exv10w11



 




Exhibit 10.11




Execution Version






 

 






CREDIT AGREEMENT




Dated as of




June 22, 2007




among




NEWFIELD EXPLORATION COMPANY




The Lenders Party Hereto




and




JPMORGAN CHASE BANK, N.A.

as Administrative Agent and as Issuing Bank




 






WACHOVIA BANK, NATIONAL ASSOCIATION

as Syndication Agent




 






THE ROYAL BANK OF SCOTLAND plc, CALYON NEW YORK BRANCH,

WELLS FARGO BANK, N.A. and BMO CAPITAL MARKETS FINANCING, INC.

as Documentation Agents

 






J. P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Lead Arranger




 

 








 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page:	 
	 
	ARTICLE I DEFINITIONS	 	 	1	 
	Section 1.01	 	Defined Terms
	 	 	1	 
	Section 1.02	 	Reserved
	 	 	18	 
	Section 1.03	 	Terms Generally
	 	 	18	 
	Section 1.04	 	Accounting Terms; GAAP
	 	 	19	 
	 	 	 
	 	 	 	 
	ARTICLE II THE CREDITS	 	 	19	 
	Section 2.01	 	Commitments
	 	 	19	 
	Section 2.02	 	Commitment Increase
	 	 	19	 
	Section 2.03	 	Loans and Borrowings
	 	 	22	 
	Section 2.04	 	Requests for Borrowings
	 	 	22	 
	Section 2.05	 	Letters of Credit
	 	 	23	 
	Section 2.06	 	Funding of Borrowings
	 	 	27	 
	Section 2.07	 	Interest Elections
	 	 	27	 
	Section 2.08	 	Termination and Reduction of Commitments
	 	 	29	 
	Section 2.09	 	Repayment of Loans; Evidence of Debt
	 	 	29	 
	Section 2.10	 	Prepayment of Loans
	 	 	30	 
	Section 2.11	 	Fees
	 	 	30	 
	Section 2.12	 	Interest
	 	 	31	 
	Section 2.13	 	Alternate Rate of Interest
	 	 	32	 
	Section 2.14	 	Increased Costs
	 	 	33	 
	Section 2.15	 	Break Funding Payments
	 	 	34	 
	Section 2.16	 	Taxes
	 	 	34	 
	Section 2.17	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	36	 
	Section 2.18	 	Mitigation Obligations; Replacement of Lenders
	 	 	37	 
	 	 	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES	 	 	38	 
	Section 3.01	 	Organization; Powers
	 	 	38	 
	Section 3.02	 	Authorization; Enforceability
	 	 	38	 
	Section 3.03	 	Governmental Approvals; No Conflicts
	 	 	38	 
	Section 3.04	 	Financial Condition; No Material Adverse Change
	 	 	39	 
	Section 3.05	 	Properties
	 	 	39	 
	Section 3.06	 	Litigation and Environmental Matters
	 	 	39	 
	Section 3.07	 	Compliance with Laws
	 	 	39	 
	Section 3.08	 	Investment Company Status
	 	 	39	 
	Section 3.09	 	Taxes
	 	 	39	 
	Section 3.10	 	ERISA
	 	 	40	 
	Section 3.11	 	Disclosure
	 	 	40	 
	 	 	 
	 	 	 	 
	ARTICLE IV CONDITIONS	 	 	40	 
	Section 4.01	 	Effective Date
	 	 	40	 
	Section 4.02	 	Each Credit Event
	 	 	41	 
	 	 	 
	 	 	 	 
	ARTICLE V AFFIRMATIVE COVENANTS	 	 	42	 
	Section 5.01	 	Financial Statements and Other Information
	 	 	42	 
	Section 5.02	 	Notices of Material Events
	 	 	44	 






i









 






	 	 	 	 	 	 	 
	 	 	 	 	Page:	 
	 
	Section 5.03	 	Existence; Conduct of Business
	 	 	44	 
	Section 5.04	 	Payment of Obligations
	 	 	44	 
	Section 5.05	 	Maintenance of Properties; Insurance
	 	 	44	 
	Section 5.06	 	Books and Records; Inspection Rights
	 	 	45	 
	Section 5.07	 	Compliance with Laws
	 	 	45	 
	Section 5.08	 	Use of Proceeds and Letters of Credit
	 	 	45	 
	Section 5.09	 	Reserved
	 	 	45	 
	Section 5.10	 	Principal Business
	 	 	45	 
	Section 5.11	 	Subsidiary Guaranties
	 	 	45	 
	 	 	 
	 	 	 	 
	ARTICLE VI NEGATIVE COVENANTS	 	 	46	 
	Section 6.01	 	Indebtedness
	 	 	46	 
	Section 6.02	 	Liens
	 	 	46	 
	Section 6.03	 	Fundamental Changes
	 	 	47	 
	Section 6.04	 	Financial Covenants
	 	 	48	 
	Section 6.05	 	Investments, Loans, Advances and Guarantees
	 	 	48	 
	Section 6.06	 	Swap Agreements
	 	 	49	 
	Section 6.07	 	Transactions with Affiliates
	 	 	49	 
	Section 6.08	 	Restrictive Agreements
	 	 	49	 
	Section 6.09	 	Reserved
	 	 	49	 
	Section 6.10	 	Designation of Unrestricted Subsidiaries
	 	 	49	 
	Section 6.11	 	New Unrestricted Subsidiaries
	 	 	50	 
	Section 6.12	 	Restricted Payments
	 	 	50	 
	Section 6.13	 	Preferred Stock
	 	 	51	 
	Section 6.14	 	Sale of Oil and Gas Properties
	 	 	51	 
	Section 6.15	 	Sale Leaseback Transactions
	 	 	51	 
	Section 6.16	 	Sale or Discount of Receivables
	 	 	51	 
	Section 6.17	 	Environmental Matters
	 	 	51	 
	 	 	 
	 	 	 	 
	ARTICLE VII EVENTS OF DEFAULT	 	 	51	 
	 	 	 
	 	 	 	 
	ARTICLE VIII THE ADMINISTRATIVE AGENT	 	 	54	 
	Section 8.01	 	Administrative Agent
	 	 	54	 
	Section 8.02	 	The Arranger, Sole Bookrunner, Syndication Agent and
Documentation Agents
	 	 	56	 
	 	 	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS	 	 	56	 
	Section 9.01	 	Notices
	 	 	56	 
	Section 9.02	 	Waivers; Amendments
	 	 	57	 
	Section 9.03	 	Expenses; Indemnity; Damage Waiver
	 	 	58	 
	Section 9.04	 	Successors and Assigns
	 	 	59	 
	Section 9.05	 	Survival
	 	 	62	 
	Section 9.06	 	Counterparts; Integration; Effectiveness
	 	 	63	 
	Section 9.07	 	Severability
	 	 	63	 
	Section 9.08	 	Governing Law; Jurisdiction; Consent to Service of Process
	 	 	63	 
	Section 9.09	 	WAIVER OF JURY TRIAL.
	 	 	64	 
	Section 9.10	 	Headings
	 	 	64	 
	Section 9.11	 	Confidentiality
	 	 	64	 
	Section 9.12	 	Interest Rate Limitation
	 	 	65	 
	Section 9.13	 	Right of Setoff
	 	 	65	 
	Section 9.14	 	USA Patriot Act Notice
	 	 	66	 






ii









 






	 	 	 
	Schedules:
	 	 
	 
	 	 
	Schedule 1.01
	 	Existing Letters of Credit
	Schedule 2.01
	 	Commitments
	Schedule 3.06
	 	Disclosed Matters
	Schedule 6.02
	 	Liens
	Schedule 6.08
	 	Existing Restrictive Agreements
	 
	 	 
	Exhibits:
	 	 
	 
	 	 
	Exhibit A
	 	Form of Assignment and Assumption
	Exhibit B
	 	Form of Notice of Commitment Increase
	Exhibit C
	 	Form of Legal Opinion
	Exhibit D
	 	Form of Subsidiary Guaranty
	Exhibit E
	 	Form of Promissory Note
	Exhibit F
	 	Form of Joinder Agreement






iii











 





     CREDIT AGREEMENT dated as of June 22, 2007 among Newfield Exploration Company, a Delaware
corporation, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent and
as Issuing Bank.



     The parties hereto agree as follows:



ARTICLE I

DEFINITIONS




     Section 1.01 Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:



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



     “Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to
(a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.



     “Administrative Agent” means JPMorgan Chase Bank, N.A. in its capacity as
administrative agent for the Lenders hereunder.



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



     “Affiliate” means, with respect to a specified Person, another Person that directly,
or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified.



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



     “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.



     “Applicable Margin” means, for any day, with respect to any Eurodollar Loan, or with
respect to any Letter of Credit or commitment fees payable hereunder, as the case may be, the
Applicable Margin per annum set forth below under the caption “Eurodollar Spread,” “Commitment Fee
Rate” or “Letter of Credit Rate,” as the case may be, based upon the ratings by Moody’s, S&P and
Fitch, respectively, applicable on such date to the Index Debt:



1









 





	 	 	 	 	 	 	 	 	 	 	 	 	 
	Index Debt Ratings	 	Eurodollar	 	Commitment Fee	 	Letter of Credit
	(S&P/Moody’s/Fitch):	 	Spread	 	Rate	 	Rate
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Category 1

BBB/Baa2/BBB or higher

	 	 	0.50	%	 	 	0.125	%	 	 	0.50	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Category 2

BBB-/Baa3/BBB-

	 	 	0.625	%	 	 	0.15	%	 	 	0.625	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Category 3

BB+/Ba1/BB+

	 	 	0.875	%	 	 	0.175	%	 	 	0.875	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Category 4

BB/Ba2/BB

	 	 	1.125	%	 	 	0.20	%	 	 	1.125	%
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Category 5

BB-/Ba3/BB- or lower

	 	 	1.375	%	 	 	0.25	%	 	 	1.375	%






     For purposes of the foregoing, (i) if none of Moody’s, S&P or Fitch shall have in effect
a rating for the Index Debt (other than by reason of the circumstances referred to in the last
sentence of this definition), then such Rating Agencies shall be deemed to have established a
rating in Category 5; (ii) if only one of Moody’s, S&P and Fitch shall have in effect a rating for
the Index Debt, or if only two of Moody’s, S&P and Fitch shall have in effect a rating for the
Index Debt (other than by reason of the circumstances referred to in the last sentence of this
definition), and such ratings fall within the same Category, then the other two Rating Agencies, or
other rating agency, shall be deemed to have established a rating in the same Category as such
agency or agencies; (iii) if only two of Moody’s, S&P and Fitch shall have in effect a rating for
the Index Debt (other than by reason of the circumstances referred to in the last sentence of this
definition), and such ratings shall fall within different Categories, the Applicable Rate shall be
based on the higher of the two ratings; (iv) if each of Moody’s, S&P and Fitch shall have in effect
a rating for the Index Debt, and such ratings shall fall within different Categories, the
Applicable Rate shall be based on (x) the majority rating, if two of such ratings fall within the
same Category, or (y) the middle rating, if all three of such ratings fall within different
Categories, (v) if the ratings established or deemed to have been established by Moody’s, S&P
and/or Fitch for the Index Debt shall be changed (other than as a result of a change in the rating
system of Moody’s, S&P or Fitch), such change shall be effective as of the date on which it is
first announced by the applicable rating agency, irrespective of when notice of such change shall
have been furnished by the Borrower to the Administrative Agent and the Lenders pursuant to Section
5.01 or otherwise. Each change in the Applicable Rate shall apply during the period commencing on
the effective date of such change and ending on the date immediately preceding the effective date
of the next such change. If the rating system of Moody’s, S&P or Fitch shall



2









 




change, or if any such rating agency shall cease to be in the business of rating corporate
debt obligations, the Borrower and the Lenders shall negotiate in good faith to amend this
definition to reflect such changed rating system or the unavailability of ratings from such rating
agency and, pending the effectiveness of any such amendment, the Applicable Rate shall be
determined by reference to the rating most recently in effect prior to such change or cessation.




     “Applicable Percentage” means, with respect to any Lender, the percentage of the
Commitments represented by such Lender’s Commitment. If the Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any Assignment and Assumptions.



     “Approved Fund” has the meaning assigned to such term in Section 9.04.



     “Arranger” means J.P. Morgan Securities Inc.



     “Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required by Section 9.04),
and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by
the Administrative Agent.



     “Attributable Obligation” means, with respect to any Sale Leaseback Transaction as of
any particular time, the present value at such time discounted at the rate of interest implicit in
the terms of the lease of the obligations of the lessee under such lease for net rental payments
during the remaining term of the lease (including any period for which such lease has been extended
or may, at the option of the Borrower or any Subsidiary, be extended).



     “Availability Period” means the period from and including the Effective Date to but
excluding the earlier of the Maturity Date and the date of termination of the Commitments.



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



     “Borrower” means Newfield Exploration Company, a Delaware corporation.



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



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



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



     “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or



3









 







personal property, or a combination thereof, which obligations are required to be classified
and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.



     “Certifying Officer” has the meaning set forth in Section 5.01(c).



     “Change in Control” means (a) the acquisition of beneficial ownership, directly or
indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and
the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of
Equity Interests representing more than 30% of the aggregate ordinary voting power represented by
the issued and outstanding Equity Interests of the Borrower; or (b) occupation of a majority of the
seats (other than vacant seats) on the board of directors of the Borrower by Persons who were
neither (i) nominated by the board of directors of the Borrower or a committee thereof nor (ii)
appointed by directors so nominated.



     “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Banks (or, for purposes of Section 2.14(b), by any lending
office of such Lender or by such Lender’s or the Issuing Banks’ holding companies, if any) with any
request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.



     “CI Lender” has the meaning set forth in Section 2.02(a).



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



     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans and to acquire participations in Letters of Credit hereunder, as such commitment may be (a)
increased from time to time pursuant to Section 2.02, (b) reduced from time to time pursuant to
Section 2.08, or (c) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on
Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is
$1,250,000,000.



     “Commitment Increase” has the meaning set forth in Section 2.02(a).



     “Commitment Increase Effective Date” has the meaning set forth in Section 2.02(b).



