EX-10.1






Exhibit 10.1




FIRST AMENDED AND RESTATED




CREDIT AND GUARANTY AGREEMENT




dated as of August 16, 2005




among




BELDEN & BLAKE CORPORATION,




as Borrower




CERTAIN SUBSIDIARIES OF BELDEN & BLAKE CORPORATION,




as Guarantors,




VARIOUS LENDERS, and




BNP PARIBAS,




as Sole Lead Arranger, Sole Bookrunner,




Sole Syndication Agent and Administrative Agent,




________________________________________________________




$390,000,000 Senior Secured Credit Facilities

________________________________________________________




	 	 	 	 	 	 	 	 	 
	SECTION 1 DEFI
	 	NITIONS AND INTERPRETATION                                          1
	 	 	 	 
	1.1
	 	Definitions
	 	 	1	 
	1.2
	 	Accounting Terms
	 	 	32	 
	1.3
	 	Interpretation, etc
	 	 	33	 
	SECTION 2
	 	LOANS AND LETTERS OF CREDIT
	 	 	33	 
	2.1
	 	[Reserved]	 	 	33	 
	2.2
	 	Revolving Loans
	 	 	33	 
	2.3
	 	Borrowing Base
	 	 	35	 
	2.4
	 	Issuance of Letters of Credit and Hedge Letters of Credit
	 	 	37	 
	2.5
	 	Pro Rata Shares; Availability of Funds
	 	 	43	 
	2.6
	 	Use of Proceeds
	 	 	43	 
	2.7
	 	Evidence of Debt; Register; Lenders' Books and Records; Notes
	 	 	44	 
	2.8
	 	Interest on Loans
	 	 	44	 
	2.9
	 	Conversion/Continuation
	 	 	46	 
	2.10
	 	Default Interest
	 	 	47	 
	2.11
	 	Fees
	 	 	47	 
	2.12
	 	Commitment Reductions
	 	 	49	 
	2.13
	 	Voluntary Prepayments/Commitment Reductions
	 	 	49	 
	2.14
	 	Mandatory Prepayments/Commitment Reductions.
	 	 	50	 
	2.15
	 	Application of Prepayments/Reductions
	 	 	51	 
	2.16
	 	General Provisions Regarding Payments
	 	 	51	 
	2.17
	 	Ratable Sharing
	 	 	52	 
	2.18
	 	Making or Maintaining Eurodollar Rate Loans
	 	 	53	 
	2.19
	 	Increased Costs; Capital Adequacy
	 	 	55	 
	2.20
	 	Taxes; Withholding, etc
	 	 	56	 
	2.21
	 	Obligation to Mitigate
	 	 	59	 
	2.22
	 	Defaulting Lenders
	 	 	59	 
	2.23
	 	Removal or Replacement of a Lender
	 	 	60	 
	SECTION 3
	 	CONDITIONS PRECEDENT
	 	 	61	 
	3.1
	 	Closing Date
	 	 	61	 
	3.2
	 	Conditions to Each Credit Extension
	 	 	65	 
	SECTION 4
	 	REPRESENTATIONS AND WARRANTIES
	 	 	66	 
	4.1
	 	Organization; Requisite Power and Authority; Qualification
	 	 	66	 
	4.2
	 	Capital Stock and Ownership
	 	 	67	 
	4.3
	 	Due Authorization
	 	 	67	 
	4.4
	 	No Conflict
	 	 	67	 
	4.5
	 	Governmental Consents
	 	 	67	 
	4.6
	 	Binding Obligation
	 	 	68	 
	4.7
	 	Historical Financial Statements
	 	 	68	 
	4.8
	 	[Reserved]	 	 	68	 
	4.9
	 	No Material Adverse Change
	 	 	68	 
	4.10
	 	No Restricted Junior Payments
	 	 	68	 
	4.11
	 	No Reserve Write-downs
	 	 	68	 
	4.12
	 	Adverse Proceedings, etc
	 	 	68	 
	4.13
	 	Payment of Taxes
	 	 	69	 
	4.14
	 	Properties
	 	 	69	 
	4.15
	 	Environmental Matters
	 	 	70	 
	4.16
	 	No Defaults
	 	 	70	 
	4.17
	 	Material Contracts
	 	 	71	 
	4.18
	 	Governmental Regulation
	 	 	71	 
	4.19
	 	Margin Stock
	 	 	71	 
	4.20
	 	Employee Matters
	 	 	71	 
	4.21
	 	Employee Benefit Plans
	 	 	71	 
	4.22
	 	Certain Fees
	 	 	72	 
	4.23
	 	Solvency
	 	 	72	 
	4.24
	 	Related Agreements
	 	 	72	 
	4.25
	 	Compliance with Statutes, etc
	 	 	73	 
	4.26
	 	Future Commitments
	 	 	73	 
	4.27
	 	Disclosure
	 	 	73	 
	SECTION 5
	 	AFFIRMATIVE COVENANTS
	 	 	73	 
	5.1
	 	Financial Statements and Other Reports
	 	 	74	 
	5.2
	 	Existence
	 	 	78	 
	5.3
	 	Payment of Taxes and Claims
	 	 	78	 
	5.4
	 	Maintenance of Properties
	 	 	78	 
	5.5
	 	Insurance
	 	 	78	 
	5.6
	 	Books and Records; Inspections
	 	 	79	 
	5.7
	 	Lenders Meetings
	 	 	79	 
	5.8
	 	Compliance with Laws
	 	 	79	 
	5.9
	 	Environmental
	 	 	79	 
	5.10
	 	Subsidiaries
	 	 	81	 
	5.11
	 	Additional Material Real Estate Assets
	 	 	81	 
	5.12
	 	Title Opinions
	 	 	82	 
	5.13
	 	Swap Agreement
	 	 	82	 
	5.14
	 	Further Assurances
	 	 	82	 
	5.15
	 	Non-Consolidation
	 	 	83	 
	SECTION 6
	 	NEGATIVE COVENANTS
	 	 	83	 
	6.1
	 	Indebtedness
	 	 	83	 
	6.2
	 	Liens
	 	 	85	 
	6.3
	 	Equitable Lien
	 	 	87	 
	6.4
	 	No Further Negative Pledges
	 	 	87	 
	SECTION 7
	 	GUARANTY
	 	 	93	 
	7.1
	 	Guaranty of the Obligations
	 	 	93	 
	7.2
	 	Contribution by Guarantors
	 	 	93	 
	7.3
	 	Payment by Guarantors
	 	 	94	 
	7.4
	 	Liability of Guarantors Absolute
	 	 	94	 
	7.5
	 	Waivers by Guarantors
	 	 	96	 
	7.6
	 	Guarantors' Rights of Subrogation, Contribution, etc
	 	 	97	 
	7.7
	 	Subordination of Other Obligations
	 	 	97	 
	7.8
	 	Continuing Guaranty
	 	 	98	 
	7.9
	 	Authority of Guarantors or Company
	 	 	98	 
	7.10
	 	Financial Condition of Company
	 	 	98	 
	7.11
	 	Bankruptcy, etc
	 	 	98	 
	7.12
	 	Discharge of Guaranty Upon Sale of Guarantor
	 	 	99	 
	SECTION 8
	 	EVENTS OF DEFAULT
	 	 	99	 
	8.1
	 	Events of Default
	 	 	99	 
	SECTION 9
	 	AGENTS
	 	 	102	 
	9.1
	 	Appointment of Agents
	 	 	102	 
	9.2
	 	Powers and Duties
	 	 	103	 
	9.3
	 	General Immunity
	 	 	103	 
	9.4
	 	Agents Entitled to Act as Lender
	 	 	104	 
	9.5
	 	Lenders' Representations, Warranties and Acknowledgment
	 	 	105	 
	9.6
	 	Right to Indemnity
	 	 	105	 
	9.7
	 	Successor Administrative Agent
	 	 	105	 
	9.8
	 	Collateral Documents and Guaranty
	 	 	106	 
	SECTION 10
	 	MISCELLANEOUS
	 	 	107	 
	10.1
	 	Notices
	 	 	107	 
	10.2
	 	Expenses
	 	 	107	 
	10.3
	 	Indemnity
	 	 	108	 
	10.4
	 	Set-Off
	 	 	108	 
	10.5
	 	Amendments and Waivers
	 	 	109	 
	10.6
	 	Successors and Assigns; Participations
	 	 	111	 
	10.7
	 	Independence of Covenants
	 	 	114	 
	10.8
	 	Survival of Representations, Warranties and Agreements
	 	 	114	 
	10.9
	 	No Waiver; Remedies Cumulative
	 	 	114	 
	10.10
	 	Marshalling; Payments Set Aside
	 	 	115	 
	10.11
	 	Severability
	 	 	115	 
	10.12
	 	Obligations Several; Independent Nature of Lenders' Rights
	 	 	115	 
	10.13
	 	Headings
	 	 	115	 
	10.14
	 	Applicable Law
	 	 	115	 
	10.15
	 	Consent to Jurisdiction
	 	 	115	 
	10.16
	 	Waiver of Jury Trial
	 	 	116	 
	10.17
	 	Confidentiality
	 	 	116	 
	10.18
	 	Usury Savings Clause
	 	 	117	 
	10.19
	 	Counterparts
	 	 	117	 
	10.20
	 	Effectiveness
	 	 	118	 
	10.21
	 	USA PATRIOT Act
	 	 	118	 
	10.22
	 	Electronic Execution of Assignments
	 	 	118	 






	 	 	 	 	 
	APPENDICES: A-1

SCHEDULES:

EXHIBITS:

	 	Revolvi

A-2

B

1.1(a)

1.1(b)

3.1(i)

4.1

4.2

4.13

4.14

4.17

6.1

6.2

6.7

6.12

A-1

A-2

A-3

B-1

B-2

C

D

E

F

G-1

G-2

H

I

J

K

L

M
	 	ng Commitments

Hedge L/C Commitments

Notice Addresses

Existing Mortgages

Existing Title Policies

Closing Date Mortgaged Properties

Company and Subsidiary Information

Capital Stock and Ownership

Taxes

Real Estate Assets; Hydrocarbon Interests

Material Contracts

Certain Indebtedness

Certain Liens

Certain Investments

Certain Affiliate Transactions

Funding Notice

Conversion/Continuation Notice

Issuance Notice

Revolving Loan Note

Hedge L/C Loan Note

Compliance Certificate

Mortgage Supplement

Assignment Agreement

Certificate Re Non-bank Status

Closing Date Certificate

Solvency Certificate

Counterpart Agreement

Pledge and Security Agreement

Owner Pledge Agreement

Mortgage

Landlord Waiver and Consent Agreement

Collateral Trust Agreement






1




FIRST AMENDED AND RESTATED




CREDIT AND GUARANTY AGREEMENT




This First Amended and Restated Credit and Guaranty Agreement dated as of August 16, 2005 is
among Belden & Blake Corporation, an Ohio corporation (“Company”), certain subsidiaries of the
Company, as Guarantors, the Lenders party hereto from time to time, BNP Paribas (“BNPP”), as Sole
Lead Arranger, Sole Book Runner, Sole Syndication Agent, and Administrative Agent (together with
its permitted successors in such capacity, “Administrative Agent”).



INTRODUCTION




The Company and certain of its Subsidiaries (such terms and each other capitalized term used
but not defined in this Introduction having the meaning provided in Section 1.1) have entered into
the Credit and Guaranty Agreement dated as of July 7, 2004 and amended as of July 22, 2004 (such
agreement, as further amended, restated, supplemented or otherwise modified prior to the date
hereof, the “Existing Credit Agreement”) with Goldman Sachs Credit Partners L.P., as sole lead
arranger, sole book runner, syndication, and administrative agent and the other lenders and agents
party thereto.



The Company has requested that the parties to the Existing Credit Agreement assign all of
their rights and delegate all of their duties under the Existing Credit Agreement to the Lenders
and the Administrative Agent and that the Lenders and Administrative Agent amend and restate the
terms of the Existing Credit Agreement, and replace the extensions of credit thereunder (including
the loans and letters of credit governed by the terms of the Existing Credit Agreement) with this
Agreement.



The parties hereto agree that from and after the effectiveness of this Agreement, the
obligations under the Existing Credit Agreement, including the terms of the extensions of credit
outstanding thereunder, shall be continued as, and evidenced by, the Loans, Letters of Credit,
Hedge Letters of Credit, and other Obligations and Credit Documents.



The Lenders have indicated their willingness to continue extensions of credit under the
Existing Credit Agreement as Loans, Letters of Credit, Hedge Letters of Credit hereunder, and make
additional Loans and continue existing or issue additional Letters of Credit or Hedge Letters of
Credit on the terms and subject to the conditions set forth herein.



Therefore, in consideration of the premises and the agreements, provisions and covenants
herein contained, the parties hereto agree as follows:



SECTION 1 DEFINITIONS AND INTERPRETATION



1.1 Definitions. The following terms used herein, including in the preamble, recitals,
exhibits and schedules hereto, shall have the following meanings:



"Acceptable Security Interest” in any Property means a Lien which (a) exists in favor of the
Collateral Trustee for the benefit of the Secured Parties, (b) is superior to all Liens or rights
of any other Person in the Property encumbered thereby other than Permitted Prior Liens, (c)
secures the Obligations, and (d) is perfected and enforceable.



"Accounting Change” has the meaning set forth in Section 1.2(b).



"Acquisition” means the acquisition by EnerVest Energy Institutional Fund X-A, L.P., EnerVest
Energy Institutional Fund X-WI, L.P., and EnerVest Energy Institutional Fund X-B, L.P. (or their
permitted successors and assigns) of all of the outstanding partnership interests of Capital C
Energy Operations, L.P. pursuant to the terms of the Acquisition Agreement.



"Acquisition Agreement” means the Partnership Interest Purchase Agreement dated as of July 5,
2005 between Capital C Energy, LP and Capital C Energy Partners, L.P., as sellers, and EnerVest
Energy Institutional Fund X-A, L.P., EnerVest Energy Institutional Fund X-WI, L.P., and EnerVest
Energy Institutional Fund X-B, L.P., as buyers.



"Adjusted Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an
Interest Period for a Eurodollar Rate Loan, the rate per annum obtained by dividing (and rounding
upward to the next whole multiple of 1/100 of 1%) (i) (a) the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be the offered rate
which appears on the page of the Telerate Screen which displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number 3740 or 3750, as
applicable) for deposits (for delivery on the first day of such period) with a term equivalent to
such period in Dollars, determined as of approximately 11:00 a.m. (London, England time) on such
Interest Rate Determination Date, or (b) in the event the rate referenced in the preceding clause
(a) does not appear on such page or service or if such page or service shall cease to be available,
the rate per annum (rounded to the nearest 1/100 of 1%) equal to the rate determined by
Administrative Agent to be the offered rate on such other page or other service which displays an
average British Bankers Association Interest Settlement Rate for deposits (for delivery on the
first day of such period) with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, or (c) in
the event the rates referenced in the preceding clauses (a) and (b) are not available, the rate per
annum (rounded to the nearest 1/100 of 1%) equal to the offered quotation rate to first class banks
in the London interbank market by BNPP for deposits (for delivery on the first day of the relevant
period) in Dollars of amounts in same day funds comparable to the principal amount of the
applicable Loan of Administrative Agent, in its capacity as a Lender, for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to such period as of
approximately 11:00 a.m. (London, England time) on such Interest Rate Determination Date, by (ii)
an amount equal to (a) one minus (b) the Applicable Reserve Requirement.



"Administrative Agent” has the meaning set forth in the preamble hereto.



"Adverse Proceeding” means any action, suit, proceeding (whether administrative, judicial or
otherwise), investigation or arbitration (whether or not purportedly on behalf of Company or any of
its Subsidiaries) at law or in equity, or before or by any Governmental Authority, domestic or
foreign (including any Environmental Claims), whether pending or, to the knowledge of Company or
any of its Subsidiaries, threatened against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries.



"Affected Lender” has the meaning set forth in Section 2.18(b).



"Affected Loans” has the meaning set forth in Section 2.18(b).



"Affiliate” means, as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the purposes of this
definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied to any Person, means the possession, directly or
indirectly, of the power (i) to vote 10% or more of the Securities having ordinary voting power for
the election of directors of such Person or (ii) to direct or cause the direction of the management
and policies of that Person, whether through the ownership of voting securities or by contract or
otherwise.



"Agent” means each of Syndication Agent, Administrative Agent and Documentation Agents.



"Aggregate Amounts Due” has the meaning set forth in Section 2.17.



"Aggregate Payments” has the meaning set forth in Section 7.2.



"Agreement” means this First Amended and Restated Credit and Guaranty Agreement, dated as of
August 16, 2005.



"Applicable Margin’’ means on any date of its determination a percentage per annum, determined
by reference to the Utilization in effect at BNPP’s close of business in New York City on such date
for the Type of Loan or the Commitment Fee as set forth below:



	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Applicable Margin	 	 
	 	 	Applicable Margin	 	for Eurodollar Rate	 	Applicable Margin
	Utilization	 	for Base Rate Loans	 	Loans	 	for Commitment Fees
	< 25%

	 	 	0.00	%	 	 	1.125	%	 	 	0.25	%
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	> 25%

	 	

	 	

	 	


	 

	 	

	 	

	 	


	< 50%

	 	 	0.00	%	 	 	1.375	%	 	 	0.25	%
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	> 50%

	 	

	 	

	 	


	 

	 	

	 	

	 	


	< 75%

	 	 	0.125	%	 	 	1.625	%	 	 	0.30	%
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	> 75%

	 	

	 	

	 	


	 

	 	

	 	

	 	


	< 90%

	 	 	0.375	%	 	 	1.875	%	 	 	0.375	%
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	> 90%

	 	 	0.625	%	 	 	2.125	%	 	 	0.375	%
	 

	 	 	 	 	 	 	 	 	 	 	 	 






The Applicable Margin shall increase by 2.00% during any Deficiency Period.



"Applicable Reserve Requirement” means, at any time, for any Eurodollar Rate Loan, the maximum
rate, expressed as a decimal, at which reserves (including, without limitation, any basic marginal,
special, supplemental, emergency or other reserves) are required to be maintained with respect
thereto against “Eurocurrency liabilities” (as such term is defined in Regulation D) under
regulations issued from time to time by the Board of Governors of the Federal Reserve System or
other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable
Reserve Requirement shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities which includes deposits by reference to which the
applicable Adjusted Eurodollar Rate or any other interest rate of a Loan is to be determined, or
(ii) any category of extensions of credit or other assets which include Eurodollar Rate Loans. A
Eurodollar Rate Loan shall be deemed to constitute Eurocurrency liabilities and as such shall be
deemed subject to reserve requirements without benefits of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender. The rate of interest on
Eurodollar Rate Loans shall be adjusted automatically on and as of the effective date of any change
in the Applicable Reserve Requirement.



"Applications” has the meaning set forth in Section 2.4(l).



"Asset Sale” means a sale, lease or sub-lease (as lessor or sublessor), sale and leaseback,
assignment, conveyance, transfer or other disposition to, or any exchange of property with, any
Person (other than Company or any Guarantor), in one transaction or a series of transactions, of
all or any part of Company’s or any of its Restricted Subsidiaries’ businesses, assets or
properties of any kind, including Production Payments, whether real, personal, or mixed and whether
tangible or intangible, whether now owned or hereafter acquired, including, without limitation, the
Capital Stock of any of Company’s Restricted Subsidiaries, other than (i) Hydrocarbons (or other
assets) sold or leased in the ordinary course of business (excluding any such sales by operations
or divisions discontinued or to be discontinued), and (ii) sales of other assets for aggregate
consideration of less than $1,000,000 with respect to any transaction or series of related
transactions and less than $5,000,000 in the aggregate during any Fiscal Year.



"Assignment Agreement” means an Assignment and Assumption Agreement substantially in the form
of Exhibit E, with such amendments or modifications as may be approved by Administrative Agent.



"Assignment Effective Date” has the meaning set forth in Section 10.6(b).



"Authorized Officer” means, as applied to any Person, any individual holding the position of
chairman of the board (if an officer), chief executive officer, president or one of its vice
presidents (or the equivalent thereof), and such Person’s chief financial officer or treasurer.



"Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.



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



"Base Rate Loan” means a Loan bearing interest at a rate determined by reference to the Base
Rate.



"Beneficiary” means each Agent, Issuing Bank, Lender and Lender Counterparty.



"BNPP” has the meaning set forth in the preamble hereto.



"Borrowing Base” means at any particular time, the lesser of (a) the Dollar amount determined
in accordance with Section 2.3 on account of Proven Reserves attributable to Oil and Gas Properties
of the Company and the Guarantors subject to an Acceptable Security Interest and described in the
most recent Independent Engineering Report or Internal Engineering Report, as applicable, delivered
to the Administrative Agent and the Lenders pursuant to Section 2.3, before taking into account any
reduction to such amount based on the principal amount of the Senior Secured Notes then
outstanding, less 30% of the outstanding principal amount of the Senior Secured Notes; (b)
amount of the Permitted First Priority Secured Indebtedness, as such term is defined in the J. Aron
Swap; and (c) such amount as may be designated in writing by the Company to the Administrative
Agent and the Revolving Lenders upon any redetermination under Section 2.3(b)(ii).



"Business Day” means (i) any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of New York or is a day on which banking institutions located
in such state are authorized or required by law or other governmental action to close and (ii) with
respect to all notices, determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, the term “Business Day” shall mean any day which is a
Business Day described in clause (i) and which is also a day for trading by and between banks in
Dollar deposits in the London interbank market.



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



"Capital Stock” means any and all shares, interests, participations or other equivalents
(however designated) of capital stock of a corporation, any and all equivalent ownership interests
in a Person (other than a corporation), including, without limitation, partnership interests and
membership interests, and any and all warrants, rights or options to purchase or other arrangements
or rights to acquire any of the foregoing.



"Cash” means money, currency or a credit balance in any Deposit Account.



"Cash Equivalents” means, as at any date of determination, (i) marketable securities (a)
issued or directly and unconditionally guaranteed as to interest and principal by the United States
Government or (b) issued by any agency of the United States the obligations of which are backed by
the full faith and credit of the United States, in each case maturing no more than one year after
such date; (ii) marketable direct obligations issued by any state of the United States of America
or any political subdivision of any such state or any public instrumentality thereof, in each case
maturing no more than one year after such date and having, at the time of the acquisition thereof,
a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of the acquisition
thereof, a rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) certificates of
deposit or bankers’ acceptances maturing no more than one year after such date and issued or
accepted by any Lender or by any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that (a) is at least “adequately
capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has
Tier 1 capital (as defined in such regulations) of not less than $100,000,000; and (v) shares of
any money market mutual fund that (a) has substantially all of its assets invested continuously in
the types of investments referred to in clauses (i) and (ii) above, (b) has net assets of not less
than $500,000,000, and (c) has the highest rating obtainable from either S&P or Moody’s.



"Certificate re Non-Bank Status” means a certificate substantially in the form of Exhibit F.



"Change of Control” means, at any time, (i) EnerVest shall cease to beneficially own and
control at least 60% on a fully diluted basis of the economic and voting interests in the Capital
Stock of Company; (ii) the majority of the seats (other than vacant seats) on the board of
directors (or similar governing body) of Company cease to be occupied by Persons who either (a)
were members of the board of directors of Company on the Closing Date or (b) were nominated for
election by the board of directors of Company, a majority of whom were directors on the Closing
Date or whose election or nomination for election was previously approved by a majority of such
directors (in each case after giving effect to any changes in the members of the board of directors
of Company contemplated to occur in connection with the Acquisition); or (iii) any “change of
control” or similar event under the Senior Secured Notes shall occur.



"Class” means (i) with respect to Lenders, each of the following classes of Lenders: (a)
Lenders having Revolving Exposure and (b) Lenders having Hedge L/C Exposure, and (ii) with respect
to Loans, each of the following classes of Loans: (a) Revolving Loans and (b) Hedge L/C Loans.



"Closing Date” means the date on which the conditions precedent set forth in Section 3.1 shall
have been satisfied or waived.



"Closing Date Certificate” means a Closing Date Certificate substantially in the form of
Exhibit G-1.



"Closing Date Mortgaged Property” has the meaning set forth in Section 3.1(i).



"Collateral” means, collectively, all of the real, personal and mixed property (including
Capital Stock) in which Liens are purported to be granted pursuant to the Collateral Documents as
security for the Obligations.



"Collateral Documents” means the Pledge and Security Agreement, the Owner Pledge Agreement,
the Mortgages, the Landlord Personal Property Collateral Access Agreements, if any, the Collateral
Trust Agreement and all other instruments, documents and agreements delivered by any Credit Party
pursuant to this Agreement or any of the other Credit Documents in order to grant to Collateral
Trustee, for the benefit of the Secured Parties, a Lien on any real, personal or mixed property of
that Credit Party as security for the Obligations.



"Collateral Trust Agreement” means a Collateral Trust Agreement substantially in the form of
Exhibit M.



"Collateral Trustee” means Wells Fargo Bank, N.A. and any successor Collateral Trustee under
the Collateral Trust Agreement.



"Commitment” means any Revolving Commitment or Hedge L/C Commitment.



"Company” has the meaning set forth in the preamble hereto.



"Compliance Certificate” means a Compliance Certificate substantially in the form of Exhibit
C.



"Consolidated Adjusted EBITDA” means, for any period, an amount determined for Company and its
Restricted Subsidiaries on a consolidated basis equal to (i) Consolidated Net Income plus
(ii) the sum, without duplication and to the extent deducted in determining Consolidated Net
Income, of the amounts for such period of (a) Consolidated Interest Expense, (b) provisions for
taxes based on income, (c) total depreciation, depletion and impairment expense, (d) total
amortization expense, and (e) other non-Cash items reducing Consolidated Net Income (excluding any
such non-Cash item to the extent that it represents an accrual or reserve for potential Cash items
in any future period or amortization of a prepaid Cash item that was paid in a prior period), and
(f) costs and expenses related to the Acquisition not to exceed $10,000,000 minus (iii)
other non-Cash items increasing Consolidated Net Income for such period (excluding any such
non-Cash item to the extent it represents the reversal of an accrual or reserve for potential Cash
item in any prior period).



"Consolidated Capital Expenditures” means, for any period, the aggregate of all expenditures
of Company and its Restricted Subsidiaries during such period determined on a consolidated basis
that, in accordance with GAAP, are or should be included in “purchase of property and equipment” or
“capital expenditures” or similar items in the consolidated statement of cash flows of Company and
its Restricted Subsidiaries. Consolidated Capital Expenditures shall not include expenditures of
insurance proceeds to rebuild or replace assets of Company and its Restricted Subsidiaries that
have been damaged or destroyed.



"Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense for
such period, excluding any amounts paid in kind under the Qualified Junior Debt, and excluding
Restricted Junior Payments permitted under the terms of Section 6.5 hereof.



"Consolidated EBITDAX” means, for any period, (i) Consolidated Adjusted EBITDA for such period
plus (ii) exploration expense to the extent deducted in determining Consolidated Net Income
for such period.



"Consolidated Interest Expense” means, for any period, total interest expense (including that
portion attributable to Capital Leases in accordance with GAAP and capitalized interest net of
payments received under Interest Rate Agreements) of Company and its Restricted Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and its Restricted
Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to
letters of credit and net costs under Interest Rate Agreements, but excluding, however, any amounts
referred to in Section 2.11(e) payable on or before the Closing Date].



"Consolidated Net Income” means, for any period, (i) the net income (or loss) of Company and
its Restricted Subsidiaries on a consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP, without giving effect to (ii) (a) the income (or
loss) of any Person (other than a Restricted Subsidiary of Company) in which any other Person
(other than Company or any of its Restricted Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to Company or any of its
Restricted Subsidiaries by such Person during such period, (b) the income (or loss) of any Person
accrued prior to the date it becomes a Restricted Subsidiary of Company or is merged into or
consolidated with Company or any of its Restricted Subsidiaries or that Person’s assets are
acquired by Company or any of its Restricted Subsidiaries, (c) the income of any Restricted
Subsidiary of Company to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted Subsidiary, (d) any
after-tax gains or losses attributable to Asset Sales or returned surplus assets of any Pension
Plan, (e) any unrealized non-cash gains or losses attributable to mark-to-market treatment of
derivatives (including those resulting from the application of FAS 133), and (f) (to the extent not
included in clauses (a) through (e) above) any net extraordinary gains or net extraordinary losses.



"Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance
sheet amount of all Indebtedness of Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with GAAP, excluding Qualified Junior Debt.



"Contractual Obligation” means, as applied to any Person, any provision of any Security issued
by that Person or of any indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of its properties is bound
or to which it or any of its properties is subject.



"Contributing Guarantors” has the meaning set forth in Section 7.2.



"Conversion/Continuation Date” means the effective date of a continuation or conversion, as
the case may be, as set forth in the applicable Conversion/Continuation Notice.



"Conversion/Continuation Notice” means a Conversion/Continuation Notice substantially in the
form of Exhibit A-2.



"Counterpart Agreement” means a Counterpart Agreement substantially in the form of Exhibit H
delivered by a Credit Party pursuant to Section 5.10.



"Credit Date” means the date of a Credit Extension.



"Credit Document” means any of this Agreement, the Notes, if any, the Collateral Documents,
any documents or certificates executed by Company in favor of Issuing Bank relating to Letters of
Credit or Hedge Letters of Credit, and all other documents, instruments or agreements executed and
delivered by a Credit Party for the benefit of any Agent, Issuing Bank or any Lender in connection
herewith.



"Credit Extension” means the making of a Loan or the issuing of a Letter of Credit or Hedge
Letter of Credit.



"Credit Party” means each Person (other than any Agent, Issuing Bank or any Lender or any
other representative thereof) from time to time party to a Credit Document.



"Currency Agreement” means any foreign exchange contract, currency swap agreement, futures
contract, option contract, synthetic cap or other similar agreement or arrangement, each of which
is for the purpose of hedging the foreign currency risk associated with Company’s and its
Restricted Subsidiaries’ operations and not for speculative purposes.



"Current Issuing Bank” has the meaning set forth in Section 2.4(j).



"Default” means a condition or event that, after notice or lapse of time or both, would
constitute an Event of Default.



"Default Excess” means, with respect to any Defaulting Lender, the excess, if any, of such
Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans or
participations in Letters of Credit or Hedge Letters of Credit of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their respective Defaulted
Loans) over the aggregate outstanding principal amount of all Loans and participations in Letters
of Credit or Hedge Letters of Credit of such Defaulting Lender.



"Default Period” means, with respect to any Defaulting Lender, the period commencing on the
date of the applicable Funding Default and ending on the earliest of the following dates: (i) the
date on which all Commitments are cancelled or terminated and/or the Obligations are declared or
become immediately due and payable, (ii) the date on which (a) the Default Excess with respect to
such Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting
Lender of any Defaulted Loans of such Defaulting Lender or by the non-pro rata application of any
voluntary or mandatory prepayments of the Loans in accordance with the terms of Section 2.13 or
Section 2.14 or by a combination thereof) and (b) such Defaulting Lender shall have delivered to
Company and Administrative Agent a written reaffirmation of its intention to honor its obligations
hereunder with respect to its Commitments, and (iii) the date on which Company, Administrative
Agent, each Issuing Bank and Requisite Lenders waive all Funding Defaults of such Defaulting Lender
in writing.



"Defaulted Loan” has the meaning set forth in Section 2.22.



"Defaulting Lender” has the meaning set forth in Section 2.22.



"Deficiency Period” means the period during which the Revolving Exposure exceeds the Borrowing
Base and an Event of Default does not exist.



"Deposit Account” means a demand, time, savings, passbook or like account with a bank, savings
and loan association, credit union or like organization, other than an account evidenced by a
negotiable certificate of deposit.



"Documentation Agents” means each Lender named as a “Documentation Agent” in an Assignment
Agreement.



"Dollar-Denominated Production Payments” means production payment obligations of Company or
any Guarantor which are payable from a specified share of proceeds received from production from
specific Properties, together with all undertakings and obligations in connection therewith.



"Dollars” and the sign “$” mean the lawful money of the United States of America.



"Domestic Subsidiary” means any Subsidiary organized under the laws of the United States of
America, any State thereof or the District of Columbia.



"Eligible Assignee” means (i) any Lender, any Affiliate of any Lender and any Related Fund
(any two or more Related Funds being treated as a single Eligible Assignee for all purposes
hereof), and (ii) any commercial bank, insurance company, investment or mutual fund or other entity
that is an “accredited investor” (as defined in Regulation D under the Securities Act) and which
extends credit or buys loans as one of its businesses; provided, no Affiliate of Company
shall be an Eligible Assignee.



"Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA
which is or was sponsored, maintained or contributed to by, or required to be contributed by,
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.



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



"EnerVest” means EnerVest Management Partners, L.P. or one or more of its managed investment
partnerships.



"Environmental Claim” means any investigation, notice, notice of violation, claim, action,
suit, proceeding, demand, abatement order or other order or directive, by any Governmental
Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous Material or any actual or
alleged Hazardous Materials Activity; or (iii) in connection with any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.



"Environmental Laws” means any and all current or future foreign or domestic, federal or state
(or any subdivision of either of them), statutes, ordinances, orders, rules, regulations, common
law, judicial or administrative judgments, Governmental Authorizations, or any other requirements
of Governmental Authorities relating to (i) pollution, preservation, remediation, protection or
restoration of the environment or natural resources, including those relating to any Hazardous
Materials Activity; (ii) the generation, use, storage, transportation or disposal of Hazardous
Materials; or (iii) occupational safety and health, industrial hygiene or land use, in any manner
applicable to Company or any of its Subsidiaries or any Facility.



"Environmental Report” means the report entitled Environmental Assessment of Belden & Blake
Corporation] conducted by E.Vironment and dated August 2005.



"ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time, and any successor thereto.



"ERISA Affiliate” means, as applied to any Person, (i) any corporation which is a member of a
controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code
of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is
a member of a group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code
of which that Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or any such Subsidiary
within the meaning of this definition with respect to the period such entity was an ERISA Affiliate
of Company or such Subsidiary and with respect to liabilities arising after such period for which
Company or such Subsidiary could be liable under the Internal Revenue Code or ERISA.



"ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and
the regulations issued thereunder with respect to any Pension Plan (excluding those for which the
provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet
the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code)
or the failure to make by its due date a required installment under Section 412(m) of the Internal
Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or
any of their respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability to Company, any of its
Subsidiaries or any of their respective Affiliates pursuant to Section 4063 or 4064 of ERISA; (v)
the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which might constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section
4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal of Company, any of its Subsidiaries or any of their respective ERISA Affiliates in a
complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefore, or the receipt by Company, any of
its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan
that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it
intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence
of an act or omission which could give rise to the imposition on Company, any of its Subsidiaries
or any of their respective ERISA Affiliates of material fines, penalties, taxes or related charges
under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or
Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material
claim (other than routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company, any of its Subsidiaries or any of
their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from
the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue
Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension Plan.



"Eurodollar Rate Loan” means a Loan bearing interest at a rate determined by reference to the
Adjusted Eurodollar Rate.



"Event of Default” means each of the conditions or events set forth in Section 8.1.



"Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and
any successor statute.



"Existing Mortgages” means the Mortgages listed on the attached Schedule 1.1(a).



"Existing Title Policies” means the title policies listed on the attached Schedule 1.1(b):



"Facility” means any real property (including all buildings, fixtures or other improvements
located thereon but excluding any Hydrocarbon Interests) now, hereafter or heretofore owned,
leased, operated or used by Company or any of its Subsidiaries or any of their respective
Affiliates.



"Fair Share Contribution Amount” has the meaning set forth in Section 7.2.



"Fair Share” has the meaning set forth in Section 7.2.



