Exhibit
      10(y)


    CREDIT
      AGREEMENT

    DATEDASOF

    JUNE 29,
      2007 

    AMONG

    ATLAS
      ENERGY RESOURCES, LLC, 

    AS
      PARENT GUARANTOR, 

    ATLAS
      ENERGY OPERATING COMPANY, LLC,


    AS
      BORROWER, 

    JPMORGAN
      CHASE BANK, N.A., 

    AS
      ADMINISTRATIVE AGENT, 

    WACHOVIA
      BANK, 

    NATIONAL
      ASSOCIATION, 

    AS
      SYNDICATION AGENT, 

    AND

    BANKOF
      AMERICA,
      N.A., 

    BNP
      PARIBAS,


    ROYAL
      BANKOF CANADA,


    AND

    UBS
      AG,
      STAMFORD BRANCH, 

    AS
      CO-DOCUMENTATION AGENTS,


    AND

    THE
      LENDERS PARTY
      HERETO

    SOLE
      LEAD ARRANGERAND
      SOLE BOOKRUNNER

    J.P.
      MORGAN
      SECURITIES INC. 

    

    
    

    TABLE
      OF CONTENTS 

     

    
      	
            	
            	
            	
            	
            
	 	  	 	  	Page
	
            	  	ARTICLE
              I	  	
            
	
            	  	Definitions
              and Accounting Matters	  	
            
	
              Section 1.01

            	  	Terms
              Defined Above	  	1
	
              Section 1.02

            	  	Certain
              Defined Terms	  	1
	
              Section 1.03

            	  	Types
              of Loans and Borrowings	  	19
	
              Section 1.04

            	  	Terms
              Generally; Rules of Construction	  	20
	
              Section 1.05

            	  	Accounting
              Terms and Determinations	  	20
	
            	
            	
            
	
            	  	ARTICLE
              II	  	
            
	
            	  	The
              Credits	  	
            
	
            	
            	
            
	
              Section 2.01

            	  	Commitments	  	20
	
              Section 2.02

            	  	Loans
              and Borrowings	  	20
	
              Section 2.03

            	  	Requests
              for Borrowings	  	21
	
              Section 2.04

            	  	Interest
              Elections	  	22
	
              Section 2.05

            	  	Funding
              of Borrowings	  	23
	
              Section 2.06

            	  	Termination,
              Reduction and Increase of Aggregate Maximum Credit
              Amounts	  	23
	
              Section 2.07

            	  	Borrowing
              Base	  	25
	
              Section 2.08

            	  	Letters
              of Credit	  	27
	
            	
            	
            
	
            	  	ARTICLE
              III	  	
            
	
            	  	Payments
              of Principal and Interest; Prepayments; Fees	  	
            
	
            	
            	
            
	
              Section 3.01

            	  	Repayment
              of Loans	  	31
	
              Section 3.02

            	  	Interest	  	31
	
              Section 3.03

            	  	Alternate
              Rate of Interest	  	32
	
              Section 3.04

            	  	Prepayments	  	32
	
              Section 3.05

            	  	Fees	  	33
	
            	
            	
            
	
            	  	ARTICLE
              IV	  	
            
	
            	  	Payments;
              Pro Rata Treatment; Sharing of Set-offs	  	
            
	
            	
            	
            
	
              Section 4.01

            	  	Payments
              Generally; Pro Rata Treatment; Sharing of
              Set-offs	  	34
	
              Section 4.02

            	  	Presumption
              of Payment by the Borrower	  	35
	
              Section 4.03

            	  	Certain
              Deductions by the Administrative Agent	  	35
	
              Section 4.04

            	  	Disposition
              of Proceeds	  	35
	
            	
            	
            
	
            	  	ARTICLE
              V	  	
            
	
            	  	Increased
              Costs; Break Funding Payments; Taxes	  	
            
	
            	
            	
            
	
              Section 5.01

            	  	Increased
              Costs	  	36
	
              Section 5.02

            	  	Break
              Funding Payments	  	37
	
              Section 5.03

            	  	Taxes	  	37
	
              Section 5.04

            	  	Designation
              of Different Lending Office	  	39
	
              Section 5.05

            	  	Replacement
              of Lenders	  	39
	
            	
            	
            
	
            	  	ARTICLE
              VI	  	
            
	
            	  	Conditions
              Precedent	  	
            
	
            	
            	
            
	
              Section 6.01

            	  	Effective
              Date	  	40
	
              Section 6.02

            	  	Each
              Credit Event	  	43


    

     

    i


    

    
    

    
      	
            	
            	
            	
            	
            
	
            	  	ARTICLE
              VII	  	
            
	
            	  	Representations
              and Warranties	  	
            
	
            	
            	
            
	
              Section 7.01

            	  	Organization;
              Powers	  	44
	
              Section
                7.02

            	  	Authority;
              Enforceability	  	44
	
              Section
                7.03

            	  	Approvals;
              No Conflicts	  	44
	
              Section
                7.04

            	  	Financial
              Condition; No Material Adverse Change	  	44
	
              Section
                7.05

            	  	Litigation	  	45
	
              Section
                7.06

            	  	Environmental
              Matters	  	45
	
              Section
                7.07

            	  	Compliance
              with the Laws and Agreements; No Defaults	  	46
	
              Section
                7.08

            	  	Investment
              Company Act	  	46
	
              Section
                7.09

            	  	Use
              of
              Loans and Letters of Credit	  	46
	
              Section
                7.10

            	  	Taxes	  	47
	
              Section
                7.11

            	  	ERISA	  	47
	
              Section
                7.12

            	  	Disclosure;
              No Material Misstatements	  	48
	
              Section
                7.13

            	  	Insurance	  	48
	
              Section
                7.14

            	  	Restriction
              on Liens	  	48
	
              Section
                7.15

            	  	Subsidiaries	  	48
	
              Section
                7.16

            	  	Location
              of Business and Offices	  	49
	
              Section
                7.17

            	  	Properties;
              Titles, Etc.	  	49
	
              Section
                7.18

            	  	Maintenance
              of Properties	  	50
	
              Section
                7.19

            	  	Gas
              Imbalances, Prepayments	  	51
	
              Section
                7.20

            	  	Marketing
              of Production	  	51
	
              Section
                7.21

            	  	Swap
              Agreements	  	51
	
              Section
                7.22

            	  	Solvency	  	51
	
              Section
                7.23

            	  	Acquisition	  	51
	
            	
            	
            
	
            	  	ARTICLE
              VIII	  	
            
	
            	  	Affirmative
              Covenants	  	
            
	
            	
            	
            
	
              Section 8.01

            	  	Financial
              Statements; Other Information	  	52
	
              Section
                8.02

            	  	Notices
              of Material Events	  	54
	
              Section
                8.03

            	  	Existence;
              Conduct of Business	  	54
	
              Section
                8.04

            	  	Payment
              of Obligations	  	55
	
              Section
                8.05

            	  	Performance
              of Obligations under Loan Documents	  	55
	
              Section
                8.06

            	  	Operation
              and Maintenance of Properties	  	55
	
              Section
                8.07

            	  	Insurance	  	56
	
              Section
                8.08

            	  	Books
              and Records; Inspection Rights	  	56
	
              Section
                8.09

            	  	Compliance
              with Laws	  	56
	
              Section
                8.10

            	  	Environmental
              Matters	  	56
	
              Section
                8.11

            	  	Further
              Assurances	  	57
	
              Section
                8.12

            	  	Reserve
              Reports	  	57
	
              Section
                8.13

            	  	Title
              Information	  	58
	
              Section
                8.14

            	  	Additional
              Collateral; Additional Guarantors	  	59
	
              Section
                8.15

            	  	ERISA
              Compliance	  	60
	
              Section
                8.16

            	  	Swap
              Agreements	  	60
	
              Section 8.17

            	  	Unrestricted
              Subsidiaries	  	60
	
            	
            	
            
	
            	  	ARTICLE
              IX	  	
            
	
            	  	Negative
              Covenants	  	
            
	
            	
            	
            
	
              Section
                9.01

            	  	Financial
              Covenants	  	61
	
              Section
                9.02

            	  	Debt	  	61


    

     

    ii


    

    
    

    
      	
            	
            	
            	
            	
            
	
              Section 9.03

            	  	Liens	  	62
	
              Section
                9.04

            	  	Restricted
              Payments; Redemption of Subordinated Debt	  	63
	
              Section
                9.05

            	  	Investments,
              Loans and Advances	  	63
	
              Section
                9.06

            	  	Nature
              of Business; International Operations; Foreign Subsidiaries	  	64
	
              Section
                9.07

            	  	Proceeds
              of Loans and Letters of Credit	  	64
	
              Section
                9.08

            	  	ERISA
              Compliance	  	65
	
              Section
                9.09

            	  	Sale
              or Discount of Receivables	  	66
	
              Section
                9.10

            	  	Mergers,
              Etc.	  	66
	
              Section
                9.11

            	  	Sale
              of Properties	  	66
	
              Section
                9.12

            	  	Environmental
              Matters	  	67
	
              Section
                9.13

            	  	Transactions
              with Affiliates	  	67
	
              Section
                9.14

            	  	Subsidiaries	  	67
	
              Section
                9.15

            	  	Negative
              Pledge Agreements; Dividend Restrictions	  	67
	
              Section
                9.16

            	  	Gas
              Imbalances, Take-or-Pay or Other Prepayments	  	67
	
              Section
                9.17

            	  	Swap
              Agreements	  	68
	
              Section
                9.18

            	  	Tax
              Status as Partnership; Partnership Agreement	  	68
	
              Section
                9.19

            	  	Designation
              and Conversion of Restricted and Unrestricted
              Subsidiaries; Debt of Unrestricted Subsidiaries	  	69
	
            	
            	
            
	
            	  	ARTICLE
              X	  	
            
	
            	  	Events
              of Default; Remedies	  	
            
	
            	
            	
            
	
              Section 10.01

            	  	Events
              of Default	  	69
	
              Section
                10.02

            	  	Remedies	  	71
	
            	
            	
            
	
            	  	ARTICLE
              XI	  	
            
	
            	  	The
              Agents	  	
            
	
            	
            	
            
	
              Section
                11.01

            	  	Appointment;
              Powers	  	71
	
              Section
                11.02

            	  	Duties
              and Obligations of Administrative Agent	  	72
	
              Section
                11.03

            	  	Action
              by Administrative Agent	  	72
	
              Section
                11.04

            	  	Reliance
              by Administrative Agent	  	73
	
              Section
                11.05

            	  	Subagents	  	73
	
              Section
                11.06

            	  	Resignation
              of Agents	  	73
	
              Section
                11.07

            	  	Agents
              as Lenders	  	74
	
              Section
                11.08

            	  	No
              Reliance	  	74
	
              Section
                11.09

            	  	Authority
              of Administrative Agent to Release Collateral and
              Liens	  	74
	
              Section
                11.10

            	  	Administrative
              Agent May File Proofs of Claim	  	74
	
              Section
                11.11

            	  	The
              Arranger, the Syndication Agent and the Documentation Agents	  	75
	
            	
            	
            
	
            	  	ARTICLE
              XII	  	
            
	
            	  	Miscellaneous	  	
            
	
            	
            	
            
	
              Section
                12.01

            	  	Notices	  	75
	
              Section
                12.02

            	  	Waivers;
              Amendments	  	76
	
              Section
                12.03

            	  	Expenses,
              Indemnity; Damage Waiver	  	77
	
              Section
                12.04

            	  	Successors
              and Assigns	  	79
	
              Section
                12.05

            	  	Survival;
              Revival; Reinstatement	  	81
	
              Section 12.06

            	  	Counterparts;
              Integration; Effectiveness	  	82
	
              Section
                12.07

            	  	Severability	  	82
	
              Section
                12.08

            	  	Right
              of Setoff	  	82
	
              Section
                12.09

            	  	GOVERNING
              LAW; JURISDICTION; CONSENT TO SERVICE OF
              PROCESS	  	83
	
              Section
                12.10

            	  	Headings	  	84
	
              Section 12.11

            	  	Confidentiality	  	84


    

     

    iii


    

    
    

    
      	
            	
            	
            	
            	
            
	
              Section 12.12

            	  	Interest
              Rate Limitation	  	84
	
              Section 12.13

            	  	No
              Third Party Beneficiaries	  	85
	
              Section 12.14

            	  	Collateral
              Matters; Swap Agreements	  	85
	
              Section 12.15

            	  	Acknowledgements	  	85
	
              Section 12.16

            	  	USA
              Patriot Act Notice	  	85


    

     

    iv


    

    
    

    Annexes,
      Exhibits and Schedules


     

    
      	
            	
            	
            
	Annex
              I	  	List
              of Maximum Credit Amounts
	Annex
              II	  	Sources
              and Uses Table
	
            	
            
	Exhibit
              A	  	Form
              of Note
	Exhibit
              B	  	Form
              of Borrowing Request
	Exhibit
              C	  	Form
              of Interest Election Request
	Exhibit
              D	  	Form
              of Compliance Certificate
	Exhibit
              E-1	  	Form
              of Legal Opinion of Ledgewood, special counsel to the Parent Guarantor
              and
              the Borrower
	Exhibit
              E-2	  	Form
              of Legal Opinion of Local Counsel
	Exhibit
              F-1	  	Security
              Instruments
	Exhibit
              F-2	  	Form
              of Guaranty and Collateral Agreement
	Exhibit
              G	  	Form
              of Assignment and Assumption
	Exhibit
              H-1	  	Form
              of Maximum Credit Amount Increase Certificate
	Exhibit
              H-2	  	Form
              of Additional Lender Certificate
	Exhibit
              I	  	Form
              of Reserve Report Certificate
	
            	
            
	Schedule
              1.02(a)	  	Approved
              Counterparties
	Schedule
              1.02(b)	  	Existing
              Letters of Credit
	Schedule
              7.05	  	Litigation
	Schedule
              7.11	  	ERISA
	Schedule
              7.15	  	Subsidiaries
              and Partnerships; Unrestricted
              Subsidiaries
	Schedule
              7.19	  	Gas
              Imbalances
	Schedule
              7.20	  	Marketing
              Contracts
	Schedule
              7.21	  	Swap
              Agreements
	Schedule
              9.02	  	Existing
              Debt
	Schedule
              9.05	  	Investments


    

     

    v


    

    
    

    THIS
      CREDIT AGREEMENT, dated as of
      June 29, 2007, is among: ATLAS ENERGY RESOURCES, LLC, a limited liability
      company duly formed and existing under the laws of the State of Delaware (the
      “Parent Guarantor”); ATLAS ENERGY OPERATING COMPANY, LLC, a limited
      liability company duly formed and existing under the laws of the State of
      Delaware (the “Borrower”); each of the Lenders from time to time party
      hereto; JPMORGAN CHASE BANK, N.A. (in its individual capacity,
“JPMorgan”), as administrative agent for the Lenders (in such capacity,
      together with its successors in such capacity, the “Administrative
      Agent”); WACHOVIA BANK, NATIONAL ASSOCIATION, as syndication agent for the
      Lenders (in such capacity, together with its successors in such capacity, the
      “Syndication Agent”); and BANK OF AMERICA, N.A., BNP PARIBAS, ROYAL BANK
      OF CANADA AND UBS AG, STAMFORD BRANCH, as co-documentation agents for the
      Lenders (each, in such capacity, together with its successors in such capacity,
      the “Documentation Agent”). 

    R
      E C I T A L S


    A.
      The Parent Guarantor and the
      Borrower have requested that the Lenders extend credit to, and on behalf of,
      the
      Borrower; and the Agents and the Lenders have agreed to extend credit to, and
      on
      behalf of, the Borrower, subject to the terms and conditions of this Agreement.
      

    B.
      Now, therefore, in consideration
      of the mutual covenants and agreements herein contained and of the loans,
      extensions of credit and commitments hereinafter referred to, the parties hereto
      agree as follows: 

    ARTICLE
      I


    Definitions
      and Accounting
      Matters 

    Section
      1.01 Terms Defined
      Above. As used in this Agreement, each term defined above has the meaning
      indicated above. 

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

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

    “Acquisition”
means
      the
      acquisition of all of the issued and outstanding Equity Interests of the Target
      pursuant to the terms and conditions of the Acquisition Documents. 

    “Acquisition
      Agreement” means
      the Purchase and Sale Agreement among MCN Energy Enterprises, Inc., as seller,
      DTE Energy Company, as seller parent, ATN Michigan, LLC, as buyer, and the
      Parent Guarantor, as buyer parent dated May 18, 2007, as amended by
      1st
      Amendment to Purchase and Sale Agreement dated
      June 29, 2007. 

    “Acquisition
      Documents” means
      (a) the Acquisition Agreement and (b) all bills of sale, assignments,
      agreements, instruments and documents executed and delivered in connection
      therewith. 

    “Acquisition
      Properties”
means the Oil and Gas Properties of the Target and its Subsidiaries.


    “Additional
      Lender” has the
      meaning assigned to such term in Section 2.06(c)(i). 

    

    
    

    “Additional
      Lender
      Certificate” has the meaning assigned to such term in
      Section 2.06(c)(ii)(E). 

    “Adjusted
      LIBO Rate” means,
      with respect to any Eurodollar Borrowing for any Interest Period, an interest
      rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal
      to
      (a) the LIBO Rate for such Interest Period multiplied by (b) the
      Statutory Reserve Rate. 

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

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

    “Agents”
means,
      collectively,
      the Administrative Agent, the Syndication Agent and each Documentation Agent;
      and “Agent” shall mean any of the Administrative Agent, the Syndication Agent or
      a Documentation Agent, as the context requires. 

    “Aggregate
      Maximum Credit
      Amounts” at any time shall equal the sum of the Maximum Credit Amounts, as
      the same may be increased, reduced or terminated pursuant to Section 2.06.


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

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

    “Applicable
      Margin” means,
      for any day, with respect to any Loan or with respect to the Commitment Fee
      Rate, the applicable rate per annum set forth below based on Borrowing Base
      Utilization Percentage on such day: 

     

    
      	
            	
            	
            	
            	
            	
            	
            
	
              Borrowing
                Base
                Utilization Percentage

            	  	Eurodollar
Loans	  	ABR
Loans	  	Commitment
Fee
              Rate
	
            	
            	
            	
            
	
              >
                110% and
                < 125%

            	  	225 b.p.	  	125 b.p.	  	37.5 b.p.
	
            	
            	
            	
            
	
              >
                100% and
                < 110%

            	  	200
              b.p.	  	100
              b.p.	  	37.5
              b.p.
	
            	
            	
            	
            
	
              >
                90% and
                < 100%

            	  	175
              b.p.	  	75
              b.p.	  	37.5
              b.p.
	
            	
            	
            	
            
	
              >
                75% and
                < 90%

            	  	150
              b.p.	  	50
              b.p.	  	35
              b.p.
	
            	
            	
            	
            
	
              >
                50% and
                < 75%

            	  	125
              b.p.	  	25
              b.p.	  	30
              b.p.
	
            	
            	
            	
            
	
              <
50%

            	  	100
              b.p.	  	0
              b.p.	  	25
              b.p.


    

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

     

    2


    

    
    

    “Applicable
      Percentage”
means, with respect to any Lender, the percentage of the Aggregate Maximum
      Credit Amounts represented by such Lender’s Maximum Credit Amount as such
      percentage is set forth on Annex I or as may be adjusted from time to time
      in
      accordance with the terms hereof. 

    “Approved
      Counterparty” means
      (a) any Lender or any Affiliate of a Lender, (b) any other Person
      whose long term senior unsecured debt rating at the time of entry into the
      applicable Swap Agreement is A-/A3 by S&P or Moody’s (or their equivalent)
      or higher, or (c) with regard to Swap Agreements in respect of commodities,
      and subject to the conditions set forth therein, any other Person listed on
      Schedule 1.02. 

    “Approved
      Petroleum
      Engineers” means (a) Ryder Scott Company Petroleum Consultants, L.P.,
      (b) Netherland Sewell & Associates, Inc.,
      (c) Wright & Company, (d) Schlumberger Ltd. and (e) any
      other independent petroleum engineers reasonably acceptable to the
      Administrative Agent. 

    “Arranger”
means
      J.P. Morgan
      Securities Inc., in its capacities as the sole lead arranger and sole bookrunner
      hereunder. 

    “Assignee”
has
      the meaning
      set forth in Section 12.04(b). 

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

    “Available
      Cash” means, with
      respect to any fiscal quarter ending prior to the Termination Date:


    (a)
      the sum of (i) all cash and
      cash equivalents of the Parent Guarantor and its Subsidiaries, treated as a
      single consolidated entity (or the Parent Guarantor’s proportionate share of
      cash and cash equivalents in the case of Subsidiaries that are not Wholly-Owned
      Subsidiaries), on hand at the end of such fiscal quarter; and (ii) all
      additional cash and cash equivalents of the Parent Guarantor and its
      Subsidiaries (or the Parent Guarantor’s proportionate share of cash and cash
      equivalents in the case of Subsidiaries that are not Wholly-Owned Subsidiaries)
      on hand on the date of determination of Available Cash with respect to such
      fiscal quarter resulting from working capital borrowings (including borrowings
      under this Agreement) made subsequent to the end of such fiscal quarter, less
      

    (b)
      the amount of any cash reserves
      established by the board of directors of the Parent Guarantor (or the Parent
      Guarantor’s proportionate share of cash and cash equivalents in the case of
      Subsidiaries that are not Wholly-Owned Subsidiaries) to (i) provide for the
      proper conduct of the business of the Parent Guarantor and its Subsidiaries
      (including reserves for future capital expenditures including drilling and
      acquisitions and for anticipated future credit needs of the Parent Guarantor
      and
      its Subsidiaries), (ii) comply with applicable law or any loan agreement,
      security agreement, mortgage, debt instrument or other agreement or obligation
      to which the Parent Guarantor or any Subsidiary is a party or by which it is
      bound or its assets are subject or (iii) provide funds for distributions
      pursuant to Section 6.3(a), Section 6.4 and Section 6.5 of the
      Operating Agreement with respect to any one or more of the next four fiscal
      quarters; provided, that disbursements made by the Parent Guarantor or
      its Subsidiaries or cash reserves established, increased or reduced after the
      end of such fiscal quarter but on or before the date of determination of
      Available Cash with respect to such fiscal quarter shall be deemed to have
      been
      made, established, increased or reduced, for purposes of determining Available
      Cash, within such fiscal quarter if the board of directors of the Parent
      Guarantor so determines. 

     

    3


    

    
    

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

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

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


    “Borrowing
      Base” means at any
      time an amount equal to the amount determined in accordance with
      Section 2.07, as the same may be adjusted from time to time pursuant to
      Section 2.07(f), Section 8.13(c) or Section 9.11(d).


    “Borrowing
      Base Equalization
      Date” means the date which is the earlier of (i) June 29, 2008 and
      (ii) the date (after consummation of the Acquisition) on which the Parent
      Guarantor (and has contributed such net cash proceeds to the Borrower) or the
      Borrower shall issue equity or debt securities in an aggregate amount of net
      cash proceeds at least equal to $200,000,000. 

    “Borrowing
      Base Utilization
      Percentage” means, as of any day, the fraction expressed as a percentage,
      the numerator of which is the sum of the Revolving Credit Exposures of the
      Lenders on such day, and the denominator of which is the Conforming Borrowing
      Base (or after the Borrowing Base Equalization Date, the Borrowing Base) in
      effect on such day. 

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


    “Business
      Day” means any day
      that is not a Saturday, Sunday or other day on which commercial banks in New
      York, New York, are authorized or required by law to remain closed; and if
      such
      day relates to a Borrowing or continuation of, a payment or prepayment of
      principal of or interest on, or a conversion of or into, or the Interest Period
      for, a Eurodollar Loan or a notice by the Borrower with respect to any such
      Borrowing or continuation, payment, prepayment, conversion or Interest Period,
      any day which is also a day on which dealings in dollar deposits are carried
      out
      in the London interbank market. 

    “Capital
      Leases” means, in
      respect of any Person, all leases which shall have been, or should have been,
      in
      accordance with GAAP, recorded as capital leases on the balance sheet of the
      Person liable (whether contingent or otherwise) for the payment of rent
      thereunder. 

    “Casualty
      Event” means any
      loss, casualty or other insured damage to, or any nationalization, taking under
      power of eminent domain or by condemnation or similar proceeding of, any
      Property of the Parent Guarantor or any of its Subsidiaries having a fair market
      value in excess of $25,000,000. 

    “Change
      in Control” means
      (a) the acquisition of ownership, directly or indirectly, beneficially or
      of record, by any Person or group of Persons acting in concert as a partnership
      or other “group” (within the meaning of the Securities Exchange Act of 1934 and
      the rules of the SEC thereunder as in effect on the date hereof) of Equity
      Interests representing more than 35% of the aggregate ordinary voting power
      represented by the issued and outstanding Equity Interests of the Parent
      Guarantor (or its successor by merger, consolidation or purchase of all or
      substantially all of its assets); (b) occupation of a majority of the seats
      (other than vacant seats) on the board of directors of the Parent Guarantor
      by
      Persons who were neither (i) nominated by the board of directors of the
      Parent Guarantor nor (ii) appointed by directors so nominated; (c) the
      Parent Guarantor ceases to be the sole member of the Borrower; or (d) Atlas
      America, 

     

    4


    

    
    

    Inc.,
      a Delaware corporation, and/or
      one or more of its directly or indirectly Wholly-Owned Subsidiaries ceases
      to
      own at least 51% of the issued and outstanding voting Equity Interests of Atlas
      Energy Management, Inc., a Delaware corporation. 

    “Change
      in Law” means
      (a) the adoption of any law, rule or regulation after the date of this
      Agreement, (b) any change in any law, rule or regulation or in the
      interpretation or application thereof by any Governmental Authority after the
      date of this Agreement or (c) compliance by any Lender or the Issuing Bank
      (or, for purposes of Section 5.01(b), by any lending office of such Lender
      or by such Lender’s or the Issuing Bank’s holding company, if any) with any
      request, guideline or directive (whether or not having the force of law) of
      any
      Governmental Authority made or issued after the date of this Agreement.


    “Closing
      Date MAE” means a
“Material Adverse Effect” as defined in the Acquisition Agreement affecting the
      Target and entitling the buyer not to complete the Acquisition pursuant to
      Section 9.12 of the Acquisition Agreement. 

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

    “Commitment”
means,
      with
      respect to each Lender, the commitment of such Lender to make Loans and to
      acquire participations in Letters of Credit hereunder, expressed as an amount
      representing the maximum aggregate amount of such Lender’s Revolving Credit
      Exposure hereunder, as such commitment may be (a) modified from time to
      time pursuant to Section 2.06 and (b) modified from time to time
      pursuant to assignments by or to such Lender pursuant to Section 12.04(b);
      and “Commitments” means the aggregate amount of the Commitments of all
      the Lenders. The amount representing each Lender’s Commitment shall at any time
      be the lesser of (i) such Lender’s Maximum Credit Amount and (ii) such
      Lender’s Applicable Percentage of the then effective Borrowing Base. As of the
      Closing Date, the aggregate Commitments of the Lenders are $850,000,000.


    “Commitment
      Fee Rate” means,
      for any day, the rate set forth in the definition of “Applicable Margin”.


    “Conduit
      Lender” means any
      special purpose corporation organized and administered by any Lender for the
      purpose of making Loans otherwise required to be made by such Lender and
      designated by such Lender in a written instrument; provided, that the
      designation by any Lender of a Conduit Lender shall not relieve the designating
      Lender of any of its obligations to fund a Loan under this Agreement if, for
      any
      reason, its Conduit Lender fails to fund any such Loan, and the designating
      Lender (and not the Conduit Lender) shall have the sole right and responsibility
      to deliver all consents and waivers required or requested under this Agreement
      with respect to its Conduit Lender, and provided, further, that no
      Conduit Lender shall (a) be entitled to receive any greater amount pursuant
      to Section 5.01, 5.02, 5.03 or 12.03 than the designating Lender would have
      been entitled to receive in respect of the extensions of credit made by such
      Conduit Lender or (b) be deemed to have any Commitment. 

    “Conforming
      Borrowing Base”
means at any time an amount equal to the amount determined in accordance
      with
      Section 2.07, as the same may be adjusted from time to time pursuant to
      Section 2.07(f), Section 8.13(c) or Section 9.11(d).


    “Consolidated
      Net Income”
means with respect to the Parent Guarantor and the Consolidated Subsidiaries,
      for any period, the aggregate of the net income (or loss) of the Parent
      Guarantor and the Consolidated Subsidiaries after allowances for taxes for
      such
      period determined on a consolidated basis in accordance with GAAP; provided
      that
      there shall be excluded from such net income (to the extent 

     

    5


    

    
    

    otherwise
      included therein) the
      following: (a) the net income of any Person in which the Parent Guarantor
      or any Consolidated Subsidiary has an interest (which interest does not cause
      the net income of such other Person to be consolidated with the net income
      of
      the Parent Guarantor and the Consolidated Subsidiaries in accordance with GAAP),
      except to the extent of the amount of dividends or distributions actually paid
      in cash during such period by such other Person to the Parent Guarantor or
      to a
      Consolidated Subsidiary, as the case may be; (b) the net income (but not
      loss) during such period of any Consolidated Subsidiary to the extent that
      the
      declaration or payment of dividends or similar distributions or transfers or
      loans by that Consolidated Subsidiary is not at the time permitted by operation
      of the terms of its charter or any agreement, instrument or Governmental
      Requirement applicable to such Consolidated Subsidiary or is otherwise
      restricted or prohibited, in each case determined in accordance with GAAP;
      (c) the net income (or loss) of any Person acquired in a
      pooling-of-interests transaction for any period prior to the date of such
      transaction; (d) any extraordinary gains or losses during such period; and
      (e) any gains or losses attributable to writeups or writedowns of assets,
      including write-downs under FASB 142 and FASB 144 (to the extent such amounts
      have been deducted in calculating Consolidated Net Income), provided, however,
      that any ceiling limitation writedowns under SEC guidelines shall be treated
      as
      capitalized costs, as if such writedowns had not occurred; and provided further
      that if the Parent Guarantor or any Consolidated Subsidiary shall acquire or
      dispose of any Property during such period having a fair market value in excess
      of $5,000,000, then Consolidated Net Income shall be calculated after giving
      pro forma effect to such acquisition or disposition, as if such
      acquisition or disposition had occurred on the first day of such period.


    “Consolidated
      Subsidiaries”
means each Subsidiary (other than an Unrestricted Subsidiary) of the Parent
      Guarantor (whether now existing or hereafter created or acquired) the financial
      statements of which shall be (or should have been) consolidated with the
      financial statements of the Parent Guarantor in accordance with GAAP.