     “Consolidated EBITDAX” means, with respect to the Borrower and its Restricted
Subsidiaries, for any period, Consolidated Net Income for that period, plus (a) to the
extent included in determining Consolidated Net Income for that period, (i) the aggregate amount of
Consolidated Interest Expense for that period, (ii) the aggregate amount of letter of credit fees
paid by the Borrower and its Restricted Subsidiaries during that period, (iii) the aggregate amount
of income tax expense of the Borrower and its Restricted Subsidiaries for that period, (iv)
non-cash extraordinary losses, (v) losses on the disposition of assets, (vi) losses or charges
under Statement of Financial Accounting Standard 133 (and any statements replacing, modifying



4









 







or superceding such statement) resulting from the net change in the Borrower’s (or any
Restricted Subsidiary’s) mark-to-market portfolio of commodity price risk management activities and
(vii) all amounts attributable to depreciation, depletion, amortization, ceiling test write-downs
and other non-cash charges and expenses of the Borrower and its Restricted Subsidiaries for that
period and (viii) exploration and abandonment expenses, minus (b) to the extent included in
determining Consolidated Net Income for that period, (i) non-cash extraordinary income, (ii) gains
on the disposition of assets, and (iii) non-cash gains under Statement of Financial Accounting
Standard 133 (and any statements replacing, modifying or superceding such statement) resulting from
the net change in Borrower’s (or any Restricted Subsidiary’s) mark-to-market portfolio of commodity
price risk management activities during that period, in each case determined on a consolidated
basis of the Borrower and its Restricted Subsidiaries in accordance with GAAP and without
duplication of amounts; provided, however, non-cash income or gains in respect of deferred revenue,
production payments and other matters included in the definition of Indebtedness shall not be
subtracted from Consolidated Net Income under clause (b).



     “Consolidated Interest Expense” means, with respect to the Borrower and its Restricted
Subsidiaries on a consolidated basis for any period, the sum of (i) gross interest expense (whether
cash or accrued) of the Borrower and its Restricted Subsidiaries for such period on a consolidated
basis in accordance with GAAP, including to the extent included in interest expense in accordance
with GAAP (x) the amortization of debt discounts and (y) the portion of any payments or accruals
with respect to Capital Lease Obligations allocable to interest expense and (ii) capitalized
interest of the Borrower and its Restricted Subsidiaries on a consolidated basis in accordance with
GAAP.



     “Consolidated Net Income” means, for any period, net income of the
Borrower and its Restricted Subsidiaries determined on a consolidated basis in accordance with
GAAP.



     “Consolidated Net Tangible Assets” means, on any date, the aggregate amount of total
assets of the Borrower and its Restricted Subsidiaries, minus (a) all current liabilities of the
Borrower and its Restricted Subsidiaries (excluding current liabilities included in the definition
of Indebtedness and excluding current liabilities attributable to commodities derivative contracts,
net of associated taxes), (b) all goodwill of the Borrower and its Restricted Subsidiaries and (c)
current and long-term assets attributable to commodities derivative contracts, net of associated
taxes, all determined on a consolidated basis in accordance with GAAP.



     “Consolidated Tangible Net Worth” means, at any date, (i) the consolidated
shareholders’ equity of Borrower and its Restricted Subsidiaries (determined in accordance with
GAAP); less (ii) the amount of consolidated intangible assets of Borrower and its Restricted
Subsidiaries, provided, that to the extent oil and gas mineral leases are classified as
intangible assets under GAAP, for purposes of this definition, those assets will be treated as
tangible assets; less (iii) the amount of such consolidated shareholders’ equity attributable to
non-cash gains under Statement of Financial Accounting Standard 133 (and any statements replacing,
modifying or superceding such statement) resulting from the net change in Borrower’s (or any
Restricted Subsidiary’s) mark-to-market portfolio of commodity price risk management activities;
plus (iv) the aggregate amount of any non-cash write downs under Statement of Financial Accounting
Standard Nos. 19, 109, 142, and 144, (and any statements replacing, modifying or superceding such
statement), on



5









 







a consolidated basis, by Borrower and its Restricted Subsidiaries after December 31,
2006, net of associated taxes; plus (v) the amount of such consolidated shareholders’ equity attributable
to losses or charges under Statement of Financial Accounting Standard 133 (and any statements
replacing, modifying or superceding such statement) resulting from the net change in the Borrower’s
(or any Restricted Subsidiary’s) mark-to-market portfolio of commodity price risk management
activities.



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



     “Credit Exposure” means, with respect to any Lender at any time, the sum of the
outstanding principal amount of such Lender’s Loans and its LC Exposure at such time.



     “Default” means any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.



     “Disclosed Matters” means the actions, suits and proceedings and the environmental
matters disclosed in Schedule 3.06, disclosed in any filing with the Securities and Exchange
Commission or as otherwise disclosed in writing from time to time to Administrative Agent.



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



     “Effective Date” means the date on which the Administrative Agent believes the
conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).



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



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



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



6









 





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



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



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



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



     “Events of Default” has the meaning set forth in Article VII.



     “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Banks or any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) income or franchise taxes imposed on or measured by such recipient’s
net income by the United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the case of any Lender,
in which its applicable lending office is located, (b) any branch profits taxes imposed by the
United States of America or any similar tax imposed by any other jurisdiction in which the Borrower
is located and (c) in the case of a Foreign Lender, any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
whether upon execution or upon assignment (or designates a new lending office) or is attributable
to such Foreign Lender’s failure to comply with Section 2.16(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.16(a).



7









 





     “Existing Credit Agreement” means that certain Credit Agreement dated as of December
2, 2005, among the Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent and as Issuing
Bank, Wachovia Bank, National Association, as Syndication Agent, Bank of America, N.A., The Royal
Bank of Scotland plc, Calyon New York Branch and Harris Nesbitt Financing, Inc., as Documentation
Agents, and the lenders parties thereto.



     “Existing Letters of Credit” means the letters of credit described on Schedule 1.01
that were issued by JPMorgan Chase Bank under the Existing Credit Agreement and that shall be
transferred to and deemed issued under this Agreement, as such letters of credit may be renewed or
amended from time to time.



     “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.



     “Financial Officer” means, with respect to any Person, the chief financial officer,
treasurer or principal accounting officer. The term “Financial Officer” without reference to a
Person shall mean a Financial Officer of the Borrower.



     “Fitch” means Fitch, Inc.



     “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this definition, the United
States of America, each state thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.



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



     “Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.



     “Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or
otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the purchase of) any security
for the payment thereof, (b) to purchase or lease property, securities or services for the purpose
of assuring the owner of such Indebtedness or other obligation of the payment



8









 







thereof, or (c) to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation, provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.



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



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



     “Hydrocarbon Interests” means all rights, titles, interests and estates now owned or
hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or
gaseous hydrocarbon leases, mineral fee or lease interests, farm-outs, overriding royalty and
royalty interests, net profit interests, oil payments, production payment interests and similar
mineral interests, including any reserved or residual interest of whatever nature.



     “Hydrocarbons” means oil, gas, casinghead gas, condensate, distillate, liquid
hydrocarbons, gaseous hydrocarbons, all products refined, separated, settled and dehydrated
therefrom, including, without limitation, kerosene, liquefied petroleum gas, refined lubricating
oils, diesel fuel, drip gasoline, natural gasoline, helium, sulfur and all other minerals.



     “Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person in respect of the deferred
purchase price of property or services (other than customary payment terms taken in the ordinary
course of business), (d) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed
limited, however, to the lesser of (1) the amount of such Indebtedness or (2) the book value of
such property, (e) all Guarantees by such Person of Indebtedness of others, (f) all Capital Lease
Obligations of such Person, (g) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit, (h) all obligations, contingent or otherwise, of
such Person in respect of bankers’ acceptances, (i) the amount of deferred revenue attributed to
any forward sale of production for which such Person has received payment in advance other than on
ordinary trade terms, (j) all obligations of such Person in respect of synthetic leases and (k) all
obligations or undertakings of such Person with respect to payments received by such Person in
consideration of oil, gas, or other minerals yet to be acquired or produced at the time of payment
(including obligations under “take-or-pay” contracts, contracts to deliver oil, gas or other
minerals in return for payments already received and the undischarged balance of any production



9









 







payment created by such Person or for the creation of which such Person directly or indirectly
received payment) or with respect to other obligations to deliver goods or services in
consideration of advance payments therefor but excluding gas imbalances arising in the ordinary
course of business between joint working interest owners of production. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a result of such
Person’s ownership interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.



     “Indemnified Taxes” means Taxes other than Excluded Taxes.



     “Index Debt” means senior, unsecured, long-term indebtedness for borrowed money of the
Borrower that is not guaranteed by any other Person except for a Subsidiary Guarantor or subject to
any other credit enhancement; provided, that if the Borrower does not have any such
indebtedness, Index Debt shall be the indebtedness under this Agreement.



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



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



     “Interest Period” means, with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months or, with the consent of the Administrative
Agent, nine or twelve months thereafter or such other periods as may be requested by the Borrower
(an “Irregular Interest Period”), in each case subject to availability, as the Borrower may elect;
provided, that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (ii) any Interest Period (other than an Irregular
Interest Period) that commences on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the last calendar month of such Interest Period) shall
end on the last Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or continuation of such
Borrowing.



     “Issuing Bank” means JPMorgan Chase Bank, N.A. and any other Lender selected by the
Borrower and agreed to by such Lender, in its capacity as the issuer of Letters of Credit
hereunder, and its successors in such capacity as provided in Section 2.05(i). An Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of
such



10









 







Issuing Bank, in which case the term “Issuing Bank” shall include such Affiliate with respect
to Letters of Credit issued by such Affiliate.



     “Joinder Agreement” has the meaning set forth in Section 2.02(a).



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



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



     “Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to Section 2.02 or pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption.



     “Letter of Credit” means any letter of credit issued pursuant to this Agreement.



     “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as
published by Reuters (or other commercially available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period, for dollar deposits (for
delivery on the first day of such Interest Period) with a term equivalent to such Interest Period.
In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with
respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.



     “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, or security interest in, on or of such asset, or any other charge or
encumbrance on any such asset to secure Indebtedness or liabilities, but excluding any right to
netting or setoff, (b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset and (c) in the case of securities,
any purchase option, call or similar right of a third party with respect to such securities.



     “Like-Kind-Exchange” means a transaction or series of transactions that complies with
the like-kind exchange requirements of Section 1031 of the Code, including the assignment by
Borrower or a Restricted Subsidiary of all or a portion of its rights under a purchase agreement
and loans or advances to, or investments in, a Qualified Intermediary (as that term is defined in
Section 1.1031(k)-1(g)(4)(v) of the Treasury Regulations).



11









 





     “Loan Documents” means this Agreement, any promissory note referred to in Section
2.09(e) and the Subsidiary Guaranties.



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



     “Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations, or financial condition of the Borrower and the Restricted Subsidiaries taken as a
whole, (b) the ability of the Borrower and the Subsidiary Guarantors, if any, to perform their
obligations, taken as a whole, under this Agreement and the other Loan Documents or (c) the rights
of or benefits available to the Lenders under this Agreement and the other Loan Documents, except
that cyclical declines in energy prices will not constitute a Material Adverse Effect.



     “Material Indebtedness” means (a) Indebtedness (other than the Loans and Letters of
Credit), or (b) obligations in respect of one or more Swap Agreements, in each case under clause
(a) or (b) of any one or more of the Borrower and its Restricted Subsidiaries, in an aggregate
principal amount exceeding $75,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Restricted Subsidiary in respect of
any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Borrower or such Restricted Subsidiary would be required to pay if such Swap
Agreement were terminated at such time.



     “Material Subsidiaries” means, at any time, one or more Subsidiaries, the aggregate
total assets of which exceed $50,000,000 at such time.



     “Maturity Date” means June 22, 2012.



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



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



     “New Funds Amount” has the meaning set forth in Section 2.02(d).



     “Non-Recourse Debt” means Indebtedness of a Subsidiary:




	 	(1)	 	as to which neither the Borrower nor any Restricted Subsidiary
(a) provides credit support of any kind (including any Guarantee, undertaking,
agreement or instrument that would constitute Indebtedness), (b) is directly or
indirectly liable as a guarantor or otherwise or (c) is the lender;
	 
	 	(2)	 	no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of
Indebtedness of the Borrower or any Restricted Subsidiary to declare a default
on such Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and




12









 












	 	(3)	 	as to which the lenders of such Non-Recourse Debt have been
notified in writing that they will not have any recourse to the Borrower, any
Restricted Subsidiary or any assets of any of them.





     “Notice of Commitment Increase” has the meaning set forth in Section 2.02(b).



     “Obligations” means all obligations (liquidated, contingent or otherwise) from time to
time owed by the Borrower or any Restricted Subsidiary pursuant to, as a result of, or in
connection with any Loan Document, including all principal of and interest on the Loans, all
reimbursement and other obligations in connection with the Letters of Credit and all obligations to
pay fees, costs, expenses, indemnities and other amounts payable under any Loan Document.



     “Obligors” means the Borrower and the Subsidiary Guarantors, each an “Obligor”.



     “Oil and Gas Properties” means Hydrocarbon Interests; the properties now or hereafter
pooled or unitized with Hydrocarbon Interests; all presently existing or future unitization,
pooling agreements and declarations of pooled units and the units created thereby (including
without limitation all units created under orders, regulations and rules of any Governmental
Authority having jurisdiction) which may affect all or any portion of the Hydrocarbon Interests;
all pipelines, gathering lines, compression facilities, tanks and processing plants; all interests
held in royalty trusts whether presently existing or hereafter created; all Hydrocarbons in and
under and which may be produced, saved, processed or attributable to the Hydrocarbon Interests, the
lands covered thereby and all Hydrocarbons in pipelines, gathering lines, tanks and processing
plants and all rents, issues, profits, proceeds, products, revenues and other incomes from or
attributable to the Hydrocarbon Interests; all tenements, hereditaments, appurtenances and
properties in any way appertaining, belonging, affixed or incidental to the Hydrocarbon Interests,
and all rights, titles, interests and estates described or referred to above, including any and all
real property, now owned or hereafter acquired, used or held for use in connection with the
operating, working or development of any of such Hydrocarbon Interests or property and including
any and all surface leases, rights-of-way, easements and servitudes together with all additions,
substitutions, replacements, accessions and attachments to any and all of the foregoing; all oil,
gas and mineral leasehold and fee interests, all overriding royalty interests, mineral interests,
royalty interests, net profits interests, net revenue interests, oil payments, production payments,
carried interests and any and all other interests in Hydrocarbons; in each case whether now owned
or hereafter acquired directly or indirectly.



     “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.



     “Participant” has the meaning set forth in Section 9.04.