"Federal Funds Effective Rate” means for any day, the rate per annum (expressed, as a decimal,
rounded upwards, if necessary, to the next higher 1/100 of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day; provided, (i) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on such day on such
transactions as determined by Administrative Agent.



"Financial Officer” means the chief financial officer, treasurer, assistant treasurer or
controller of Company.



"Financial Officer Certification” means, with respect to the financial statements for which
such certification is required, the certification of a Financial Officer of Company (in his or her
capacity as an officer of Company and not in his or her individual capacity) that such financial
statements fairly present in accordance with GAAP the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and their cash flows for
the periods indicated, subject to changes resulting from audit and normal year-end adjustments.



"Financial Plan” has the meaning set forth in Section 5.1(i).



"Fiscal Quarter” means a fiscal quarter of any Fiscal Year.



"Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on December 31 of
each calendar year.



"Flood Hazard Property” means any Real Estate Asset subject to a mortgage in favor of
Collateral Trustee, for the benefit of the Secured Parties, and located in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide hazards.



"Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.



"Funding Default” has the meaning set forth in Section 2.22.



"Funding Guarantors” has the meaning set forth in Section 7.2.



"Funding Notice” means a notice substantially in the form of Exhibit A-1.



"GAAP” means, subject to the limitations on the application thereof set forth in Section 1.2,
United States generally accepted accounting principles in effect as of the date of determination
thereof.



"Governmental Acts” means any act or omission, whether rightful or wrongful, of any
Governmental Authority.



"Governmental Authority” means any federal, state, municipal, national or other government,
governmental department, commission, board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity or officer exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any government or any court, in each
case whether associated with a state of the United States, the United States, or a foreign entity
or government.



"Governmental Authorization” means any permit, license, authorization, directive, consent
order or consent decree of or from any Governmental Authority.



"Grantor” has the meaning set forth in the Pledge and Security Agreement.



"Guaranteed Obligations” has the meaning set forth in Section 7.1.



"Guarantor” means each Domestic Subsidiary of Company (other Great West Operating Company,
L.C.) as of the Closing Date and each Domestic Subsidiary that becomes a Guarantor in accordance
with Section 5.10.



"Guaranty” means the guaranty of each Guarantor set forth in Section 7.



"Hazardous Materials” means any chemical, material or substance, exposure to which is
prohibited, limited or regulated under any Environmental Law by any Governmental Authority or which
is otherwise defined, listed or regulated as a pollutant, contaminant, or a hazardous, extremely
hazardous or toxic substance, material or waste under any Environmental Law, a radioactive
material, or Hydrocarbon, petroleum or petroleum waste, petroleum breakdown material or petroleum
product or byproduct.



"Hazardous Materials Activity” means any activity, event or occurrence involving any Hazardous
Materials, including the use, manufacture, possession, storage, holding, presence, location,
Release, threatened Release, discharge, placement, generation, transportation, processing,
treatment, abatement, removal, remediation, disposal or handling of any Hazardous Materials and any
corrective action or response action with respect to any of the foregoing.



"Hedge Agreement” means an Interest Rate Agreement or a Currency Agreement entered into with a
Lender Counterparty or the Lead Arranger in order to satisfy the requirements of this Agreement or
otherwise in the ordinary course of Company’s or any of its Restricted Subsidiaries’ businesses but
not for speculative purposes.



"Hedge L/C Commitment” means the commitment of a Lender to acquire participations in Hedge
Letters of Credit, and “Hedge L/C Commitments” means such commitments of all Lenders in the
aggregate. The amount of each Lender’s Hedge L/C Commitment, if any, is set forth on Appendix A-2
or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Hedge L/C Commitments as of the Closing
Date is $40,000,000.



"Hedge L/C Commitment Period” means the period from the Closing Date to but excluding the
Hedge L/C Commitment Termination Date.



"Hedge L/C Commitment Termination Date” means the earliest to occur of (i) August 16, 2010,
(ii) the date the Hedge L/C Commitments are permanently reduced to zero pursuant to Section
2.13(b), and (iii) the date of the termination of the Hedge L/C Commitments pursuant to Section
8.1.



"Hedge L/C Exposure” means, with respect to any Lender as of any date of determination, (i)
prior to the termination of the Hedge L/C Commitments, that Lender’s Hedge L/C Commitment; and (ii)
after the termination of the Hedge L/C Commitments, the sum of (a) the aggregate outstanding
principal amount of the Hedge L/C Loans of that Lender, (b) in the case of Issuing Bank, the
aggregate Hedge Letter of Credit Usage in respect of all Hedge Letters of Credit issued by that
Lender (net of any participations by Lenders in such Hedge Letters of Credit) and (c) the aggregate
amount of all participations by that Lender in any outstanding Hedge Letters of Credit or any
unreimbursed drawing under any Hedge Letter of Credit.



"Hedge L/C Loan” means a Loan made by a Lender to Company pursuant to Section 2.4(i).



"Hedge L/C Loan Note” means a promissory note in the form of Exhibit B-2.



"Hedge L/C Reimbursement Date” has the meaning set forth in Section 2.4(i).



"Hedge Letter of Credit” means a letter of credit issued or to be issued by Issuing Bank
pursuant to Section 2.4(h) of this Agreement.



"Hedge Letter of Credit Usage” means, as at any date of determination, the sum of (i) the
maximum aggregate amount which is, or at any time thereafter may become, available for drawing
under all Hedge Letters of Credit then outstanding, and (ii) the aggregate amount of all drawings
under Hedge Letters of Credit honored by Issuing Bank and not theretofore reimbursed by or on
behalf of Company.



"Highest Lawful Rate” means the maximum lawful interest rate, if any, that at any time or from
time to time may be contracted for, charged, or received under the laws applicable to any 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 now allow.



"Historical Financial Statements” means as of the Closing Date, (i) the audited financial
statements of Company and its Subsidiaries, as of and for the Year ended December 31, 2004,
consisting of a consolidated balance sheet and the related consolidated statements of income,
stockholders’ equity and cash flows for such Fiscal Year, and (ii) the unaudited financial
statements of Company and its Subsidiaries for the three-month period ending March 31, 2005,
consisting of a consolidated balance sheet and the related consolidated statements of income,
stockholders’ equity and cash flows for the three-month period ending on such date, and, in the
case of clauses (i) and (ii), certified by the chief financial officer of Company that they fairly
present in accordance with GAAP the financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end adjustments.



"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.



"Increased-Cost Lenders” has the meaning set forth in Section 2.23.



"Indebtedness” as applied to any Person means, without duplication, (i) all indebtedness for
borrowed money; (ii) that portion of obligations with respect to Capital Leases that is properly
classified as a liability on a balance sheet in conformity with GAAP; (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing obligations for
borrowed money; (iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA), which purchase price is
(a) due more than six months from the date of incurrence of the obligation in respect thereof or
(b) evidenced by a note or similar written instrument; (v) all indebtedness secured by any Lien on
any property or asset owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person
(limited, however, to the fair market value of such property in the event such indebtedness is not
assumed); (vi) the face amount of any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings; (vii) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such Person of the
obligation of another; (viii) any obligation of such Person the primary purpose or intent of which
is to provide assurance to an obligee that the obligation of the obligor thereof will be paid or
discharged, or any agreement relating thereto will be complied with, or the holders thereof will be
protected (in whole or in part) against loss in respect thereof; (ix) any liability of such Person
for an obligation of another through any agreement (contingent or otherwise) (a) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for
the payment or discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (b) to maintain the solvency or any balance sheet
item, level of income or financial condition of another if, in the case of any agreement described
under subclauses (a) or (b) of this clause (ix), the primary purpose or intent thereof is as
described in clause (viii) above; (x) all obligations of such Person in respect of any exchange
traded or over the counter derivative transaction, including, without limitation, the Swap
Agreements and any Interest Rate Agreement and Currency Agreement, whether entered into for hedging
or speculative purposes; provided, in no event shall obligations under any Interest Rate
Agreement, any Currency Agreement or the Swap Agreements be deemed “Indebtedness” for any purpose
under Section 6.8; and (xi) all Production Payments granted by any Person but solely to the extent
of any warranties or guaranties of production or payment by such Person with respect to such
Production Payment.



"Indemnified Liabilities” means, collectively, any and all liabilities, obligations, losses,
damages (including natural resource damages), penalties, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing, abatement, cleanup,
removal, remediation or other response action necessary to remove, remediate, clean up or abate any
Hazardous Materials Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by any Person, whether
or not any such Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated
hereby or thereby (including the Lenders’ agreement to make Credit Extensions or the use or
intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including
any sale of, collection from, or other realization upon any of the Collateral or the enforcement of
the Guaranty)); (ii) the statements contained in the commitment letter delivered by any Lender to
Company with respect to the transactions contemplated by this Agreement; or (iii) any Environmental
Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any
past or present activity, operation, land ownership, use or practice of Company, any of its
Subsidiaries or the predecessors of the Company or any of its Subsidiaries.



"Indemnified Taxes” has the meaning set forth in Section 2.20(a).



"Indemnitee” has the meaning set forth in Section 10.3.



"Independent Engineer” means Wright & Company, Inc., Ryder Scott Company, DeGolyer and
McNaughton, Netherland Sewell & Associates, Cawley, Gillespie and Associates, Inc., or any other
engineering firm acceptable to the Administrative Agent.



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



"Installment” has the meaning set forth in Section 2.12(a).



"Installment Date” has the meaning set forth in Section 2.12(a).



"Interest Coverage Ratio” means the ratio as of the last day of any Fiscal Quarter of (i)
Consolidated EBITDAX for (a) the one-Fiscal Quarter ending on September 30, 2005, (b) the
two-Fiscal Quarter period ending December 31, 2005, (c) the three-Fiscal Quarter period ending
March 31, 2006, and (d) each four-Fiscal Quarter period ending thereafter to (ii) Consolidated Cash
Interest Expense for such period.



"Interest Payment Date” means with respect to (i) any Revolving Loan or Hedge L/C Loan that is
a Base Rate Loan, each March 31, June 30, September 30 and December 31 of each year, commencing on
the first such date to occur after the Closing Date and the final maturity date of such Loan and
(ii) any Revolving Loan or Hedge L/C Loan that is a Eurodollar Rate Loan, the last day of each
Interest Period applicable to such Loan; provided, in the case of each Interest Period of
longer than three months “Interest Payment Date” shall also include each date that is three months,
or an integral multiple thereof, after the commencement of such Interest Period.



"Interest Period” means, in connection with a Eurodollar Rate Loan, an interest period of one,
two, three or six months, as selected by Company in the applicable Funding Notice or
Conversion/Continuation Notice, (i) initially, commencing on the Credit Date or
Conversion/Continuation Date thereof, as the case may be and (ii) thereafter, commencing on the day
on which the immediately preceding Interest Period expires; provided, (a) if an Interest
Period would otherwise expire on a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day unless no further Business Day occurs in such month, in
which case such Interest Period shall expire on the immediately preceding Business Day; (b) any
Interest Period that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of such Interest Period)
shall, subject to clauses (c) and (d), of this definition, end on the last Business Day of a
calendar month; and (c) no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Commitment Termination Date.



"Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate hedging agreement or other similar agreement or
arrangement, each of which is for the purpose of hedging the interest rate exposure associated with
Company’s and its Restricted Subsidiaries’ operations and not for speculative purposes.



"Interest Rate Determination Date” means, with respect to any Interest Period, the date that
is two Business Days prior to the first day of such Interest Period.



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



"Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof
and from time to time hereafter, and any successor statute.



"Investment” means (i) any direct or indirect purchase or other acquisition by Company or any
of its Restricted Subsidiaries of, or of a beneficial interest in, any of the Securities of any
other Person (other than a Guarantor); (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by any Subsidiary of Company from any Person (other than Company or
any Guarantor), of any Capital Stock of such Person; and (iii) any direct or indirect loan, advance
(other than advances to employees for moving, entertainment and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business) or capital contribution by Company or
any of its Subsidiaries to any other Person (other than Company or any Guarantor), including all
indebtedness and accounts receivable from that other Person that are not current assets or did not
arise from sales to that other Person in the ordinary course of business. The amount of any
Investment shall be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.



"Issuance Notice” means an Issuance Notice substantially in the form of Exhibit A-3.



"Issuing Bank” means (i) BNPP or a bank or other legally authorized Person meeting the Letter
of Credit Issuer Rating selected by or acceptable to Administrative Agent in such Person’s capacity
as an issuer of a Letter of Credit or Hedge Letter of Credit; and (ii) any Replacement Issuing
Bank.



"J. Aron Swap” means the ISDA Master Agreement dated as of June 30, 2004 by and between J.
Aron & Company and the Company (including the Schedule thereto and the confirmations thereunder)
pursuant to which the parties thereto have entered into certain gas and oil commodity derivatives
transactions, and all “Credit Support Documents” described therein and any other documents or
agreements entered into in connection therewith.



"Joint Venture” means a joint venture, partnership or other similar arrangement, whether in
corporate, partnership or other legal form; provided, in no event shall any corporate
Restricted Subsidiary of any Person be considered to be a Joint Venture to which such Person is a
party.



"Landlord Consent and Estoppel” means, with respect to any Leasehold Property, a letter,
certificate or other instrument in writing from the lessor under the related lease, pursuant to
which, among other things, the landlord consents to the granting of a Mortgage on such Leasehold
Property by the Credit Party tenant, such Landlord Consent and Estoppel to be in form and substance
acceptable to Administrative Agent in its reasonable discretion, but in any event sufficient for
Collateral Trustee to obtain a Title Policy with respect to such Mortgage.



"Landlord Personal Property Collateral Access Agreement” means a Landlord Waiver and Consent
Agreement substantially in the form of Exhibit L with such amendments or modifications as may be
approved by Administrative Agent.



"Lead Arranger” has the meaning set forth in the preamble hereto.



"Leasehold Property” means any leasehold interest of any Credit Party as lessee under any
lease of real property, other than any such leasehold interest designated from time to time by
Administrative Agent in its sole discretion as not being required to be included in the Collateral;
provided that Leasehold Property shall exclude Hydrocarbon Interests.



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



"Lender” means each financial institution listed on the signature pages hereto as a Lender,
and any other Person that becomes a party hereto pursuant to an Assignment Agreement.



"Lender Counterparty” means each Lender or any Affiliate of a Lender counterparty to a Hedge
Agreement (including any person who was a Lender or an Affiliate of a Lender at the time such Hedge
Agreement was entered into but subsequently ceases to be a Lender or an Affiliate of a Lender)
including, without limitation, each such Affiliate that enters into a joinder agreement with the
Collateral Trustee.



"Letter of Credit” means a commercial or standby letter of credit (other than a Hedge Letter
of Credit) issued or to be issued by an Issuing Bank pursuant to this Agreement.



"Letter of Credit Commitment Period” means the period from the Closing Date to but excluding
the Revolving Commitment Termination Date.



"Letter of Credit Issuer Rating” has the meaning provided that term as of the Closing Date in
the ISDA Master Agreement (and related Schedules) referred to in the definition of J. Aron Swap.



"Letter of Credit Sublimit” means the lesser of (i) $20,000,000 and (ii) the aggregate unused
amount of the Revolving Commitments then in effect.



"Letter of Credit Usage” means, as at any date of determination, the sum of (i) the maximum
aggregate amount which is, or at any time thereafter may become, available for drawing under all
Letters of Credit then outstanding and (ii) the aggregate amount of all drawings under Letters of
Credit honored by Issuing Bank and not theretofore reimbursed by or on behalf of Company.



"Leverage Ratio” means the ratio as of the last day of any Fiscal Quarter or other date of
determination of (i) Consolidated Total Debt as of such day to (ii) Consolidated EBITDAX for the
four-Fiscal Quarter period ending on such date (or if such date of determination is not the last
day of a Fiscal Quarter, for the four-Fiscal Quarter period ending as of the most recently
concluded Fiscal Quarter for which financial statements have been required to be delivered under
this Agreement).



"Lien” means (i) any lien, mortgage, pledge, assignment, security interest, charge or
encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale
or other title retention agreement, and any lease in the nature thereof) and any option, trust or
other preferential arrangement having the practical effect of any of the foregoing and (ii) in the
case of Securities, any purchase option, call or similar right of a third party with respect to
such Securities.



"Loan” means a Revolving Loan and a Hedge L/C Loan.



"Margin Stock” has the meaning set forth in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.



"Material Adverse Effect” means a material adverse effect on and/or material adverse
developments with respect to (i) the business operations, properties, assets, condition (financial
or otherwise) or prospects of Company and its Subsidiaries taken as a whole; (ii) the ability of
the Credit Parties, taken as a whole, to fully and timely perform the Obligations; (iii) the
legality, validity, binding effect or enforceability against a Credit Party of a Credit Document to
which it is a party; or (v) the rights, remedies and benefits available to, or conferred upon, any
Agent and any Lender or any Secured Party under any Credit Document.



"Material Contract” means any contract or other arrangement to which Company or any of its
Restricted Subsidiaries is a party (other than the Credit Documents) for which breach,
nonperformance, cancellation or failure to renew could reasonably be expected to have a Material
Adverse Effect, including, without limitation, the J. Aron Swap.



"Material Real Estate Asset’’ means (i)(a) any fee-owned Real Estate Asset having a fair
market value in excess of $2,500,000 as of the date of the acquisition thereof and (b) all
Leasehold Properties other than those with respect to which the aggregate payments under the term
of the lease are less than $250,000 per annum or (ii) any Real Estate Asset that the Requisite
Lenders have determined is material to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any Restricted Subsidiary thereof, including
Company.



"Material Subsidiary” means any Restricted Subsidiary of the Company to which, on any date of
its determination either (i) $2,000,000 or more of Consolidated EBITDAX during the four-Fiscal
Quarter period most recently ended was attributable to such Restricted Subsidiary or (ii) assets
with a book value of $10,000,000 or more is attributable.



"Maximum Delivery Amount” shall mean, as of any date, the maximum amount that could be
required to be delivered on such date as specified in paragraph 13(b)(i)(A) of the Amended and
Restated Credit Support Annex dated as of August 16, 2005, and as in effect on the Closing Date and
entered into in connection with the J. Aron Swap.



"Moody’s” means Moody’s Investor Services, Inc.



"Mortgage” means a Mortgage substantially in the form of Exhibit K.



"Mortgage Supplement” means Supplements to the Existing Mortgages, substantially in the form
of the attached Exhibit D.



"Multiemployer Plan” means any Employee Benefit Plan which is a “multiemployer plan” as
defined in Section 3(37) of ERISA.



"NAIC” means The National Association of Insurance Commissioners, and any successor thereto.



"Narrative Report” means, with respect to the financial statements for which such narrative
report is required, a narrative report describing the operations of Company and its Subsidiaries in
the form prepared for presentation to senior management thereof for the applicable Fiscal Year.



"Net Insurance/Condemnation Proceeds” means an amount equal to: (i) any Cash payments or
proceeds received by Company or any of its Restricted Subsidiaries (a) under any casualty insurance
policy in respect of a covered loss thereunder or (b) as a result of the taking of any assets of
Company or any of its Restricted Subsidiaries by any Person pursuant to the power of eminent
domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with
such power under threat of such a taking, minus (ii) (a) any actual and reasonable costs
incurred by Company or any of its Restricted Subsidiaries in connection with the adjustment or
settlement of any claims of Company or such Restricted Subsidiary in respect thereof, and (b) any
bona fide direct costs incurred in connection with any sale of such assets as referred to in clause
(i)(b) of this definition, including income taxes payable as a result of any gain recognized in
connection therewith.



"Non-Recourse Debt” means Indebtedness:



(i) as to which neither the Company nor any of its Restricted Subsidiaries (A) provides credit
support of any kind (including any undertaking, agreement or instrument that would constitute
Indebtedness), other than a pledge of the stock or other ownership interests of an Unrestricted
Subsidiary, or (B) is directly or indirectly liable as a guarantor or otherwise, or (C) constitutes
the lender;



(ii) no default with respect to which (including any rights that the holders of the
Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit
upon notice, lapse of time or both any holder of any other Indebtedness of the Company or any of
its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of
such other Indebtedness to be accelerated or payable prior to its stated maturity; and



(iii) as to which the lenders of such Indebtedness have been notified in writing that they
will not have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries, except as permitted in clause (i)(A) above.



"Non-US Lender” has the meaning set forth in Section 2.20(c).



"Note” means a Revolving Loan Note or a Hedge L/C Loan Note.



"Notice” means a Funding Notice, an Issuance Notice, or a Conversion/Continuation Notice.



"Obligations” means all obligations of every nature of each Credit Party from time to time
owed to the Agents (including former Agents), the Collateral Trustee, the Lenders or any of them,
each Issuing Bank and Lender Counterparties, under any Credit Document or Hedge Agreement
(including, without limitation, with respect to a Hedge Agreement, obligations owed thereunder to
any person who was a Lender or an Affiliate of a Lender at the time such Hedge Agreement was
entered into), whether for principal, interest (including interest which, but for the filing of a
petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation,
whether or not a claim is allowed against such Credit Party for such interest in the related
bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit or Hedge Letters of
Credit, payments for early termination of Hedge Agreements, and all other fees, expenses,
indemnification obligations and other amounts or obligations.



"Obligee Guarantor” has the meaning set forth in Section 7.7.



"Oil And Gas Business” means (a) the acquisition, exploration, exploitation, development,
operation and disposition of interests in oil and gas properties and Hydrocarbons, (b) the
gathering, marketing, treating, processing, storage, selling and transporting of any production
from such interests or properties, including, without limitation, the marketing of Hydrocarbons
obtained from unrelated Persons; (c) any business relating to or arising from exploration for or
development, production, treatment, processing, storage, transportation or marketing of oil, gas
and other minerals and products produced in association therewith; (d) any business relating to
oilfield sales and service; and (e) any activity that is ancillary or necessary or desirable to
facilitate the activities described in clauses (a) through (d) of this definition, excluding, for
the avoidance of doubt, refining of hydrocarbons.



"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 servitude 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. For the avoidance of doubt, this
definition applies to Oil and Gas Properties and Hydrocarbon Interests now owned or hereafter
acquired directly or indirectly by the Company or the Guarantors.



"Organizational Documents” means (i) with respect to any corporation, its certificate or
articles of incorporation or organization and its by-laws, (ii) with respect to any limited
partnership, its certificate of limited partnership, as amended, and its partnership agreement,
(iii) with respect to any general partnership, its partnership agreement, and (iv) with respect to
any limited liability company, its articles of organization and its operating agreement. In the
event any term or condition of this Agreement or any other Credit Document requires any
Organizational Document to be certified by a secretary of state or similar governmental official,
the reference to any such “Organizational Document” shall only be to a document of a type
customarily certified by such governmental official.



"Owner Pledge Agreement” means the First Priority Lien Pledge Agreement between Capital C
Energy Operations, LP and the Collateral Trustee in substantially the form of Exhibit J.



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



"Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is
subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA.



"Permitted Acquisition” means any acquisition by Company or any of its wholly-owned Restricted
Subsidiaries, whether by purchase, merger or otherwise, of all or substantially all of the assets
of, all of the Capital Stock of, or a business line or unit or a division of, any Person or any
Hydrocarbon Interest of any Person; provided, except with respect to Permitted Acquisitions
of Hydrocarbon Interests having a value of less than $5,000,000,



(i) immediately prior to, and after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing or would result therefrom;



(ii) all transactions in connection therewith shall be consummated, in all material respects,
in accordance with all applicable laws and in conformity with all applicable Governmental
Authorizations;



(iii) in the case of the acquisition of Capital Stock, the Requisite Lenders shall have
consented to such acquisition and all of the Capital Stock (except for any such Securities in the
nature of directors’ qualifying shares required pursuant to applicable law) acquired or otherwise
issued by such Person or any newly formed Restricted Subsidiary of Company in connection with such
acquisition shall be owned 100% by Company or a Guarantor thereof, and Company shall have taken, or
caused to be taken, as of the date such Person becomes a Restricted Subsidiary of Company, each of
the actions set forth in Sections 5.10 and/or 5.11, as applicable;



(iv) Company shall be in compliance with the financial covenants set forth in Section 6.8 on a
pro forma basis after giving effect to such acquisition as of the last day of the Fiscal Quarter
most recently ended, (as determined in accordance with Section 6.8(h); and



(v) Company shall have delivered to Administrative Agent (A) at least five Business Days prior
to such proposed acquisition, a Compliance Certificate evidencing compliance with Section 6.8 as
required under clause (iv) above, together with all relevant financial information with respect to
such acquired assets, including, without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate compliance with Section 6.8.



"Permitted Business Investments” means investments made in the ordinary course of, and of a
nature that is or shall have become customary in, the Oil and Gas Business as a means of actively
exploiting, exploring for, acquiring, developing, processing, gathering, marketing or transporting
oil and gas through agreements, transactions, interests or arrangements which permit one to share
risks of costs, comply with regulatory requirements regarding local ownership or satisfy other
objectives customarily achieved through the conduct of Oil and Gas Business jointly or with third
parties, including, without limitation, the entry into operating agreements, working interests,
royalty interests, mineral leases, processing agreements, farm-out and farm-in agreements, division
orders, contracts for the sale, transportation or exchange of oil or natural gas, unitization and
pooling declarations and agreements and area of mutual interest agreements, production sharing
agreements or other similar or customary agreements, transactions, properties, interests, and
investments and expenditures in connection therewith, and also including investments in capital
stock, partnership interests, joint venture interests, limited liability company interests or other
similar equity interests in a Person, provided that an investment in any such equity interest shall
not be permitted at any time that an Event of Default shall be in effect, nor shall any such
investment be permitted if the portion of the liabilities of such partnership, joint venture or
limited liability company for which the Company shall become liable would have a Material Adverse
Effect on the Company; and further provided that, Volumetric Production Payments shall not
constitute a Permitted Business Investment, except for those certain Volumetric Production Payments
to be made under the terms of that certain Agreement of Limited Partnership of Blue Spruce
Investments Limited partnership dated as of September 1, 1993.



"Permitted Encumbrances” has the meaning specified in the Mortgages.



"Permitted Liens” means each of the Liens permitted pursuant to Section 6.2.



"Permitted Prior Liens” means the Liens permitted under paragraphs (b), (c), (d), (f), (g),
(i), (m), (n), (o), (q), (r), (s), and (t) of Section 6.2.



"Person” means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships, joint stock companies,
Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and Governmental Authorities.



"Pledge and Security Agreement” means the Priority Lien Pledge and Security Agreement to be
executed by Company and each Guarantor substantially in the form of Exhibit I.



"Prime Rate” means the rate of interest publicly announced by BNPP in New York, New York from
time to time as its base rate (the base rate not being intended to be the lowest rate of interest
charged by BNPP in connection with extensions of credit to debtors. Agent or any other Lender may
make commercial loans or other loans at rates of interest at, above or below the Prime Rate.



"Principal Office” means, for each of Administrative Agent and Issuing Bank, such Person’s
“Principal Office” as set forth on Appendix B, or such other office or office of a third party or
sub-agent, as appropriate, as such Person may from time to time designate in writing to Company,
Administrative Agent and each Lender.



"Pro Rata Share” means (i) with respect to all payments, computations and other matters
relating to the Revolving Commitment or Revolving Loans of any Lender or any Letters of Credit
issued or participations purchased therein by any Lender, the percentage obtained by dividing (a)
the Revolving Exposure of that Lender by (b) the aggregate Revolving Exposure of all Lenders; and
(ii) with respect to all payments, computations and other matters relating to the Hedge L/C
Commitment or Hedge L/C Loans of any Lender or any Hedge Letters of Credit issued or participations
purchased therein by any Lender, the percentage obtained by dividing (a) the Hedge L/C Exposure of
that Lender by (b) the aggregate Hedge L/C Exposure of all Lenders. For all other purposes with
respect to each Lender, “Pro Rata Share” means the percentage obtained by dividing (A) an amount
equal to the sum of the Revolving Exposure and the Hedge L/C Exposure of that Lender, by (B) an
amount equal to the sum of aggregate Revolving Exposure and the aggregate Hedge L/C Exposure of all
Lenders.



"Production Payments” means, collectively, Dollar-Denominated Production Payments and
Volumetric Production Payments.



"Properties” means any kind of facility, fixture, property or asset, whether real, personal or
mixed, or tangible or intangible owned, leased or operated by the Company or any Subsidiary.



"Proved Developed Producing Reserves” means those Oil and Gas Properties designated as “proved
developed producing” (applying the reporting standards prescribed by the Society of Petroleum
Engineers) in the Engineering Report.



"Proven Reserves” means, at any particular time, the estimated quantities of Hydrocarbons
which geological and engineering data demonstrate with reasonable certainty to be recoverable in
future years from known reservoirs attributable to Oil and Gas Properties included or to be
included in the Borrowing Base under then existing economic and operating conditions.



"Qualified Junior Debt” means unsecured Indebtedness of the Company payable to its equity
holders subordinated to the Obligations in a manner satisfactory to the Administrative Agent in its
reasonable discretion and that only requires cash interest to be paid to the extent permitted under
this Agreement.



"Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or
otherwise) then owned by any Credit Party in any real property, other than Hydrocarbon Interests.



"Record Document” means, with respect to any Leasehold Property, (i) the lease evidencing such
Leasehold Property or a memorandum thereof, executed and acknowledged by the owner of the affected
real property, as lessor, or (ii) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease document, executed
and acknowledged by such holder, in each case in form sufficient to give such constructive notice
upon recordation and otherwise in form reasonably satisfactory to Administrative Agent.



"Recorded Leasehold Interest” means a Leasehold Property with respect to which a Record
Document has been recorded in all places necessary or desirable, in Administrative Agent’s
reasonable judgment, to give constructive notice of such Leasehold Property to third-party
purchasers and encumbrancers of the affected real property.



"Register” has the meaning set forth in Section 2.7(b).



"Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.



"Reimbursement Date” has the meaning set forth in Section 2.4(d).



"Related Agreements” means, collectively, the Acquisition Agreement, the Senior Secured Debt
Documents, and the Swap Agreements.



"Related Fund” means, with respect to any Lender that is an investment fund, any other
investment fund that invests in commercial loans and that is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.



"Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping,
deposit, disposal, discharge, dispersal, dumping, leaching or migration of any Hazardous Material
into the indoor or outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Material), including the movement
of any Hazardous Material through the air, soil, surface water or groundwater.



"Replacement Issuing Bank” has the meaning set forth in Section 2.4(j).



"Replacement Lender” has the meaning set forth in Section 2.23.



"Requisite Class Lenders” means, at any time of determination, (i) for the Class of Lenders
having Revolving Exposure, Lenders holding more than 66.67% of the aggregate Revolving Exposure of
all Lenders and (ii) for each Class of Lenders having Hedge L/C Exposure, Lenders holding more than
66.67% of the aggregate Hedge L/C Exposure of that Class.



"Requisite Lenders” means one or more Lenders having or holding Hedge L/C Exposure and/or
Revolving Exposure and representing more than 66.67% of the sum of (i) the aggregate Revolving
Exposure of all Lenders and (ii) the aggregate Hedge L/C Exposure of all Lenders.



"Requisite Revolving Lenders” means one or more Revolving Lenders having or holding Revolving
Exposure and representing more than 66.67% of the Revolving Exposure of all Lenders.



"Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect,
on account of any shares of any class of stock of Company now or hereafter outstanding, except a
dividend payable solely in shares of that class of stock to the holders of that class; (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock of Company now or hereafter outstanding;
(iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of stock of Company now or hereafter outstanding;
and (iv) any payment or prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or
similar payment with respect to, any subordinated Indebtedness, including any Qualified Junior
Debt, except for interest payable solely as Qualified Junior Debt.



"Restricted Subsidiary” of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary.



"Revolving Commitment” means the commitment of a Lender to make or otherwise fund any
Revolving Loan and to acquire participations in Letters of Credit hereunder and “Revolving
Commitments” means such commitments of all Lenders in the aggregate. The amount of each Lender’s
Revolving Commitment, if any, is set forth on Appendix A-3 or in the applicable Assignment
Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The
aggregate amount of the Revolving Commitments as of the Closing Date is $350,000,000.



"Revolving Commitment Period” means the period from the Closing Date to but excluding the
Revolving Commitment Termination Date.



"Revolving Commitment Termination Date” means the earliest to occur of (i) August 16, 2010,
(ii) the date the Revolving Commitments are permanently reduced to zero pursuant to Section
2.13(b), and (iii) the date of the termination of the Revolving Commitments pursuant to Section
8.1.



"Revolving Exposure” means, with respect to any Lender as of any date of determination, (i)
prior to the termination of the Revolving Commitments, that Lender’s Revolving Commitment; and (ii)
after the termination of the Revolving Commitments, the sum of (a) the aggregate outstanding
principal amount of the Revolving Loans of that Lender, (b) in the case of Issuing Bank, the
aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (net of
any participations by Lenders in such Letters of Credit) and (c) the aggregate amount of all
participations by that Lender in any outstanding Letters of Credit or any unreimbursed drawing
under any Letter of Credit.



"Revolving Lender” means a Lender with Revolving Exposure.



"Revolving Loan” means a Loan made by a Lender to Company pursuant to Section 2.2(a) and/or
2.22.



"Revolving Loan Note” means a promissory note in the form of Exhibit B-1.



"S&P” means Standard & Poor’s Ratings Group, a division of The McGraw Hill Corporation.



"SEC” means the Securities and Exchange Commission.



"SEC Value” means the future net revenues before income taxes from Proven Reserves, estimated
utilizing the price for the appropriate category of oil or gas as of the date of determination and
assuming that oil and natural gas prices and production costs thereafter remain constant, then
discounted at the rate of 10% per year to obtain the present value, and otherwise applying the
financial accounting and reporting standards prescribed by the SEC for application of the
successful efforts method of accounting under Rule 4-10 of Regulation S-X as promulgated by the SEC
from time to time.



"Section 29 Properties” has the meaning set forth in subsection 6.9(h).



"Secured Parties” has the meaning assigned to that term in the Pledge and Security Agreement.



"Securities” means any stock, shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit-sharing agreement or arrangement, options,
warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly known as
“securities” or any certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing.



"Securities Act” means the Securities Act of 1933, as amended from time to time, and any
successor statute.



"Senior Debt” means, as at any date of determination, the aggregate principal amount of Loans
outstanding as of such date.



"Senior Secured Debt Documents” means the Senior Secured Note Indenture, the Senior Secured
Notes and each other document executed in connection with the Senior Secured Notes, and any
documents executed in connection with any refinancings or replacements thereof to the extent
permitted under Section 6.16.



"Senior Secured Indebtedness” means the obligations of Company pursuant to the Senior Secured
Debt Documents.



"Senior Secured Note Indenture” means the indenture dated July 7, 2004, pursuant to which the
Senior Secured Notes are issued, and any indenture pursuant to which the Senior Secured Notes are
refinanced or replaced pursuant to a transaction permitted under Section 6.1.



"Senior Secured Notes” means the Senior Secured Notes of Company in the aggregate principal
amount of not less than $192,500,000 and issued pursuant to the Senior Secured Note Indenture, and
any subordinated promissory notes issued in respect of any refinancing or replacement of such
Senior Secured Notes in a transaction permitted under Section 6.1.



"Settlement Confirmation” has the meaning set forth in Section 10.6(b).



"Settlement Service” has the meaning set forth in Section 10.6(d).



"Solvency Certificate” means a Solvency Certificate of the chief financial officer of Company
substantially in the form of Exhibit G-2.



"Solvent” means, with respect to any Credit Party, that as of the date of determination, both
(i) (a) the sum of such Credit Party’s debt (including contingent liabilities) does not exceed the
present fair saleable value of such Credit Party’s present assets; (b) such Credit Party’s capital
is not unreasonably small in relation to its business as contemplated on the Closing Date or with
respect to any transaction contemplated or undertaken after the Closing Date; and (c) such Person
has not incurred and does not intend to incur, or believe (nor should it reasonably believe) that
it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity
or otherwise); and (ii) such Person is “solvent” within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting
Standard No. 5).