    “Control”
means
      the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management or policies of a Person, whether through the ability
      to exercise voting power, by contract or otherwise. For the purposes of this
      definition, and without limiting the generality of the foregoing, any Person
      that owns directly or indirectly 5% or more of the Equity Interests having
      ordinary voting power for the election of the directors or other governing
      body
      of a Person (other than as a limited partner of such other Person) will be
      deemed to “control” such other Person. “Controlling” and
“Controlled” have meanings correlative thereto. 

    “Debt”
means,
      for any Person,
      the sum of the following (without duplication): (a) all obligations of such
      Person for borrowed money or evidenced by bonds, bankers’ acceptances,
      debentures, notes or other similar instruments; (b) all obligations of such
      Person (whether contingent or otherwise) in respect of letters of credit, surety
      or other bonds and similar instruments; (c) all accounts payable and all
      accrued expenses, liabilities or other obligations of such Person to pay the
      deferred purchase price of Property or services; (d) all obligations under
      Capital Leases; (e) all obligations under Synthetic Leases; (f) all
      Debt (as defined in the other clauses of this definition) of others secured
      by a
      Lien on any Property of such Person, whether or not such Debt is assumed by
      such
      Person; (g) all Debt (as defined in the other clauses of this definition)
      of others guaranteed by such Person or in which such Person otherwise assures
      a
      creditor against loss of the Debt (howsoever such assurance shall be made)
      to
      the extent of the lesser of the amount of such Debt and the maximum stated
      amount of such guarantee or assurance against loss; (h) all obligations or
      undertakings of such Person to maintain or cause to be maintained the financial
      position or covenants of others or to purchase the Debt or Property of others;
      (i) obligations to deliver commodities, goods or services, including,
      without limitation, Hydrocarbons, in consideration of one or more advance
      payments for periods in excess of 120 days prior to the day of delivery, other
      than sales of Hydrocarbons and gas balancing arrangements in the ordinary course
      of business; (j) obligations to pay for goods or services whether or not
      such goods or services are actually received or utilized by such 

     

    6


    

    
    

    Person;
      (k) any Debt of a
      partnership for which such Person is liable either by agreement, by operation
      of
      law or by a Governmental Requirement but only to the extent of such liability;
      (l) Disqualified Capital Stock; and (m) the undischarged balance of
      any production payment created by such Person or for the creation of which
      such
      Person directly or indirectly received payment. The Debt of any Person shall
      include all obligations of such Person of the character described above to
      the
      extent such Person remains legally liable in respect thereof notwithstanding
      that any such obligation is not included as a liability of such Person under
      GAAP. 

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


    “Disqualified
      Capital Stock”
means any Equity Interest that, by its terms (or by the terms of any security
      into which it is convertible or for which it is exchangeable) or upon the
      happening of any event, matures or is mandatorily redeemable for any
      consideration other than other Equity Interests (which would not constitute
      Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise,
      or is convertible or exchangeable for Debt or redeemable for any consideration
      other than other Equity Interests (which would not constitute Disqualified
      Capital Stock) at the option of the holder thereof, in whole or in part, on
      or
      prior to the date that is one year after the earlier of (a) the Maturity
      Date and (b) the date on which there are no Loans, LC Exposure or other
      obligations hereunder outstanding and all of the Commitments are terminated.
      Notwithstanding the preceding sentence, any Equity Interest that would
      constitute Disqualified Capital Stock solely because (i) the holders
      thereof have the right to require the Person to repurchase such Equity Interests
      upon the occurrence of a change of control or an asset sale shall not constitute
      Disqualified Capital Stock. 

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

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

    “EBITDA”
means,
      for any
      period, the sum of Consolidated Net Income for such period plus the following
      expenses or charges, without duplication and to the extent deducted from
      Consolidated Net Income in such period: interest, income taxes, depreciation,
      depletion, amortization and other noncash charges and expenses (including stock
      based compensation under FASB 123R and noncash losses under FASB 133 as a result
      of changes in the fair market value of derivatives), minus all noncash income
      added to Consolidated Net Income (including all noncash gains under FASB 133
      as
      a result of changes in the fair market value of derivatives); provided that
      EBITDA for each of the four fiscal quarters set forth below shall be calculated
      after giving pro forma effect to the Acquisition by adding the Acquisition
      EBITDA amount set forth opposite such date to actual historical EBITDA for
      such
      fiscal quarter: 

     

    
      	
            	
            	
            	
            
	
              September 30,
                2006

            	  	$	27,325,000
	
              December 31,
                2006

            	  	$	27,325,000
	
              March 31,
                2007

            	  	$	24,735,000
	
              June 30,
                2007

            	  	$	25,000,000


    

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

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

     

    7


    

    
    

    “Environmental
      Laws” means
      any and all Governmental Requirements pertaining in any way to health, safety,
      the environment, the preservation or reclamation of natural resources, or the
      management, Release or threatened Release of any Hazardous Materials, in effect
      in any and all jurisdictions in which the Parent Guarantor or any Subsidiary
      is
      conducting, or at any time has conducted, business, or where any Property of
      the
      Parent Guarantor or any Subsidiary is located, including, the Oil Pollution
      Act
      of 1990 (“OPA”), as amended, the Clean Air Act, as amended, the
      Comprehensive Environmental, Response, Compensation, and Liability Act of 1980
      (“CERCLA”), as amended, the Federal Water Pollution Control Act, as
      amended, the Occupational Safety and Health Act of 1970, as amended, the
      Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the
      Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as
      amended, the Superfund Amendments and Reauthorization Act of 1986, as amended,
      the Hazardous Materials Transportation Law, as amended, and other environmental
      conservation or protection Governmental Requirements. 

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

    “ERISA”
means
      the Employee
      Retirement Income Security Act of 1974, as amended, and any successor statutes,
      and all regulations and guidances promulgated thereunder. 

    “ERISA
      Affiliate” means each
      trade or business (whether or not incorporated) which together with the Parent
      Guarantor or a Subsidiary would be deemed to be a “single employer” within the
      meaning of section 4001(b)(1) of ERISA or subsections (b), (c), (m) or
      (o) of section 414 of the Code. 

    “ERISA
      Event” means
      (a) a “Reportable Event” described in section 4043 of ERISA, other than a
      Reportable Event as to which the provisions of 30 days notice to the PBGC is
      expressly waived under applicable regulations, (b) the withdrawal of the
      Parent Guarantor, a Subsidiary or any ERISA Affiliate from a Plan during a
      plan
      year in which it was a “substantial employer” as defined in section 4001(a)(2)
      of ERISA, (c) the filing of a notice of intent to terminate a Plan or the
      treatment of a Plan amendment as a termination under section 4041 of ERISA,
      (d) the institution of proceedings to terminate a Plan by the PBGC,
      (e) receipt of a notice of withdrawal liability pursuant to
      Section 4202 of ERISA or (f) any other event or condition which might
      constitute grounds under section 4042 of ERISA for the termination of, or the
      appointment of a trustee to administer, any Plan. 

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

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

    “Excepted
      Liens” means:
      (a) Liens for taxes, assessments or other governmental charges or levies
      which are not delinquent or which are being contested in good faith by
      appropriate action and for which adequate reserves have been maintained in
      accordance with GAAP; (b) Liens in connection with workers’ compensation,
      unemployment insurance or other social security, old age pension or public
      liability obligations which are not delinquent or which are being contested
      in
      good faith by appropriate action and for which adequate reserves have been
      maintained in accordance with GAAP; (c) statutory landlord’s liens,
      operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’,
      suppliers’, workers’, materialmen’s, construction or other like Liens arising by
      operation of law in the ordinary course of business or incident to the
      exploration, development, operation and maintenance of Oil and Gas Properties
      each of which is in respect of obligations that are not delinquent or which
      are
      being contested 

     

    8


    

    
    

    in
      good faith by appropriate action
      and for which adequate reserves have been maintained in accordance with GAAP;
      (d) contractual Liens which arise in the ordinary course of business under
      operating agreements, joint venture agreements, oil and gas partnership
      agreements, oil and gas leases, farm-out agreements, division orders, contracts
      for the sale, transportation or exchange of oil and natural gas, unitization
      and
      pooling declarations and agreements, area of mutual interest agreements,
      overriding royalty agreements, marketing agreements, processing agreements,
      net
      profits agreements, development agreements, gas balancing or deferred production
      agreements, injection, repressuring and recycling agreements, salt water or
      other disposal agreements, seismic or other geophysical permits or agreements,
      and other agreements which are usual and customary in the oil and gas business
      and are for claims which are not delinquent or which are being contested in
      good
      faith by appropriate action, provided that any such Lien referred to in this
      clause does not materially impair the use of the Property covered by such Lien
      for the purposes for which such Property is held by the Parent Guarantor or
      any
      Subsidiary or materially impair the value of such Property subject thereto;
      (e) Liens arising solely by virtue of any statutory or common law provision
      relating to banker’s liens, rights of set-off or similar rights and remedies and
      burdening only deposit accounts or other funds maintained with a creditor
      depository institution, provided that no such deposit account is a dedicated
      cash collateral account or is subject to restrictions against access by the
      depositor in excess of those set forth by regulations promulgated by the Board
      and no such deposit account is intended by Parent Guarantor or any of its
      Subsidiaries to provide collateral to the depository institution;
      (f) easements, restrictions, servitudes, permits, conditions, covenants,
      exceptions or reservations in any Property of the Parent Guarantor or any
      Subsidiary for the purpose of roads, pipelines, transmission lines,
      transportation lines, distribution lines for the removal of gas, oil, coal
      or
      other minerals or timber, and other like purposes, or for the joint or common
      use of real estate, rights of way, facilities and equipment which in the
      aggregate do not materially impair the use of such Property for the purposes
      of
      which such Property is held by the Parent Guarantor or any Subsidiary or
      materially impair the value of such Property subject thereto; (g) Liens on
      cash or securities pledged to secure performance of tenders, surety and appeal
      bonds, government contracts, performance and return of money bonds, bids, trade
      contracts, leases, statutory obligations, regulatory obligations and other
      obligations of a like nature incurred in the ordinary course of business;
      (h) judgment and attachment Liens not giving rise to an Event of Default,
      provided that any appropriate legal proceedings which may have been duly
      initiated for the review of such judgment shall not have been finally terminated
      or the period within which such proceeding may be initiated shall not have
      expired and no action to enforce such Lien has been commenced; and
      (i) Liens arising from Uniform Commercial Code financing statement filings
      regarding operating leases entered into by the Parent Guarantor and the
      Subsidiaries in the ordinary course of business covering only the Property
      under
      lease; provided, further that (1) Liens described in clauses
      (a) through (e), (g) and (h) shall remain “Excepted Liens” only
      for so long as no action to enforce such Lien has been commenced and (2) no
      intention to subordinate the first priority Lien granted in favor of the
      Administrative Agent and the Lenders is to be hereby implied or expressed by
      the
      permitted existence of any Excepted Lien. 

    “Existing
      Credit Agreement”
means that certain Revolving Credit Agreement dated as of December 18, 2006
      among the Borrower, the guarantors, lenders and agents named therein, and
      Wachovia Bank, National Association, as administrative agent. 

    “Existing
      Letters of Credit”
means the letters of credit set forth in Schedule 1.02(b). 

    “Expense
      Sharing Agreement”
means that certain Applicant’s Expense Agreement dated as of March 24, 2006
      between Anthem Securities, Inc. and Atlas Resources, LLC. 

    “Federal
      Funds Effective
      Rate” means, for any day, the weighted average (rounded upwards, if
      necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
      transactions with members of the Federal Reserve System arranged by Federal
      funds brokers, as published on the next succeeding 

     

    9


    

    
    

    Business
      Day by the Federal Reserve
      Bank of New York or, if such rate is not so published for any day that is a
      Business Day, the average (rounded upwards, if necessary, to the next 1/100
      of
      1%) of the quotations for such day for such transactions received by the
      Administrative Agent from three Federal funds brokers of recognized standing
      selected by it. 

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

    “Financial
      Statements” means
      the financial statement or statements of the Parent Guarantor and its
      Consolidated Subsidiaries referred to in Section 7.04(a). 

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

    “GAAP”
means
      generally
      accepted accounting principles in the United States as in effect from time
      to
      time. 

    “Governmental
      Authority”
means the government of the United States of America, any other nation
      or any
      political subdivision thereof, whether state or local, and any agency,
      authority, instrumentality, regulatory body, court, central bank or other entity
      exercising executive, legislative, judicial, taxing, regulatory or
      administrative powers or functions of or pertaining to government over the
      Parent Guarantor, the Borrower any Subsidiary, any of their Properties, any
      Agent, the Issuing Bank or any Lender. 

    “Governmental
      Requirement”
means any applicable law, statute, code, ordinance, order, determination,
      rule,
      regulation, judgment, decree, injunction, franchise, permit, certificate,
      license, authorization or other directive or requirement, whether now or
      hereinafter in effect, including, without limitation, Environmental Laws, energy
      regulations and occupational, safety and health standards or controls, of any
      Governmental Authority. 

    “Guarantors”
means:
      

     

    
      	 	•	 	
              the
                Parent Guarantor, 

            


    

     

    
      	 	•	 	
              AER
                PIPELINE CONSTRUCTION, INC., 

            


    

     

    
      	 	•	 	
              AIC,
                LLC, 

            


    

     

    
      	 	•	 	
              ATLAS
                AMERICA, LLC, 

            


    

     

    
      	 	•	 	
              ATLAS
                ENERGY OHIO, LLC, 

            


    

     

    
      	 	•	 	
              ATLAS
                NOBLE, LLC, 

            


    

     

    
      	 	•	 	
              ATLAS
                RESOURCES, LLC, 

            


    

     

    
      	 	•	 	
              ATLAS
                ENERGY MICHIGAN, LLC, 

            


    

     

    
      	 	•	 	
              ATLAS
                GAS & OIL COMPANY, LLC, 

            


    

     

    
      	 	•	 	
              WESTSIDE
                PIPELINE COMPANY, LLC, 

            


    

     

    10


    

    
    

    
      	 	•	 	
              REI-NY,
                LLC, 

            


    

     

    
      	 	•	 	
              RESOURCE
                ENERGY, LLC, 

            


    

     

    
      	 	•	 	
              RESOURCE
                WELL SERVICES, LLC, 

            


    

     

    
      	 	•	 	
              VIKING
                RESOURCES LLC, and 

            


    

     

    
      	 	•	 	
              each
                other Material Subsidiary that guarantees the Indebtedness pursuant
                to
                Section 8.14(b). 

            


    

    “Guaranty
      Agreement” means an
      agreement executed by the Guarantors in substantially the form of Exhibit F-2
      unconditionally guarantying on a joint and several basis, payment of the
      Indebtedness, as the same may be amended, modified or supplemented from time
      to
      time. 

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

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

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

    “Indebtedness”
means
      any and
      all amounts owing or to be owing by the Parent Guarantor, the Borrower or any
      Subsidiary: (a) to the Administrative Agent, any Issuing Bank or any Lender
      under any Loan Document; (b) to any Lender or any Affiliate of a Lender
      under any Swap Agreement or any Specified Cash Management Agreements between
      the
      Parent Guarantor, the Borrower or any Subsidiary and such Lender or Affiliate
      of
      a Lender while such Person (or in the case of its Affiliate, the Person
      affiliated therewith) is a Lender hereunder and (c) all renewals,
      extensions and/or rearrangements of any of the above. 

    “Information
      Memorandum”
means the Confidential Information Memorandum dated June 2007 relating
      to the
      Parent Guarantor, the Borrower and the Transactions. 

    “Initial
      Reserve Report”
means the report of the Borrower dated February 28, 2007, with respect to
      certain Oil and Gas Properties of the Borrower and its Subsidiaries as of
      December 31, 2006 and with respect to the Acquisition Properties the report
      of Schlumberger dated as of June 4, 2007 evaluating such Properties as of
      June 30, 2007. 

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

     

    11


    

    
    

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

    “Interest
      Period” means with
      respect to any Eurodollar Borrowing, the period commencing on the date of such
      Borrowing and ending on the numerically corresponding day in the calendar month
      that is one, two, three or six months, and if available by all the Lenders,
      nine
      months thereafter, as the Borrower may elect; provided, that (a) if any
      Interest Period would end on a day other than a Business Day, such Interest
      Period shall be extended to the next succeeding Business Day unless such next
      succeeding Business Day would fall in the next calendar month, in which case
      such Interest Period shall end on the next preceding Business Day, (b) no
      Interest Period may have a term which would extend beyond the Maturity Date
      and
      (c) any Interest Period pertaining to a Eurodollar Borrowing that commences
      on the last Business Day of a calendar month (or on a day for which there is
      no
      numerically corresponding day in the last calendar month of such Interest
      Period) shall end on the last Business Day of the last calendar month of such
      Interest Period. For purposes hereof, the date of a Borrowing initially shall
      be
      the date on which such Borrowing is made and thereafter shall be the effective
      date of the most recent conversion or continuation of such Borrowing.


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

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

    “Investment”
means,
      for any
      Person: (a) the acquisition (whether for cash, Property, services or
      securities or otherwise) of Equity Interests of any other Person or any
      agreement to make any such acquisition (including, without limitation, capital
      contributions, any “short sale” or any sale of any securities at a time when
      such securities are not owned by the Person entering into such short sale),
      (b) the making of any deposit with, or advance, loan or other extension of
      credit to, any other Person (including the purchase of Property from another
      Person subject to an understanding or agreement, contingent or otherwise, to
      resell such Property to such Person, but excluding any such advance, loan or
      extension of credit having a term not exceeding ninety (90) days
      representing the purchase price of inventory or supplies sold by such Person
      in
      the ordinary course of business) or (c) the entering into of any guarantee
      of, or other contingent obligation (including the deposit of any Equity
      Interests to be sold) with respect to, Debt or other liability of any other
      Person and (without duplication) any amount committed to be advanced, lent
      or
      extended to such Person. 

    “Issuing
      Bank” means JPMorgan
      in its capacity as the issuer of Letters of Credit hereunder and, as the context
      requires with respect to the Existing Letters of Credit only, Wachovia Bank,
      N.A. The Issuing Bank may, in its discretion, arrange for one or more Letters
      of
      Credit to be issued by Affiliates of the Issuing Bank, in which case the term
      “Issuing Bank” shall include any such Affiliate with respect to Letters
      of Credit issued by such Affiliate. 

    “LC
      Commitment” at any time
      means Fifty Million dollars ($50,000,000). 

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

    “LC
      Exposure” means, at any
      time, the sum of (a) the aggregate undrawn amount of all outstanding
      Letters of Credit at such time plus (b) the aggregate amount of all LC
      Disbursements that 

     

    12


    

    
    

    have
      not yet been reimbursed by or
      on behalf of the Borrower at such time. The LC Exposure of any Lender at any
      time shall be its Applicable Percentage of the total LC Exposure at such time.
      

    “Lenders”
means
      the Persons
      listed on Annex I, any Person that shall have become a party hereto pursuant
      to
      an Assignment and Assumption, other than any such Person that ceases to be
      a
      party hereto pursuant to an Assignment and Assumption, and any Person that
      shall
      have become a party hereto as an Additional Lender pursuant to
      Section 2.06(c); provided, that unless the context otherwise
      requires, each reference herein to the Lenders shall be deemed to include any
      Conduit Lender. 

    “Letter
      of Credit” means any
      letter of credit issued pursuant to this Agreement, including the Existing
      Letters of Credit. 

    “Letter
      of Credit Agreements”
means all letter of credit applications and other agreements (including
      any
      amendments, modifications or supplements thereto) submitted by the Borrower
      or
      entered into by the Borrower with the Issuing Bank relating to any Letter of
      Credit. 

    “LIBO
      Rate” means, with
      respect to each day during each Interest Period pertaining to a Eurodollar
      Loan,
      the rate per annum determined on the basis of the rate for deposits in dollars
      for a period equal to such Interest Period commencing on the first day of such
      Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M.,
      London time, two Business Days prior to the beginning of such Interest Period.
      In the event that such rate does not appear on such page (or otherwise on such
      screen), the “LIBO Rate” shall be determined by reference to such other
      comparable publicly available service for displaying eurodollar rates as may
      be
      selected by the Administrative Agent or, in the absence of such availability,
      by
      reference to the rate at which the Administrative Agent is offered dollar
      deposits at or about 11:00 A.M., London time, two Business Days prior to the
      beginning of such Interest Period in the interbank eurodollar market where
      its
      eurodollar and foreign currency and exchange operations are then being conducted
      for delivery on the first day of such Interest Period for the number of days
      comprised therein. 

    “Lien”
means
      any interest in
      Property securing an obligation owed to, or a claim by, a Person other than
      the
      owner of the Property, whether such interest is based on the common law, statute
      or contract, and whether such obligation or claim is fixed or contingent, and
      including but not limited to (a) the lien or security interest arising from
      a mortgage, encumbrance, pledge, security agreement, conditional sale or trust
      receipt or a lease, consignment or bailment for security purposes or
      (b) production payments and the like payable out of Oil and Gas Properties.
      The term “Lien” shall include easements, restrictions, servitudes,
      permits, conditions, covenants, exceptions or reservations. For the purposes
      of
      this Agreement, the Parent Guarantor and its Subsidiaries shall be deemed to
      be
      the owner of any Property which it has acquired or holds subject to a
      conditional sale agreement, or leases under a financing lease or other
      arrangement pursuant to which title to the Property has been retained by or
      vested in some other Person in a transaction intended to create a financing.
      

    “Loan
      Documents” means this
      Agreement, the Notes, if any, the Letter of Credit Agreements, the Letters
      of
      Credit and the Security Instruments. 

    “Loan
      Parties” means the
      Borrower and each Guarantor, including the Parent Guarantor. 

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

    “Majority
      Lenders” means, at
      any time while no Loans or LC Exposure is outstanding, Lenders having greater
      than fifty percent (50%) of the Aggregate Maximum Credit Amounts; and at
      any time while any Loans or LC Exposure is outstanding, Lenders holding greater
      than fifty percent (50%) of the 

     

    13


    

    
    

    outstanding
      aggregate principal
      amount of the Loans or participation interests in Letters of Credit (without
      regard to any sale by a Lender of a participation in any Loan under
      Section 12.04(c)). 

    “Management
      Agreement” means
      the Management Agreement dated as of December 18, 2006 between the Parent
      Guarantor and Atlas Energy Management, Inc., a Delaware corporation.


    “Material
      Adverse Effect”
means any event, development or circumstance that has had or could reasonably
      be
      expected to have a material adverse effect on (a) the assets or Properties,
      financial condition, businesses or operations of the Loan Parties, taken as
      a
      whole, (b) the ability of the Loan Parties to carry out its business as of
      the Effective Date or as proposed to be conducted on the Effective Date, or
      (c) the validity or enforceability of any of the Loan Documents or the
      rights and remedies available to the Administrative Agent, any other Agent,
      the
      Issuing Bank or any Lender under any Loan Document. 

    “Material
      Indebtedness” means
      Debt (other than the Loans and Letters of Credit), or obligations in respect
      of
      one or more Swap Agreements, of any one or more of the Parent Guarantor and
      its
      Subsidiaries in an aggregate principal amount exceeding $25,000,000. For
      purposes of determining Material Indebtedness, the “principal amount” of the
      obligations of the Parent Guarantor or any Subsidiary in respect of any Swap
      Agreement at any time shall be the maximum aggregate amount (giving effect
      to
      any netting agreements) that the Parent Guarantor or such Subsidiary would
      be
      required to pay if such Swap Agreement were terminated at such time, including
      unpaid amounts in respect of such Swap Agreement. 

    “Material
      Subsidiary” means,
      as of any date, any Subsidiary (other than an Unrestricted Subsidiary) that
      (a) is a Wholly-Owned Subsidiary and (b) together with its
      Subsidiaries (other than Unrestricted Subsidiaries), owns Property having a
      fair
      market value of $250,000 or more. 

    “Maturity
      Date” means
      June 29, 2012. 

    “Maximum
      Credit Amount”
means, as to each Lender, the amount set forth opposite such Lender’s name on
      Annex I under the caption “Maximum Credit Amounts”, as the same may be
      (a) reduced or terminated from time to time in connection with a reduction
      or termination of the Aggregate Maximum Credit Amounts pursuant to
      Section 2.06(b), (b) increased from time to time pursuant to
      Section 2.06(c) or (c) modified from time to time pursuant to any
      assignment permitted by Section 12.04(b). As of the Closing Date, the
      aggregate Maximum Credit Amounts of the Lenders are $850,000,000. 

    “Maximum
      Credit Amount Increase
      Certificate” has the meaning assigned to such term in
      Section 2.06(c)(ii)(D). 

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

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

    “Multiemployer
      Plan” means a
      Plan which is a multiemployer plan as defined in section 3(37) or 4001 (a)(3)
      of
      ERISA. 

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

     

    14


    

    
    

    “Non-Recourse
      Debt” means any
      Debt of any Unrestricted Subsidiary, in each case in respect of which:
      (a) the holder or holders thereof (i) shall have recourse only to, and
      shall have the right to require the obligations of such Unrestricted Subsidiary
      to be performed, satisfied, and paid only out of, the Property of such
      Unrestricted Subsidiary and/or one or more of its Subsidiaries (but only to
      the
      extent that such Subsidiaries are Unrestricted Subsidiaries) and/or any other
      Person (other than any Loan Party or any of their Subsidiaries which have not
      been designated as Unrestricted Subsidiaries) and (ii) shall have no direct
      or indirect recourse (including by way of guaranty, support or indemnity) to
      any
      Loan Party or any of their Subsidiaries which have not be designated as
      Unrestricted Subsidiaries or to any of the Property of such Persons, whether
      for
      principal, interest, fees, expenses or otherwise; and (b) the terms and
      conditions relating to the non-recourse nature of such Debt are in form and
      substance reasonably acceptable to the Administrative Agent. 

    “Non-US
      Lender” has the
      meaning set forth in Section 5.03(d). 

    “Notes”
means
      the promissory
      notes, if any, of the Borrower described in Section 2.02(c) and being
      substantially in the form of Exhibit A, together with all amendments,
      modifications, replacements, extensions and rearrangements thereof.


    “Oil
      and Gas Properties”
means (a) Hydrocarbon Interests; (b) the Properties now or hereafter
      pooled or unitized with Hydrocarbon Interests; (c) all presently existing
      or future unitization, pooling agreements and declarations of pooled units
      and
      the units created thereby (including without limitation all units created under
      orders, regulations and rules of any Governmental Authority) which may affect
      all or any portion of the Hydrocarbon Interests; (d) all operating
      agreements, contracts and other agreements, including production sharing
      contracts and agreements, which relate to any of the Hydrocarbon Interests
      or
      the production, sale, purchase, exchange or processing of Hydrocarbons from
      or
      attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and
      under and which may be produced and saved or attributable to the Hydrocarbon
      Interests, including all oil in tanks, and all rents, issues, profits, proceeds,
      products, revenues and other incomes from or attributable to the Hydrocarbon
      Interests; (f) all tenements, hereditaments, appurtenances and Properties
      in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon
      Interests and (g) all Properties, rights, titles, interests and estates
      described or referred to above, including any and all Property, real or
      personal, now owned or hereinafter acquired and situated upon, used, held for
      use or useful in connection with the operating, working or development of any
      of
      such Hydrocarbon Interests or Property (excluding drilling rigs, automotive
      equipment, rental equipment or other personal Property which may be on such
      premises for the purpose of drilling a well or for other similar temporary
      uses)
      and including any and all oil wells, gas wells, injection wells or other wells,
      buildings, structures, fuel separators, liquid extraction plants, plant
      compressors, pumps, pumping units, field gathering systems, tanks and tank
      batteries, fixtures, valves, fittings, machinery and parts, engines, boilers,
      meters, apparatus, equipment, appliances, tools, implements, cables, wires,
      towers, casing, tubing and rods, surface leases, rights-of-way, easements and
      servitudes together with all additions, substitutions, replacements, accessions
      and attachments to any and all of the foregoing. 

    “Operating
      Agreement” means
      the Amended and Restated Operating Agreement of the Parent Guarantor dated
      as of
      December 18, 2006, as the same may be amended in accordance with
      Section 9.18. 

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

    “Participant”
has
      the meaning
      set forth in Section 12.04(c)(i). 

     

    15


    

    
    

    “Partnerships”
means
      the
      partnerships listed on Schedule 7.15 and any other partnerships which are
      engaged principally in the acquisition and development of Oil and Gas Properties
      as may be wholly or partially owned, directly or indirectly, by any Loan Party
      from time to time hereafter. 

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

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

    “Plan”
means
      any employee
      pension benefit plan, as defined in section 3(2) of ERISA, which (a) is
      currently or hereafter sponsored, maintained or contributed to by the Parent
      Guarantor, a Subsidiary or an ERISA Affiliate or (b) was at any time during
      the six calendar years preceding the date hereof, sponsored, maintained or
      contributed to by the Parent Guarantor or a Subsidiary or an ERISA Affiliate.
      

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

    “Property”
means
      any interest
      in any kind of property or asset, whether real, personal or mixed, or tangible
      or intangible, including, without limitation, cash, securities, accounts and
      contract rights. 

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

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


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

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

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

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

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


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

     

    16


    

    
    

    “Remedial
      Work” has the
      meaning assigned such term in Section 8.10. 

    “Reserve
      Report” means the
      Initial Reserve Report and a report, in form and substance reasonably
      satisfactory to the Administrative Agent, setting forth, as of each
      December 31st or June 30th (or such other date in the event of an
      Interim Redetermination) the oil and gas reserves attributable to the Oil and
      Gas Properties of the Borrower and the Subsidiaries (or the Borrower’s
      proportionate share of such Oil and Gas Properties in the case of the
      Partnerships), together with a projection of the rate of production and future
      net income, taxes, operating expenses and capital expenditures with respect
      thereto as of such date, consistent with SEC reporting requirements at the
      time,
      together with a supplement indicating future net income based upon the
      Administrative Agent’s usual and customary pricing assumptions for oil and gas
      loans then in effect, in each case reflecting Swap Agreements in place with
      respect to such production. Each Reserve Report shall include a report on a
      well
      by well basis reflecting the working and revenue interests for the Borrower
      and
      each Guarantor, and the net working interest and net revenue interests for
      each
      Partnership and such other information and in such form as may be reasonably
      requested by the Administrative Agent. 

