance with
Environmental Law other than to the extent that such non-compliance could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change or in any liability to the Lenders or the Administrative Agent,
and (b) shall, nor shall it permit any of its Subsidiaries to, release any
Hazardous Substance or Hazardous Waste into the environment and shall not permit
any Credit Party’s or any Subsidiary’s Property to be subjected to any release
of Hazardous Substance or Hazardous Waste, except in compliance with
Environmental Law other than to the extent that such non-compliance could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Change or in any liability on the Lenders or the Administrative Agent.

 

Section 6.13                             Compliance with ERISA.  Except for
matters that individually or in the aggregate could not reasonably be expected
to cause a Material Adverse Change, no Credit Party shall, nor shall it permit
any of its Subsidiaries to, directly or indirectly: (a) engage in any
transaction in connection with which the Borrower or any Subsidiary could be
subjected to either a civil penalty assessed pursuant to section 502(c), (i) or
(l) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code;
(b) terminate, or permit any member of the Controlled Group to terminate, any
Plan in a manner, or take any other action with respect to any Plan, which could
result in any liability to the Borrower, any Subsidiary or any member of the
Controlled Group to the PBGC; (c) fail to make, or permit any member of the
Controlled Group 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 Subsidiary or member of the Controlled Group is required to pay
as contributions thereto; (d) permit to exist, or allow any Subsidiary or any
member of the Controlled Group to permit to exist, any accumulated funding
deficiency (or unpaid minimum required contribution for plan years after
December 31, 2007) within the meaning of Section 302 of ERISA or section 412 of
the Code, whether or not waived, with respect to any Plan; (e) permit, or allow
any member of the Controlled Group to permit, the actuarial present value of the
benefit liabilities (as “actuarial present value of the benefit liabilities”
shall have the meaning specified in section 4041 of ERISA) under any Plan that
is regulated under Title IV of ERISA to exceed the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities; (f) contribute to or assume an
obligation to contribute to, or permit any member of the Controlled Group to
contribute to or assume an obligation to contribute to, any Multiemployer Plan;
(g) acquire, or permit any member of the Controlled Group to acquire, an
interest in any Person that causes such Person to become a member of the
Controlled Group if such Person sponsors, maintains or contributes to, or at any
time in the six-year period preceding such acquisition has sponsored,
maintained,

 

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or contributed to, (1) any Multiemployer Plan, or (2) any other Plan that is
subject to Title IV of ERISA under which the actuarial present value of the
benefit liabilities under such Plan exceeds the current value of the assets
(computed on a plan termination basis in accordance with Title IV of ERISA) of
such Plan allocable to such benefit liabilities; (h) incur, or permit any member
of the Controlled Group to incur, a liability to or on account of a Plan under
sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; or (i) contribute to or
assume an obligation to contribute to any employee welfare benefit plan, as
defined in section 3(1) of ERISA, maintained to provide benefits to former
employees of such entities, that may not be terminated by such entities in their
sole discretion at any time without any liability.

 

Section 6.14                             Sale and Leaseback Transactions.  No
Credit Party shall, nor shall it permit any of its Subsidiaries to, sell or
transfer to a Person any Property, whether now owned or hereafter acquired, if
at the time or thereafter the Borrower or a Subsidiary shall lease as lessee
such Property or any part thereof or other Property which the Borrower or a
Subsidiary intends to use for substantially the same purpose as the Property
sold or transferred.

 

Section 6.15                             Limitation on Hedging.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, (a) purchase, assume, or
hold a speculative position in any commodities market or futures market or enter
into any Hedging Arrangement for speculative purposes; or (b) be party to or
otherwise enter into any Hedging Arrangement which (i) is entered into for
reasons other than as a part of its normal business operations as a risk
management strategy and/or hedge against changes resulting from market
conditions related to the Borrower’s or its Subsidiaries’ operations, or
(ii) (A) covers notional volumes in excess of 90% of the anticipated production
of gas volumes attributable to PDP Reserves of the Borrower and its
Subsidiaries, as reflected in the most recently delivered Engineering Report
under Section 2.2, (B) covers notional volumes in excess of 90% of the
anticipated production of natural gas liquids volumes attributable to PDP
Reserves of the Borrower and its Subsidiaries, as reflected in the most recently
delivered Engineering Report under Section 2.2 or (C) with respect to Hedging
Arrangements entered into after the Closing Date, covers notional volumes (in
the aggregate, taking into account all other Hedging Arrangements entered into
by the Credit Parties) in excess of 90% of the anticipated production of oil
volumes attributable to PDP Reserves of the Borrower and its Subsidiaries, as
reflected in the most recently delivered Engineering Report under Section 2.2
for each month during the period such Hedging Arrangement is in effect;
provided, however, that the volume limitations shall not apply to put option
contracts that are not related to corresponding calls, collars or swaps, or
(iii) is longer than 60 months in duration from the date such Hedging
Arrangement is entered into, or (iv) is secured (unless such Hedging Arrangement
is with a Swap Counterparty) or obligates any Credit Party to any margin call
requirements or otherwise requires the Borrower or any of its Subsidiaries to
put up money, assets or other security or includes any deferred premium
payment.  Furthermore, no Credit Party shall be party to or otherwise enter into
any Hedging Arrangement which relates to interest rates if (A) such Hedging
Arrangement relates to payment obligations on Debt which is not permitted to be
incurred under Section 6.1 above, (B) the aggregate notional amount of all such
Hedging Arrangements exceeds 75% of the anticipated outstanding principal
balance of the Debt under this Agreement to be hedged by such Hedging
Arrangements, (C) such Hedging Arrangement is with a counterparty or has a
guarantor of the obligation of the counterparty who (unless such counterparty is
a Lender or one of its Affiliates) at the time the Hedging Arrangement is made
is rated lower than A by S & P or A2 by Moody’s, (D) as to any such Hedging
Arrangement covering the Debt incurred under this Agreement, such Hedging
Arrangement is with a counterparty that is not a Lender or an Affiliate of a
Lender, or (E) the floating rate index of such Hedging Arrangement does not
generally match the index used to determine the floating rates of interest on
the corresponding Debt to be hedged by such Hedging Arrangement.

 

Section 6.16                             Leverage Ratio.  Borrower shall not
permit the Leverage Ratio as of each fiscal quarter end, beginning with the
fiscal quarter ending January 31, 2013, to be more than 4.00 to 1.00.

 

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Section 6.17                             Current Ratio. The Borrower shall not
permit the ratio of, as of the last day of each fiscal quarter of the Borrower,
beginning with the fiscal quarter ending January 31, 2013, the Borrower’s and
its consolidated Subsidiaries’ (a) consolidated current assets to
(b) consolidated current liabilities, to be less than 1.00 to 1.00.  For
purposes of this calculation (i) “current assets” shall include, as of the date
of calculation, the Availability but shall exclude any asset representing a
valuation account arising from the application of ASC 815, and (ii) “current
liabilities” shall exclude, as of the date of calculation, the current portion
of long—term Debt existing under this Agreement and any liabilities representing
a valuation account arising from the application of ASC 815.

 

Section 6.18                             Operating Leases.  No Credit Party
shall, nor shall it permit any of its Subsidiaries to, enter into any lease that
constitutes an operating lease under GAAP if the obligations of a Credit Party
or such Subsidiary as lessee under such lease would cause its lease payments
(excluding payments for taxes, insurance, and other non-rental expenses to the
extent not included within the stated amount of the rental payments under such
lease) in respect of all such leases entered into by the Credit Parties to
exceed $5,000,000 during any fiscal year of the Borrower.