"Subject Transaction” has the meaning set forth in Section 6.8(h).



"Subsidiary” means, with respect to any Person, any corporation, partnership, limited
liability company, association, joint venture or other business entity of which more than 50% of
the total voting power of shares of stock or other ownership interests entitled (without regard to
the occurrence of any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions) having the power to
direct or cause the direction of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof; provided, in determining the percentage of ownership
interests of any Person controlled by another Person, no ownership interest in the nature of a
“qualifying share” of the former Person shall be deemed to be outstanding.



"Swap Agreements” means (i) the J. Aron Swap, and (ii) any ISDA Master Agreement, other master
agreement, long form confirmation, or other agreement entered into after the Closing Date by the
Company and/or its Restricted Subsidiaries (including the Schedule thereto and the confirmations
thereunder), pursuant to which the parties thereto enter into certain gas and oil commodity
derivatives transactions.



"Swap Agreement Documents” means the Swap Agreements and each other document executed in
connection with the Swap Agreements, and any documents executed in connection with any refinancings
or replacements thereof to the extent permitted under Section 6.15.



"Syndication Agent” means BNPP.



"Tax” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction
or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever
imposed, levied, collected, withheld or assessed; provided, “Tax on the overall net income”
of a Person shall be construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person’s applicable principal office (and/or, in the case of a
Lender, its lending office) is located or in which that Person (and/or, in the case of a Lender,
its lending office) is deemed to be doing business on all or part of the net income, profits or
gains (whether worldwide, or only insofar as such income, profits or gains are considered to arise
in or to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in the case of
a Lender, its applicable lending office).



"Tender Offer” means the Company’s offer to purchase for cash all outstanding Senior Secured
Notes pursuant to the terms and conditions of that certain Offer to Purchase and Consent
Solicitation Statement dated July 18, 2005.



"Terminated Lender” has the meaning set forth in Section 2.23.



"Title Company” means a title insurance company of recognized national standing which is
acceptable to the Administrative Agent in its reasonable discretion.



"Title Policy” shall mean, with respect to any Mortgage, a mortgagee policy of title insurance
(ALTA or the equivalent) or marked “commitment” of title insurance insuring the applicable Mortgage
as a first priority Lien on such real property asset in favor of the Collateral Trustee (for the
benefit of the holders of the Obligations, including the Secured Parties) to secure the
Obligations, free of all Liens other than the Permitted Encumbrances, which policy of title
insurance shall be issued by a Title Company in such policy amounts, with such endorsements and
affirmative insurance, and in form and substance reasonably satisfactory to the Administrative
Agent, and shall contain no exceptions to coverage other than matters satisfactory to the
Administrative Agent in its judgment reasonably exercised and which policy of title insurance shall
have been fully paid for by the Company.



"Total Utilization of Revolving Commitments” means, as at any date of determination, the sum
of (i) the aggregate principal amount of all outstanding Revolving Loans (other than Revolving
Loans made for the purpose of reimbursing Issuing Bank for any amount drawn under any Letter of
Credit, but not yet so applied) and (ii) the Letter of Credit Usage.



"Total Utilization of Hedge L/C Commitments” means, as at any date of determination, the sum
of (i) the aggregate principal amount of all outstanding Hedge L/C Loans (other than Hedge L/C
Loans made for the purpose of reimbursing Issuing Bank for any amount drawn under any Letter of
Credit, but not yet so applied) and (ii) the Hedge Letter of Credit Usage.



"Transaction Costs” means the fees, costs and expenses payable by Company or any of Company’s
Restricted Subsidiaries on or before the Closing Date in connection with the transactions
contemplated by the Credit Documents and the Related Agreements.



"Type of Loan” means a Base Rate Loan or a Eurodollar Rate Loan.



"UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in
effect in any applicable jurisdiction.



"Unadjusted Eurodollar Rate Component” means that component of the interest costs to Company
in respect of a Eurodollar Rate Loan that is based upon the rate obtained pursuant to clause (i) of
the definition of Adjusted Eurodollar Rate.



"Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Board
of Directors of the Company as an Unrestricted Subsidiary pursuant to a resolution of the Board of
Directors, but only to the extent that such Subsidiary:



(i) has no Indebtedness other than Non-Recourse Debt;



(ii) except as permitted by Section 6.12 hereof, is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless
the terms of any such agreement, contract, arrangement or understanding are no less favorable to
the Company or such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company;



(iii) is a Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (A) to subscribe for additional Capital Stock or
(B) to maintain or preserve such Person’s financial condition or to cause such Person to achieve
any specified levels of operating results; and



(iv) has not guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Company or any of its Restricted Subsidiaries.



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



"Utilization” means, on any day of its determination, (a) the Total Utilization of Revolving
Commitments on BNPP’s close of business in New York City on such day divided by (b) the lesser of
(i) the Revolving Commitments at such time and (ii) the Borrowing Base in effect at such time.



"Volumetric Production Payments” means production payment obligations, royalties or overriding
royalties of Company or any of its Restricted Subsidiaries which are payable from a specified share
of production from specific properties together with all undertakings and obligations in connection
therewith.



	 	 	 
	“Wells” has the meaning set forth in Section 2.3(b)(iv).

	 
	 	 
	1.2

	 	Accounting Terms.






(a) Except as otherwise expressly provided herein, all accounting terms not otherwise defined
herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and
other information required to be delivered by Company to Lenders pursuant to Section 5.1(a) and
5.1(b) shall be prepared in accordance with GAAP as in effect at the time of such preparation (and
delivered together with the reconciliation statements provided for in Section 5.1(e), if
applicable). Subject to the foregoing, calculations in connection with the definitions, covenants
and other provisions hereof shall utilize accounting principles and policies in conformity with
those used to prepare the Historical Financial Statements.



(b) In the event that any “Accounting Change” (as defined below) shall occur and such change
results in a change in the method of calculation of financial covenants, standards or terms in this
Agreement, then Company and the Administrative Agent agree to enter into negotiations in order to
amend such provisions of this Agreement so as equitably to reflect such Accounting Change with the
desired result that the criteria for evaluating Company’s and its Subsidiaries’ financial condition
shall be the same after such Accounting Change as if such Accounting Change had not been made.
Until such time as such an amendment shall have been executed and delivered by Company, the
Administrative Agent and the Requisite Lenders, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if such Accounting Change had not
occurred. “Accounting Change” refers to any change in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if applicable, the
Securities and Exchange Commission.



1.3 Interpretation, etc.



Any of the terms defined herein may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference. References herein to any Section, Appendix,
Schedule or Exhibit shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word “include” or
“including”, when following any general statement, term or matter, shall not be construed to limit
such statement, term or matter to the specific items or matters set forth immediately following
such word or to similar items or matters, whether or not no limiting language (such as “without
limitation” or “but not limited to” or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter. Any definition of or reference to any
agreement, instrument or other document (including any Organization Document) 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 or in any other Credit Document).



	 	 	 
	SECTION 2

2.1

2.2

	 	LOANS AND LETTERS OF CREDIT

[Reserved].

Revolving Loans.






(a) Revolving Commitments. During the Revolving Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make Revolving Loans to Company in an
aggregate amount up to but not exceeding such Lender’s Unused Revolving Commitment Amount;
provided, that after giving effect to the making of any Revolving Loans in no event shall
the Total Utilization of Revolving Commitments exceed the lesser of (i) Revolving Commitments then
in effect and (ii) the Borrowing Base then in effect. Amounts borrowed pursuant to this Section
2.2(a) may be repaid and reborrowed during the Revolving Commitment Period. Each Lender’s
Revolving Commitment shall expire on the Revolving Commitment Termination Date and all Revolving
Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.



(b) Borrowing Mechanics for Revolving Loans.



(i) Except pursuant to 2.4(d), Revolving Loans shall be made in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount.



(ii) Whenever Company desires that Lenders make Revolving Loans, Company shall deliver to
Administrative Agent a fully executed and delivered Funding Notice no later than 10:00 a.m. (New
York City time) at least three Business Days in advance of the proposed Credit Date in the case of
a Eurodollar Rate Loan, and at least one Business Day in advance of the proposed Credit Date in the
case of a Revolving Loan that is a Base Rate Loan. Except as otherwise provided herein, a Funding
Notice for a Revolving Loan that is a Eurodollar Rate Loan shall be irrevocable on and after the
related Interest Rate Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.



(iii) Notice of receipt of each Funding Notice in respect of Revolving Loans, together with
the amount of each Lender’s Pro Rata Share thereof, if any, together with the applicable interest
rate, shall be provided by Administrative Agent to each applicable Lender by telefacsimile with
reasonable promptness, but (provided Administrative Agent shall have received such notice by 10:00
a.m. (New York City time)) and not later than 2:00 p.m. (New York City time) on the same day as
Administrative Agent’s receipt of such Notice from Company.



(iv) Each Lender shall make the amount of its Revolving Loan available to Administrative Agent
not later than 12:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of
same day funds in Dollars, at the Principal Office designated by Administrative Agent. Except as
provided herein, upon satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of such Revolving Loans available to Company promptly
after receipt from the Lenders on the applicable Credit Date by causing an amount of same day funds
in Dollars equal to the proceeds of all such Revolving Loans received by Administrative Agent from
Lenders to be credited to the account of Company at the Principal Office designated by
Administrative Agent or such other account as may be designated in writing to Administrative Agent
by Company.



2.3 Borrowing Base.



(a) Borrowing Base. The initial Borrowing Base in effect as of the date of this
Agreement has been set by the Administrative Agent and the Revolving Lenders and acknowledged by
the Company as $80,250,000. Such initial Borrowing Base shall remain in effect until the next
redetermination made pursuant to this Section 2.3. The Borrowing Base shall be determined in
accordance with the standards set forth in Section 2.3(d) and is subject to periodic
redetermination pursuant to Sections 2.3(b) and 2.3(c).



(b) Calculation of Borrowing Base.



(i) The Company shall deliver to the Administrative Agent and each of the Revolving Lenders on
or before March 1, 2006 and on or before the first day of each March thereafter, an Independent
Engineering Report dated effective as of the immediately preceding January 1, and such other
information as may be reasonably requested by any Revolving Lender with respect to the Oil and Gas
Properties included or to be included in the Borrowing Base. The Administrative Agent shall
promptly, and in any event within 30 days after the Administrative Agent’s and the Revolving
Lenders’ receipt of such Independent Engineering Report and other information, deliver to each
Revolving Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base.
The Administrative Agent and the Revolving Lenders shall promptly, and in any event on the later of
(A) April 1 and (B) 15 days after the Revolving Lenders’ receipt of the Administrative Agent’s
recommendation, redetermine the Borrowing Base in accordance with Section 2.3(d), and the
Administrative Agent shall promptly notify the Company in writing of the amount of the Borrowing
Base as so redetermined, which redetermined Borrowing Base shall become effective as of the date of
such notice.



(ii) The Company shall deliver to the Administrative Agent and each Revolving Lender on or
before September 1 of each year beginning September 1, 2005 an Internal Engineering Report dated
effective as of the immediately preceding July 1 and such other information as may be reasonably
requested by the Administrative Agent or any Revolving Lender with respect to the Oil and Gas
Properties included or to be included in the Borrowing Base. The Administrative Agent shall
promptly, and in any event within 30 days after the Administrative Agent’s and the Revolving
Lenders’ receipt of such Internal Engineering Report and other information, deliver to each
Revolving Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base.
The Administrative Agent and the Revolving Lenders shall promptly, and in any event on the later of
(A) October 1 and (B) 15 days after the Revolving Lenders’ receipt of the Administrative Agent’s
recommendation, redetermine the Borrowing Base in accordance with Section 2.3(d), and the
Administrative Agent shall promptly notify the Company in writing of the amount of the Borrowing
Base as so redetermined, which redetermined Borrowing Base shall become effective as of the date of
such notice.



(iii) In the event that the Company does not furnish to the Administrative Agent and the
Revolving Lenders the Independent Engineering Report, Internal Engineering Report or other
information specified in clauses (i) and (ii) above by the date specified therein, the
Administrative Agent and the Revolving Lenders may nonetheless redetermine the Borrowing Base and
redesignate the Borrowing Base from time-to-time thereafter as provided herein in their sole
discretion until the Administrative Agent and the Revolving Lenders receive the relevant
Independent Engineering Report, Internal Engineering Report, or other information, as applicable,
whereupon the Administrative Agent and the Revolving Lenders shall redetermine the Borrowing Base
as otherwise specified in this Section 2.3.



(iv) Each delivery of an Engineering Report by the Company to the Administrative Agent and the
Revolving Lenders shall be delivered with a certificate executed on behalf of the Company by an
Authorized Officer of the Company, which certificate shall contain a representation and warranty by
the Company to the Administrative Agent and the Revolving Lenders that, except as noted in such
certificate, (A) the Company and the Guarantors, as applicable, own the Oil and Gas Properties
specified therein subject to an Acceptable Security Interest on not less than 80% of the total
value of Proven Reserves indicated therein, and (B) on and as of the date of such Engineering
Report, each Oil and Gas Property described as “proved developed” therein was developed for oil and
gas, and the wells pertaining to such Oil and Gas Properties that are described therein as
producing wells (“Wells”), were each producing oil and gas in paying quantities, except for Wells
that were utilized as water or gas injection wells or as water disposal wells. Additionally, the
Company shall deliver with each such Engineering Report a list of any Proven Reserves that have
been sold or acquired by the Company and the Guarantors since the date of the last Engineering
Report delivered to the Administrative Agent.



(c) Interim Redeterminations. In addition to the Borrowing Base redeterminations
provided for in Section 2.3(b), (i) the Administrative Agent may, at the request of the Requisite
Revolving Lenders, upon written notice to the Company and based on such information as the
Administrative Agent and the Revolving Lenders deem relevant (but in accordance with Section
2.3(d)), make up to two additional redeterminations of the Borrowing Base during any calendar year
period; (ii) the Company may, by written request to the Administrative Agent, request that the
Administrative Agent and the Revolving Lenders make up to two additional redeterminations of the
Borrowing Base during any calendar year period based on such information as the Administrative
Agent and the Revolving Lenders deem relevant (but in accordance with Section 2.3(d)); and (iii)
the Administrative Agent or the Requisite Revolving Lenders may request an additional
redetermination in connection with any sale or proposed sale of Oil and Gas Properties of the
Company or any of the Guarantors having a market value of $10,000,000 or more to the extent any
such sale is permitted by this Agreement. The party requesting the redetermination under the
foregoing clauses (i)-(iii) shall give the other party at least 10 days’ prior written notice that
a redetermination of the Borrowing Base pursuant to this paragraph (c) is to be performed. In
connection with any redetermination of the Borrowing Base under this Section 2.3(c), the Company
shall provide the Administrative Agent and the Revolving Lenders with such information regarding
the Company and the Guarantors’ business (including, without limitation, its Oil and Gas
Properties, the Proven Reserves, and production relating thereto) as the Administrative Agent or
the Requisite Revolving Lenders may reasonably request, including, in the case of requests for an
increase to the Borrowing Base of $10,000,000 or more, an updated Independent Engineering Report or
Internal Engineering Report, as agreed between the Company and the Administrative Agent. The
Administrative Agent shall promptly, and in any event within 45 days after the Administrative Agent
and the Revolving Lender’s receipt of such information, and to the extent applicable, an updated
Independent Engineering Report, notify the Company in writing of each redetermination of the
Borrowing Base pursuant to this Section 2.3(c) and the amount of the Borrowing Base as so
redetermined, which redetermined Borrowing Base shall become effective as of the date of such
notice.



(d) Standards for Redetermination. Each redetermination of the Borrowing Base by the
Administrative Agent and the Revolving Lenders pursuant to this Section 2.3 shall be made (i) in
the sole discretion of the Administrative Agent and the Revolving Lenders (but in accordance with
the other provisions of this Section 2.3(d)), (ii) in accordance with the Administrative Agent’s
and the Revolving Lenders’ customary internal standards and practices for valuing and redetermining
the value of Oil and Gas Properties in connection with reserve based oil and gas loan transactions,
(iii) in conjunction with the most recent Independent Engineering Report or Internal Engineering
Report, as applicable, or other information received by the Administrative Agent and the Revolving
Lenders relating to the Proven Reserves of the Company and the Guarantors, and (iv) based upon the
estimated value of the Proven Reserves owned by the Company and the Guarantors as determined by the
Administrative Agent and the Revolving Lenders. In valuing and redetermining the Borrowing Base,
the Administrative Agent and the Revolving Lenders may also consider the business, financial
condition, and Indebtedness obligations of the Company and Guarantors and such other factors as the
Administrative Agent and the Revolving Lenders customarily deem appropriate. No Proven Reserves
shall be included or considered for inclusion in the Borrowing Base unless the Administrative Agent
and the Revolving Lenders shall have received, at the Company’s expense, evidence of title
reasonably satisfactory in form and substance to the Administrative Agent that the Administrative
Agent has an Acceptable Security Interest in not less than 80% of the value of the Oil and Gas
Properties relating thereto pursuant to the Security Instruments. If Company has not, within 10
days of the Company’s receipt from the Administrative Agent of notification of a redetermination of
the Borrowing Base under this Section 2.3 provided the Administrative Agent with written notice
designating a lesser amount as the Borrowing Base, the Borrowing Base shall remain equal to the
redetermined amount in such notice provided by the Administrative Agent, or, if the Company has
provided notice to the Administrative Agent requesting a lesser amount for the Borrowing Base, the
Borrowing Base shall be established at such lesser amount effective on the date the Company gives
such request and shall, in either case, remain effective until the Borrowing Base is subsequently
redetermined in accordance with this Section 2.3.



(e) Voting. Any changes in, or renewals of, the Borrowing Base (other than increases
in the Borrowing Base) must be consented to in writing by the Requisite Revolving Lenders. Any
increases in the Borrowing Base must be consented to in writing by all of the Revolving Lenders.



2.4 Issuance of Letters of Credit and Hedge Letters of Credit.



(a) Letters of Credit. During the Revolving Commitment Period, subject to the terms
and conditions hereof, Issuing Bank agrees to issue Letters of Credit for the account of Company;
provided, that (i) each Letter of Credit shall be denominated in Dollars; (ii) the
stated amount of each Letter of Credit shall be such amount as is acceptable to Issuing Bank; (iii)
after giving effect to such issuance, in no event shall the Total Utilization of Revolving
Commitments exceed the lesser of (A) the Revolving Commitments then in effect and (B) the Borrowing
Base then in effect; (iv) after giving effect to such issuance, in no event shall the Letter of
Credit Usage exceed the Letter of Credit Sublimit then in effect; (v) in no event shall any standby
Letter of Credit have an expiration date later than the earlier of (1) five Business Days before
the Revolving Commitment Termination Date and (2) the date which is one year from the date of
issuance of such standby Letter of Credit; and (vi) in no event shall any commercial Letter of
Credit have an expiration date later than the earlier of (1) five Business Days before the
Revolving Loan Commitment Termination Date and (2) the date which is 180 days from the date of
issuance of such commercial Letter of Credit. Subject to the foregoing, Issuing Bank may agree
that a standby Letter of Credit will automatically be extended for one or more successive periods
not to exceed one year each, unless Issuing Bank elects not to extend for any such additional
period.



(b) Notice of Issuance. Whenever Company desires the issuance (or amendment) of a
Letter of Credit or a Hedge Letter of Credit, it shall deliver to Issuing Bank and Administrative
Agent an Issuance Notice no later than 12:00 p.m. (New York City time) at least two Business Days
in the case of standby letters of credit and Hedge Letters of Credit or five Business Days in the
case of commercial letters of credit, or in each case such shorter period as may be agreed to by
Issuing Bank in any particular instance, in advance of the proposed date of issuance or amendment
that increases or decreases the stated amount. Upon satisfaction or waiver of the conditions set
forth in Section 3.2, Issuing Bank shall issue the requested Letter of Credit or Hedge Letter of
Credit only in accordance with Issuing Bank’s standard operating procedures. Upon the issuance of
any Letter of Credit or Hedge Letter of Credit or amendment or modification to a Letter of Credit
or Hedge Letter of Credit, Issuing Bank shall promptly notify each Lender of such issuance, which
notice shall be accompanied by a copy of such Letter of Credit or Hedge Letter of Credit or
amendment or modification to a Letter of Credit or Hedge Letter of Credit and the amount of such
Lender’s respective participation in such Letter of Credit or Hedge Letter of Credit pursuant to
Section 2.4(e).



(c) Responsibility of Issuing Bank With Respect to Requests for Drawings and Payments.
In determining whether to honor any drawing under any Letter of Credit or Hedge Letter of Credit
by the beneficiary thereof, Issuing Bank shall be responsible only to examine the documents
delivered under such Letter of Credit or Hedge Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in accordance with the terms and conditions of
such Letter of Credit or Hedge Letter of Credit. Subject to the last sentence of this Section
2.4(c), as between Company and Issuing Bank, Company assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit or Hedge Letters of Credit issued by Issuing Bank, by the
respective beneficiaries of such Letters of Credit or Hedge Letters of Credit. In furtherance and
not in limitation of the foregoing, Issuing Bank shall not be responsible for: (i) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party
in connection with the application for and issuance of any such Letter of Credit or Hedge Letter of
Credit, even if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any such Letter of Credit or Hedge Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) failure of the beneficiary of any such
Letter of Credit or Hedge Letter of Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit or Hedge Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make a drawing under
any such Letter of Credit or Hedge Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit or Hedge Letter of Credit of the
proceeds of any drawing under such Letter of Credit or Hedge Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Issuing Bank, including any Governmental
Acts; none of the above shall affect or impair, or prevent the vesting of, any of Issuing Bank’s
rights or powers hereunder. Without limiting the foregoing and in furtherance thereof, any action
taken or omitted by Issuing Bank under or in connection with the Letters of Credit or Hedge Letters
of Credit or any documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not give rise to any liability on the part of Issuing Bank to Company.
Notwithstanding anything to the contrary contained in this Section 2.4(c), Company shall retain any
and all rights it may have against Issuing Bank for any liability arising solely out of the gross
negligence or willful misconduct of Issuing Bank.



(d) Reimbursement by Company of Amounts Drawn or Paid Under Letters of Credit. In the
event Issuing Bank has determined to honor a drawing under a Letter of Credit, it shall promptly
notify Company and Administrative Agent, and Company shall reimburse Issuing Bank on or before the
Business Day on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars
and in same day funds equal to the amount of such honored drawing; provided, anything
contained herein to the contrary notwithstanding, (i) unless Company shall have notified
Administrative Agent and Issuing Bank prior to 10:00 a.m. (New York City time) on the date such
drawing is honored that Company intends to reimburse Issuing Bank for the amount of such honored
drawing with funds other than the proceeds of Revolving Loans, Company shall be deemed to have
given a timely Funding Notice to Administrative Agent requesting Lenders to make Revolving Loans
that are Base Rate Loans on the Reimbursement Date in an amount in Dollars equal to the amount of
such honored drawing, and (ii) subject to satisfaction or waiver of the conditions specified in
Section 3.2, Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base Rate
Loans in the amount of such honored drawing, the proceeds of which shall be applied directly by
Administrative Agent to reimburse Issuing Bank for the amount of such honored drawing; and
provided further, if for any reason proceeds of Revolving Loans are not received by
Issuing Bank on the Reimbursement Date in an amount equal to the amount of such honored drawing,
Company shall reimburse Issuing Bank, on demand, in an amount in same day funds equal to the excess
of the amount of such honored drawing over the aggregate amount of such Revolving Loans, if any,
which are so received. Nothing in this Section 2.4(d) shall be deemed to relieve any Lender from
its obligation to make Revolving Loans on the terms and conditions set forth herein, and Company
shall retain any and all rights it may have against any Lender resulting from the failure of such
Lender to make such Revolving Loans under this Section 2.4(d).



(e) Lenders’ Purchase of Participations in Letters of Credit and Hedge Letters of
Credit. Immediately upon the issuance of each Letter of Credit or Hedge Letter of Credit, each
Lender having a Revolving Commitment or Hedge L/C Commitment, as applicable, shall be deemed to
have purchased, and hereby agrees to irrevocably purchase, from Issuing Bank a participation in
such Letter of Credit or Hedge Letter of Credit, as the case may be, and any drawings honored
thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to the Revolving
Commitments or Hedge L/C Commitments, as applicable) of the maximum amount which is or at any time
may become available to be drawn thereunder. In the event that Company shall fail for any reason
to reimburse Issuing Bank as provided in Section 2.4(d) (with respect to Letters of Credit) or
Section 2.4(i) (with respect to Hedge Letters of Credit), and in each case as the same has not been
repaid from the proceeds of Revolving Loans in accordance with Section 2.4(d) or a Hedge L/C Loan
in accordance with Section 2.4(i), Issuing Bank shall promptly notify each Lender of the
unreimbursed amount of such honored drawing and of such Lender’s respective participation therein
based on such Lender’s Pro Rata Share of the Revolving Commitments or the Hedge L/C Commitments, as
applicable. Each Lender shall make available to Issuing Bank an amount equal to its respective
participation, in Dollars and in same day funds, at the office of Issuing Bank specified in such
notice, not later than 12:00 p.m. (New York City time) on the first business day (under the laws of
the jurisdiction in which such office of Issuing Bank is located) after the date notified by
Issuing Bank. In the event that any Lender fails to make available to Issuing Bank on such
business day the amount of such Lender’s participation in such Letter of Credit or Hedge Letter of
Credit, as applicable, as provided in this Section 2.4(e), Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with interest thereon for three Business
Days at the rate customarily used by Issuing Bank for the correction of errors among banks and
thereafter at the Base Rate. Nothing in this Section 2.4(e) shall be deemed to prejudice the right
of any Lender to recover from Issuing Bank any amounts made available by such Lender to Issuing
Bank pursuant to this Section in the event that it is determined that the payment with respect to a
Letter of Credit or Hedge Letter of Credit in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part of Issuing Bank. In the event
Issuing Bank shall have been reimbursed by other Lenders pursuant to this Section 2.4(e) for all or
any portion of any drawing honored by Issuing Bank under a Letter of Credit or Hedge Letter of
Credit, such Issuing Bank shall distribute to each Lender which has paid all amounts payable by it
under this Section 2.4(e) with respect to such honored drawing such Lender’s Pro Rata Share of all
payments subsequently received by Issuing Bank from Company in reimbursement of such honored
drawing when such payments are received. Any such distribution shall be made to a Lender at its
primary address set forth below its name on Appendix B or at such other address as such Lender may
request.



(f) Obligations Absolute. The obligation of Company to reimburse Issuing Bank for
drawings honored under the Letters of Credit or Hedge Letters of Credit issued by it and to repay
any Revolving Loans made by Lenders pursuant to Section 2.4(d) and the obligations of Lenders under
Section 2.4(e) shall be unconditional and irrevocable and shall be paid strictly in accordance with
the terms hereof under all circumstances including any of the following circumstances: (i) any lack
of validity or enforceability of any Letter of Credit or Hedge Letter of Credit; (ii) the existence
of any claim, set-off, defense or other right which Company or any Lender may have at any time
against a beneficiary or any transferee of any Letter of Credit or Hedge Letter of Credit (or any
Persons for whom any such transferee may be acting), Issuing Bank, Lender or any other Person or,
in the case of a Lender, against Company, whether in connection herewith, the transactions
contemplated herein or any unrelated transaction (including any underlying transaction between
Company or one of its Subsidiaries and the beneficiary for which any Letter of Credit or Hedge
Letter of Credit was procured); (iii) any draft or other document presented under any Letter of
Credit or Hedge Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by Issuing
Bank under any Letter of Credit or Hedge Letter of Credit against presentation of a draft or other
document which does not substantially comply with the terms of such Letter of Credit or Hedge
Letter of Credit; (v) any adverse change in the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Company or any of its Subsidiaries; (vi) any breach hereof
or any other Credit Document by any party thereto; (vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing; or (viii) the fact that an Event of
Default or a Default shall have occurred and be continuing; provided, in each case, that
payment by Issuing Bank under the applicable Letter of Credit or Hedge Letter of Credit shall not
have constituted gross negligence or willful misconduct of Issuing Bank under the circumstances in
question.



(g) Indemnification. Without duplication of any obligation of Company under Section
10.2 or 10.3, in addition to amounts payable as provided herein, Company hereby agrees to protect,
indemnify, pay and save harmless Issuing Bank from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable fees, expenses and
disbursements of counsel) which Issuing Bank may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit or Hedge Letter of Credit by Issuing Bank,
other than as a result of (1) the gross negligence or willful misconduct of Issuing Bank or (2) the
wrongful dishonor by Issuing Bank of a proper demand for payment made under any Letter of Credit or
Hedge Letter of Credit issued by it, or (ii) the failure of Issuing Bank to honor a drawing under
any such Letter of Credit or Hedge Letter of Credit as a result of any Governmental Act.



(h) Hedge Letters of Credit. During the Hedge L/C Commitment Period, subject to the
terms and conditions hereof, Issuing Bank hereby agrees to issue Hedge Letters of Credit for the
account of Company in an amount not to exceed the aggregate Hedge L/C Commitments; provided
that each such Hedge Letter of Credit shall be used by Company solely to secure Company’s
obligations under the J. Aron Swap. The aggregate outstanding amount of Hedge Letters of Credit
shall not exceed the aggregate Hedge L/C Commitment at any time. Each of the Lenders, the Agents,
the Issuing Bank and Company agrees that (A) the obligations related to each such Hedge Letter of
Credit shall constitute Obligations for all purposes of this Agreement and the other Credit
Documents, unless otherwise specifically excluded therefrom and (B) each such Hedge Letter of
Credit shall be entitled and subject to all other rights, remedies, benefits, duties and
obligations contained in the Credit Documents, including, without limitation, the benefits of the
Liens of the Collateral Trustee on the Collateral. In no event shall any Hedge Letter of Credit
have an expiration date later than the earlier of (1) the Hedge L/C Commitment Termination Date and
(2) the date which is one year from the date of issuance of such Hedge Letter of Credit. Subject
to the foregoing, Issuing Bank may agree that a Hedge Letter of Credit will automatically be
extended for one or more successive periods not to exceed one year each, unless Issuing Bank elects
not to extend for any such additional period; provided, in the event a Funding Default
exists, Issuing Bank shall not be required to issue any Hedge Letter of Credit unless Issuing Bank
has entered into arrangements satisfactory to it and Company to eliminate Issuing Bank’s risk with
respect to the participation in Hedge Letters of Credit of the Defaulting Lender, including by cash
collateralizing such Defaulting Lender’s Pro Rata Share of the Hedge Letter of Credit Usage.



(i) Drawing and Reimbursement re Hedge Letters of Credit. The payment by the Issuing
Bank of a drawing under a Hedge Letter of Credit shall constitute the making by the Issuing Bank of
a loan in the amount of such payment. In the event Issuing Bank has determined to honor a drawing
under a Hedge Letter of Credit, it shall immediately notify Company and Administrative Agent, and
Company shall reimburse Issuing Bank on or before the Business Day on which such drawing is honored
(the “Hedge L/C Reimbursement Date”) in an amount in Dollars and in same day funds equal to the
amount of such honored drawing; provided, anything contained herein to the contrary
notwithstanding, (i) unless Company shall have notified Administrative Agent and Issuing Bank prior
to 10:00 a.m. (New York City time) on the date such drawing is honored that Company intends to
reimburse Issuing Bank for the amount of such honored drawing with funds other than the proceeds of
Hedge L/C Loans, Company shall be deemed to have given a timely Funding Notice to Administrative
Agent requesting Lenders to make Hedge L/C Loans that are Base Rate Loans on the Hedge L/C
Reimbursement Date in an amount in Dollars equal to the amount of such honored drawing, and (ii)
subject to satisfaction or waiver of the conditions specified in Section 3.2, Lenders shall, on the
Hedge L/C Reimbursement Date, make Hedge L/C Loans that are Base Rate Loans in the amount of such
honored drawing, the proceeds of which shall be applied directly by Administrative Agent to
reimburse Issuing Bank for the amount of such honored drawing; and provided
further, if for any reason proceeds of Hedge L/C Loans are not received by Issuing Bank on
the Hedge L/C Reimbursement Date in an amount equal to the amount of such honored drawing, Company
shall reimburse Issuing Bank, on demand, in an amount in same day funds equal to the excess of the
amount of such honored drawing over the aggregate amount of such Hedge L/C Loans, if any, which are
so received. Nothing in this Section 2.4(i) shall be deemed to relieve any Lender from its
obligation to make Hedge L/C Loans on the terms and conditions set forth herein, and Company shall
retain any and all rights it may have against any Lender resulting from the failure of such Lender
to make such Hedge L/C Loans under this Section 2.4(i).



(j) Replacement of Issuing Bank. If the Issuing Bank (the “Current Issuing Bank”)
fails to meet the Letter of Credit Issuer Rating or defaults in making any required payment
pursuant to a Letter of Credit or Hedge Letter of Credit, it shall promptly notify the
Administrative Agent and the Company. If the Issuing Bank fails to meet the Letter of Credit
Issuer Rating or defaults in making any required payment pursuant to a Letter of Credit or Hedge
Letter of Credit, and regardless of whether Company or Administrative Agent shall have received the
notice referred to in the immediately preceding sentence, (i) Company shall be permitted to locate
a banking institution (including any Lender) to act as the new Issuing Bank (the “Replacement
Issuing Bank”) and (ii) the Administrative Agent shall use commercially reasonable efforts to
assist the Company in locating a Replacement Issuing Bank. Any Replacement Issuing Bank must meet
the Letter of Credit Issuer Rating. In connection with such replacement, Company shall have caused
each outstanding Letter of Credit or Hedge Letter of Credit, as applicable, issued thereby to be
cancelled or returned to the Current Issuing Bank. Current Issuing Bank agrees to cooperate and
provide all needed documentation reasonably required to effect the foregoing replacement.



(k) [Reserved].



(l) Letter of Credit Applications. If required by its standard operating procedures,
the Issuing Bank may require Company to execute and deliver one or more letter of credit
applications or similar documents (“Applications”) in connection with the issuance by the Issuing
Bank of any Letter of Credit or Hedge Letter of Credit. Notwithstanding the terms and provisions
of any such Application and the fact that Company executes and delivers such Application after the
date this Agreement is executed and delivered, any provision of any Application that purports to
add additional interest, charges or rights to indemnification not found in this Agreement, that
provides for additional or different defaults, events of default, or grace periods not found in
this Agreement, that purports to create additional security interests not provided for in this
Agreement or any Credit Document, that purports to require the posting of additional cash
collateral or other security, or that is otherwise inconsistent with, or in conflict with, any
provision of this Agreement or any Credit Document, shall not have any force or effect and the
provisions of this Agreement and the Credit Documents shall apply.



2.5 Pro Rata Shares; Availability of Funds.



(a) Pro Rata Shares. All Loans shall be made, and all participations purchased, by
Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood
that no Lender shall be responsible for any default by any other Lender in such other Lender’s
obligation to make a Loan requested hereunder or purchase a participation required hereby nor shall
any Revolving Commitment or Hedge L/C Commitment of any Lender be increased or decreased as a
result of a default by any other Lender in such other Lender’s obligation to make a Loan requested
hereunder or purchase a participation required hereby.