    “Responsible
      Officer” means,
      as to any Person, the Chief Executive Officer, the Chief Operating Officer,
      the
      President, any Financial Officer or any Vice President of such Person. Unless
      otherwise specified, all references to a Responsible Officer herein shall mean
      a
      Responsible Officer of the Parent Guarantor. 

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


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


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

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

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

    “Security
      Instruments” means
      the Guaranty Agreement, mortgages, deeds of trust and other agreements,
      instruments or certificates described or referred to in Exhibit F-1, and any
      and
      all other agreements, instruments or certificates now or hereafter executed
      and
      delivered by any Loan Party or any other Person (other than Swap Agreements
      or
      Specified Cash Management Agreements with the Lenders or any Affiliate of a
      Lender or participation or similar agreements between any Lender and any other
      lender or creditor with respect to any Indebtedness pursuant to this Agreement)
      in connection with, or as security for the payment or performance of the
      Indebtedness, the Notes, if any, this Agreement, or reimbursement obligations
      under the Letters of Credit, as such agreements may be amended, modified,
      supplemented or restated from time to time. 

    “Senior
      Notes” means any
      unsecured senior or senior subordinated notes issued by the Parent Guarantor
      or
      the Borrower under Section 9.02(h) and any guarantees thereof by the
      Borrower or a Guarantor. 

     

    17


    

    
    

    “Significant
      Subsidiary”
means any Subsidiary of the Borrower (together with the Subsidiaries of
      such
      Subsidiary) which has total assets and liabilities in excess of $15,000,000.
      

    “Solvent”
means
      when used
      with respect to any Person, means that, as of any date of determination,
      (a) the amount of the “present fair saleable value” of the assets of such
      Person will, as of such date, exceed the amount of all “liabilities of such
      Person, contingent or otherwise”, as of such date, as such quoted terms are
      determined in accordance with applicable federal and state laws governing
      determinations of the insolvency of debtors, (b) the present fair saleable
      value of the assets of such Person will, as of such date, be greater than the
      amount that will be required to pay the liability of such Person on its debts
      as
      such debts become absolute and matured, (c) such Person will not have, as
      of such date, an unreasonably small amount of capital with which to conduct
      its
      business, and (d) such Person will be able to pay its debts as they mature.


    “S&P”
means
      Standard & Poor’s Ratings Group, a division of The McGraw-Hill
      Companies, Inc., and any successor thereto that is a nationally recognized
      rating agency. 

    “Specified
      Cash Management
      Agreement” means any agreement providing for treasury, depositary,
      purchasing card or cash management services, including in connection with any
      automated clearing house transfers of funds or any similar transactions between
      the Borrower or any Guarantor and any Lender or Affiliate thereof. 

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

    “Subsidiary”
means:
      (a) any Person of which at least a majority of the outstanding Equity
      Interests having by the terms thereof ordinary voting power to elect a majority
      of the board of directors, manager or other governing body of such Person
      (irrespective of whether or not at the time Equity Interests of any other class
      or classes of such Person shall have or might have voting power by reason of
      the
      happening of any contingency) is at the time directly or indirectly owned or
      controlled by the Parent Guarantor and/or one or more of its Subsidiaries,
      (b) any partnership of which the Parent Guarantor or any of its
      Subsidiaries is a general partner and (c) without duplication of clause
      (b), each Partnership. Unless otherwise indicated herein, each reference to
      the
      term “Subsidiary” shall mean a Subsidiary of the Parent Guarantor.


    “Super-Majority
      Lenders”
means, at any time while no Loans or LC Exposure is outstanding, Lenders
      having
      at least sixty-six and two-thirds percent (66- 2/3%)
      of the Aggregate
      Maximum Credit Amounts; and at any time while any Loans or LC Exposure is
      outstanding, Lenders holding at least sixty-six and two-thirds percent (66- 2/3%)
      of the outstanding
      aggregate principal amount of the Loans or participation interests in Letters
      of
      Credit (without regard to any sale by a Lender of a participation in any Loan
      under Section 12.04(c)). 

    “Swap
      Agreement” means any
      agreement with respect to any swap, forward, future or derivative transaction
      or
      option or similar agreement, whether exchange traded, “over-the-counter” or
      otherwise, 

     

    18


    

    
    

    involving,
      or settled by reference
      to, one or more rates, currencies, commodities, equity or debt instruments
      or
      securities, or economic, financial or pricing indices or measures of economic,
      financial or pricing risk or value or any similar transaction or any combination
      of these transactions. 

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

    “Target”
means
      DTE
      Gas & Oil Company, a Michigan corporation. 

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

    “Total
      Debt” means, at any
      date, all Debt of the Parent Guarantor and the Consolidated Subsidiaries on
      a
      consolidated basis other than (i) contingent obligations in respect of Debt
      described in clause (b) and (ii) Debt described in clause (c) of
      the definition of “Debt”. For the avoidance of doubt, “Total Debt” shall not
      include “asset retirement obligations” as such term is used in FASB Statement
      143 to the extent such term relates to the plugging and abandonment of wells.
      

    “Transactions”
means,
      with
      respect to (a) the Borrower, the execution, delivery and performance by the
      Borrower of this Agreement and each other Loan Document to which it is a party,
      the borrowing of Loans, the use of the proceeds thereof and the issuance of
      Letters of Credit hereunder, and the grant of Liens by the Borrower on Mortgaged
      Properties pursuant to the Security Instruments and (b) each Guarantor, the
      execution, delivery and performance by such Guarantor of each Loan Document
      and
      each Acquisition Document to which it is a party, consummation of the
      Acquisition, the guaranteeing of the Indebtedness and the other obligations
      under the Guaranty Agreement by such Guarantor and such Guarantor’s grant of the
      security interests and provision of collateral thereunder, and the grant of
      Liens by such Guarantor on Mortgaged Properties pursuant to the Security
      Instruments. 

    “Transferee”
means
      any
      Assignee or Participant. 

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

    “Unrestricted
      Subsidiary”
means any Subsidiary designated as such on Schedule 7.15 or which the Borrower
      has designated in writing to the Administrative Agent to be an Unrestricted
      Subsidiary pursuant to Section 9.19. 

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

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

     

    19


    

    
    

    Section
      1.04 Terms Generally;
      Rules of Construction. The definitions of terms herein shall apply equally
      to the singular and plural forms of the terms defined. Whenever the context
      may
      require, any pronoun shall include the corresponding masculine, feminine and
      neuter forms. The words “include”, “includes” and “including” shall be deemed to
      be followed by the phrase “without limitation”. The word “will” shall be
      construed to have the same meaning and effect as the word “shall”. Unless the
      context requires otherwise (a) any definition of or reference to any
      agreement, instrument or other document herein shall be construed as referring
      to such agreement, instrument or other document as from time to time amended,
      supplemented or otherwise modified (subject to any restrictions on such
      amendments, supplements or modifications set forth herein), (b) any
      reference herein to any law shall be construed as referring to such law as
      amended, modified, codified or reenacted, in whole or in part, and in effect
      from time to time, (c) any reference herein to any Person shall be
      construed to include such Person’s successors and assigns (subject to the
      restrictions contained herein), (d) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
      Agreement in its entirety and not to any particular provision hereof,
      (e) with respect to the determination of any time period, the word “from”
means “from and including” and the word “to” means “to and including” and
      (f) any reference herein to Articles, Sections, Annexes, Exhibits and
      Schedules shall be construed to refer to Articles and Sections of, and Annexes,
      Exhibits and Schedules to, this Agreement. 

    Section
      1.05 Accounting Terms and
      Determinations. Unless otherwise specified herein, all terms of an
      accounting or financial nature shall be construed in accordance with GAAP,
      as in
      effect from time to time; provided that, if the Borrower or the Parent
      Guarantor notifies the Administrative Agent that the Borrower or the Parent
      Guarantor requests an amendment to any provision hereof to eliminate the effect
      of any change occurring after the date hereof in GAAP or in the application
      thereof on the operation of such provision (or if the Administrative Agent
      notifies the Borrower or the Parent Guarantor that the Required Lenders request
      an amendment to any provision hereof for such purpose), regardless of whether
      any such notice is given before or after such change in GAAP or in the
      application thereof, then such provision shall be interpreted on the basis
      of
      GAAP as in effect and applied immediately before such change shall have become
      effective until such notice shall have been withdrawn or such provision amended
      in accordance herewith. 

    ARTICLE
      II


    The
      Credits


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

    Section
      2.02 Loans and
      Borrowings. 

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

    (b)
Types
      of Loans. Subject
      to Section 3.03, each Borrowing shall be comprised entirely of ABR Loans or
      Eurodollar Loans as the Borrower may request in accordance herewith. Each Lender
      at its option may make any Eurodollar Loan by causing any domestic or foreign
      branch or 

     

    20


    

    
    

    Affiliate
      of such Lender to make
      such Loan; provided that any exercise of such option shall not affect the
      obligation of the Borrower to repay such Loan in accordance with the terms
      of
      this Agreement. 

    (c)
Minimum
      Amounts; Limitation
      on Number of Borrowings. At the commencement of each Interest Period for any
      Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is
      an
      integral multiple of $1,000,000 and not less than $1,000,000. At the time that
      each ABR Borrowing is made, such Borrowing shall be in an aggregate amount
      that
      is an integral multiple of $1,000,000 and not less than $1,000,000; provided
      that an ABR Borrowing may be in an aggregate amount that is equal to the entire
      unused balance of the total Commitments. Borrowings of more than one Type may
      be
      outstanding at the same time; provided that there shall not at any time be
      more
      than a total of fifteen (15) Eurodollar Borrowings outstanding.
      Notwithstanding any other provision of this Agreement, the Borrower shall not
      be
      entitled to request, or to elect to convert or continue, any Borrowing if the
      Interest Period requested with respect thereto would end after the Maturity
      Date. 

    (d)
Notes.
      If a Lender shall
      make a written request to the Administrative Agent and the Borrower to have
      its
      Loans evidenced by a promissory note, then the Borrower shall execute and
      deliver a single promissory note of the Borrower in substantially the form
      of
      Exhibit A, payable to the order of such Lender in a principal amount equal
      to
      its Maximum Credit Amount as then in effect, and otherwise duly completed.
      The
      date, amount, Type, interest rate and, if applicable, Interest Period of each
      Loan made by each Lender, and all payments made on account of the principal
      thereof, may be recorded by such Lender on its books for its Note, and, prior
      to
      any transfer, may be endorsed by such Lender on a schedule attached to such
      Note
      or any continuation thereof or on any separate record maintained by such Lender;
      provided that the failure to make any such notation or to attach a schedule
      shall not affect any Lender’s or the Borrower’s rights or obligations in respect
      of such Loans or affect the validity of such transfer by any Lender of its
      Note.


    Section
      2.03 Requests for
      Borrowings. To request a Borrowing, the Borrower shall notify the
      Administrative Agent of such request by telephone or by written Borrowing
      Request in substantially the form of Exhibit B and signed by the Parent
      Guarantor and the Borrower (a “written Borrowing Request”): (a) in
      the case of a Eurodollar Borrowing, not later than 12:00 noon, New York, New
      York time, three Business Days before the date of the proposed Borrowing or
      (b) in the case of an ABR Borrowing, not later than 12:00 noon, New York,
      New York time, one Business Day prior to the date of the proposed Borrowing.
      Each telephonic and written Borrowing Request shall be irrevocable and each
      telephonic Borrowing Request shall be confirmed promptly by hand delivery or
      telecopy to the Administrative Agent of a written Borrowing Request. Each such
      telephonic and written Borrowing Request shall specify the following information
      in compliance with Section 2.02: 

    (i)
      the aggregate amount of the
      requested Borrowing; 

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

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

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


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

     

    21


    

    
    

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

    After
      the Borrowing Base
      Equalization Date, information regarding the Conforming Borrowing Base may
      be
      omitted from subsequent Borrowing Requests. 

    If
      no election as to the Type of
      Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.
      If no Interest Period is specified with respect to any requested Eurodollar
      Borrowing, then the Borrower shall be deemed to have selected an Interest Period
      of one month’s duration. Each Borrowing Request shall constitute a
      representation that the amount of the requested Borrowing shall not cause the
      total Revolving Credit Exposures to exceed the total Commitments (i.e.,
      the lesser of the Aggregate Maximum Credit Amounts and the then effective
      Borrowing Base). 

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

    Section
      2.04 Interest
      Elections. 

    (a)
Conversion
      and
      Continuance. Each Borrowing initially shall be of the Type specified in the
      applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
      have an initial Interest Period as specified in such Borrowing Request.
      Thereafter, the Borrower may elect to convert such Borrowing to a different
      Type
      or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
      elect Interest Periods therefor, all as provided in this Section 2.04. The
      Borrower may elect different options with respect to different portions of
      the
      affected Borrowing, in which case each such portion shall be allocated ratably
      among the Lenders holding the Loans comprising such Borrowing, and the Loans
      comprising each such portion shall be considered a separate Borrowing.


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

    (c)
Information
      in Interest
      Election Requests. Each telephonic and written Interest Election Request
      shall specify the following information in compliance with Section 2.02:


    (i)
      the Borrowing to which such
      Interest Election Request applies and, if different options are being elected
      with respect to different portions thereof, the portions thereof to be allocated
      to each resulting Borrowing (in which case the information to be specified
      pursuant to Section 2.04(c)(iii) and (iv) shall be specified for each
      resulting Borrowing); 

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

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

     

    22


    

    
    

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

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

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

    (e)
Effect
      of Failure to Deliver
      Timely Interest Election Request and Events of Default on Interest Election.
      If the Borrower fails to deliver a timely Interest Election Request with respect
      to a Eurodollar Borrowing prior to the end of the Interest Period applicable
      thereto, then, unless such Borrowing is repaid as provided herein, at the end
      of
      such Interest Period such Borrowing shall be converted to an ABR Borrowing.
      Notwithstanding any contrary provision hereof, if an Event of Default has
      occurred and is continuing: (i) no outstanding Borrowing may be converted
      to or continued as a Eurodollar Borrowing (and any Interest Election Request
      that requests the conversion of any Borrowing to, or continuation of any
      Borrowing as, a Eurodollar Borrowing shall be ineffective) and (ii) unless
      repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at
      the
      end of the Interest Period applicable thereto. 

    Section
      2.05 Funding of
      Borrowings. 

    (a)
Funding
      by Lenders. Each
      Lender shall make each Loan to be made by it hereunder on the proposed date
      thereof by wire transfer of immediately available funds by 1:00 p.m., New York,
      New York time, to the account of the Administrative Agent most recently
      designated by it for such purpose by notice to the Lenders. The Administrative
      Agent will make such Loans available to the Borrower by promptly crediting
      the
      amounts so received, in like funds, to an account designated by the Borrower
      in
      the applicable Borrowing Request. 

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

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

    (a)
Scheduled
      Termination of
      Commitments. Unless previously terminated, the Commitments shall terminate
      on the Maturity Date. If at any time the Aggregate Maximum Credit 

     

    23


    

    
    

    Amounts
      or the Borrowing Base is
      terminated or reduced to zero, then the Commitments shall terminate on the
      effective date of such termination or reduction. 

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

    (i)
      The Borrower may at any time
      terminate, or from time to time reduce, the Aggregate Maximum Credit Amounts;
      provided that (A) each reduction of the Aggregate Maximum Credit Amounts
      shall be in an amount that is an integral multiple of $1,000,000 and not less
      than $5,000,000 and (B) the Borrower shall not terminate or reduce the
      Aggregate Maximum Credit Amounts if, after giving effect to any concurrent
      prepayment of the Loans in accordance with Section 3.04(c), the total
      Revolving Credit Exposures would exceed the total Commitments. 

    (ii)
      The Borrower shall notify the
      Administrative Agent of any election to terminate or reduce the Aggregate
      Maximum Credit Amounts under Section 2.06(b)(i) at least three Business
      Days prior to the effective date of such termination or reduction, specifying
      such election and the effective date thereof. Promptly following receipt of
      any
      notice, the Administrative Agent shall advise the Lenders of the contents
      thereof. Each notice delivered by the Borrower pursuant to this
      Section 2.06(b)(ii) shall be irrevocable. Any termination or reduction of
      the Aggregate Maximum Credit Amounts shall be permanent and may not be
      reinstated except pursuant to Section 2.06(c). Each reduction of the
      Aggregate Maximum Credit Amounts shall be made ratably among the Lenders in
      accordance with each Lender’s Applicable Percentage. 

    (c)
Optional
      Increase in
      Aggregate Maximum Credit Amounts. 

    (i)
      Subject to the conditions set
      forth in Section 2.06(c)(ii), the Borrower may increase the Aggregate
      Maximum Credit Amounts then in effect with the prior written consent of the
      Administrative Agent by increasing the Maximum Credit Amount of a Lender or
      by
      causing a Person that at such time is not a Lender to become a Lender (an
“Additional Lender”). 

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

    (A)
      such increase shall not be less
      than $50,000,000 unless the Administrative Agent otherwise consents, and no
      such
      increase shall be permitted if after giving effect thereto the Aggregate Maximum
      Credit Amounts would exceed $1,050,000,000; 

    (B)
      no Default shall have occurred
      and be continuing at the effective date of such increase or would result after
      giving effect to such increase; 

    (C)
      no Lender’s Maximum Credit
      Amount may be increased without the consent of such Lender (such consent to
      be
      granted in such Lender’s sole discretion); 

    (D)
      if the Borrower elects to
      increase the Aggregate Maximum Credit Amounts by increasing the Maximum Credit
      Amount of a Lender, the Parent Guarantor, the Borrower and such Lender shall
      execute and deliver to the Administrative Agent a certificate substantially
      in
      the form of Exhibit H-1 (a “Maximum Credit Amount Increase Certificate”);
      and 

    (E)
      if the Borrower elects to
      increase the Aggregate Maximum Credit Amounts by causing an Additional Lender
      to
      become a party to this Agreement, then the Parent Guarantor, the Borrower and
      such Additional Lender shall execute and deliver to the Administrative


     

    24


    

    
    

    Agent
      a certificate substantially in
      the form of Exhibit H-2 (an “Additional Lender Certificate”), together
      with an Administrative Questionnaire. 

    (iii)
      Any such Additional Lender
      shall be deemed to be a party in all respects to this Agreement and any other
      Loan Documents to which the Lenders are a party, and upon the effective date
      set
      forth in such Additional Lender Certificate or Maximum Credit Amount Increase
      Certificate, any such Lender party to a Maximum Credit Amount Increase
      Certificate or an Additional Lender Certificate shall purchase a pro rata
      portion of the outstanding Revolving Credit Exposure of each of the current
      Lenders such that the Lenders (including any Additional Lender, if applicable)
      shall have the appropriate portion of the aggregate outstanding Revolving Credit
      Exposure (based in each case of such Lender’s Applicable Percentage, as revised
      pursuant to this Section). 

    Section
      2.07 Borrowing Base.


    (a)
Initial
      Borrowing Base and
      Initial Conforming Borrowing Base. For the period from and including the
      Effective Date to but excluding the first Redetermination Date, the amount
      of
      the Borrowing Base shall be $850,000,000 and the amount of the Conforming
      Borrowing Base shall be $685,000,000; provided that for the period from the
      Effective Date until the Borrowing Base Equalization Date the Borrowing Base
      shall not be less than $850,000,000. Notwithstanding the foregoing, the
      Borrowing Base and the Conforming Borrowing Base may be subject to further
      adjustments from time to time pursuant to Section 2.07(f),
      Section 8.13(c) or Section 9.11(d). On the Borrowing Base Equalization
      Date, the Borrowing Base shall be reduced to an amount equal to the Conforming
      Borrowing Base. 

    (b)
Scheduled
      and Interim
      Redeterminations. The Borrowing Base and, until the Borrowing Base
      Equalization Date, the Conforming Borrowing Base, shall be redetermined
      semi-annually in accordance with this Section 2.07 (a “Scheduled
      Redetermination”), and, subject to Section 2.07(d), such redetermined
      amounts shall become effective and applicable to the Borrower, the Agents,
      the
      Issuing Bank and the Lenders on April 1st and October 1st of each
      year, commencing October 1, 2007. In addition, the Borrower may, by
      notifying the Administrative Agent thereof, and the Administrative Agent may,
      at
      the direction of the Super-Majority Lenders, by notifying the Borrower thereof,
      one time during each six month period, elect any of the foregoing amounts to
      be
      redetermined between Scheduled Redeterminations (an “Interim
      Redetermination”) in accordance with this Section 2.07. 

    (c)
Scheduled
      and Interim
      Redetermination Procedure. 

    (i)
      Each Scheduled Redetermination
      and each Interim Redetermination shall be effectuated as follows: Upon receipt
      by the Administrative Agent of (A) the Reserve Report and the certificate
      required to be delivered by the Borrower to the Administrative Agent, in the
      case of a Scheduled Redetermination, pursuant to Section 8.12(a) and (c),
      and, in the case of an Interim Redetermination, pursuant to Section 8.12(b)
      and (c), and (B) such other reports, data and supplemental information,
      including, without limitation, the information provided pursuant to
      Section 8.12(c), as may, from time to time, be reasonably requested by the
      Super-Majority Lenders (the Reserve Report, such certificate and such other
      reports, data and supplemental information being the “Engineering
      Reports”), the Administrative Agent shall evaluate the information contained
      in the Engineering Reports and shall, in good faith, propose a new Borrowing
      Base, which prior to the Borrowing Base Equalization Date shall further specify
      a new Conforming Borrowing Base (all such amounts being the “Proposed
      Borrowing Base”) based upon such information and such other information
      (including, without limitation, the status of title information with respect
      to
      the Oil and Gas Properties as described in the Engineering Reports and the
      existence of any other Debt) as the Administrative Agent deems appropriate
      in
      its sole discretion and consistent with its normal oil and gas lending criteria
      as it exists at the particular time. 

     

    25


    

    
    

    (ii)
      The Administrative Agent shall
      notify the Borrower and the Lenders of the Proposed Borrowing Base (the
“Proposed Borrowing Base Notice”): 

    (A)
      in the case of a Scheduled
      Redetermination (1) if the Administrative Agent shall have received the
      Engineering Reports required to be delivered by the Borrower pursuant to
      Section 8.12(a) and (c) in a timely and complete manner, then on or
      before the March 15th and September 15th of such year following the
      date of delivery or (2) if the Administrative Agent shall not have received
      the Engineering Reports required to be delivered by the Borrower pursuant to
      Section 8.12(a) and (c) in a timely and complete manner, then promptly
      after the Administrative Agent has received complete Engineering Reports from
      the Borrower and has had a reasonable opportunity to determine the Proposed
      Borrowing Base in accordance with Section 2.07(c)(i); and 

    (B)
      in the case of an Interim
      Redetermination, promptly, and in any event, within fifteen (15) days after
      the Administrative Agent has received the required Engineering Reports.


    (iii)
      Any Proposed Borrowing Base
      that would increase the Borrowing Base (and prior to the Borrowing Base
      Equalization Date, the Conforming Borrowing Base) then in effect must be
      approved or deemed to have been approved by all of the Lenders as provided
      in
      this Section 2.07(c)(iii); and any Proposed Borrowing Base that would
      decrease or maintain the Borrowing Base (and prior to the Borrowing Base
      Equalization Date, the Conforming Borrowing Base) then in effect must be
      approved or be deemed to have been approved by the Super-Majority Lenders as
      provided in this Section 2.07(c)(iii). Such decisions will be made by each
      Lender based upon such criteria as such Lender deems appropriate in its sole
      discretion and consistent with its normal oil and gas lending criteria as it
      exists at the particular time. Upon receipt of the Proposed Borrowing Base
      Notice, each Lender shall have fifteen (15) days to agree with the Proposed
      Borrowing Base or disagree with the Proposed Borrowing Base by proposing an
      alternate Borrowing Base (which proposal must prior to the Borrowing Base
      Equalization Date also propose a Conforming Borrowing Base). If at the end
      of
      such fifteen (15) days, any Lender has not communicated its approval or
      disapproval in writing to the Administrative Agent, such silence shall be deemed
      to be an approval of the Proposed Borrowing Base. If, at the end of such 15-day
      period, all of the Lenders, in the case of a Proposed Borrowing Base that would
      increase the Borrowing Base (and prior to the Borrowing Base Equalization Date,
      the Conforming Borrowing Base) then in effect, or the Super-Majority Lenders,
      in
      the case of a Proposed Borrowing Base that would decrease or maintain the
      Borrowing Base (and prior to the Borrowing Base Equalization Date, the
      Conforming Borrowing Base) then in effect, have approved or deemed to have
      approved, as aforesaid, then the Proposed Borrowing Base (and prior to the
      Borrowing Base Equalization Date, the Conforming Borrowing Base) shall become
      the new Borrowing Base and the new Conforming Borrowing Base, effective on
      the
      date specified in Section 2.07(d). If, however, at the end of such 15-day
      period, all of the Lenders or the Super-Majority Lenders, as applicable, have
      not approved or deemed to have approved, as aforesaid, then the Administrative
      Agent shall poll the Lenders to ascertain the highest amount (which proposal
      must, prior to the Borrowing Base Equalization Date, also propose a Conforming
      Borrowing Base) then acceptable to all of the Lenders, or the Super-Majority
      Lenders in the case of an amount that would decrease or maintain the Borrowing
      Base (and prior to the Borrowing Base Equalization Date, the Conforming
      Borrowing Base), then in effect, for purposes of this Section 2.07 and such
      amount shall become the new Borrowing Base (and, prior to the Borrowing Base
      Equalization Date, the Conforming Borrowing Base), effective on the date
      specified in Section 2.07(d). 

    (d)
Effectiveness
      of a
      Redetermined Borrowing Base. After a redetermined Borrowing Base (and prior
      to the Borrowing Base Equalization Date, the Conforming Borrowing Base) is
      approved or is deemed to have been approved by all of the Lenders or the
      Super-Majority Lenders, as applicable, pursuant to Section 2.07(c)(iii),
      the Administrative Agent shall notify the Borrower and the 

     

    26


    

    
    

    Lenders
      (the “New Borrowing Base
      Notice”), and such amount (or amounts, as applicable) shall become the new
      Borrowing Base (and prior to the Borrowing Base Equalization Date, the new
      Conforming Borrowing Base), effective and applicable to the Borrower, the
      Agents, the Issuing Bank and the Lenders: 

    (i)
      in the case of a Scheduled
      Redetermination, (A) if the Administrative Agent shall have received the
      Engineering Reports required to be delivered by the Borrower pursuant to
      Section 8.12(a) and (c) in a timely and complete manner, then on the
      April 1st or October 1st, as applicable, following such notice, or
      (B) if the Administrative Agent shall not have received the Engineering
      Reports required to be delivered by the Borrower pursuant to
      Section 8.12(a) and (c) in a timely and complete manner, then on the
      Business Day next succeeding delivery of such notice; and 

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

    (e)
      Such amount shall then become
      the Borrowing Base (and prior to the Borrowing Base Equalization Date, the
      Conforming Borrowing Base) until the next Scheduled Redetermination Date, the
      next Interim Redetermination Date or the next adjustment, to the extent
      applicable, under Section 2.07(f), Section 8.13(c) or
      Section 9.11, whichever occurs first. Notwithstanding the foregoing, no
      Scheduled Redetermination or Interim Redetermination shall become effective
      until the New Borrowing Base Notice related thereto is received by the Borrower.
      

    (f)
Reduction
      of Borrowing Base
      Upon Issuance of Permitted Senior Notes. Notwithstanding anything to the
      contrary contained herein, upon the issuance of any Senior Notes in accordance
      with Section 9.02(h), the Borrowing Base and the Conforming Borrowing Base
      then in effect shall be reduced by an amount equal to the product of 0.25
      multiplied by the stated principal amount of such Senior Notes (without regard
      to any initial issue discount), and the Borrowing Base and the Conforming
      Borrowing Base as so reduced shall become the new Borrowing Base and the new
      Conforming Base immediately upon the date of such issuance, effective and
      applicable to the Borrower, the Agents, the Issuing Bank and the Lenders on
      such
      date until the next redetermination or modification thereof hereunder; provided
      that if the date of such issuance constitutes the Borrowing Base Equalization
      Date, the Borrowing Base shall be reduced to an amount equal to the Conforming
      Borrowing Base (as in effect prior to such issuance) less the reduction required
      by this Section 2.07(f). 

    Section
      2.08 Letters of
      Credit. 

    (a)
General.
      Subject to the
      terms and conditions set forth herein, the Borrower may request the Issuing
      Bank
      to issue US dollar denominated Letters of Credit for its own account or for
      the
      account of the Parent Guarantor or any of its Subsidiaries, in a form reasonably
      acceptable to the Administrative Agent and the Issuing Bank, at any time and
      from time to time during the period from the Effective Date until the day which
      is five (5) Business Days prior to the end of the Availability Period. In
      the event of any inconsistency between the terms and conditions of this
      Agreement and the terms and conditions of any form of letter of credit
      application or other agreement submitted by the Borrower to, or entered into
      by
      the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
      and conditions of this Agreement shall control. 

    (b)
Notice
      of Issuance,
      Amendment, Renewal, Extension; Certain Conditions. To request the issuance
      of a Letter of Credit (or the amendment, renewal or extension of an outstanding
      Letter of Credit), the Borrower shall hand deliver or telecopy (or transmit
      by
      electronic communication, if arrangements for doing so have been approved by
      the
      Issuing Bank) to the Issuing Bank and the Administrative Agent (unless otherwise
      agreed by the Issuing Bank, not less than three (3) Business Days in
      advance of the requested date of issuance, amendment, renewal or extension)
      a
      notice: 

    (i)
      requesting the issuance of a
      Letter of Credit or identifying the outstanding Letter of Credit to be amended,
      renewed or extended; 

     

    27


    

    
    

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

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

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

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

    (vi)
      specifying the amount of the
      then effective Borrowing Base and the current total Revolving Credit Exposures
      (without regard to the requested Letter of Credit or the requested amendment,
      renewal or extension of an outstanding Letter of Credit) and the pro
      forma total Revolving Credit Exposures (giving effect to the requested
      Letter of Credit or the requested amendment, renewal or extension of an
      outstanding Letter of Credit). 

    Each
      notice shall constitute a
      representation that after giving effect to the requested issuance, amendment,
      renewal or extension, as applicable, (i) the LC Exposure shall not exceed
      the LC Commitment and (ii) the total Revolving Credit Exposures shall not
      exceed the total Commitments (i.e., the lesser of the Aggregate Maximum
      Credit Amounts and the then effective Borrowing Base). 

    If
      requested by the Issuing Bank,
      the Borrower also shall submit a letter of credit application on the Issuing
      Bank’s standard form in connection with any request for a Letter of Credit and
      shall guarantee the reimbursement of any Letter of Credit issued for the account
      of the Parent Guarantor or a Subsidiary. 