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



     “Permitted Encumbrances” means:



13









 






     (a) Liens imposed by law for taxes, assessments, or other governmental charges or
levies that are not yet delinquent or are being contested in compliance with Section 5.04;




     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s, landlords,
vendors, workmen, operators, and other like Liens arising in the ordinary course of business
or incident to the exploration, development, operation, processing and maintenance of
Hydrocarbons and related facilities and assets and securing obligations that are not overdue
by more than 90 days or are being contested in compliance with Section 5.04;




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




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




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




     (f) easements, zoning restrictions, rights-of-way, servitudes, permits, conditions,
exceptions, reservations, and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any Indebtedness and do not
materially interfere with the ordinary conduct of business of the Borrower or any Restricted
Subsidiary;




     (g) legal or equitable encumbrances deemed to exist by reason of negative pledges such
as in Section 6.02 of this Agreement or the existence of any litigation or other legal
proceeding and any related lis pendens filing (excluding any attachment prior to judgment,
judgment lien or attachment lien in aid of execution on a judgment);




     (h) rights of a common owner of any interest in property held by Borrower or any
Restricted Subsidiary as a common owner;




     (i) farmout, carried working interest, oil and gas leases, joint operating,
unitization, royalty, overriding royalty, sales, area of mutual interest, division order,
joint venture, partnership and similar agreements relating to the exploration or development
of, or production from, oil and gas properties incurred in the ordinary course of business,




     (j) Liens arising pursuant to Section 9.343 of the Texas Uniform Commercial Code or
other similar statutory provisions of other states with respect to production purchased from
others;



14









 






     (k) any defects, irregularities, or deficiencies in title to easements, rights-of-way,
or other properties which do not in the aggregate have a Material Adverse Effect;




     (l) Liens on the stock or other ownership interest of or in any Unrestricted
Subsidiary, provided that there is no recourse to the Borrower or any Restricted
Subsidiary other than recourse to such stock or other ownership interest and proceeds
thereof;




     (m) Liens resulting from the deposit of funds or evidences of Indebtedness in trust for
the purpose of defeasing Indebtedness of the Borrower or any Restricted Subsidiary;




     (n) Liens arising under customary letter of credit reimbursement agreements and
customary deposit account agreement, and similar agreements entered into in the ordinary
course of business with respect to instruments or money in the possession of the other party
thereto in the ordinary course of business;




     (o) reservations in original grants to any Governmental Authority or rights of any
Governmental Authority to terminate any lease; and




     (p) Liens in renewal or extension of any of the foregoing permitted Liens, so long as
limited to the property or assets encumbered and the amounts of indebtedness secured
immediately prior to such renewal or extension is not increased.



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



     “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.



     “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.



     “Property” and “asset” (in each case whether or not capitalized) each means
any and all tangible and intangible assets and properties, including goods, real property, personal
property, fixtures, cash, securities, accounts, contract rights, intangibles, intellectual
property, any other form of asset or property and any interest therein.



     “Proved Reserves” means the estimated quantities of crude oil, condensate, natural
gas and natural gas liquids that adequate geological and engineering data demonstrate with
reasonable certainty to be recoverable in future years from proved reservoirs under existing
economic and operating conditions (i.e., prices and costs as of the date the estimate is made).



15









 





     “PV” means the net present value of projected future cash flows from Proved Reserves
based upon the most recently delivered Reserve Report (using the arithmetical average of the
discount rate and customary price deck of JPMorgan Chase Bank, N.A. as of the December 31 effective
date of such Reserve Report and giving effect to the Borrower’s hedging arrangements and long-term
contracts). For purposes of calculating the PV, a maximum of 25% of the PV value will be included
from Proved Reserves that are not proved developed producing reserves and a maximum of 20% of the
PV value will be included from reserves located in countries other than the United States, Canada
and the United Kingdom. If, during any period between the December 31 effective dates of Reserve
Reports, the aggregate fair market value, in the reasonable opinion of the Borrower, of Oil and Gas
Properties disposed of or purchased by the Borrower and the Restricted Subsidiaries shall exceed
$100,000,000, then the PV for such period shall be reduced or increased, as the case may be, from
time to time, by an amount equal to the value assigned such Oil and Gas Properties in the most
recent calculation of the PV for such period (or if no value was assigned, by an amount agreed to
by the Borrower and JPMorgan Chase Bank, N.A.). PV shall reflect the deferred revenue with respect
to production payments included in Total Debt, at a value that is equal to the amount of deferred
revenues so included in Total Debt.



     “Rating Agencies” means Moody’s, S&P and Fitch.



     “Reducing Percentage Lender” has the meaning set forth in Section 2.02(d).



     “Reduction Amount” has the meaning set forth in Section 2.02(d).



     “Register” has the meaning set forth in Section 9.04.



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



     “Required Lenders” means, at any time, Lenders having Credit Exposures and unused
Commitments representing greater than 50% of the sum of the total Credit Exposures and unused
Commitments at such time.



     “Reserve Report” means a report prepared as of December 31 of each year by the
Borrower with respect to the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries
and audited at least as to 70% of the PV of such Oil and Gas Properties by Ryder Scott Company,
Netherland, Sewell & Associates, Inc., DeGolyer & MacNaughton or another independent engineering
firm selected by the Borrower and reasonably acceptable to the Administrative Agent.



     “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such Equity Interests in the Borrower or any
Subsidiary.




16









 





     “Restricted Subsidiaries” means all Subsidiary Guarantors and, without
duplication, all Subsidiaries of the Borrower that are not Unrestricted Subsidiaries.



     “S&P” means Standard & Poor’s.



     “Sale Leaseback Transaction” means any arrangement entered into by the Borrower or any
Subsidiary, directly or indirectly, whereby the Borrower or any Subsidiary shall sell or transfer
any Property and whereby the Borrower or any Subsidiary shall then or thereafter rent or lease as
lessee such property or any part thereof or other property which the Borrower or any Subsidiary
intends to use for substantially the same purpose or purposes as the property sold or transferred.



     “Stable Investment Grade Date” means the first date on which the Borrower’s Index Debt
rating is BBB- or better by S&P (without negative outlook or negative watch) or Baa3 or better by
Moody’s (without negative outlook or review for downgrade), unless one of the two ratings is two or
more categories lower than the other and the category that is one above the lower rating is not
BBB- or Baa3 or better.



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



     “Subordinated Debt” means all Indebtedness (i) subordinated to the Obligations on
terms satisfactory to the Administrative Agent and (ii) existing on the Effective Date under the
Borrower’s senior subordinated notes in the aggregate principal amount of $875,000,000.



     “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.



     “Subsidiary” means any subsidiary of the Borrower.



17









 





     “Subsidiary Guarantor” means any Restricted Subsidiary that is required to execute and
deliver a Subsidiary Guaranty.



     “Subsidiary Guaranty” means a Subsidiary Guaranty substantially in the form of Exhibit
D executed by a Restricted Subsidiary



     “Swap Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom stock or
similar plan providing for payments only on account of services provided by current or former
directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap
Agreement.



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



     “Total Cap” means, as of any date of determination, the sum of Total Debt plus
Consolidated Tangible Net Worth of the Borrower and the Restricted Subsidiaries.



     “Total Debt” means as of any date of determination, all Indebtedness (without
duplication) of the Borrower and the Restricted Subsidiaries on a consolidated basis (including any
Indebtedness proposed to be incurred on such date of determination and excluding all Indebtedness
to be paid on such date of determination with the proceeds thereof and excluding any Indebtedness
described in clause (g) of the definition of Indebtedness herein).



     “Transactions” means the execution, delivery and performance by the Borrower of this
Agreement, the borrowing of Loans, the use of the proceeds thereof, the issuance of Letters of
Credit hereunder and any Guarantee by a Subsidiary Guarantor of the Obligations of the Borrower
that may be executed in accordance with this Agreement.



     “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.



     “Unrestricted Subsidiary” means (i) any Subsidiary that has been designated as an
Unrestricted Subsidiary by the Borrower in accordance with Section 6.10, and (ii) each subsidiary
of such Unrestricted Subsidiary.



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



     Section 1.02 Reserved.



     Section 1.03 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any



18









 







pronoun shall include the corresponding masculine, feminine and neuter forms. The words
“include”, “includes” and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and effect as the word
“shall”. Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision hereof,
and (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.



     Section 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP (including but not limited to any Statement of Financial
Accounting Standard) or in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is given before or after
such change in GAAP or in the application thereof, then such provision shall be interpreted on the
basis of GAAP as in effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in accordance herewith.



ARTICLE II

THE CREDITS




     Section 2.01 Commitments. Subject to the terms and conditions set forth herein, each
Lender agrees to make Loans in dollars to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result in (i) such Lender’s Credit Exposure
exceeding such Lender’s Commitment or (ii) the sum of the total Credit Exposures exceeding the
total Commitments. Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Loans.



     Section 2.02 Commitment Increase.



          (a) Subject to the terms and conditions set forth herein, the Borrower shall have the right,
without the consent of the Lenders but with the prior approval of the Administrative Agent and
each Issuing Bank, to cause from time to time an increase in the Commitments of the Lenders (a
“Commitment Increase”) by adding to this Agreement one or more additional financial
institutions that is not already a Lender hereunder and that is reasonably satisfactory to the
Administrative Agent or by allowing one or more existing Lenders to increase their respective
Commitments (each a “CI Lender”); provided, however that (i) no Event of
Default shall have occurred which is continuing, (ii) no such Commitment




19









 







Increase shall cause the Commitments under this Agreement to exceed $1,650,000,000, (iii) no
Lender’s Commitment shall be increased without such Lender’s prior written consent, (iv) if, on
the effective date of such increase, any Loans have been funded or any LC Exposure exists, then
(a) the Borrower shall be obligated to pay any breakage fees or costs in connection with the
reallocation of such outstanding Loans, (b) all conditions to the obligation of any Lender to make
a Loan on such date shall have been satisfied, (c) all Loans and participations in the LC Exposure
(including participations retained by the applicable Issuing Banks in their capacity as Lenders)
shall be fully reallocated on a prorata basis among, and such reallocation shall be agreed to and
accepted by, all Lenders (such prorata reallocation to be determined immediately after such
increase) and (d) the Borrower shall pay all accrued and unpaid interest on all amounts
reallocated to a CI Lender, and (v) each CI Lender that is not already a Lender hereunder shall
execute a joinder agreement in the form of Exhibit F attached hereto (a “Joinder
Agreement”).




          (b) Any Commitment Increase shall be requested by written notice from the Borrower to the
Administrative Agent (a “Notice of Commitment Increase”) in the form of Exhibit B
attached hereto and shall be approved by the Administrative Agent, such consent to not be
unreasonably withheld. Each such Notice of Commitment Increase shall specify (i) the proposed
effective date of such Commitment Increase, which date shall be no earlier than five (5) Business
Days after receipt by the Administrative Agent of such Notice of Commitment Increase, (ii) the
amount of the requested Commitment Increase (provided that after giving effect to such
requested Commitment Increase, the aggregate amount of the Commitments does not exceed the amount
set forth in subsection (a)(ii) above), (iii) the identity of each CI Lender, and (iv) the amount
of the respective Commitments of the then existing Lenders and the CI Lenders from and after the
Commitment Increase Effective Date (as defined below). The Administrative Agent shall review each
Notice of Commitment Increase and shall notify the Borrower whether or not the Administrative
Agent consents to the proposed Commitment Increase. If the Administrative Agent consents to such
Commitment Increase (such consent not to be unreasonably withheld) and if each Issuing Bank
approves such Commitment Increase, the Administrative Agent shall execute a counterpart of the
Notice of Commitment Increase and such Commitment Increase shall be effective on the proposed
effective date set forth in the Notice of Commitment Increase (if the Administrative Agent
consented to such Commitment Increase prior to such proposed date) or on another date agreed to by
the Administrative Agent and the Borrower (such date referred to as the “Commitment Increase
Effective Date”).




          (c) On each Commitment Increase Effective Date, to the extent that there are Loans
outstanding as of such date, (i) each CI Lender shall, by wire transfer of immediately available
funds, deliver to the Administrative Agent such CI Lender’s New Funds Amount, which amount, for
each such CI Lender, shall constitute Loans made by such CI Lender to the Borrower pursuant to
this Agreement on such Commitment Increase Effective Date, (ii) the Administrative Agent shall, by
wire transfer of immediately available funds, pay to each then Reducing Percentage Lender its
Reduction Amount, which amount, for each such Reducing Percentage Lender, shall constitute a
prepayment by the Borrower pursuant to Section 2.10, ratably in accordance with the respective
principal amounts thereof, of the principal amounts of all then outstanding Loans of such Reducing
Percentage Lender, and (iii) the Borrower shall be




20









 







responsible to pay to each Lender any breakage fees or costs in connection with the
reallocation of any outstanding Loans.




          (d) For purposes of this Section 2.02 and Exhibit B, the following defined terms
shall have the following meanings: (i) “New Funds Amount” means the amount equal to (x) a
CI Lender’s increase in Commitment or a CI Lender’s new Commitment (as applicable) times (y) the
aggregate principal amount of the outstanding Loans immediately prior to giving effect to the
Commitment Increase, if any, as of a Commitment Increase Effective Date (without regard to any
increase in the aggregate principal amount of Loans as a result of borrowings made after giving
effect to the Commitment Increase on such Commitment Increase Effective Date) divided by (z) the
aggregate Commitments after giving effect to the Commitment Increase; (ii) “Reducing
Percentage Lender” means each then existing Lender immediately prior to giving effect to the
Commitment Increase whose relative percentage of the Commitments shall be reduced after giving
effect to such Commitment Increase; and (iii) “Reduction Amount” means, with respect to
any Reducing Percentage Lender, the amount equal to (x) the aggregate principal amount of the
outstanding Loans immediately prior to giving effect to the Commitment Increase, if any, as of a
Commitment Increase Effective Date (without regard to any increase in the aggregate principal
amount of Loans as a result of borrowings made after giving effect to the Commitment Increase on
such Commitment Increase Effective Date) times (y) the amount (expressed as a decimal) by which
such Reducing Percentage Lender’s Applicable Percentage immediately prior to such increase exceeds
such Reducing Percentage Lender’s Applicable Percentage after giving effect to the Commitment
Increase.




          (e) Each Commitment Increase shall become effective on its Commitment Increase Effective Date
and upon such effectiveness (i) with respect to each CI Lender who is not already a Lender
hereunder, the Administrative Agent shall record in the register such CI Lender’s information as
provided in the Notice of Commitment Increase and pursuant to an Administrative Questionnaire
satisfactory to the Administrative Agent that shall be executed and delivered by each such CI
Lender to the Administrative Agent on or before the Commitment Increase Effective Date, (ii)
Schedule 2.01 hereof shall be amended and restated to set forth all Lenders (including any
CI Lenders) that will be Lenders hereunder after giving effect to such Commitment Increase (which
shall be set forth in Annex I to the applicable Notice of Commitment Increase) and the
Administrative Agent shall distribute to each Lender (including each CI Lender) a copy of such
amended and restated Schedule 2.01, and (iii) each CI Lender identified on the Notice of
Commitment Increase for such Commitment Increase shall be a “Lender” for all purposes under this
Agreement.




21









 








     Section 2.03 Loans and Borrowings.



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




          (b) Subject to Section 2.13, each Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender at its option
(but subject to Section 2.18) may make any Eurodollar Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that any exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.




          (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than
$5,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $5,000,000; provided
that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of
the total Commitments or that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.05(e). Borrowings of more than one Type may be outstanding at the same
time; provided that there shall not at any time be more than a total of fifteen (15)
Eurodollar Borrowings outstanding.




          (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date.




     Section 2.04 Requests for Borrowings. To request a Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of
the proposed Borrowing and (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York
City time, on the same Business Day of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with this Agreement:




	 	(i)	 	the aggregate amount of the requested Borrowing;
	 
	 	(ii)	 	the date of such Borrowing, which shall be a Business Day;
	 
	 	(iii)	 	whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;




22









 












	 	(iv)	 	in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the term
“Interest Period”; and
	 
	 	(v)	 	the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.