(b) Availability of Funds. Unless Administrative Agent shall have been notified by
any Lender prior to the applicable Credit Date that such Lender does not intend to make available
to Administrative Agent the amount of such Lender’s Loan requested on such Credit Date,
Administrative Agent may assume that such Lender has made such amount available to Administrative
Agent on such Credit Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Credit Date. If such
corresponding amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from such Credit Date until the date such
amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the
correction of errors among banks for three Business Days and thereafter at the Base Rate. If such
Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand
therefor, Administrative Agent shall promptly notify Company and Company shall immediately pay such
corresponding amount to Administrative Agent together with interest thereon, for each day from such
Credit Date until the date such amount is paid to Administrative Agent, at the rate payable
hereunder for Base Rate Loans for such Class of Loans. Nothing in this Section 2.5(b) shall be
deemed to relieve any Lender from its obligation to fulfill its Revolving Commitments hereunder or
to prejudice any rights that Company may have against any Lender as a result of any default by such
Lender hereunder.



2.6 Use of Proceeds. Amounts available under the Revolving Commitments shall be used for
general corporate purposes of Company, including Permitted Acquisitions and refinancing of
Indebtedness existing on the Closing Date. Amounts available under the Hedge L/C Commitments shall
be used solely to provide credit support to Company’s obligations under the J. Aron Swap as in
effect on the Closing Date. No portion of the proceeds of any Credit Extension shall be used in
any manner that causes or might cause such Credit Extension or the application of such proceeds to
violate Regulation T, Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System or any other regulation thereof or to violate the Exchange Act.



2.7 Evidence of Debt; Register; Lenders’ Books and Records; Notes.



(a) Lenders’ Evidence of Debt. Each Lender shall maintain on its internal records an
account or accounts evidencing the Obligations of Company to such Lender, including the amounts of
the Loans made by it and each repayment and prepayment in respect thereof. Any such recordation
shall be conclusive and binding on Company, absent manifest error; provided, that the
failure to make any such recordation, or any error in such recordation, shall not affect any
Lender’s Revolving Commitments or Company’s Obligations in respect of any applicable Loans; and
provided further, in the event of any inconsistency between the Register and any
Lender’s records, the recordations in the Register shall govern.



(b) Register. Administrative Agent (or its agent or sub-agent appointed by it) shall
maintain at the Principal Office a register for the recordation of the names and addresses of
Lenders and the Revolving Commitments, the Hedge L/C Commitments and Loans of each Lender from time
to time (the “Register”). The Register, as in effect at the close of business on the preceding
Business Day, shall be available for inspection by Company or any Lender at any reasonable time and
from time to time upon reasonable prior notice. Administrative Agent shall record, or shall cause
to be recorded, in the Register the Revolving Commitments, Hedge L/C Commitments and the Loans in
accordance with the provisions of Section 10.6, and each repayment or prepayment in respect of the
principal amount of the Loans, and any such recordation shall be conclusive and binding on Company
and each Lender, absent manifest error; provided, failure to make any such recordation, or
any error in such recordation, shall not affect any Lender’s Revolving Commitments, Hedge L/C
Commitments or Company’s Obligations in respect of any Loan. Company hereby designates BNPP to
serve as Company’s agent solely for purposes of maintaining the Register as provided in this
Section 2.7, and Company hereby agrees that, BNPP and its officers, directors, employees, agents,
sub-agents and affiliates shall constitute “Indemnitees.”



(c) Notes. If so requested by any Lender by written notice to Company (with a copy to
Administrative Agent) at least two Business Days prior to the Closing Date, or at any time
thereafter, Company shall execute and deliver to such Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 10.6)
on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after
Company’s receipt of such notice) a Note or Notes to evidence such Lender’s Revolving Loan or Hedge
L/C Loan, as the case may be.



2.8 Interest on Loans.



(a) Except as otherwise set forth herein, each Type of Loan shall bear interest on the unpaid
principal amount thereof from the date made through repayment (whether by acceleration or
otherwise) thereof as follows:



(i) if a Base Rate Loan, at the Base Rate plus the Applicable Margin; or



(ii) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate plus the Applicable
Margin.



(b) The basis for determining the rate of interest with respect to any Loan, and the Interest
Period with respect to any Eurodollar Rate Loan, shall be selected by Company and notified to
Administrative Agent and Lenders pursuant to the applicable Funding Notice or
Conversion/Continuation Notice, as the case may be. If on any day a Loan is outstanding with
respect to which a Funding Notice or Conversion/Continuation Notice has not been delivered to
Administrative Agent in accordance with the terms hereof specifying the applicable basis for
determining the rate of interest, then for that day such Loan shall be a Base Rate Loan.



(c) In connection with Eurodollar Rate Loans, there shall be no more than six (6) Interest
Periods outstanding at any time. In the event Company fails to specify between a Base Rate Loan or
a Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation Notice, such
Loan (if outstanding as a Eurodollar Rate Loan) will be automatically continued as a Eurodollar
Rate Loan with an Interest Period of the same duration on the last day of the then-current Interest
Period for such Loan (or if outstanding as a Base Rate Loan will remain as, or (if not then
outstanding) will be made as, a Base Rate Loan). In the event Company fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Funding Notice or Conversion/Continuation
Notice, Company shall be deemed to have selected an Interest Period of one month. As soon as
practicable after 10:00 a.m. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to the Eurodollar Rate
Loans for which an interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Company and
each Lender.



(d) Interest payable pursuant to Section 2.8(a) shall be computed (i) in the case of Base Rate
Loans on the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case of
Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the actual number of days
elapsed in the period during which it accrues. In computing interest on any Loan, the date of the
making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of
payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with
respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of
such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded;
provided, if a Loan is repaid on the same day on which it is made, one day’s interest shall
be paid on that Loan.



(e) Except as otherwise set forth herein, interest on each Loan (i) shall accrue on a daily
basis and shall be payable in arrears on each Interest Payment Date with respect to interest
accrued on and to each such payment date; (ii) shall accrue on a daily basis and shall be payable
in arrears upon any prepayment of that Loan, whether voluntary or mandatory, to the extent accrued
on the amount being prepaid; and (iii) shall accrue on a daily basis and shall be payable in
arrears at maturity of the Loans, including final maturity of the Loans; provided, however,
with respect to any voluntary prepayment of a Base Rate Loan, accrued interest shall instead be
payable on the applicable Interest Payment Date.



(f) Company agrees to pay to Issuing Bank, with respect to drawings honored under any Letter
of Credit or Hedge Letter of Credit, interest on the amount paid by Issuing Bank in respect of each
such honored drawing from the date such drawing is honored to but excluding the date such amount is
reimbursed by or on behalf of Company at a rate equal to (i) for the period from the date such
drawing is honored to but excluding the applicable Reimbursement Date, the rate of interest
otherwise payable hereunder with respect to Revolving Loans that are Base Rate Loans, and (ii)
thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable
hereunder with respect to Revolving Loans that are Base Rate Loans.



(g) Interest payable pursuant to Section 2.8(f) shall be computed on the basis of a
365/366-day year for the actual number of days elapsed in the period during which it accrues, and
shall be payable on demand or, if no demand is made, on the date on which the related drawing under
a Letter of Credit or Hedge Letter of Credit, as the case may be, is reimbursed in full. Promptly
upon receipt by Issuing Bank of any payment of interest pursuant to Section 2.8(f), Issuing Bank
shall distribute to each Lender, out of the interest received by Issuing Bank in respect of the
period from the date such drawing is honored to but excluding the date on which Issuing Bank is
reimbursed for the amount of such drawing (including any such reimbursement out of the proceeds of
any Revolving Loans or Hedge L/C Loan), the amount that such Lender would have been entitled to
receive in respect of the letter of credit fee that would have been payable in respect of such
Letter of Credit or Hedge Letter of Credit, as the case may be, for such period if no drawing had
been honored under such Letter of Credit or Hedge Letter of Credit. In the event Issuing Bank
shall have been reimbursed by Lenders for all or any portion of such honored drawing, Issuing Bank
shall distribute to each Lender which has paid all amounts payable by it under Section 2.4(e) with
respect to such honored drawing such Lender’s Pro Rata Share of any interest received by Issuing
Bank in respect of that portion of such honored drawing so reimbursed by Lenders for the period
from the date on which Issuing Bank was so reimbursed by Lenders to but excluding the date on which
such portion of such honored drawing is reimbursed by Company.



2.9 Conversion/Continuation.



(a) Subject to Section 2.18 and so long as no Default or Event of Default shall have occurred
and then be continuing, Company shall have the option:



(i) to convert at any time all or any part of any Revolving Loan or Hedge L/C Loan equal to
$1,000,000 and integral multiples of $1,000,000 in excess of that amount from one Type of Loan to
another Type of Loan; provided, a Eurodollar Rate Loan may only be converted on the
expiration of the Interest Period applicable to such Eurodollar Rate Loan unless Company shall pay
all amounts due under Section 2.18 in connection with any such conversion; or



(ii) upon the expiration of any Interest Period applicable to any Eurodollar Rate Loan, to
continue all or any portion of such Loan equal to $5,000,000 and integral multiples of $1,000,000
in excess of that amount as a Eurodollar Rate Loan.



(b) Company shall deliver a Conversion/Continuation Notice to Administrative Agent no later
than 10:00 a.m. (New York City time) at least one Business Day in advance of the proposed
conversion date (in the case of a conversion to a Base Rate Loan) and at least three Business Days
in advance of the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). Except as otherwise provided herein, a
Conversion/Continuation Notice for conversion to, or continuation of, any Eurodollar Rate Loans (or
telephonic notice in lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to effect a conversion or continuation in accordance
therewith.



2.10 Default Interest. Upon the occurrence and during the continuance of an Event of Default,
the overdue principal amount of all Loans outstanding and, to the extent permitted by applicable
law, any overdue interest payments on the Loans or any overdue fees or other amounts owed
hereunder, shall thereafter bear interest (including post-petition interest in any proceeding under
the Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate that is 2% per
annum in excess of the interest rate otherwise payable hereunder with respect to the applicable
Loans (or, in the case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable hereunder for Base Rate Loans); provided, in
the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time
any such increase in interest rate is effective such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and any overdue principal amount thereof shall thereafter bear interest payable
upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable
hereunder for Base Rate Loans. Payment or acceptance of the increased rates of interest provided
for in this Section 2.10 is not a permitted alternative to timely payment and shall not constitute
a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.



2.11 Fees.



(a) Company agrees to pay to Lenders having Revolving Exposure:



(i) commitment fees equal to (1) the average of the daily difference between (a) the lesser of
(I) the Revolving Commitments then in effect and (II) the Borrowing Base then in effect, and (b)
the Total Utilization of Revolving Commitments, times (2) the Applicable Margin for commitment
fees; and



(ii) during the Letter of Credit Commitment Period, letter of credit fees equal to (1) the
Applicable Margin for Revolving Loans that are Eurodollar Rate Loans, times (2) the average
aggregate daily maximum amount available to be drawn under all such Letters of Credit (regardless
of whether any conditions for drawing could then be met and determined as of the close of business
on any date of determination).



All fees referred to in this Section 2.11(a) shall be paid to Administrative Agent at its Principal
Office and upon receipt, Administrative Agent shall promptly distribute to each Lender its Pro Rata
Share thereof.



(b) Company agrees to pay to Lenders having Hedge L/C Exposure:



(i) commitment fees equal to (1) the average of the daily difference between (a) the Hedge L/C
Commitments, and (b) the sum of (x) the aggregate principal amount of outstanding Hedge L/C Loans
plus (y) the Hedge Letter of Credit Usage, times (2) the Applicable Margin for commitment fees; and



(ii) letter of credit fees equal to (1) the Applicable Margin for Revolving Loans that are
Eurodollar Rate Loans, times (2) the average aggregate daily maximum amount available to be drawn
under all such Hedge Letters of Credit (regardless of whether any conditions for drawing could then
be met and determined as of the close of business on any date of determination).



(c) Company agrees to pay directly to Issuing Bank, for its own account, the following fees:



(i) a fronting fee with respect to Letters of Credit and Hedge Letters of Credit equal to (1)
0.15% per annum times (2) the average aggregate daily maximum amount available to be drawn under
all Letters of Credit and Hedge Letters of Credit issued by such Issuing Bank (regardless of
whether any conditions for drawing could then be met and determined as of the close of business on
any date of determination), but not less than $500; and



(ii) such documentary and processing charges for any issuance, amendment, transfer or payment
of a Letter of Credit or Hedge Letter of Credit, as the case may be, as are in accordance with
Issuing Bank’s standard schedule for such charges and as in effect at the time of such issuance,
amendment, transfer or payment, as the case may be.



(d) All fees referred to in Sections 2.11(a), (b) and (c)(i) shall be calculated on the basis
of a 360-day year and the actual number of days elapsed and shall be payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year during the Revolving Commitment
Period or Hedge L/C Commitment Period, as applicable, commencing on the first such date to occur
after the Closing Date, and on the Revolving Commitment Termination Date with respect to the fees
referred to in Sections 2.11(a)(i) and (c)(i) (with respect to Letters of Credit) and (iii) on the
Hedge L/C Commitment Termination Date with respect to the fees referred to in Section 2.11(b) and
(c)(i) (with respect to Hedge Letters of Credit).



(e) In addition to any of the foregoing fees, Company agrees to pay to Agents such other fees
in the amounts and at the times separately agreed upon.



(f) Company agrees to pay a fee to the Administrative Agent for the ratable benefit of the
Revolving Lenders as agreed to between the Company and the Administrative Agent upon any increase
of the Borrowing Base on the amount by which the Borrowing Base after such increase exceeds the
highest previous Borrowing Base.



2.12 Commitment Reductions.



(a) [Reserved].



(b) Commitment Reductions. The Revolving Commitments and Hedge L/C Commitments, as
the case may be, shall be permanently reduced in connection with any voluntary or mandatory
reductions of the Revolving Commitments or Hedge L/C Commitments, as the case may be, in accordance
with Sections 2.13 and 2.15, as applicable, and all other amounts owed hereunder with respect
thereto shall, in any event, be paid in full on the Revolving Commitment Termination Date and Hedge
L/C Commitment Termination Date, respectively.



2.13 Voluntary Prepayments/Commitment Reductions.



(a) Voluntary Prepayments.



(i) Any time and from time to time, Company may prepay any Loans on any Business Day in whole
or in part, in an aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000 in
excess of that amount.



(ii) All such prepayments shall be made:



(1) upon not less than one Business Day’s prior written or telephonic notice in the case of
Base Rate Loans; and



(2) upon not less than three Business Days’ prior written or telephonic notice in the case of
Eurodollar Rate Loans.



in each case given to Administrative Agent, by 12:00 p.m. (New York City time) on the date required
and, if given by telephone, promptly confirmed in writing to Administrative Agent (and
Administrative Agent will promptly transmit such telephonic or original notice by telefacsimile or
telephone to each Lender). Upon the giving of any such notice, the principal amount of the Loans
specified in such notice shall become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in Section 2.15(a).



(b) Voluntary Commitment Reductions.



(i) Company may, upon not less than three Business Days’ prior written or telephonic notice
confirmed in writing to Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or telephone to each applicable
Lender), at any time and from time to time terminate in whole or permanently reduce in part,
without premium or penalty, the Revolving Commitments in an amount up to the amount by which the
Revolving Commitments exceed the Total Utilization of Revolving Commitments at the time of such
proposed termination or reduction; provided, any such partial reduction of the Revolving
Commitments shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess of that amount.



(ii) Company’s notice to Administrative Agent shall designate the date (which shall be a
Business Day) of such termination or reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Commitments shall be effective on the date specified in
Company’s notice and shall reduce the Revolving Commitment of each Lender proportionately to its
Pro Rata Share thereof.



2.14 Mandatory Prepayments/Commitment Reductions.



(a) Borrowing Base Deficiency. If the aggregate outstanding amount of the Total
Utilization of Revolving Commitments ever exceeds the lesser of the (i) Borrowing Base and (ii) the
aggregate Revolving Commitments, the Company shall after receipt of written notice from the
Administrative Agent regarding such deficiency, deliver to the Administrative Agent within ten days
of receipt of such notice from the Administrative Agent, a written response indicating which of the
following actions it intends to take to remedy the Borrowing Base deficiency (and the failure of
the Company to deliver such election notice or to perform the action chosen to remedy such
Borrowing Base deficiency shall constitute an election to cure such deficiency pursuant to the
following clause (i)):



(i) prepay Revolving Loans to the extent of the Borrowing Base deficiency set forth in such
notice or, if the Revolving Loans have been repaid in full, make deposits to the extent of such
Borrowing Base deficiency set forth in such notice into a cash collateral account acceptable to
Administrative Agent to provide cash collateral for the Hedge L/C Exposure, such that the Borrowing
Base deficiency is cured within 90 days after the date such deficiency notice is received by the
Company from the Administrative Agent or



(ii) pledge as Collateral for the Obligations additional Oil and Gas Properties acceptable to
the Administrative Agent and each of Lenders such that the Borrowing Base deficiency is cured
within 60 days after the date such deficiency notice is received by the Company from the
Administrative Agent.



Each prepayment pursuant to this Section 2.14(a) shall be accompanied by accrued interest on the
amount prepaid to the date of such prepayment and amounts, if any, required to be paid pursuant to
Section 2.18(c) as a result of such prepayment being made on such date. Each prepayment under this
Section 2.14(a) shall be applied to the Revolving Loans as determined by the Administrative Agent
and agreed to by the Requisite Revolving Lenders in their sole discretion.



(b) Insurance/Condemnation Proceeds. No later than the first Business Day following
the date of receipt by Company or any of its Restricted Subsidiaries, or Administrative Agent as
loss payee of any Net Insurance/Condemnation Proceeds, Company shall prepay the Loans (without a
reduction in the Revolving Commitments) in an aggregate amount equal to such Net
Insurance/Condemnation Proceeds.



(c) [Reserved].



(d) [Reserved].



(e) [Reserved].



(f) Revolving Loans; Hedge L/C Loans. (i) Company shall from time to time prepay the
Revolving Loans to the extent necessary so that the Total Utilization of Revolving Commitments
shall not at any time exceed the Revolving Commitments then in effect and (ii) Company shall from
time to time prepay the Hedge L/C Loans to the extent necessary so that the Total Utilization of
Hedge L/C Commitments shall not at any time exceed the Hedge L/C Commitments then in effect.



2.15 Application of Prepayments/Reductions.



(a) Application of Voluntary Prepayments by Type of Loans. Any prepayment of any Loan
pursuant to Section 2.13(a) shall be applied as specified by Company in the applicable notice of
prepayment; provided, in the event Company fails to specify the Loans to which any such
prepayment shall be applied, such prepayment shall be applied as follows:



first, to repay outstanding Revolving Loans to the full extent thereof; and



second, to repay outstanding Hedge L/C Loans to the full extent thereof.



(b) [Reserved].



(c) Application of Prepayments of Loans to Base Rate Loans and Eurodollar Rate Loans.
Considering each Class of Loans being prepaid separately, any prepayment thereof shall be applied
first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in
each case in a manner which minimizes the amount of any payments required to be made by Company
pursuant to Section 2.18(c).



2.16 General Provisions Regarding Payments.



(a) All payments by Company of principal, interest, fees and other Obligations shall be made
in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Administrative Agent not later than 12:00 p.m. (New York City time) on
the date due at the Principal Office designated by Administrative Agent for the account of Lenders;
for purposes of computing interest and fees, funds received by Administrative Agent after that time
on such due date shall be deemed to have been paid by Company on the next succeeding Business Day.



(b) All payments in respect of the principal amount of any Loan (other than voluntary
prepayments of Revolving Loans) shall be accompanied by payment of accrued interest on the
principal amount being repaid or prepaid.



(c) Administrative Agent (or its agent or sub-agent appointed by it) shall promptly distribute
to each Lender at such address as such Lender shall indicate in writing, such Lender’s applicable
Pro Rata Share of all payments and prepayments of principal and interest due hereunder, together
with all other amounts due thereto, including, without limitation, all fees payable with respect
thereto, to the extent received by Administrative Agent.



(d) Notwithstanding the foregoing provisions hereof, if any Conversion/Continuation Notice is
withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans in lieu of its
Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.



(e) Subject to the provisos set forth in the definition of “Interest Period” as they may apply
to Revolving Loans or Hedge L/C Loans, whenever any payment to be made hereunder with respect to
any Loan shall be stated to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and, with respect to Revolving Loans and Hedge L/C Loans only,
such extension of time shall be included in the computation of the payment of interest hereunder or
of the Revolving Commitment fees hereunder.



(f) Company hereby authorizes Administrative Agent to charge Company’s accounts, if any, with
Administrative Agent in order to cause timely payment to be made to Administrative Agent of all
principal, interest, fees and expenses due hereunder (subject to sufficient funds being available
in its accounts for that purpose).



(g) Administrative Agent shall deem any payment by or on behalf of Company hereunder that is
not made in same day funds prior to 1:00 p.m. (New York City time) to be a non-conforming payment.
Any such payment shall not be deemed to have been received by Administrative Agent until the later
of (i) the time such funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic notice to Company and each applicable Lender
(confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute
or become a Default or Event of Default in accordance with the terms of Section 8.1(a). Interest
shall continue to accrue on any principal as to which a non-conforming payment is made until such
funds become available funds (but in no event less than the period from the date of such payment to
the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.10 from
the date such amount was due and payable until the date such amount is paid in full.



(h) If an Event of Default shall have occurred and not otherwise been waived, and the maturity
of the Obligations shall have been accelerated pursuant to Section 8.1, all payments or proceeds
received by Agents hereunder in respect of any of the Obligations, shall be applied in accordance
with the application arrangements described in Section 7.2 of the Pledge and Security Agreement.



2.17 Ratable Sharing. Lenders hereby agree among themselves that, except as otherwise
provided in the Collateral Documents with respect to amounts realized from the exercise of rights
with respect to Liens on the Collateral, if any of them shall, whether by voluntary payment (other
than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), through
the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the
enforcement of any right under the Credit Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of
Credit, amounts payable in respect of Hedge Letters of Credit, fees and other amounts then due and
owing to such Lender hereunder or under the other Credit Documents (collectively, the “Aggregate
Amounts Due” to such Lender) which is greater than the proportion received by any other Lender in
respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each other Lender of the
receipt of such payment and (b) apply a portion of such payment to purchase participations (which
it shall be deemed to have purchased from each seller of a participation simultaneously upon the
receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in
proportion to the Aggregate Amounts Due to them; provided, if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned to such purchasing
Lender ratably to the extent of such recovery, but without interest. Company expressly consents to
the foregoing arrangement and agrees that any holder of a participation so purchased may exercise
any and all rights of banker’s lien, set-off or counterclaim with respect to any and all monies
owing by Company to that holder with respect thereto as fully as if that holder were owed the
amount of the participation held by that holder.



2.18 Making or Maintaining Eurodollar Rate Loans.



(a) Inability to Determine Applicable Interest Rate. In the event that Administrative
Agent shall have determined (which determination shall be final and conclusive and binding upon all
parties hereto), on any Interest Rate Determination Date with respect to any Eurodollar Rate Loans,
that by reason of circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in
the definition of Adjusted Eurodollar Rate, Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Company and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans until
such time as Administrative Agent notifies Company and Lenders that the circumstances giving rise
to such notice no longer exist, and (ii) any Funding Notice or Conversion/Continuation Notice given
by Company with respect to the Loans in respect of which such determination was made shall be
deemed to be rescinded by Company.



(b) Illegality or Impracticability of Eurodollar Rate Loans. In the event that on any
date any Lender shall have determined (which determination shall be final and conclusive and
binding upon all parties hereto but shall be made only after consultation with Company and
Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans (i)
has become unlawful as a result of compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful), or (ii) has become impracticable, as a result
of contingencies occurring after the date hereof which materially and adversely affect the London
interbank market or the position of such Lender in that market, then, and in any such event, such
Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by
telephone confirmed in writing) to Company and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender). Thereafter (1) the
obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans
shall be suspended until such notice shall be withdrawn by the Affected Lender, (2) to the extent
such determination by the Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall
make such Loan as (or continue such Loan as or convert such Loan to, as the case may be) a Base
Rate Loan, (3) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans
(the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans or when required by law, and (4)
the Affected Loans shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as
described above relates to a Eurodollar Rate Loan then being requested by Company pursuant to a
Funding Notice or a Conversion/Continuation Notice, Company shall have the option, subject to the
provisions of Section 2.18(c), to rescind such Funding Notice or Conversion/Continuation Notice as
to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected Lender gives notice of
its determination as described above (which notice of rescission Administrative Agent shall
promptly transmit to each other Lender). Except as provided in the immediately preceding sentence,
nothing in this Section 2.18(b) shall affect the obligation of any Lender other than an Affected
Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance
with the terms hereof.



(c) Compensation for Breakage or Non-Commencement of Interest Periods. Company shall
compensate each Lender, upon written request by such Lender (which request shall set forth the
basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including
any interest paid by such Lender to Lenders of funds borrowed by it to make or carry its Eurodollar
Rate Loans and any loss, expense or liability sustained by such Lender in connection with the
liquidation or re-employment of such funds but excluding loss of anticipated profits) which such
Lender may sustain: (i) if for any reason (other than a default by such Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Funding Notice or a
telephonic request for borrowing, or a conversion to or continuation of any Eurodollar Rate Loan
does not occur on a date specified therefor in a Conversion/Continuation Notice or a telephonic
request for conversion or continuation; (ii) if any prepayment or other principal payment of, or
any conversion of, any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan; or (iii) if any prepayment of any of its Eurodollar Rate
Loans is not made on any date specified in a notice of prepayment given by Company.



(d) Booking of Eurodollar Rate Loans. Any Lender may make, carry or transfer
Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an
Affiliate of such Lender.



(e) Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all
amounts payable to a Lender under this Section 2.18 and under Section 2.19 shall be made as though
such Lender had actually funded each of its relevant Eurodollar Rate Loans through the purchase of
a Eurodollar deposit bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and
having a maturity comparable to the relevant Interest Period and through the transfer of such
Eurodollar deposit from an offshore office of such Lender to a domestic office of such Lender in
the United States of America; provided, however, each Lender may fund each of its
Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized
only for the purposes of calculating amounts payable under this Section 2.18 and under Section
2.19.



2.19 Increased Costs; Capital Adequacy.



(a) Compensation For Increased Costs and Taxes. Subject to the provisions of Section
2.20 (which shall be controlling with respect to the matters covered thereby), in the event that
any Lender (which term shall include Issuing Bank for purposes of this Section 2.19(a)) shall
determine (which determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order), or any
determination of a court or governmental authority, in each case that becomes effective after the
date hereof, or compliance by such Lender with any guideline, request or directive issued or made
after the date hereof by any central bank or other governmental or quasi-governmental authority
(whether or not having the force of law): (i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net income of such Lender) with
respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder
or thereunder or any payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder; (ii) imposes, modifies or holds applicable
any reserve (including any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, or advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or
other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of
Adjusted Eurodollar Rate or with respect to Base Rate Loans that are included in the determination
of the Prime Rate); or (iii) imposes any other condition (other than with respect to a Tax matter)
on or affecting such Lender (or its applicable lending office) or its obligations hereunder or the
London interbank market; and the result of any of the foregoing is to increase the cost to such
Lender of agreeing to make, making or maintaining Loans hereunder or to reduce any amount received
or receivable by such Lender (or its applicable lending office) with respect thereto; then, in any
such case, Company shall promptly pay to such Lender, upon receipt of the statement referred to in
the next sentence, such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased cost or reduction
in amounts received or receivable hereunder; provided that Company shall not be required to
compensate a Lender pursuant to this Section for any increased costs incurred or reductions
suffered more than six months prior to the date that such Lender notifies Company of the change in
law giving rise to such increased costs or reductions and of such Lender’s intention to claim
compensation therefor (except that, if the change in law giving rise to such increased costs or
reductions is retroactive, then the six-month period referred to above shall be extended to include
the period of retroactive effect thereof). Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this Section 2.19(a), which statement
shall be conclusive and binding upon all parties hereto absent manifest error.



(b) Capital Adequacy Adjustment. In the event that any Lender (which term shall
include Issuing Bank for purposes of this Section 2.19(b)) shall have determined that the
adoption, effectiveness, phase-in or applicability after the Closing Date of any law, rule or
regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance by any Lender (or
its applicable lending office) with any guideline, request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence of, or with reference to,
such Lender’s Loans or Revolving Commitments or Letters of Credit or Hedge Letters of Credit, or
participations therein or other obligations hereunder with respect to the Loans or the Letters of
Credit or Hedge Letters of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in, applicability,
change or compliance (taking into consideration the policies of such Lender or such controlling
corporation with regard to capital adequacy), then from time to time, within five Business Days
after receipt by Company from such Lender of the statement referred to in the next sentence,
Company shall pay to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such Lender shall deliver
to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Lender under this Section 2.19(b),
which statement shall be conclusive and binding upon all parties hereto absent manifest error.



2.20 Taxes; Withholding, etc.



(a) Payments to Be Free and Clear. All sums payable by any Credit Party hereunder and
under the other Credit Documents shall (except to the extent required by law) be paid free and
clear of, and without any deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States of America or any
other jurisdiction from or to which a payment is made by or on behalf of any Credit Party or by any
federation or organization of which the United States of America or any jurisdiction is a member at
the time of payment (“Indemnified Taxes”).



(b) Withholding of Taxes. If any Credit Party or any other Person is required by law
to make any deduction or withholding on account of any Indemnified Taxes from any sum paid or
payable by any Credit Party to Administrative Agent or any Lender (which term shall include Issuing
Bank for purposes of this Section 2.20(b)) under any of the Credit Documents: (i) Company shall
notify Administrative Agent of any such requirement or any change in any such requirement as soon
as Company becomes aware of it; (ii) Company shall pay any Indemnified Taxes before the date on
which penalties attach thereto, such payment to be made (if the liability to pay is imposed on any
Credit Party) for its own account or (if that liability is imposed on Administrative Agent or such
Lender, as the case may be) on behalf of and in the name of Administrative Agent or such Lender;
(iii) the sum payable by such Credit Party in respect of which the relevant deduction, withholding
or payment of Indemnified Taxes is required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum equal to what it would have received
had no such deduction, withholding or payment been required or made; and (iv) within thirty days
after paying any sum from which it is required by law to make any deduction or withholding of
Indemnified Taxes, and within thirty days after the due date of payment of any Indemnified Taxes
which it is required by clause (ii) above to pay, Company shall deliver to Administrative Agent
evidence satisfactory to the other affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other authority; provided, no such additional
amount shall be required to be paid to any Lender under clause (iii) above except to the extent
that any change after the date hereof (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender) in any such requirement for a
deduction, withholding or payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such Lender.



(c) Treatment of Certain Refunds. If the Administrative Agent, a Lender or the
Issuing Bank determines, in its sole judgment, that it has received a refund of any Taxes as to
which it has been indemnified by Company or with respect to which Company has paid additional
amounts pursuant to this Section 2.20, it shall pay to Company an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by Company under this
Section 2.20 with respect to the Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and
without interest (other than any interest paid by the relevant Governmental Authority with respect
to such refund), provided that Company, upon the request of the Administrative Agent, such
Lender or the Issuing Bank, agrees to repay the amount paid over to Company (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the Administrative
Agent, such Lender or the Issuing Bank in the event the Administrative Agent, such Lender or the
Issuing Bank is required to repay such refund to such Governmental Authority. This paragraph shall
not be construed to require the Administrative Agent, any Lender or the Issuing Bank to make
available its tax returns (or any other information relating to its taxes that it deems
confidential) to Company or any other Person.



(d) Evidence of Exemption From Withholding Tax. Any Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction in which the
relevant Credit Party is resident for tax purposes, or any treaty to which such jurisdiction is a
party, with respect to payments hereunder or under any Loan Document shall deliver to such Credit
Party (with a copy to the Administrative Agent), at the time or times prescribed by applicable law
and reasonably requested by such Credit Party or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such payments to be made
without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by
Company or the Administrative Agent, shall deliver such other documentation prescribed by
applicable law and reasonably requested by Company or the Administrative Agent to determine whether
or not such Lender is subject to backup withholding or information reporting requirements. Without
limiting any of the foregoing, each Lender that is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal income tax purposes
(a “Non-US Lender”) shall deliver to Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Lender listed on the signature pages hereof on the Closing
Date) or on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as may be necessary in the
determination of Company or Administrative Agent (each in the reasonable exercise of its
discretion), (i) two original copies of Internal Revenue Service Form W-8BEN (claiming benefits
under an applicable treaty) or W-8ECI (or any successor forms), properly completed and duly
executed by such Lender, and such other documentation required under the Internal Revenue Code and
reasonably requested by Company to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the Credit Documents, or (ii) if
such Lender is not a “bank” or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver Internal Revenue Service Forms W-8BEN or W-8ECI pursuant to clause (i)
above, a Certificate re Non-Bank Status together with two original copies of Internal Revenue
Service Form W-8BEN (or any successor form), properly completed and duly executed by such Lender,
and such other documentation required under the Internal Revenue Code and reasonably requested by
Company to establish that such Lender is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender of interest payable under any of the
Credit Documents. Each Lender required to deliver any forms, certificates or other evidence with
respect to United States federal income tax withholding matters pursuant to this Section 2.20(d)
hereby agrees, from time to time after the initial delivery by such Lender of such forms,
certificates or other evidence, whenever a lapse in time or change in circumstances renders such
forms, certificates or other evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly deliver to Administrative Agent for transmission to Company two new original
copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re Non-Bank Status and
two original copies of Internal Revenue Service Form W-8BEN (or any successor form), as the case
may be, properly completed and duly executed by such Lender, and such other documentation required
under the Internal Revenue Code and reasonably requested by Company to confirm or establish that
such Lender is not subject to deduction or withholding of United States federal income tax with
respect to payments to such Lender under the Credit Documents, or notify Administrative Agent and
Company of its inability to deliver any such forms, certificates or other evidence. Company shall
not be required to pay any additional amount to any Non-US Lender in respect of Indemnified Taxes
under Section 2.20(b) if such Lender shall have failed (1) to deliver the forms, certificates or
other evidence referred to in the second sentence of this Section 2.20(d), or (2) to notify
Administrative Agent and Company of its inability to deliver any such forms, certificates or other
evidence, as the case may be; provided, if such Lender shall have satisfied the
requirements of the first sentence of this Section 2.20(d) on the Closing Date or on the date of
the Assignment Agreement pursuant to which it became a Lender, as applicable, nothing in this last
sentence of Section 2.20(d) shall relieve Company of its obligation to pay any additional amounts
in respect of Indemnified Taxes pursuant this Section 2.20 in the event that, as a result of any
change in any applicable law, treaty or governmental rule, regulation or order, or any change in
the interpretation, administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described herein.



(e) To the extent required by any applicable law, the Administrative Agent may withhold from
any interest payment to any Lender an amount equivalent to any applicable withholding tax. If any
governmental authority asserts a claim that the Administrative Agent did not properly withhold Tax
from amounts paid to or for the account of any Lender because the appropriate form was not
delivered or was not properly executed or because such Lender failed to notify the Administrative
Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding
tax ineffective or for any other reason, such Lender shall indemnify the Administrative Agent fully
for all amounts paid, directly or indirectly, by the Administrative Agent as Tax or otherwise,
including any penalties or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expenses) incurred.