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

    (d)
Participations.
By
      the
      issuance of a Letter of Credit (or an amendment to an existing Letter of Credit
      increasing the amount thereof) and without any further action on the part of
      the
      Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender,
      and
      each Lender hereby acquires from the Issuing Bank, a participation in such
      Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate
      amount available to be drawn under such Letter of Credit. In consideration
      and
      in furtherance of the foregoing, each Lender hereby absolutely and
      unconditionally agrees to pay to the Administrative Agent, for the account
      of
      the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement
      made by the Issuing Bank and not reimbursed by the Borrower on the date due
      as
      provided in Section 2.08(e), or of any reimbursement payment required to be
      refunded to the Borrower for any reason. Each Lender acknowledges and agrees
      that its obligation to acquire participations pursuant to this
      Section 2.08(d) in respect of Letters of Credit is absolute and
      unconditional and shall not be affected by any circumstance whatsoever,
      including any amendment, renewal or extension of any Letter of Credit or the
      occurrence and continuance of a Default or reduction or termination of the
      Commitments, and that each such payment shall be made without any offset,
      abatement, withholding or reduction whatsoever. 

     

    28


    

    
    

    (e)
Reimbursement.
      If the
      Issuing Bank shall make any LC Disbursement, the Borrower shall reimburse such
      LC Disbursement by paying to the Administrative Agent an amount equal to such
      LC
      Disbursement not later than the fifth (5th) Business
      Day after the Borrower shall have received
      notice of such LC Disbursement, together with interest on the amount disbursed
      from and including the date of disbursement until payment in full of such
      disbursed amount at a varying rate per annum equal to (i) the then
      applicable interest rate for ABR Loans for each day such LC Disbursement shall
      remain outstanding through the fifth (5th) Business
      Day following its receipt of notice of such
      disbursement and (ii) thereafter, the post-default rate for ABR Loans for
      the period from and including the sixth Business Day following the date of
      such
      disbursement to and including the date of repayment in full of such disbursed
      amount. If the Borrower fails to make such payment when due, the Administrative
      Agent shall notify each Lender of the applicable LC Disbursement, the payment
      then due from the Borrower in respect thereof and such Lender’s Applicable
      Percentage thereof. Promptly following receipt of such notice, each Lender
      shall
      pay to the Administrative Agent its Applicable Percentage of the payment then
      due from the Borrower, in the same manner as provided in Section 2.05 with
      respect to Loans made by such Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
      Administrative Agent shall promptly pay to the Issuing Bank the amounts so
      received by it from the Lenders. Promptly following receipt by the
      Administrative Agent of any payment from the Borrower pursuant to this
      Section 2.08(e), the Administrative Agent shall distribute such payment to
      the Issuing Bank or, to the extent that Lenders have made payments pursuant
      to
      this Section 2.08(e) to reimburse the Issuing Bank, then to such Lenders as
      their interests may appear. Any payment made by a Lender pursuant to this
      Section 2.08(e) to reimburse the Issuing Bank for any LC Disbursement shall
      not constitute a Loan and shall not relieve the Borrower of its obligation
      to
      reimburse such LC Disbursement. 

    (f)
Obligations
      Absolute. The
      Borrower’s obligation to reimburse LC Disbursements as provided in
      Section 2.08(e) shall be absolute, unconditional and irrevocable, and shall
      be performed strictly in accordance with the terms of this Agreement under
      any
      and all circumstances whatsoever and irrespective of (i) any lack of
      validity or enforceability of any Letter of Credit, any Letter of Credit
      Agreement or this Agreement, or any term or provision therein, (ii) any
      draft or other document presented under a Letter of Credit proving to be forged,
      fraudulent or invalid in any respect or any statement therein being untrue
      or
      inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter
      of Credit against presentation of a draft or other document that does not comply
      with the terms of such Letter of Credit or any Letter of Credit Agreement,
      or
      (iv) any other event or circumstance whatsoever, whether or not similar to
      any of the foregoing, that might, but for the provisions of this
      Section 2.08(f), constitute a legal or equitable discharge of, or provide a
      right of setoff against, the Borrower’s obligations hereunder. Neither the
      Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related
      Parties shall have any liability or responsibility by reason of or in connection
      with the issuance or transfer of any Letter of Credit or any payment or failure
      to make any payment thereunder (irrespective of any of the circumstances
      referred to in the preceding sentence), or any error, omission, interruption,
      loss or delay in transmission or delivery of any draft, notice or other
      communication under or relating to any Letter of Credit (including any document
      required to make a drawing thereunder), any error in interpretation of technical
      terms or any consequence arising from causes beyond the control of the Issuing
      Bank; provided that the foregoing shall not be construed to excuse the Issuing
      Bank from liability to the Borrower to the extent of any direct damages (as
      opposed to consequential damages, claims in respect of which are hereby waived
      by the Borrower to the extent permitted by applicable law) suffered by the
      Borrower that are caused by the Issuing Bank’s failure to exercise care when
      determining whether drafts and other documents presented under a Letter of
      Credit comply with the terms thereof. The parties hereto expressly agree that,
      in the absence of gross negligence or willful misconduct on the part of the
      Issuing Bank, the Issuing Bank shall be deemed to have exercised all requisite
      care in each such determination. In furtherance of the foregoing and without
      limiting the generality thereof, the parties agree that, with respect to
      documents presented which appear on their face to be in substantial compliance
      with the terms of a Letter of Credit, the Issuing Bank may, in its sole
      discretion, either accept and make 

     

    29


    

    
    

    payment
      upon such documents without
      responsibility for further investigation, regardless of any notice or
      information to the contrary, or refuse to accept and make payment upon such
      documents if such documents are not in strict compliance with the terms of
      such
      Letter of Credit. 

    (g)
Disbursement
      Procedures.
      The Issuing Bank shall, promptly following its receipt thereof, examine all
      documents purporting to represent a demand for payment under a Letter of Credit.
      The Issuing Bank shall promptly notify the Administrative Agent and the Borrower
      by telephone (confirmed by telecopy) of such demand for payment and whether
      the
      Issuing Bank has made or will make an LC Disbursement thereunder; provided
      that
      any failure to give or delay in giving such notice shall not relieve the
      Borrower of its obligation to reimburse the Issuing Bank and the Lenders with
      respect to any such LC Disbursement. 

    (h)
Interim
      Interest. If the
      Issuing Bank shall make any LC Disbursement, then, until the Borrower shall
      have
      reimbursed the Issuing Bank for such LC Disbursement, the unpaid amount thereof
      shall bear interest, for each day from and including the date such LC
      Disbursement is made to but excluding the date that the Borrower reimburses
      such
      LC Disbursement, at the rate per annum then applicable to ABR Loans. Interest
      accrued pursuant to this Section 2.08(h) shall be for the account of the
      Issuing Bank, except that interest accrued on and after the date of payment
      by
      any Lender pursuant to Section 2.08(e) to reimburse the Issuing Bank shall
      be for the account of such Lender to the extent of such payment. 

    (i)
Cash
      Collateralization.
      If (i) any Event of Default shall occur and be continuing and the Borrower
      receives notice from the Administrative Agent or the Majority Lenders demanding
      the deposit of cash collateral pursuant to this Section 2.08(i), or
      (ii) the Borrower is required to pay to the Administrative Agent the excess
      attributable to an LC Exposure in connection with any prepayment pursuant to
      Section 3.04(c), then the Borrower shall deposit, in an account with the
      Administrative Agent, in the name of the Administrative Agent and for the
      benefit of the Lenders, an amount in cash equal to, in the case of an Event
      of
      Default, the LC Exposure, and in the case of a payment required by
      Section 3.04(c), the amount of such excess as provided in
      Section 3.04(c), as of such date plus any accrued and unpaid interest
      thereon; provided that the obligation to deposit such cash collateral shall
      become effective three (3) Business Days after notice from the
      Administrative Agent, and such deposit shall become immediately due and payable,
      without demand or other notice of any kind, upon the occurrence of any Event
      of
      Default with respect to any Loan Party or any Subsidiary described in
      Section 10.01(h) or Section 10.01(i). The Borrower hereby grants to
      the Administrative Agent, for the benefit of the Issuing Bank and the Lenders,
      an exclusive first priority and continuing perfected security interest in and
      Lien on such account and all cash, checks, drafts, certificates and instruments,
      if any, from time to time deposited or held in such account, all deposits or
      wire transfers made thereto, any and all investments purchased with funds
      deposited in such account, all interest, dividends, cash, instruments, financial
      assets and other Property from time to time received, receivable or otherwise
      payable in respect of, or in exchange for, any or all of the foregoing, and
      all
      proceeds, products, accessions, rents, profits, income and benefits therefrom,
      and any substitutions and replacements therefor. The Borrower’s obligation to
      deposit amounts pursuant to this Section 2.08(i) shall be absolute and
      unconditional, without regard to whether any beneficiary of any such Letter
      of
      Credit has attempted to draw down all or a portion of such amount under the
      terms of a Letter of Credit, and, to the fullest extent permitted by applicable
      law, shall not be subject to any defense or be affected by a right of set-off,
      counterclaim or recoupment which the Parent Guarantor, any other Loan Party
      or
      any of its Subsidiaries may now or hereafter have against any such beneficiary,
      the Issuing Bank, the Administrative Agent, the Lenders or any other Person
      for
      any reason whatsoever. Such deposit shall be held as collateral securing the
      payment and performance of the Borrower’s and the other Loan Party’s obligations
      under this Agreement and the other Loan Documents in a “securities account”
(within the meaning of Article 8 of the Uniform Commercial Code in effect from
      time to time in the State of New York, the “UCC”) over which the
      Administrative Agent shall have 

     

    30


    

    
    

    “control”
(within
      the meaning of the
      UCC). Notwithstanding the foregoing, the Borrower may direct the Administrative
      Agent and the “securities intermediary” (within the meaning of the UCC) to
      invest amounts credited to the securities account, at the Borrower’s risk and
      expense, in Investments described in Section 9.05(c) through (f). Interest
      or profits, if any, on such investments shall accumulate in such account. Moneys
      in such account shall be applied by the Administrative Agent to reimburse,
      on a
pro rata basis, the Issuing Bank for LC Disbursements for which it has
      not been reimbursed and, to the extent not so applied, shall be held for the
      satisfaction of the reimbursement obligations of the Borrower for the LC
      Exposure at such time or, if the maturity of the Loans has been accelerated,
      be
      applied to satisfy other obligations of the Borrower and the Loan Party’s under
      this Agreement or the other Loan Documents. If the Borrower is required to
      provide an amount of cash collateral hereunder as a result of the occurrence
      of
      an Event of Default, and the Borrower is not otherwise required to pay to the
      Administrative Agent the excess attributable to an LC Exposure in connection
      with any prepayment pursuant to Section 3.04(c), then such amount (to the
      extent not applied as aforesaid) shall be returned to the Borrower within three
      Business Days after all Events of Default have been cured or waived.


    (j)
Existing
      Letters of
      Credit. On the Effective Date, the Existing Letters of Credit shall be
      deemed issued under this Agreement without further action on any Person’s part.


    ARTICLE
      III


    Payments
      of Principal and
      Interest; Prepayments; Fees 

    Section
      3.01 Repayment of
      Loans. The Borrower hereby unconditionally promises to pay to the
      Administrative Agent for the account of each Lender the then unpaid principal
      amount of each Loan on the Termination Date. 

    Section
      3.02 Interest.


    (a)
ABR
      Loans. The Loans
      comprising each ABR Borrowing shall bear interest at the Alternate Base Rate
      plus the Applicable Margin. 

    (b)
Eurodollar
      Loans. The
      Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted
      LIBO Rate for the Interest Period in effect for such Borrowing plus the
      Applicable Margin. 

    (c)
Post-Default
      Rate.
      Notwithstanding the foregoing, if any principal of or interest on any Loan
      or
      any fee or other amount payable by the Borrower or any other Loan Party
      hereunder or under any other Loan Document is not paid when due, whether at
      stated maturity, upon acceleration or otherwise, such overdue amount shall
      bear
      interest, after as well as before judgment, at a rate per annum equal to two
      percent (2%) plus the rate applicable to ABR Loans as provided in
      Section 3.02(a), or if no rate is then applicable to such amount, at a rate
      per annum equal to two percent (2%) plus the highest rate then applicable
      to ABR Loans as provided in Section 3.02(a). 

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

     

    31


    

    
    

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

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

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

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

    then
      the Administrative Agent shall
      give notice thereof to the Borrower and the Lenders by telephone or telecopy
      as
      promptly as practicable thereafter and, until the Administrative Agent notifies
      the Borrower and the Lenders that the circumstances giving rise to such notice
      no longer exist, (i) any Interest Election Request that requests the
      conversion of any Borrowing to, or continuation of any Borrowing as, a
      Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing
      Request requests a Eurodollar Borrowing, such Borrowing shall be made as an
      ABR
      Borrowing. 

    Section
      3.04 Prepayments.


    (a)
Optional
      Prepayments. The
      Borrower shall have the right at any time and from time to time to prepay any
      Borrowing in whole or in part, subject to prior notice in accordance with
      Section 3.04(b). 

    (b)
Notice
      and Terms of Optional
      Prepayment. The Borrower shall notify the Administrative Agent by telephone
      (confirmed by telecopy) of any prepayment hereunder (i) in the case of
      prepayment of a Eurodollar Borrowing, not later than 12:00 noon, New York,
      New
      York time, three Business Days before the date of prepayment, or (ii) in
      the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New
      York,
      New York time, one (1) Business Day prior to the date of prepayment. Each
      such notice shall be irrevocable and shall specify the prepayment date and
      the
      principal amount of each Borrowing or portion thereof to be prepaid. Promptly
      following receipt of any such notice relating to a Borrowing, the Administrative
      Agent shall advise the Lenders of the contents thereof. Each partial prepayment
      of any Borrowing shall be in an amount that would be permitted in the case
      of an
      advance of a Borrowing of the same Type as provided in Section 2.02. Each
      prepayment of a Borrowing shall be applied ratably to the Loans included in
      the
      prepaid Borrowing. Prepayments shall be accompanied by accrued interest to
      the
      extent required by Section 3.02. 

    (c)
Mandatory
      Prepayments.


    (i)
      If, after giving effect to any
      termination or reduction of the Aggregate Maximum Credit Amounts pursuant to
      Section 2.06(b), the total Revolving Credit Exposures exceeds the total
      Commitments, then the Borrower shall (A) prepay the Borrowings on the date
      of such termination or 

     

    32


    

    
    

    reduction
      in an aggregate principal
      amount equal to such excess, and (B) if any excess remains after prepaying
      all of the Borrowings as a result of an LC Exposure, pay to the Administrative
      Agent on behalf of the Lenders an amount equal to such excess to be held as
      cash
      collateral as provided in Section 2.08(i). 

    (ii)
      Upon any scheduled or interim
      redetermination of the amount of the Borrowing Base in accordance with
      Section 2.07(d) or adjustment under Section 8.13(c) at any time, if
      the total Revolving Credit Exposures exceeds the redetermined or adjusted
      Borrowing Base, then the Borrower shall, within thirty (30) days after its
      receipt of a New Borrowing Base Notice inform the Administrative Agent of the
      Borrower’s election to: (A) prepay the Loans in six equal monthly
      installments, commencing on the 30th day following its receipt of such New
      Borrowing Base Notice or notice of adjustment with each payment being equal
      to
      1/6th of the deficiency (provided that all payments required to be made pursuant
      to this Section 3.04(c)(ii) must be made on or prior to the Termination
      Date), (B) furnish additional Oil and Gas Properties not evaluated in the
      Reserve Report having a loan value (as determined by the Lenders in their sole
      discretion) not less than the deficiency or (C) undertake a combination of
      clauses (A) and (B) satisfactory to the Administrative Agent and all
      of the Lenders. If, because of LC Exposure, a Borrowing Base deficiency remains
      after prepaying all of the Loans, the Borrower shall pay to the Administrative
      Agent on behalf of the Lenders an amount equal to such remaining Borrowing
      Base
      deficiency to be held as cash collateral as provided in Section 2.08(i).


    (iii)
      Upon any adjustments to the
      Borrowing Base pursuant to Section 2.07(f) or Section 9.11, if the
      total Revolving Credit Exposures exceeds the Borrowing Base as adjusted, then
      the Borrower shall (A) prepay Borrowings in an aggregate principal amount
      equal to such excess, and (B) if any excess remains after prepaying all
      Borrowings as a result of an LC Exposure, pay to the Administrative Agent on
      behalf of the Lenders an amount equal to such excess to be held as cash
      collateral as provided in Section 2.08(i). The Borrower shall be obligated
      to make such prepayment and/or deposit of cash collateral on the date the Parent
      Guarantor, the Borrower or such other Person receives cash proceeds as a result
      of such disposition or such incurrence of Debt. 

    (iv)
      Each prepayment of Borrowings
      pursuant to this Section 3.04(c) shall be applied, first, ratably to any
      ABR Borrowings then outstanding, and, second, to any Eurodollar Borrowings
      then
      outstanding as the Borrower may direct. 

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

    (d)
No
      Premium or Penalty.
      Prepayments permitted or required under this Section 3.04 shall be without
      premium or penalty, except as required under Section 5.02. 

    Section
      3.05 Fees.


    (a)
Commitment
      Fees. The
      Borrower agrees to pay to the Administrative Agent for the account of each
      Lender a commitment fee, which shall accrue at the applicable Commitment Fee
      Rate on the average daily amount of the unused amount of each Lender’s
      Applicable Percentage of the Borrowing Base during the period from and including
      the date of this Agreement to but excluding the Termination Date. Accrued
      commitment fees shall be payable in arrears on the third Business Day after
      the
      last day of March, June, September and December of each year and on the
      Termination Date, commencing on the first such date to occur after the date
      hereof. All commitment fees shall be computed on the basis of a year of 360
      days
      and shall be payable for the actual number of days elapsed (including the first
      day but excluding the last day). 

     

    33


    

    
    

    (b)
Letter
      of Credit Fees.
      The Borrower agrees to pay (i) to the Administrative Agent for the account
      of each Lender a participation fee with respect to its participations in Letters
      of Credit, which shall accrue at the same Applicable Margin for Eurodollar
      Loans
      on the average daily amount of such Lender’s LC Exposure (excluding any portion
      thereof attributable to unreimbursed LC Disbursements) during the period from
      and including the date of this Agreement to but excluding the later of the
      date
      on which such Lender’s Commitment terminates and the date on which such Lender
      ceases to have any LC Exposure, (ii) to the Issuing Bank, for its own
      account, a fronting fee, which shall accrue at the rate of 0.125% per annum
      on the average daily amount of the LC Exposure (excluding any portion thereof
      attributable to unreimbursed LC Disbursements) during the period from and
      including the date of this Agreement to but excluding the later of the date
      of
      termination of the Commitments and the date on which there ceases to be any
      LC
      Exposure, provided that in no event shall such fee be less than $500 during
      any
      year, and (iii) to the Issuing Bank, for its own account, its standard and
      customary fees with respect to the issuance, amendment, renewal or extension
      of
      any Letter of Credit or processing of drawings thereunder. Participation fees
      and fronting fees accrued through and including the last day of March, June,
      September and December of each year shall be payable on the third Business
      Day
      following such last day, commencing on the first such date to occur after the
      date of this Agreement; provided that all such fees shall be payable on the
      Termination Date and any such fees accruing after the Termination Date shall
      be
      payable on demand. Any other fees payable to the Issuing Bank pursuant to this
      Section 3.05(b) shall be payable within 10 days after demand. All
      participation fees and fronting fees shall be computed on the basis of a year
      of
      360 days and shall be payable for the actual number of days elapsed (including
      the first day but excluding the last day). 

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


    ARTICLE
      IV


    Payments;
      Pro Rata
      Treatment; Sharing of Set-offs. 

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

    (a)
Payments
      by the Borrower.
      The Borrower shall make each payment required to be made by it hereunder
      (whether of principal, interest, fees or reimbursement of LC Disbursements,
      or
      of amounts payable under Section 5.01, Section 5.02, Section 5.03
      or otherwise) prior to 12:00 noon, New York, New York time, on the date when
      due, in immediately available funds, without defense, deduction, recoupment,
      set-off or counterclaim. Fees, once paid, shall be fully earned and shall not
      be
      refundable under any circumstances. Any amounts received after such time on
      any
      date may, in the discretion of the Administrative Agent, be deemed to have
      been
      received on the next succeeding Business Day for purposes of calculating
      interest thereon. All such payments shall be made to the Administrative Agent
      at
      its offices specified in Section 12.01, except payments to be made directly
      to the Issuing Bank as expressly provided herein and except that payments
      pursuant to Section 5.01, Section 5.02, Section 5.03 and
      Section 12.03 shall be made directly to the Persons entitled thereto. The
      Administrative Agent shall distribute any such payments received by it for
      the
      account of any other Person to the appropriate recipient promptly following
      receipt thereof. If any payment hereunder shall be due on a day that is not
      a
      Business Day, the date for payment shall be extended to the next succeeding
      Business Day, and, in the case of any payment accruing interest, interest
      thereon shall be payable for the period of such extension. All payments
      hereunder shall be made in dollars. 

    (b)
Application
      of Insufficient
      Payments. If at any time prior the Termination Date, insufficient funds are
      received by and available to the Administrative Agent to pay fully all amounts
      of principal, unreimbursed LC Disbursements, interest, fees and other amounts
      then due hereunder, such 

     

    34


    

    
    

    funds
      shall be applied:
first, ratably to reimbursement of expenses and indemnities provided for
      in this Agreement and the Security Instruments; second, to accrued
      interest on the Loans; third, to fees; fourth, pro rata to
      outstanding principal of the Loans and unreimbursed LC Disbursements; and
fifth, if applicable, to serve as cash collateral to be held by the
      Administrative Agent to secure the LC Exposure, in each case, ratably among
      the
      parties entitled thereto in accordance with the amounts then due to such
      parties. 

    (c)
Sharing
      of Payments by
      Lenders. If any Lender shall, by exercising any right of set-off or
      counterclaim or otherwise, obtain payment in respect of any principal of or
      interest on any of its Loans or participations in LC Disbursements resulting
      in
      such Lender receiving payment of a greater proportion of the aggregate amount
      of
      its Loans and participations in LC Disbursements and accrued interest thereon
      than the proportion received by any other Lender, then the Lender receiving
      such
      greater proportion shall purchase (for cash at face value) participations in
      the
      Loans and participations in LC Disbursements of other Lenders to the extent
      necessary so that the benefit of all such payments shall be shared by the
      Lenders ratably in accordance with the aggregate amount of principal of and
      accrued interest on their respective Loans and participations in LC
      Disbursements; provided that (i) if any such participations are purchased
      and all or any portion of the payment giving rise thereto is recovered, such
      participations shall be rescinded and the purchase price restored to the extent
      of such recovery, without interest, and (ii) the provisions of this
      Section 4.01(c) shall not be construed to apply to any payment made by the
      Borrower pursuant to and in accordance with the express terms of this Agreement
      or any payment obtained by a Lender as consideration for the assignment of
      or
      sale of a participation in any of its Loans or participations in LC
      Disbursements to any assignee or participant, other than to a Loan Party or
      Affiliate thereof (as to which the provisions of this Section 4.01(c) shall
      apply). The Parent Guarantor and the Borrower consents to the foregoing and
      agrees, to the extent it may effectively do so under applicable law, that any
      Lender acquiring a participation pursuant to the foregoing arrangements may
      exercise against either the Parent Guarantor or the Borrower rights of set-off
      and counterclaim with respect to such participation as fully as if such Lender
      were a direct creditor of the Parent Guarantor and the Borrower in the amount
      of
      such participation. 

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

    Section
      4.03 Certain Deductions
      by the Administrative Agent. If any Lender shall fail to make any payment
      required to be made by it pursuant to Section 2.05(b),
      Section 2.08(d), Section 2.08(e) or Section 4.02 then the
      Administrative Agent may, in its discretion (notwithstanding any contrary
      provision hereof), apply any amounts thereafter received by the Administrative
      Agent for the account of such Lender to satisfy such Lender’s obligations under
      such Sections until all such unsatisfied obligations are fully paid.


    Section
      4.04 Disposition of
      Proceeds. The Security Instruments contain an assignment by the Borrower
      and/or the Loan Party’s unto and in favor of the Administrative Agent for the
      benefit of the 

     

    35


    

    
    

    Lenders
      of all of the Borrower’s or
      each other Loan Party’s interest in and to production and all proceeds
      attributable thereto which may be produced from or allocated to the Mortgaged
      Property. The Security Instruments further provide in general for the
      application of such proceeds to the satisfaction of the Indebtedness and other
      obligations described therein and secured thereby. Notwithstanding the
      assignment contained in such Security Instruments, until the occurrence of
      an
      Event of Default, the Administrative Agent and the Lenders agree that they
      will
      neither notify the purchaser or purchasers of such production nor take any
      other
      action to cause such proceeds to be remitted to the Administrative Agent or
      the
      Lenders, but the Lenders will instead permit such proceeds to be paid to the
      Borrower or any other applicable Loan Party and the Lenders hereby authorize
      the
      Administrative Agent to take such actions as may be necessary to cause such
      proceeds to be paid to the Borrower and/or such Loan Parties. 

    ARTICLE
      V


    Increased
      Costs; Break
      Funding Payments; Taxes 

    Section
      5.01 Increased Costs.


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

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


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

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

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

    (c)
Certificates.
      A
      certificate of a Lender or the Issuing Bank setting forth the amount or amounts
      necessary to compensate such Lender or the Issuing Bank or its holding company,
      as the case may be, as specified in Section 5.01(a) or (b) and
      reasonably detailed calculations therefor shall be delivered to the Borrower
      and
      shall be conclusive absent manifest error. The Borrower shall pay such Lender
      or
      the Issuing Bank, as the case may be, the amount shown as due on any such
      certificate within 30 days after receipt thereof. 

     

    36


    

    
    

    (d)
Effect
      of Failure or Delay in
      Requesting Compensation. Failure or delay on the part of any Lender or the
      Issuing Bank to demand compensation pursuant to this Section 5.01 shall not
      constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such
      compensation; provided that the Borrower shall not be required to compensate
      a
      Lender or the Issuing Bank pursuant to this Section 5.01 for any increased
      costs or reductions incurred more than one (1) year prior to the date that
      such Lender or the Issuing Bank, as the case may be, notifies the Borrower
      of
      the Change in Law giving rise to such increased costs or reductions and of
      such
      Lender’s or the Issuing Bank’s intention to claim compensation therefor;
      provided further that, if the Change in Law giving rise to such increased costs
      or reductions is retroactive, then the one (1) year period referred to
      above shall be extended to include the period of retroactive effect thereof.
      

    Section
      5.02 Break Funding
      Payments. In the event of (a) the payment of any principal of any
      Eurodollar Loan other than on the last day of an Interest Period applicable
      thereto (including as a result of an Event of Default), (b) the conversion
      of any Eurodollar Loan into an ABR Loan other than on the last day of the
      Interest Period applicable thereto, or (c) the failure to borrow, convert,
      continue or prepay any Eurodollar Loan on the date specified in any notice
      delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan
      other than on the last day of the Interest Period applicable thereto as a result
      of a request by the Borrower pursuant to Section 5.05, then, in any such
      event, the Borrower shall compensate each Lender for the loss, cost and expense
      attributable to such event. In the case of a Eurodollar Loan, such loss, cost
      or
      expense to any Lender shall be deemed to include an amount determined by such
      Lender to be the excess, if any, of (i) the amount of interest which would
      have accrued on the principal amount of such Loan had such event not occurred,
      at the Adjusted LIBO Rate that would have been applicable to such Loan, for
      the
      period from the date of such event to the last day of the then current Interest
      Period therefor (or, in the case of a failure to borrow, convert or continue,
      for the period that would have been the Interest Period for such Loan), over
      (ii) the amount of interest which would accrue on such principal amount for
      such period at the interest rate which such Lender would bid were it to bid,
      at
      the commencement of such period, for dollar deposits of a comparable amount
      and
      period from other banks in the eurodollar market. 

    A
      certificate of any Lender setting
      forth any amount or amounts that such Lender is entitled to receive pursuant
      to
      this Section 5.02 shall be delivered to the Borrower and shall be
      conclusive absent manifest error. The Borrower shall pay such Lender the amount
      shown as due on any such certificate within 30 days after receipt thereof.
      

    Section
      5.03 Taxes.


    (a)
      All payments made by any Loan
      Party under this Agreement or any Loan Document shall be made free and clear
      of,
      and without deduction or withholding for or on account of, any present or future
      income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
      or withholdings, now or hereafter imposed, levied, collected, withheld or
      assessed by any Governmental Authority, excluding net income taxes and franchise
      taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent
      or any Lender as a result of a present or former connection between the
      Administrative Agent or such Lender and the jurisdiction of the Governmental
      Authority imposing such tax or any political subdivision or taxing authority
      thereof or therein (other than any such connection arising solely from the
      Administrative Agent or such Lender having executed, delivered or performed
      its
      obligations or received a payment under, or enforced, this Agreement or any
      other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
      charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other
      Taxes are required to be withheld from any amounts payable to the Administrative
      Agent or any Lender hereunder, the amounts so payable to the Administrative
      Agent or such Lender shall be increased to the extent necessary to yield to
      the
      Administrative Agent or such Lender (after payment of all Non-Excluded Taxes
      and
      Other Taxes) interest or any such other amounts 

     

    37


    

    
    

    payable
      hereunder at the rates or in
      the amounts specified in this Agreement, provided, however, that
      the Borrower shall not be required to increase any such amounts payable to
      any
      Lender with respect to any Non-Excluded Taxes (i) that are attributable to
      such Lender’s failure to comply with the requirements of Section 5.03(d) or
      (e) or (ii) that are United States withholding taxes imposed on
      amounts payable to such Lender at the time such Lender becomes a party to this
      Agreement, except to the extent that such Lender’s assignor (if any) was
      entitled, at the time of assignment, to receive additional amounts from the
      Borrower with respect to such Non-Excluded Taxes pursuant to this
      Section 5.03(a). 

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

    (c)
      Whenever any Non-Excluded Taxes
      or Other Taxes are payable by a Loan Party, as promptly as possible thereafter
      such Loan Party shall send to the Administrative Agent for its own account
      or
      for the account of the relevant Lender, as the case may be, a certified copy
      of
      an original official receipt received by such Loan Party showing payment
      thereof. If such Loan Party fails to pay any Non-Excluded Taxes or Other Taxes
      when due to the appropriate taxing authority or fails to remit to the
      Administrative Agent the required receipts or other required documentary
      evidence, the Borrower shall indemnify the Administrative Agent and the Lenders
      for any incremental taxes, interest or penalties that may become payable by
      the
      Administrative Agent or any Lender as a result of any such failure.