If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.




     Section 2.05 Letters of Credit.



          (a) General. The Borrower, the Administrative Agent, the Issuing Banks and the
Lenders hereby agree that all Existing Letters of Credit shall be deemed to be issued under this
Agreement as of the Effective Date and shall constitute Letters of Credit hereunder for all
purposes (except that the Issuing Banks’ standard issuance fee shall not be payable on such deemed
issuance). Subject to the terms and conditions set forth herein, the Borrower may request the
issuance of standby Letters of Credit, in dollars and in a form reasonably acceptable to the
Administrative Agent and the applicable Issuing Bank, at any time and from time to time during the
Availability Period.




          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Condition. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding
Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the applicable Issuing Bank) to
the applicable Issuing Bank and the Administrative Agent (reasonably in advance of the requested
date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the
date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c) below), the amount
of such Letter of Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by an Issuing Bank, the Borrower also shall submit a letter of credit application on
such Issuing Bank’s standard form in connection with any request for a Letter of Credit;
provided that no provision in such application shall be deemed effective to the extent
such provision contains, provides for, or requires, representations, warranties, covenants,
security interests, Liens, indemnities, reimbursements of costs or expenses, events of defaults,
remedies, or standards of care or to the extent such provision conflicts or is inconsistent with
this Agreement. A Letter of Credit shall be issued, amended, renewed or extended only if (and
upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or
extension (i) the total




23









 







Credit Exposures shall not exceed the total Commitments and (ii) the LC Exposure shall not
exceed in the aggregate $250,000,000 at any time.




          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.




          (d) Participation. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Banks or the Lenders, the Issuing Banks hereby grant to each Lender, and each Lender
hereby acquires from the Issuing Banks, a participation in such Letter of Credit equal to such
Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Banks,
such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Banks and not
reimbursed by the Borrower on the date due as provided in paragraph (e) below, and of any
reimbursement payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph
in respect of Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or
the occurrence and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding or reduction
whatsoever.




          (e) Reimbursement. If an Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the
Administrative Agent an amount equal to such LC Disbursement not later than 1:00 p.m., New York
City time, on the date that such LC Disbursement is made, if the Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date, then not later than
12:00 noon, New York City time, on (i) the Business Day that the Borrower receives such notice, if
such notice is received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii)
the Business Day immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that, if such LC
Disbursement is not less than $5,000,000, the Borrower may, subject to the conditions to borrowing
set forth herein, request in accordance with Section 2.04 that such payment be financed with an
ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR Borrowing. If the
Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such
Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender
shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender
(and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and
the Administrative Agent shall promptly pay to the applicable Issuing Banks the amounts so




24









 







received by it from the Lenders. Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall
distribute such payment to the applicable Issuing Banks or, to the extent that Lenders have made
payments pursuant to this paragraph to reimburse such Issuing Banks, then to such Lenders and
Issuing Banks as their interests may appear. Any payment made by a Lender pursuant to this
paragraph to reimburse the applicable Issuing Banks for any LC Disbursement (other than the
funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.




          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) above shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit
or this Agreement, or any term or provision therein, (ii) any draft or other document presented
under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect, or (iii) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the
provisions of this Section, constitute a legal or equitable discharge of, or provide a right of
setoff against, the Borrower’s obligations hereunder. Neither the Administrative Agent, the
Lenders nor the Issuing Banks, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit
or any payment or failure to make any payment thereunder (irrespective of any of the circumstances
referred to in the preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or relating to any
Letter of Credit (including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond the control of the
Issuing Banks; provided that the foregoing shall not be construed to excuse any Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by such Issuing Bank’s failure to
exercise care when determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of
gross negligence or willful misconduct on the part of an Issuing Bank (as finally determined by a
court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the generality thereof,
the parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Banks may, in their sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.




          (g) Disbursement Procedures. The Issuing Bank that issued a Letter of Credit shall,
promptly following receipt thereof, examine all documents purporting to represent a demand for
payment under such Letter of Credit. Such Issuing Bank shall promptly notify the Administrative
Agent and the Borrower by telephone (confirmed by telecopy) of such demand




25









 







for payment and whether the Issuing Banks have made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Banks and the Lenders with respect to any
such LC Disbursement.




          (h) Interim Interest. If an Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) above, then
Section 2.12(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account
of the relevant Issuing Bank, except that interest accrued on and after the date of payment by any
Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the
account of such Lender to the extent of such payment.




          (i) Additional and Replacement Issuing Banks. Any other Lender in addition to
JPMorgan Chase Bank, N.A. selected by the Borrower and agreed to by such Lender may become an
Issuing Bank. The Borrower shall provide JPMorgan Chase Bank, N.A. notice of any such additional
Issuing Bank. An Issuing Bank may be replaced at any time by written agreement among the
Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued
for the account of the replaced Issuing Bank pursuant to Section 2.11(b). From and after the
effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer
to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and
obligations of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters of Credit or to
amend, extend or renew any Letter of Credit.




          (j) Cash Collateralization. If the Loans have become due and payable (A) pursuant to
Article VII (other than pursuant to clause (h) or (i) of such Article VII), on the Business Day
following the Business Day that the Borrower receives notice from the Administrative Agent (at the
direction of Required Lenders) or the Required Lenders demanding the deposit of cash collateral
pursuant to this paragraph, or (B) pursuant to clause (h) or (i) of Article VII, without any
demand or the taking of any other action by the Issuing Banks, the Administrative Agent, or any of
the Lenders, the Borrower shall deposit in an account with the Administrative Agent, in the name
of the Administrative Agent and for the benefit of the Issuing Banks and the Lenders, an amount in
cash equal to the LC Exposure as of such date plus any accrued and unpaid interest on LC
Disbursements comprising such LC Exposure. Such deposit shall be held by the Administrative Agent
as collateral for the payment




26









 







and performance of the obligations of the Borrower under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over
such account (which shall be invested in obligations of, obligations guaranteed by, or obligations
backed by the full faith and credit of, the United States of America, certificates of deposit of
Administrative Agent or commercial paper having the highest rating from S&P or Moody’s, in each
case maturing in less than 180 days). Other than any interest earned on the investment of such
deposits, which investments shall be made at the option and sole discretion of the Administrative
Agent and at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse an Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or,
if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other
obligations of the Borrower under this Agreement, with any excess amounts returned to the
Borrower.




     Section 2.06 Funding of Borrowings.



          (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds by 1:00 pm, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.
The Administrative Agent will make such Loans available to the Borrower by promptly crediting the
amounts so received, in like funds, to an account of the Borrower maintained with the
Administrative Agent in New York City and designated by the Borrower in the applicable Borrowing
Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e) shall be remitted by the Administrative Agent to the applicable
Issuing Bank.




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




     Section 2.07 Interest Elections.



27









 





          (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Borrower may elect
different options with respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.




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




          (c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with this Agreement:





     (i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);




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




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




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



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




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




          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period




28









 







such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event
of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an
ABR Borrowing at the end of the Interest Period applicable thereto.




     Section 2.08 Termination and Reduction of Commitments.



          (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.




          (b) The Borrower may at any time terminate, or from time to time, reduce the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the
Loans in accordance with Section 2.10, the sum of the total Credit Exposures would exceed the
Commitments.




          (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Commitments under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments delivered
by the Borrower may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of
the Commitments shall be made ratably among the Lenders in accordance with their respective
Applicable Percentages.




     Section 2.09 Repayment of Loans; Evidence of Debt.



          (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Loan on the Maturity Date.




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




          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable from the Borrower
to each Lender hereunder and (iii) the amount of any sum




29









 







received by the Administrative Agent hereunder for the account of the Lenders and each
Lender’s share thereof.




          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the obligations recorded
therein; provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.




          (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and substantially in the form attached hereto as Exhibit E. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).




     Section 2.10 Prepayment of Loans.



          (a) Subject to any breakage funding costs payable pursuant to Section 2.15, the Borrower
shall have the right at any time and from time to time to prepay any Borrowing in whole or in part
without premium or penalty, provided that each prepayment is in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000, or if such amount is lesser, the outstanding
amount of the Borrowing, and made subject to prior notice in accordance with paragraph (b) of this
Section.




          (b) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 12:00 noon, New York City time, three Business Days before the date of prepayment, or (ii) in
the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date
and the principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice of termination of
the Commitments as contemplated by Section 2.08, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with Section 2.08. Promptly following receipt
of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would
be permitted in the case of an advance of a Borrowing of the same Type as provided in Section
2.03. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by
Section 2.12.




     Section 2.11 Fees.



30









 





          (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a
commitment fee, which shall accrue at the Applicable Margin for commitment fees on the daily
amount of the unused Commitment of such Lender during the period from and including the date
hereof to but excluding the date on which such Commitment terminates. Accrued Commitment fees
shall be payable in arrears no later than three (3) Business Days after the last day of March,
June, September and December of each year and on the date on which the Commitments terminate,
commencing on the first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).




          (b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender
a participation fee with respect to its participations in Letters of Credit, which shall accrue at
the Applicable Margin for Letters of Credit on the average daily amount of such Lender’s LC
Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Effective Date to but excluding the later of the date on which such
Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure,
and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on
the average daily amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date of termination of the Commitments and the date on which there
ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings
thereunder. Participation fees and fronting fees shall be payable in arrears on the last day of
March, June, September and December of each year and on the date on which the Commitments
terminate. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable
within 10 days after demand. All participation fees and fronting fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).




          (c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon in writing between the Borrower and the
Administrative Agent.




          (d) All fees payable hereunder shall be paid on the dates due, in immediately available
funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees and participation fees, to the Lenders. Fees paid
shall not be refundable under any circumstances.




     Section 2.12 Interest.



          (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate,
but not to exceed the Highest Lawful Rate.




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          (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin, but not to
exceed the Highest Lawful Rate.




          (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus
the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section, but not to exceed the Highest Lawful Rate.




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




          (e) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), and in each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or
LIBO Rate shall be determined by the Administrative Agent and such determination shall be
conclusive absent manifest error.




     Section 2.13 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:



          (a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate or the LIBO Rate, as applicable, for such Interest Period; or




          (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate
or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such
Interest Period;



then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or


32









 






continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any
Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.




     Section 2.14 Increased Costs.



          (a) If any Change in Law shall:




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



               (ii) impose on any Lender or the Issuing Banks or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein (excluding, in each case, Taxes, as to which Section 2.16 shall govern);



          and the result of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or the Issuing Banks of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
the Issuing Banks hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Banks, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Banks, as the case may be, for such additional costs
incurred or reduction suffered.




          (b) If any Lender or an Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company,
if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or the
Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.




          (c) A certificate of a Lender or the Issuing Bank setting forth in reasonable detail the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company,
as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower. The Borrower shall pay to the Administrative Agent for the account of such Lender or
the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.




33









 








          (d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s
right to demand such compensation; provided that the Borrower shall not be required to
compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 270-day period referred to above shall be extended to include
the period of retroactive effect thereof.




     Section 2.15 Break Funding Payments. In the event of (a) the payment of any principal
of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant
hereto (regardless of whether such notice may be revoked under Section 2.10(b) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section
2.18, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense
to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such Lender would bid
were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section in reasonable
detail shall be delivered to the Borrower. The Borrower shall pay to the Administrative Agent for
the account of such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.



     Section 2.16 Taxes.



          (a) Any and all payments by or on account of any obligation of the Borrower hereunder shall
be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable under this
Section) the Administrative Agent, Lender, or Issuing Banks (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower
shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.





34










 





          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.




          (c) The Borrower shall indemnify the Administrative Agent, each Lender, and the Issuing Banks
within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid by the Administrative Agent, such Lender, or the Issuing Banks, as the case may
be (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts
payable under this Section), and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability in reasonable detail shall be delivered to the Borrower by a
Lender or the Issuing Banks, or by the Administrative Agent on its own behalf or on behalf of a
Lender or the Issuing Banks.




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




          (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or at a
reduced rate.




          (f) Upon the Borrower’s written request, the Administrative Agent and each Lender shall use
reasonable efforts to make any filings necessary to obtain any refund, deduction or credit of any
Taxes or Other Taxes as to which the Borrower has indemnified it or with respect to which the
Borrower has paid additional amounts pursuant to this Section 2.16. If the Administrative Agent
or a Lender receives any refund of any Taxes or Other Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section 2.16, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 2.16 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses
of the Administrative Agent or such Lender and without interest (other than any interest paid by
the relevant Governmental Authority with respect to such refund); provided, that the Borrower,
upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over
to the Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative
Agent or such Lender is required to repay such refund to such Governmental Authority. This
Section shall not be construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person or to attempt to take any position to obtain a refund, deduction,

35









 








or credit, which attempt would be inconsistent with any reporting position otherwise taken by
the Administrative Agent or such Lender on its applicable tax returns.




     Section 2.17 Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 



          (a) The Borrower shall make each payment required to be made by it hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under
Section 2.14, 2.15 or 2.16, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except payments to be made directly to the Issuing Banks as expressly provided
herein and except that payments pursuant to Section 9.03 shall be made directly to the Persons
entitled thereto. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in dollars.




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




          (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Loans or participations in
LC Disbursements resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans and participations
in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made by the Borrower
pursuant to and in accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other

36









 








than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a participation pursuant to
the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim
with respect to such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.




          (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Banks hereunder that the Borrower will not make such payment, the Administrative Agent
may assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Banks, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such payment, then each of
the Lenders or the Issuing Banks, as the case may be, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Banks
with interest thereon, for each day from and including the date such amount is distributed to it
to but excluding the date of payment to the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.




          (e) If any Lender shall fail to make any payment required to be made by it pursuant to
Section 2.05(d) or (e), 2.06(b) or 2.17(d), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under
such Sections until all such unsatisfied obligations are fully paid.




     Section 2.18 Mitigation Obligations; Replacement of Lenders. 



          (a) If any Lender requests compensation under Section 2.14, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a
different lending office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of
such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.
The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.




          (b) If any Lender requests compensation under Section 2.14, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.16, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in

37









 








Section 9.04), all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior written consent
of the Administrative Agent (and, if a Commitment is being assigned, the Issuing Banks) which
consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting
from a claim for compensation under Section 2.14 or payments required to be made pursuant to
Section 2.16, such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.




ARTICLE III

REPRESENTATIONS AND WARRANTIES




     The Borrower represents and warrants to the Lenders that:



     Section 3.01 Organization; Powers. Each of the Borrower and its Restricted
Subsidiaries is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and
is in good standing in, every jurisdiction where such qualification is required.



     Section 3.02 Authorization; Enforceability. The Transactions are within each
Obligor’s corporate powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement and all Subsidiary Guaranties have been duly executed
and delivered by the Obligor which is a party thereto, and constitute a legal, valid and binding
obligation of such Obligor, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law.