 

Section 6.19                             Prepayment of Certain Debt and Other
Obligations.  No Credit Party shall, nor shall it permit any of its Subsidiaries
to, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Debt, except (a) the prepayment of the
Obligations in accordance with the terms of this Agreement, (b) regularly
scheduled or required repayments or redemptions of Permitted Debt and
refinancings and refundings of such Permitted Debt so long as such refinancings
and refundings would otherwise comply with Section 6.1, (c) so long as no Event
of Default exists or would result therefrom, other prepayments of Permitted Debt
not described in the immediately preceding clauses (a) and (b).

 

Section 6.20                             Gas Imbalances, Take-or-Pay or Other
Prepayments.  The Borrower shall not, nor shall it permit any of its
Subsidiaries to, allow gas imbalances (other than those imbalances which
(a) occur in the normal course of business and (b) do not exceed 2% of the value
of the Proven Reserves of the Credit Parties), take-or-pay obligations or
prepayments with respect to the Oil and Gas Properties of the Borrower or any
Subsidiary which would require the Borrower or any Subsidiary to deliver their
respective Hydrocarbons produced on a monthly basis from such Oil and Gas
Properties at some future time without then or thereafter receiving full payment
therefor.

 

ARTICLE 7
DEFAULT AND REMEDIES

 

Section 7.1                                    Events of Default.  The
occurrence of any of the following events shall constitute an “Event of Default”
under this Agreement and any other Credit Document:

 

(a)                                 Payment Failure.  Any Credit Party (i) fails
to pay any principal when due under this Agreement or (ii) fails to pay, within
three Business Days of when due, any interest or other amount due under this
Agreement or any other Credit Document, including payments of fees,
reimbursements, and indemnifications;

 

(b)                                 False Representation or Warranties.  Any
representation or warranty made or deemed to be made by any Credit Party or any
officer thereof in this Agreement, in any other Credit Document or in any
certificate delivered in connection with this Agreement or any other Credit
Document is incorrect, false or otherwise misleading in any material respect
(except that such materiality qualifier shall not be applicable to any
representations and warranties that already are qualified or modified by
materiality in the text thereof) at the time it was made or deemed made;

 

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(c)                                  Breach of Covenant.  (i) Any breach by any
Credit Party of any of the covenants in Section 5.1, Section 5.2(g),
Section 5.3(a), Section 5.14 or Article 6 of this Agreement or the corresponding
covenants in any Guaranty or (ii) any breach by any Credit Party of any other
covenant contained in this Agreement or any other Credit Document and such
breach shall remain unremedied for a period of thirty days following the earlier
of (A) the date on which Administrative Agent gave notice of such failure to
Borrower and (B) the date any officer of the Borrower or any Subsidiary acquires
knowledge of such failure (such grace period to be applicable only in the event
such Default can be remedied by corrective action of the Borrower or any
Subsidiary);

 

(d)                                 Guaranties.  Any provisions in the
Guaranties shall at any time (before its expiration according to its terms) and
for any reason cease to be in full force and effect and valid and binding on the
Guarantors party thereto or shall be contested by any party thereto; any
Guarantor shall deny it has any liability or obligation under such Guaranties;
or any Guarantor shall cease to exist other than as expressly permitted by the
terms of this Agreement;

 

(e)                                  Security Documents.  Any Security Document
shall at any time and for any reason cease to create an Acceptable Security
Interest in the Property purported to be subject to such agreement in accordance
with the terms of such agreement or any material provisions thereof shall cease
to be in full force and effect and valid and binding on the Credit Party that is
a party thereto or any such Person shall so state in writing (unless released or
terminated pursuant to the terms of such Security Document);

 

(f)                                   Cross-Default. (i) The Borrower or any
Guarantor shall fail to pay any principal of or premium or interest on its Debt
which is outstanding in a principal amount of at least $5,000,000 individually
or when aggregated with all such Debt of the Borrower and the Subsidiaries so in
default (but excluding the Obligations) when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such Debt; (ii) any
other event shall occur or condition shall exist under any agreement or
instrument relating to Debt which is outstanding in a principal amount of at
least $5,000,000 individually or when aggregated with all such Debt of the
Borrower and the Subsidiaries so in default (other than Debt the Obligations),
and shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt prior to
the stated maturity thereof; or (iii) any such Debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment); provided that, for purposes of this paragraph (f), the
“principal amount” of the obligations in respect of Hedging Arrangements at any
time shall be the maximum aggregate amount (giving effect to any netting
agreements) that would be required to be paid if such Hedging Arrangements were
terminated at such time;

 

(g)                                  Bankruptcy and Insolvency.  (i) Except as
permitted under Section 6.7 above, any Credit Party or any Subsidiary of the
Borrower shall terminate its existence or dissolve or (ii) any Credit Party or
any Subsidiary of the Borrower (A) admits in writing its inability to pay its
debts generally as they become due; makes an assignment for the benefit of its
creditors; consents to or acquiesces in the appointment of a receiver,
liquidator, fiscal agent, or trustee of itself or any of its Property; files a
petition under bankruptcy or other laws for the relief of debtors; or consents
to any reorganization, arrangement, workout, liquidation, dissolution, or
similar relief or (B) shall have had, without its consent: any court enter an
order appointing a receiver, liquidator, fiscal agent, or trustee of itself or
any of its Property; any petition filed against it seeking reorganization,
arrangement, workout, liquidation, dissolution or similar relief under
bankruptcy or other laws for the relief of debtors and such petition shall not
be dismissed, stayed, or set aside for an aggregate of 60 days, whether or not
consecutive;

 

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(h)                                 Settlements; Adverse Judgment.  The Borrower
or any of its Subsidiaries enters into a settlement of any claim against any of
them when a suit has been filed or suffers final judgments against any of them
since the date of this Agreement in an aggregate amount, less any insurance
proceeds covering such settlements or judgments which are received or as to
which the insurance carriers admit liability, greater than $5,000,000 and, in
the case of final judgments, either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgments or (ii) there shall be any period
of 30 consecutive days during which a stay of enforcement of such judgments, by
reason of a pending appeal or otherwise, shall not be in effect;

 

(i)                                     Termination Events.  Any Termination
Event with respect to a Plan shall have occurred, and, 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent, such
Termination Event shall not have been corrected and shall have created and
caused to be continuing a material risk of Plan termination or liability for
withdrawal from the Plan as a “substantial employer” (as defined in
Section 4001(a)(2) of ERISA), which termination could reasonably be expect to
result in a liability of, or liability for withdrawal could reasonably be
expected to be, greater than $5,000,000;

 

(j)                                    Plan Withdrawals.  The Borrower or any
member of the Controlled Group as employer under a Multiemployer Plan shall have
made a complete or partial withdrawal from such Multiemployer Plan and such
withdrawing employer shall have incurred a withdrawal liability in an annual
amount exceeding $5,000,000;

 

(k)                                 Credit Documents; Lien.  Any material
provision of any Credit Document shall for any reason cease to be valid and
binding on a Credit Party or any of their respective Subsidiaries or any such
Person shall so state in writing or the Administrative Agent shall fail to have
an Acceptable Security Interest in Property required to be Collateral under the
Credit Documents; or

 

(l)                                     Change in Control.  The occurrence of a
Change in Control.