    (d)
      Each Lender (or Transferee) that
      is not a “U.S. Person” as defined in Section 7701(a)(30) of the Code (a
“Non-U.S. Lender”) shall deliver to the Borrower and the Administrative
      Agent (or, in the case of a Participant, to the Lender from which the related
      participation shall have been purchased) two copies of either U.S. Internal
      Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender
      claiming exemption from U.S. federal withholding tax under Section 871(h)
      or 881(c) of the Code with respect to payments of “portfolio interest”, a
      statement substantially in the form of Exhibit H and a Form W-8BEN, or any
      subsequent versions thereof or successors thereto, properly completed and duly
      executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
      rate of, U.S. federal withholding tax on all payments by the Loan Parties under
      this Agreement and the other Loan Documents. Such forms shall be delivered
      by
      each Non-U.S. Lender on or before the date it becomes a party to this Agreement
      (or, in the case of any Participant, on or before the date such Participant
      purchases the related participation). In addition, each Non-U.S. Lender shall
      deliver such forms promptly upon the obsolescence or invalidity of any form
      previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
      promptly notify the Borrower at any time it determines that it is no longer
      in a
      position to provide any previously delivered certificate to the Borrower (or
      any
      other form of certification adopted by the U.S. taxing authorities for such
      purpose). Notwithstanding any other provision of this Section 5.03(d), a
      Non-U.S. Lender shall not be required to deliver any form pursuant to this
      Section 5.03(d) that such Non-U.S. Lender is not legally able to deliver.


    (e)
      A Lender that is entitled to an
      exemption from or reduction of non-U.S. withholding tax under the law of the
      jurisdiction in which the Borrower is located, or any treaty to which such
      jurisdiction is a party, with respect to payments under this Agreement or any
      Loan Document shall deliver to the Borrower (with a copy to the Administrative
      Agent), at the time or times prescribed by applicable law or reasonably
      requested by the Borrower, 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, provided that such Lender is legally
      entitled to complete, execute and deliver such documentation and in such
      Lender’s judgment such completion, execution or submission would not materially
      prejudice the legal position of such Lender. 

    (f)
      If the Administrative Agent or
      any Lender determines, in its sole discretion, that it has received a refund
      of
      any Non-Excluded Taxes or Other Taxes as to which it has been indemnified


     

    38


    

    
    

    by
      the Borrower or with respect to
      which the Borrower has paid additional amounts pursuant to this
      Section 5.03, it shall pay over such refund to the Borrower (but only to
      the extent of indemnity payments made, or additional amounts paid, by the
      Borrower under this Section 5.03 with respect to the Non-Excluded Taxes or
      Other Taxes giving rise to such refund), net of all out-of-pocket expenses
      of
      the Administrative Agent or such Lender and without interest (other than any
      interest paid by the relevant Governmental Authority with respect to such
      refund); provided, that the Borrower, upon the request of the
      Administrative Agent or such Lender, agrees to repay the amount paid over to
      the
      Borrower (plus any penalties, interest or other charges imposed by the relevant
      Governmental Authority) to the Administrative Agent or such Lender in the event
      the Administrative Agent or such Lender is required to repay such refund to
      such
      Governmental Authority. This Section 5.03 shall not be construed to require
      the Administrative Agent or any Lender to make available its tax returns (or
      any
      other information relating to its taxes which it deems confidential) to the
      Borrower or any other Person. 

    (g)
      The agreements in this
      Section 5.03 shall survive the termination of this Agreement and the
      payment of the Loans and all other amounts payable hereunder. 

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

    Section
      5.05 Replacement of
      Lenders. If (a) any Lender requests compensation under
      Section 5.01, (b) the Borrower is required to pay any additional
      amount to any Lender or any Governmental Authority for the account of any Lender
      pursuant to Section 5.03, (c) any Lender defaults in its obligation to
      fund Loans hereunder, (d) any Lender has not approved (or is not deemed to
      have approved) an increase in the Borrowing Base proposed by the Administrative
      Agent pursuant to Section 2.07(c)(iii) which has been approved by Lenders
      holding 75% or more of the then outstanding Commitments or (e) any Lender
      has not approved a proposed waiver or amendment requiring 100% approval or
      consent but which has been approved by Lenders holding 75% or more of the then
      outstanding Commitments, then the Borrower may, at its sole expense and effort,
      upon notice to such Lender and the Administrative Agent, require such Lender
      to
      assign and delegate, without recourse (in accordance with and subject to the
      restrictions contained in Section 12.04(b)), all its interests, rights and
      obligations under this Agreement to an assignee that shall assume such
      obligations (which assignee may be another Lender, if a Lender accepts such
      assignment); provided that (i) the Borrower shall have received the
      prior written consent of the Administrative Agent, which consent shall not
      unreasonably be withheld, (ii) such Lender shall have received payment of
      an amount equal to the outstanding principal of its Loans and participations
      in
      LC Disbursements, accrued interest thereon, accrued fees and all other amounts
      payable to it hereunder, from the assignee (to the extent of such outstanding
      principal and accrued interest and fees) or the Borrower (in the case of all
      other amounts) and (iii) in the case of any such assignment resulting from
      a claim for compensation under Section 5.01 or payments required to be made
      pursuant to Section 5.03, such assignment will result in a reduction in
      such compensation or payments or will result in the approval of the proposed
      Borrowing Base. A Lender shall not be required to make any such assignment
      and
      delegation if, prior thereto, as a result of a waiver by such Lender or
      otherwise, the circumstances entitling the Borrower to require such assignment
      and delegation cease to apply. 

     

    39


    

    
    

    ARTICLE
      VI


    Conditions
      Precedent


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

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

    (b)
      The Administrative Agent shall
      have received a certificate of the Secretary or an Assistant Secretary of the
      Borrower and each Guarantor setting forth (i) resolutions of its board of
      directors with respect to the authorization of the Borrower or such Guarantor
      to
      execute and deliver the Loan Documents to which it is a party and to enter
      into
      the transactions contemplated in those documents, (ii) the officers of the
      Borrower or such Guarantor (A) who are authorized to sign the Loan
      Documents to which the Borrower or such Guarantor is a party and (B) who
      will, until replaced by another officer or officers duly authorized for that
      purpose, act as its representative for the purposes of signing documents and
      giving notices and other communications in connection with this Agreement and
      the transactions contemplated hereby, (iii) specimen signatures of such
      authorized officers, and (iv) the articles or certificate of incorporation
      and bylaws of the Borrower and such Guarantor, certified as being true and
      complete. The Administrative Agent and the Lenders may conclusively rely on
      such
      certificate until the Administrative Agent receives notice in writing from
      the
      Borrower to the contrary. 

    (c)
      The Administrative Agent shall
      have received certificates of the appropriate State agencies with respect to
      the
      existence, qualification and good standing of the Borrower and each Guarantor.
      

    (d)
      The Administrative Agent shall
      have received a compliance certificate which shall be substantially in the
      form
      of Exhibit D, duly and properly executed by a Responsible Officer of the Parent
      Guarantor and dated as of the date of Effective Date. 

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

    (f)
      The Administrative Agent shall
      have received from each party thereto duly executed counterparts (in such number
      as may be requested by the Administrative Agent) of the Security Instruments,
      including the Guaranty Agreement and the other Security Instruments described
      on
      Exhibit F-1. In connection with the execution and delivery of the Security
      Instruments, the Administrative Agent shall: 

    (i)
      be reasonably satisfied that the
      Security Instruments create first priority, perfected Liens (except that
      Excepted Liens identified in clauses (a) to (d) and (f) of the
      definition thereof may exist, but subject to the provisos at the end of such
      definition) on at least 80% of the total value of the Oil and Gas Properties
      evaluated in the Initial Reserve Report; and 

    (ii)
      be reasonably satisfied that
      each of its Wholly-Owned Subsidiaries which are not Unrestricted Subsidiaries
      shall have pledged all of its partnership interests in each Partnership; and
      

     

    40


    

    
    

    (iii)
      have received certificates, if
      appropriate, together with undated, blank stock powers for each such
      certificate, representing all of the issued and outstanding Equity Interests
      of
      the Borrower and each of the Guarantors (other than the Parent Guarantor).
      

    (g)
      The Administrative Agent shall
      have received an opinion of (i) Ledgewood, special counsel to the Parent
      Guarantor and the Borrower, substantially in the form of Exhibit E hereto and
      (ii) local counsel in each of the following states: Michigan, Ohio,
      Pennsylvania and any other jurisdictions requested by the Administrative Agent,
      substantially in the form of Exhibit E-2. 

    (h)
      The Administrative Agent shall
      have received a certificate of insurance coverage of the Borrower evidencing
      that the Borrower is carrying insurance in accordance with Section 7.13.


    (i)
      The Administrative Agent shall
      have received title information as the Administrative Agent may reasonably
      require satisfactory to the Administrative Agent setting forth the status of
      title to at least 75% of the total value of the Oil and Gas Properties evaluated
      in the Initial Reserve Report. 

    (j)
      The Administrative Agent shall
      have received a certificate of a Responsible Officer of the Parent Guarantor
      certifying that the Parent Guarantor or a Loan Party has (i) received all
      consents and approvals required by Section 7.03, and (ii) no action,
      investigation, litigation or proceeding pending or threatened in any court
      or
      before any Governmental Authority that could reasonably be expected to have
      a
      Material Adverse Effect on the Parent, the Acquisition, any other Transaction
      or
      any of the other transactions contemplated hereby. 

    (k)
      The Administrative Agent shall
      have received the financial statements referred to in Section 7.04(a) and
      the Initial Reserve Report accompanied by a certificate covering the matters
      described in Section 8.12(c). 

    (l)
      The Administrative Agent shall
      have received appropriate UCC search certificates reflecting no prior Liens
      encumbering the Properties of each Loan Party, each Partnership and the Target
      and its Subsidiaries for each of the following jurisdictions: Delaware,
      Michigan, New York, Ohio, Pennsylvania and any other jurisdiction requested
      by
      the Administrative Agent; other than those being assigned or released on or
      prior to the Effective Date or Liens permitted by Section 9.03.


    (m)
      The sources and uses of funding
      for the Transaction shall be substantially consistent with the Annex II and
      the
      terms of such funding sources shall be consistent with the terms hereof or
      the
      Transaction Agreement, as applicable; and the Borrower shall have unused
      availability under this Agreement of not less than $150,000,000. The
      Administrative Agent shall have received a certificate of a Responsible Officer
      of the Parent Guarantor certifying that no provision of the Acquisition
      Agreement shall have been unenforced, waived, amended, supplemented or otherwise
      modified in any respect materially adverse to the Borrower or the Lenders
      without the prior consent of the Administrative Agent. 

    (n)
      The Administrative Agent shall
      have received (i) a certificate of a Responsible Officer of the Parent
      Guarantor certifying: (A) that the Borrower or a Guarantor is concurrently
      consummating the Acquisition in accordance with the terms of the Acquisition
      Agreement (with all of the material conditions precedent thereto having been
      satisfied in all material respects by the parties thereto) and applicable law
      and acquiring substantially all of the Acquisition Properties contemplated
      by
      the Acquisition Documents; (B) as to the final purchase price for the
      Acquisition Properties after giving effect to all adjustments as of the closing
      date contemplated by the Acquisition Documents and 

     

    41


    

    
    

    specifying,
      by category
      (i.e., working capital, cap-ex, title defect or environmental defect),
      the amount of such adjustment; (C) that attached thereto is a true and
      complete list of the Acquisition Properties, if any, which have been excluded
      from the Acquisition pursuant to the terms of the Acquisition Documents,
      specifying with respect thereto the basis of exclusion as (1) title defect
      or (2) environmental defect; (D) that attached thereto is a true and
      complete list of all Acquisition Properties for which any seller has elected
      to
      cure a title defect, (E) that attached thereto is a true and complete list
      of all Acquisition Properties for which any seller has elected to remediate
      an
      adverse environmental condition, and (F) that attached thereto is a true
      and complete list of all Acquisition Properties which are currently pending
      final decision by a third party regarding purchase of such property in
      accordance with any preferential right; (ii) a true and complete executed
      copy of the Acquisition Agreement; (iii) original counterparts or copies,
      certified as true and complete, of the assignments, deeds and leases for all
      of
      the Acquisition Properties; and (iv) such other related documents and
      information as the Administrative Agent shall have reasonably requested.


    (o)
      The Administrative Agent shall
      have received a certificate of a Responsible Officer of the Borrower certifying
      that immediately after giving effect to the Acquisition, the Parent Guarantor
      and its Subsidiaries will have no Debt or preferred stock outstanding other
      than
      the Indebtedness under this Agreement and other indebtedness listed on Schedule
      9.02. 

    (p)
      The Parent Guarantor shall have
      entered into one or more Swap Agreements with Approved Counterparties
      (collectively, the “Hedge”) relating to the Acquisition Properties which
      cover at least: (i) during the 24-month period immediately following the
      Effective Date, the lesser of (A) 90% of the reasonably anticipated
      projected production from the proved oil and gas interests of the Acquisition
      Properties, and (B) 100% of the of the reasonably anticipated projected
      production from the proved developed producing oil and gas interests of the
      Acquisition Properties; (ii) during the 18-month period immediately
      following the period described in clause (i), 80% of the reasonably anticipated
      projected production from the proved developed producing oil and gas interests
      of the Acquisition Properties; and (iii) during the 24-month period
      immediately following the period described in clause (ii), 50% of the reasonably
      anticipated projected production from the proved developed producing oil and
      gas
      interests of the Acquisition Properties, in each case calculated separately
      for
      each of oil and gas, and otherwise on terms and conditions reasonably acceptable
      to the Administrative Agent. 

    (q)
      The Parent Guarantor shall have
      invested, as a common equity contribution in the Borrower for subsequent
      investment in ATN Michigan, LLC, cash in an amount of not less than 25% of
      the
      total purchase price to be paid for the Acquisition Properties in connection
      with the Acquisition. 

    (r)
      The Administrative Agent shall
      have received evidence reasonably satisfactory to Administrative Agent of the
      payment in full of all amounts due under the Existing Credit Agreements, the
      termination of all commitments to lend thereunder and the release of all Liens
      securing such obligations and any other obligations secured thereby
      contemporaneously with the proceeds of the initial funding under this Agreement.
      

    (s)
      The Lenders shall have received,
      to the extent requested, all documentation and other information required by
      regulatory authorities under applicable “know your customer” and anti-money
      laundering rules and regulations, including the USA Patriot Act. 

    (t)
      The Administrative Agent shall
      have received such other documents as the Administrative Agent or special
      counsel to the Administrative Agent may reasonably request. 

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


     

    42


    

    
    

    Lenders
      to make Loans and of the
      Issuing Bank to issue Letters of Credit hereunder shall not become effective
      unless each of the foregoing conditions is satisfied (or waived pursuant to
      Section 12.02) at or prior to 2:00 p.m., New York, New York time, on
      August 1, 2007 (and, in the event such conditions are not so satisfied or
      waived, the Commitments shall terminate at such time). 

    Section
      6.02 Each Credit
      Event. The obligation of each Lender to make a Loan on the occasion of any
      Borrowing (including the initial funding), and of the Issuing Bank to issue,
      amend, renew or extend any Letter of Credit, is subject to the satisfaction
      of
      the following conditions: 

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

    (b)
      At the time of and immediately
      after giving effect to such Borrowing or the issuance, amendment, renewal or
      extension of such Letter of Credit, as applicable, no Material Adverse Effect
      shall have occurred; provided that with respect to the initial funding on the
      Effective Date, the condition precedent shall be that no Closing Date MAE shall
      have occurred. 

    (c)
      The representations and
      warranties of the Loan Parties set forth in this Agreement and in the other
      Loan
      Documents shall be true and correct on and as of the date of such Borrowing
      or
      the date of issuance, amendment, renewal or extension of such Letter of Credit,
      as applicable, except to the extent any such representations and warranties
      are
      expressly limited to an earlier date, in which case, on and as of the date
      of
      such Borrowing or the date of issuance, amendment, renewal or extension of
      such
      Letter of Credit, as applicable, such representations and warranties shall
      continue to be true and correct as of such specified earlier date; provided
      that
      with respect to the initial funding on the Effective Date, no Loan Party will
      be
      required to make the representation contained in Section 7.04(b) and the
      only representations (and related Defaults) relating to the Acquisition
      Properties the making of which shall be a condition precedent under this
      Section 6.02(c) on the Effective Date shall be those representations
      contained in Sections 7.01, 7.02, 7.03, 7.07(a), 7.08, 7.09 and 7.23.


    (d)
      The making of such Loan or the
      issuance, amendment, renewal or extension of such Letter of Credit, as
      applicable, would not conflict with, or cause any Lender or the Issuing Bank
      to
      violate or exceed, any applicable Governmental Requirement, and no Change in
      Law
      shall have occurred, and no litigation shall be pending or threatened, which
      does or, with respect to any threatened litigation, seeks to, enjoin, prohibit
      or restrain, the making or repayment of any Loan, the issuance, amendment,
      renewal, extension or repayment of any Letter of Credit or any participations
      therein or the consummation of the transactions contemplated by this Agreement
      or any other Loan Document. 

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

    Each
      Borrowing and each issuance,
      amendment, renewal or extension of any Letter of Credit shall be deemed to
      constitute a representation and warranty by the Parent Guarantor and the
      Borrower on the date thereof as to the matters specified in Section 6.02(a)
      through (e). 

     

    43


    

    
    

    ARTICLE
      VII


    Representations
      and
      Warranties 

    The
      Parent Guarantor and the
      Borrower represent and warrant to the Lenders that: 

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

    Section
      7.02 Authority;
      Enforceability. The Transactions to which it is a party are within each Loan
      Party’s corporate powers and have been duly authorized by all necessary
      corporate and, if required, member action. Each Loan Document and each
      Acquisition Document to which an Loan Party is a party has been duly executed
      and delivered by it and constitutes a legal, valid and binding obligation of
      such Loan Party, as applicable, enforceable in accordance with its terms,
      subject to applicable bankruptcy, insolvency, reorganization, moratorium or
      other laws affecting creditors’ rights generally and subject to general
      principles of equity, regardless of whether considered in a proceeding in equity
      or at law. 

    Section
      7.03 Approvals; No
      Conflicts. The Transactions (a) do not require any consent or approval
      of, registration or filing with, or any other action by, any Governmental
      Authority or any other third Person, nor is any such consent, approval,
      registration, filing or other action necessary for the validity or
      enforceability of any Loan Document or the consummation of the transactions
      contemplated thereby, except such as have been obtained or made and are in
      full
      force and effect other than (i) the recording and filing of the Security
      Instruments as required by this Agreement and (ii) those third party
      approvals or consents which, if not made or obtained, would not cause a Default
      hereunder, could not reasonably be expected to have a Material Adverse Effect
      or
      do not have an adverse effect on the enforceability of the Loan Documents,
      (b) will not violate any applicable law or regulation or the charter,
      by-laws or other organizational documents of any Loan Party or any order of
      any
      Governmental Authority, (c) will not violate or result in a default under
      any indenture, agreement or other instrument binding upon any Loan Party or
      its
      Properties, or give rise to a right thereunder to require any payment to be
      made
      by any Loan Party and (d) will not result in the creation or imposition of
      any Lien on any Property of any Loan Party (other than the Liens created by
      the
      Loan Documents or permitted under Section 9.03). 

    Section
      7.04 Financial Condition;
      No Material Adverse Change. 

    (a)
      The Parent Guarantor has
      heretofore furnished to the Lenders (i) combined and consolidated balance
      sheets as of December 31, 2006 and 2005, and the related combined and
      consolidated statements of income, comprehensive income, equity, and cash flows
      for the year ended December 31, 2006, the three month period ended
      December 31, 2005 and the years ended September 30, 2005 and 2004,
      certified by its independent public accountants; and (ii) consolidated
      balance sheet and the related consolidated statements of income, comprehensive
      income, equity, and cash flows for the fiscal quarter ended March 31, 2007,
      certified by its chief financial officer. Such financial statements present
      fairly, in all material respects, the combined or consolidated, as applicable,
      financial position and results of operations and cash flows of the Parent
      Guarantor and its Consolidated Subsidiaries as of such dates and for such
      periods in accordance with GAAP, subject to year-end audit adjustments and
      the
      absence of footnotes in the case of the unaudited quarterly financial
      statements. 

    (b)
      The Parent Guarantor has
      heretofore furnished to the Lenders the unaudited consolidated balance sheet
      and
      statements of earnings and cash flows for the Acquisition Properties for the
      three month period ending March 31, 2007. To the best of the Parent
      Guarantor’s knowledge, such financial statements present fairly, in all material
      respects, the financial position of the Acquisition 

     

    44


    

    
    

    Properties
      as of such date and for
      such period in accordance with GAAP, subject to normal recurring year-end audit
      adjustments and the absence of footnotes). 

    (c)
      Since December 31, 2006,
      (i) there has been no event, development or circumstance that has had or
      could reasonably be expected to have a Material Adverse Effect and (ii) the
      business of the Loan Parties has been conducted only in the ordinary course
      consistent with past business practices. 

    (d)
      No Loan Party or any
      Consolidated Subsidiary has on the date hereof any material Debt (including
      Disqualified Capital Stock) or any contingent liabilities, off-balance sheet
      liabilities or partnerships, liabilities for taxes, unusual forward or long-term
      commitments or unrealized or anticipated losses from any unfavorable
      commitments, except as referred to or reflected or provided for in the Financial
      Statements. 

    Section
      7.05 Litigation.


    (a)
      Except as set forth on
      Schedule 7.05, there are no actions, suits, investigations or proceedings
      by or before any arbitrator or Governmental Authority pending against or
      affecting the Parent Guarantor or any Subsidiary (i) as to which there is a
      reasonable possibility of an adverse determination that, if adversely
      determined, could reasonably be expected, individually or in the aggregate,
      to
      result in a Material Adverse Effect or (ii) that involve any Loan Document
      or the Transactions. 

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

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

    (a)
      Neither any Property of the
      Borrower or any Subsidiary nor the operations conducted thereon violate any
      order or requirement of any court or Governmental Authority or any Environmental
      Laws. 

    (b)
      Without limitation of
      clause (a) above, no Property of the Borrower or any Subsidiary nor the
      operations currently conducted thereon or, to the best knowledge of any Loan
      Party, by any prior owner or operator of such Property or operation, are in
      violation of or subject to any existing, pending or threatened action, suit,
      investigation, inquiry or proceeding by or before any court or Governmental
      Authority or to any remedial obligations under Environmental Laws. 

    (c)
      All notices, permits, licenses
      or similar authorizations, if any, required to be obtained or filed in
      connection with the operation or use of any and all Property of the Borrower
      and
      each Subsidiary, including without limitation past or present treatment,
      storage, disposal or release of a Hazardous Material or solid waste into the
      environment, have been duly obtained or filed, and the Borrower and each
      Subsidiary are in compliance with the terms and conditions of all such notices,
      permits, licenses and similar authorizations. 

    (d)
      All Hazardous Materials, solid
      waste, and oil and gas exploration and production wastes, if any, generated
      at
      any and all Property of the Borrower or any Subsidiary have in the past been
      transported, treated and disposed of in accordance with Environmental Laws
      and
      so as not to pose an imminent and substantial endangerment to public health
      or
      welfare or the environment, and, to the best knowledge of the Loan Parties,
      all
      such transport carriers and treatment and disposal facilities have been


     

    45


    

    
    

    and
      are operating in compliance with
      Environmental Laws and so as not to pose an imminent and substantial
      endangerment to public health or welfare or the environment, and are not the
      subject of any existing, pending or threatened action, investigation or inquiry
      by any Governmental Authority in connection with any Environmental Laws.


    (e)
      The Borrower has taken all steps
      reasonably necessary to determine and have determined that no Hazardous
      Materials, solid waste, or oil and gas exploration and production wastes, have
      been disposed of or otherwise Released and there has been no threatened Release
      of any Hazardous Materials on or to any Property of the Borrower or any
      Subsidiary except in compliance with Environmental Laws and so as not to pose
      an
      imminent and substantial endangerment to public health or welfare or the
      environment. 

    (f)
      To the extent applicable, all
      Property of the Borrower and each Subsidiary currently satisfies all design,
      operation, and equipment requirements imposed by the OPA or scheduled as of
      the
      Closing Date to be imposed by OPA during the term of this Agreement, and the
      Borrower does not have any reason to believe that such Property, to the extent
      subject to OPA, will not be able to maintain compliance with the OPA
      requirements during the term of this Agreement. 

    (g)
      Neither the Borrower nor any
      Subsidiary has any known contingent liability in connection with any Release
      or
      threatened Release of any oil, Hazardous Material or solid waste into the
      environment. 

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

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

    (b)
      Neither the Parent Guarantor nor
      any Subsidiary is in default nor has any event or circumstance occurred which,
      but for the expiration of any applicable grace period or the giving of notice,
      or both, would constitute a default or would require the Parent Guarantor or
      a
      Subsidiary to Redeem or make any offer to Redeem under any indenture, note,
      credit agreement or instrument pursuant to which any Material Indebtedness
      is
      outstanding or by which the Parent Guarantor or any Subsidiary or any of their
      Properties is bound. 

    (c)
      No Default has occurred and is
      continuing. 

    Section
      7.08 Investment Company
      Act. Neither the Parent Guarantor nor any Subsidiary is an “investment
      company” or a company “controlled” by an “investment company,” within the
      meaning of, or subject to regulation under, the Investment Company Act of 1940,
      as amended. 

    Section
      7.09 Use of Loans and
      Letters of Credit. The proceeds of the Loans and the Letters of Credit shall
      be used (a) to provide working capital for exploration and production
      operations, (b) to refinance existing Debt of the Borrower under the
      Existing Credit Agreement, (c) to provide funding for general corporate
      purposes of the Borrower and its Subsidiaries, including a portion of the
      purchase price of the Acquisition and the acquisition of exploration and
      production properties and to make capital contributions to the Partnerships
      (but
      such capital contributions shall not be used for the purpose of funding
      Partnership distributions) and (d) for any distribution advances of
      Available Cash, provided that 

     

    46


    

    
    

    if
      the Borrowing Base Utilization
      Percentage is equal to or exceeds 90% before or after giving effect to the
      requested Loan or Letter of Credit, then no proceeds of any Loan or any Letter
      of Credit may be used to fund Restricted Payments under
      Section 9.04(a)(iii). No Loan Party is engaged principally, or as one of
      its or their important activities, in the business of extending credit for
      the
      purpose, whether immediate, incidental or ultimate, of buying or carrying margin
      stock (within the meaning of Regulation T, U or X of the Board). No part of
      the
      proceeds of any Loan or Letter of Credit will be used for any purpose which
      violates the provisions of Regulations T, U or X of the Board. 

    Section
      7.10 Taxes. Each of
      the Parent Guarantor and its Subsidiaries has timely filed or caused to be
      filed
      all tax returns and reports required to have been filed and has paid or caused
      to be paid all taxes required to have been paid by it, except (a) taxes
      that are being contested in good faith by appropriate proceedings and for which
      the Parent Guarantor or such Subsidiary, as applicable, has set aside on its
      books adequate reserves in accordance with GAAP or (b) to the extent that
      the failure to do so could not reasonably be expected to result in a Material
      Adverse Effect. The charges, accruals and reserves on the books of the Parent
      Guarantor and its Subsidiaries in respect of taxes and other governmental
      charges are, in the reasonable opinion of the Parent Guarantor, adequate. No
      tax
      Lien has been filed and no claim is being asserted with respect to any such
      tax
      or other such governmental charge. 

    Section
      7.11 ERISA. Except as
      set forth on Schedule 7.11, 

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

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


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

    (d)
      No Plan (other than a defined
      contribution plan) or any trust created under any such Plan has been terminated
      since September 2, 1974. No liability to the PBGC (other than for the
      payment of current premiums which are not past due) by the Parent Guarantor,
      any
      Subsidiary or any ERISA Affiliate has been or is expected by the Parent
      Guarantor, any Subsidiary or any ERISA Affiliate to be incurred with respect
      to
      any Plan. No ERISA Event with respect to any Plan has occurred. 

    (e)
      Full payment when due has been
      made of all amounts which the Parent Guarantor, the Subsidiaries or any ERISA
      Affiliate is required under the terms of each Plan or applicable law to have
      paid as contributions to such Plan as of the date hereof, and no accumulated
      funding deficiency (as defined in section 302 of ERISA and section 412 of the
      Code), whether or not waived, exists with respect to any Plan. 

    (f)
      The actuarial present value of
      the benefit liabilities under each Plan which is subject to Title IV of
      ERISA does not, as of the end of the Parent Guarantor’s most recently ended
      fiscal year, exceed the current value of the assets (computed on a plan
      termination basis in accordance with Title IV of ERISA) of such Plan
      allocable to such benefit liabilities. The term “actuarial present value of the
      benefit liabilities” shall have the meaning specified in section 4041 of ERISA.


     

    47


    

    
    

    (g)
      Neither the Parent Guarantor,
      the Subsidiaries nor any ERISA Affiliate sponsors, maintains, or contributes
      to
      an employee welfare benefit plan, as defined in section 3(1) of ERISA,
      including, without limitation, any such plan maintained to provide benefits
      to
      former employees of such entities, that may not be terminated by the Parent
      Guarantor, a Subsidiary or any ERISA Affiliate in its sole discretion at any
      time without any material liability. 

    (h)
      Neither the Parent Guarantor,
      the Subsidiaries nor any ERISA Affiliate sponsors, maintains or contributes
      to,
      or has at any time in the six-year period preceding the date hereof sponsored,
      maintained or contributed to, any Multiemployer Plan. 

    (i)
      Neither the Parent Guarantor,
      the Subsidiaries nor any ERISA Affiliate is required to provide security under
      section 401(a)(29) of the Code due to a Plan amendment that results in an
      increase in current liability for the Plan. 