     Section 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
violate the charter, by-laws or other organizational documents of the Borrower or any of its
Restricted Subsidiaries or (b) except as to matters that could not reasonably be expected to result
in a Material Adverse Effect, (i) do not require any consent or approval of, registration or filing
with, or any other action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect, (ii) will not violate any applicable law or regulation or any
order of any Governmental Authority, (iii) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its Restricted
Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Restricted Subsidiaries, and (iv) will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Restricted Subsidiaries.



38









 





     Section 3.04 Financial Condition; No Material Adverse Change.



          (a) The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and
statements of income, stockholders’ equity and cash flows (i) as of and for the fiscal year ended
December 31, 2006, reported on by PricewaterhouseCoopers LLC, independent public accountants, and
(ii) as of and for the fiscal quarter ended March 31, 2007, certified by its Financial Officer.
Such financial statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such
dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause (ii) above.




          (b) As of the Effective Date, there has been no change which could reasonably be expected to
have a Material Adverse Effect.




     Section 3.05 Properties. Each of the Borrower and its Restricted Subsidiaries has
good title to, or valid leasehold interests in, all its real and personal property material to its
business, except for any failure, defect or other matter that could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.



     Section 3.06 Litigation and Environmental Matters.



          (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries that could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or that
involve this Agreement or the Transactions.




          (b) Except for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows
of any basis for any Environmental Liability.




     Section 3.07 Compliance with Laws. Each of the Borrower and its Restricted
Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.



     Section 3.08 Investment Company Status. Neither the Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.



     Section 3.09 Taxes. Each of the Borrower and its Restricted Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been filed and has paid or



39









 




caused to be paid all Taxes required to have been paid by it, except (a) Taxes for which the
Borrower or such Restricted Subsidiary, as applicable, has set aside on its books adequate reserves
including Taxes that are being contested in good faith by appropriate proceedings or (b) to the
extent that the failure to do so could not reasonably be expected to result in a Material Adverse
Effect.




     Section 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect. The
Borrower and each ERISA Affiliate has fulfilled its obligations under the minimum funding standards
of ERISA and the Code with respect to each Plan and is in compliance in all material respects with
the presently applicable provisions of ERISA and the Code with respect to each Plan. Neither the
Borrower nor any ERISA Affiliate has (a) sought a waiver of the minimum funding standard under
Section 412 of the Code in respect of any Plan, (b) failed to make any contribution or payment to
any Plan or Multiemployer Plan, or made any amendment to any Plan that has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under ERISA or the Code, or
(c) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums
under Section 4007 of ERISA that are not past due.



     Section 3.11 Disclosure. The information furnished by or on behalf of the Borrower to
the Administrative Agent or any Lender in connection with the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other information so furnished), taken as a
whole, contains no material misstatement of fact nor omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
materially misleading; provided that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.



ARTICLE IV

CONDITIONS




     Section 4.01 Effective Date. The obligations of the Lenders to make Loans and of the
Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with Section 9.02):



          (a) The Administrative Agent (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of this Agreement.




          (b) The Administrative Agent shall have received a favorable written opinion (addressed to
the Administrative Agent and the Lenders and dated the Effective Date) of King & Spalding LLP,
outside counsel for the Borrower, covering those matters described on Exhibit C. The Borrower
hereby requests such counsel to deliver such opinion.




40









 








          (c) The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization, existence
and good standing of the Borrower, the authorization of the Transactions and any other legal
matters relating to the Borrower, this Agreement or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.




          (d) The Administrative Agent shall have received a certificate, dated the Effective Date and
signed by the President, a Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a), (b) and (c) of Section 4.02.




          (e) The Administrative Agent, Lenders and Arranger shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.




          (f) All commitments under the Existing Credit Agreement shall have been terminated in full
and all amounts (including accrued fees in respect of Existing Letters of Credit) outstanding
under the Existing Credit Agreement shall have been paid in full.




          (g) As of the Effective Date, PV shall be equal to or greater than $3,890,000,000.




          (h) The Administrative Agent shall have received an original promissory note as contemplated
by Section 2.09(e) for each Lender that has notified the Administrative Agent prior to the
Effective Date that such Lender requests such note.




     The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and
such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Banks to issue Letters of Credit hereunder shall not
become effective unless such notice is given at or prior to 3:00 p.m., New York City time, on July
22, 2007 (and, in the event such conditions are not so satisfied or waived, the Commitments shall
terminate at such time).



     Section 4.02 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Banks to issue, amend, renew or extend any Letter of
Credit, is subject to the satisfaction of the following conditions:



          (a) The representations and warranties of the Borrower set forth in this Agreement and of the
Subsidiary Guarantors set forth in the Subsidiary Guaranties shall be true and correct in all
material respects (except that any such representations and warranties that are qualified as to
materiality shall be true and correct in all respects) on and as of the date of such Borrowing or
the date of the issuance, amendment, renewal or extension of such Letter of Credit, as applicable
(or, to the extent such representations and warranties specifically relate to an earlier date,
that such representations and warranties were true, correct and complete in all material respects
on and as of such earlier date).




41









 








          (b) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have
occurred and be continuing.




          (c) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no Material Adverse
Effect shall have occurred and be continuing.




     Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall
be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (a), (b) and (c) of this Section.



ARTICLE V

AFFIRMATIVE COVENANTS




     Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:



     Section 5.01 Financial Statements and Other Information. The Borrower will furnish to
the Administrative Agent and each Lender:



          (a) within 90 days after the end of each fiscal year of the Borrower, its audited
consolidated (and if any Unrestricted Subsidiary existed during such year, its unaudited
consolidating) balance sheet and related statements of operations, stockholders’ equity and cash
flows as of the end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, (i) all (other than any such consolidating balance sheet and
consolidating statements) reported on by PricewaterhouseCoopers LLC or other independent public
accountants of recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such audit) to the effect
that such consolidated financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, and (ii) in the case of such
consolidating balance sheet and consolidating statements, if any, certified by one of its
Financial Officers as presenting fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a consolidating basis
in accordance with GAAP consistently applied;




          (b) within 45 days after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower, its consolidated (and if any Unrestricted Subsidiary existed during such
year, its consolidating) balance sheet and related statements of operations, stockholders’ equity
and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by one of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Borrower and its

42









 








consolidated Subsidiaries on a consolidated basis (and, in the case of such consolidating
balance sheet and consolidating statements, if any, on a consolidating basis) in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes;




          (c) simultaneously with the delivery of the financial statements referred to in subsections
(a) or (b) of this Section 5.01, a copy of the certification signed by the principal executive
officer and the principal financial officer of the Borrower (each, a “Certifying Officer”)
as required by Rule 13A-14 under the Securities Exchange Act of 1934 and a copy of the internal
controls disclosure statement by such Certifying Officers as required by Rule 13A-15 under the
Securities Exchange Act of 1934 and Final Rules Release No. 33-8238 of the United States
Securities and Exchange Commission, each as included in the Borrower’s Annual Report on Form 10-K
or Quarterly Report on Form 10-Q, for the applicable fiscal period;




          (d) concurrently with any delivery of financial statements under subsections (a) or (b) of
this Section 5.01, a certificate of a Financial Officer of the Borrower (i) certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the details thereof and
any action taken or proposed to be taken with respect thereto, and (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.04 (a), (b) and (c);




          (e) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be;




          (f) prior to a Stable Investment Grade Date, by April 30 of each year, the Borrower shall
furnish to the Administrative Agent and to each Lender a Reserve Report, which Reserve Report
shall be dated as of the immediately preceding December 31 and shall set forth the Proved Reserves
attributable to all or substantially all of the Oil and Gas Properties then owned by the Borrower
and its Restricted Subsidiaries and the PV attributable thereto as contemplated in the definition
of Reserve Report;




          (g) promptly after Moody’s or S&P shall have announced a change in the rating established or
deemed to have been established for the Index Debt, written notice of such rating change;




          (h) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may reasonably request; and




          (i) concurrently with delivery of any Reserve Report required under clause (f) of this
Section 5.01, a written statement of the Borrower’s hedging arrangements since the date of the
last such statement.




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     Section 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:



          (a) the occurrence of any Default;




          (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator
or Governmental Authority against or affecting the Borrower or any Affiliate thereof that involves
monetary claims in excess of $25,000,000 or that could reasonably be expected to result in a
Material Adverse Effect if adversely determined;




          (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events
that have occurred, could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $35,000,000; and




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




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



     Section 5.03 Existence; Conduct of Business. The Borrower will, and will cause each
of its Restricted Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights, licenses, permits, privileges
and franchises material to the conduct of its business except for any failure to maintain, preserve
or qualify that could not reasonably be expected to have a Material Adverse Effect; provided that
the foregoing shall not prohibit (i) any merger, consolidation, transfer, lease, liquidation or
dissolution permitted under Section 6.03 or (ii) a termination of such existence, good standing,
rights, licenses, permits, privileges and franchises of any Restricted Subsidiary if Borrower
determines in good faith that such termination is in the best interest of Borrower and could not
reasonably be expected to have a Material Adverse Effect.



     Section 5.04 Payment of Obligations. The Borrower will, and will cause each of its
Restricted Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid,
could reasonably be expected to result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings, and (b) the Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP.



     Section 5.05 Maintenance of Properties; Insurance. The Borrower will, and will cause
each of its Restricted Subsidiaries to, (a) keep and maintain all property material to the conduct
of its business in good working order and condition, ordinary wear and tear excepted, except for
any failure that could not reasonably be expected to result in a Material Adverse Effect and (b)
maintain, with financially sound and reputable insurance companies, insurance in such amounts and
against such risks as is customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.



44









 





     Section 5.06 Books and Records; Inspection Rights. The Borrower will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Restricted Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice,
to visit and inspect its properties, to examine and make extracts from its books and records, and
to discuss its affairs, finances and condition with its officers and independent accountants, all
at such reasonable times and as often as reasonably requested.



     Section 5.07 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.



     Section 5.08 Use of Proceeds and Letters of Credit. The proceeds of the Loans will be
used to repay outstanding bank debt, for acquisitions and for other general corporate purposes. No
part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that
entails a violation of any of the Regulations of the Board, including Regulations T, U and X.



     Section 5.09 Reserved.



     Section 5.10 Principal Business. Except as otherwise permitted by Section 5.03,
Borrower will, and will cause each Restricted Subsidiary to maintain as its primary business the
exploration, production and development of oil, natural gas and other liquid and gaseous
Hydrocarbons and the gathering, processing, transmission and marketing of Hydrocarbons and
activities related or ancillary thereto.



     Section 5.11 Subsidiary Guaranties. If any Restricted Subsidiary is created or
acquired which has Guaranteed, or any Restricted Subsidiary Guarantees or proposes to Guarantee (in
each case, the “Guaranteeing Subsidiary”), any Indebtedness or other obligation of the Borrower or
any Subsidiary, then the Borrower will cause the Guaranteeing Subsidiary, simultaneously with or
prior to such acquisition or creation or such Guarantee of Indebtedness or other obligation, as the
case may be, to deliver to the Administrative Agent (i) a Subsidiary Guaranty duly executed by such
Guaranteeing Subsidiary, (ii) certified copies of the charter, by-laws, partnership or company
agreement or similar documents pertaining to such Guaranteeing Subsidiary, (iii) evidence,
reasonably satisfactory to the Administrative Agent, of the authorization and due execution and
delivery of such Subsidiary Guaranty by such Guaranteeing Subsidiary, (iv) other documents and
certificates of the type referred to in Section 4.01(c) with respect to such Guaranteeing
Subsidiary and (v) a legal opinion of counsel reasonably acceptable to the Administrative Agent
covering the items substantially as set forth in Exhibit C, but referring to such Guaranteeing
Subsidiary and such Subsidiary Guaranty rather than the Borrower and the documents referred to in
Exhibit C.



45









 





ARTICLE VI

NEGATIVE COVENANTS




     Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:



     Section 6.01 Indebtedness. (a) The Borrower will not, and will not permit any Restricted
Subsidiary to, create, incur, or assume (collectively “incur”) any Indebtedness if at the time of
such incurrence or immediately after giving effect thereto, any Default shall have occurred and is
continuing; and



          (b) The Borrower will not permit any Restricted Subsidiary to incur Indebtedness except for
(i) Indebtedness of a Restricted Subsidiary in respect of letters of credit issued for the account
of such Restricted Subsidiary that do not secure Indebtedness or obligations of the Borrower or an
Unrestricted Subsidiary, (ii) Indebtedness owed by such Restricted Subsidiary to the Borrower or to
another Restricted Subsidiary; (iii) Indebtedness of a Person that becomes, by acquisition or
merger, a Restricted Subsidiary which Indebtedness (A) existed prior to the time of such
acquisition or merger and was not incurred or created in contemplation of such acquisition or
merger and (B) is repaid or otherwise ceases to be Indebtedness of a Restricted Subsidiary within
270 days after such acquisition or merger; (iv) Indebtedness of any Restricted Subsidiary in
respect of production payments, forward sales, similar arrangements and other secured Indebtedness,
in each case referred to in Section 6.02(g); (v) Indebtedness incurred in accordance with, and
subject to the satisfaction of the requirements set forth in, Section 5.11; and (vi) other
Indebtedness outstanding at such time for all Restricted Subsidiaries (but without duplication) in
an aggregate amount not exceeding $125,000,000.




     Section 6.02 Liens. The Borrower will not, and will not permit any Restricted
Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned
or hereafter acquired by it, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except:



          (a) Permitted Encumbrances;




          (b) any Lien on any property or asset of the Borrower or any Restricted Subsidiary existing
on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not
apply to any other property or asset of the Borrower or any Restricted Subsidiary and (ii) such
Lien shall secure only those obligations which it secures on the date hereof and extensions,
renewals and replacements thereof that do not increase the outstanding principal amount thereof;




          (c) any Lien on any property or asset existing prior to the acquisition thereof by the
Borrower or any Subsidiary or on any property or asset of any Person that becomes a Subsidiary
after the date hereof existing prior to the time such Person becomes a Restricted Subsidiary;
provided that (i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall

46









 








not apply to any other property or assets of the Borrower or any Restricted Subsidiary, and
(iii) such Lien shall secure only those obligations which it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions,
renewals and replacements thereof that do not increase the outstanding principal amount thereof;




          (d) Liens created in connection with the acquisition, development, construction or
improvement by the Borrower or any Restricted Subsidiary of fixed or capital assets;
provided that (i) such Liens secure Indebtedness permitted by Section 6.01 and all
Indebtedness secured by Liens permitted by this clause does not exceed $75,000,000 in the
aggregate outstanding at any time, (ii) such Liens and the Indebtedness secured thereby are
incurred prior to or within 180 days after such acquisition or the completion of such development,
construction or improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, developing, constructing or improving such fixed or capital assets and (iv)
such Liens shall not apply to any property or assets of the Borrower or any Restricted Subsidiary
other than such fixed or capital assets so acquired, developed, constructed or improved and other
fixed or capital assets that are developed or improved thereby or otherwise reasonably related
thereto (in the good faith determination of the Borrower) and working capital assets related
thereto (including but not limited to revenue from, and insurance, condemnation, sale and other
proceeds of, any such fixed or capital assets); and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof and do not apply to any other
property or assets not previously encumbered by the Lien so extended, renewed or replaced;




          (e) Liens securing Obligations;




          (f) Liens on deposits pursuant to any Swap Agreement entered into by the Borrower or any
Restricted Subsidiary in the ordinary course of its business, not to exceed $75,000,000 in the
aggregate amount outstanding at any time; and




          (g) production payments, forward sales and similar arrangements and other secured
Indebtedness; provided that the aggregate amount of Indebtedness attributable thereto does not
exceed 10% of Consolidated Net Tangible Assets determined as of the time each such production
payment, forward sale or similar arrangement or other secured Indebtedness is entered into and
determined based upon the financial statements then most recently delivered pursuant to Section
5.01 (a) and (b), and without reduction to Consolidated Net Tangible Assets on account of any such
production payment, forward sale or similar arrangement or other secured Indebtedness.