2.21 Obligation to Mitigate. Each Lender (which term shall include Issuing Bank for purposes
of this Section 2.21) agrees that, as promptly as practicable after the officer of such Lender
responsible for administering its Loans or Letters of Credit or Hedge Letters of Credit, as the
case may be, becomes aware of the occurrence of an event or the existence of a condition that would
cause such Lender to become an Affected Lender or that would entitle such Lender to receive
payments under Section 2.18, 2.19 or 2.20, it will, to the extent not inconsistent with the
internal policies of such Lender and any applicable legal or regulatory restrictions, use
reasonable efforts to (a) make, issue, fund or maintain its Credit Extensions, including any
Affected Loans, through another office of such Lender, or (b) take such other measures as such
Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender
to be an Affected Lender would cease to exist or the additional amounts which would otherwise be
required to be paid to such Lender pursuant to Section 2.18, 2.19 or 2.20 would be materially
reduced and if, as determined by such Lender in its sole discretion, the making, issuing, funding
or maintaining of such Revolving Commitments, Loans or Letters of Credit or Hedge Letters of Credit
through such other office or in accordance with such other measures, as the case may be, would not
otherwise adversely affect such Revolving Commitments, Loans or Letters of Credit or Hedge Letters
of Credit or the interests of such Lender; provided, such Lender will not be obligated to
utilize such other office pursuant to this Section 2.21 unless Company agrees to pay all
incremental expenses incurred by such Lender as a result of utilizing such other office as
described in clause (i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this Section 2.21 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender to Company (with a copy to Administrative Agent) shall be
conclusive absent manifest error.



2.22 Defaulting Lenders. Anything contained herein to the contrary notwithstanding, in the
event that any Lender, other than at the direction or request of any regulatory agency or
authority, defaults (a “Defaulting Lender”) in its obligation to fund (a “Funding Default”) any
Revolving Loan or Hedge L/C Loan or its portion of any unreimbursed payment or participation
obligations under Section 2.2(b)(iv), 2.4(d), 2.4(e) or 2.4(i) (in each case, a “Defaulted Loan”),
then (a) during any Default Period with respect to such Defaulting Lender, such Defaulting Lender
shall be deemed not to be a “Lender” for purposes of voting on any matters (including the granting
of any consents or waivers) with respect to any of the Credit Documents; (b) to the extent
permitted by applicable law, until such time as the Default Excess with respect to such Defaulting
Lender shall have been reduced to zero, (i) any voluntary prepayment of the Revolving Loans shall,
if Company so directs at the time of making such voluntary prepayment, be applied to the Revolving
Loans of other Lenders as if such Defaulting Lender had no Revolving Loans outstanding and the
Revolving Exposure of such Defaulting Lender were zero, and (ii) any mandatory prepayment of the
Revolving Loans shall, if Company so directs at the time of making such mandatory prepayment, be
applied to the Revolving Loans of other Lenders (but not to the Revolving Loans of such Defaulting
Lender) as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender, it
being understood and agreed that Company shall be entitled to retain any portion of any mandatory
prepayment of the Revolving Loans that is not paid to such Defaulting Lender solely as a result of
the operation of the provisions of this clause (b); (c) such Defaulting Lender’s Revolving
Commitment and outstanding Revolving Loans and such Defaulting Lender’s Pro Rata Share of the
Letter of Credit Usage shall be excluded for purposes of calculating the Revolving Commitment fee
payable to Lenders in respect of any day during any Default Period with respect to such Defaulting
Lender, and such Defaulting Lender shall not be entitled to receive any Revolving Commitment fee
pursuant to Section 2.11 with respect to such Defaulting Lender’s Revolving Commitment in respect
of any Default Period with respect to such Defaulting Lender; and (d) the Total Utilization of
Revolving Commitments as at any date of determination shall be calculated as if such Defaulting
Lender had funded all Defaulted Loans of such Defaulting Lender. No Revolving Commitment of any
Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in
this Section 2.22, performance by Company of its obligations hereunder and the other Credit
Documents shall not be excused or otherwise modified as a result of any Funding Default or the
operation of this Section 2.22. The rights and remedies against a Defaulting Lender under this
Section 2.22 are in addition to other rights and remedies which Company may have against such
Defaulting Lender with respect to any Funding Default and which Administrative Agent or any Lender
may have against such Defaulting Lender with respect to any Funding Default.



2.23 Removal or Replacement of a Lender. Anything contained herein to the contrary
notwithstanding, in the event that: (a)(i) any Lender (an “Increased-Cost Lender”) shall give
notice to Company that such Lender is an Affected Lender or that such Lender is entitled to receive
payments under Section 2.18, 2.19 or 2.20, (ii) the circumstances which have caused such Lender to
be an Affected Lender or which entitle such Lender to receive such payments shall remain in effect,
and (iii) such Lender shall fail to withdraw such notice within five Business Days after Company’s
request for such withdrawal or (b)(i) any Lender shall become a Defaulting Lender, (ii) the Default
Period for such Defaulting Lender shall remain in effect, and (iii) such Defaulting Lender shall
fail to cure the default as a result of which it has become a Defaulting Lender within five
Business Days after Company’s request that it cure such default; then, with respect to each such
Increased-Cost Lender or Defaulting Lender (the “Terminated Lender”), Company may, by giving
written notice to Administrative Agent and any Terminated Lender of its election to do so, elect to
cause such Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to assign its
outstanding Loans, its Revolving Commitments, and its Hedge L/C Commitment, if any, in full to one
or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of
Section 10.6 and Terminated Lender shall pay any fees payable thereunder in connection with such
assignment; provided, (1) on the date of such assignment, the Replacement Lender shall pay
to Terminated Lender an amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Terminated Lender, (B) an amount equal to all
unreimbursed drawings that have been funded by such Terminated Lender, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid fees owing to such Terminated Lender pursuant to Section 2.11 and (2) on the
date of such assignment, Company shall pay any amounts payable to such Terminated Lender pursuant
to Section 2.18(c), 2.19 or 2.20; or otherwise as if it were a prepayment; provided,
Company may not make such election with respect to any Terminated Lender that is also an Issuing
Bank unless, prior to the effectiveness of such election, Company shall have caused each
outstanding Letter of Credit or Hedge Letter of Credit, as applicable, issued thereby to be
cancelled. Upon the prepayment of all amounts owing to any Terminated Lender and the termination
of such Terminated Lender’s Revolving Commitments, if any, such Terminated Lender shall no longer
constitute a “Lender” for purposes hereof; provided, any rights of such Terminated Lender
to indemnification hereunder shall survive as to such Terminated Lender.



SECTION 3 CONDITIONS PRECEDENT



3.1 Closing Date. The obligation of any Lender to make a Credit Extension on the Closing Date
is subject to the satisfaction, or waiver in accordance with Section 10.5, of the following
conditions on or before the Closing Date:



(a) Credit Documents. Administrative Agent shall have received sufficient copies of
each Credit Document originally executed and delivered by each applicable Credit Party for each
Lender.



(b) Organizational Documents; Incumbency. Administrative Agent shall have received
(i) sufficient copies of each Organizational Document executed and delivered by each Credit Party,
as applicable, and, to the extent applicable, certified as of a recent date by the appropriate
governmental official, for each Lender, each dated the Closing Date or a recent date prior thereto;
(ii) signature and incumbency certificates of the officers of such Person executing the Credit
Documents to which it is a party; (iii) resolutions of the Board of Directors or similar governing
body of each Credit Party approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents and the Related Agreements to which it is a party or by
which it or its assets may be bound as of the Closing Date, certified as of the Closing Date by its
secretary or an assistant secretary as being in full force and effect without modification or
amendment; and (iv) a good standing certificate from the applicable Governmental Authority of each
Credit Party’s jurisdiction of incorporation, organization or formation and in each jurisdiction in
which it is qualified as a foreign corporation or other entity to do business, each dated a recent
date prior to the Closing Date.



(c) Organizational and Capital Structure. The organizational structure and capital
structure of Company and its Subsidiaries, both before and after giving effect to the Acquisition,
shall be as set forth on Schedules 4.1 and 4.2.



(d) Capitalization of Company. On or before the Closing Date, the Company shall have
received the gross proceeds from equity contributions or Qualified Junior Debt in an aggregate
amount not less than $34,000,000.



(e) Consummation of Transactions Contemplated by Related Agreements.



(i) (1) All conditions to the transactions contemplated by each of the Related Agreements
shall have been satisfied or the fulfillment of any such conditions shall have been waived with the
consent of Administrative Agent and (2) the Acquisition shall have become effective in accordance
with the terms of the Acquisition Agreement.



(ii) Administrative Agent shall have received a fully executed or conformed copy of each
Related Agreement and any documents executed in connection therewith. Each Related Agreement shall
be in full force and effect, shall include terms and provisions reasonably satisfactory to
Administrative Agent and no provision thereof shall have been modified or waived in any respect
determined by Administrative Agent to be material, in each case without the consent of
Administrative Agent.



(f) Existing Credit Agreement. On the Closing Date, the administrative agent and the
lenders under the Existing Credit Agreement shall have assigned all of their rights under the
Credit Documents (as defined in the Existing Credit Agreement) to the Administrative Agent and the
Lenders in a manner reasonably satisfactory to the Administrative Agent.



(g) Transaction Costs. On or prior to the Closing Date, Company shall have delivered
to Administrative Agent Company’s reasonable best estimate of the Transactions Costs (other than
fees payable to any Agent) and shall have paid all Transaction Costs payable in connection with the
Credit Documents.



(h) Governmental Authorizations and Consents. Each Credit Party shall have obtained
all Governmental Authorizations (other than the filing of UCC financing statements and the
Mortgages) and all consents of other Persons, in each case that are necessary in connection with
the transactions contemplated by the Credit Documents and the Related Agreements and each of the
foregoing shall be in full force and effect and in form and substance reasonably satisfactory to
Administrative Agent. All applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the transactions contemplated by the Credit Documents or the Related
Agreements or the financing thereof and no action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending, and
the time for any applicable agency to take action to set aside its consent on its own motion shall
have expired.



(i) Real Estate Assets; Hydrocarbon Interests. In order to create in favor of
Collateral Trustee, for the benefit of Secured Parties, a valid and, subject to any filing and/or
recording referred to herein, an Acceptable Security Interest in certain Real Estate Assets and
certain Hydrocarbon Interests, Collateral Trustee shall have received from Company and each
applicable Guarantor:



(i) fully executed and notarized Mortgage Supplements for each of the Existing Mortgages, in
proper form for recording in all appropriate places in all applicable jurisdictions, encumbering
each Real Estate Asset listed in Schedule 3.1(i) (each, a “Closing Date Mortgaged Property’’) and
each Hydrocarbon Interest listed on Schedule 3.1(i), which Hydrocarbon Interests shall represent no
less than 80% of the value of Proven Reserves of Company and the Guarantors as of the Closing Date
(as valued in the Borrowing Base);



(ii) (A) an opinion of counsel (which counsel shall be reasonably satisfactory to
Administrative Agent) in each state in which a Closing Date Mortgaged Property is located with
respect to the enforceability of the Mortgages recorded in such, as supplemented by the Mortgage
Supplements and recorded in such state and such other matters as Administrative Agent may
reasonably request, in each case in form and substance reasonably satisfactory to Administrative
Agent, (B) current updates, addressed to the Administrative Agent, of title opinions previously
delivered to Company or its predecessors with respect to at least 43% of the Borrowing Base value
of the Company’s and the Guarantors’ Proven Reserves; and (C) lien searches from all counties in
Michigan, Ohio, Pennsylvania and New York in which the Company and/or any Guarantor own Real Estate
Assets, in form and substance reasonably satisfactory to Administrative Agent.



(iii) [Reserved];



(iv) evidence satisfactory to Administrative Agent that Credit Party has paid all recording
and stamp taxes (including mortgage recording and intangible taxes) payable in connection with
recording the Mortgages for each Closing Date Mortgaged Property in the appropriate real estate
records; and



(v) evidence of flood insurance with respect to each Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program, in each case in compliance
with any applicable regulations of the Board of Governors of the Federal Reserve System, in form
and substance reasonably satisfactory to Administrative Agent.



(j) Personal Property Collateral. In order to create in favor of Collateral Trustee,
for the benefit of Secured Parties, an Acceptable Security Interest in the personal property
Collateral, Collateral Trustee shall have received:



(i) evidence satisfactory to Collateral Trustee of the compliance by each Credit Party with
its obligations under the Pledge and Security Agreement and the other Collateral Documents
(including, without limitation, their obligations to file UCC financing statements, deliver
originals of certificated securities, instruments and chattel paper, and execute and deliver
control agreements with respect to deposit and/or securities accounts as provided therein);



(ii) the results of a recent search, by a Person satisfactory to Administrative Agent, of all
effective UCC financing statements (or equivalent filings) made with respect to any personal or
mixed property of any Credit Party in the jurisdictions requested by Administrative Agent, together
with copies of all such filings disclosed by such search, to the extent reasonably requested by
Administrative Agent, and (B) UCC termination statements (or similar documents) duly authorized by
all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate
any effective UCC financing statements (or equivalent filings) disclosed in such search (other than
any such financing statements in respect of Permitted Liens);



(iii) opinions of counsel with respect to the creation and perfection of the security
interests in favor of Collateral Trustee in such Collateral and such other matters governed by the
laws of each jurisdiction in which any Credit Party or any such personal property Collateral is
located as Administrative Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Administrative Agent; and



(iv) evidence that each Credit Party shall have taken or caused to be taken any other action,
executed and delivered or caused to be executed and delivered any other agreement, document and
instrument and made or caused to be made any other filing and recording (other than as set forth
herein) reasonably required by Administrative Agent.



(k) Environmental Reports. Administrative Agent shall have received the Environmental
Report, the Environmental Report shall be addressed to the Administrative Agent and the Lenders, or
the Administrative Agent shall have received a reliance letter authorizing reliance by
Administrative Agent and the Lenders on the Environmental Report, and the scope and findings of the
Environmental Report shall be reasonably satisfactory to the Administrative Agent.



(l) Financial Statements. Lenders shall have received from Company (i) the Historical
Financial Statements, and (ii) pro forma consolidated balance sheets of Company and its
Subsidiaries as at the Closing Date, and reflecting the consummation of the Acquisition, the
transactions contemplated by the Swap Agreements, the related financings and the other transactions
contemplated by the Credit Documents to occur on or prior to the Closing Date, which pro forma
financial statements shall be in form and substance satisfactory to Administrative Agent.



(m) Evidence of Insurance. Administrative Agent shall have received a certificate
from Company’s insurance broker or other evidence satisfactory to it that all insurance required to
be maintained pursuant to Section 5.5 is in full force and effect, together with endorsements
naming the Collateral Trustee, for the benefit of the Secured Parties, as additional insured and
loss payee thereunder to the extent required under Section 5.5.



(n) Opinions of Counsel to Credit Parties. Lenders and their respective counsel shall
have received originally executed copies of the favorable written opinions of each of (i) Haynes &
Boone, LLP, New York and Texas counsel to the Company, (ii) Bricker & Eckler LLP, Ohio counsel,
(iii) Dickinson Wright PLLC, Michigan counsel, and (iv) Culbertson, Weiss, Schetroma and Schug,
P.C., Pennsylvania counsel, each covering, among other things and as applicable, the matters
referred to in Section 3.1(i)(ii) and 3.1(j)(iii), and such other matters as Administrative Agent
may reasonably request, dated as of the Closing Date and otherwise in form and substance reasonably
satisfactory to Administrative Agent (and each Credit Party hereby instructs such counsel to
deliver such opinions to Agents and Lenders).



(o) Fees. Company shall have paid to Administrative Agent the fees payable on the
Closing Date referred to in Section 2.11(e).



(p) Solvency Certificate. On the Closing Date, Administrative Agent shall have
received a Solvency Certificate from the chief financial officer of Company dated the Closing Date,
with appropriate attachments and demonstrating that after giving effect to the consummation of the
Acquisition, Company and its Subsidiaries are and will be Solvent.



(q) Closing Date Certificate. Company shall have delivered to Administrative Agent an
originally executed Closing Date Certificate, together with all attachments thereto.



(r) J. Aron Swap. The Administrative Agent shall be reasonably satisfied with the
terms and conditions of the J. Aron Swap.



(s) No Litigation. There shall not exist any action, suit, investigation, litigation
or proceeding, pending or threatened in any court or before any arbitrator or Governmental
Authority that, in the reasonable opinion of Administrative Agent, singly or in the aggregate,
materially impairs the Acquisition, the financing thereof or any of the other transactions
contemplated by the Credit Documents or the Related Agreements, or that could reasonably be
expected to have a Material Adverse Effect.



(t) Completion of Proceedings. All partnership, corporate and other proceedings taken
or to be taken in connection with the transactions contemplated hereby and all documents incidental
thereto not previously found acceptable by Administrative Agent and its counsel shall be
satisfactory in form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or certified copies of
such documents as Administrative Agent may reasonably request.



(u) Other Documents. The Administrative Agent shall have received such other
documents, governmental certificates, agreements and lien searches as the Administrative Agent or
any Lender may reasonably request.



Each Lender, by delivering its signature page to this Agreement and funding a Loan on the Closing
Date, shall be deemed to have acknowledged receipt of, and consented to and approved, each Credit
Document and each other document required to be approved by any Agent, Requisite Lenders or
Lenders, as applicable on the Closing Date.



3.2 Conditions to Each Credit Extension.



(a) Conditions Precedent. The obligation of each Lender to make any Loan, or Issuing
Bank to issue any Letter of Credit or Hedge Letter of Credit, on any Credit Date, including the
Closing Date, are subject to the satisfaction, or waiver in accordance with Section 10.5, of the
following conditions precedent:



(i) Administrative Agent shall have received a fully executed and delivered Funding Notice or
Issuance Notice, as the case may be;



(ii) after making the Credit Extensions requested on such Credit Date, (A) the Total
Utilization of Revolving Commitments shall not exceed the lesser of aggregate Revolving Commitments
then in effect and the Borrowing Base then in effect and (B) the Total Utilization of Hedge L/C
Commitments shall not exceed the aggregate Hedge L/C Commitments then in effect;



(iii) as of such Credit Date, the representations and warranties of the Credit Parties
contained herein and in the other Credit Documents shall be true and correct in all material
respects on and as of that Credit Date to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically relate to an earlier date, in
which case such representations and warranties shall have been true and correct in all material
respects on and as of such earlier date;



(iv) as of such Credit Date, no event shall have occurred and be continuing or would result
from the consummation of the applicable Credit Extension that would constitute an Event of Default
or a Default; and



(v) on or before the date of issuance of any Letter of Credit or Hedge Letter of Credit,
Administrative Agent shall have received all other information required by the applicable Issuance
Notice, and such other documents or information as Issuing Bank may reasonably require in
connection with the issuance of such Letter of Credit or Hedge Letter of Credit.



Administrative Agent or Requisite Lenders shall be entitled, but not obligated to, request and
receive, prior to the making of any Credit Extension, additional information reasonably
satisfactory to the requesting party confirming the satisfaction of any of the foregoing if, in the
good faith judgment of such Administrative Agent or each such Requisite Lender such request is
warranted under the circumstances.



(b) Notices. Any Notice shall be executed by an Authorized Officer in a writing
delivered to Administrative Agent. In lieu of delivering a Notice, Company may give Administrative
Agent telephonic notice by the required time of any proposed borrowing, conversion/continuation or
issuance of a Letter of Credit or the Hedge Letter of Credit, as the case may be; provided
each such notice shall be promptly confirmed in writing by delivery of the applicable Notice to
Administrative Agent on or before the applicable date of borrowing, continuation/conversion or
issuance. Neither Administrative Agent nor any Lender shall incur any liability to Company in
acting upon any telephonic notice referred to above that Administrative Agent believes in good
faith to have been given by a duly authorized officer or other person authorized on behalf of
Company or for otherwise acting in good faith.



SECTION 4 REPRESENTATIONS AND WARRANTIES



In order to induce Lenders and Issuing Bank to enter into this Agreement and to make each
Credit Extension to be made thereby, each Credit Party represents and warrants to each Lender and
Issuing Bank, on the Closing Date and on each Credit Date, that the following statements are true
and correct (it being understood and agreed that the representations and warranties made on the
Closing Date are deemed to be made concurrently with the consummation of the Acquisition and other
transactions contemplated by Related Agreements):



4.1 Organization; Requisite Power and Authority; Qualification. Each of Company and its
Subsidiaries (a) is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization as identified in Schedule 4.1, (b) has all requisite power and
authority to own and operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Credit Documents to which it is a party and to carry
out the transactions contemplated thereby, and (c) is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to carry out its business
and operations, except in jurisdictions where the failure to be so qualified or in good standing
has not had, and could not be reasonably expected to have, a Material Adverse Effect. As of the
Closing Date, the principal place of business, tax identification number, and state organizational
number of the Company and each of its Restricted Subsidiaries is as set forth on Schedule 4.1.



4.2 Capital Stock and Ownership. The Capital Stock of each of Company and its Subsidiaries
has been duly authorized and validly issued and is fully paid and non-assessable. As of the
Closing Date, except as set forth on Schedule 4.2, there is no existing option, warrant, call,
right, commitment or other agreement to which Company or any of its Subsidiaries is a party
requiring, and there is no membership interest or other Capital Stock of Company or any of its
Subsidiaries outstanding which upon conversion or exchange would require, the issuance by Company
or any of its Subsidiaries of any additional membership interests or other Capital Stock of Company
or any of its Subsidiaries or other Securities convertible into, exchangeable for or evidencing the
right to subscribe for or purchase, a membership interest or other Capital Stock of Company or any
of its Subsidiaries. Schedule 4.2 correctly sets forth the ownership interest of Company and each
of its Subsidiaries in their respective Subsidiaries as of the Closing Date both before and after
giving effect to the Acquisition.



4.3 Due Authorization. The execution, delivery and performance of the Credit Documents have
been duly authorized by all necessary action on the part of each Credit Party that is a party
thereto.



4.4 No Conflict. The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions contemplated by the
Credit Documents do not and will not (a) violate any provision of any law or any governmental rule
or regulation applicable to Company or any of its Subsidiaries, any of the Organizational Documents
of Company or any of its Subsidiaries, or any order, judgment or decree of any court or other
agency of government binding on Company or any of its Subsidiaries; (b) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default under any Contractual
Obligation of Company or any of its Subsidiaries, except to the extent such conflict or breach
could not reasonably be expected to have a Material Adverse Effect; (c) result in or require the
creation or imposition of any Lien upon any of the properties or assets of Company or any of its
Subsidiaries (other than any Liens created under any of the Credit Documents in favor of Collateral
Agent, on behalf of Secured Parties); or (d) require any approval of stockholders, members or
partners or any approval or consent of any Person under any Contractual Obligation of Company or
any of its Subsidiaries, except for such approvals or consents which will be obtained on or before
the Closing Date and disclosed in writing to Lenders and except for any approval, the failure of
which to obtain could not reasonably be expected to have a Material Adverse Effect.



4.5 Governmental Consents. The execution, delivery and performance by Credit Parties of the
Credit Documents to which they are parties and the consummation of the transactions contemplated by
the Credit Documents do not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any Governmental Authority, except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to Collateral Trustee
for filing and/or recordation, as of and after the Closing Date, and routine filings required to be
made in the ordinary course of business pursuant to the requirements of applicable law.



4.6 Binding Obligation. Each Credit Document has been duly executed and delivered by each
Credit Party that is a party thereto and is the legally valid and binding obligation of such Credit
Party, enforceable against such Credit Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors’ rights generally or by equitable principles relating to enforceability.



4.7 Historical Financial Statements. The Historical Financial Statements were prepared in
conformity with GAAP and fairly present, in all material respects, the financial position, on a
consolidated basis, of Company and its Subsidiaries as at the respective dates thereof and the
results of operations and cash flows, on a consolidated basis, of the entities described therein
for each of the periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments. As of the Closing
Date, neither Company nor any of its Subsidiaries has any contingent liability or liability for
taxes, long-term lease or unusual forward or long-term commitment that is not reflected in the
Historical Financial Statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial or otherwise) or
prospects of Company and any of its Subsidiaries taken as a whole.



4.8 [Reserved].



4.9 No Material Adverse Change. Since December 31, 2004, no event, circumstance or change has
occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect.



4.10 No Restricted Junior Payments. Since December 31, 2004, neither Company nor any of its
Restricted Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart
any sum or property for, any Restricted Junior Payment or agreed to do so except as permitted
pursuant to Section 6.5.



4.11 No Reserve Write-downs. From December 31, 2004 through the Closing Date, Company has not
reduced the volume of its reserves by more than 2%, except as previously disclosed to the
Administrative Agent prior to the Closing Date.



4.12 Adverse Proceedings, etc. There are no Adverse Proceedings, individually or in the
aggregate, that could reasonably be expected to have a Material Adverse Effect. Neither Company
nor any of its Subsidiaries (a) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign,
that, individually or in the aggregate, could reasonably be expected to have a Material Adverse
Effect.



4.13 Payment of Taxes. Except as described on Schedule 4.13, and except as otherwise
permitted under Section 5.3, all tax returns and reports of Company and its Subsidiaries required
to be filed by any of them have been timely filed (taking into account any extensions), and all
taxes shown on such tax returns to be due and payable and all material assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their respective properties,
assets, income, businesses and franchises which are due and payable have been paid when due and
payable. Company knows of no proposed tax assessment against Company or any of its Subsidiaries
which is not being actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided, such reserves or other appropriate provisions, if any,
as shall be required in conformity with GAAP shall have been made or provided therefor.



4.14 Properties.



(a) Title. Each of Company and its Restricted Subsidiaries has (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests
in (in the case of leasehold interests in real or personal property), and (iii) good title to (in
the case of all other personal property), all of their respective properties and assets reflected
in their respective Historical Financial Statements referred to in Section 4.5 and in the most
recent financial statements delivered pursuant to Section 5.1, in each case except for (a) assets
disposed of since the date of such financial statements in the ordinary course of business or as
otherwise permitted under Section 6.9, (b) Permitted Liens and (c) with respect to Oil and Gas
Properties, such imperfections of title which do not in the aggregate materially detract from the
value thereof to, or the use thereof in, the business of Company or any of the Guarantors. All
such properties and assets are free and clear of Liens except Permitted Liens.



(b) Real Estate. As of the Closing Date, Schedule 4.14 contains a true, accurate and
complete list of (i) all Material Real Estate Assets, (ii) all leases, subleases or assignments of
leases (together with all amendments, modifications, supplements, renewals or extensions of any
thereof) affecting each Material Real Estate Asset of any Credit Party, regardless of whether such
Credit Party is the landlord or tenant (whether directly or as an assignee or successor in
interest) under such lease, sublease or assignment and (iii) the working interest and net revenue
interest in each Hydrocarbon Interest of each Credit Party. Each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and Company does not have
knowledge of any default that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Credit Party, enforceable
against such Credit Party in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors’ rights generally or by equitable principles. As of the Closing Date, with respect to
Hydrocarbon Interests set forth on Schedule 4.14 constituting 80% of the total value of Proven
Reserves, each Credit Party has a net revenue interest no less than the net revenue interest set
forth on such Schedule for such Proven Reserves.



(c) Condition. The material personal Properties of the Company and its Restricted
Subsidiaries used or to be used in the continuing operations of the Company and each of its
Restricted Subsidiaries are in good repair, working order and condition (ordinary wear and tear
excepted). Since December 31, 2004, neither the business nor the material Properties of the
Company and each of the Guarantors, taken as a whole, has been materially and adversely affected as
a result of any fire, explosion, earthquake, flood, drought, windstorm, accident, strike or other
labor disturbance, embargo, requisition or taking of Property or cancellation of contracts,
permits, or concessions by a Governmental Authority, riot, activities of armed forces, or acts of
God or of any public enemy.



4.15 Environmental Matters. Neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to any Environmental Law, any Environmental Claim, or
any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither Company nor any of its Subsidiaries has
received any letter or request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparable state law that
relates to an actual or potential Environmental Claim or other liability that, individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect. There are and, to
each of Company’s and its Subsidiaries’ knowledge, have been, no conditions, occurrences, or
Hazardous Materials Activities at, on, under or adjacent to, Facilities or Oil and Gas Properties
or at any other real property currently or previously owned, operated, or used by the Company, its
Subsidiaries or, to any of Company’s or its Subsidiaries’ knowledge, predecessors of the Company or
its Subsidiaries, which could reasonably be expected to form the basis of an Environmental Claim
against Company or any of its Subsidiaries that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. Neither Company nor any of its Subsidiaries nor, to
any of Company and its Subsidiaries’ knowledge, any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past or present treatment
of Hazardous Materials at any Facility or Oil and Gas Properties, and none of Company’s or any of
its Subsidiaries’ operations involves the generation, transportation, treatment or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent, except where
doing so could not reasonably be expected to have a Material Adverse Effect. Compliance by Company
and its Subsidiaries with all current or reasonably foreseeable future requirements pursuant to or
under Environmental Laws could not be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect and no event or condition has occurred or is occurring with
respect to Company or any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity which individually or in the aggregate has
had, or could reasonably be expected to have, a Material Adverse Effect.



4.16 No Defaults. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or conditions contained
in any of its Contractual Obligations, and no condition exists which, with the giving of notice or
the lapse of time or both, could constitute such a default, except where the consequences, direct
or indirect, of such default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect.



4.17 Material Contracts. Schedule 4.17 contains a true, correct and complete list of all the
Material Contracts in effect on the Closing Date, and except as described thereon, all such
Material Contracts are in full force and effect and no defaults currently exist thereunder, except
where the consequences, direct or indirect, of such default or defaults, if any, could not
reasonably be expected to have a Material Adverse Effect.



4.18 Governmental Regulation. Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any portion of the
Obligations unenforceable. Neither Company nor any of its Subsidiaries is a “registered investment
company” or a company “controlled” by a “registered investment company” or a “principal
underwriter” of a “registered investment company” as such terms are defined in the Investment
Company Act of 1940.



4.19 Margin Stock. Neither Company nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the purpose of purchasing
or carrying any Margin Stock. No part of the proceeds of the Loans made to such Credit Party will
be used to purchase or carry any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose that violates, or is inconsistent
with, the provisions of Regulation T, U or X of said Board of Governors.



4.20 Employee Matters. Neither Company nor any of its Subsidiaries is engaged in any unfair
labor practice that could reasonably be expected to have a Material Adverse Effect. There is (a)
no unfair labor practice complaint pending against Company or any of its Subsidiaries, or to the
best knowledge of Company, threatened against any of them before the National Labor Relations Board
and no grievance or arbitration proceeding arising out of or under any collective bargaining
agreement that is so pending against Company or any of its Subsidiaries or to the best knowledge of
Company, threatened against any of them, (b) no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected to have a Material
Adverse Effect, and (c) to the best knowledge of Company, no union representation question
existing with respect to the employees of Company or any of its Subsidiaries and, to the best
knowledge of Company, no union organization activity that is taking place, except (with respect to
any matter specified in clause (a), (b) or (c) above, either individually or in the aggregate) such
as is not reasonably likely to have a Material Adverse Effect.



4.21 Employee Benefit Plans. Company, each of its Subsidiaries and each of their respective
ERISA Affiliates are in compliance in all material respects with all applicable provisions and
requirements of ERISA and the Internal Revenue Code and the regulations and published
interpretations thereunder with respect to each Employee Benefit Plan, and have performed in all
material respects their obligations under each Employee Benefit Plan. Each Employee Benefit Plan
which is intended to qualify under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service indicating that such Employee
Benefit Plan is so qualified and nothing has occurred subsequent to the issuance of such
determination letter which would cause such Employee Benefit Plan to lose its qualified status. No
material liability to the PBGC (other than required premium payments), the Internal Revenue
Service, any Employee Benefit Plan or any trust established under Title IV of ERISA has been or is
expected to be incurred by Company, any of its Subsidiaries or any of their ERISA Affiliates. No
ERISA Event has occurred or is reasonably expected to occur. Except to the extent required under
Section 4980B of the Internal Revenue Code or similar state laws, no Employee Benefit Plan provides
health or welfare benefits (through the purchase of insurance or otherwise) for any retired or
former employee of Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
The present value of the aggregate benefit liabilities under each Pension Plan sponsored,
maintained or contributed to by Company, any of its Subsidiaries or any of their ERISA Affiliates
(determined as of the end of the most recent plan year on the basis of the actuarial assumptions
specified for funding purposes in the most recent actuarial valuation for such Pension Plan), did
not exceed the aggregate current value of the assets of such Pension Plan. As of the most recent
valuation date for each Multiemployer Plan for which the actuarial report is available, the
potential liability of Company, its Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA),
when aggregated with such potential liability for a complete withdrawal from all Multiemployer
Plans, based on information available pursuant to Section 4221(e) of ERISA is zero. Company, each
of its Subsidiaries and each of their ERISA Affiliates have complied with the requirements of
Section 515 of ERISA with respect to each Multiemployer Plan and are not in material “default” (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.



4.22 Certain Fees. No broker’s or finder’s fee or commission will be payable with respect
hereto or any of the transactions contemplated hereby.



4.23 Solvency. Each Credit Party is and, upon the incurrence of any Obligation by such Credit
Party on any date on which this representation and warranty is made, will be, Solvent.



4.24 Related Agreements.



(a) Delivery. Company has delivered to Administrative Agent complete and correct
copies of (i) each Related Agreement and of all exhibits and schedules thereto as of the date
hereof and (ii) copies of any material amendment, restatement, supplement or other modification to
or waiver of each Related Agreement entered into after the date hereof.



(b) Representations and Warranties. Except to the extent otherwise expressly set
forth herein or in the schedules hereto, and subject to the qualifications set forth therein, each
of the representations and warranties given by any Credit Party in any Related Agreement is true
and correct in all material respects as of the Closing Date (or as of any earlier date to which
such representation and warranty specifically relates). Notwithstanding anything in the Related
Agreement to the contrary, the representations and warranties of each Credit Party set forth in
this Section 4.24 shall, solely for purposes hereof, survive the Closing Date for the benefit of
Lenders.



(c) Governmental Approvals. All Governmental Authorizations and all other
authorizations, approvals and consents of any other Person required by the Related Agreements or to
consummate the Acquisition and other transactions contemplated by the Related Agreements have been
obtained and are in full force and effect, except for (i) filings and recordings with respect to
the Collateral to be made on or after the Closing Date, (ii) routine filings required to be made in
the ordinary course of business pursuant to the requirements of applicable law, and (iii) consents,
the failure to obtain of which would not reasonably be expected to have a Material Adverse Effect.



(d) Conditions Precedent. On the Closing Date, (i) all of the conditions to effecting
or consummating the Acquisition and other transactions contemplated by the Related Agreements have
been duly satisfied or, with the consent of Administrative Agent, waived, and (ii) the Acquisition
and other transactions contemplated by the Related Agreements has been consummated in accordance
with the Related Agreements and all applicable laws.



4.25 Compliance with Statutes, etc. Each of Company and its Subsidiaries is in compliance
with all applicable statutes, regulations and orders of, and all applicable restrictions imposed
by, all Governmental Authorities, in respect of the conduct of its business and the ownership of
its property (including compliance with all applicable Environmental Laws), except such
non-compliance that, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.



4.26 Future Commitments. Except with respect to gas imbalances, take-or-pay or other
prepayments with respect to any Oil and Gas Property of Company or any of the Guarantors which
would require Company or any of the Guarantors either (a) to deliver Hydrocarbons produced from Oil
and Gas Properties or (b) to make cash settlements for such products with a value not in excess of
$2,000,000, on a net basis there are no gas imbalances, take-or-pay or other prepayments with
respect to any Oil and Gas Property of Company or any of the Guarantors or any cash settlement for
such products at some future time without then or thereafter receiving full payment therefor.



4.27 Disclosure. No representation or warranty of any Credit Party contained in any Credit
Document or in any other documents, certificates or written statements furnished to Lenders by or
on behalf of Company or any of its Subsidiaries for use in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to state a material
fact (known to Company, in the case of any document not furnished by either of them) necessary in
order to make the statements contained herein or therein, taken as a whole, not misleading in light
of the circumstances in which the same were made. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and assumptions
believed by Company to be reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual results during the
period or periods covered by any such projections may differ from the projected results. There are
no facts known to Company (other than matters of a general economic nature) that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse Effect and that have
not been disclosed herein or in such other documents, certificates, reports and statements
furnished to Lenders for use in connection with the transactions contemplated hereby.