    Section
      7.12 Disclosure; No
      Material Misstatements. The Parent Guarantor and the Borrower have disclosed
      to the Administrative Agent and the Lenders all agreements, instruments and
      corporate or other restrictions to which it or any of its Subsidiaries is
      subject, and all other matters known to it, that, individually or in the
      aggregate, could reasonably be expected to result in a Material Adverse Effect.
      Neither the Information Memorandum nor any of the other reports, financial
      statements, certificates or other information furnished by or on behalf of
      the
      Parent Guarantor or the Borrower or any of its Subsidiaries to the
      Administrative Agent or any Lender or any of their Affiliates in connection
      with
      the negotiation of this Agreement or any other Loan Document or delivered
      hereunder or under any other Loan Document (as modified or supplemented by
      other
      information so furnished) contains any material misstatement of fact or omits
      to
      state any material fact necessary to make the statements therein, in the light
      of the circumstances under which they were made, not misleading; provided that,
      with respect to projected financial information, the Parent Guarantor and the
      Borrower represent only that such information was prepared in good faith based
      upon assumptions believed to be reasonable at the time; provided that the
      representations regarding Information and Projections in each case, with respect
      to the Acquisition Properties, shall be limited to the best of the Parent
      Guarantor’s knowledge. 

    Section
      7.13 Insurance. The
      Parent Guarantor has, and has caused all its Subsidiaries to have, (a) all
      insurance policies sufficient for the compliance by each of them with all
      material Governmental Requirements and all material agreements and
      (b) insurance coverage in at least amounts and against such risk
      (including, without limitation, public liability) that are usually insured
      against by companies similarly situated and engaged in the same or a similar
      business for the assets and operations of the Parent Guarantor and its
      Subsidiaries. The Administrative Agent and the Lenders have been named as
      additional insureds in respect of such liability insurance policies and the
      Administrative Agent has been named as loss payee with respect to Property
      loss
      insurance. 

    Section
      7.14 Restriction on
      Liens. Neither the Parent Guarantor nor any of the Subsidiaries is a party
      to any material agreement or arrangement (other than Capital Leases creating
      Liens permitted by Section 9.03(c), but then only on the Property subject
      of such Capital Lease), or subject to any order, judgment, writ or decree,
      which
      either restricts or purports to restrict its ability to grant Liens to the
      Administrative Agent and the Lenders on or in respect of their Properties to
      secure the Indebtedness and the Loan Documents. 

    Section
      7.15 Subsidiaries.


    (a)
      Except as set forth on Schedule
      7.15 or as disclosed in writing to the Administrative Agent (which shall
      promptly furnish a copy to the Lenders), which shall be a supplement to Schedule
      7.15, the Parent Guarantor has no Subsidiaries, each Subsidiary is a
      Wholly-Owned 

     

    48


    

    
    

    Subsidiary
      and the Parent Guarantor
      has no Foreign Subsidiaries. Schedule 7.15 lists all the Partnerships owned
      by
      the Borrower or its Subsidiaries and their partnership interests in each such
      Partnership. Schedule 7.15 identifies each Subsidiary which is an Unrestricted
      Subsidiary. Neither the Parent Guarantor nor any Subsidiary has any Foreign
      Subsidiaries. As of the Effective Date, the Borrower is the only directly owned
      Subsidiary of the Parent Guarantor. 

    (b)
      The Borrower and the Guarantor’s
      Equity Interests in the Partnerships are free and clear of any and all Liens,
      claims and encumbrances including any preferential rights to purchase and
      consents to assignments. 

    (c)
      The amount and type of the
      authorized Equity Interests of each of the Persons listed on Schedule 7.15
      are
      accurately described thereon, and all such Equity Interests that are issued
      and
      outstanding have been validly issued and are fully paid and nonassessable and
      are owned by and issued to the Person listed as their owner on Schedule 7.15.
      The Borrower and each Guarantor have good and marketable title to all the Equity
      Interests of the Subsidiaries (except for the Unrestricted Entities) issued
      to
      it, free and clear of all Liens, and all such Equity Interests have been duly
      and validly issued and are fully paid and nonassessable (except to the extent
      general partnership interests are assessable under applicable law).


    Section
      7.16 Location of Business
      and Offices. The Parent Guarantor’s jurisdiction of organization is
      Delaware; the name of the Parent Guarantor as listed in the public records
      of
      Delaware is Atlas Energy Resources, LLC; and the organizational identification
      number of the Parent Guarantor in Delaware is 418-0472 (or, in each case, as
      set
      forth in a notice delivered to the Administrative Agent pursuant to
      Section 8.01(l) in accordance with Section 12.01). The Borrower’s
      jurisdiction of organization is Delaware; the name of the Borrower as listed
      in
      the public records of Delaware is Atlas Energy Operating Company, LLC; and
      the
      organizational identification number of the Borrower in Delaware is 418-4160
      (or, in each case, as set forth in a notice delivered to the Administrative
      Agent pursuant to Section 8.01(l) in accordance with Section 12.01).
      The Parent Guarantor’s and the Borrower’s principal place of business and chief
      executive offices are located at the address specified in Section 12.01 (or
      as set forth in a notice delivered pursuant to Section 8.01(l) and
      Section 12.01(c)). Each other Loan Parties’ jurisdiction of organization,
      name as listed in the public records of its jurisdiction of organization,
      organizational identification number in its jurisdiction of organization, and
      the location of its principal place of business and chief executive office
      is
      stated on Schedule 7.15 (or as set forth in a notice delivered pursuant to
      Section 8.01(l)). 

    Section
      7.17 Properties; Titles,
      Etc. 

    (a)
      Each Loan Party, directly or
      indirectly through is percentage ownership of the Partnerships, good and
      defensible title to the Oil and Gas Properties evaluated in the most recently
      delivered Reserve Report and good title to all its personal Properties, in
      each
      case, free and clear of all Liens except Liens permitted by Section 9.03.
      After giving full effect to the Excepted Liens, each Loan Party, directly or
      indirectly through is percentage ownership of the Partnerships, specified as
      the
      owner owns the net interests in production attributable to the Hydrocarbon
      Interests as reflected in the most recently delivered Reserve Report, and the
      ownership of such Properties shall not in any material respect obligate the
      Parent Guarantor or such Subsidiary to bear the costs and expenses relating
      to
      the maintenance, development and operations of each such Property in an amount
      in excess of the working interest of each Property set forth in the most
      recently delivered Reserve Report that is not offset by a corresponding
      proportionate increase in the Parent Guarantor’s or such Subsidiary’s net
      revenue interest in such Property; provided that to the extent the Borrower
      or a
      Guarantor is a general partner of a Partnership, it is liable for all of the
      costs and expenses attributable to such Partnership’s interest, but only


     

    49


    

    
    

    entitled
      to its percentage interest
      in such Partnership’s net revenues. All information contained in the most
      recently delivered Reserve Report is true and correct in all material respects
      as of the date thereof. 

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

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


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

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

    Section
      7.18 Maintenance of
      Properties. Except for such acts or failures to act as could not be
      reasonably expected to have a Material Adverse Effect, the Oil and Gas
      Properties (and Properties unitized therewith) of the Loan Parties and their
      Subsidiaries have been maintained, operated and developed in a good and
      workmanlike manner and in conformity with all Governmental Requirements and
      in
      conformity with the provisions of all leases, subleases or other contracts
      comprising a part of the Hydrocarbon Interests and other contracts and
      agreements forming a part of the Oil and Gas Properties. Specifically in
      connection with the foregoing, except for those as could not be reasonably
      expected to have a Material Adverse Effect, (a) no Oil and Gas Property is
      subject to having allowable production reduced below the full and regular
      allowable (including the maximum permissible tolerance) because of any
      overproduction (whether or not the same was permissible at the time) and
      (b) none of the wells comprising a part of the Oil and Gas Properties (or
      Properties unitized therewith) is deviated from the vertical more than the
      maximum permitted by Governmental Requirements, and such wells are, in fact,
      bottomed under and are producing from, and the well bores are wholly within,
      the
      Oil and Gas Properties (or in the case of wells located on Properties unitized
      therewith, such unitized Properties). All pipelines, wells, gas processing
      plants, platforms and other material improvements, fixtures and equipment owned
      in whole or in part by the Parent Guarantor or any of its Subsidiaries that
      are
      necessary to conduct normal operations are being maintained in a state adequate
      to conduct normal operations, and with respect to such of the foregoing which
      are operated by the Parent Guarantor or any of its Subsidiaries, in a manner
      consistent with the Parent Guarantor’s or its Subsidiaries’ past practices
      (other than those the failure of which to maintain in accordance with this
      Section 7.18 could not reasonably be expect to have a Material Adverse
      Effect). 

     

    50


    

    
    

    Section
      7.19 Gas Imbalances,
      Prepayments. As of the date hereof, except as set forth on Schedule 7.19 or
      on the most recent certificate delivered pursuant to Section 8.12(c), on a
      net basis there are no gas imbalances, take or pay or other prepayments which
      would require the Parent Guarantor or any of its Subsidiaries to deliver
      Hydrocarbons produced from the Oil and Gas Properties at some future time
      without then or thereafter receiving full payment therefor exceeding three
      and
      one-half percent (3.5%) of monthly production in the aggregate.


    Section
      7.20 Marketing of
      Production. Except for contracts listed and in effect on the date hereof on
      Schedule 7.20, and thereafter either disclosed in writing to the Administrative
      Agent or included in the most recently delivered Reserve Report (with respect
      to
      all of which contracts the Parent Guarantor represents that it or its
      Subsidiaries are receiving a price for all production sold thereunder which
      is
      computed substantially in accordance with the terms of the relevant contract
      and
      are not having deliveries curtailed substantially below the subject Property’s
      delivery capacity except as disclosed in Schedule 7.20 or the most recently
      delivered Reserve Report), no material agreements exist which are not cancelable
      on 60 days notice or less without penalty or detriment for the sale of
      production from the Parent Guarantor’s or its Subsidiaries’ Hydrocarbons
      (including, without limitation, calls on or other rights to purchase,
      production, whether or not the same are currently being exercised) that
      (a) pertain to the sale of production at a fixed price and (b) have a
      maturity or expiry date of longer than six (6) months from the date hereof.


    Section
      7.21 Swap Agreements.
      Schedule 7.21, as of the date hereof, and after the date hereof, each report
      required to be delivered by the Parent Guarantor pursuant to
      Section 8.01(d), sets forth, a true and complete list of all Swap
      Agreements of the Parent Guarantor, each Subsidiary and the Partnerships, the
      material terms thereof (including the type, term, effective date, termination
      date and notional amounts or volumes), the net mark to market value thereof,
      all
      credit support agreements relating thereto (including any margin required or
      supplied) and the counterparty to each such agreement. 

    Section
      7.22 Solvency. Each
      Loan Party is, and after giving effect to the Acquisition and the incurrence
      of
      all Debt and obligations being incurred in connection herewith and therewith
      will be and will continue to be, Solvent. 

    Section
      7.23 Acquisition. The
      copies of the Acquisition Documents previously delivered by the Parent Guarantor
      to the Administrative Agent are true, accurate and complete and have not been
      amended or modified in any manner, other than pursuant to amendments or
      modifications previously delivered to the Administrative Agent. The
      representations made in the Acquisition Agreement concerning the Acquisition
      Properties are true and correct in all material respects. 

    ARTICLE
      VIII


    Affirmative
      Covenants


    Until
      the Commitments have expired
      or been terminated and the principal of and interest on each Loan and all fees
      payable hereunder and all other amounts payable under the Loan Documents shall
      have been paid in full and all Letters of Credit shall have expired or
      terminated and all LC Disbursements shall have been reimbursed, the Parent
      Guarantor and the Borrower covenant and agree with the Lenders that:


     

    51


    

    
    

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

    (a)
Annual
      Financial
      Statements. As soon as available, but in any event in accordance with then
      applicable law and not later than 100 days after the end of each fiscal year
      of
      the Parent Guarantor, its audited consolidated balance sheet and related
      statements of income, stockholders’ equity and cash flows as of the end of and
      for such year, setting forth in each case in comparative form the figures for
      the previous fiscal year, all reported on by independent public accountants
      of
      recognized national standing (without a “going concern” or like qualification or
      exception and without any qualification or exception as to the scope of such
      audit) to the effect that such consolidated financial statements present fairly
      in all material respects the financial condition and results of operations
      of
      the Parent Guarantor and its Consolidated Subsidiaries on a consolidated basis
      in accordance with GAAP consistently applied. 

    (b)
Quarterly
      Financial
      Statements. As soon as available, but in any event in accordance with then
      applicable law and not later than 55 days after the end of each of the first
      three fiscal quarters of each fiscal year of the Parent Guarantor, its
      consolidated balance sheet and related statements of income, stockholders’
equity and cash flows as of the end of and for such fiscal quarter and the
      then
      elapsed portion of the fiscal year, setting forth in each case in comparative
      form the figures for the corresponding period or periods of (or, in the case
      of
      the balance sheet, as of the end of) the previous fiscal year, all certified
      by
      one of its Financial Officers as presenting fairly in all material respects
      the
      financial condition and results of operations of the Parent Guarantor and its
      Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
      consistently applied, subject to normal year-end audit adjustments and the
      absence of footnotes. 

    (c)
Certificate
      of Financial
      Officer – Compliance. Concurrently with any delivery of financial statements
      under Section 8.01(a) or Section 8.01(b), a compliance certificate of
      a Financial Officer of the Parent Guarantor in substantially the form of Exhibit
      D hereto (i) certifying as to whether a Default has occurred and, if a
      Default has occurred, specifying the details thereof and any action taken or
      proposed to be taken with respect thereto and (ii) setting forth reasonably
      detailed calculations demonstrating compliance with Section 9.01.


    (d)
Certificate
      of Financial
      Officer – Swap Agreements. Concurrently with the delivery of financial
      statements under Section 8.01(a) or Section 8.01(b), a certificate of
      a Financial Officer, in form and substance reasonably satisfactory to the
      Administrative Agent, setting forth as of a recent date, a true and complete
      list of all Swap Agreements of the Parent Guarantor, each Subsidiary and each
      Partnership, the material terms thereof (including the type, term, effective
      date, termination date and notional amounts or volumes and volumes attributable
      to Partnership production), the net mark-to-market value therefor, any new
      credit support agreements relating thereto not listed on Schedule 7.21, any
      margin required or supplied under any credit support document, and the
      counterparty to each such agreement. 

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

    (f)
Other
      Accounting Reports.
      Promptly upon receipt thereof, a copy of each other report or letter (except
      standard and customary correspondence) submitted to the Parent Guarantor or
      any
      of its Subsidiaries by independent accountants in connection with any annual,
      interim or special audit made by them of the books of the Parent Guarantor
      or
      any such Subsidiary, and a copy of any response by the Parent Guarantor or
      any
      such Subsidiary, or the board of directors of the Parent Guarantor or any such
      Subsidiary, to such letter or report. 

     

    52


    

    
    

    (g)
SEC
      and Other Filings;
      Reports to Shareholders. Promptly after the same become publicly available,
      copies of all periodic and other reports, proxy statements and other materials
      filed by the Parent Guarantor or any Subsidiary with the SEC, or with any
      national securities exchange, or distributed by the Parent Guarantor to its
      shareholders generally, as the case may be. Documents required to be delivered
      pursuant to Section 8.01(a) and Section 8.01(b) and this
      Section 8.01(g) may be delivered electronically and if so delivered, shall
      be deemed to have been delivered on the date on which the Parent Guarantor
      posts
      such documents to EDGAR (or such other free, publicly-accessible internet
      database that may be established and maintained by the SEC as a substitute
      for
      or successor to EDGAR). 

    (h)
Notices
      Under Material
      Instruments. Promptly after the furnishing thereof, copies of any financial
      statement, report or notice furnished to or by any Person pursuant to the terms
      of any indenture, loan or credit or other similar agreement, other than this
      Agreement and not otherwise required to be furnished to the Lenders pursuant
      to
      any other provision of this Section 8.01. 

    (i)
Lists
      of Purchasers.
      Promptly upon written request of the Administrative Agent, a list of Persons
      purchasing Hydrocarbons from the Borrower or any Subsidiary accounting for
      at
      least 85% of the revenues resulting from the sale of all Hydrocarbons in the
      one-year period prior to the “as of” date of such Reserve Report. 

    (j)
Notice
      of Sales of Oil and
      Gas Properties. Within 30 days of the end of each calendar month, a list of
      all Oil or Gas Properties or any Equity Interests in any Subsidiary disposed
      if
      the aggregate value of all such Properties and Equity Interests so disposed
      of
      since the last Scheduled Redetermination Date exceeds $35,000,000. 

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

    (l)
Information
      Regarding the
      Loan Parties. Prompt written notice (and in any event within ten
      (10) Business Days prior thereto) of any change (i) in any Loan
      Party’s corporate name or in any trade name used to identify such Person in the
      conduct of its business or in the ownership of its Properties, (ii) in the
      location of any Loan Party’s chief executive office or principal place of
      business, (iii) in any Loan Party’s identity or corporate structure or in
      the jurisdiction in which such Person is incorporated or formed, (iv) in
      any Loan Party’s jurisdiction of organization or such Person’s organizational
      identification number in such jurisdiction of organization, and (v) in any
      Loan Party’s federal taxpayer identification number. 

    (m)
Production
      Report and Lease
      Operating Statements. Promptly upon written request of the Administrative
      Agent, a report setting forth, for the current fiscal year to date, the volume
      of production and sales attributable to production (and the prices at which
      such
      sales were made and the revenues derived from such sales) from the Oil and
      Gas
      Properties, and setting forth the related ad valorem, severance and production
      taxes and lease operating expenses attributable thereto and incurred.


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

     

    53


    

    
    

    (o)
Notices
      Relating to
      Acquisition. In the event that after the Effective Date: (i) any
      material matter being disputed in accordance with the terms of the Acquisition
      Documents is resolved, (ii) the Parent Guarantor or any Loan Party asserts
      a claim for indemnification or such a claim is resolved or (iii) a Loan
      Party and the seller(s) calculate and agree upon the “closing statement” or
“final closing statement” as contemplated by the Acquisition Documents, then, in
      each such case, the Borrower shall promptly give the Administrative Agent notice
      in reasonable detail of such circumstances. 

    (p)
Certificate
      of Financial
      Officer – Consolidating Information. If, at any time, any of the
      Subsidiaries of the Parent Guarantor are Unrestricted Subsidiaries, then
      concurrently with any delivery of financial statements under
      Section 8.01(a) or Section 8.01(b), a certificate of a Financial
      Officer setting forth consolidating spreadsheets that show all Unrestricted
      Subsidiaries and the eliminating entries, in such form as would be presentable
      to the auditors of the Parent Guarantor or other reconciliation of cash flows
      for such Unrestricted Subsidiaries. 

    (q)
Issuance
      of Senior Notes.
      In the event the Parent Guarantor or the Borrower intends to issue any Senior
      Notes, prior written notice of such intended offering therefor, the amount
      thereof and the anticipated date of closing and will furnish a copy of the
      preliminary offering memorandum (if any) and the final offering memorandum
      (if
      any). 

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

    Section
      8.02 Notices of Material
      Events. The Parent Guarantor will furnish to the Administrative Agent prompt
      written notice of the following: 

    (a)
      the occurrence of any Event of
      Default; 

    (b)
      the filing or commencement of
      any action, suit, proceeding, investigation or arbitration by or before any
      arbitrator or Governmental Authority against the Parent Guarantor or any
      Subsidiary thereof not previously disclosed in writing to the Lenders or any
      material adverse development in any action, suit, proceeding, investigation
      or
      arbitration previously disclosed to the Lenders that, if adversely determined,
      could reasonably be expected to result in liability in excess of $25,000,000;
      

    (c)
      the occurrence of any ERISA
      Event that, alone or together with any other ERISA Events that have occurred,
      could reasonably be expected to result in liability of the Parent Guarantor
      and
      its Subsidiaries in an aggregate amount exceeding $10,000,000; and 

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

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

    Section
      8.03 Existence; Conduct
      of Business. The Parent Guarantor will, and will cause each Loan Party to,
      do or cause to be done all things necessary to preserve, renew and keep in
      full
      force and effect its legal existence and the rights, licenses, permits,
      privileges and franchises material to the conduct 

     

    54


    

    
    

    of
      its business and maintain, if
      necessary, its qualification to do business in each other jurisdiction in which
      the nature of the business conducted by it requires such qualification, except
      where the failure to so qualify could not reasonably be expected to have a
      Material Adverse Effect; provided that the foregoing shall not prohibit any
      merger, consolidation, liquidation or dissolution permitted under
      Section 9.10. 

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

    Section
      8.05 Performance of
      Obligations under Loan Documents. The Borrower will pay the Loans according
      to the reading, tenor and effect thereof, and the Parent Guarantor will, and
      will cause each Subsidiary to, do and perform every act and discharge all of
      the
      obligations to be performed and discharged by them under the Loan Documents,
      including, without limitation, this Agreement, at the time or times and in
      the
      manner specified. 

    Section
      8.06 Operation and
      Maintenance of Properties. The Parent Guarantor, at its own expense, will,
      and will cause each Subsidiary to: 

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

    (b)
      keep and maintain all Property
      material to the conduct of its business in good working order and condition,
      ordinary wear and tear excepted preserve, maintain and keep in good repair,
      working order and efficiency (ordinary wear and tear excepted) all of its
      material Oil and Gas Properties and other material Properties, including,
      without limitation, all equipment, machinery and facilities, except to the
      extent a portion of such Property is no longer capable of producing Hydrocarbons
      in economically reasonable amounts. 

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

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

     

    55


    

    
    

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

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

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

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

    Section
      8.10 Environmental
      Matters. 

    (a)
      The Parent Guarantor shall at
      its sole expense: (i) comply, and shall cause its Properties and operations
      and each Subsidiary and each Subsidiary’s Properties and operations to comply,
      with all applicable Environmental Laws, the breach of which could be reasonably
      expected to have a Material Adverse Effect; (ii) not Release or threaten to
      Release, and shall cause each Subsidiary not to Release or threaten to Release,
      any Hazardous Material on, under, about or from any of the Parent Guarantor’s or
      its Subsidiaries’ Properties or any other property offsite the Property to the
      extent caused by the Parent Guarantor’s or any of its Subsidiaries’ operations
      except in compliance with applicable Environmental Laws, the Release or
      threatened Release of which could reasonably be expected to have a Material
      Adverse Effect; (iii) timely obtain or file, and shall cause each
      Subsidiary to timely obtain or file, all environmental permits, if any, required
      under applicable Environmental Laws to be obtained or filed in connection with
      the operation or use of the Parent Guarantor’s or its Subsidiaries’ Properties,
      which failure to obtain or file could reasonably be expected to have a Material
      Adverse Effect; (iv) promptly commence and diligently prosecute to
      completion, and shall cause each Subsidiary to promptly commence and diligently
      prosecute to completion, any assessment, evaluation, investigation, monitoring,
      containment, cleanup, removal, repair, restoration, remediation or other
      remedial obligations (collectively, the “Remedial Work”) in the event any
      Remedial Work is required or reasonably necessary under applicable Environmental
      Laws because of or in connection with the actual or suspected past, present
      or
      future Release or threatened Release of any Hazardous Material on, under, about
      or from any of the Parent Guarantor’s or its Subsidiaries’ Properties, which
      failure to commence and diligently prosecute to completion could reasonably
      be
      expected to have a Material Adverse Effect; (v) conduct, and cause its
      Subsidiaries to conduct, their respective operations and businesses in a manner
      that will not expose any Property or Person to Hazardous Materials that could
      reasonably be expected to form the basis for a claim for damages or compensation
      that could reasonably be expected to have a Material Adverse Effect; and


     

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    (vi)
      establish and implement, and
      shall cause each Subsidiary to establish and implement, such procedures as
      may
      be necessary to continuously determine and assure that the Parent Guarantor’s
      and its Subsidiaries’ obligations under this Section 8.10 are timely and
      fully satisfied, which failure to establish and implement could reasonably
      be
      expected to have a Material Adverse Effect. 

    (b)
      The Parent Guarantor will
      promptly, but in no event later than five days of the occurrence of a triggering
      event, notify the Administrative Agent and the Lenders in writing of any action,
      investigation or inquiry by any Governmental Authority or any demand or lawsuit
      by any Person against the Parent Guarantor or its Subsidiaries or their
      Properties of which the Parent Guarantor has knowledge in connection with any
      Environmental Laws if the Parent Guarantor could reasonably anticipate that
      such
      action will result in liability (whether individually or in the aggregate)
      in
      excess of $10,000,000, not fully covered by insurance, subject to normal
      deductibles. 

    (c)
      The Parent Guarantor will, and
      will cause each Subsidiary to, provide environmental assessments, audits and
      tests in accordance with the most current version of the American Society of
      Testing Materials standards upon request by the Administrative Agent and the
      Lenders and no more than once per year in the absence of any Event of Default
      (or as otherwise required to be obtained by the Administrative Agent or the
      Lenders by any Governmental Authority), in connection with any future
      acquisitions of Oil and Gas Properties or other Properties. 

    Section
      8.11 Further
      Assurances. 

    (a)
      The Parent Guarantor at its
      expense will, and will cause each Subsidiary to, promptly execute and deliver
      to
      the Administrative Agent all such other documents, agreements and instruments
      reasonably requested by the Administrative Agent to comply with, cure any
      defects or accomplish the conditions precedent, covenants and agreements of
      the
      Parent Guarantor or any Subsidiary, as the case may be, in the Loan Documents,
      including the Notes, if any, or to further evidence and more fully describe
      the
      collateral intended as security for the Indebtedness, or to correct any
      omissions in this Agreement or the Security Instruments, or to state more fully
      the obligations secured therein, or to perfect, protect or preserve any Liens
      created pursuant to this Agreement or any of the Security Instruments or the
      priority thereof, or to make any recordings, file any notices or obtain any
      consents, all as may be reasonably necessary or appropriate, in the reasonable
      discretion of the Administrative Agent, in connection therewith. 

    (b)
      The Borrower and the Parent
      Guarantor hereby authorize the Administrative Agent to file one or more
      financing or continuation statements, and amendments thereto, relative to all
      or
      any part of the Mortgaged Property without the signature of any Loan Party
      where
      permitted by law. A carbon, photographic or other reproduction of the Security
      Instruments or any financing statement covering the Mortgaged Property or any
      part thereof shall be sufficient as a financing statement where permitted by
      law. 

    Section
      8.12 Reserve Reports.


    (a)
      On or before March 1st and
      September 1st of each year, commencing September 1, 2007, the Borrower
      shall furnish to the Administrative Agent and the Lenders a Reserve Report.
      The
      Reserve Report as of December 31 of each year shall be prepared by one or
      more Approved Petroleum Engineers or by or under the supervision of the chief
      engineer of the Borrower and audited or reviewed by one or more Approved
      Petroleum Engineers, and all other Reserve Reports shall be prepared by or
      under
      the supervision of the chief engineer of the Borrower and otherwise in a manner
      consistent with the preceding December 31st Reserve Report. Each Reserve
      Report prepared by or under the supervision of the chief engineer of the
      Borrower shall be certified by the chief engineer to be true and accurate in
      all


     

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    material
      respects and to have been
      prepared in accordance with the procedures used in the immediately preceding
      December 31st Reserve Report. 

    (b)
      In the event of an Interim
      Redetermination, the Borrower shall furnish to the Administrative Agent and
      the
      Lenders a Reserve Report prepared by or under the supervision of the chief
      engineer of the Borrower who shall certify such Reserve Report to be true and
      accurate in all material respects and to have been prepared in accordance with
      the procedures used in the immediately preceding December 31 Reserve
      Report. For any Interim Redetermination requested by the Administrative Agent
      or
      the Borrower pursuant to Section 2.07(b), the Borrower shall provide such
      Reserve Report with an “as of” date as required by the Administrative Agent as
      soon as possible, but in any event no later than forty-five (45) days
      following the receipt of such request. 

    (c)
      With the delivery of each
      Reserve Report, the Borrower shall provide to the Administrative Agent and
      the
      Lenders a certificate substantially in the form of Exhibit I from a Responsible
      Officer certifying that in all material respects: (i) the information
      contained in the Reserve Report and any other information delivered in
      connection therewith is true and correct, (ii) the Borrower or its
      Subsidiaries owns good and defensible title to the Oil and Gas Properties
      evaluated in such Reserve Report and such Properties are free of all Liens
      except for Liens permitted by Section 9.03, (iii) except as set forth
      on an exhibit to the certificate, on a net basis there are no gas imbalances,
      take or pay or other prepayments in excess of the volume specified in
      Section 7.19 with respect to its Oil and Gas Properties evaluated in such
      Reserve Report which would require the Borrower or any Subsidiary to deliver
      Hydrocarbons either generally or produced from such Oil and Gas Properties
      at
      some future time without then or thereafter receiving full payment therefor,
      (iv) none of their Oil and Gas Properties have been sold since the date of
      the last Borrowing Base determination except as set forth on an exhibit to
      the
      certificate, which certificate shall list all of its Oil and Gas Properties
      sold
      and in such detail as reasonably required by the Administrative Agent,
      (v) attached to the certificate is a list of all marketing agreements
      entered into subsequent to the later of the date hereof or the most recently
      delivered Reserve Report which the Borrower could reasonably be expected to
      have
      been obligated to list on Schedule 7.20 had such agreement been in effect on
      the
      date hereof and (vi) attached thereto is a schedule of the Oil and Gas
      Properties evaluated by such Reserve Report that are Mortgaged Properties and
      demonstrating the percentage of the Borrowing Base that the value of such
      Mortgaged Properties represent. 

    Section
      8.13 Title
      Information. 

    (a)
      On or before the delivery to the
      Administrative Agent and the Lenders of each Reserve Report required by
      Section 8.12(a), the Borrower will deliver, if requested by the
      Administrative Agent, title information in form and substance reasonably
      acceptable to the Administrative Agent covering enough of the Oil and Gas
      Properties evaluated by such Reserve Report that were not included in the
      immediately preceding Reserve Report, so that the Administrative Agent shall
      have received together with title information previously delivered to the
      Administrative Agent, reasonably satisfactory title information on at least
      75%
      of the total value of the Oil and Gas Properties evaluated by such Reserve
      Report. 

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

     

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    together
      with title information
      previously delivered to the Administrative Agent, reasonably satisfactory title
      information on at least 75% of the value of the Oil and Gas Properties evaluated
      by such Reserve Report. 