     Section 6.03 Fundamental Changes. 



          (a) The Borrower will not, and will not permit any Restricted Subsidiary to, merge into or
consolidate with any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any substantial part of its business or assets, or any Equity Interests of
any of its Restricted Subsidiaries (in each case, whether now owned or hereafter acquired), or
liquidate or dissolve, except that (A) the Borrower may sell, transfer, lease or otherwise dispose
of assets in connection with the consummation of a Like-Kind-Exchange; (B) if at the

47









 








time thereof and immediately after giving effect thereto no Event of Default shall have
occurred and be continuing, this Section 6.03 shall not prohibit (i) any Person from merging into
the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Person
(other than the Borrower) from merging into any Restricted Subsidiary in a transaction in which
the surviving entity is a Restricted Subsidiary wholly-owned by the Borrower and (iii) any
Restricted Subsidiary from selling, transferring, leasing or otherwise disposing of its assets to
the Borrower or to another Restricted Subsidiary wholly-owned by the Borrower; and (C) if at the
time thereof and immediately after giving effect thereto no Default shall have occurred and be
continuing, this Section 6.03 shall not prohibit (i) any Restricted Subsidiary from liquidating or
dissolving if the Borrower determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the Lenders, and (ii) any
Restricted Subsidiary from selling, transferring, leasing or otherwise disposing of its assets if
such sale, transfer, lease or other disposition would otherwise be permitted under Section 6.14.




          (b) The Borrower will not, and will not permit any of its Restricted Subsidiaries to, engage
to any material extent in any business other than businesses of the type conducted by the Borrower
and its Restricted Subsidiaries on the date of execution of this Agreement and businesses
reasonably related thereto




     Section 6.04 Financial Covenants



          (a) The Borrower shall not permit, at any time, the ratio of Total Debt to Total Cap to be
greater than 0.60 to 1.0 or to be less than zero.




          (b) The Borrower shall not permit, at any time, the ratio of Total Debt at such time to
Consolidated EBITDAX for the four fiscal quarters most recently ended on (if such day is the last
day of a fiscal quarter) or prior to such date to exceed 3.5 to 1.0 or be less than zero.




          (c) Prior to the occurrence of a Stable Investment Grade Date, the Borrower will not permit
on any day the ratio of (i) PV to (ii) Total Debt on such day to be less than 1.75 to 1.0. For
purposes of this Section 6.04(c) only, Total Debt shall only include fifty percent (50.0%) of
Subordinated Debt.




     Section 6.05 Investments, Loans, Advances and Guarantees. (a) The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, make any loans or advances to, Guarantee
any obligations of, or make any investment or acquire any other interest in, any Unrestricted
Subsidiaries except that (x) Like-Kind-Exchanges may be consummated, and (y) the Borrower or any
Restricted Subsidiaries may make loans or advances to, or investments or other interests in
Unrestricted Subsidiaries if at the time of the making of such loan, advance, investment or other
interest (all such loans, advances, investments and other interests are collectively referred to in
this Section 6.05 as “Investments”) (i) the aggregate amount of such Investments plus the aggregate
amount of all Restricted Payments made during each fiscal year of the Borrower does not exceed
$250,000,000, and (ii) at the time of any such Investment, and immediately after giving effect
thereto, no Default shall have occurred and be continuing.



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          (b) No Restricted Subsidiary shall Guarantee Indebtedness of the Borrower unless it shall have
previously or concurrently therewith Guaranteed the Obligations under the Loan Documents on at
least an equal and ratable basis with such Guarantee of Indebtedness of the Borrower in accordance
with Section 5.11 hereof.




     Section 6.06 Swap Agreements. The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into
to hedge or mitigate risks to which the Borrower or any Restricted Subsidiary has actual or
projected exposure (other than those in respect of Equity Interests of the Borrower or any of its
Subsidiaries), (b) Swap Agreements entered into in order to effectively cap, collar or exchange
interest rates (from fixed to floating rates, from one floating rate to another floating rate or
otherwise) with respect to any interest-bearing liability or investment of the Borrower or any
Restricted Subsidiary and (c) other Swap Agreements permitted under the risk management policies
approved by the Borrower’s Board of Directors from time to time and not subjecting the Borrower and
its Restricted Subsidiaries to material speculative risks.



     Section 6.07 Transactions with Affiliates. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, sell, lease or otherwise transfer any property or assets to,
or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) transactions on fair and reasonable
terms, (b) transactions between or among the Borrower and its wholly-owned Restricted Subsidiaries
not involving any other Affiliate or (c) any Restricted Payment permitted by Section 6.12.



     Section 6.08 Restrictive Agreements. The Borrower will not, and will not permit any
of its Restricted Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability
of (a) the Borrower or any Restricted Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) any Restricted Subsidiary to pay dividends or other
distributions with respect to any of its Equity Interests or to make or repay loans or advances to
the Borrower or any other Restricted Subsidiary or to Guarantee Indebtedness of the Borrower or any
other Restricted Subsidiary; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by law or by this Agreement, (ii) the foregoing shall not apply to restrictions
and conditions existing on the date hereof identified on Schedule 6.08 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness (including Capital Lease Obligations)
permitted by this Agreement if such restrictions or conditions apply only to the property or assets
securing such Indebtedness and (v) clause (a) of the foregoing shall not apply to customary
provisions in leases and other contracts restricting the assignment thereof.



     Section 6.09 Reserved.



     Section 6.10 Designation of Unrestricted Subsidiaries. The Borrower will not
designate any Subsidiary as an Unrestricted Subsidiary, unless:



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     (i) neither such Subsidiary nor any of its subsidiaries has any Indebtedness
except Non-Recourse Debt;




     (ii) neither such Subsidiary nor any of its subsidiaries is a party to any
agreement, arrangement, understanding or other transaction with the Borrower or any
Restricted Subsidiary, except those agreements and other transactions entered into in
writing in the ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower and each Restricted Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties;




     (iii) neither such Subsidiary nor any of its subsidiaries is a Guarantor
Subsidiary or has any outstanding Letter of Credit issued for its account;




     (iv) at the time of such designation and immediately after giving effect
thereto, no Default shall have occurred and be continuing;




     (v) the Borrower would have been in compliance with Sections 6.04 (a), (b)
and (c) on the last day of the most recently ended fiscal quarter of the Borrower had such
Subsidiary been an Unrestricted Subsidiary on such day;




     (vi) neither such Subsidiary nor any of its subsidiaries owns any
Indebtedness or Equity Interest of, or is the beneficiary of any Lien on any
property of, the Borrower or any Restricted Subsidiary; and




     (vii) at or immediately prior to such designation, the Borrower delivers a
certificate to the Lenders certifying (a) the names of such Subsidiary and all of its
subsidiaries, and (b) that all requirements of this Section have been met for such
designation.



     Section 6.11 New Unrestricted Subsidiaries. The Borrower will not permit any
Unrestricted Subsidiary to acquire or create any subsidiary of such Unrestricted Subsidiary unless
such subsidiary is designated as an Unrestricted Subsidiary in accordance with Section 6.10.



     Section 6.12 Restricted Payments. The Borrower will not, and will not permit any of
the Restricted Subsidiaries to, pay, declare or make, or agree to pay, declare or make, directly or
indirectly, any Restricted Payment, except (a) the Borrower may declare and pay dividends with
respect to its Equity Interests payable solely in additional shares of its common stock, (b)
Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (c) the
Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Borrower and its Subsidiaries and (d) the
Borrower may declare and pay cash dividends, and redeem for cash or repurchase for cash its common
and preferred stock, if in each case (i) the aggregate amount of such dividends plus the aggregate
amount paid for such redemptions and repurchases from the Effective Date through the Maturity Date
does not exceed $500,000,000, and (ii) at the time of any such dividend, redemption or repurchase,
and immediately after giving effect thereto, no Default shall have occurred and be continuing.



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     Section 6.13 Preferred Stock. The Borrower will not permit any Restricted Subsidiary
to issue preferred stock.



     Section 6.14 Sale of Oil and Gas Properties. The Borrower and its Restricted
Subsidiaries, taken as a whole, will not sell all or substantially all of their Oil and Gas
Properties.



     Section 6.15 Sale Leaseback Transactions. The Borrower will not enter into, and will
not permit any Restricted Subsidiary to enter into, any Sale Leaseback Transaction if, immediately
after giving effect thereto, the aggregate amount of all Attributable Obligations for all Sale
Leaseback Transactions would exceed $50,000,000.



     Section 6.16 Sale or Discount of Receivables. The Borrower will not, and will not
permit any Restricted Subsidiary to, discount or sell (with or without recourse) any of its notes
receivable or accounts receivable, except that the Borrower and Restricted Subsidiaries may
discount or sell past due accounts receivable and past due notes receivable if the Borrower
determines in its reasonable judgment that such course of action is a reasonably prudent means of
collection with respect to such note receivable or account receivable and if the notes and accounts
receivables discounted or sold do not constitute a material portion of the Borrower’s and the
Restricted Subsidiaries’ notes receivable or accounts receivable outstanding at such time.



     Section 6.17 Environmental Matters. The Borrower will not, and will not permit any
Subsidiary to, cause or permit any of its Property to be in violation of, or do anything or permit
anything to be done which will subject any such Property to any remedial obligations under any
Environmental Laws, assuming disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to such Property, where such violations and
remedial obligations would in the aggregate, have a Material Adverse Effect.



ARTICLE VII

EVENTS OF DEFAULT




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



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




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




          (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any
Subsidiary Guarantor in or in connection with this Agreement, any Subsidiary Guaranty or any
amendment or modification hereof or waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection with this Agreement,
any Subsidiary Guaranty or any amendment or modification hereof or thereof or any waiver hereof or
thereof, shall prove to have been

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incorrect in any material respect when made or deemed made and either (1) an officer of the
Borrower had actual knowledge that such representation or warranty was false or incorrect in a
material respect when made or (2) if no officer had such knowledge, such representation or
warranty shall continue to be false or incorrect in any material respect thirty (30) Business Days
after the earlier of an officer of the Borrower obtaining actual knowledge thereof or written
notice thereof shall have been sent to Borrower by Administrative Agent or by any Lender;




          (d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, Section 5.03 (with respect to the Borrower’s existence), or Section
5.08 or in Article VI;




          (e) the Borrower or any Subsidiary Guarantor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement or any Subsidiary Guaranty (other than those
specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied
for a period of thirty (30) days after notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender);




          (f) the Borrower or any Restricted Subsidiary shall fail to make any payment of principal or
interest in respect of any Material Indebtedness (other than in respect of any Swap Agreement),
when and as the same shall become due and payable and such failure continues beyond any applicable
period of grace provided therefor, or any event or condition occurs that results in any Material
Indebtedness (including in respect of any Swap Agreement) becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness (other than in respect of any Swap
Agreement) or any trustee or agent on its or their behalf to cause such Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity, and such event or condition continues beyond any applicable period of
grace provided therefor, if the effect thereof is to accelerate the maturity of the obligations
due thereunder or require such obligations to be prepaid prior to the stated maturity thereof;
provided that this clause (f) shall not apply to secured Indebtedness that becomes due as
a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to
the extent such Indebtedness is paid when due;




          (g) any event or condition occurs (with respect to which the Borrower or any Restricted
Subsidiary is the defaulting party) that enables or permits the holder or holders of any Material
Indebtedness under a Swap Agreement to declare an early termination date or otherwise cause such
Material Indebtedness to become due prior to its scheduled maturity and such event or condition
continues beyond any applicable period of grace provided therefor, except where such event or
condition is being contested in good faith;




          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any
Restricted Subsidiary or its debts, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect

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or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days
or an order or decree approving or ordering any of the foregoing shall be entered;




          (i) the Borrower or any Restricted Subsidiary shall (i) voluntarily commence any proceeding
or file any petition seeking liquidation, reorganization or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Restricted Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose
of effecting any of the foregoing;




          (j) the Borrower or any Restricted Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;




          (k) one or more judgments for the payment of money in an aggregate amount in excess of
$75,000,000 shall be rendered against the Borrower, any Restricted Subsidiary or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any material domestic assets of the Borrower or any Restricted
Subsidiary to enforce any such judgment;




          (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect or result in liability of the Borrower and its Subsidiaries in
an aggregate amount exceeding $75,000,000 for all periods;




          (m) a Change in Control shall occur;




          (n) any provision of any Subsidiary Guaranty for any reason is not a legal, valid, binding
and enforceable obligation of the Subsidiary Guarantor shown as being a party thereto or any
Subsidiary or the Borrower shall so state in writing; provided that an Event of Default
shall not exist under this clause (n) unless the Subsidiary Guarantors implicated hereby consist
of Material Subsidiaries; or




          (o) the Borrower or any other Person shall petition or apply for or obtain any order
restricting payment by an Issuing Bank under any Letter of Credit or extending the liability of an
Issuing Bank under any Letter of Credit beyond the expiration date stated therein;



then, and in every such event (other than an event with respect to an Obligor described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different times: (i)


53









 






terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be due and payable),
and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Borrower; and in case of any event with respect to an Obligor
described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall automatically become due and
payable, without presentment, demand, protest or other notice of any kind, all of which are hereby
waived by the Borrower.




ARTICLE VIII

THE ADMINISTRATIVE AGENT




     Section 8.01 Administrative Agent. Each of the Lenders and the Issuing Banks hereby
irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent
to take such actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.



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



     The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to exercise in writing as
directed by the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or willful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof
is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with this Agreement, (ii) the



54









 







contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.



     The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.



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



     Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Banks and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative
Agent. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for
the benefit of such retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them while it was acting
as Administrative Agent.



     Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent, any Issuing Bank or any Lender and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter into



55









 







this Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, any Issuing Bank or any Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.