 

Section 7.2                                    Optional Acceleration of
Maturity.  If any Event of Default shall have occurred and be continuing, then,
and in any such event:

 

(a)                                 the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare that the obligation of each Lender to make Advances and the
obligation of the Issuing Lender to issue Letters of Credit shall be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the request, or
may with the consent, of the Required Lenders, by notice to the Borrower,
declare the Obligations, the Notes, all interest thereon, and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Obligations, the Notes, all such interest, and all such amounts shall become and
be forthwith due and payable in full, without presentment, demand, protest or
further notice of any kind (including, without limitation, any notice of intent
to accelerate or notice of acceleration), all of which are hereby expressly
waived by each of the Credit Parties,

 

(b)                                 the Borrower shall, on demand of the
Administrative Agent at the request or with the consent of the Required Lenders,
deposit with the Administrative Agent into the Cash Collateral Account an amount
of cash equal to the outstanding Letter of Credit Exposure as security for the
Secured Obligations to the extent the Letter of Credit Obligations are not
otherwise paid or cash collateralized at such time, and

 

(c)                                  the Administrative Agent shall at the
request of, or may with the consent of, the Required Lenders proceed to enforce
its rights and remedies under the Security Documents, the Guaranties, or any
other Credit Document for the ratable benefit of the Secured Parties by
appropriate proceedings.

 

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Section 7.3                                    Automatic Acceleration of
Maturity.  If any Event of Default pursuant to Section 7.1(g) shall occur:

 

(a)                                 the obligation of each Lender to make
Advances and the obligation of the Issuing Lender to issue Letters of Credit
shall immediately and automatically be terminated and the Obligations, the
Notes, all interest on the Notes, and all other amounts payable under this
Agreement shall immediately and automatically become and be due and payable in
full, without presentment, demand, protest or any notice of any kind (including,
without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by each of the Credit
Parties,

 

(b)                                 the Borrower shall, on demand of the
Administrative Agent at the request or with the consent of the Required Lenders,
deposit with the Administrative Agent into the Cash Collateral Account an amount
of cash equal to the outstanding Letter of Credit Exposure as security for the
Secured Obligations to the extent the Letter of Credit Obligations are not
otherwise paid or cash collateralized at such time, and

 

(c)                                  the Administrative Agent shall at the
request of, or may with the consent of, the Required Lenders proceed to enforce
its rights and remedies under the Security Documents, the Guaranties, or any
other Credit Document for the ratable benefit of the Secured Parties by
appropriate proceedings.

 

Section 7.4                                    Set-off.  Upon (a) the occurrence
and during the continuance of any Event of Default and (b) the making of the
request or the granting of the consent, if any, specified by Section 7.2 to
authorize the Administrative Agent to declare the Notes and any other amount
payable hereunder due and payable pursuant to the provisions of Section 7.2 or
the automatic acceleration of the Notes and all amounts payable under this
Agreement pursuant to Section 7.3, the Administrative Agent and each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Administrative Agent or such Lender to or for the credit
or the account of any Credit Party against any and all of the obligations of the
Borrower now or hereafter existing under this Agreement, the Notes held by the
Administrative Agent or such Lender, and the other Credit Documents,
irrespective of whether or not the Administrative Agent or such Lender shall
have made any demand under this Agreement, such Note, or such other Credit
Documents, and although such obligations may be unmatured.  Each Lender agrees
to promptly notify the Borrower after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.  The rights of the Administrative
Agent and each Lender under this Section 7.4 are in addition to any other rights
and remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.

 

Section 7.5                                    Remedies Cumulative, No Waiver. 
No right, power, or remedy conferred to any Lender in this Agreement or the
Credit Documents, or now or hereafter existing at law, in equity, by statute, or
otherwise shall be exclusive, and each such right, power, or remedy shall to the
full extent permitted by law be cumulative and in addition to every other such
right, power or remedy.  No course of dealing and no delay in exercising any
right, power, or remedy conferred to any Lender in this Agreement and the Credit
Documents or now or hereafter existing at law, in equity, by statute, or
otherwise shall operate as a waiver of or otherwise prejudice any such right,
power, or remedy.  Any Lender may cure any Event of Default without waiving the
Event of Default.  No notice to or demand upon the Borrower or any other Credit
Party shall entitle the Borrower or any other Credit Party to similar notices or
demands in the future.

 

Section 7.6                                    Application of Payments.  Prior
to an Event of Default, all payments made hereunder shall be applied by the
Administrative Agent as directed by the Borrower, but subject

 

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to the terms of this Agreement, including the application of prepayments
according to Section 2.5 and Section 2.12. During the existence of an Event of
Default, all payments and collections received by the Administrative Agent
(other than as a result of the exercise of remedies against Collateral or
against the Borrower or any Subsidiary) shall be applied by the Administrative
Agent in its discretion, but subject to the terms of this Agreement, including
the application of prepayments according to Section 2.5 and Section 2.12. During
the existence of an Event of Default, all payments and collections received by
the Administrative Agent as a result of the exercise of remedies against
Collateral or against the Borrower or any Subsidiary shall be applied to the
Secured Obligations in accordance with Section 2.12 and otherwise in the
following order:

 

FIRST, to the payment of all costs and expenses incurred by the Administrative
Agent (in its capacity as such hereunder or under any other Credit Document) in
connection with this Agreement or any of the Secured Obligations, including all
court costs and the fees and expenses of its agents and legal counsel, the
repayment of all advances made by the Administrative Agent as secured party
hereunder or under any other Credit Document on behalf of any Credit Party and
any other costs or expenses incurred in connection with the exercise of any
right or remedy hereunder or under any other Credit Document;

 

SECOND, to the payment of all accrued interest constituting part of the Secured
Obligations (the amounts so applied to be distributed ratably among the Secured
Parties in accordance with the amounts of the Secured Obligations described in
this clause “SECOND” owed to them on the date of any such distribution);

 

THIRD, to the payment of any Secured Obligations not addressed in clauses
“FIRST” or “SECOND” of this Section 7.6(c) (including, without limitation, any
principal, fees or expenses, Letter of Credit  Obligations, Obligations to make
deposits into the Cash Collateral Account, Secured Obligations owing to Swap
Counterparties in respect of Hedging Arrangements, and Banking Services
Obligations) constituting part of the Secured Obligations (the amounts so
applied to be distributed ratably among the Secured Parties in accordance with
the amounts of the Secured Obligations described in this clause “THIRD” owed to
them on the date of any such distribution); and

 

FOURTH, to the Credit Parties, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

 

Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Credit Parties to preserve the
allocation to Secured Obligations otherwise set forth above in this Section.

 

ARTICLE 8
THE ADMINISTRATIVE AGENT

 

Section 8.1                                    Appointment, Powers, and
Immunities.  Each Lender hereby irrevocably appoints and authorizes the
Administrative Agent to act as its agent under this Agreement and the other
Credit Documents with such powers and discretion as are specifically delegated
to the Administrative Agent by the terms of this Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental
thereto.  The Administrative Agent (which term as used in this sentence and in
Section 8.5 and the first sentence of Section 8.6 shall include its Affiliates
and its own and its Affiliates’ officers, directors, employees, and agents): 
(a) shall not have any duties or responsibilities except those

 

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expressly set forth in this Agreement and shall not be a trustee or fiduciary
for any Lender; (b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made in or in
connection with any Credit Document or any certificate or other document
referred to or provided for in, or received by any of them under, any Credit
Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Credit Document, or any other document
referred to or provided for therein or for any failure by any Credit Party or
any other Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Credit Party or
the satisfaction of any condition or to inspect the Property (including the
books and records) of any Credit Party or any of its Subsidiaries or Affiliates;
(d) shall not be required to initiate or conduct any litigation or collection
proceedings under any Credit Document unless requested by the Required Lenders
in writing and it receives indemnification satisfactory to it from the Lenders;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Credit Document, except for its own gross
negligence or willful misconduct.  The Administrative Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by the
Administrative Agent with reasonable care.