SECTION 5 AFFIRMATIVE COVENANTS



Each Credit Party covenants and agrees that so long as any Commitment is in effect and until
payment in full of all Obligations and cancellation or expiration of all Letters of Credit, each
Credit Party shall perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 5.



5.1 Financial Statements and Other Reports. Company will deliver to Administrative Agent and
Lenders:



(a) Quarterly Financial Statements. As soon as available, and in any event within
forty-five (45) days after the end of each of the first three Fiscal Quarters of each Fiscal Year,
the consolidated balance sheets of Company and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income, stockholders’ equity and cash flows of
Company and its Subsidiaries for such Fiscal Quarter and for the period from the beginning of the
then current Fiscal Year to the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan for the current Fiscal Year, all in
reasonable detail, together with a Financial Officer Certification;



(b) Annual Financial Statements. As soon as available, and in any event no later than
the earlier of (x) one hundred five (105) days after the end of each Fiscal Year and (y) five days
after Company is required, under the Exchange Act, to file its Annual Report on Form 10-K, (i) the
consolidated balance sheets of Company and its Subsidiaries as at the end of such Fiscal Year and
the related consolidated statements of income, stockholders’ equity and cash flows of Company and
its Subsidiaries for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding figures from the Financial
Plan for the Fiscal Year covered by such financial statements, in reasonable detail, together with
a Financial Officer Certification and a Narrative Report with respect thereto; and (ii) with
respect to such consolidated financial statements a report thereon of Ernst & Young LLP or other
independent certified public accountants of recognized national standing selected by Company (which
report shall be unqualified as to going concern and scope of audit, and shall state that such
consolidated financial statements fairly present, in all material respects, the consolidated
financial position of Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years (except as otherwise disclosed in such financial statements)
and that the examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing standards) together with a
written statement by such independent certified public accountants stating (1) that their audit
examination has included a review of the terms of the Credit Documents, (2) whether, in connection
therewith, any condition or event that constitutes a Default or an Event of Default has come to
their attention and, if such a condition or event has come to their attention, specifying the
nature and period of existence thereof (it being understood that such examination and statement
shall be limited to the items that independent certified public accountants are permitted to cover
in such statements pursuant to their professional standards and customs of the profession), and (3)
that nothing has come to their attention that causes them to believe that the information contained
in any Compliance Certificate is not correct or that the matters set forth in such Compliance
Certificate are not stated in accordance with the terms hereof;



(c) [Reserved];



(d) Compliance Certificate. Together with each delivery of financial statements of
Company and its Subsidiaries pursuant to Sections 5.1(a) and 5.1(b), a duly executed and completed
Compliance Certificate and Financial Officer certificate pursuant to Section 6.8(g);



(e) Statements of Reconciliation after Change in Accounting Principles. If, as a
result of any change in accounting principles and policies from those used in the preparation of
the Historical Financial Statements, the consolidated financial statements of Company and its
Subsidiaries delivered pursuant to Section 5.1(a) or 5.1(b) will differ in any material respect
from the consolidated financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and policies been made, then, together
with the first delivery of such financial statements after such change, one or more statements of
reconciliation for the Fiscal Year immediately prior to the then current Fiscal Year in form and
substance satisfactory to Administrative Agent;



(f) Notice of Default. Promptly upon any officer of Company obtaining knowledge (i)
of any condition or event that constitutes a Default or an Event of Default or that notice has been
given to Company with respect thereto; (ii) that any Person has given any notice to Company or any
of its Subsidiaries or taken any other action with respect to any event or condition set forth in
Section 8.1(b); or (iii) of the occurrence of any event or change that has caused or evidences,
either in any case or in the aggregate, a Material Adverse Effect, a certificate of its Authorized
Officers specifying the nature and period of existence of such condition, event or change, or
specifying the notice given and action taken by any such Person and the nature of such claimed
Event of Default, Default, default, event or condition, and what action Company has taken, is
taking and proposes to take with respect thereto;



(g) Notice of Litigation. Promptly upon any officer of Company obtaining knowledge of
(i) the institution of, or non-frivolous threat of, any Adverse Proceeding not previously disclosed
in writing by Company to Lenders, or (ii) any material development in any Adverse Proceeding that,
in the case of either (i) or (ii) could be reasonably expected to have a Material Adverse Effect,
or seeks to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated hereby, written notice thereof together with
such other information as may be reasonably available to Company to enable Lenders and their
counsel to evaluate such matters;



(h) ERISA. (i) Promptly upon any officer of Company obtaining knowledge of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice specifying the nature
thereof, what action Company, any of its Subsidiaries or any of their respective ERISA Affiliates
has taken, is taking or proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto; and (ii) with reasonable promptness, copies of (1) each Schedule B (Actuarial Information)
to the annual report (Form 5500 Series) filed by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates with the Internal Revenue Service with respect to each Pension Plan;
(2) all notices received by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event; and (3) copies of such
other documents or governmental reports or filings relating to any Employee Benefit Plan as
Administrative Agent shall reasonably request;



(i) Financial Plan. As soon as practicable and in any event no later than thirty days
after the beginning of each Fiscal Year, a consolidated plan and financial forecast for such Fiscal
Year (a “Financial Plan”), including (i) a forecasted consolidated balance sheet and forecasted
consolidated statements of income and cash flows of Company and its Subsidiaries for such Fiscal
Year, together with pro forma Compliance Certificates for such Fiscal Year and an explanation of
the assumptions on which such forecasts are based, (ii) forecasted consolidated statements of
income and cash flows of Company and its Subsidiaries for each quarter of such Fiscal Year, (iii)
forecasts addressing Company’s projected compliance with the requirements of Section 6.8 during
such Fiscal Year, and (iv) forecasts addressing Company’s liquidity through the end of such Fiscal
Year, together, in each case, with an explanation of the assumptions on which such forecasts are
based all in form and substance reasonably satisfactory to Administrative Agent;



(j) Insurance Report. As soon as practicable and in any event by the last day of each
Fiscal Year, a report in form and substance satisfactory to Administrative Agent outlining all
material insurance coverage maintained as of the date of such report by Company and its
Subsidiaries and all material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;



(k) Notice of Change in Board of Directors. With reasonable promptness, written
notice of any change in the board of directors (or similar governing body) of Company;



(l) Notice Regarding Material Contracts. Promptly, and in any event within ten
Business Days (i) after any Material Contract of Company or any of its Restricted Subsidiaries is
terminated or amended in a manner that could reasonably be expected to have a Material Adverse
Effect, or (ii) any new Material Contract is entered into, a written statement describing such
event, with copies of such material amendments or new contracts, delivered to Administrative Agent
(to the extent such delivery is permitted by the terms of any such Material Contract, provided, no
such prohibition on delivery shall be effective if it were bargained for by Company or its
applicable Restricted Subsidiary with the intent of avoiding compliance with this Section 5.1(l)),
and an explanation of any actions being taken with respect thereto;



(m) [Reserved];



(n) Information Regarding Collateral. Company will furnish to Collateral Trustee
prompt written notice, with a copy to Administrative Agent, of any change (i) in any Credit Party’s
corporate name, (ii) in any Credit Party’s identity or corporate structure or (iii) in any Credit
Party’s Federal Taxpayer Identification Number. Company agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for Collateral Trustee to continue at all
times following such change to have a valid, legal and perfected security interest in all the
Collateral and for the Collateral at all times following such change to have a valid, legal and
perfected security interest as contemplated in the Collateral Documents. Company also agrees
promptly to notify Collateral Trustee if any material portion of the Collateral is damaged or
destroyed;



(o) Annual Collateral Verification. Each year, at the time of delivery of annual
financial statements with respect to the preceding Fiscal Year pursuant to Section 5.1(b), Company
shall deliver to Collateral Trustee, with a copy to Administrative Agent, an Officer’s Certificate
(i) either confirming that there has been no change in the information contained in the Schedules
to this Agreement or in the Collateral Documents since the Closing Date or the date of the most
recent certificate delivered pursuant to this Section and/or identifying such changes (ii)
certifying that all Uniform Commercial Code financing statements (including fixtures filings, as
applicable) or other appropriate filings, recordings or registrations, have been filed of record in
each governmental, municipal or other appropriate office in each jurisdiction identified pursuant
to clause (i) above to the extent necessary to perfect the security interests under the Collateral
Documents for a period of not less than 18 months after the date of such certificate (except as
noted therein with respect to any continuation statements to be filed within such period);



(p) Engineering Report. Not later than 60 days after June 30th an Internal
Engineering Report and December 31st of each year an Independent Engineering Report, in
each case certified by the Internal Engineer or the Independent Engineer, as applicable, to be true
and accurate and to have been prepared in accordance with the standard procedures used in the Oil
and Gas Business, and together with each such Engineering Report, a certificate of an Authorized
Officer (in his or her capacity as an officer of Company and not in his or her individual capacity)
certifying that, to the best of his knowledge (1) the information contained in the Engineering
Report and any other information delivered in connection therewith is true and correct in all
material respects, (2) Company and the Guarantors own good and defensible title to their Oil and
Gas Properties evaluated in such Engineering Report and such Properties are free and clear of all
Liens except for Permitted Liens, (3) except as set forth on an exhibit to the certificate, on a
net basis there are no gas imbalances, take-or-pay, Production Payments or other prepayments with
respect to its Oil and Gas Properties evaluated in such Engineering Report which would require
Company or the Guarantors to deliver Hydrocarbons produced from such Oil and Gas Properties or make
cash payments at some future time without then or thereafter receiving full payment therefor, and
(4) except as set forth on an exhibit to the certificate, none of its Oil and Gas Properties have
been sold since the date of the Engineering Report, most recently delivered pursuant to this
subsection 5.1(p), which exhibit shall list all of its Oil and Gas Properties sold and in such
detail as is reasonably required by the Administrative Agent;



(q) [Reserved]; and



(r) Other Information. (A) Promptly upon their becoming available, copies of (i) all
financial statements, proxy statements and other similar reports and notices sent or made available
generally by Company to its security holders acting in such capacity or by any Subsidiary of
Company to its security holders other than Company or another Subsidiary of Company, (ii) all
regular and periodic reports and all registration statements and prospectuses, if any, filed by
Company or any of its Subsidiaries with any securities exchange or with the Securities and Exchange
Commission and (iii) all press releases and other statements made available generally by Company or
any of its Subsidiaries to the public concerning material developments in the business of Company
or any of its Subsidiaries, and (B) such other information and data with respect to Company or any
of its Subsidiaries as from time to time may be reasonably requested by Administrative Agent or any
Lender.



5.2 Existence. Except as otherwise permitted under Section 6.9, each Credit Party will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect its
existence and all rights and franchises, licenses and permits material to its business except where
failure to maintain such rights, franchises, licenses and permits either is no longer required by
applicable law or could not reasonably be expected to have a Material Adverse Effect or that the
loss thereof is not disadvantageous in any material respect to such Person or to Lenders.



5.3 Payment of Taxes and Claims. Each Credit Party will, and will cause each of its
Subsidiaries to, pay all Taxes imposed upon it or any of its properties or assets or in respect of
any of its income, businesses or franchises before any penalty or fine accrues thereon, and all
claims (including claims for labor, services, materials and supplies) for sums that have become due
and payable and that by law have or may become a Lien upon any of its properties or assets, prior
to the time when any penalty or fine shall be incurred with respect thereto; provided, no
such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as (a) adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP shall have been made therefor, and (b) in
the case of a Tax or claim which has or may become a Lien against any of the Collateral, such
contest proceedings conclusively operate to stay the sale of any portion of the Collateral to
satisfy such Tax or claim. No Credit Party will, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any Person (other than
Company or any of its Subsidiaries).



5.4 Maintenance of Properties. Each Credit Party will, and will cause each of its Restricted
Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all material properties used or useful in the business of Company
and its Restricted Subsidiaries and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof.



5.5 Insurance. Company will maintain or cause to be maintained, with financially sound and
reputable insurers, such public liability insurance, third party property damage insurance,
business interruption insurance and casualty insurance with respect to liabilities, losses or
damage in respect of the assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and otherwise on such terms and
conditions as shall be customary for such Persons. Without limiting the generality of the
foregoing, Company will maintain or cause to be maintained (a) flood insurance with respect to each
Flood Hazard Property that is located in a community that participates in the National Flood
Insurance Program, in each case in compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, and (b) casualty insurance on the Collateral under such
policies of insurance, with such insurance companies, in such amounts, with such deductibles, and
covering such risks as are at all times carried or maintained under similar circumstances by
Persons of established reputation engaged in similar businesses. Each such policy of insurance
shall (i) name Collateral Trustee, on behalf of Secured Parties as an additional insured thereunder
as its interests may appear and (ii) in the case of each casualty insurance policy, contain a
standard loss payable clause or endorsement that names Collateral Trustee, on behalf of Secured
Parties as the loss payee thereunder and provides for at least thirty days’ prior written notice to
Collateral Trustee of any modification or cancellation of such policy.



5.6 Books and Records; Inspections. Each Credit Party will, and will cause each of its
Subsidiaries to (i) keep proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of Company and each of its
Subsidiaries in accordance with GAAP and (ii) permit, upon notice to Administrative Agent by a
Lender, any authorized representatives designated by any such Lender to visit and inspect any of
the properties of any Credit Party and any of its respective Subsidiaries, to inspect, copy and
take extracts from its and their financial and accounting records, and to discuss its and their
affairs, finances and accounts with its and their officers and independent public accountants, all
upon reasonable notice and at such reasonable times during normal business hours and as often as
may reasonably be requested.



5.7 Lenders Meetings. Company will, upon the request of Administrative Agent or Requisite
Lenders, participate in a meeting of Administrative Agent and Lenders once during each Fiscal Year
to be held at Company’s corporate offices (or at such other location as may be agreed to by Company
and Administrative Agent) at such time as may be agreed to by Company and Administrative Agent.



5.8 Compliance with Laws. Each Credit Party will comply, and shall use reasonable efforts to
cause each of its Subsidiaries and all other Persons, if any, on or occupying any Facilities to
comply, with the requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including all Environmental Laws), noncompliance with which could
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.



5.9 Environmental.



(a) Environmental Disclosure. Company will deliver to Administrative Agent and
Lenders:



(i) as soon as practicable following receipt thereof, notification of, and, upon request,
copies of all material environmental audits, investigations, analyses and reports (except to the
extent where doing so would, upon advice of Company counsel, jeopardize an applicable privilege,
and then only to the extent Company, the Administrative Agent and the Lenders cannot reasonably
agree on a confidentiality agreement that protects such privilege), whether prepared by personnel
of Company or any of its Subsidiaries or by independent consultants, Governmental Authorities or
any other Persons, with respect to significant environmental matters at any Facility or Oil and Gas
Properties or with respect to any Environmental Claims;



(ii) promptly upon the occurrence thereof, written notice describing in reasonable detail (1)
any Release required to be reported to any federal, state or local governmental or regulatory
agency under any applicable Environmental Laws that could reasonably result in a Material Adverse
Effect, (2) any remedial action taken by Company or any other Person in response to any Hazardous
Materials Activities, or any Environmental Claims that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect, and (3) Company’s discovery of any
occurrence or condition at or from any real property adjoining or in the vicinity of any Facility
or Oil and Gas Properties that could cause the Company or any of its Subsidiaries to be required
under Environmental Law to undertake remedial action or cause such Facility or Oil and Gas
Properties or any part thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws that could reasonably be
expected to result in a Material Adverse Effect;



(iii) as soon as practicable following the sending or receipt thereof by Company or any of its
Subsidiaries, a copy of any material written communications (except to the extent where doing so
would, upon advice of Company counsel, jeopardize an applicable privilege, and then only to the
extent Company, the Administrative Agent and the Lenders cannot reasonably agree on a
confidentiality agreement that protects such privilege), with respect to (1) any Environmental
Claims that, individually or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, (2) any Release required to be reported to any federal, state or local governmental
or regulatory agency that could reasonably be expected to result in a material Environmental Claim,
and (3) any written request for information from any Governmental Agency that suggests such
authority is investigating whether Company or any of its Subsidiaries may be potentially
responsible for any Hazardous Materials Activity that could reasonably be expected to result in a
Material Adverse Effect;



(iv) prompt written notice describing in reasonable detail (1) any proposed acquisition of
stock, assets, or property by Company or any of its Subsidiaries that could reasonably be expected
to expose Company or any of its Subsidiaries to, or result in, Environmental Claims that could
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and (2)
any proposed action to be taken by Company or any of its Subsidiaries to modify current operations
in a manner that could reasonably be expected to subject Company or any of its Subsidiaries to any
additional material obligations or requirements under any Environmental Laws that could reasonably
result in a Material Adverse Effect; and



(v) with reasonable promptness, such other documents and information as from time to time may
be reasonably requested by Administrative Agent in relation to any matters disclosed pursuant to
this Section 5.9(a).



(b) Hazardous Materials Activities, Etc. Each Credit Party shall promptly take, and
shall use reasonable efforts to cause each of its Subsidiaries promptly to take, any and all
actions necessary to (i) cure any violation of applicable Environmental Laws by Company or its
Subsidiaries that could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and (ii) promptly discharge any Environmental Claim against Company or any
of its Subsidiaries and discharge any obligations it may have to any Person thereunder where
failure to do so could reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.



5.10 Subsidiaries. In the event that (i) any Person becomes a Domestic Subsidiary that is a
Material Subsidiary or (ii) any Domestic Subsidiary of Company in existence as of the Closing Date
which is not a Guarantor becomes a Material Subsidiary, Company shall (a) promptly cause such
Domestic Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral Trustee a Counterpart
Agreement, and (b) take all such actions and execute and deliver, or cause to be executed and
delivered, all such documents, instruments, agreements, and certificates as are similar to those
described in Sections 3.1(b), 3.1(i) (provided that Mortgages on Hydrocarbon Interests shall be
required only to the extent provided in Section 5.11), 3.1(j) and 3.1(n), and in the case of each
Leasehold Property that is a Closing Date Mortgaged Property, (1) a Landlord Consent and Estoppel
and (2) Evidence that such Leasehold Property is a Recorded Leasehold Interest. In the event that
any Person becomes a Foreign Subsidiary of Company that is a Restricted Subsidiary, and the
ownership interests of such Foreign Subsidiary are owned by Company or by any Domestic Subsidiary
thereof, Company shall, or shall cause such Domestic Subsidiary to, deliver, all such documents,
instruments, agreements, and certificates as are similar to those described in Sections 3.1(b), and
Company shall take, or shall cause such Domestic Subsidiary to take, all of the actions referred to
in Section 3.1(j)(i) necessary to grant and an Acceptable Security Interest under the Pledge and
Security Agreement in 65% of such ownership interests. With respect to each such Subsidiary,
Company shall promptly send to Administrative Agent written notice setting forth with respect to
such Person (i) the date on which such Person became a Subsidiary of Company, and (ii) all of the
data required to be set forth in Schedules 4.1 and 4.2 with respect to all Subsidiaries of Company;
provided, such written notice shall be deemed to supplement Schedule 4.1 and 4.2 for all
purposes hereof.



5.11 Additional Material Real Estate Assets.



(a) In the event that any Credit Party (i) acquires a Material Real Estate Asset, (ii)
acquires any Hydrocarbon Interests which Hydrocarbon Interest produces in commercially reasonable
quantities, or (iii) develops a previously undeveloped Hydrocarbon Interest, such Hydrocarbon
Interest produces in commercially reasonable quantities and such Hydrocarbon Interest has not
otherwise been made subject to the Lien of the Collateral Documents in favor of Collateral Trustee,
for the benefit of Secured Parties, or (iv) a Real Estate Asset owned or leased on the Closing Date
becomes a Material Real Estate Asset and such interest has not otherwise been made subject to the
Lien of the Collateral Documents in favor of Collateral Trustee, for the benefit of Secured
Parties, then in each case such Credit Party, contemporaneously with the occurrence of any of the
events described in clauses (i) or (iv) of this Section 5.11 and semi-annually with respect to the
events described in clauses (ii) and (iii) of this Section 5.11, shall take all such actions and
execute and deliver, or cause to be executed and delivered, all such mortgages, documents,
instruments, agreements, opinions and certificates similar to those described in Sections 3.1(i),
3.1(j) and 3.1(k) with respect to each such Material Real Estate Asset or Hydrocarbon Interests
that Administrative Agent shall reasonably request to create, subject to any filing and/or
recording referred to herein, an Acceptable Security Interest in such Material Real Estate Assets
or Hydrocarbon Interests. In addition to the foregoing, Company shall, at the request of Requisite
Lenders, deliver, from time to time, to Administrative Agent such appraisals as are required by law
or regulation of Real Estate Assets with respect to which Collateral Trustee has been granted a
Lien, but, other than after the occurrence and during the continuance of an Event of Default, not
more than one such appraisal in any twelve month period.



(b) No later than ninety (90) days after June 30th and December 31st of
each year, Company and the Guarantors shall, if required, take all such actions and execute and
deliver, or cause to be executed and delivered, all such mortgages, documents, instruments,
agreements, opinions and certificates similar to those described in Section 3.1(i) with respect to
additional Hydrocarbon Interests which have not otherwise been made subject to the Lien of the
Collateral Documents in favor of Collateral Trustee, for the benefit of Secured Parties, such that
the aggregate of Hydrocarbon Interests subject to the Lien of the Collateral Documents in favor of
Collateral Trustee, for the benefit of Secured Parties, shall represent no less than 80% of the
value of the Proven Reserves of Company and the Guarantors based on the most recent Engineering
Report.



5.12 Title Opinions. The Company shall from time to time upon the reasonable request of the
Administrative Agent after each scheduled redetermination of the Borrowing Base commencing with the
July 1, 2005 Borrowing Base redetermination, take such actions and execute and deliver such
documents and instruments as the Administrative Agent shall require to ensure that the
Administrative Agent shall have received satisfactory title opinions (including, if requested,
supplemental or new title opinions addressed to it) or other title evidence, which title opinions
or other title evidence shall be in form and substance acceptable to the Administrative Agent in
its sole discretion and shall include, if title opinions are requested by the Administrative Agent,
opinions regarding the before payout and after payout ownership interests held by the Company and
the Guarantors, for all wells located on the Oil and Gas Properties covered thereby as to the
ownership of Oil and Gas Properties of the Company and the Guarantors, and reflecting that the
Administrative Agent has an Acceptable Security Interest in such Oil and Gas Properties of the
Company and the Guarantors, constituting at least 80% of the value of the Proven Reserves of
Company and the Guarantors based on the most recent Engineering Report. Notwithstanding the
foregoing, the Administrative Agent and each Lender acknowledge and agree that the title opinions
and other evidence of title furnished under and in satisfaction of Section 3.1(i)(ii) shall satisfy
the requirements of this Section 5.12 with respect to the Oil and Gas Properties of the Company and
the Guarantors owned as of the Closing Date.



5.13 Swap Agreement. It is contemplated by the Company that the J. Aron Swap will remain in
place during the term of this Agreement on terms and conditions satisfactory to the Administrative
Agent; provided, however, the Company shall have the right to terminate the J. Aron Swap, but only
if the Borrowing Base shall have been redetermined before giving effect to the termination and,
after giving effect thereto, no Event of Default would exist and Total Utilization would not exceed
the lesser of the Borrowing Base and the Revolving Commitments.



5.14 Further Assurances. At any time or from time to time upon the request of Administrative
Agent, each Credit Party will, at its expense, promptly execute, acknowledge and deliver such
further documents and do such other acts and things as Administrative Agent or Collateral Trustee
may reasonably request in order to effect fully the purposes of the Credit Documents, including
providing Lenders with any information requested pursuant to Section 10.21. In furtherance and not
in limitation of the foregoing, each Credit Party shall take such actions as Administrative Agent
or Collateral Trustee may reasonably request from time to time to ensure that the Obligations are
guarantied by the Guarantors and, subject to the limitations set forth in Section 5.11(b) above and
the limitations on security provided in the Collateral Documents, are secured by substantially all
of the assets of Company and the Guarantors and all of the outstanding Capital Stock of Company and
its Subsidiaries other than Unrestricted Subsidiaries and any Subsidiaries of Unrestricted
Subsidiaries (subject to limitations contained in the Credit Documents with respect to Foreign
Subsidiaries).



5.15 Non-Consolidation. Unless otherwise consented to by Agents or Requisite Lenders, Company
will and will cause each of its Material Subsidiaries to: (i) maintain entity records and books of
account separate from those of any other entity which is an Affiliate of such entity; (ii) not
commingle its funds or assets with those of any other entity which is an Affiliate of such entity;
and (iii) provide that its board of directors or other analogous governing body will hold all
appropriate meetings to authorize and approve such entity’s actions, which meetings will be
separate from those of other entities.



SECTION 6 NEGATIVE COVENANTS



Each Credit Party covenants and agrees that, so long as any Commitment is in effect and until
payment in full of all Obligations and cancellation or expiration of all Letters of Credit, such
Credit Party shall perform, and shall cause each of its Restricted Subsidiaries to perform, all
covenants in this Section 6.



6.1 Indebtedness. No Credit Party shall, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness, except:



(a) the Obligations;



(b) unsecured Indebtedness of any Guarantor to Company or to any other Guarantor, or of
Company to any Guarantor;



(c) the Senior Secured Indebtedness;



(d) Indebtedness incurred by Company or any of its Restricted Subsidiaries arising from
agreements providing for indemnification, adjustment of purchase price or similar obligations, or
from guaranties or letters of credit, surety bonds or performance bonds securing the performance of
Company or any such Restricted Subsidiary pursuant to such agreements, in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or Restricted Subsidiary of Company
or any of its Restricted Subsidiaries;



(e) Indebtedness which may be deemed to exist pursuant to any guaranties, performance, surety,
statutory, appeal or similar obligations incurred in the ordinary course of business;



(f) Indebtedness in respect of netting services, overdraft protections and otherwise in
connection with deposit accounts;



(g) guaranties in the ordinary course of business of the obligations of suppliers, customers,
franchisees and licensees of Company and its Restricted Subsidiaries;



(h) guaranties by Company of Indebtedness of a Guarantor or guaranties by a Restricted
Subsidiary of Company of Indebtedness of Company or a Guarantor with respect, in each case, to
Indebtedness otherwise permitted to be incurred pursuant to this Section 6.1;



(i) Indebtedness described in Schedule 6.1, but not any extensions, renewals or replacements
of such Indebtedness except (i) renewals and extensions expressly provided for in the agreements
evidencing any such Indebtedness as the same are in effect on the date of this Agreement and (ii)
refinancings and extensions of any such Indebtedness if the terms and conditions thereof are not
less favorable to the obligor thereon or to the Lenders than the Indebtedness being refinanced or
extended, and the average life to maturity thereof is greater than or equal to that of the
Indebtedness being refinanced or extended; provided, such Indebtedness permitted under the
immediately preceding clause (i) or (ii) above shall not (A) include Indebtedness of an obligor
that was not an obligor with respect to the Indebtedness being extended, renewed or refinanced, (B)
exceed in a principal amount the Indebtedness being renewed, extended or refinanced or (C) be
incurred, created or assumed if any Default or Event of Default has occurred and is continuing or
would result therefrom;



(j) Indebtedness incurred under the Swap Agreements as of the Closing Date;



(k) additional Indebtedness incurred under the Swap Agreements after the Closing Date or any
replacement thereof, but in no event covering the expected production of Hydrocarbons from more
than 100% of Proved Developed Producing Reserves, as set forth in the most recent Engineering
Report delivered pursuant to Section 5.1(p);



(l) Indebtedness incurred under any Interest Rate Agreement or Currency Agreement otherwise
entered into in the ordinary course of Company’s or any of its Restricted Subsidiaries’ businesses
and not for speculative purposes;



(m) Qualified Junior Debt;



(n) in-kind obligations relating to net oil and natural gas balancing positions arising in the
ordinary course of business;



(o) any obligation arising from agreements of Company or a Restricted Subsidiary of Company
providing for indemnification, guarantee, contingency payment obligation based on the performance
of the acquired or disposed asset or similar obligations, in each case, incurred or assumed in
connection with the acquisition or disposition of any business, asset or Capital Stock of a
Guarantor, to the extent permitted hereunder;



(p) Indebtedness with respect to Capital Leases and purchase money Indebtedness secured by
Liens permitted by Section 6.2 (including any Indebtedness acquired in connection with a Permitted
Acquisition) in an aggregate amount not to exceed at any time $5,000,000; provided, that
such purchase money Indebtedness (other than Indebtedness acquired in connection with a Permitted
Acquisition) (i) shall be secured only by the asset acquired in connection with the incurrence of
such Indebtedness, and (ii) shall constitute not less than 70% and not more than 100% of the
aggregate consideration paid with respect to such asset;



(q) other unsecured Indebtedness of Company and its Restricted Subsidiaries, in an aggregate
amount not to exceed at any time $10,000,000; and



(r) up to $20,000,000 aggregate principal amount of unsecured subordinated debt outstanding at
any one time; provided any such Indebtedness incurred pursuant to this Section 6.1(r) in an
aggregate principal amount of $10,000,000 or more in any one transaction or series of related
transactions shall be on subordination terms and conditions reasonably acceptable to the
Administrative Agent.



6.2 Liens. No Credit Party shall, nor shall it permit any of its Restricted Subsidiaries to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any
property or asset of any kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Restricted Subsidiaries, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit the filing of, or permit to remain
in effect, any financing statement or other similar notice of any Lien with respect to any such
property, asset, income or profits under the UCC of any State or under any similar recording or
notice statute, except:



(a) Liens in favor of Collateral Trustee for the benefit of Secured Parties granted pursuant
to any Credit Document;



(b) Liens for Taxes (i) not yet due and payable or (ii) if obligations with respect to such
Taxes are being contested in good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as adequate reserves or other appropriate provision, as shall be
required in conformity with GAAP, shall have been made with respect to such Taxes;



(c) statutory Liens of landlords, banks (and rights of set-off), of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens imposed by law (other than any such
Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in
each case incurred in the ordinary course of business (i) for amounts not yet overdue or (ii) for
amounts that are overdue and that (in the case of any such amounts overdue for a period in excess
of five days) are being contested in good faith by appropriate proceedings, so long as such
reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made
for any such contested amounts;



(d) Liens incurred in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government
contracts, trade contracts, performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money or other Indebtedness), so long as no
foreclosure, sale or similar proceedings have been commenced with respect to any portion of the
Collateral on account thereof;



(e) easements, rights-of-way, restrictions, encroachments, and other minor defects or
irregularities in title, in each case which do not and will not interfere in any material respect
with the ordinary conduct of the business of Company or any of its Restricted Subsidiaries;



(f) any interest or title of a lessor or sublessor under any lease of real estate permitted
hereunder;



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



(h) purported Liens evidenced by the filing of precautionary UCC financing statements relating
solely to consignment of goods or operating leases of personal property entered into in the
ordinary course of business;



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



(j) any zoning or similar law or right reserved to or vested in any governmental office or
agency to control or regulate the use of any real property;



(k) licenses of patents, trademarks and other intellectual property rights granted by Company
or any of its Restricted Subsidiaries in the ordinary course of business and not interfering in any
respect with the ordinary conduct of the business of Company or such Restricted Subsidiary;



(l) Liens described in Schedule 6.2 or on a title report delivered pursuant to Section
3.1(i)(iv);



(m) Liens reserved in oil and gas mineral leases for bonus, royalty, or rental payments
payable to the lessor thereunder and for compliance with the terms of such leases; provided
that the amount of any obligations secured thereby that are delinquent, that are not diligently
contested in good faith and for which adequate reserves are not maintained by Company or the
applicable Restricted Subsidiary, as the case may be, do not exceed, at any time outstanding, the
amount owing by Company or any Restricted Subsidiary, as applicable, for one month’s payments as
due thereunder;



(n) Liens arising under operating agreements, joint venture agreements, partnership
agreements, oil and gas leases, farm-out and farm-in agreements, division orders, contracts for the
sale, transportation or exchange of oil or natural gas, unitization and pooling declarations and
agreements, area of mutual interest agreements that are customary in the Oil and Gas Business;
provided that the amount of any obligations secured thereby that are delinquent, that are
not diligently contested in good faith and for which adequate reserves are not maintained by
Company or the applicable Restricted Subsidiary, as the case may be, do not exceed, at any time
outstanding, the amount owing by Company or any Restricted Subsidiary, as applicable, for one
month’s billed operating expenses or other expenditures attributable to such entity’s interest in
the Property covered thereby;



(o) Liens on, or related to, properties or assets to secure all or part of the costs incurred
in the ordinary course, and consistent with past practice, of the Oil and Gas Business for the
exploration, drilling, development, production, processing, transportation, marketing, storage or
operation thereof;



(p) Liens securing Indebtedness under the Senior Secured Debt Documents, the Swap Agreements
or Indebtedness permitted under Section 6.1(k); provided such Liens are (i) subordinate to
the Liens incurred hereunder and pursuant to the Collateral Documents and (ii) subject to the
Collateral Trust Agreement;



(q) Liens on cash or cash equivalents securing the Swap Agreements or Indebtedness permitted
under Section 6.1(k) to the extent that the sum of such cash or cash equivalents constitutes the
proceeds of any draw on any letter of credit issued to secure the Swap Agreements or Indebtedness
permitted under Section 6.1(k);



(r) Liens on property (including Capital Stock) existing at the time of acquisition of the
property by Company or any Restricted Subsidiary; provided that such Liens were in existence prior
to such acquisition, and not incurred in contemplation of, such acquisition;



(s) Liens on property of a Person existing at the time such Person is merged with or into or
consolidated with Company or any Restricted Subsidiary; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not extend to any
assets other than those of the Person merged into or consolidated with Company or the Restricted
Subsidiary; and



(t) Liens securing Indebtedness incurred pursuant to Section 6.1(p).



6.3 Equitable Lien. If any Credit Party or any of its Restricted Subsidiaries shall create or
assume any Lien upon any of its properties or assets, whether now owned or hereafter acquired,
other than Permitted Liens, it shall make or cause to be made effective provisions whereby the
Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness
secured thereby as long as any such Indebtedness shall be so secured; provided,
notwithstanding the foregoing, this covenant shall not be construed as a consent by Requisite
Lenders to the creation or assumption of any such Lien not otherwise permitted hereby.



6.4 No Further Negative Pledges. Except with respect to (a) specific property encumbered to
secure payment of particular Indebtedness or to be sold pursuant to an executed agreement with
respect to a permitted asset sale, (b) restrictions by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses and similar agreements
entered into in the ordinary course of business (provided that such restrictions are limited to the
property or assets secured by such Liens or the property or assets subject to such leases, licenses
or similar agreements, as the case may be) and (c) restrictions pursuant to the Credit Documents,
the Senior Secured Debt Documents or the Swap Agreement Documents, no Credit Party nor any of its
Restricted Subsidiaries shall enter into any agreement prohibiting the creation or assumption of
any Lien upon any of its properties or assets, whether now owned or hereafter acquired.



6.5 Restricted Junior Payments. No Credit Party shall, nor shall it permit any of its
Restricted Subsidiaries or Affiliates through any manner or means or through any other Person to,
directly or indirectly, declare, order, pay, make or set apart, or agree to declare, order, pay,
make or set apart, any sum for any Restricted Junior Payment except that so long as no Default
exists or would be caused thereby, and Utilization is less than 90% after giving effect to such
Restricted Junior Payment, Company may make Restricted Junior Payments.