     Each Lender, ratably in accordance with its respective Applicable Percentage, shall indemnify
the Administrative Agent, sub-agents appointed by the Administrative Agent pursuant to this Article
VIII and each Related Party of the Administrative Agent and such sub-agents (each such Person being
called an “Agent Indemnitee”) against, and hold each Agent Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Agent Indemnitee, incurred by or asserted against any Agent
Indemnitee to the extent (i) that such Agent Indemnitee is entitled to indemnification from the
Borrower pursuant to Section 9.03(b) and (ii) either (1) such Agent Indemnitee is not promptly and
indefeasibly paid the amount of such indemnification by the Borrower or (2) any such payment is
rescinded or must otherwise be returned by such Agent Indemnitee upon the insolvency, bankruptcy or
reorganization of any Person or otherwise. It is the express intent of the parties hereto that
each Agent Indemnitee shall, to the extent contemplated in Section 9.03 be indemnified for its own
ordinary, sole or contributory negligence; provided that such indemnity shall not, as to any Agent
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final non-appealable judgment to
have resulted from the gross negligence or willful misconduct of such Agent Indemnitee. Payment by
any Lender pursuant to this Article VIII shall not relieve the Borrower of its obligations under
Section 9.03, and each Lender making a payment under this paragraph shall be entitled to receive
from each Agent Indemnitee such Lender’s ratable share of any amount indefeasibly recovered by such
Agent Indemnitee from the Borrower on account of the previously unpaid indemnification pursuant to
Section 9.03(b) that required such payment by such Lender under this paragraph, in each case
without interest.



     Section 8.02 The Arranger, Sole Bookrunner, Syndication Agent and Documentation
Agents. The Arranger, Sole Bookrunner, Syndication Agent and Documentation Agents shall have
no duties, responsibilities or liabilities under this Agreement and the other Loan Documents other
than their duties, responsibilities and liabilities in their capacity as Lenders (or as an Issuing
Bank, if applicable) hereunder.



ARTICLE IX

MISCELLANEOUS




     Section 9.01 Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:



56









 






     (i) if to the Borrower, to 363 N. Sam Houston Parkway, Suite 2020, Houston, Texas
77060, Attention of chief financial officer (Telecopy No. (713) 847-6006);




     (ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., Loan and Agency
Services Group, 1111 Fannin Street, 10th Floor, Houston, Texas, 77002, Attention
of Ms. Janene English (Facsimile No. (713) 427-6307), with a copy to JPMorgan Chase Bank,
N.A., 600 Travis Street, 20th Floor, Houston, Texas 77002, Attention of Mr. Peter Licalzi
(Facsimile No. (713) 216-4117);




     (iii) if to the Issuing Banks, to JPMorgan Chase Bank, N.A. at the address set forth in
paragraph (ii) above, and if to any other Lender who is an Issuing Bank, to it at its
address (or telecopy number) set forth in its Administrative Questionnaire; and




     (iv) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.



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




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




     Section 9.02 Waivers; Amendments. 



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





57










 





          (b) Neither this Agreement, any provision hereof, nor any provisions of the Subsidiary
Guaranties may be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase or extend the Commitment of any Lender without the written
consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce
the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount
of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of
any Commitment, without the written consent of each Lender affected thereby, (iv) change Section
2.17(b) or (c), or Section 2.08(c) in a manner that would alter the pro rata treatment of Lenders
or pro rata sharing of payments required thereby, without the written consent of each Lender, or
(v) change any of the provisions of this Section or the definition of “Required Lenders” or any
other provision hereof specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing
Banks hereunder without the prior written consent of the Administrative Agent or the Issuing
Banks, as the case may be.




     Section 9.03 Expenses; Indemnity; Damage Waiver. 



          (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and the Arranger and their Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with the syndication of
the credit facilities provided for herein, the preparation and administration of this Agreement
and the Subsidiary Guaranties or any amendments, modifications or waivers of the provisions hereof
(whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Banks in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing
Banks or any Lender, including the reasonable fees, charges and disbursements of any counsel for
the Administrative Agent, the Issuing Banks or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement and the Subsidiary Guaranties,
including its rights under this Section, or in connection with the Loans made or Letters of Credit
issued hereunder, including all such reasonable out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of Credit.




          (b) The Borrower shall indemnify the Administrative Agent, each Issuing Bank, each Lender and
each Related Party of the Administrative Agent, any Issuing Bank or any Lender (each such Person
being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges
and disbursements of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of
this Agreement or any




58









 







agreement or instrument contemplated hereby, the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Banks to honor any demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly comply with the
terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or
any Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto; and SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING
THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR
PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES OF
NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE
INDEMNITEES OR ANY STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES;
PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF COMPETENT
JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH INDEMNITEE.




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




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




          (e) All amounts due under this Section shall be payable promptly after written demand
therefor.




     Section 9.04 Successors and Assigns. 



59









 





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




          (b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may
assign to one or more assignees (other than to the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) all or a portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and the Loans at the time owing to it) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of:




                    (A) the Borrower, provided that no consent of the Borrower shall be required for an
assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has
occurred and is continuing, any other assignee; and



                    (B) the Administrative Agent and each Issuing Bank, provided that no consent of the
Administrative Agent or any Issuing Bank shall be required for an assignment of any Commitment to
an assignee that is a Lender with a Commitment immediately prior to giving effect to such
assignment.



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



                    (A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount
of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as
of the date the Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $10,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, provided that no such consent of the Borrower shall
be required if an Event of Default has occurred and is continuing;



                    (B) each partial assignment shall be made as an assignment of a proportionate part of all the
assigning Lender’s rights and obligations under this Agreement, provided that this clause
shall not be construed to prohibit the assignment of a proportionate part of all the assigning
Lender’s rights and obligations in respect of its Commitments or Loans;



60









 





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



                    (D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire and comply with the requirements of Section 2.16(e).



          For the purposes of this Section 9.04(b), the term “Approved Fund” has the following
meaning:




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




               (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.



               (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitment of, and
principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be conclusive
absent manifest error, and the Borrower, the Administrative Agent, the Issuing Banks and the
Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.
The Register shall be available for inspection by the Borrower, the Issuing Banks and any Lender,
at any reasonable time and from time to time upon reasonable prior notice.



               (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in this
paragraph (b) of this Section and any written



61









 




consent to such assignment required by this paragraph (b) of this Section, the Administrative
Agent shall accept such Assignment and Assumption and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.




          (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or the
Issuing Banks, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Administrative Agent, the Issuing Banks and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any amendment, modification
or waiver described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to paragraph (b) of this Section.




               (ii) A Participant shall not be entitled to receive any greater payment under Section 2.14 or
Section 2.16 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.16(e) as though it were a Lender.



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.




     Section 9.05 Survival. All covenants, agreements, representations and warranties made
by the Borrower herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing



62









 




Banks or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and shall continue in full
force and effect as long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any provision hereof.




     Section 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
Except as provided in Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement. This Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire contract among the
parties relating to the subject matter hereof and thereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter hereof and thereof.
THIS AGREEMENT, SUCH SEPARATE LETTER AGREEMENTS AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.



     Section 9.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



     Section 9.08 Governing Law; Jurisdiction; Consent to Service of Process.




          (a) This Agreement shall be construed in accordance with and governed by the law of the State
of New York.




          (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court of the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any



63









 







such action or proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against the Borrower or its properties
in the courts of any jurisdiction.




          (c) The Borrower hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.




          (d) Each party to this Agreement irrevocably consents to service of process in the
manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right of
any party to this Agreement to serve process in any other manner permitted by law.




     Section 9.09 WAIVER OF JURY TRIAL. EACH PARTY HEREBY (i) IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT RELATED TO THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY
AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION
9.09.



     Section 9.10 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.



     Section 9.11 Confidentiality. Each of the Administrative Agent, the Issuing Banks and
the Lenders agrees to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and
agents, including accountants and legal counsel (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any regulatory



64









 




authority or any self-regulatory body claiming to have authority, (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process or authority, (d) to
any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement, (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (iii)
to its advisors (other than its accountants and legal counsel), (iv) to an investor or prospective
investor in an Approved Fund that also agrees that Information shall be used solely for the purpose
of evaluating an investment in such Approved Fund, (v) to a trustee, collateral manager, servicer,
backup servicer, noteholder or secured party in an Approved Fund in connection with the
administration, servicing and reporting on the assets serving as collateral for an Approved Fund,
or (vi) to a nationally recognized rating agency that requires access to information regarding the
Borrower, the Loans and Loan Documents in connection with ratings issued with respect to an
Approved Fund, (g) with the consent of the Borrower or (h) to the extent such Information
becomes publicly available other than as a result of a breach of this Section. For the purposes of
this Section, “Information” means all information received from the Borrower relating to the
Borrower or its business, other than any such information that is available to the Administrative
Agent, the Issuing Banks or any Lender on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower after the date
hereof, such information is clearly identified at the time of delivery as confidential. Any Person
required to maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such Person would accord to
its own confidential information.




     Section 9.12 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable
law, the rate of interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by such Lender.



     Section 9.13 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under this Agreement



65









 




held by such Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement and although such obligations may be unmatured. The rights of each Lender
under this Section are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.




     Section 9.14 USA Patriot Act Notice. Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the Borrower in accordance
with the Act.



[SIGNATURE PAGES BEGIN NEXT PAGE]





66










 








SCHEDULE 2.01

COMMITMENTS




	 	 	 	 	 
	 	 	Final	 
	Bank	 	Allocation	 
	JPMorgan Chase Bank, N.A.
	 	$	100,000,000	 
	Wachovia Bank, N.A.
	 	$	100,000,000	 
	The Royal Bank of Scotland plc
	 	$	100,000,000	 
	Calyon New York Branch
	 	$	100,000,000	 
	Harris Nesbitt Financing Inc.
	 	$	100,000,000	 
	Wells Fargo Bank, N.A.
	 	$	100,000,000	 
	Bank of America
	 	$	85,000,000	 
	Den Norske Bank ASA
	 	$	85,000,000	 
	Compass Bank
	 	$	65,000,000	 
	Mizuho Corporate Bank, Ltd.
	 	$	65,000,000	 
	Union Bank of California
	 	$	65,000,000	 
	Fortis Capital Corp.
	 	$	65,000,000	 
	U.S. Bank
	 	$	50,000,000	 
	Societe Generale
	 	$	50,000,000	 
	The Bank of Tokyo-Mitsubishi UFJ, Ltd.
	 	$	30,000,000	 
	Barclays Bank PLC
	 	$	30,000,000	 
	ING Capital LLC
	 	$	30,000,000	 
	Natixis Banque Populaires
	 	$	30,000,000	 
	 
	 	 	 
	Total
	 	$	1,250,000,000	 
	 
	 	 	 






Schedule 2.01




 









 





EXHIBIT A




FORM OF




ASSIGNMENT AND ASSUMPTION




          This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit Agreement identified
below [, as amended] (the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee, it being agreed that as used herein and in Annex 1 the term
“Effective Date” shall have the meaning set forth below and not the meaning set forth in the Credit
Agreement. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby
agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as
if set forth herein in full.




          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations (including, without limitation, all liabilities and duties under Sections
2.05(d) and 2.05(e)) in its capacity as a Lender under the Credit Agreement and any other documents
or instruments delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of the Assignor under
the Credit Agreement and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing, including contract
claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights
and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”). Such sale and assignment is without recourse to
the Assignor and, except as expressly provided in this Assignment and Assumption, without
representation or warranty by the Assignor.




	 	 	 
	1. Assignor:

	 	                                         ___
	 
	 	 
	2. Assignee

	 	                                                            
	 

	 	[and is an Affiliate/Approved Fund of [identify Lender]1]








 




			
	1	 	Select as applicable.




EXHIBIT A-1









 










	 	 	 
	3. Borrower

	 	Newfield Exploration Company
	 
	 	 
	4. Administrative Agent:

	 	                                        , as the administrative agent under the Credit Agreement
	 
	 	 
	5. Credit Agreement:

	 	The Credit Agreement dated as of June 22, 2007 among Newfield Exploration
Company, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and each
Issuing Bank
	 
	 	 
	6. Assigned Interest:

	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Amount of	 	Amount of	 	Percentage Assigned
	 	 	Commitment/Loans	 	Commitment/Loans	 	of
	Facility Assigned	 	for all Lenders	 	Assigned	 	Commitment/Loans2
	All facilities
	 	$	 	 	 	$	 	 	 	 	 	%





Effective Date:                      ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]



The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 	 	 
	 	ASSIGNOR



[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	ASSIGNEE



[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 	 
	 	 	 	 
	 





 




			
	2	 	Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.




EXHIBIT A-2









 










	 	 	 	 	 
	Consented to and Accepted:



[NAME OF ADMINISTRATIVE AGENT], as

Administrative Agent

 	 	 
	By  	 	 	 
	 	Title: 	 	 
	 	 	 	 



	 	 	 	 	 
	[NAME OF ISSUING BANK], as Issuing Bank

 	 
	By  	 	 	 
	 	Title: 	 	 
	 



	 	 	 	 	 
	[Consented to:



NEWFIELD EXPLORATION COMPANY

 	 	 
	By  	 	]3
	 
	 	Title 	 	 
	 	 	 	 





 




			
	3	 	To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.




EXHIBIT A-3









 










ANNEX 1




[                                        ]4




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




          1. Representations and Warranties.




          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.




          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 3.04 or 5.01
thereof, as applicable, and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest, and it has made such analysis and decision independently and
without reliance on the Administrative Agent, any Issuing Bank or any Lender, and (v) if it is a
Foreign Lender, attached to the Assignment and Assumption is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative
Agent, the Assignor, any Issuing Bank or any Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own decisions in taking or not taking
action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.






 




			
	4	 	Describe Credit Agreement at option of Administrative Agent.




EXHIBIT A-4









 










          2. Payments. From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but excluding the
Effective Date and to the Assignee for amounts which have accrued from and after the Effective
Date.




          3. General Provisions. This Assignment and Assumption shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors and assigns.
This Assignment and Assumption may be executed in any number of counterparts, which
together shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment and Assumption by telecopy shall be effective as delivery
of a manually executed counterpart of this Assignment and Assumption. This Assignment and
Assumption shall be governed by, and construed in accordance with, the law of the State of
New York.





EXHIBIT A-5









 





EXHIBIT B




FORM OF

NOTICE OF COMMITMENT INCREASE




[Date]




JPMorgan Chase Bank, N.A.

                                                            

                                                            

Attention:                                         




     Ladies and Gentlemen:



     The undersigned, Newfield Exploration Company, refers to the Credit Agreement dated as of June
22, 2007 (as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”, with terms defined in the Credit Agreement and not otherwise defined herein being
used herein as therein defined) among Newfield Exploration Company (the “Borrower”), the
Issuing Banks and Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent,
and hereby gives you notice, irrevocably, pursuant to Section 2.02(b) of the Credit Agreement that
the undersigned hereby requests that the aggregate amount of the Lenders’ Commitments be increased,
and in that connection sets forth below the information relating to such proposed Commitment
Increase as required by Section 2.02 of the Credit Agreement:



          (a) the effective date of such increase of the aggregate total amount of the Lenders’
Commitments is                     ;




          (b) the amount of the requested increase of the aggregate total Lenders’ Commitments is
$                    ;




          (c) the CI Lenders, which have agreed with the Borrower to provide their respective
Commitments, are: [INSERT NAMES OF THE CI LENDERS][also, list existing Lenders that have agreed to
increase their Commitments]; and




          (d) set forth on Annex I hereto is the amount of the respective Commitments of all Reducing
Percentage Lenders, CI Lenders and other Lenders holding Commitments on the Commitment Increase
Effective Date.