 

Section 8.2                                    Reliance by Administrative
Agent.  The Administrative Agent shall be entitled to rely upon any
certification, notice, instrument, writing, or other communication (including,
without limitation, any thereof by telephone or telecopy) believed by it to be
genuine and correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel for any Credit Party), independent accountants, and other
experts selected by the Administrative Agent.  The Administrative Agent may deem
and treat the payee of any Notes as the holder thereof for all purposes hereof
unless and until the Administrative Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 9.7.  As to any matters not
expressly provided for by this Agreement, the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding on all of the Lenders; provided, however, that the
Administrative Agent shall not be required to take any action that exposes the
Administrative Agent to personal liability or that is contrary to any Credit
Document or applicable law or unless it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking any such action.

 

Section 8.3                                    Defaults.  The Administrative
Agent shall not be deemed to have knowledge or notice of the occurrence of a
Default or Event of Default unless the Administrative Agent has received written
notice from a Lender or the Borrower specifying such Default or Event of Default
and stating that such notice is a “Notice of Default”.  In the event that the
Administrative Agent receives such a notice of the occurrence of a Default or
Event of Default, the Administrative Agent shall give prompt notice thereof to
the Lenders.  The Administrative Agent shall (subject to Section 8.2) take such
action with respect to such Default or Event of Default as shall reasonably be
directed by the Required Lenders, provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interest of the Lenders.

 

Section 8.4                                    Rights as Lender.  With respect
to its Commitments and the Advances made by it, Wells Fargo (and any successor
acting as Administrative Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not acting as the Administrative Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include the
Administrative Agent in its individual capacity. Wells Fargo

 

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(and any successor acting as Administrative Agent) and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to, make investments in, provide services to, and generally engage in any
kind of lending, trust, or other business with any Credit Party or any of its
Subsidiaries or Affiliates as if it were not acting as Administrative Agent, and
Wells Fargo (and any successor acting as Administrative Agent) and its
Affiliates may accept fees and other consideration from any Credit Party or any
of its Subsidiaries or Affiliates for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.

 

Section 8.5                                    Indemnification.  THE LENDERS
SEVERALLY AGREE TO INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING LENDER, AND
EACH OF THEIR RESPECTIVE AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AND AGENTS (TO THE EXTENT NOT REIMBURSED BY THE BORROWER), RATABLY
ACCORDING TO THE RESPECTIVE PRINCIPAL AMOUNTS OF THE ADVANCES THEN HELD BY EACH
OF THEM (OR IF NO PRINCIPAL OF THE ADVANCES IS AT THE TIME OUTSTANDING, RATABLY
ACCORDING TO THE RESPECTIVE COMMITMENTS HELD BY EACH OF THEM IMMEDIATELY PRIOR
TO THE TERMINATION, EXPIRATION OR FULL REDUCTION OF EACH SUCH COMMITMENT), FROM
AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, TAXES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS OF ANY
KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED
AGAINST THE ADMINISTRATIVE AGENT OR ISSUING LENDER IN ANY WAY RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE
ADMINISTRATIVE AGENT OR ISSUING LENDER UNDER THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT (IN ALL CASES, WHETHER OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN
PART, OUT OF THE COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE
ADMINISTRATIVE AGENT OR ISSUING LENDER), AND INCLUDING, WITHOUT LIMITATION,
ENVIRONMENTAL LIABILITIES, PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY
PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, TAXES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES, OR DISBURSEMENTS RESULTING FROM THE
ADMINISTRATIVE AGENT’S OR ISSUING LENDER’S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.  WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO
REIMBURSE THE ADMINISTRATIVE AGENT OR ISSUING LENDER PROMPTLY UPON DEMAND FOR
ITS RATABLE SHARE (DETERMINED AS SET FORTH ABOVE IN THIS PARAGRAPH) OF ANY
OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES) INCURRED BY THE ADMINISTRATIVE
AGENT OR ISSUING LENDER IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT,
TO THE EXTENT THAT THE ADMINISTRATIVE AGENT OR ISSUING LENDER IS NOT REIMBURSED
FOR SUCH BY THE BORROWER.

 

Section 8.6                                    Non-Reliance on Administrative
Agent and Other Lenders.  Each Lender agrees that it has, independently and
without reliance on the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and the other Credit Parties and decision to enter into
this Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under the Credit
Documents.  Except for notices, reports, and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder and for other information in the Administrative Agent’s possession

 

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which has been requested by a Lender and for which such Lender pays the
Administrative Agent’s expenses in connection therewith, the Administrative
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition, or
business of any Credit Party or any of its Subsidiaries or Affiliates that may
come into the possession of the Administrative Agent or any of its Affiliates.

 

Section 8.7                                    Resignation of Administrative
Agent and Issuing Lender.  The Administrative Agent or the Issuing Lender may
resign at any time by giving written notice thereof to the Lenders and the
Borrower.  Upon receipt of notice of any such resignation, the Required Lenders
shall have the right to appoint a successor Administrative Agent or Issuing
Lender with, so long as no Event of Default has occurred and is continuing, the
consent of the Borrower, which consent shall not be unreasonably withheld.  If
no successor Administrative Agent or Issuing Lender shall have been so appointed
by the Required Lenders with the consent of the Borrower, and shall have
accepted such appointment, within 30 days after the retiring Administrative
Agent’s or Issuing Lender’s giving of notice of resignation, then the retiring
Administrative Agent or Issuing Lender may, on behalf of the Lenders and the
Borrower, appoint a successor Administrative Agent or Issuing Lender, which
shall be, in the case of a successor agent, a commercial bank organized under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $250,000,000 and, in the case of the
Issuing Lender, a Lender; provided that, if the Administrative Agent or Issuing
Lender shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Administrative
Agent or Issuing Lender shall be discharged from its duties and obligations
hereunder and under the other Credit Documents (except that (A) in the case of
any collateral security held by the Administrative Agent on behalf of the
Lenders or the Issuing Lender under any of the Credit Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed and (B) the retiring
Issuing Lender shall remain the Issuing Lender with respect to any Letters of
Credit outstanding on the effective date of its resignation or removal and the
provisions affecting the Issuing Lender with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Lender until the termination
of all such Letters of Credit) and (2) all payments, communications and
determinations provided to be made by, to or through the retiring Administrative
Agent shall instead be made by or to each Lender and the Issuing Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent or Issuing Lender, as applicable, as provided for above in
this paragraph.  Upon the acceptance of any appointment as Administrative Agent
or Issuing Lender by a successor Administrative Agent or Issuing Lender, such
successor Administrative Agent or Issuing Lender shall thereupon succeed to and
become vested with all the rights, powers, privileges, and duties of the
retiring Administrative Agent or Issuing Lender, and the retiring Administrative
Agent or Issuing Lender shall be discharged from its duties and obligations
under this Agreement and the other Credit Documents, except that the retiring
Issuing Lender shall remain the Issuing Lender with respect to any Letters of
Credit outstanding on the effective date of its resignation or removal and the
provisions affecting the Issuing Lender with respect to such Letters of Credit
shall inure to the benefit of the retiring Issuing Lender until the termination
of all such Letters of Credit.  After any retiring Administrative Agent’s or
Issuing Lender’s resignation as Administrative Agent or Issuing Lender, the
provisions of this Article 8 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or Issuing Lender
under this Agreement and the other Credit Documents.

 

Section 8.8                                    Collateral Matters.

 

(a)                                 The Administrative Agent is authorized on
behalf of the Secured Parties, without the necessity of any notice to or further
consent from such Secured Parties, from time to time, to take any actions with
respect to any Collateral or Security Documents which may be necessary to
perfect and maintain the Liens upon the Collateral granted pursuant to the
Security Documents.  The Administrative

 

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Agent is further authorized (but not obligated) on behalf of the Secured
Parties, without the necessity of any notice to or further consent from the
Secured Parties, from time to time, to take any action in exigent circumstances
as may be reasonably necessary to preserve any rights or privileges of the
Secured Parties under the Credit Documents or applicable Legal Requirements.  By
accepting the benefit of the Liens granted pursuant to the Security Documents,
each Secured Party hereby agrees to the terms of this paragraph (a).