    (c)
      If the Borrower is unable to
      cure any title defect requested by the Administrative Agent or the Lenders
      to be
      cured within the 60-day period or the Borrower does not comply with the
      requirements to provide acceptable title information covering 75% of the value
      of the Oil and Gas Properties evaluated in the most recent Reserve Report,
      such
      default shall not be a Default, but instead the Administrative Agent and/or
      the
      Super-Majority Lenders shall have the right to exercise the following remedy
      in
      their sole discretion from time to time, and any failure to so exercise this
      remedy at any time shall not be a waiver as to future exercise of the remedy
      by
      the Administrative Agent or the Lenders. To the extent that the Administrative
      Agent or the Super-Majority Lenders are not satisfied with title to any
      Mortgaged Property after the 60-day period has elapsed, such unacceptable
      Mortgaged Property shall not count towards the 75% requirement, and the
      Administrative Agent may send a notice to the Borrower and the Lenders that
      the
      then outstanding Borrowing Base shall be reduced by an amount as determined
      by
      the Super-Majority Lenders to cause the Borrower to be in compliance with the
      requirement to provide acceptable title information on 75% of the value of
      the
      Oil and Gas Properties. This new Borrowing Base shall become effective
      immediately after receipt of such notice. 

    Section
      8.14 Additional
      Collateral; Additional Guarantors. 

    (a)
      In connection with each
      redetermination of the Borrowing Base, the Borrower shall review the Reserve
      Report and the list of current Mortgaged Properties (as described in
      Section 8.12(c)(vi)) to ascertain whether the Mortgaged Properties
      represent at least 80% of the total value of the Oil and Gas Properties
      evaluated in the most recently completed Reserve Report after giving effect
      to
      exploration and production activities, acquisitions, dispositions and
      production. In the event that the Mortgaged Properties do not represent at
      least
      80% of such total value, then the Borrower shall, and shall cause its
      Subsidiaries to, grant within thirty (30) days of the delivery of the
      certificate referred to in Section 8.12(c) to the Administrative Agent as
      security for the Indebtedness a first-priority Lien interest (provided that
      Excepted Liens of the type described in clauses (a) to (d) and
      (f) of the definition thereof may exist, but subject to the provisos at the
      end of such definition) on additional Oil and Gas Properties not already subject
      to a Lien of the Security Instruments such that after giving effect thereto,
      the
      Mortgaged Properties will represent at least 80% of the total value of the
      Oil
      and Gas Properties included in the then effective Borrowing Base. All such
      Liens
      will be created and perfected by and in accordance with the provisions of deeds
      of trust, security agreements and financing statements or other Security
      Instruments, all in form and substance reasonably satisfactory to the
      Administrative Agent and in sufficient executed (and acknowledged where
      necessary or appropriate) counterparts for recording purposes. In order to
      comply with the foregoing, if any Subsidiary places a Lien on its Oil and Gas
      Properties and such Subsidiary is not a Guarantor, then it shall become a
      Guarantor and comply with Section 8.14(b). 

    (b)
      The Parent Guarantor shall
      promptly cause each Material Subsidiary to guarantee the Indebtedness pursuant
      to the Guaranty Agreement. In connection with any such guaranty, the Parent
      Guarantor shall, or shall cause such Subsidiary to, (i) execute and deliver
      a supplement to the Guaranty Agreement executed by such Subsidiary,
      (ii) grant a first-priority security interest in all of the Equity
      Interests of such Subsidiary (including, without limitation, delivery of
      original certificates evidencing the Equity Interests of such Subsidiary, as
      appropriate, together with undated stock powers for each certificate duly
      executed in blank by the registered owner thereof) and (iii) execute and
      deliver such other additional documents, certificates and legal opinions as
      shall reasonably be requested by the Administrative Agent. 

     

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    (c)
      In the event that the Borrower
      or any Material Subsidiary becomes a partner in a Partnership or acquire
      additional interest in a Partnership, then the Borrower shall, or shall cause
      such Subsidiary to, (i) grant a first-priority security interest in all the
      Equity Interests owned by such Person in such Partnership and (ii) execute
      and deliver such other additional documents, certificates and legal opinions
      as
      shall reasonably be requested by the Administrative Agent. 

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

    Section
      8.16 Swap Agreements.
      The Parent Guarantor shall maintain the hedge position established by the Swap
      Agreements required under Section 6.01(p) during the period specified
      therein and shall neither assign, terminate or unwind any such Swap Agreements
      nor sell any Swap Agreements if the effect of such action (when taken together
      with any other Swap Agreements executed contemporaneously with the taking of
      such action) would have the effect of canceling its positions under such Swap
      Agreements required hereby. 

    Section
      8.17 Unrestricted
      Subsidiaries. The Parent Guarantor: 

    (a)
      will cause the management,
      business and affairs of each of the Parent Guarantor and its Subsidiaries to
      be
      conducted in such a manner (including, without limitation, by keeping separate
      books of account, furnishing separate financial statements of Unrestricted
      Subsidiaries to creditors and potential creditors thereof and by not permitting
      Properties of the Parent Guarantor and its respective Subsidiaries to be
      commingled) so that each Unrestricted Subsidiary that is a corporation will
      be
      treated as a corporate entity separate and distinct from Parent Guarantor and
      the Subsidiaries; provided that the foregoing will not prohibit payments under
      the Expense Sharing Agreement or other expense sharing agreements with such
      Unrestricted Subsidiaries which are consistent with past practices and/or
      required by any applicable Governmental Authority. 

    (b)
      will not, and will not permit
      any of the Subsidiaries to, incur, assume, guarantee or be or become liable
      for
      any Debt of any of the Unrestricted Subsidiaries. 

    (c)
      will not permit any Unrestricted
      Subsidiary to hold any Equity Interest in, or any Debt of, the Parent Guarantor
      or any Subsidiary. 

     

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    ARTICLE
      IX


    Negative
      Covenants


    Until
      the Commitments have expired
      or terminated and the principal of and interest on each Loan and all fees
      payable hereunder and all other amounts payable under the Loan Documents have
      been paid in full and all Letters of Credit have expired or terminated and
      all
      LC Disbursements shall have been reimbursed, the Parent Guarantor and the
      Borrower covenant and agree with the Lenders that: 

    Section
      9.01 Financial
      Covenants

    (a)
Ratio
      of Total Debt to
      EBITDA. The Parent Guarantor will not, as of any date of determination,
      permit its ratio of Total Debt as of such day to EBITDA for the four fiscal
      quarters ending on the last day of the fiscal quarter immediately preceding
      such
      date of determination for which financial statements are available to be greater
      than: 

    (i)
      for the period beginning on the
      Closing Date through December 31, 2008: 4.0:1, 

    (ii)
      for the period beginning after
      December 31, 2008 through December 31, 2009: 3.75:1, and 

    (iii)
      thereafter: 3.5:1.


    For
      the avoidance of doubt, the
      foregoing ratio shall be calculated to exclude Total Debt and EBITDA
      attributable to the Unrestricted Subsidiaries (but to include cash distributions
      from Anthem Securities paid to the Borrower or other Loan Party). 

    (b)
Current
      Ratio. The Parent
      Guarantor will not permit, as of the last day of any fiscal quarter, its ratio
      of (i) consolidated current assets (including the unused amount of the
      total Commitments, but excluding non-cash assets under FAS 133) to
      (ii) consolidated current liabilities (excluding non-cash obligations under
      FAS 133, current maturities of Loans and those portions of advance payments
      received by the Loan Parties for drilling and completion of oil and gas wells
      that exceed the cost to the Loan Parties and are classified as current
      liabilities) to be less than 1.0 to 1.0; provided that for purposes of this
      covenant, current assets and current liabilities of Unrestricted Subsidiaries
      shall be excluded. 

    Section
      9.02 Debt. The Parent
      Guarantor will not, and will not permit any Subsidiary (other than Unrestricted
      Subsidiaries) to, incur, create, assume or suffer to exist any Debt, except:
      

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

    (b)
      Debt of the Parent Guarantor and
      its Subsidiaries existing on the date hereof that is reflected in the Financial
      Statements and Schedule 9.02 and any renewals and extensions thereof (but not
      any increases). 

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


     

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    (d)
      Debt under Capital Leases not to
      exceed $25,000,000 (excluding capitalized leases of Hydrocarbon Interests).
      

    (e)
      Debt associated with worker’s
      compensation claims, performance, bid, surety or similar bonds or surety
      obligations required by Governmental Requirements or third parties in connection
      with the operation of the Oil and Gas Properties. 

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

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

    (h)
      Senior Notes provided that
      (i) at the time of incurring such Debt (A) no Default has occurred and
      is then continuing and (B) no Default would result from the incurrence of
      such Debt after giving effect to the incurrence of such Debt (and any concurrent
      repayment of Debt with the proceeds of such incurrence), (ii) such Debt
      does not have any scheduled amortization prior to one year after the Maturity
      Date, (iii) such Debt does not mature sooner than one year after the
      Maturity Date, (iv) the terms of such Debt are not materially more onerous,
      taken as a whole, than the terms of this Agreement and the other Loan Documents
      and (v) such Debt and any guarantees thereof are on prevailing market terms
      for similar situated companies. 

    (i)
      Debt owed to Atlas America, Inc.
      not to exceed $50,000,000 in the aggregate; provided, that, all such debt shall
      be unsecured and subordinated to the Indebtedness on terms and conditions
      reasonably satisfactory to the Administrative Agent. 

    (j)
      other Debt not to exceed
      $50,000,000 in the aggregate at any one time outstanding. 

    Notwithstanding
      the foregoing, no
      Subsidiary which is a Partnership shall incur or become liable in respect of
      any
      Debt. 

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

    (a)
      Liens securing the payment of
      any Indebtedness. 

    (b)
      Excepted Liens. 

    (c)
      Liens securing Capital Leases
      permitted by Section 9.02(d) but only on the Property under lease.


    (d)
      Liens on Property of
      Unrestricted Subsidiaries securing Non-Recourse Debt of such Unrestricted
      Subsidiaries permitted by Section 9.20(d). 

    (e)
      Liens on cash and securities
      pledged to secure Swap Agreements, provided the aggregate amount of all such
      cash and securities shall not exceed $25,000,000. 

     

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    (f)
      Liens on Property not
      constituting collateral for the Indebtedness and not otherwise permitted by
      the
      foregoing clauses of this Section 9.03; provided that the aggregate
      principal or face amount of all Debt secured under this Section 9.03(f)
      shall not exceed $10,000,000 at any time. 

    Section
      9.04 Restricted Payments;
      Redemption of Subordinated Debt. 

    (a)
Restricted
      Payments. The
      Parent Guarantor will not, and will not permit any of its Subsidiaries to,
      declare or make, or agree to pay or make, directly or indirectly, any Restricted
      Payment, return any capital to its stockholders or make any distribution of
      its
      Property to its Equity Interest holders, except (i) the Parent Guarantor
      may declare and pay dividends with respect to its Equity Interests payable
      solely in additional shares of its Equity Interests (other than Disqualified
      Capital Stock), (ii) Subsidiaries may declare and pay dividends ratably
      with respect to their Equity Interests and (iii) so long as no Borrowing
      Base deficiency or Event of Default has occurred and is continuing or would
      result therefrom, and, subject to the proviso in Section 7.09(d), the
      Parent Guarantor may declare and pay quarterly cash dividends to its members
      of
      Available Cash in accordance with the Operating Agreement. 

    (b)
Redemption
      of Senior
      Notes. The Parent Guarantor will not, and will not permit any Subsidiary to,
      prior to the date that is one year after the Maturity Date: (i) call, make
      or offer to make any optional or voluntary Redemption of or otherwise optionally
      or voluntarily Redeem (whether in whole or in part) any Senior Notes permitted
      to be incurred hereunder, provided that the Parent Guarantor may Redeem such
      Debt with the net cash proceeds of any sale of Equity Interests of the Parent
      Guarantor (other than Disqualified Capital Stock); or (ii) amend, modify,
      waive or otherwise change, consent or agree to any amendment, modification,
      waiver or other change to, any of the terms of the Senior Notes or any
      indenture, agreement, instrument, certificate or other document relating to
      the
      Senior Notes permitted hereunder other than supplemental indentures to add
      guarantors if such Person has become a Guarantor of the Indebtedness.


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

    (a)
      Investments reflected in the
      Financial Statements or which are disclosed to the Lenders in Schedule 9.05.
      

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

    (c)
      direct obligations of the United
      States or any agency thereof, or obligations guaranteed by the United States
      or
      any agency thereof, in each case maturing within one year from the date of
      creation thereof. 

    (d)
      commercial paper maturing within
      one year from the date of creation thereof rated no lower than A2 or P2 by
      S&P or Moody’s, respectively. 

    (e)
      deposits maturing within one
      year from the date of creation thereof with, including certificates of deposit
      issued by, any Lender or any office located in the United States of any other
      bank or trust company which is organized under the laws of the United States
      or
      any state thereof, has capital, surplus and undivided profits aggregating at
      least $100,000,000 (as of the date of such bank or trust company’s most recent
      financial reports) and has a short term deposit rating of no lower than A2
      or
      P2, as such rating is set forth from time to time, by S&P or Moody’s,
      respectively. 

     

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    (f)
      deposits in money market funds
      investing exclusively in Investments described in Section 9.05(c),
      Section 9.05(d) or Section 9.05(e). 

    (g)
      Investments (i) made by the
      Parent Guarantor in or to the Borrower, (ii) made by the Borrower in or to
      any Subsidiary of the Borrower which is a Guarantor, (iii) made by any
      Subsidiary in or to the Borrower or any Guarantor, and (iv) made by the
      Borrower or any Guarantor (other than the Parent Guarantor) or any Subsidiary
      in
      or to any Subsidiary that is not a Guarantor in an aggregate amount in all
      such
      Subsidiaries at any one time outstanding not to exceed $5,000,000. 

    (h)
      Investments (including, without
      limitation, capital contributions), in the Partnerships. 

    (i)
      loans or advances to employees,
      officers or directors of the Parent Guarantor or any of its Subsidiaries, in
      each case in the ordinary course of business and consistent with past practices.
      

    (j)
      Investments in stock,
      obligations or securities received in settlement of debts arising from
      Investments permitted under this Section 9.05 owing to the Parent Guarantor
      or any Subsidiary as a result of a bankruptcy or other insolvency proceeding
      of
      the obligor in respect of such debts or upon the enforcement of any Lien in
      favor of the Parent Guarantor or any of its Subsidiaries 

    (k)
      Non-hostile acquisitions of
      Equity Interests or assets constituting a business unit of any Person,
provided that: (i) immediately prior to and after
      giving effect to such acquisition, no Default or Event of Default exists or
      would result therefrom; (ii) if such acquisition is of Equity Interests,
      substantially all of the Equity Interests of such Person are acquired and such
      Person becomes a Guarantor; (iii) such Person is principally engaged in the
      same business as the Obligors; (iv) the Borrower shall be in pro forma
      compliance with the covenants set forth in Section 9.01 based on the
      trailing four (4) quarters and as adjusted on a pro forma basis for such
      acquisition; (v) such acquired Person or assets shall not be subject to any
      material liabilities except as permitted by this Agreement and Loan Documents;
      and (vi) a first priority perfected Lien shall be granted to the
      Administrative Agent for the benefit of the Lenders in such acquired assets.
      

    (l)
      Investments in Unrestricted
      Subsidiaries not to exceed $25,000,000 in the aggregate at any time.


    (m)
      other Investments not to exceed
      $25,000,000 in the aggregate at any time. 

    Section
      9.06 Nature of Business;
      International Operations; Foreign Subsidiaries. Neither the Parent Guarantor
      nor any Subsidiary will allow any material change to be made in the character
      of
      its business as a domestic independent oil and gas exploration and production
      company. From and after the date hereof, the Parent Guarantor and its
      Subsidiaries will not acquire or make any other expenditure (whether such
      expenditure is capital, operating or otherwise) in or related to, any Oil and
      Gas Properties not located within the geographical boundaries of the United
      States. 

    Section
      9.07 Proceeds of Loans
      and Letters of Credit. The Parent Guarantor will not permit the proceeds of
      the Loans to be used for any purpose other than those permitted by
      Section 7.09. Neither the Parent Guarantor nor any Person acting on behalf
      of the Parent Guarantor has taken or will take any action which might cause
      any
      of the Loan Documents to violate Regulations T, U or X or any other regulation
      of the Board or to violate Section 7 of the Securities Exchange Act of 1934
      or any rule or regulation thereunder, in each case as now in effect or as the
      same may hereinafter be in effect. If requested by the Administrative Agent,
      the
      Parent Guarantor will furnish to the Administrative Agent and each Lender a
      statement to the foregoing effect in conformity with the requirements of FR
      Form
      U-1 or such other form referred to in Regulation U, Regulation T or Regulation
      X
      of the Board, as the case may be. 

     

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    Section
      9.08 ERISA
      Compliance. The Parent Guarantor and the Subsidiaries will not at any time:


    (a)
      engage in, or permit any ERISA
      Affiliate to engage in, any transaction in connection with which the Parent
      Guarantor, a Subsidiary or any ERISA Affiliate could be subjected to either
      a
      civil penalty assessed pursuant to subsections (c), (i) or (l) of
      section 502 of ERISA or a tax imposed by Chapter 43 of Subtitle D of
      the Code, if either of which would have a Material Adverse Effect. 

    (b)
      terminate, or permit any ERISA
      Affiliate to terminate, any Plan in a manner, or take any other action with
      respect to any Plan, which could reasonably be expected to result in any
      liability of the Parent Guarantor, a Subsidiary or any ERISA Affiliate to the
      PBGC. 

    (c)
      fail to make, or permit any
      ERISA Affiliate to fail to make, full payment when due of all amounts which,
      under the provisions of any Plan, agreement relating thereto or applicable
      law,
      the Parent Guarantor, a Subsidiary or any ERISA Affiliate is required to pay
      as
      contributions thereto if such failure could reasonably be expected to have
      a
      Material Adverse Effect. 

    (d)
      permit to exist, or allow any
      ERISA Affiliate to permit to exist, any accumulated funding deficiency within
      the meaning of section 302 of ERISA or section 412 of the Code, whether or
      not
      waived, with respect to any Plan which exceeds $2,000,000. 

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

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

    (g)
      acquire, or permit any ERISA
      Affiliate to acquire, an interest in any Person that causes such Person to
      become an ERISA Affiliate with respect to the Parent Guarantor or a Subsidiary
      or with respect to any ERISA Affiliate of the Parent Guarantor or a Subsidiary
      if such Person sponsors, maintains or contributes to, or at any time in the
      six-year period preceding such acquisition has sponsored, maintained, or
      contributed to, (i) any Multiemployer Plan, or (ii) any other Plan
      that is subject to Title IV of ERISA under which the actuarial present
      value of the benefit liabilities under such Plan exceeds the current value
      of
      the assets (computed on a plan termination basis in accordance with
      Title IV of ERISA) of such Plan allocable to such benefit liabilities by
      any amount in excess of $2,000,000. 

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

    (i)
      contribute to or assume an
      obligation to contribute to, or permit any ERISA Affiliate to contribute to
      or
      assume an obligation to contribute to, any employee welfare benefit plan, as
      defined in section 3(1) of ERISA, including, without limitation, any such plan
      maintained to provide 

     

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    benefits
      to former employees of such
      entities, that may not be terminated by such entities in their sole discretion
      at any time without any material liability. 

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


    Section
      9.09 Sale or Discount of
      Receivables. Except for receivables obtained by the Parent Guarantor or any
      Subsidiary out of the ordinary course of business or the settlement of joint
      interest billing accounts in the ordinary course of business or discounts
      granted to settle collection of accounts receivable or the sale of defaulted
      accounts arising in the ordinary course of business in connection with the
      compromise or collection thereof and not in connection with any financing
      transaction, neither the Parent Guarantor nor any Subsidiary will discount
      or
      sell (with or without recourse) to any other Person that is not the Parent
      Guarantor or a Guarantor any of its notes receivable or accounts receivable.
      

    Section
      9.10 Mergers, Etc.
      Neither the Parent Guarantor nor any Loan Party will merge into or with or
      consolidate with any other Person, or sell, lease or otherwise dispose of
      (whether in one transaction or in a series of transactions) all or substantially
      all of its Property to any other Person (any such transaction, a
“consolidation”); provided that: 

    (a)
      any Subsidiary (other than the
      Borrower) may participate in a consolidation with the Parent Guarantor (provided
      that the Parent Guarantor shall be the continuing or surviving Person), and
      

    (b)
      any Subsidiary of the Borrower
      may participate in a consolidation with the Borrower (provided that the Borrower
      shall be the continuing or surviving Person) or any other Subsidiary (provided
      that if a Party to such consolidation is a Guarantor or the surviving Person
      is
      a Material Subsidiary, then the survivor is either a Guarantor or becomes a
      Guarantor under Section 8.14(b), and if one of such Subsidiaries party to
      such consolidation is a Wholly-Owned Subsidiary, then the surviving Person
      shall
      be a Wholly-Owned Subsidiary). 

    Section
      9.11 Sale of
      Properties. The Parent Guarantor will not, and will not permit any
      Subsidiary to, sell, assign, farm-out, convey or otherwise transfer any Property
      except for (a) the sale of Hydrocarbons in the ordinary course of business;
      (b) farmouts of undeveloped acreage, zones or depths and assignments in
      connection with such farmouts; (c) the sale or transfer of equipment that
      is no longer necessary for the business of the Parent Guarantor or such
      Subsidiary or is replaced by equipment of at least comparable value and use;
      (d) the sale or other disposition (including Casualty Events) of any Oil
      and Gas Property or any interest therein or any Subsidiary owning Oil and Gas
      Properties; provided that (i) 100% of the consideration received in respect
      of such sale or other disposition shall be cash or other similar Oil and Gas
      Properties, (ii) the consideration received in respect of such sale or
      other disposition shall be equal to or greater than the fair market value of
      the
      Oil and Gas Property, interest therein or Subsidiary subject of such sale or
      other disposition (as reasonably determined by the board of directors of the
      Parent Guarantor and, if requested by the Administrative Agent, the Parent
      Guarantor shall deliver a certificate of a Responsible Officer of the Parent
      Guarantor certifying to that effect), (iii) if such sale or other
      disposition of Oil and Gas Property (including farm-outs under
      Section 9.11(b)) or Subsidiary owning Oil and Gas Properties included in
      the most recently delivered Reserve Report during any period between two
      successive Scheduled Redetermination Dates has a fair market value in excess
      of
      ten percent (10%) of the then effective Borrowing Base, individually or in
      the aggregate, the Borrowing Base (and prior to the Borrowing Base Equalization
      Date, the Conforming Borrowing Base) shall be reduced, effective immediately
      upon such sale or disposition, by an amount equal to the allocated value, if
      any, assigned such Property in the most recently delivered Borrowing Base and
      (iv) if any such sale or other disposition is of a Subsidiary owning Oil
      and Gas Properties, such sale or other disposition shall include 

     

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    all
      the Equity Interests of such
      Subsidiary; and (e) sales and other dispositions of Properties not
      regulated by Section 9.11(a) to (d) having a fair market value not to
      exceed $10,000,000 during any 6-month period. 

    Section
      9.12 Environmental
      Matters. The Parent Guarantor will not, and will not permit any Subsidiary
      to, cause or permit any of its Property to be in violation of, or do anything
      or
      permit anything to be done which will subject any such Property to a Release
      or
      threatened Release of Hazardous Materials, exposure to any Hazardous Materials,
      or to any Remedial Work under any applicable Environmental Laws, assuming
      disclosure to the applicable Governmental Authority of all relevant facts,
      conditions and circumstances, if any, pertaining to such Property where such
      violations, Release or threatened Release, exposure, or remedial obligations
      could reasonably be expected to have a Material Adverse Effect. 

    Section
      9.13 Transactions with
      Affiliates. Except for the Management Agreement and the Expense Sharing
      Agreement, the Parent Guarantor will not, and will not permit any Subsidiary
      to,
      enter into any transaction, including, without limitation, any purchase, sale,
      lease or exchange of Property or the rendering of any service, with any
      Affiliate (other than the Guarantors and Wholly-Owned Subsidiaries of the Parent
      Guarantor) unless such transactions are otherwise permitted under this Agreement
      and are upon fair and reasonable terms no less favorable to it than it would
      obtain in a comparable arm’s length transaction with a Person not an Affiliate.


    Section
      9.14 Subsidiaries.
      The Parent Guarantor shall not, and shall not permit any Subsidiary to, create
      or acquire any additional Subsidiary or designate or redesignate a Subsidiary
      as
      an Unrestricted Subsidiary unless the Parent Guarantor gives written notice
      to
      the Administrative Agent of such creation or acquisition and complies with
      Section 8.14(b). The Parent Guarantor shall not, and shall not permit any
      Subsidiary to, sell, assign or otherwise dispose of any Equity Interests in
      any
      Subsidiary except in compliance with Section 9.11(d). Neither the Parent
      Guarantor nor any Subsidiary shall have any Foreign Subsidiaries. 

    Section
      9.15 Negative Pledge
      Agreements; Dividend Restrictions. The Parent Guarantor will not, and will
      not permit any Subsidiary to, create, incur, assume or suffer to exist any
      contract, agreement or understanding which in any way prohibits or restricts
      the
      granting, conveying, creation or imposition of any Lien on any of its Property
      in favor of the Administrative Agent and the Lenders or restricts any Subsidiary
      from paying dividends or making distributions to the Parent Guarantor, the
      Borrower or any other Loan Party, or which requires the consent of or notice
      to
      other Persons in connection therewith; provided, however, that the preceding
      restrictions will not apply to encumbrances or restrictions arising under or
      by
      reason of (a) this Agreement or the Security Instruments, (b) any
      leases or licenses or similar contracts as they affect any Property or Lien
      subject to a lease or license, (c) any contract, agreement or understanding
      creating Liens on Capital Leases permitted by Section 9.03(c) (but only to
      the extent related to the Property on which such Liens were created),
      (d) any restriction with respect to a Subsidiary imposed pursuant to an
      agreement entered into for the direct or indirect sale or disposition of all
      or
      substantially all the equity or Property of such Subsidiary (or the Property
      that is subject to such restriction) pending the closing of such sale or
      disposition, or (e) customary provisions with respect to the distribution
      of Property in joint venture agreements. 

    Section
      9.16 Gas Imbalances,
      Take-or-Pay or Other Prepayments. The Parent Guarantor will not allow gas
      imbalances, take-or-pay or other prepayments with respect to the Oil and Gas
      Properties of the Parent Guarantor or any Subsidiary that would require the
      Parent Guarantor or such Subsidiary to deliver Hydrocarbons at some future
      time
      without then or thereafter receiving full payment therefor to exceeding three
      and one-half percent (3.5%) of monthly production in the aggregate.


     

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    Section
      9.17 Swap Agreements.
      The Parent Guarantor will not, and will not permit any Subsidiary to, enter
      into
      any Swap Agreements with any Person other than: 

    (a)
      Swap Agreements listed on
      Schedule 7.21 and other Swap Agreements (other than purchase options) in respect
      of commodities entered into by the Borrower fixing prices on oil and/or gas
      expected to be produced by the Loan Parties and the Partnerships provided that
      (i) such contracts shall be with an Approved Counterparty, (ii) no
      such contract shall be entered into by the Borrower on behalf of another Person,
      except where the Borrower has the contractual authority to enter into such
      Swap
      Agreements on behalf of such Person and the obligations under such Swap
      Agreements are fully recourse to such Person and (iii) the notional volumes
      for which (when aggregated with other commodity Swap Agreements then in effect
      other than basis differential swaps on volumes already hedged pursuant to other
      Swap Agreements) do not exceed, as of the date such Swap Agreement is executed:
      (A) during the 24-month period immediately following the date on which such
      Swap Agreement is entered: the lesser of (1) 90% of the reasonably
      anticipated projected production from its and its Subsidiaries’ and the
      Partnerships proved Oil and Gas Properties (including the Acquisition
      Properties) and (2) 100% of the reasonably anticipated projected production
      from its and its Subsidiaries’ and the Partnerships proved developed producing
      Oil and Gas Properties (including the Acquisition Properties), and (B) for
      the 24-month period immediately following the period described in clause (A),
      85% of the reasonably anticipated projected production from its, its
      Subsidiaries and the Partnerships’ proved, developed, producing Oil and Gas
      Properties. Any such projections to be adjusted as follows: (A) Oil and Gas
      Properties evaluated in the most recently delivered Reserve Report shall reflect
      the actual historical decline profile of such Oil and Gas Properties and
      (B) Oil and Gas Properties not evaluated in the most recently delivered
      Reserve Report shall reflect a reasonable decline profile based upon actual
      historical decline profiles of similar or analogous Oil and Gas Properties)
      for
      each month during the period during which such Swap Agreement is in effect
      for
      each of crude oil and natural gas, calculated separately. 

    (b)
      Swap Agreements in respect of
      interest rates with an Approved Counterparty, as follows: (i) Swap
      Agreements effectively converting interest rates from fixed to floating, the
      notional amounts of which (when aggregated with all other Swap Agreements of
      the
      Parent Guarantor and its Subsidiaries then in effect effectively converting
      interest rates from fixed to floating) do not exceed 50% of the then outstanding
      principal amount of the Parent Guarantor’s Debt for borrowed money which bears
      interest at a fixed rate and (ii) Swap Agreements effectively converting
      interest rates from floating to fixed, the notional amounts of which (when
      aggregated with all other Swap Agreements of the Parent Guarantor and its
      Subsidiaries then in effect effectively converting interest rates from floating
      to fixed) do not exceed 75% of the then outstanding principal amount of the
      Parent Guarantor’s Debt for borrowed money which bears interest at a floating
      rate. 

    (c)
      Except as set forth in
      Section 9.03(e), in no event shall any Swap Agreement contain any
      requirement, agreement or covenant for the Parent Guarantor or any Subsidiary
      to
      post collateral or margin to secure their obligations under such Swap Agreement
      or to cover market exposures. 

    Section
      9.18 Tax Status as
      Partnership; Partnership Agreement. The Parent Guarantor shall not alter its
      status as a partnership for purposes of United States Federal Income taxes.
      The
      Parent Guarantor shall not, and shall not permit any Subsidiary to, amend or
      modify any provision of the Operating Agreement or any other organizational
      document, or any agreements with Affiliates of the type referred to in
      Section 9.13, if such amendment or modification could reasonably be
      expected to have a Material Adverse Effect. 

     

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    Section
      9.19 Designation and
      Conversion of Restricted and Unrestricted Subsidiaries; Debt of Unrestricted
      Subsidiaries. 

    (a)
      Unless designated as an
      Unrestricted Subsidiary on Schedule 7.15 as of the date hereof or thereafter,
      assuming compliance with Section 9.19(b), any Person that becomes a
      Subsidiary of the Borrower or any of its Subsidiaries shall be classified as
      a
      Subsidiary. 