     Delivery of an executed counterpart of this Notice of Commitment Increase by telecopier shall
be effective as delivery of an original executed counterpart of this Notice of Commitment Increase.



Exhibit B-1









 





	 	 	 	 	 
	 	Very truly yours,



Newfield Exploration Company

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



Approved:




JPMorgan Chase Bank, N.A., as Administrative Agent




	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 





Commitment Increase Effective Date:                     




Exhibit B-2









 





EXHIBIT D




FORM OF




SUBSIDIARY GUARANTY




     GUARANTY
dated as of                , 200___ made by the undersigned (the
“Guarantor”) in favor of the Lenders, the Issuing Banks and the Administrative Agent, as
those terms are defined in the Credit Agreement dated as of June 22, 2007 among JPMorgan Chase
Bank, N.A., as Administrative Agent and as Issuing Bank, Newfield Exploration Company, a Delaware
corporation (the “Borrower”), and the Lenders party thereto [as amended] (the “Credit Agreement”;
terms defined therein and not defined herein are used herein as therein defined).



     PRELIMINARY STATEMENTS: The Credit Agreement provides for Loans to, and Letters of Credit for
the account of, the Borrower and requires this Guaranty be executed by the Guarantor on the
circumstances set forth therein. The Guarantor a Restricted Subsidiary and is financially
interested in the affairs of the Borrower.



     THEREFORE, in order to induce the Lenders, the Issuing Banks and the Administrative Agent
(together the “Beneficiaries” and each a “Beneficiary”) to extend credit or give financial
accommodation under or perform duties under the Credit Agreement and to comply with the terms
thereof, the Guarantor agrees as follows:



     Section 1. Guaranty of Payment. The Guarantor unconditionally and irrevocably
guarantees to the Beneficiaries the punctual payment of all Obligations now owing or which may in
the future be owing, when the same are due and payable, whether on demand, at stated maturity, by
acceleration or otherwise, and whether for principal, interest, Letter of Credit reimbursement
obligations, fees, expenses, indemnification or otherwise (all of the foregoing sums being the
“Liabilities”). The Liabilities include, without limitation, interest accruing after the
commencement of a proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at
the rate or rates provided in the Loan Documents. This Guaranty is a guaranty of payment and not
of collection only. The Beneficiaries shall not be required to exhaust any right or remedy or take
any action against the Borrower or any other Person or any collateral. The Guarantor agrees that,
as between the Guarantor and the Beneficiaries, the Liabilities may be declared to be due and
payable for the purposes of this Guaranty notwithstanding any stay, injunction or other prohibition
which may prevent, delay or vitiate any declaration as regards the Borrower and that in the event
of a declaration or attempted declaration, the Liabilities shall immediately become due and payable
by the Guarantor for the purposes of this Guaranty.



     Section 2. Guaranty Absolute. The Guarantor guarantees that the Liabilities shall be
paid strictly in accordance with the terms of the Loan Documents. The liability of the Guarantor
under this Guaranty is absolute and unconditional irrespective of: (a) any change in the time,
manner or place of payment of, or in any other term of, all or any of the Loan Documents or
Liabilities, or any other amendment or waiver of or any consent to departure from any of the terms
of any Loan Document or Liability, including any increase or decrease in the rate of interest
thereon; (b) any release or amendment or waiver of, or consent to departure from, any other
guaranty or support document, or any exchange, release or non-perfection of any collateral, for all
or any of the Loan



Exhibit D-1









 




Documents or Liabilities; (c) any present or future law, regulation or order of any jurisdiction
(whether of right or in fact) or of any agency thereof purporting to reduce, amend, restructure or
otherwise affect any term of any Loan Document or Liability; (d) without being limited by the
foregoing, any lack of validity or enforceability of any Loan Document or Liability; and (e) any
other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or
any other theory) with respect to the Loan Documents or the transactions contemplated thereby which
might constitute a legal or equitable defense available to, or discharge of, the Borrower or a
guarantor.




     Section 3. Guaranty Irrevocable. This Guaranty is a continuing guaranty of the
payment of all Liabilities now or hereafter existing and shall remain in full force and effect
until payment in full of all Liabilities and other amounts payable under this Guaranty and
termination of all Letters of Credit and the Commitments and until the Credit Agreement is no
longer in effect.



     Section 4. Reinstatement. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the Liabilities is rescinded
or must otherwise be returned by any Beneficiary on the insolvency, bankruptcy or reorganization of
the Borrower or any Subsidiary or otherwise, all as though the payment had not been made.



     Section 5. Subrogation; Contribution. The Guarantor shall not exercise any rights
which it may acquire by way of subrogation or contribution, by any payment made under this Guaranty
or otherwise, until all the Liabilities have been paid in full, all Letters of Credit and
Commitments have been terminated, and the Credit Agreement is no longer in effect. If any amount
is paid to the Guarantor on account of subrogation or contribution rights, the amount shall be held
in trust for the benefit of the Beneficiaries and shall be promptly paid to the Administrative
Agent to be credited and applied to the Liabilities, whether matured or unmatured or absolute or
contingent, in accordance with the terms of the Credit Agreement.



     Section 6. Subordination. Without limiting the Beneficiaries’ rights under any other
agreement, any liabilities owed by the Borrower to the Guarantor in connection with any extension
of credit or financial accommodation by the Guarantor to or for the account of the Borrower,
including but not limited to interest accruing at the agreed contract rate after the commencement
of a bankruptcy or similar proceeding, are hereby subordinated to the Liabilities, and such
liabilities of the Borrower to the Guarantor, if the Required Lenders so request, shall be
collected, enforced and received by the Guarantor as trustee for the Beneficiaries and shall be
paid over to the Administrative Agent on account of the Liabilities but without reducing or
affecting in any manner the liability of the Guarantor under the other provisions of this Guaranty.



     Section 7. Payments Generally. All payments by the Guarantor shall be made in
dollars, in the manner and at the place required by the Credit Agreement.



     Section 8. Certain Taxes. The Guarantor further agrees that all payments to be made
hereunder shall be made without setoff or counterclaim and free and clear of, and without deduction
for, any taxes, levies, imposts, duties, charges, fees, deductions, withholdings or restrictions or
conditions of any nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed by any country or by any political subdivision or taxing authority thereof or



Exhibit D-2









 




therein (“Taxes”). If any Taxes are required to be withheld from any amounts payable
hereunder, the amounts so payable shall be increased to the extent necessary to yield (after
payment of all Taxes) the amounts payable hereunder in the full amounts so to be paid. Whenever
any Tax is paid by the Guarantor, as promptly as possible thereafter, the Guarantor shall send the
Administrative Agent an official receipt showing payment thereof, together with such additional
documentary evidence as may be required from time to time by the Administrative Agent.




     Section 9. Representations and Warranties. The Guarantor represents and warrants
that: (a) this Guaranty (i) has been authorized by all necessary action; (ii) does not violate any
agreement, instrument, law, regulation or order applicable to the Guarantor; (iii) does not require
the consent or approval of any Person or entity, including but not limited to any Governmental
Authority, or any filing or registration of any kind; and (iv) is the legal, valid and binding
obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, except
to the extent that enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors’ rights generally; and (b) in executing and delivering this
Guaranty, the Guarantor has (i) without reliance on any Beneficiary or any information received
from any Beneficiary and based upon such documents and information it deems appropriate, made an
independent investigation of the transactions contemplated hereby and the Borrower, the Borrower’s
business, assets, operations, prospects and condition, financial or otherwise, and any
circumstances which may bear upon such transactions, the Borrower or the obligations and risks
undertaken herein with respect to the Liabilities; (ii) adequate means to obtain from the Borrower
on a continuing basis information concerning the Borrower; (iii) full and complete access to the
Loan Documents and any other documents executed in connection with the Loan Documents; and (iv) not
relied and will not rely upon any representations or warranties of any Beneficiary or any acts
heretofore or hereafter taken by any Beneficiary (including but not limited to any review by any
Beneficiary of the affairs of the Borrower).



     Section 10. Remedies Generally. The remedies provided in this Guaranty are cumulative
and not exclusive of any remedies provided by law.



     Section 11. Setoff. The Guarantor agrees that, in addition to (and without
limitation of) any right of setoff, banker’s lien or counterclaim any Beneficiary may otherwise
have, each Beneficiary shall be entitled, at its option, to offset balances (general or special,
time or demand, provisional or final) held by it for the account of the Guarantor at any of such
Beneficiary’s offices, in dollars or in any other currency, against any amount payable by the
Guarantor under this Guaranty which is not paid when due (regardless of whether such balances are
then due to the Guarantor), in which case it shall promptly notify the Guarantor thereof;
provided that the failure to give such notice shall not affect the validity thereof.



     Section 12. Formalities. The Guarantor waives presentment, notice of dishonor,
protest, notice of acceptance of this Guaranty or incurrence of any Liability and any other
formality with respect to any of the Liabilities or this Guaranty.



     Section 13. Amendments and Waivers. No amendment or waiver of any provision of this
Guaranty, nor consent to any departure by the Guarantor therefrom, shall be effective unless it is
in writing and signed by the Lenders, and then the waiver or consent shall be effective only in



Exhibit D-3









 




the specific instance and for the specific purpose for which given. No failure on the part of any
Beneficiary to exercise, and no delay in exercising, any right under this Guaranty shall operate as
a waiver or preclude any other or further exercise thereof or the exercise of any other right.




     Section 14. Expenses. The Guarantor shall reimburse each Beneficiary on demand for
all costs, expenses and charges (including without limitation fees and charges of external legal
counsel for such Beneficiary and costs allocated by its internal legal department) incurred by such
Beneficiary in connection with the performance or enforcement of this Guaranty. The obligations of
the Guarantor under this Section shall survive the termination of this Guaranty.



     Section 15. Assignment. This Guaranty shall be binding on, and shall inure to the
benefit of the Guarantor, each Beneficiary and their respective successors and assigns;
provided that the Guarantor may not assign or transfer its rights or obligations under this
Guaranty. Without limiting the generality of the foregoing: (a) the obligations of the Guarantor
under this Guaranty shall continue in full force and effect and shall be binding on any successor
partnership and on previous partners if the Guarantor is a partnership, regardless of any change in
the partnership; and (b) each Beneficiary may assign, sell participations in or otherwise transfer
its rights under the Loan Documents to any other Person in accordance with the Credit Agreement,
and the other Person shall then become vested with all the rights granted to such Beneficiary in
this Guaranty to the extent of such assignment, participation or transfer.



     Section 16. Captions. The headings and captions in this Guaranty are for convenience
only and shall not affect the interpretation or construction of this Guaranty.



     Section 17. Governing Law; Jurisdiction; Consent to Service of Process. (e) This
Guaranty shall be construed in accordance with and governed by the law of the State of New York.



          (b) The Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in
New York County and of the United States District Court of the Southern District of New York, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Guaranty, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Guaranty shall affect any right
that the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Guaranty against the Guarantor or its properties in the
courts of any jurisdiction.




          (c) The Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Guaranty in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.




Exhibit D-4









 








          (d) The Guarantor irrevocably consents to service of process by delivery of notice
to the address set forth below. Nothing in this Guaranty will affect the right of any Person to
serve process in any other manner permitted by law.




     Section 18. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.



     Section 19. Integration; Effectiveness. This Guaranty alone sets forth the entire
understanding of the Guarantor and the Beneficiaries relating to the guarantee by the Guarantor of
the Liabilities and constitutes the entire contract between the parties relating to the subject
matter hereof and supersedes any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof, it being expressly agreed, however, that this Guaranty does
not amend, limit or impair any other Loan Document. This Guaranty shall become effective when it
shall have been executed and delivered by the Guarantor to the Administrative Agent. Delivery of
an executed signature page of this Guaranty by telecopy shall be effective as delivery of a
manually executed counterpart of this Guaranty.



     Section 20. Limit of Liability. The liabilities and obligations of the Guarantor
under this Guaranty shall be limited to an aggregate amount equal to the largest amount that would
not render such Guarantor’s liabilities and obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of any applicable
state law.



     IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered
by its authorized officer as of the date first above written.



	 	 	 	 	 
	 	[Name of Guarantor]


 	 
	 	By:	 	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	Address: 	  	 



Exhibit D-5









 






	 	 	 	 	 



EXHIBIT E




FORM OF

PROMISSORY NOTE




			
	$[               ]
	 	[               ], 200[  ]






     FOR VALUE RECEIVED, NEWFIELD EXPLORATION COMPANY, a Delaware corporation (the
“Company”), hereby promises to pay to the order of [_________] (the “Bank”), at
the office of JPMORGAN CHASE BANK, N.A. (the “Agent”), at 270 Park Avenue, New
York, New York 10017, the principal sum of [_________] DOLLARS [($_________)]
(or such lesser amount as shall equal the aggregate unpaid principal amount of the Loans owed to
the Bank by the Company under the Credit Agreement, as hereinafter defined), in lawful money of the
United States of America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount of
each such Loan, at such office, in like money and funds, for the period commencing on the date of
such Loan until such Loan shall be paid in full, at the rates per annum and on the dates provided
in the Credit Agreement.



     The date, amount, Type, interest rate, Interest Period (if any) and maturity of each Loan made
by the Bank to the Company, and each payment made on account of the principal thereof, shall be
recorded by the Bank on its books and, prior to any transfer of this promissory note (the
“Note”), may be endorsed by the Bank on the schedules attached hereto or any continuation
thereof.



     This Note is one of the promissory notes referred to in Section 2.09(e) of the Credit
Agreement dated as of June 22, 2007 among the Company, the Lenders which are or become parties
thereto (including the Bank) and the Agent, and evidences Loans made by the Bank thereunder (such
Credit Agreement as the same may be amended or supplemented from time to time, the “Credit
Agreement”). Capitalized terms used in this Note and not defined herein shall have the
respective meanings assigned to them in the Credit Agreement.



     This Note is issued pursuant to the Credit Agreement and is entitled to the benefits provided
for in the Credit Agreement and the other Loan Documents. The Credit Agreement provides for the
acceleration of the maturity of this Note upon the occurrence of certain events, for prepayments of
Loans upon the terms and conditions specified therein and other provisions relevant to the Note.



     THIS NOTE (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.



Exhibit E









 





	 	 	 	 	 
	 	NEWFIELD EXPLORATION COMPANY

 	 
	 	By:  	 	 
	 	 	Terry W. Rathert 	 
	 	 	Vice President and Chief Financial Officer 	 



Signature Page to Promissory Note