 

(b)                                 The Lenders hereby, and any other Secured
Party by accepting the benefit of the Liens granted pursuant to the Security
Documents, irrevocably authorize the Administrative Agent to (i) release any
Lien granted to or held by the Administrative Agent upon any Collateral (a) upon
termination of this Agreement, termination of all Hedging Agreements with such
Persons (other than Hedging 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 the Issuing Lender in its sole discretion have been made), and
the payment in full of all outstanding Advances, Letter of Credit Obligations
and all other Secured Obligations payable under this Agreement and under any
other Credit Document; (b) constituting property sold or to be sold or disposed
of as part of or in connection with any disposition permitted under this
Agreement or any other Credit Document; (c) constituting property in which no
Credit Party owned an interest at the time the Lien was granted or at any time
thereafter; or (d) constituting property leased to any Credit Party under a
lease which has expired or has been terminated in a transaction permitted under
this Agreement or is about to expire and which has not been, and is not intended
by such Credit Party to be, renewed or extended; and (ii) release a Guarantor
from its obligations under a Guaranty and any other applicable Credit Document
if such Person ceases to be a Subsidiary as a result of a transaction permitted
under this Agreement. Upon the request of the Administrative Agent at any time,
the Secured Parties will confirm in writing the Administrative Agent’s authority
to release particular types or items of Collateral pursuant to this Section 8.8.

 

(c)                                  Notwithstanding anything contained in any
of the Credit Documents to the contrary, the Credit Parties, the Administrative
Agent, and each Secured Party hereby agree that no Secured Party shall have any
right individually to realize upon any of the Collateral or to enforce the
Guaranties, it being understood and agreed that all powers, rights and remedies
hereunder and under the Security Documents may be exercised solely by
Administrative Agent on behalf of the Secured Parties in accordance with the
terms hereof and the other Credit Documents.  By accepting the benefit of the
Liens granted pursuant to the Security Documents, each Secured Party not party
hereto hereby agrees to the terms of this paragraph (c).

 

Section 8.9                                    No Other Duties, etc.  Anything
herein to the contrary notwithstanding, none of the Bookrunners or Arrangers
listed on the cover page hereof shall have any powers, duties or
responsibilities under this Agreement or any of the other Credit Documents,
except in its capacity, as applicable, as the Administrative Agent, a Lender or
an Issuing Lender hereunder.

 

ARTICLE 9
MISCELLANEOUS

 

Section 9.1                                    Costs and Expenses.  The Borrower
agrees to pay on demand:

 

(a)                                 all reasonable out-of-pocket costs and
expenses of Administrative Agent (but not of other Lenders) in connection with
the preparation, execution, delivery, administration, modification, and
amendment of this Agreement, the Notes, and the other Credit Documents including
the fees and out-of-pocket expenses of outside counsel for Administrative Agent
(but not of other Lenders), with

 

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respect to advising the Administrative Agent as to its rights and
responsibilities under this Agreement, and

 

(b)                                 all out-of-pocket costs and expenses, if
any, of the Administrative Agent and each Lender (including outside counsel fees
and expenses of each Lender) in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of this Agreement, the Notes, and
the other Credit Documents.

 

Section 9.2                                    Indemnification; Waiver of
Damages.

 

(a)                                 INDEMNIFICATION.  EACH CREDIT PARTY HERETO
AGREES TO, JOINTLY AND SEVERALLY, INDEMNIFY AND HOLD HARMLESS THE ADMINISTRATIVE
AGENT, THE ARRANGER, THE ISSUING LENDER AND EACH LENDER AND EACH OF THEIR
AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND
ADVISORS (EACH, AN “INDEMNITEE”) FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES,
LOSSES, TAXES, LIABILITIES, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS’ FEES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED
AGAINST ANY INDEMNITEE, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY
REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION,
LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION THEREWITH) THE
CREDIT DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR
PROPOSED USE OF THE PROCEEDS OF THE ADVANCES, IN ALL CASES, WHETHER OR NOT
CAUSED BY OR ARISING, IN WHOLE OR IN PART, OUT OF THE COMPARATIVE, CONTRIBUTORY
OR SOLE NEGLIGENCE OF THE APPLICABLE INDEMNITEE, EXCEPT TO THE EXTENT SUCH
CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS FOUND IN A FINAL,
NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED
FROM SUCH INDEMNITEE’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.  IN THE CASE OF
AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS
SECTION 9.2 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH
INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY ANY CREDIT PARTY, ITS
DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNITEE OR ANY OTHER PERSON OR ANY
INDEMNITEE IS OTHERWISE A PARTY THERETO.  No Credit Party shall, without the
prior written consent of each Indemnitee affected thereby (which consent will
not be unreasonably withheld), settle any threatened or pending claim or action
that would give rise to the right of any Indemnitee to claim indemnification
hereunder unless such settlement (x) includes a full and unconditional release
of all liabilities arising out of such claim or action against such Indemnitee
and (y) does not include any statement as to or an admission of fault,
culpability or failure to act by or on behalf of any Indemnitee. THIS
SECTION 9.2(a) SHALL NOT APPLY WITH RESPECT TO TAXES OTHER THAN ANY TAXES THAT
REPRESENT LOSSES, CLAIMS, DAMAGES, ETC. ARISING FROM ANY NON-TAX CLAIM.

 

(b)                                 Waiver of Consequential Damages, Etc.  To
the fullest extent permitted by applicable law, no Credit Party shall assert,
agrees not to 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 Credit Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Advance or Letter of Credit or the use of the proceeds thereof.  No
Indemnitee referred to in subsection (a) above shall be liable for any damages
arising from the use by unintended recipients of any information or other
materials distributed to such unintended recipients by such Indemnitee through
telecommunications, electronic or other information transmission systems in

 

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connection with this Agreement or the other Credit Documents or the transactions
contemplated hereby or thereby other than for direct or actual damages resulting
from the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent jurisdiction.

 

(c)                                  Payments.  All payments required to be made
under this Section 9.2 shall be made within 10 days of demand therefor.

 

(d)                                 Survival.  Without prejudice to the survival
of any other agreement of the Credit Parties hereunder, the agreements and
obligations of the Credit Parties contained in this Section 9.2 shall survive
the termination of this Agreement, the termination of all Commitments, and the
payment in full of the Advances and all other amounts payable under this
Agreement.