6.6 Restrictions on Restricted Subsidiary Distributions. Except as provided herein, no Credit
Party shall, nor shall it permit any of its Restricted Subsidiaries to, create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary of Company to (a) pay dividends or make any other
distributions on any of such Restricted Subsidiary’s Capital Stock owned by Company or any other
Restricted Subsidiary of Company, (b) repay or prepay any Indebtedness owed by such Restricted
Subsidiary to Company or any other Restricted Subsidiary of Company, (c) make loans or advances to
Company or any other Restricted Subsidiary of Company, or (d) transfer any of its property or
assets to Company or any other Restricted Subsidiary of Company other than restrictions by reason
of customary provisions restricting assignments, subletting or other transfers contained in leases,
licenses, joint venture agreements and similar agreements entered into in the ordinary course of
business or that are or were created by virtue of any transfer of, agreement to transfer or option
or right with respect to any property, assets or Capital Stock not otherwise prohibited under this
Agreement, provided that the foregoing shall not apply to customary restrictions or
conditions imposed by (i) law or (ii) any of the Credit Documents, Senior Secured Debt Documents or
the Swap Agreement Documents.



6.7 Investments. No Credit Party shall, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, make or own any Investment in any Person, including
without limitation any Joint Venture, except:



(a) Investments in Cash and Cash Equivalents;



(b) equity Investments owned as of the Closing Date in any Subsidiary and Investments made
after the Closing Date in any Guarantor;



(c) Investments (i) consisting of trade receivables arising in the ordinary course of business
and consistent with past practices, (ii) in any Securities received in satisfaction or partial
satisfaction thereof from financially troubled account debtors and (ii) deposits, prepayments and
other credits to suppliers made in the ordinary course of business consistent with the past
practices of Company and its Restricted Subsidiaries;



(d) intercompany loans to the extent permitted under Section 6.1(b);



(e) Consolidated Capital Expenditures;



(f) loans and advances to employees of Company and its Restricted Subsidiaries made in the
ordinary course of business in an aggregate principal amount not to exceed $2,000,000 in the
aggregate outstanding at any time;



(g) Investments made in connection with Permitted Acquisitions permitted pursuant to Section
6.9;



(h) Investments described in Schedule 6.7;



(i) Investments in any Interest Rate Agreement, Currency Agreement, or the Swap Agreements;



(j) Permitted Business Investments; and



(k) other Investments in an aggregate amount not to exceed at any time $10,000,000.



Notwithstanding the foregoing, in no event shall any Credit Party make any Investment which results
in or facilitates in any manner any Restricted Junior Payment not otherwise permitted under the
terms of Section 6.5.



6.8 Financial Covenants.




(a) Interest Coverage Ratio. Company shall not permit the Interest Coverage
Ratio as of the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending
September 30, 2005, to be less than 2.5 to 1.0.




(b) Leverage Ratio. Company shall not permit as of any day the Leverage Ratio
for the four Fiscal Quarters for which financial statements have most recently been required
to be delivered under this Agreement immediately preceding such day to exceed (i) 4.5 to 1.0
through December 31, 2005; (ii) 4.25 to 1.0 from January 1, 2006 through March 31, 2006; and
(iii) 4.0 to 1.0 thereafter.




(c) Current Ratio. Company shall not permit the ratio of its current assets
(including for the purposes hereof, any Unused Revolving Commitment Amount if the Company
can meet the conditions to the making of Revolving Loans) to its current liabilities
(excluding for purposes hereof, any current maturities of Revolving Loans) as of the last
day of any Fiscal Quarter, beginning with the Fiscal Quarter ending September 30, 2005, to
be less than 1.0 to 1.0. For purposes of this Section, current liabilities and current
assets shall exclude any liability or asset representing a valuation account arising from
the application of SFAS 133 and 143, and any deferred taxes attributable thereto.




(d) [Reserved].




(e) [Reserved].




(f) [Reserved].




(g) [Reserved].




(h) Certain Calculations. With respect to any period during which a Permitted
Acquisition or an Asset Sale has occurred (each, a “Subject Transaction”), for purposes of
determining compliance with the financial covenants set forth in this Section 6.8,
Consolidated Adjusted EBITDA and Consolidated EBITDAX shall be calculated with respect to
such period on a pro forma basis (including pro forma adjustments arising out of events
which are directly attributable to a specific transaction, are factually supportable and are
expected to have a continuing impact, in each case determined on a basis consistent with
Article 11 of Regulation S-X promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission, which would include cost savings resulting
from head count reduction, closure of facilities and similar restructuring charges, which
pro forma adjustments shall be certified by the chief financial officer of Company) using
the historical audited financial statements of any business so acquired or to be acquired or
sold or to be sold and the consolidated financial statements of Company and its Subsidiaries
which shall be reformulated as if such Subject Transaction, and any Indebtedness incurred or
repaid in connection therewith, had been consummated or incurred or repaid at the beginning
of such period (and assuming that such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant acquisition at the weighted average of
the interest rates applicable to outstanding Loans incurred during such period).



6.9 Fundamental Changes; Disposition of Assets; Acquisitions. No Credit Party shall, nor
shall it permit any of its Restricted Subsidiaries to, enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution),
or convey, sell, lease or sub-lease (as lessor or sublessor), exchange, transfer or otherwise
dispose of, in one transaction or a series of transactions, all or any part of its business, assets
or property of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, or acquire by purchase or otherwise (other
than purchases or other acquisitions of inventory, materials and equipment and Consolidated Capital
Expenditures in the ordinary course of business) all or substantially all of the business, property
or fixed assets of, or stock or other evidence of beneficial ownership of, any Person or any
division or line of business or other business unit of any Person, except:



(a) any Restricted Subsidiary of Company may be merged with or into Company or any Guarantor,
or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may
be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of
transactions, to Company or any Guarantor; provided, in the case of such a merger, Company
or such Guarantor, as applicable shall be the continuing or surviving Person;




(b) sales or other dispositions of assets that do not constitute Asset Sales;



(c) Asset Sales, the proceeds of which (valued at the principal amount thereof in the case of
non-Cash proceeds consisting of notes or other debt Securities and valued at fair market value in
the case of other non-Cash proceeds) (i) are less than $5,000,000 with respect to any single Asset
Sale or series of related Asset Sales and (ii) when aggregated with the proceeds of all other Asset
Sales made within the same Fiscal Year, are less than $10,000,000; provided (1) the
consideration received for such assets shall be in an amount at least equal to the fair market
value thereof (determined in good faith by a Financial Officer of Company) and (2) no less than 75%
thereof shall be paid in Cash




(d) disposals of obsolete, worn out or surplus property;



(e) Permitted Acquisitions, provided, that in connection with any Permitted
Acquisition, any Restricted Subsidiary of Company may be merged with or into any company acquired
in such Permitted Acquisition so long as such Guarantor shall be the continuing or surviving
Person;



(f) the sale of (i) Oil and Gas Properties, Real Estate Assets and other related assets and
property constituting the Company’s coalbed methane properties and acreage in Pennsylvania, and
(ii) other Oil and Gas Properties not containing Proven Reserves in the ordinary course of
business; provided, that, the aggregate value of Oil and Gas Properties so abandoned,
farmed-out or subleased pursuant to this clause (ii) during any six-month period commencing January
1 and ending June 30 or commencing July 1 and ending December 31 shall not exceed $5,000,000;



(g) the trade or exchange by Company or any Restricted Subsidiary of any Oil and Gas Property
or interest therein owned or held by Company or such Restricted Subsidiary for any Oil and Gas
Property or interest therein owned or held by another Person, including any cash or Cash
Equivalents necessary in order to achieve an exchange of equivalent value; provided, that,
the aggregate value of trades or exchanges permitted by this paragraph (g) shall not exceed
$5,000,000 during any six-month period commencing January 1 and ending June 30 or commencing July 1
and ending December 31;



(h) the sale of Oil and Gas Properties in connection with tax credit transactions complying
with Section 29 of the Internal Revenue of 1986, as amended from time to time (“Section 29
Properties”), which sale does not result in a reduction in Company’s or its Restricted
Subsidiaries’, as the case may be, right to receive the cash flow from such Oil and Gas Properties
through the Revolving Loan Maturity Date and which sale is on terms reasonably acceptable to the
Administrative Agent; and




(i) Investments made in accordance with Section 6.7.



6.10 Disposal of Subsidiary Interests. Except for (i) any sale of all of its interests in the
Capital Stock of any of its Subsidiaries in compliance with the provisions of Section 6.9 and (ii)
any pledge of the Capital Stock of Company or its Subsidiaries to secure the Obligations hereunder
or the Obligations under the Senior Secured Notes or any Swap Agreement, no Credit Party shall, nor
shall it permit any of its Restricted Subsidiaries to, (a) directly or indirectly sell, assign,
pledge or otherwise encumber or dispose of any Capital Stock of any of its Restricted Subsidiaries,
except to qualify directors if required by applicable law; or (b) permit any of its Restricted
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise encumber or dispose of any
Capital Stock of any of its Restricted Subsidiaries, except to another Credit Party (subject to the
restrictions on such disposition otherwise imposed hereunder), or to qualify directors if required
by applicable law.



6.11 Sales and Lease-Backs. No Credit Party shall, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease of any property (whether real, personal or mixed), whether
now owned or hereafter acquired, which such Credit Party (a) has sold or transferred or is to sell
or to transfer to any other Person (other than Company or any of its Restricted Subsidiaries), or
(b) intends to use for substantially the same purpose as any other property which has been or is to
be sold or transferred by such Credit Party to any Person (other than Company or any of its
Restricted Subsidiaries) in connection with such lease.



6.12 Transactions with Shareholders and Affiliates. No Credit Party shall, nor shall it
permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist
any transaction (including the purchase, sale, lease or exchange of any property or the rendering
of any service) with any holder of 10% or more of any class of Capital Stock of Company or any of
its Restricted Subsidiaries or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Restricted Subsidiary, as the case may be, than those that
might be obtained at the time from a Person who is not such a holder or Affiliate;
provided, the foregoing restriction shall not apply to (a) any transaction between Company
and any Guarantor; (b) reasonable and customary fees paid to members of the board of directors (or
similar governing body) of Company and its Restricted Subsidiaries; (c) compensation arrangements
for officers and other employees of Company and its Restricted Subsidiaries entered into in the
ordinary course of business; and (d) transactions described in Schedule 6.12.



6.13 Conduct of Business. From and after the Closing Date, no Credit Party shall, nor shall
it permit any of its Subsidiaries to, engage in any business other than (i) Oil and Gas Business,
and (ii) such other lines of business as may be consented to by Requisite Lenders.



6.14 Forward Sales. Except in accordance with ordinary practice in the Oil and Gas Business,
enter into or permit to exist any advance payment agreement or other arrangement pursuant to which
Company or any of its Restricted Subsidiaries, having received full or substantial payment of the
purchase price for a specified quantity of Hydrocarbons upon entering such agreement or
arrangement, is required to deliver, in one or more installments subsequent to the date of such
agreement or arrangement, such quantity of Hydrocarbons pursuant to and during the terms of such
agreement or arrangement; provided that any Production Payment is prohibited without the
consent of the Requisite Lenders, except for those certain Volumetric Production Payments to be
made under the terms of that certain Agreement of Limited Partnership of Blue Spruce Investments
Limited partnership dated as of September 1, 1993..



6.15 Amendments or Waivers of Certain Related Agreements. No Credit Party shall nor shall it
permit any of its Restricted Subsidiaries to, agree to any material amendment, restatement,
supplement or other modification to, or waiver of, any of its material rights under any Related
Agreement (other than the Senior Secured Indebtedness and future transactions otherwise permitted
by the terms of this Agreement) after the Closing Date without in each case obtaining the prior
written consent of Requisite Lenders to such amendment, restatement, supplement or other
modification or waiver.



6.16 Amendments or Waivers of with respect to Senior Secured Indebtedness. No Credit Party
shall, nor shall it permit any of its Restricted Subsidiaries to, amend or otherwise change the
terms of any Senior Secured Indebtedness, or make any payment consistent with an amendment thereof
or change thereto, except for the amendments and changes contemplated by the Tender Offer and any
other amendments or changes if the effect of such amendment or change does not (i) increase the
interest rate on such Senior Secured Indebtedness, (ii) change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, (iii) change any event of default or
condition to an event of default with respect thereto (other than to eliminate any such event of
default or increase any grace period related thereto), or (iv) change the redemption, prepayment or
defeasance provisions thereof, or change the lien subordination provisions of such Senior Secured
Indebtedness (or of any guaranty thereof), in each case which, together with all other amendments
or changes made, results in a material increase in the obligations of the obligors thereunder or
confers any additional rights on the holders of such Senior Secured Indebtedness (or a trustee or
other representative on their behalf) which could reasonably be expected to be adverse in any
material respect to any Credit Party or Lenders.



6.17 Fiscal Year. No Credit Party shall, nor shall it permit any of its Subsidiaries to
change its Fiscal Year-end from December 31.



SECTION 7 GUARANTY



7.1 Guaranty of the Obligations. Subject to the provisions of Section 7.2, Guarantors jointly
and severally hereby irrevocably and unconditionally guaranty to Administrative Agent for the
ratable benefit of the Beneficiaries the due and punctual payment in full of all Obligations when
the same shall become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)) (collectively,
the “Guaranteed Obligations”).



7.2 Contribution by Guarantors. All Guarantors desire to allocate among themselves
(collectively, the “Contributing Guarantors”), in a fair and equitable manner, their obligations
arising under this Guaranty. Accordingly, in the event any payment or distribution is made on any
date by a Guarantor (a “Funding Guarantor”) under this Guaranty such that its Aggregate Payments
exceeds its Fair Share as of such date, such Funding Guarantor shall be entitled to a contribution
from each of the other Contributing Guarantors in an amount sufficient to cause each Contributing
Guarantor’s Aggregate Payments to equal its Fair Share as of such date. “Fair Share” means, with
respect to a Contributing Guarantor as of any date of determination, an amount equal to (a) the
ratio of (i) the Fair Share Contribution Amount with respect to such Contributing Guarantor to (ii)
the aggregate of the Fair Share Contribution Amounts with respect to all Contributing Guarantors
multiplied by (b) the aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. “Fair Share Contribution
Amount” means, with respect to a Contributing Guarantor as of any date of determination, the
maximum aggregate amount of the obligations of such Contributing Guarantor under this Guaranty that
would not render its obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code or any comparable
applicable provisions of state law; provided, solely for purposes of calculating the “Fair
Share Contribution Amount” with respect to any Contributing Guarantor for purposes of this Section
7.2, any assets or liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of contribution
hereunder shall not be considered as assets or liabilities of such Contributing Guarantor.
"Aggregate Payments” means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (1) the aggregate amount of all payments and distributions made
on or before such date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate amount of all payments
received on or before such date by such Contributing Guarantor from the other Contributing
Guarantors as contributions under this Section 7.2. The amounts payable as contributions hereunder
shall be determined as of the date on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Contributing Guarantors of their obligations as
set forth in this Section 7.2 shall not be construed in any way to limit the liability of any
Contributing Guarantor hereunder. Each Guarantor is a third party beneficiary to the contribution
agreement set forth in this Section 7.2.



7.3 Payment by Guarantors. Subject to Section 7.2, Guarantors hereby jointly and severally
agree, in furtherance of the foregoing and not in limitation of any other right which any
Beneficiary may have at law or in equity against any Guarantor by virtue hereof, that upon the
failure of Company to pay any of the Guaranteed Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. § 362(a)), Guarantors will upon demand pay, or cause to
be paid, in Cash, to Administrative Agent for the ratable benefit of Beneficiaries, an amount equal
to the sum of the unpaid principal amount of all Guaranteed Obligations then due as aforesaid,
accrued and unpaid interest on such Guaranteed Obligations (including interest which, but for
Company’s becoming the subject of a case under the Bankruptcy Code, would have accrued on such
Guaranteed Obligations, whether or not a claim is allowed against Company for such interest in the
related bankruptcy case) and all other Guaranteed Obligations then owed to Beneficiaries as
aforesaid.



7.4 Liability of Guarantors Absolute. Each Guarantor agrees that its obligations hereunder
are irrevocable, absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or surety other than
payment in full of the Guaranteed Obligations. In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:



(a) this Guaranty is a guaranty of payment when due and not of collectability. This Guaranty
is a primary obligation of each Guarantor and not merely a contract of surety;



(b) Administrative Agent may enforce this Guaranty upon the occurrence of an Event of Default
notwithstanding the existence of any dispute between Company and any Beneficiary with respect to
the existence of such Event of Default;



(c) the obligations of each Guarantor hereunder are independent of the obligations of Company
and the obligations of any other guarantor (including any other Guarantor) of the obligations of
Company, and a separate action or actions may be brought and prosecuted against such Guarantor
whether or not any action is brought against Company or any of such other guarantors and whether or
not Company is joined in any such action or actions;



(d) payment by any Guarantor of a portion, but not all, of the Guaranteed Obligations shall in
no way limit, affect, modify or abridge any Guarantor’s liability for any portion of the Guaranteed
Obligations which has not been paid. Without limiting the generality of the foregoing, if
Administrative Agent is awarded a judgment in any suit brought to enforce any Guarantor’s covenant
to pay a portion of the Guaranteed Obligations, such judgment shall not be deemed to release such
Guarantor from its covenant to pay the portion of the Guaranteed Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent satisfied by such
Guarantor, limit, affect, modify or abridge any other Guarantor’s liability hereunder in respect of
the Guaranteed Obligations;



(e) any Beneficiary, upon such terms as it deems appropriate, without notice or demand and
without affecting the validity or enforceability hereof or giving rise to any reduction,
limitation, impairment, discharge or termination of any Guarantor’s liability hereunder, from time
to time may (i) renew, extend, accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment of the Guaranteed Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect to, or
substitutions for, the Guaranteed Obligations or any agreement relating thereto and/or subordinate
the payment of the same to the payment of any other obligations; (iii) request and accept other
guaranties of the Guaranteed Obligations and take and hold security for the payment hereof or the
Guaranteed Obligations; (iv) release, surrender, exchange, substitute, compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration, any security for payment of the
Guaranteed Obligations, any other guaranties of the Guaranteed Obligations, or any other obligation
of any Person (including any other Guarantor) with respect to the Guaranteed Obligations; (v)
enforce and apply any security now or hereafter held by or for the benefit of such Beneficiary in
respect hereof or the Guaranteed Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that such Beneficiary may have against any such security, in
each case as such Beneficiary in its discretion may determine consistent herewith or the applicable
Hedge Agreement and any applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every aspect of any such sale
is commercially reasonable, and even though such action operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of any Guarantor against Company or any
security for the Guaranteed Obligations; and (vi) exercise any other rights available to it under
the Credit Documents or the Hedge Agreements; and



(f) this Guaranty and the obligations of Guarantors hereunder shall be valid and enforceable
and shall not be subject to any reduction, limitation, impairment, discharge or termination for any
reason (other than payment in full of the Guaranteed Obligations), including the occurrence of any
of the following, whether or not any Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or election not to assert or enforce,
or the stay or enjoining, by order of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy (whether arising under the Credit
Documents or the Hedge Agreements, at law, in equity or otherwise) with respect to the Guaranteed
Obligations or any agreement relating thereto, or with respect to any other guaranty of or security
for the payment of the Guaranteed Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or provisions (including
provisions relating to events of default) hereof, any of the other Credit Documents, any of the
Hedge Agreements or any agreement or instrument executed pursuant thereto, or of any other guaranty
or security for the Guaranteed Obligations, in each case whether or not in accordance with the
terms hereof or such Credit Document, such Hedge Agreement or any agreement relating to such other
guaranty or security; (iii) the Guaranteed Obligations, or any agreement relating thereto, at any
time being found to be illegal, invalid or unenforceable in any respect; (iv) the application of
payments received from any source (other than payments received pursuant to the other Credit
Documents or any of the Hedge Agreements or from the proceeds of any security for the Guaranteed
Obligations, except to the extent such security also serves as collateral for indebtedness other
than the Guaranteed Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though any Beneficiary might have elected to apply such payment to any part or
all of the Guaranteed Obligations; (v) any Beneficiary’s consent to the change, reorganization or
termination of the corporate structure or existence of Company or any of its Subsidiaries and to
any corresponding restructuring of the Guaranteed Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral which secures any of the Guaranteed
Obligations; (vii) any defenses, set-offs or counterclaims which Company may allege or assert
against any Beneficiary in respect of the Guaranteed Obligations, including failure of
consideration, breach of warranty, payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and (viii) any other act or thing or omission, or delay to do any other act
or thing, which may or might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Guaranteed Obligations.



7.5 Waivers by Guarantors. Each Guarantor hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment or performance by such
Guarantor, to (i) proceed against Company, any other guarantor (including any other Guarantor) of
the Guaranteed Obligations or any other Person, (ii) proceed against or exhaust any security held
from Company, any such other guarantor or any other Person, (iii) proceed against or have resort to
any balance of any Deposit Account or credit on the books of any Beneficiary in favor of Company or
any other Person, or (iv) pursue any other remedy in the power of any Beneficiary whatsoever; (b)
any defense arising by reason of the incapacity, lack of authority or any disability or other
defense of Company or any other Guarantor including any defense based on or arising out of the lack
of validity or the unenforceability of the Guaranteed Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of Company or any other Guarantor
from any cause other than payment in full of the Guaranteed Obligations; (c) any defense based upon
any statute or rule of law which provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the principal; (d) any defense based upon
any Beneficiary’s errors or omissions in the administration of the Guaranteed Obligations, except
behavior which amounts to bad faith; (e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms hereof and any legal or equitable
discharge of such Guarantor’s obligations hereunder, (ii) to the extent permitted by law, the
benefit of any statute of limitations affecting such Guarantor’s liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and counterclaims, and (iv)
promptness, diligence and any requirement that any Beneficiary protect, secure, perfect or insure
any security interest or lien or any property subject thereto; (f) notices, demands, presentments,
protests, notices of protest, notices of dishonor and notices of any action or inaction, including
acceptance hereof, notices of default hereunder, the Hedge Agreements or any agreement or
instrument related thereto, notices of any renewal, extension or modification of the Guaranteed
Obligations or any agreement related thereto, notices of any extension of credit to Company and
notices of any of the matters referred to in Section 7.4 and any right to consent to any thereof;
and (g) any defenses or benefits that may be derived from or afforded by law which limit the
liability of or exonerate guarantors or sureties, or which may conflict with the terms hereof.



7.6 Guarantors’ Rights of Subrogation, Contribution, etc. Until the Guaranteed Obligations
shall have been indefeasibly paid in full and the Revolving Commitments shall have terminated and
all Letters of Credit and Hedge Letters of Credit shall have expired or been cancelled, each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that such Guarantor now has
or may hereafter have against Company or any other Guarantor or any of its assets in connection
with this Guaranty or the performance by such Guarantor of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by statute, under common law
or otherwise and including without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against Company with respect to
the Guaranteed Obligations, (b) any right to enforce, or to participate in, any claim, right or
remedy that any Beneficiary now has or may hereafter have against Company, and (c) any benefit of,
and any right to participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guaranteed Obligations shall have been indefeasibly paid in
full and the Revolving Commitments shall have terminated and all Letters of Credit and Hedge
Letters of Credit shall have expired or been cancelled, each Guarantor shall withhold exercise of
any right of contribution such Guarantor may have against any other guarantor (including any other
Guarantor) of the Guaranteed Obligations, including, without limitation, any such right of
contribution as contemplated by Section 7.2. Each Guarantor further agrees that, to the extent the
waiver or agreement to withhold the exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement or indemnification
such Guarantor may have against Company or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be junior and
subordinate to any rights any Beneficiary may have against Company, to all right, title and
interest any Beneficiary may have in any such collateral or security, and to any right any
Beneficiary may have against such other guarantor. If any amount shall be paid to any Guarantor on
account of any such subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly paid in full, such
amount shall be held in trust for Administrative Agent on behalf of Beneficiaries and shall
forthwith be paid over to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms hereof.



7.7 Subordination of Other Obligations. Any Indebtedness of Company or any Guarantor now or
hereafter held by any Guarantor (the “Obligee Guarantor”) is hereby subordinated in right of
payment to the Guaranteed Obligations, and any such indebtedness collected or received by the
Obligee Guarantor after an Event of Default has occurred and is continuing shall be held in trust
for Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over to
Administrative Agent for the benefit of Beneficiaries to be credited and applied against the
Guaranteed Obligations but without affecting, impairing or limiting in any manner the liability of
the Obligee Guarantor under any other provision hereof.



7.8 Continuing Guaranty. This Guaranty is a continuing guaranty and shall remain in effect
until all of the Guaranteed Obligations shall have been paid in full and the Revolving Commitments
shall have terminated and all Letters of Credit and Hedge Letters of Credit shall have expired or
been cancelled. Each Guarantor hereby irrevocably waives any right to revoke this Guaranty as to
future transactions giving rise to any Guaranteed Obligations.



7.9 Authority of Guarantors or Company. It is not necessary for any Beneficiary to inquire
into the capacity or powers of any Guarantor or Company or the officers, directors or any agents
acting or purporting to act on behalf of any of them.



7.10 Financial Condition of Company. Any Credit Extension may be made to Company or continued
from time to time, and any Hedge Agreements may be entered into from time to time, in each case
without notice to or authorization from any Guarantor regardless of the financial or other
condition of Company at the time of any such grant or continuation or at the time such Hedge
Agreement is entered into, as the case may be. No Beneficiary shall have any obligation to
disclose or discuss with any Guarantor its assessment, or any Guarantor’s assessment, of the
financial condition of Company. Each Guarantor has adequate means to obtain information from
Company on a continuing basis concerning the financial condition of Company and its ability to
perform its obligations under the Credit Documents and the Hedge Agreements, and each Guarantor
assumes the responsibility for being and keeping informed of the financial condition of Company and
of all circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations. Each
Guarantor hereby waives and relinquishes any duty on the part of any Beneficiary to disclose any
matter, fact or thing relating to the business, operations or conditions of Company now known or
hereafter known by any Beneficiary.



7.11 Bankruptcy, etc. So long as any Guaranteed Obligations remain outstanding, no Guarantor
shall, without the prior written consent of Administrative Agent acting pursuant to the
instructions of Requisite Lenders, commence or join with any other Person in commencing any
bankruptcy, reorganization or insolvency case or proceeding of or against Company or any other
Guarantor. The obligations of Guarantors hereunder shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any case or proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation or arrangement of
Company or any other Guarantor or by any defense which Company or any other Guarantor may have by
reason of the order, decree or decision of any court or administrative body resulting from any such
proceeding.



(a) Each Guarantor acknowledges and agrees that any interest on any portion of the Guaranteed
Obligations which accrues after the commencement of any case or proceeding referred to in clause
(a) above (or, if interest on any portion of the Guaranteed Obligations ceases to accrue by
operation of law by reason of the commencement of such case or proceeding, such interest as would
have accrued on such portion of the Guaranteed Obligations if such case or proceeding had not been
commenced) shall be included in the Guaranteed Obligations because it is the intention of
Guarantors and Beneficiaries that the Guaranteed Obligations which are guaranteed by Guarantors
pursuant hereto should be determined without regard to any rule of law or order which may relieve
Company of any portion of such Guaranteed Obligations. Guarantors will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit of creditors or similar person
to pay Administrative Agent, or allow the claim of Administrative Agent in respect of, any such
interest accruing after the date on which such case or proceeding is commenced.



(b) In the event that all or any portion of the Guaranteed Obligations are paid by Company,
the obligations of Guarantors hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such payment(s) are rescinded
or recovered directly or indirectly from any Beneficiary as a preference, fraudulent transfer or
otherwise, and any such payments which are so rescinded or recovered shall constitute Guaranteed
Obligations for all purposes hereunder.



7.12 Discharge of Guaranty Upon Sale of Guarantor. If all of the Capital Stock of any
Guarantor or any of its successors in interest hereunder shall be sold or otherwise disposed of
(including by merger or consolidation) in accordance with the terms and conditions hereof, the
Guaranty of such Guarantor or such successor in interest, as the case may be, hereunder shall
automatically be discharged and released without any further action by any Beneficiary or any other
Person effective as of the time of such Asset Sale.



Notwithstanding anything herein to the contrary, each Guarantor confirms that it is its intention
that the guaranty by such Guarantor pursuant to this Guaranty not constitute a fraudulent transfer
or conveyance for purposes of any federal, state or foreign law. To effectuate the foregoing
intention, each Guarantor hereby irrevocably agrees that the obligations of each Guarantor under
this Guaranty shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to any collections from
payments made by or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guaranty, result in the obligations of such Guarantor under this Guaranty not
constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law.



SECTION 8 EVENTS OF DEFAULT



8.1 Events of Default. If any one or more of the following conditions or events shall occur:



(a) Failure to Make Payments When Due. Failure by Company to pay (i) when due any
installment of principal of any Loan, whether at stated maturity, by acceleration, by notice of
voluntary prepayment, by mandatory prepayment or otherwise; (ii) when due any amount payable to
Issuing Bank in reimbursement of any drawing under a Letter of Credit or Hedge Letter of Credit; or
(iii) any interest on any Loan or any fee or any other amount due hereunder within five days after
the date due; or



(b) Default in Other Agreements. (i) Failure of any Credit Party or any of their
respective Restricted Subsidiaries to pay when due any principal of or interest on or any other
amount payable in respect of one or more items of Indebtedness (other than Indebtedness referred to
in Section 8.1(a)) in a principal amount of $10,000,000 or more beyond the grace period, if any,
provided therefor; or (ii) breach or default by any Credit Party with respect to any other material
term of (1) one or more items of Indebtedness in the principal amounts referred to in clause (i)
above or (2) any loan agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness, in each case beyond the grace period, if any, provided therefor, if the effect of
such breach or default is to cause, or to permit the holder or holders of that Indebtedness (or a
trustee on behalf of such holder or holders), to cause, that Indebtedness to become or be declared
due and payable (or redeemable) prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be; or (iii) breach or default by Company under the J. Aron
Swap or any other material Swap Agreement, if the effect of such breach or default is to permit the
holder or holders of that Indebtedness to terminate the J. Aron Swap or any other material Swap
Agreement, and all or substantially all of the outstanding transactions thereunder; or



(c) Breach of Certain Covenants. Failure of any Credit Party to perform or comply
with any term or condition contained in Section 2.6, Section 5.2 (as to the existence of any Credit
Party) or Section 6; or



(d) Breach of Representations, etc. Any representation, warranty, certification or
other statement made or deemed made by any Credit Party in any Credit Document or in any statement
or certificate at any time given by any Credit Party or any of its Subsidiaries in writing pursuant
hereto or thereto or in connection herewith or therewith shall be false in any material respect as
of the date made or deemed made; or



(e) Other Defaults Under Credit Documents. Any Credit Party shall default in the
performance of or compliance with any term contained herein or any of the other Credit Documents,
other than any such term referred to in any other Section of this Section 8.1, and such default
shall not have been remedied or waived within thirty days after the earlier of (i) an officer of
such Credit Party becoming aware of such default or (ii) receipt by Company of notice from
Administrative Agent or any Lender of such default; or



(f) Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court of competent
jurisdiction shall enter a decree or order for relief in respect of Company or any of its
Subsidiaries in an involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not
stayed; or any other similar relief shall be granted under any applicable federal or state law; or
(ii) an involuntary case shall be commenced against Company or any of its Subsidiaries under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over Company or any of its Subsidiaries, or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary appointment of an
interim receiver, trustee or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Company or any of its
Subsidiaries, and any such event described in this clause (ii) shall continue for sixty days
without having been dismissed, bonded or discharged; or



(g) Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Company or any of its
Subsidiaries shall have an order for relief entered with respect to it or shall commence a
voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such
law, or shall consent to the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of its property; or Company or any of its Subsidiaries
shall make any assignment for the benefit of creditors; or (ii) Company or any of its Subsidiaries
shall be unable, or shall fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or the board of directors (or similar governing body) of Company or any
of its Subsidiaries (or any committee thereof) shall adopt any resolution or otherwise authorize
any action to approve any of the actions referred to herein or in Section 8.1(f); or



(h) Judgments and Attachments. Any money judgment, writ or warrant of attachment or
similar process involving (i) in any individual case an amount in excess of $3,000,000 or (ii) in
the aggregate at any time an amount in excess of $10,000,000 (in either case to the extent not
adequately covered by insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its Subsidiaries or any
of their respective assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of any proposed sale
thereunder); or



(i) Dissolution. Any order, judgment or decree shall be entered against any Credit
Party decreeing the dissolution or split up of such Credit Party and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or



(j) Employee Benefit Plans. (i) There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably be expected to result in liability
of Company, any of its Subsidiaries or any of their respective ERISA Affiliates in excess of
$10,000,000 during the term hereof; or (ii) there exists any fact or circumstance that reasonably
could be expected to result in the imposition of a Lien or security interest under Section 412(n)
of the Internal Revenue Code or under ERISA; or



(k) Change of Control. A Change of Control shall occur; or



(l) Guaranties, Collateral Documents and other Credit Documents. At any time after
the execution and delivery thereof, (i) the Guaranty for any reason, other than the satisfaction in
full of all Obligations, shall cease to be in full force and effect (other than in accordance with
its terms) or shall be declared to be null and void or any Guarantor shall repudiate its
obligations thereunder, (ii) this Agreement or any Collateral Document ceases to be in full force
and effect (other than by reason of a release of Collateral in accordance with the terms hereof or
thereof or the satisfaction in full of the Obligations in accordance with the terms hereof) or
shall be declared null and void, or Collateral Trustee shall not have or shall cease to have a
valid and perfected Lien in any Collateral purported to be covered by the Collateral Documents with
the priority required by the relevant Collateral Document, in each case for any reason other than
the failure of Collateral Trustee or any Secured Party to take any action within its control, or
(iii) any Credit Party shall contest the validity or enforceability of any Credit Document in
writing or deny in writing that it has any further liability, including with respect to future
advances by Lenders, under any Credit Document to which it is a party; or



(m) Subordination. The lien subordination provisions contained in the Collateral
Trust Agreement shall cease, for any reason, to be in full force and effect, or any Person that is
a party thereto or holders of at least 25% of the aggregate principal amount of the Senior Secured
Notes shall so assert; or



(n) Borrowing Base. Any failure to cure any Borrowing Base deficiency in accordance
with Section 2.14(a);



THEN, (1) upon the occurrence of any Event of Default described in Section 8.1(f) or 8.1(g),
automatically, and (2) upon the occurrence of any other Event of Default, at the request of (or
with the consent of) Requisite Lenders, upon notice to Company by Administrative Agent, (A) the
Revolving Commitments, if any, of each Lender having such Revolving Commitments and the obligation
of Issuing Bank to issue any Letter of Credit shall immediately terminate; (B) the Hedge L/C
Commitments, if any, of each Lender having such Hedge L/C Commitments and the obligation of Issuing
Bank to issue any Hedge Letter of Credit shall immediately terminate, (C) each of the following
shall immediately become due and payable, in each case without presentment, demand, protest or
other requirements of any kind, all of which are hereby expressly waived by each Credit Party: (I)
the unpaid principal amount of and accrued interest on the Loans, (II) an amount, to be held as
cash collateral, equal to the maximum amount that may at any time be drawn under all Letters of
Credit then outstanding (regardless of whether any beneficiary under any such Letter of Credit
shall have presented, or shall be entitled at such time to present, the drafts or other documents
or certificates required to draw under such Letters of Credit), (III) an amount, to be held as cash
collateral, equal to the maximum amount that may at any time be drawn under all Hedge Letters of
Credit then outstanding (regardless of whether any beneficiary under any such Hedge Letter of
Credit shall have presented, or shall be entitled at such time to present, the drafts or other
documents or certificates required to draw under the Hedge Letters of Credit) and (IV) all other
Obligations; provided, the foregoing shall not affect in any way the obligations of Lenders
under Section 2.4(e); (D) Administrative Agent may cause Collateral Trustee to enforce any and all
Liens and security interests created pursuant to Collateral Documents; and (E) Administrative Agent
shall direct Company to pay (and Company hereby agrees upon receipt of such notice, or upon the
occurrence of any Event of Default specified in Section 8.1(f) and (g) to pay) to Administrative
Agent such additional amounts of cash, to be held as security for Company’s reimbursement
Obligations in respect of (i) Letters of Credit then outstanding, equal to the Letter of Credit
Usage at such time and (ii) Hedge Letters of Credit then outstanding, equal to the Hedge Letter of
Credit Usage at such time.