 

Section 9.3                                    Waivers and Amendments.  No
amendment or waiver of any provision of this Agreement, the Notes, or any other
Credit Document (other than the Engagement Letter), nor consent to any departure
by the Borrower or any Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders and the
Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that:

 

(a)                                 no amendment, waiver, or consent shall,
unless in writing and signed by all the Lenders and the Borrower, do any of the
following: (i)  reduce the principal of, or interest on, the Notes,
(ii) postpone or extend any date fixed for any payment of principal of, or
interest on, the Notes, including, without limitation, the Maturity Date, or
(iii) change the number of Lenders which shall be required for the Lenders to
take any action hereunder or under any other Credit Document;

 

(b)                                 no amendment, waiver, or consent shall,
unless in writing and signed by all the Lenders and the Borrower, do any of the
following:  (i) waive any of the conditions specified in Section 3.1 or
Section 3.2, (ii) reduce any fees or other amounts payable hereunder or under
any other Credit Document (other than those specifically addressed above in this
Section 9.3), (iii) increase the aggregate Commitments, (iv) postpone or extend
any date fixed for any payment of any fees or other amounts payable hereunder
(other than those otherwise specifically addressed in this Section 9.3),
(v) amend Section 2.12(e), Section 7.6, this Section 9.3 or any other provision
in any Credit Document which expressly requires the consent of, or action or
waiver by, all of the Lenders, (vii) release any Guarantor from its obligation
under any Guaranty or, except as specifically provided in the Credit Documents
and as a result of transactions permitted by the terms of this Agreement,
release all or a material portion of the Collateral except as permitted under
Section 8.8(b); or (viii) amend the definitions of “Required Lenders” or
“Maximum Exposure Amount”;

 

(c)                                  no Commitment of a Lender or any
obligations of a Lender may be increased or extended without such Lender’s
written consent;

 

(d)                                 no amendment, waiver, or consent shall,
unless in writing and signed by the Administrative Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the
Administrative Agent under this Agreement or any other Credit Document; and

 

(e)                                  no amendment, waiver or consent shall,
unless in writing and signed by an Issuing Lender in addition to the Lenders
required above to take such action, affect the rights or duties of such Issuing
Lender under this Agreement or any other Credit Document.

 

Section 9.4                                    Severability.  In case one or
more provisions of this Agreement or the other Credit Documents shall be
invalid, illegal or unenforceable in any respect under any applicable law, the

 

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validity, legality, and enforceability of the remaining provisions contained
herein or therein shall not be affected or impaired thereby.

 

Section 9.5                                    Survival of Representations and
Obligations.  All representations and warranties contained in this Agreement or
made in writing by or on behalf of the Credit Parties in connection herewith
shall survive the execution and delivery of this Agreement and the other Credit
Documents, the making of the Advances or the issuance of any Letters of Credit
and any investigation made by or on behalf of the Lenders, none of which
investigations shall diminish any Lender’s right to rely on such representations
and warranties.  All obligations of the Borrower or any other Credit Party
provided for in Sections 2.10, 2.11, 2.13(c), 9.1 and 9.2 and all of the
obligations of the Lenders in Section 8.5 shall survive any termination of this
Agreement and repayment in full of the Obligations.

 

Section 9.6                                    Binding Effect.  This Agreement
shall become effective when it shall have been executed by the Borrower and the
Administrative Agent, and when the Administrative Agent shall have, as to each
Lender, either received a counterpart hereof executed by such Lender or been
notified by such Lender that such Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Administrative Agent,
and each Lender and their respective successors and assigns, except that neither
the Borrower nor any other Credit Party shall have the right to assign its
rights or delegate its duties under this Agreement or any interest in this
Agreement without the prior written consent of each Lender.

 

Section 9.7                                    Lender Assignments and
Participations.

 

(a)                                 Each Lender may assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Advances, its
Notes, and its Commitments); provided, however, that (i) each such assignment
shall be to an Eligible Assignee; (ii) except in the case of an assignment to
another Lender or an assignment of all of a Lender’s rights and obligations
under this Agreement, any such partial assignment shall be in an amount at least
equal to $5,000,000 unless the Administrative Agent and, so long as no Default
or Event of Default has occurred and is continuing, the Borrower otherwise
consents to a lower amount (each such consent not to be unreasonably withheld or
delayed); provided that the Borrower shall be deemed to have consented to such
lower amount unless it shall have objected thereto by written notice to the
Administrative Agent within five (5) Business Days after having received notice
thereof; (iii) each assignment of a Lender’s rights and obligations with respect
to Advances and its Commitments shall be of a constant, and not varying,
percentage of all of its rights and obligations under this Agreement as a Lender
and the Notes (other than rights of reimbursement and indemnity arising before
the effective date of such assignment) and shall be of an equal pro rata share
of the Assignor’s interest in the Advances and its Commitment; and (iv) the
parties to such assignment shall execute and deliver to the Administrative Agent
for its acceptance an Assignment and Acceptance, together with any Notes subject
to such assignment and the assignor or assignee Lender shall pay a processing
fee of $3,500; provided that such processing fee shall not be required for the
initial assignments made by Wells Fargo as a Lender in connection with the
initial syndication of its Commitments hereunder and such processing fee may be
waived at the sole discretion of the Administrative Agent.  Upon execution,
delivery, and acceptance of such Assignment and Acceptance and payment of the
processing fee, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits of a
Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations under
this Agreement.  Upon the consummation of any assignment pursuant to this
Section 9.7, the assignor, the Administrative Agent and the Borrower shall make
appropriate arrangements so that, if required, new Notes are issued to the
assignor and the assignee.  If the assignee is not incorporated under the laws
of the United States of America or a state thereof, it shall deliver to the
Borrower and the

 

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Administrative Agent certification as to exemption from deduction or withholding
of Taxes in accordance with Section 2.13(e).

 

(b)                                 The Administrative Agent shall maintain at
its address referred to in Section 9.9 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount of the
Advances owing to, each Lender from time to time (the “Register”).  The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Credit Parties, the Administrative Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement.

 

(c)                                  Upon its receipt of an Assignment and
Acceptance executed by the parties thereto, together with any Notes subject to
such assignment and payment of the processing fee, the Administrative Agent
shall, if such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register, and (iii) give prompt notice thereof to the parties thereto.

 

(d)                                 Each Lender may sell participations to one
or more Persons (other than a natural Person or the Borrower or any of the
Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Commitments or its Advances)
provided, however, that (i) such Lender’s obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Participant
shall be entitled to the benefit of the yield protection provisions contained in
Sections 2.10 and 2.11 and the right of set-off contained in Section 7.4, and
(iv) the Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower relating to its Advances and its Notes and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal of or
the rate at which interest is payable on such Advances or Notes, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Advances or Notes, or extending its Commitment).  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 Person it sells a participation to and the principal amounts (and stated
interest) of such Participant’s interest in the Advances or other obligations
under the Credit 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 such Participant or any information
relating to a participant’s interest in any commitments, loans, letters of
credit or its other obligations under any Credit Document) 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 U.S. Treasury Regulations.  The entries in the
Participant Register shall be conclusive absent manifest error, and such Lender
shall treat each Person whose name is recorded in the Participant Register as
the owner of such participation for all purposes of this Agreement
notwithstanding any notice to the contrary.  For the avoidance of doubt, the
Administrative Agent (in its capacity as Administrative Agent) shall have no
responsibility for maintaining a Participant Register.

 

(e)                                  Notwithstanding any other provision set
forth in this Agreement, any Lender may at any time assign and pledge all or any
portion of its Advances and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank.  No such assignment shall release the assigning Lender
from its obligations hereunder.

 

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(f)                                   Any Lender may furnish any information
concerning the Borrower or any of its Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of the
following Section 9.8.

 

Section 9.8                                    Confidentiality.  The
Administrative Agent, each Issuing Lender, and each Lender (each a “Lending
Party”) agree to keep confidential any information furnished or made available
to it by any Credit Party pursuant to this Agreement and identified by such
Credit Party as proprietary or confidential; provided that nothing herein shall
prevent any Lending Party from disclosing such information (a) to any other
Lending Party or any Affiliate of any Lending Party, or any officer, director,
employee, agent, or advisor of any Lending Party or Affiliate of any Lending
Party for purposes of administering, negotiating, considering, processing,
implementing, syndicating, assigning, or evaluating the credit facilities
provided herein and the transactions contemplated hereby, (b) to any other
Person if directly incidental to the administration of the credit facilities
provided herein, (c) as required by any Legal Requirement, (d) upon the order of
any court or administrative agency, (e) upon the request or demand of any
regulatory agency or authority, (f) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any other Lending Party prohibited by this Agreement, (g) in
connection with any litigation relating to this Agreement or any other Credit
Document to which such Lending Party or any of its Affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any right or
remedy under this Agreement or any other Credit Document, (i) on a confidential
basis to (i)  any rating agency in connection with rating the Borrower or its
Subsidiaries or the credit facilities provided for herein or (ii) the CUSIP
Service Bureau or any similar agency in connection with the issuance and
monitoring of CUSIP numbers with respect to the credit facilities provided for
herein, and (j) to any actual or proposed participant or assignee, in each case,
subject to provisions similar to those contained in this Section 9.8. 
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, nothing in this
Agreement shall (a) restrict any Lending Party from providing information to any
bank or other regulatory or governmental authorities, including the Federal
Reserve Board and its supervisory staff; (b) require or permit any Lending Party
to disclose to any Credit Party that any information will be or was provided to
the Federal Reserve Board or any of its supervisory staff; or (c) require or
permit any Lending Party to inform any Credit Party of a current or upcoming
Federal Reserve Board examination or any nonpublic Federal Reserve Board
supervisory initiative or action.

 

Section 9.9                                    Notices, Etc.

 

(a)                                 Subject to clause (b) below, all notices and
other communications (other than Notices of Borrowing and Notices of
Continuation or Conversion, which are governed by Article 2 of this Agreement)
shall be in writing and hand delivered with written receipt, telecopied, sent by
facsimile (with a hard copy sent as otherwise permitted in this Section 9.9),
sent by a nationally recognized overnight courier, or sent by certified mail,
return receipt requested as follows: if to a Credit Party, as specified on
Schedule I, if to the Administrative Agent or the Issuing Lender, at its credit
contact specified under its name on Schedule I, and if to any Lender at is
credit contact specified in its Administrative Questionnaire.  Each party may
change its notice address by written notification to the other parties.  All
such notices and communications shall be effective when delivered, except that
notices and communications to any Lender or the Issuing Lender pursuant to
Article 2 shall not be effective until received and, in the case of telecopy,
such receipt is confirmed by such Lender or Issuing Lender, as applicable,
verbally or in writing.

 

(b)                                 Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communications
pursuant to procedures approved by the Administrative Agent; provided that the
foregoing shall not apply to notices pursuant to Article 2 or Section 5.2(g) or
(k) of this Agreement unless otherwise agreed by the Administrative Agent and
the applicable Lender. The

 

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Administrative Agent or the Borrower may, in their discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it; provided that approval of such procedures
may be limited to particular notices or communications.

 

Section 9.10                             Usury Not Intended.  It is the intent
of each Credit Party and each Lender in the execution and performance of this
Agreement and the other Credit Documents to contract in strict compliance with
applicable usury laws, including conflicts of law concepts, governing the
Advances of each Lender including such applicable laws of the State of New York,
if any, and the United States of America from time to time in effect.  In
furtherance thereof, the Lenders and the Credit Parties stipulate and agree that
none of the terms and provisions contained in this Agreement or the other Credit
Documents shall ever be construed to create a contract to pay, as consideration
for the use, forbearance or detention of money, interest at a rate in excess of
the Maximum Rate and that for purposes of this Agreement “interest” shall
include the aggregate of all charges which constitute interest under such laws
that are contracted for, charged or received under this Agreement; and in the
event that, notwithstanding the foregoing, under any circumstances the aggregate
amounts taken, reserved, charged, received or paid on the Advances, include
amounts which by applicable law are deemed interest which would exceed the
Maximum Rate, then such excess shall be deemed to be a mistake and each Lender
receiving same shall credit the same on the principal of its Notes (or if such
Notes shall have been paid in full, refund said excess to the Borrower).  In the
event that the maturity of the Notes are accelerated by reason of any 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 may never include more than the Maximum
Rate, and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable Notes
(or, if the applicable Notes shall have been paid in full, refunded to the
Borrower of such interest).  In determining whether or not the interest paid or
payable under any specific contingencies exceeds the Maximum Rate, the Credit
Parties and the Lenders shall to the maximum extent permitted under applicable
law amortize, prorate, allocate and spread in equal parts during the period of
the full stated term of the Notes all amounts considered to be interest under
applicable law at any time contracted for, charged, received or reserved in
connection with the Obligations.  The provisions of this Section shall control
over all other provisions of this Agreement or the other Credit Documents which
may be in apparent conflict herewith.

 

Section 9.11                             Usury Recapture.  In the event the rate
of interest chargeable under this Agreement at any time is greater than the
Maximum Rate, the unpaid principal amount of the Advances shall bear interest at
the Maximum Rate until the total amount of interest paid or accrued on the
Advances equals the amount of interest which would have been paid or accrued on
the Advances if the stated rates of interest set forth in this Agreement had at
all times been in effect. In the event, upon payment in full of the Advances,
the total amount of interest paid or accrued under the terms of this Agreement
and the Advances is less than the total amount of interest which would have been
paid or accrued if the rates of interest set forth in this Agreement had, at all
times, been in effect, then the Borrower shall, to the extent permitted by
applicable law, pay the Administrative Agent for the account of the Lenders an
amount equal to the difference between (i) the lesser of (A) the amount of
interest which would have been charged on its Advances if the Maximum Rate had,
at all times, been in effect and (B) the amount of interest which would have
accrued on its Advances if the rates of interest set forth in this Agreement had
at all times been in effect and (ii) the amount of interest actually paid under
this Agreement on its Advances.  In the event the Lenders ever receive, collect
or apply as interest any sum in excess of the Maximum Rate, such excess amount
shall, to the extent permitted by law, be applied to the reduction of the
principal balance of the Advances, and if no such principal is then outstanding,
such excess or part thereof remaining shall be paid to the Borrower.

 

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Section 9.12                             Governing Law; Service of Process. 
This Agreement, the Notes and the other Credit Documents (unless otherwise
expressly provided therein) shall be deemed a contract under, and shall be
governed by, and construed and enforced in accordance with, the laws of the
State of New York without regard to conflicts of laws principles (other than
Sections 5-1401 and 5-1402 of the General Obligations Law of the State of New
York).  Each Letter of Credit shall be governed by either (i) the Uniform
Customs and Practice for Documentary Credits (2007 Revision), International
Chamber of Commerce Publication No. 600, or (ii) the International Standby
Practices (ISP98), International Chamber of Commerce Publication No. 590, in
either case, including any subsequent revisions thereof approved by a Congress
of the International Chamber of Commerce and adhered to by the Issuing Lender. 
The Borrower hereby agrees that service of copies of the summons and complaint
and any other process which may be served in any such action or proceeding may
be made by mailing or delivering a copy of such process to the Borrower at the
address set forth for the Borrower in this Agreement.  Nothing in this
Section shall affect the rights of any Lender to serve legal process in any
other manner permitted by the law or affect the right of any Lender to bring any
action or proceeding against the Borrower or its Property in the courts of any
other jurisdiction.

 

Section 9.13                             Submission to Jurisdiction.  The
parties hereto hereby agree that any suit or proceeding arising in respect of
this Agreement or any other Credit Document, or any of the matters contemplated
hereby or thereby will be tried exclusively in the U.S. District Court for the
Southern District of New York or, if such court does not have subject matter
jurisdiction, in any state court located in the City and County of New York, and
the parties hereto hereby agree to submit to the exclusive jurisdiction of, and
venue in, such court.  Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
applicable law.  The parties hereto hereby agree that service of any process,
summons, notice or document by registered mail addressed to the applicable
parties will be effective service of process against such party for any action
or proceeding relating to any such dispute.  Each party hereto hereby
irrevocably and unconditionally waives, to the fullest extent permitted by
applicable Legal Requirement, any objection that it may now or hereafter have to
the laying of venue of any action or proceeding arising out of or relating to
this Agreement in any court referred to in this Section.  Each of the parties
hereto irrevocably waives, to the fullest extent permitted by applicable Legal
Requirement, the defense of any inconvenient forum to the maintenance of such
action or proceeding in any such court.