SECTION 9 AGENTS



9.1 Appointment of Agents. BNPP is hereby appointed Administrative Agent hereunder and under
the other Credit Documents and each Lender hereby authorizes Administrative Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. The Administrative Agent
hereby agrees to act upon the express conditions contained herein and the other Credit Documents,
as applicable. The provisions of this Section 9 are solely for the benefit of Agents and Lenders
and no Credit Party shall have any rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties hereunder, each Agent shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its Subsidiaries. No Syndication
Agent or Documentation Agent shall have any obligations under the Credit Documents, but shall be
entitled to all benefits of this Section 9.



9.2 Powers and Duties. Each Lender irrevocably authorizes each Agent to take such action on
such Lender’s behalf and to exercise such powers, rights and remedies hereunder and under the other
Credit Documents as are specifically delegated or granted to such Agent by the terms hereof and
thereof, together with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly specified herein and the
other Credit Documents. Each Agent may exercise such powers, rights and remedies and perform such
duties by or through its agents or employees. No Agent shall have, by reason hereof or any of the
other Credit Documents, a fiduciary relationship in respect of any Lender; and nothing herein or
any of the other Credit Documents, expressed or implied, is intended to or shall be so construed as
to impose upon any Agent any obligations in respect hereof or any of the other Credit Documents
except as expressly set forth herein or therein.



9.3 General Immunity.



(a) No Responsibility for Certain Matters. No Agent shall be responsible to any
Lender for the execution, effectiveness, genuineness, validity, enforceability, collectability or
sufficiency hereof or any other Credit Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or in any financial or
other statements, instruments, reports or certificates or any other documents furnished or made by
any Agent to Lenders or by or on behalf of any Credit Party, any Lender or any person providing the
Settlement Service to any Agent or any Lender in connection with the Credit Documents and the
transactions contemplated thereby or for the financial condition or business affairs of any Credit
Party or any other Person liable for the payment of any Obligations, nor shall any Agent be
required to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Credit Documents or as to
the use of the proceeds of the Loans or as to the existence or possible existence of any Event of
Default or Default or to make any disclosures with respect to the foregoing. Anything contained
herein to the contrary notwithstanding, Administrative Agent shall not have any liability arising
from confirmations of the amount of outstanding Loans or the Letter of Credit Usage or Hedge Letter
of Credit Usage or the component amounts thereof.



(b) Exculpatory Provisions. No Agent nor any of its officers, partners, directors,
employees or agents shall be liable to Lenders for any action taken or omitted by any Agent under
or in connection with any of the Credit Documents except to the extent caused by such Agent’s gross
negligence or willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection herewith or any of the
other Credit Documents or from the exercise of any power, discretion or authority vested in it
hereunder or thereunder unless and until such Agent shall have received instructions in respect
thereof from Requisite Lenders (or such other Lenders as may be required to give such instructions
under Section 10.5) and, upon receipt of such instructions from Requisite Lenders (or such other
Lenders, as the case may be), such Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance with such
instructions. Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or sent by the proper
Person or Persons, including any Settlement Confirmation or other communication issues by any
Settlement Service, and shall be entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall have any right of
action whatsoever against any Agent as a result of such Agent acting or (where so instructed)
refraining from acting hereunder or any of the other Credit Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 10.5).



(c) Delegation of Duties. Administrative Agent may perform any and all of its duties
and exercise its rights and powers under this Agreement or under any other Credit Document by or
through any one or more sub-agents appointed by Administrative Agent. Administrative Agent and any
such sub-agent may perform any and all of its duties and exercise its rights and powers by or
through their respective Affiliates. The exculpatory, indemnification and other provisions of this
Section 9.3 and of Section 9.6 shall apply to any the Affiliates of Administrative 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. All of the rights, benefits, and
privileges (including the exculpatory and indemnification provisions) of this Section 9.3 and of
Section 9.6 shall apply to any such sub-agent and to the Affiliates of any such sub-agent, and
shall apply to their respective activities as sub-agent as if such sub-agent and Affiliates were
named herein. Notwithstanding anything herein to the contrary, with respect to each sub-agent
appointed by the Administrative Agent, (i) such sub-agent shall be a third party beneficiary under
this Agreement with respect to all such rights, benefits and privileges (including exculpatory
rights and rights to indemnification) and shall have all of the rights and benefits of a third
party beneficiary, including an independent right of action to enforce such rights, benefits and
privileges (including exculpatory rights and rights to indemnification) directly, without the
consent or joinder of any other Person, against any or all of the Credit Parties and the Lenders,
(ii) such rights, benefits and privileges (including exculpatory rights and rights to
indemnification) shall not be modified or amended without the consent of such sub-agent, and (iii)
such sub-agent shall only have obligations to Administrative Agent and not to any Credit Party,
Lender or any other Person and no Credit Party, Lender or any other Person shall have any rights,
directly or indirectly, as a third party beneficiary or otherwise, against such sub-agent.



9.4 Agents Entitled to Act as Lender. The agency hereby created shall in no way impair or
affect any of the rights and powers of, or impose any duties or obligations upon, any Agent in its
individual capacity as a Lender hereunder. With respect to its participation in the Loans and the
Letters of Credit and Hedge Letters of Credit, each Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as if it were not performing the duties and
functions delegated to it hereunder, and the term “Lender” shall, unless the context clearly
otherwise indicates, include each Agent in its individual capacity. Any Agent and its Affiliates
may accept deposits from, lend money to, own securities of, and generally engage in any kind of
banking, trust, financial advisory or other business with Company or any of its Affiliates as if it
were not performing the duties specified herein, and may accept fees and other consideration from
Company for services in connection herewith and otherwise without having to account for the same to
Lenders.



9.5 Lenders’ Representations, Warranties and Acknowledgment.



(a) Each Lender represents and warrants that it has made its own independent investigation of
the financial condition and affairs of Company and its Subsidiaries in connection with Credit
Extensions hereunder and that it has made and shall continue to make its own appraisal of the
creditworthiness of Company and its Subsidiaries. No Agent shall have any duty or responsibility,
either initially or on a continuing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders or otherwise disclosed to such Lender.



(b) Each Lender, by delivering its signature page to this Agreement and funding its Revolving
Loans on the Closing Date, shall be deemed to have acknowledged receipt of, and consented to and
approved, each Credit Document and each other document required to be approved by any Agent,
Requisite Lenders or Lenders, as applicable on the Closing Date and posted to IntraLinks.



9.6 Right to Indemnity. Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent and each Issuing Bank, to the extent that such Agent or Issuing Bank shall not
have been reimbursed by any Credit Party, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses (including reasonable
counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against such Agent or Issuing Bank in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Credit Documents or
otherwise in its capacity as such Agent or Issuing Bank in any way relating to or arising out of
this Agreement or the other Credit Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent’s or Issuing Bank’s gross negligence or
willful misconduct. If any indemnity furnished to any Agent or Issuing Bank for any purpose shall,
in the opinion of such Agent or Issuing Bank, be insufficient or become impaired, such Agent or
Issuing Bank may call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished; provided, in no event
shall this sentence require any Lender to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement in excess of such
Lender’s Pro Rata Share thereof; and provided further, this sentence shall not be
deemed to require any Lender to indemnify any Agent or Issuing Bank against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or disbursement described
in the proviso in the immediately preceding sentence.



9.7 Successor Administrative Agent. Administrative Agent may resign at any time by giving
thirty days’ prior written notice thereof to Lenders and Company, and Administrative Agent may be
removed at any time with or without cause by an instrument or concurrent instruments in writing
delivered to Company and Administrative Agent and signed by Requisite Lenders. Upon any such
notice of resignation or any such removal, Requisite Lenders shall have the right, upon five
Business Days’ notice to Company, and in consultation with Company, to appoint a successor
Administrative Agent. Upon the acceptance of any appointment as Administrative Agent hereunder by
a successor Administrative Agent, that successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the retiring or removed
Administrative Agent and the retiring or removed Administrative Agent shall promptly (i) transfer
to such successor Administrative Agent all sums, Securities and other items of Collateral held
under the Collateral Documents, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor Administrative Agent
under the Credit Documents, and (ii) execute and deliver to such successor Administrative Agent
such amendments to financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Administrative Agent of the
security interests created under the Collateral Documents, whereupon such retiring or removed
Administrative Agent shall be discharged from its duties and obligations hereunder. After any
retiring or removed Administrative Agent’s resignation or removal hereunder as Administrative
Agent, the provisions of this Section 9 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent hereunder.



9.8 Collateral Documents and Guaranty.



(a) Agents under Collateral Documents and Guaranty. Each Lender hereby further
authorizes Administrative Agent or any other Person appointed by Administrative Agent, on behalf of
and for the benefit of Lenders, to (i) be the agent for and representative of Lenders with respect
to the Guaranty, the Collateral and the Collateral Documents and (ii) enter into the Collateral
Trust Agreement and appoint the Collateral Trustee to act on behalf of the Agents and the Lenders
with respect to the Collateral, and each Lender agrees to be bound by the terms of the Collateral
Trust Agreement. Subject to Section 10.5, without further written consent or authorization from
Lenders, Administrative Agent or any other Person appointed by Administrative Agent may execute any
documents or instruments necessary to (i) in accordance with the terms of the Collateral Trust
Agreement and the Collateral Documents, release, or authorize the release of, any Lien encumbering
any item of Collateral that is the subject of a sale or other disposition of assets permitted
hereby or to which Requisite Lenders (or such other Lenders as may be required to give such consent
under Section 10.5) have otherwise consented or (ii) release any Guarantor from the Guaranty
pursuant to Section 7.12 or with respect to which Requisite Lenders (or such other Lenders as may
be required to give such consent under Section 10.5) have otherwise consented; provided
that Administrative Agent shall not enter into or consent to any material amendment, modification,
termination or waiver of the Collateral Trust Agreement without the prior consent of Requisite
Lenders (or such other Lenders as may be required to give such instructions under subsection 10.5).



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



SECTION 10 MISCELLANEOUS



10.1 Notices. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given to a Credit Party, Administrative Agent, or
Issuing Bank shall be sent to such Person’s address as set forth on Appendix B or in the other
relevant Credit Document, and in the case of any Lender, the address as indicated on Appendix B or
otherwise indicated to Administrative Agent in writing. Each notice hereunder shall be in writing
and may be personally served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by courier service and
signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days
after depositing it in the United States mail with postage prepaid and properly addressed;
provided, no notice to any Agent shall be effective until received by such Agent;
provided further, any such notice or other communication shall at the request of
the Administrative Agent be provided to any sub-agent appointed pursuant to Section 9.3(c) hereto
as designated by the Administrative Agent from time to time.



10.2 Expenses. Whether or not the transactions contemplated hereby shall be consummated,
Company agrees to pay promptly (a) all the actual and reasonable costs and expenses of preparation
of the Credit Documents and any consents, amendments, waivers or other modifications thereto; (b)
all the costs of furnishing all opinions by counsel for Company and the other Credit Parties; (c)
the reasonable fees, expenses and disbursements of counsel to Administrative Agent and Syndication
Agent in connection with the negotiation, preparation, execution and administration of the Credit
Documents and any consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by Company; (d) all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Collateral Trustee, for the benefit of Administrative
Agent and Lenders pursuant hereto, including filing and recording fees, expenses and taxes, stamp
or documentary taxes, search fees, title insurance premiums and reasonable fees, expenses and
disbursements of counsel to Administrative Agent and Collateral Trustee and of counsel providing
any opinions that Administrative Agent, Collateral Trustee or Requisite Lenders may request in
respect of the Collateral or the Liens created pursuant to the Collateral Documents; (e) all the
actual costs and reasonable expenses (including the reasonable fees, expenses and disbursements of
any appraisers, consultants, advisors and agents employed or retained by Collateral Trustee and
Administrative Agent and their respective counsel) in connection with the custody or preservation
of any of the Collateral; (g) all other actual and reasonable costs and expenses incurred by
Administrative Agent and Syndication Agent in connection with the syndication of the Loans and
Commitments and the negotiation, preparation and execution of the Credit Documents and any
consents, amendments, waivers or other modifications thereto and the transactions contemplated
thereby; and (h) after the occurrence of a Default or an Event of Default, all costs and expenses,
including reasonable attorneys’ fees and costs of settlement, incurred by any Agent, Collateral
Trustee and Lenders in enforcing any Obligations of or in collecting any payments due from any
Credit Party hereunder or under the other Credit Documents by reason of such Default or Event of
Default (including in connection with the sale of, collection from, or other realization upon any
of the Collateral or the enforcement of the Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a “work-out” or
pursuant to any insolvency or bankruptcy cases or proceedings.



10.3 Indemnity.



(a) In addition to the payment of expenses pursuant to Section 10.2, whether or not the
transactions contemplated hereby shall be consummated, each Credit Party agrees to defend (subject
to Indemnitees’ selection of counsel), indemnify, pay and hold harmless, each Agent, each Issuing
Bank and Lender and the officers, partners, directors, trustees, advisors, employees, agents,
sub-agents and Affiliates of each Agent, the Collateral Trustee and each Lender (each, an
“Indemnitee”), from and against any and all Indemnified Liabilities; provided, no Credit
Party shall have any obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross negligence or willful
misconduct of that Indemnitee. To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this Section 10.3 may be unenforceable in whole or in part because they
are violative of any law or public policy, the applicable Credit Party shall contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of them.



(b) To the extent permitted by applicable law, no Credit Party shall assert, and each Credit
Party hereby waives, any claim against Lenders, Agents, each Issuing Bank and their respective
Affiliates, directors, employees, attorneys, agents or sub-agents, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or actual damages)
(whether or not the claim therefor is based on contract, tort or duty imposed by any applicable
legal requirement) arising out of, in connection with, arising out of, as a result of, or in any
way related to, this Agreement or any Credit Document or any agreement or instrument contemplated
hereby or thereby or referred to herein or therein, the transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof or any act or omission or event occurring in
connection therewith, and Company hereby waives, releases and agrees not to sue upon any such claim
or any such damages, whether or not accrued and whether or not known or suspected to exist in its
favor.



10.4 Set-Off. In addition to any rights now or hereafter granted under applicable law and not
by way of limitation of any such rights, upon the occurrence of any Event of Default each Issuing
Bank and Lender is hereby authorized by each Credit Party at any time or from time to time subject
to the consent of Administrative Agent (such consent not to be unreasonably withheld or delayed),
without notice to any Credit Party or to any other Person (other than Administrative Agent), any
such notice being hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held
or owing by such Issuing Bank or Lender to or for the credit or the account of any Credit Party
against and on account of the obligations and liabilities of any Credit Party to such Issuing Bank
or Lender hereunder, the Letters of Credit and Hedge Letters of Credit and participations therein
and under the other Credit Documents, including all claims of any nature or description arising out
of or connected hereto, the Letters of Credit and Hedge Letters of Credit and participations
therein or with any other Credit Document, irrespective of whether or not (a) such Issuing Bank or
Lender shall have made any demand hereunder or (b) the principal of or the interest on the Loans or
any amounts in respect of the Letters of Credit or Hedge Letters of Credit or any other amounts due
hereunder shall have become due and payable pursuant to Section 2 and although such obligations and
liabilities, or any of them, may be contingent or unmatured.



10.5 Amendments and Waivers.



(a) Requisite Lenders’ Consent. Subject to Section 10.5(b) and 10.5(c), no amendment,
modification, termination or waiver of any provision of the Credit Documents, or consent to any
departure by any Credit Party therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders.



(b) Affected Lenders’ Consent. Without the written consent of each Lender (other
than a Defaulting Lender) that would be affected thereby, no amendment, modification, termination,
or consent shall be effective if the effect thereof would:



(i) extend the scheduled final maturity of any Loan or Note;



(ii) waive, reduce or postpone any scheduled repayment (but not prepayment);



(iii) (x) extend the stated expiration date of any Letter of Credit beyond the Revolving
Commitment Termination Date or (y) extend the stated expiration date of any Hedge Letter of Credit
beyond the Hedge L/C Commitment Termination Date;



(iv) reduce the rate of interest on any Loan (other than any waiver of any increase in the
interest rate applicable to any Loan pursuant to Section 2.10) or any fee payable hereunder;



(v) extend the time for payment of any such interest or fees;



(vi) reduce or forgive the principal amount of any Loan or any reimbursement obligation in
respect of any Letter of Credit or Hedge Letter of Credit;



(vii) amend, modify, terminate or waive any provision of this Section 10.5(b) or Section
10.5(c);



(viii) amend the definition of “Requisite Lenders” or “Pro Rata Share”; provided, with
the consent of Requisite Lenders, additional extensions of credit pursuant hereto may be included
in the determination of “Requisite Lenders” or “Pro Rata Share” on substantially the same basis as
the Revolving Commitments, the Revolving Loans, the Hedge L/C Commitments and the Hedge L/C Loans
are included on the Closing Date;



(ix) release all or substantially all of the Collateral or all Guarantors or any material
Guarantor from the Guaranty except as expressly provided in the Credit Documents;



(x) consent to the assignment or transfer by any Credit Party of any of its rights and
obligations under any Credit Document; or



(xi) amend any provision in Section 10.6 which has the effect of further restricting Lenders’
ability to assign or transfer all or a portion of their rights and obligations under this
Agreement, other than any amendments with respect to the settlement of assignments through a
Settlement Service.



(c) Other Consents. No amendment, modification, termination or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall:



(i) increase any Revolving Commitment of any Lender over the amount thereof then in effect
without the consent of such Lender; provided, no amendment, modification or waiver of any
condition precedent, covenant, Default or Event of Default shall constitute an increase in any
Revolving Commitment of any Lender;



(ii) amend the definition of “Requisite Class Lenders” without the consent of Requisite Class
Lenders of each Class; provided, with the consent of the Requisite Lenders, additional
extensions of credit pursuant hereto may be included in the determination of such “Requisite Class
Lenders” on substantially the same basis as the Revolving Commitments and the Revolving Loans are
included on the Closing Date;



(iii) alter the requirement to make, or the required application of any repayments or
prepayments as between Classes pursuant to Sections 2.14 or 2.15 hereof or Section 7.2 of the
Pledge and Security Agreement without the consent of Requisite Class Lenders of each Class which
would receive a lesser repayment or prepayment as a result thereof; provided, Requisite
Lenders may waive, in whole or in part, any prepayment so long as the application, as between
Classes, of any portion of such prepayment which is still required to be made is not altered;



(iv) amend, modify, terminate or waive (A) any obligation of Lenders relating to the purchase
of participations in Letters of Credit or Hedge Letter of Credit as provided in Section 2.4(e) or
any other provision set forth in Section 2.4 without the written consent of Administrative Agent
and of Issuing Bank or (B) the last paragraph of Section 8.1 as it relates to the cash
collateralization of letter of credit obligations without the prior written consent of each Issuing
Bank;



(v) amend, modify, terminate or waive any provision of Section 9 as the same applies to any
Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent;



(vi) amend the definition of “Requisite Revolving Lenders” without the consent of all of the
Revolving Lenders; or



(vii) increase the Borrowing Base without the consent of all of the Revolving Lenders.



(d) Execution of Amendments, etc. Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.5 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by a Credit Party, on such Credit Party.



10.6 Successors and Assigns; Participations.



(a) Generally. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties hereto and the
successors and assigns of Lenders. No Credit Party’s rights or obligations hereunder nor any
interest therein may be assigned or delegated by any Credit Party without the prior written consent
of all Lenders. 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
and, to the extent expressly contemplated hereby, Affiliates of each of the Agents and Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.



(b) Register. Company, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the corresponding
Commitments and Loans listed therein for all purposes hereof, and no assignment or transfer of any
such Commitment or Loan shall be effective, in each case, unless and until recorded in the Register
following receipt of (x) a written or electronic confirmation of an assignment issued by a
Settlement Service pursuant to Section 10.6(d) (a “Settlement Confirmation”) or (y) an Assignment
Agreement effecting the assignment or transfer thereof, in each case, as provided in Section
10.6(d). Each assignment shall be recorded in the Register on the Business Day the Settlement
Confirmation or Assignment Agreement is received by the Administrative Agent, if received by 12:00
noon New York City time, and on the following Business Day if received after such time, prompt
notice thereof shall be provided to Company and a copy of such Assignment Agreement or Settlement
Confirmation shall be maintained, as applicable. The date of such recordation of a transfer shall
be referred to herein as the “Assignment Effective Date.” Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or consent, is listed in
the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or
transferee of the corresponding Commitments or Loans.



(c) Right to Assign. Each Lender shall have the right at any time to assign all or a
portion of its rights and obligations under this Agreement, including, without limitation, all or a
portion of its Commitment or Loans owing to it or other Obligation; provided,
however, that:



(i) each assignment shall be of a uniform, and not varying, percentage of all rights and
obligations under and in respect of any Loan and any related Commitments;



(ii) each assignment shall be to an Eligible Assignee;



(iii) if to an Eligible Assignee meeting the criteria of clause (i) of the definition of
“Eligible Assignee,” prior written notice of the assignment shall have been given to Company and
Administrative Agent;



(iv) in the case of an Eligible Assignee meeting the criteria of clause (ii) of the definition
of “Eligible Assignee” (except in the case of assignments made by or to BNPP), each of Company,
each Issuing Bank and Administrative Agent shall have consented to such assignment (such consent
not to be (x) unreasonably withheld or delayed or (y) in the case of Company, required at any time
an Event of Default shall have occurred and then be continuing);



(v) each assignment shall be in an aggregate amount of not less than $5,000,000 (or such
lesser amount as may be agreed to by Company and Administrative Agent or as shall constitute the
aggregate amount of the Revolving Commitments and Revolving Loans or Hedge L/C Loans or Hedge L/C
Commitments of the assigning Lender);



(vi) the parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together
with the Notes, if any, subject to such assignment, and



(vii) each Eligible Assignee (other than the Eligible Assignee of the Administrative Agent)
shall pay to the Administrative Agent a $3,500 administrative fee.



(d) Mechanics. Assignments and assumptions of Revolving Loans, Revolving Commitments,
Hedge L/C Loans and Hedge L/C Commitments shall only be effected by manual execution and delivery
to the Administrative Agent of an Assignment Agreement. Assignments made pursuant to the foregoing
provision shall be effective as of the Assignment Effective Date. In connection with all
assignments there shall be delivered to Administrative Agent such forms, certificates or other
evidence, if any, with respect to United States federal income tax withholding matters as the
assignee under such Assignment Agreement may be required to deliver pursuant to Section 2.20(c).



(e) Representations and Warranties of Assignee. Each Lender, upon execution and
delivery hereof or upon succeeding to an interest in the Commitments and Loans, as the case may be,
represents and warrants as of the Closing Date or as of the Assignment Effective Date that (i) it
is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in
commitments or loans such as the applicable Commitments or Loans, as the case may be; and (iii) it
will make or invest in, as the case may be, its Commitments or Loans for its own account in the
ordinary course of its business and without a view to distribution of such Commitments or Loans
within the meaning of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this Section 10.6, the disposition of such
Revolving Commitments or Loans or any interests therein shall at all times remain within its
exclusive control).



(f) Effect of Assignment. Subject to the terms and conditions of this Section 10.6,
as of the Assignment Effective Date: (i) the assignee thereunder shall have the rights and
obligations of a “Lender” hereunder to the extent of its interest in the Loans and Commitments as
reflected in the Register and shall thereafter be a party hereto and a “Lender” for all purposes
hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned to the assignee, relinquish its rights (other than any rights which
survive the termination hereof under Section 10.8) and be released from its obligations hereunder
(and, in the case of an assignment covering all or the remaining portion of an assigning Lender’s
rights and obligations hereunder, such Lender shall cease to be a party hereto on the Assignment
Effective Date; provided, anything contained in any of the Credit Documents to the contrary
notwithstanding, (y) Issuing Bank shall continue to have all rights and obligations thereof with
respect to such Letters of Credit or Hedge Letters of Credit, as the case may be, until the
cancellation or expiration of such Letters of Credit or Hedge Letters of Credit, as applicable, and
the reimbursement of any amounts drawn thereunder and (z) such assigning Lender shall continue to
be entitled to the benefit of all indemnities hereunder as specified herein with respect to matters
arising out of the prior involvement of such assigning Lender as a Lender hereunder); (iii) the
Commitments shall be modified to reflect the Commitment of such assignee and any Revolving
Commitment of such assigning Lender, if any; and (iv) if any such assignment occurs after the
issuance of any Note hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its applicable Notes to
Administrative Agent for cancellation, and thereupon Company shall issue and deliver new Notes, if
so requested by the assignee and/or assigning Lender, to such assignee and/or to such assigning
Lender, with appropriate insertions, to reflect the new Revolving Commitments and/or outstanding
Loans of the assignee and/or the assigning Lender.



(g) Participations. Each Lender shall have the right at any time to sell one or more
participations to any Person (other than Company, any of its Subsidiaries or any of its Affiliates)
in all or any part of its Commitments, Loans or in any other Obligation. The holder of any such
participation, other than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder except with respect to
any amendment, modification or waiver that would (i) extend the final scheduled maturity of any
Loan, Note, Letter of Credit or Hedge Letter of Credit (unless such Letter of Credit or Hedge
Letter of Credit is not extended beyond the Revolving Commitment Termination Date or Hedge L/C
Commitment Termination Date, as applicable) in which such participant is participating, or reduce
the rate or extend the time of payment of interest or fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or reduce the principal
amount thereof, or increase the amount of the participant’s participation over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted without the
consent of any participant if the participant’s participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by any Credit Party of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of the Collateral under
the Collateral Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. Company agrees that each participant
shall be entitled to the benefits of Sections 2.18(c), 2.19 and 2.20 to the same extent as if it
were a Lender and had acquired its interest by assignment pursuant to paragraph (c) of this
Section; provided, (i) a participant shall not be entitled to receive any greater payment
under Section 2.19 or 2.20 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 Company’s prior written consent and (ii) a participant that would be a
Non-US Lender if it were a Lender shall not be entitled to the benefits of Section 2.20 unless
Company is notified of the participation sold to such participant and such participant agrees, for
the benefit of Company, to comply with Section 2.20 as though it were a Lender. To the extent
permitted by law, each participant also shall be entitled to the benefits of Section 10.4 as though
it were a Lender, provided such Participant agrees to be subject to Section 2.17 as though it were
a Lender.



(i) Certain Other Assignments. In addition to any other assignment permitted pursuant
to this Section 10.6, any Lender may assign and/or pledge all or any portion of its Loans, the
other Obligations owed by or to such Lender, and its Notes, if any, to secure obligations of such
Lender including, without limitation, any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; provided, no Lender, as between Company and such
Lender, shall be relieved of any of its obligations hereunder as a result of any such assignment
and pledge, and provided further, in no event shall the applicable Federal Reserve
Bank, pledgee or trustee be considered to be a “Lender” or be entitled to require the assigning
Lender to take or omit to take any action hereunder.



10.7 Independence of Covenants. All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such covenants, the fact that
it would be permitted by an exception to, or would otherwise be within the limitations of, another
covenant shall not avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.



10.8 Survival of Representations, Warranties and Agreements. All representations, warranties
and agreements made herein shall survive the execution and delivery hereof and the making of any
Credit Extension. Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20, 10.2, 10.3 and 10.4 and
the agreements of Lenders set forth in Sections 2.17, 9.3(b) and 9.6 shall survive the payment of
the Loans, the cancellation or expiration of the Letters of Credit and the Hedge Letters of Credit
and the reimbursement of any amounts drawn thereunder, and the termination hereof.



10.9 No Waiver; Remedies Cumulative. No failure or delay on the part of any Agent or any
Lender in the exercise of any power, right or privilege hereunder or under any other Credit
Document shall impair such power, right or privilege or be construed to be a waiver of any default
or acquiescence therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power, right or privilege.
The rights, powers and remedies given to each Agent and each Lender hereby are cumulative and shall
be in addition to and independent of all rights, powers and remedies existing by virtue of any
statute or rule of law or in any of the other Credit Documents or any of the Hedge Agreements. Any
forbearance or failure to exercise, and any delay in exercising, any right, power or remedy
hereunder shall not impair any such right, power or remedy or be construed to be a waiver thereof,
nor shall it preclude the further exercise of any such right, power or remedy.



10.10 Marshalling; Payments Set Aside. Neither any Agent nor any Lender shall be under any
obligation to marshal any assets in favor of any Credit Party or any other Person or against or in
payment of any or all of the Obligations. To the extent that any Credit Party makes a payment or
payments to Administrative Agent or Lenders (or to Administrative Agent, on behalf of Lenders), or
Administrative Agent or Lenders enforce any security interests or exercise their rights of setoff,
and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or
federal law, common law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and effect as if such
payment or payments had not been made or such enforcement or setoff had not occurred.



10.11 Severability. In case any provision in or obligation hereunder or any Note shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.



10.12 Obligations Several; Independent Nature of Lenders’ Rights. The obligations of Lenders
hereunder are several and no Lender shall be responsible for the obligations or Commitment of any
other Lender hereunder. Nothing contained herein or in any other Credit Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The amounts payable at
any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall
be entitled to protect and enforce its rights arising out hereof and it shall not be necessary for
any other Lender to be joined as an additional party in any proceeding for such purpose.



10.13 Headings. Section headings herein are included herein for convenience of reference only
and shall not constitute a part hereof for any other purpose or be given any substantive effect.



10.14 Applicable Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW).



10.15 Consent to Jurisdiction. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY
ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF
NEW YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (c)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT; AND (e) AGREES AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.



10.16 Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY
OF THE OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING ESTABLISHED. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE
TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A
MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.



10.17 Confidentiality. Each Lender shall hold all non-public information regarding Company
and its Subsidiaries and their businesses identified as such by Company and obtained by such Lender
pursuant to the requirements hereof in accordance with such Lender’s customary procedures for
handling confidential information of such nature, it being understood and agreed by Company that,
in any event, a Lender may make (i) disclosures of such information to Affiliates of such Lender
and to their agents, trustees and advisors (and to other persons authorized by a Lender or Agent to
organize, present or disseminate such information in connection with disclosures otherwise made in
accordance with this Section 10.17), (ii) disclosures of such information reasonably required by
any bona fide or potential assignee, transferee or participant in connection with the contemplated
assignment, transfer or participation by such Lender of any Loans or any participations therein or
by any direct or indirect contractual counterparties (or the professional advisors thereto) in
Hedge Agreements (provided, such counterparties and advisors are advised of and agree to be bound
by the provisions of this Section 10.17), (iii) disclosure to any rating agency when required by
it, provided that, prior to any disclosure, such rating agency shall undertake in writing
to preserve the confidentiality of any confidential information relating to the Credit Parties
received by it from any of the Agents or any Lender, and (iv) disclosures required or requested by
any governmental agency or representative thereof or by the NAIC or pursuant to legal or judicial
process; provided, unless specifically prohibited by applicable law or court order, each
Lender shall make reasonable efforts to notify Company of any request by any governmental agency or
representative thereof (other than any such request in connection with any examination of the
financial condition or other routine examination of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of such information.



10.18 Usury Savings Clause. Notwithstanding any other provision herein, the aggregate
interest rate charged with respect to any of the Obligations, including all charges or fees in
connection therewith deemed in the nature of interest under applicable law shall not exceed the
Highest Lawful Rate. If the rate of interest (determined without regard to the preceding sentence)
under this Agreement at any time exceeds the Highest Lawful Rate, the outstanding amount of the
Loans made hereunder shall bear interest at the Highest Lawful Rate until the total amount of
interest due hereunder equals the amount of interest which would have been due hereunder if the
stated rates of interest set forth in this Agreement had at all times been in effect. In addition,
if when the Loans made hereunder are repaid in full the total interest due hereunder (taking into
account the increase provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement had at all times
been in effect, then to the extent permitted by law, Company shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the amount of interest which
would have been paid if the Highest Lawful Rate had at all times been in effect. Notwithstanding
the foregoing, it is the intention of Lenders and Company to conform strictly to any applicable
usury laws. Accordingly, if any Lender contracts for, charges, or receives any consideration which
constitutes interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled
automatically and, if previously paid, shall at such Lender’s option be applied to the outstanding
amount of the Loans made hereunder or be refunded to Company.



10.19 Counterparts. This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.



10.20 Effectiveness. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and Administrative Agent of
written or telephonic notification of such execution and authorization of delivery thereof. Upon
the effectiveness of this Agreement and the occurrence of the Closing Date, the engagement letter
dated as of July 1, 2005 between BNPP and the Company shall have no further force or effect, except
with respect to such provisions which explicitly survive the termination of the Commitment Letter
by reason of the occurrence of the Closing Date. In addition, unless specifically amended hereby,
each of the Credit Documents, the Exhibits and Schedules to this Agreement shall continue in full
force and effect.



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



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



[Remainder of page intentionally left blank]




2




IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed
and delivered by their respective officers thereunto duly authorized as of the date first written
above.




BELDEN & BLAKE CORPORATION




By: /s/ James Vanderhider

Name: James Vanderhider

Title: President and Chief Operating Officer



3





BNP PARIBAS,


as Lead Arranger, Syndication Agent,
Administrative Agent and a Lender



	 	 	 
	By:

	 	/s/ Evans Swann
	
 
	 	 
	By:

	 	Authorized Signatory

/s/ Gabe Ellisor
	
 
	 	 
	
 
	 	Authorized Signatory






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APPENDIX A-1

TO CREDIT AND GUARANTY AGREEMENT




Revolving Commitments




	 	 	 	 	 	 	 	 	 
	Lender	 	Revolving Commitment	 	Pro Rata Share
	 
	 	 	 	 	 	 	 	 
	BNP Paribas
	 	$	350,000,000.00	 	 	 	100.0	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	350,000,000.00	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 






5




APPENDIX A-2

TO CREDIT AND GUARANTY AGREEMENT




Hedge L/C Commitments




	 	 	 	 	 	 	 	 	 
	Lender	 	Hedge L/C Commitment	 	Pro Rata Share
	 
	 	 	 	 	 	 	 	 
	BNP Paribas
	 	$	40,000,000.00	 	 	 	100.0	%
	 
	 	 	 	 	 	 	 	 
	Total
	 	$	40,000,000.00	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 






6




APPENDIX B

TO CREDIT AND GUARANTY AGREEMENT




Notice Addresses




BELDEN & BLAKE CORPORATION


5200 Stoneham Road, Suite 2500


North Canton, OH 44720-0500


Attention: Chief Financial Officer


Telephone: (330) 499-1660


Telecopier: (330) 497-5470



in each case, with copies to:



EnerVest Management Partners, Ltd.


1001 Fannin Street, Suite 800


Houston, TX 77002


Attention: James M. Vanderhider



7



BNP PARIBAS, as Lead Arranger, Syndication Agent, Administrative Agent and a Lender



919 Third Avenue



New York, NY 10022



Attention: Millie Carillo



Fax: (212) 841-2683



with a copy to:



1200 Smith, Suite 3100


Houston, Texas 77002


Attention: Gabe Ellisor


Fax: (713) 659-6915




8