 

Section 9.14                             Execution in Counterparts.  This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

 

Section 9.15                             Waiver of Jury Trial.  THE BORROWER,
THE LENDERS, THE ISSUING LENDER, AND THE ADMINISTRATIVE AGENT HEREBY ACKNOWLEDGE
THAT THEY HAVE BEEN REPRESENTED BY AND HAVE CONSULTED WITH COUNSEL OF THEIR
CHOICE, AND HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE
ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

Section 9.16                             USA Patriot Act.  Each Lender that is
subject to the Patriot Act and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies each Credit Party that pursuant to the
requirements of the Patriot Act it is required to obtain, verify and record
information that identifies such Credit Party, which information includes the
name and address of such Credit Party and

 

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other information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Credit Party in accordance with the Patriot Act.

 

Section 9.17                             Enduring Security.  The parties hereto
acknowledge and agree that:

 

(a)                                 it is the parties intent that the Liens
created or intended to be created under the Credit Documents secure, among other
things, all obligations of the Credit Parties owing to any Swap Counterparty
under any Hedging Arrangement even after such Swap Counterparty ceases to be a
Lender or an Affiliate of a Lender hereunder; provided, however, as provided in
the definition of “Swap Counterparty”, (i) when any Swap Counterparty assigns or
otherwise transfers any interest held by it under any Hedging Arrangement to any
other Person pursuant to the terms of such agreement, the obligations thereunder
shall be secured by such Liens only if such assignee or transferee is also then
a Lender or an Affiliate of a Lender and (ii) if a Swap Counterparty ceases to
be a Lender hereunder or an Affiliate of a Lender hereunder, obligations owing
to such Swap Counterparty shall be secured by such Liens only to the extent such
obligations arise from transactions under such individual Hedging Arrangements
(and not the Master Agreement between such parties) entered into prior to the
Effective Date or at the time such Swap Counterparty was a Lender hereunder or
an Affiliate of a Lender hereunder, without giving effect to any extension,
increases, or modifications thereof which are made after such Swap Counterparty
ceases to be a Lender hereunder or an Affiliate of a Lender hereunder; and

 

(b)                                 the Borrower’s and its Subsidiaries’ ability
to enter into, or otherwise be party to, Hedging Arrangements are limited by the
terms under this Agreement, including the limitations in Section 6.15 above
which restricts, among other things, the Borrower’s and its Subsidiaries’
ability to enter into, or otherwise be party to, secured Hedging Arrangements
with counterparties that are not Swap Counterparties or Hedging Arrangements
that have margin call requirements.

 

Section 9.18                             Keepwell.  Each Qualified ECP Guarantor
hereby jointly and severally absolutely, unconditionally and irrevocably
undertakes to provide such funds or other support as may be needed from time to
time by each other Credit Party to honor all of its obligations under this
Agreement in respect of Swap Obligations (provided, however, that each Qualified
ECP Guarantor shall only be liable under this Section 9.18 for the maximum
amount of such liability that can be hereby incurred without rendering its
obligations under this Section 9.18, or otherwise under this Agreement, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount). The obligations of each Qualified ECP Guarantor
under this Section shall remain in full force and effect until the termination
of all Commitments and payment in full of all Secured Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit (other than Letters of Credit as to which other arrangements
satisfactory to the Administrative Agent and the Issuing Lender have been made).
Each Qualified ECP Guarantor intends that this Section 9.18 constitute, and this
Section 9.18 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 9.19                             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 Credit Document), the Borrower acknowledges and agrees,
and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent,
the Arranger, and the Lenders are arm’s-length commercial transactions between
the Borrower and its Affiliates, on the one hand, and the Administrative Agent,
the Arranger, and the Lenders, on the other hand, (B) the Borrower has consulted
its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate, and (C) the Borrower is capable of evaluating, and
understands and accepts, the terms, risks and conditions of the transactions

 

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contemplated hereby and by the other Credit Documents; (ii) (A) the
Administrative Agent, the Arranger and each Lender is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrower or any of its Affiliates, or any other Person and
(B) neither the Administrative Agent, the Arranger nor any Lender has any
obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Credit Documents; and (iii) the Administrative Agent,
the Arranger and the Lenders and their respective Affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the
Borrower and its Affiliates, and neither the Administrative Agent, the Arranger,
nor any Lender has any obligation to disclose any of such interests to the
Borrower or its Affiliates.  To the fullest extent permitted by law, the
Borrower hereby waives and releases any claims that it may have against the
Administrative Agent, the Arranger or any Lender with respect to any breach or
alleged breach of agency or fiduciary duty in connection with any aspect of any
transaction contemplated hereby.

 

Section 9.20                             Amendment and Restatement.  This
Agreement represents a full and complete amendment and restatement of the
Existing Credit Agreement, and the Existing Credit Agreement is deemed replaced
hereby as of the effectiveness of this Agreement.  The indebtedness under the
Existing Credit Agreement continues under this Agreement and the execution of
this Agreement does not indicate a payment, satisfaction, novation, or discharge
thereof.  All security and support for the indebtedness under the Existing
Credit Agreement continues to secure and support the Obligations hereunder.

 

Section 9.21                             Integration.  THIS WRITTEN AGREEMENT
AND THE CREDIT DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES AND SUPERSEDE ALL PRIOR UNDERSTANDINGS AND
AGREEMENTS, WHETHER WRITTEN OR ORAL, RELATING TO THE TRANSACTIONS PROVIDED FOR
HEREIN AND THEREIN.  ADDITIONALLY, THIS AGREEMENT AND THE CREDIT DOCUMENTS
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

 

IN EXECUTING THIS AGREEMENT, EACH CREDIT PARTY HERETO HEREBY WARRANTS AND
REPRESENTS IT IS NOT RELYING ON ANY STATEMENT OR REPRESENTATION OTHER THAN THOSE
IN THIS AGREEMENT AND IS RELYING UPON ITS OWN JUDGMENT AND ADVICE OF ITS
ATTORNEYS.

 

[Remainder of this page intentionally left blank.  Signature pages follow.]

 

86

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EXECUTED as of the date first above written.

 

 

 

BORROWER:

 

 

 

 

 

TRIANGLE USA PETROLEUM CORPORATION

 

 

 

 

 

By:

/s/ Jonathan Samuels

 

Name:

Jonathan Samuels

 

Title:

President

 

[SIGNATURE PAGE TO A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM CORPORATION]-

 

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ADMINISTRATIVE AGENT/LENDERS:

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Issuing Lender,
and a Lender

 

 

 

 

 

By:

/s/ Joseph T. Rottinghaus

 

Name:

Joseph T. Rottinghaus

 

Title:

Vice President

 

[SIGNATURE PAGE TO A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM CORPORATION]-

 

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LENDERS:

 

 

 

BANK OF AMERICA, N.A., as a Lender

 

 

 

 

 

By:

/s/ Jason Zilewicz

 

Name:

Jason Zilewicz

 

Title:

Assistant Vice President

 

[SIGNATURE PAGE TO A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM CORPORATION]-

 

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THE BANK OF NOVA SCOTIA, as a Lender

 

 

 

 

 

By:

/s/ Terry Donovan

 

Name:

Terry Donovan

 

Title:

Managing Director

 

[SIGNATURE PAGE TO A&R CREDIT AGREEMENT — TRIANGLE USA PETROLEUM CORPORATION]-

 

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