    (b)
      The Borrower may designate by
      written notification thereof to the Administrative Agent, any Subsidiary,
      including a newly formed or newly acquired Subsidiary, as an Unrestricted
      Subsidiary if prior, and after giving effect, to such designation, neither
      a
      Default nor a Borrowing Base deficiency would exist and such designation is
      deemed to be an Investment in an Unrestricted Subsidiary in an amount equal
      to
      the fair market value as of the date of such designation of the Borrower’s
      direct and indirect ownership interest in such Subsidiary and such Investment
      would be permitted to be made at the time of such designation under
      Section 9.05(l). Except as provided in this Section 9.19(b), no
      Subsidiary may be redesignated as an Unrestricted Subsidiary. 

    (c)
      The Borrower may designate any
      Unrestricted Subsidiary to be a Subsidiary if after giving effect to such
      designation, the representations and warranties of the Borrower and its
      Subsidiaries contained in each of the Loan Documents are true and correct on
      and
      as of such date as if made on and as of the date of such redesignation (or,
      if
      stated to have been made expressly as of an earlier date, were true and correct
      as of such date), no Default would exist and the Borrower complies with the
      requirements of Section 8.14, Section 8.17 and Section 9.14. Any
      such designation shall be treated as a cash dividend in an amount equal to
      the
      lesser of the fair market value of the Borrower’s direct and indirect ownership
      interest in such Subsidiary or the amount of the Borrower’s cash investment
      previously made for purposes of the limitation on Investments under
      Section 9.05(l). 

    (d)
      The Borrower shall not permit
      the aggregate principal amount of all Non-Recourse Debt outstanding at any
      one
      time to exceed $25,000,000. 

    ARTICLE
      X


    Events
      of Default; Remedies


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

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

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

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


    (d)
      the Parent Guarantor or any
      Subsidiary shall fail to observe or perform any covenant, condition or agreement
      contained Section 8.02(a) or in ARTICLE IX. 

     

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

    (f)
      the Parent Guarantor or any
      Subsidiary shall fail to make any payment (whether of principal or interest
      and
      regardless of amount) in respect of any Material Indebtedness, when and as
      the
      same shall become due and payable. 

    (g)
      any event or condition occurs
      that results in any Material Indebtedness becoming due prior to its scheduled
      maturity or that enables or permits (with or without the giving of notice,
      the
      lapse of time or both) the holder or holders of any Material Indebtedness or
      any
      trustee or agent on its or their behalf to cause any Material Indebtedness
      to
      become due, or to require the Redemption thereof or any offer to Redeem to
      be
      made in respect thereof (other than as permitted by the definition of
      Disqualified Capital Stock), prior to its scheduled maturity or require the
      Parent Guarantor or any Subsidiary to make an offer in respect thereof.


    (h)
      an involuntary proceeding shall
      be commenced or an involuntary petition shall be filed seeking
      (i) liquidation, reorganization or other relief in respect of any Loan
      Party or any Significant Subsidiary or its debts, or of a substantial part
      of
      its assets, under any Federal, state or foreign bankruptcy, insolvency,
      receivership or similar law now or hereafter in effect or (ii) the
      appointment of a receiver, trustee, custodian, sequestrator, conservator or
      similar official for any Loan Party or any Significant Subsidiary or for a
      substantial part of its assets, and, in any such case, such proceeding or
      petition shall continue undismissed for 30 days or an order or decree approving
      or ordering any of the foregoing shall be entered. 

    (i)
      any Loan Party or any
      Significant Subsidiary shall (i) voluntarily commence any proceeding or
      file any petition seeking liquidation, reorganization or other relief under
      any
      Federal, state or foreign bankruptcy, insolvency, receivership or similar law
      now or hereafter in effect, (ii) consent to the institution of, or fail to
      contest in a timely and appropriate manner, any proceeding or petition described
      in Section 10.01(h), (iii) apply for or consent to the appointment of
      a receiver, trustee, custodian, sequestrator, conservator or similar official
      for any Loan Party or any Significant Subsidiary or for a substantial part
      of
      its assets, (iv) file an answer admitting the material allegations of a
      petition filed against it in any such proceeding, (v) make a general
      assignment for the benefit of creditors or (vi) take any action for the
      purpose of effecting any of the foregoing. 

    (j)
      any Loan Party or any
      Significant Subsidiary shall become unable, admit in writing its inability,
      or
      fail generally to pay its debts as they become due. 

    (k)
      one or more judgments for the
      payment of money in an aggregate amount in excess of $25,000,000 shall be
      rendered against Parent Guarantor, any of its Subsidiaries, including the
      Borrower, or any combination thereof and the same shall remain undischarged
      (or
      provision shall not be made for such discharge), or a stay of execution thereof
      shall not be procured, within the period of time prescribed by applicable rules
      of civil procedure in which to perfect an appeal thereof. 

    (l)
      the Loan Documents after
      delivery thereof shall for any reason, except to the extent permitted by the
      terms thereof, cease to be in full force and effect and valid, binding and
      enforceable in accordance with their terms against any Loan Party or shall
      be
      repudiated, or cease to 

     

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    create
      a valid and perfected Lien of
      the priority required thereby on any of the collateral purported to be covered
      thereby, except to the extent permitted by the terms of this Agreement, or
      any
      Loan Party shall so state in writing. 

    (m)
      an ERISA Event shall have
      occurred that, in the opinion of the Majority Lenders, when taken together
      with
      all other ERISA Events that have occurred, could reasonably be expected to
      result in liability of the Parent Guarantor and its Subsidiaries in an aggregate
      amount exceeding $25,000,000. 

    (n)
      a Change in Control shall occur.


    Section
      10.02 Remedies.


    (a)
      In the case of an Event of
      Default other than one described in Section 10.01(h), Section 10.01(i)
      or Section 10.01(j), at any time thereafter during the continuance of such
      Event of Default, the Majority Lenders may, by notice to the Borrower, take
      either or both of the following actions, at the same or different times:
      (i) terminate the Commitments, and thereupon the Commitments shall
      terminate immediately, and (ii) declare the Notes and the Loans then
      outstanding to be due and payable in whole (or in part, in which case any
      principal not so declared to be due and payable may thereafter be declared
      to be
      due and payable), and thereupon the principal of the Loans so declared to be
      due
      and payable, together with accrued interest thereon and all fees and other
      obligations of the Loan Parties accrued hereunder and under the Notes and the
      other Loan Documents (including, without limitation, the payment of cash
      collateral to secure the LC Exposure as provided in Section 2.08(i)), shall
      become due and payable immediately, without presentment, demand, protest, notice
      of intent to accelerate, notice of acceleration or other notice of any kind,
      all
      of which are hereby waived by each Loan Party; and in case of an Event of
      Default described in Section 10.01(h), Section 10.01(i) or
      Section 10.01(j), the Commitments shall automatically terminate and the
      Notes and the principal of the Loans then outstanding, together with accrued
      interest thereon and all fees and the other obligations of the Borrower and
      the
      Guarantors accrued hereunder and under the Notes and the other Loan Documents
      (including, without limitation, the payment of cash collateral to secure the
      LC
      Exposure as provided in Section 2.08(i)), shall automatically become due
      and payable, without presentment, demand, protest or other notice of any kind,
      all of which are hereby waived by each Loan Party. 

    (b)
      In the case of the occurrence of
      an Event of Default, the Administrative Agent and each Lender will have all
      other rights and remedies available to it or them at law and equity.


    (c)
      All proceeds realized from the
      liquidation or other disposition of collateral or otherwise received after
      the
      Termination Date, whether by acceleration or otherwise, shall be applied:
first, to reimbursement of expenses and indemnities provided for in this
      Agreement and the Security Instruments; second, to accrued interest on
      the Loans; third, to fees; fourth, pro rata to outstanding
      principal of the Loans, to serve as cash collateral to be held by the
      Administrative Agent to secure the LC Exposure and Indebtedness referred to
      in
      Clause (b) of the definition of Indebtedness owing to a Lender or an
      Affiliate of a Lender; fifth, to any other Indebtedness; and any excess
      shall be paid to the Borrower or as otherwise required by any Governmental
      Requirement. 

    ARTICLE
      XI


    The
      Agents


    Section
      11.01 Appointment;
      Powers. Each of the Lenders and the Issuing Bank hereby irrevocably (subject
      to Section 11.06) appoints the Administrative Agent as its agent and
      authorizes the Administrative Agent to take such actions on its behalf and
      to
      exercise such powers as are delegated to 

     

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    the
      Administrative Agent by the
      terms hereof and the other Loan Documents, together with such actions and powers
      as are reasonably incidental thereto. 

    Section
      11.02 Duties and
      Obligations of Administrative Agent. The Administrative Agent shall not have
      any duties or obligations except those expressly set forth in the Loan
      Documents. Without limiting the generality of the foregoing, (a) the
      Administrative Agent shall not be subject to any fiduciary or other implied
      duties, regardless of whether a Default has occurred and is continuing (the
      use
      of the term “agent” herein and in the other Loan Documents with reference to the
      Administrative Agent is not intended to connote any fiduciary or other implied
      (or express) obligations arising under agency doctrine of any applicable law;
      rather, such term is used merely as a matter of market custom, and is intended
      to create or reflect only an administrative relationship between independent
      contracting parties), (b) the Administrative Agent shall not have any duty
      to take any discretionary action or exercise any discretionary powers, except
      as
      provided in Section 11.03, and (c) except as expressly set forth
      herein, the Administrative Agent shall not have any duty to disclose, and shall
      not be liable for the failure to disclose, any information relating to the
      Parent Guarantor or any of its Subsidiaries that is communicated to or obtained
      by the bank serving as Administrative Agent or any of its Affiliates in any
      capacity. The Administrative Agent shall be deemed not to have knowledge of
      any
      Default unless and until written notice thereof is given to the Administrative
      Agent by the Parent Guarantor or a Lender, and shall not be responsible for
      or
      have any duty to ascertain or inquire into (i) any statement, warranty or
      representation made in or in connection with this Agreement or any other Loan
      Document, (ii) the contents of any certificate, report or other document
      delivered hereunder or under any other Loan Document or in connection herewith
      or therewith, (iii) the performance or observance of any of the covenants,
      agreements or other terms or conditions set forth herein or in any other Loan
      Document, (iv) the validity, enforceability, effectiveness or genuineness
      of this Agreement, any other Loan Document or any other agreement, instrument
      or
      document, (v) the satisfaction of any condition set forth in ARTICLE VI or
      elsewhere herein, other than to confirm receipt of items expressly required
      to
      be delivered to the Administrative Agent or as to those conditions precedent
      specifically required to be to the Administrative Agent’s satisfaction,
      (vi) the existence, value, perfection or priority of any collateral
      security or the financial or other condition of the Parent Guarantor and its
      Subsidiaries or any other obligor or guarantor, or (vii) any failure by the
      Parent Guarantor or any other Person (other than itself) to perform any of
      its
      obligations hereunder or under any other Loan Document or the performance or
      observance of any covenants, agreements or other terms or conditions set forth
      herein or therein. For purposes of determining compliance with the conditions
      specified in Article VI, each Lender shall be deemed to have consented to,
      approved or accepted or to be satisfied with, each document or other matter
      required thereunder to be consented to or approved by or acceptable or
      satisfactory to a Lender unless the Administrative Agent shall have received
      written notice from such Lender prior to the proposed closing date specifying
      its objection thereto. 

    Section
      11.03 Action by
      Administrative Agent. The Administrative Agent shall not have any duty to
      take any discretionary action or exercise any discretionary powers, except
      discretionary rights and powers expressly contemplated hereby or by any of
      the
      Loan Documents that the Administrative Agent is required to exercise in writing
      as directed by the Majority Lenders (or such other number or percentage of
      the
      Lenders as shall be necessary under the circumstances as provided in
      Section 12.02) and in all cases the Administrative Agent shall be fully
      justified in failing or refusing to act hereunder or under any other Loan
      Documents unless it shall (a) receive written instructions from the
      Majority Lenders or the Lenders, as applicable, (or such other number or
      percentage of the Lenders as shall be necessary under the circumstances as
      provided in Section 12.02) specifying the action to be taken and
      (b) be indemnified to its satisfaction by the Lenders against any and all
      liability and expenses which may be incurred by it by reason of taking or
      continuing to take any such action. The instructions as aforesaid and any action
      taken or failure to act pursuant thereto by the Administrative Agent shall
      be
      binding on all of the Lenders. If a Default has occurred and is continuing,
      then
      the Administrative Agent shall take such action with respect 

     

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    to
      such Default as shall be directed
      by the requisite Lenders in the written instructions (with indemnities)
      described in this Section 11.03, provided that, unless and until the
      Administrative Agent shall have received such directions, the Administrative
      Agent may (but shall not be obligated to) take such action, or refrain from
      taking such action, with respect to such Default as it shall deem advisable
      in
      the best interests of the Lenders. In no event, however, shall the
      Administrative Agent be required to take any action which exposes the
      Administrative Agent to personal liability or which is contrary to this
      Agreement, the Loan Documents or applicable law. If a Default has occurred
      and
      is continuing, neither the Syndication Agent nor the Documentation Agents shall
      have any obligation to perform any act in respect thereof. No Agent shall be
      liable for any action taken or not taken by it with the consent or at the
      request of the Majority Lenders or the Lenders (or such other number or
      percentage of the Lenders as shall be necessary under the circumstances as
      provided in Section 12.02), and otherwise no Agent shall be liable for any
      action taken or not taken by it hereunder or under any other Loan Document
      or
      under any other document or instrument referred to or provided for herein or
      therein or in connection herewith or therewith INCLUDING ITS OWN ORDINARY
      NEGLIGENCE, except for its own gross negligence or willful misconduct.


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

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

    Section
      11.06 Resignation of
      Agents. Subject to the appointment and acceptance of a successor Agent as
      provided in this Section 11.06, any Agent may resign at any time by
      notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
      resignation, the Majority Lenders shall have the right, in consultation with
      and
      upon the approval of the Borrower (so long as no Event of Default has occurred
      and is continuing), which approval shall not be unreasonably withheld, to
      appoint a successor. If no successor shall have been so appointed by the
      Majority Lenders and shall have accepted such appointment within 30 days after
      the retiring Agent gives notice of its resignation, then the retiring Agent
      may,
      on behalf of the Lenders and the Issuing Bank, appoint a successor Agent which
      shall be a bank with an office in New York, New York, or an Affiliate of any
      such bank. Upon the acceptance of its appointment as Agent hereunder by a
      successor, such successor shall succeed to and become vested with all the
      rights, powers, privileges and duties of the retiring Agent, and the retiring
      Agent shall be discharged from its duties and obligations hereunder. After
      the
      Agent’s resignation hereunder, the provisions of this ARTICLE XI and


     

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    Section 12.03
      shall continue in
      effect for the benefit of such retiring Agent, its sub-agents and their
      respective Related Parties in respect of any actions taken or omitted to be
      taken by any of them while it was acting as Agent. 

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

    Section
      11.08 No Reliance.
      Each Lender acknowledges that it has, independently and without reliance upon
      the Administrative Agent, any other Agent or any other Lender and based on
      such
      documents and information as it has deemed appropriate, made its own credit
      analysis and decision to enter into this Agreement and each other Loan Document
      to which it is a party. Each Lender also acknowledges that it will,
      independently and without reliance upon the Administrative Agent, any other
      Agent or any other Lender and based on such documents and information as it
      shall from time to time deem appropriate, continue to make its own decisions
      in
      taking or not taking action under or based upon this Agreement, any other Loan
      Document, any related agreement or any document furnished hereunder or
      thereunder. The Agents shall not be required to keep themselves informed as
      to
      the performance or observance by the Parent Guarantor or any of its Subsidiaries
      of this Agreement, the Loan Documents or any other document referred to or
      provided for herein or to inspect the Properties or books of the Parent
      Guarantor or its Subsidiaries. Except for notices, reports and other documents
      and information expressly required to be furnished to the Lenders by the
      Administrative Agent hereunder, no Agent or the Arranger shall have any duty
      or
      responsibility to provide any Lender with any credit or other information
      concerning the affairs, financial condition or business of the Parent Guarantor
      (or any of its Affiliates) which may come into the possession of such Agent
      or
      any of its Affiliates. In this regard, each Lender acknowledges that
      Vinson & Elkins L.L.P. is acting in this transaction as special counsel
      to the Administrative Agent only, except to the extent otherwise expressly
      stated in any legal opinion or any Loan Document. Each other party hereto will
      consult with its own legal counsel to the extent that it deems necessary in
      connection with the Loan Documents and the matters contemplated therein.


    Section
      11.09 Authority of
      Administrative Agent to Release Collateral and Liens. Each Lender and the
      Issuing Bank hereby authorizes the Administrative Agent to release any
      collateral that is permitted to be sold or released pursuant to the terms of
      the
      Loan Documents. Each Lender and the Issuing Bank hereby authorizes the
      Administrative Agent to execute and deliver to the Borrower, at the Borrower’s
      sole cost and expense, any and all releases of Liens, termination statements,
      assignments or other documents reasonably requested by the Borrower in
      connection with any sale or other disposition of Property to the extent such
      sale or other disposition is permitted by the terms of Section 9.11 or
      Section 12.02(b). 

    Section
      11.10 Administrative
      Agent May File Proofs of Claim. 

    (a)
      In case of the pendency of any
      receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
      adjustment, composition or other judicial proceeding relative to any Loan Party,
      the Administrative Agent (irrespective of whether the principal of any Loan
      shall then be due and payable as herein expressed or by declaration or otherwise
      and irrespective of whether the Administrative Agent shall have made any demand
      on the Borrower) shall be entitled and empowered, by intervention in such
      proceeding or otherwise: 

    (i)
      to file and prove a claim for
      the whole amount of the principal and interest owing and unpaid in respect
      of
      the Loans and all other Indebtedness that are owing and unpaid 

     

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    and
      to file such other documents as
      may be necessary or advisable in order to have the claims of the Lenders and
      the
      Administrative Agent (including any claim for the reasonable compensation,
      expenses, disbursements and advances of the Lenders and the Administrative
      Agent
      and their respective agents and counsel and all other amounts due the Lenders
      and the Administrative Agent under Section 12.03) allowed in such judicial
      proceeding; and 

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

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

    (b)
      Nothing contained herein shall
      be deemed to authorize the Administrative Agent to authorize or consent to
      or
      accept or adopt on behalf of any Lender any plan of reorganization, arrangement,
      adjustment or composition affecting the Indebtedness or the rights of any Lender
      or to authorize the Administrative Agent to vote in respect of the claim of
      any
      Lender in any such proceeding. 

    Section
      11.11 The Arranger, the
      Syndication Agent and the Documentation Agents. The Arranger, the
      Syndication Agent and the Documentation Agents shall have no duties,
      responsibilities or liabilities under this Agreement and the other Loan
      Documents other than their duties, responsibilities and liabilities in their
      capacity as Lenders hereunder. 

    ARTICLE
      XII


    Miscellaneous
      

    Section
      12.01 Notices.


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

    (i)
      if to the Borrower, to it at
      West Pointe Corporate Center I, 1550 Coraopolis Heights Road, Moon Township,
      Pennsylvania 15108, Attention of Matthew A. Jones, (Telecopy
      No. 215.546.4785/Email: mjones@atlaspipelinepartners.com); 

    (ii)
      if to the Administrative Agent,
      to it at: 1 Chase Tower, 10 South Dearborn, IL1-0010, Chicago, Illinois 60603
      Attention: Mi Y Kim, Phone No. 312.732.4853, Fax No. 312.385.7096, and
      for all other correspondence other than borrowings, continuation, conversion
      and
      Letter of Credit requests 600 Travis, 20th Floor, Houston, Texas 77002,
      Attention of Robert C. Mertensotto (Telecopy No. 713.216.4117); and


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

     

    75


    

    
    

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

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

    Section
      12.02 Waivers;
      Amendments. 

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

    (b)
      Neither this Agreement nor any
      provision hereof nor any Security Instrument nor any provision thereof may
      be
      waived, amended or modified except pursuant to an agreement or agreements in
      writing entered into by the Parent Guarantor, the Borrower and the Majority
      Lenders or by the Parent Guarantor, the Borrower and the Administrative Agent
      with the consent of the Majority Lenders; provided that no such agreement shall
      (i) increase the Maximum Credit Amount of any Lender without the written
      consent of such Lender, (ii) increase the Borrowing Base or the Conforming
      Borrowing Base without the written consent of all Lenders, decrease or maintain
      the Borrowing Base or the Conforming Borrowing Base without the consent of
      the
      Super-Majority Lenders, or modify Section 2.07 without the consent of each
      Lender, (iii) extend or post-pone the Borrowing Base Equalization Date
      without the written consent of each Lender, (iv) reduce the principal
      amount of any Loan or LC Disbursement or reduce the rate of interest thereon,
      or
      reduce any fees payable hereunder, or reduce any other Indebtedness hereunder
      or
      under any other Loan Document, without the written consent of each Lender
      affected thereby, (v) postpone the scheduled date of payment or prepayment
      of the principal amount of any Loan or LC Disbursement, or any interest thereon,
      or any fees payable hereunder, or any other Indebtedness hereunder or under
      any
      other Loan Document, or reduce the amount of, waive or excuse any such payment,
      or postpone or extend the Termination Date without the written consent of each
      Lender affected thereby, (vi) change Section 4.01(b) or
      Section 4.01(c) in a manner that would alter the pro rata sharing of
      payments required thereby, without the written consent of each Lender,
      (vii) release any Guarantor (except as set forth in the Guaranty
      Agreement), release any of the collateral (other than as provided in
      Section 11.09), or reduce the percentage set forth in Section 8.14(a)
      to less than 80%, without 

     

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    the
      written consent of each Lender,
      or (viii) change any of the provisions of this Section 12.02(b) or the
      definitions of “Super-Majority Lenders” or “Majority Lenders” or any other
      provision hereof specifying the number or percentage of Lenders required to
      waive, amend or modify any rights hereunder or under any other Loan Documents
      or
      make any determination or grant any consent hereunder or any other Loan
      Documents, without the written consent of each Lender; provided further that
      no
      such agreement shall amend, modify or otherwise affect the rights or duties
      of
      the Administrative Agent, any other Agent or the Issuing Bank hereunder or
      under
      any other Loan Document without the prior written consent of the Administrative
      Agent, such other Agent or the Issuing Bank, as the case may be. Notwithstanding
      the foregoing, any supplement to Schedule 7.15 (Subsidiaries) shall be effective
      simply by delivering to the Administrative Agent a supplemental schedule clearly
      marked as such and, upon receipt, the Administrative Agent will promptly deliver
      a copy thereof to the Lenders. 

    Section
      12.03 Expenses,
      Indemnity; Damage Waiver. 

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

    (b)
      THE BORROWER SHALL INDEMNIFY THE
      ARRANGER, EACH AGENT, THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY
      OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
“INDEMNITEE”) AGAINST, DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY
      AND ALL LOSSES, CLAIMS, DAMAGES, PENALITIES, LIABILITIES AND RELATED EXPENSES,
      INCLUDING THE REASONABLE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR
      ANY
      INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF,
      IN
      CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS
      AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
      HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OR THE PARTIES TO
      ANY
      OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER
      OR
      THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
      DOCUMENT, (ii) THE FAILURE OF THE PARENT GUARANTOR OR ANY LOAN PARTY TO
      COMPLY WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH
      ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY REPRESENTATION OR
      ANY BREACH OF ANY WARRANTY OR COVENANT OF THE PARENT GUARANTOR OR ANY GUARANTOR
      

     

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    SET
      FORTH IN ANY OF THE LOAN
      DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN
      CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE
      PROCEEDS THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY THE
      ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE
      DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH
      THE TERMS OF SUCH LETTER OF CREDIT, OR (B) THE PAYMENT OF A DRAWING UNDER
      ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER
      IMPROPER PRESENTATION OF THE DOCUMENTS PRESENTED IN CONNECTION THEREWITH,
      (v) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE
      BUSINESS OF THE PARENT GUARANTOR AND ITS SUBSIDIARIES, (vii) ANY ASSERTION
      THAT THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT
      TO
      THE SECURITY INSTRUMENTS, (viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE
      PARENT GUARANTOR OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES, INCLUDING WITHOUT
      LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE,
      USE,
      TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND GAS
      WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES,
      (ix) THE BREACH OR NON-COMPLIANCE BY THE PARENT GUARANTOR OR ANY SUBSIDIARY
      WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE PARENT GUARANTOR OR ANY SUBSIDIARY,
      (x) THE PAST OWNERSHIP BY THE PARENT GUARANTOR OR ANY SUBSIDIARY OF ANY OF
      THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH
      LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY,
      (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL, GENERATION,
      THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT OR ARRANGEMENT FOR
      DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON
      OR
      AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE PARENT GUARANTOR OR ANY
      SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS
      ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE PARENT GUARANTOR OR ANY OF
      ITS
      SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE
      PARENT GUARANTOR OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER
      ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS,
      OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR
      PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT
      OR
      ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO,
      AND SUCH INDEMNITY SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE
      OR
      CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE
      OR
      PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT
      LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT
      (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF STRICT
      LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNITEES; PROVIDED
      THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT
      THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES HAVE RESULTED
      FROM THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF SUCH INDEMNITEE. 

    (c)
      To the extent that the Borrower
      fails to pay any amount required to be paid by it to any Agent or the Issuing
      Bank under Section 12.03(a) or (b), each Lender severally agrees to pay to
      such Agent or the Issuing Bank, as the case may be, such Lender’s Applicable
      Percentage (determined as of the time that the applicable unreimbursed expense
      or indemnity payment is sought) of such unpaid 

     

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    amount;
      provided that the
      unreimbursed expense or indemnified loss, claim, damage, liability or related
      expense, as the case may be, was incurred by or asserted against such Agent
      or
      the Issuing Bank in its capacity as such. 

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

    (e)
      All amounts due under this
      Section 12.03 shall be payable promptly after written demand therefor.


    Section
      12.04 Successors and
      Assigns. 

    (a)
      The provisions of this Agreement
      shall be binding upon and inure to the benefit of the parties hereto and their
      respective successors and assigns permitted hereby (including any Affiliate
      of
      the Issuing Bank that issues any Letter of Credit), except that (i) the
      Borrower may not assign or otherwise transfer any of its rights or obligations
      hereunder without the prior written consent of each Lender (and any attempted
      assignment or transfer by the Borrower without such consent shall be null and
      void) and (ii) no Lender may assign or otherwise transfer its rights or
      obligations hereunder except in accordance with this Section 12.04. Nothing
      in this Agreement, expressed or implied, shall be construed to confer upon
      any
      Person (other than the parties hereto, their respective successors and assigns
      permitted hereby (including any Affiliate of the Issuing Bank that issues any
      Letter of Credit), Participants (to the extent provided in
      Section 12.04(c)) and, to the extent expressly contemplated hereby, the
      Related Parties of each of the Administrative Agent, the Issuing Bank and the
      Lenders) any legal or equitable right, remedy or claim under or by reason of
      this Agreement 

    (b)
      (i) Subject to the conditions
      set forth in paragraph (b)(ii) below, any Lender may assign to one or more
      assignees (each, an “Assignee”) all or a portion of its rights and
      obligations under this Agreement (including all or a portion of its Commitment
      and the Loans at the time owing to it) with the prior written consent of:


    (A)
      the Borrower (such consent not
      to be unreasonably withheld), provided that no consent of the Borrower
      shall be required for an assignment to a Lender, an Affiliate of a Lender,
      an
      Approved Fund (as defined below) or, if an Event of Default has occurred and
      is
      continuing, any other Person; and 

    (B)
      the Administrative Agent and
      each Issuing Bank (such consent not to be unreasonably withheld). 

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

    (A)
      except in the case of an
      assignment to a Lender, an affiliate of a Lender or an Approved Fund or an
      assignment of the entire remaining amount of the assigning Lender’s Commitment
      or Loans, the amount of the Commitment or Loans of the assigning Lender subject
      to each such assignment (determined as of the date the Assignment and Assumption
      with respect to such assignment is delivered to the Administrative Agent) shall
      not be less than $5,000,000 unless each of the Borrower and the Administrative
      Agent otherwise consent, provided that (1) no such consent of the


     

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    Borrower
      shall be required if an
      Event of Default has occurred and is continuing and (2) such amounts shall
      be aggregated in respect of each Lender and its Affiliates or Approved Funds,
      if
      any; 

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


    (C)
      the Assignee, if it shall not be
      a Lender, shall deliver to the Administrative Agent an Administrative
      Questionnaire. 

    For
      the purposes of this
      Section 12.04, “Approved Fund” means any Person (other than a
      natural person) that is engaged in making, purchasing, holding or investing
      in
      bank loans and similar extensions of credit in the ordinary course of its
      business and that is administered or managed by (a) a Lender, (b) an
      Affiliate of a Lender or (c) Person or an Affiliate of a Person that
      administers or manages a Lender. 

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

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

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

    (c)
      (i) Any Lender may, without the
      consent of the Borrower or the Administrative Agent, sell participations to
      one
      or more banks or other entities (a “Participant”) in all or a portion of
      such Lender’s rights and obligations under this Agreement (including all or a
      portion of its Commitment and the Loans owing to it); provided that
      (A) such Lender’s obligations under this Agreement shall remain unchanged,
      (B) such Lender shall remain solely responsible to the other parties hereto
      for the 

     

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    performance
      of such obligations and
      (C) the Borrower, the Administrative Agent, the Issuing Bank and the other
      Lenders shall continue to deal solely and directly with such Lender in
      connection with such Lender’s rights and obligations under this Agreement. Any
      agreement pursuant to which a Lender sells such a participation shall provide
      that such Lender shall retain the sole right to enforce this Agreement and
      to
      approve any amendment, modification or waiver of any provision of this
      Agreement; provided that such agreement may provide that such Lender will
      not, without the consent of the Participant, agree to any amendment,
      modification or waiver that (1) requires the consent of each Lender
      directly affected thereby pursuant to the proviso to the second sentence of
      Section 12.02 and (2) directly affects such Participant. Subject to
      paragraph (c)(ii) of this Section, the Borrower agrees that each Participant
      shall be entitled to the benefits of Sections 5.01, 5.02 and 5.03 to the same
      extent as if it were a Lender and had acquired its interest by assignment
      pursuant to Section 12.04(b). To the extent permitted by law, each
      Participant also shall be entitled to the benefits of Section 12.08 as
      though it were a Lender, provided such Participant shall be subject to
      Section 4.01 as though it were a Lender. 

    (ii)
      A Participant shall not be
      entitled to receive any greater payment under Section 5.01 or 5.03 than the
      applicable Lender would have been entitled to receive with respect to the
      participation sold to such Participant, unless the sale of the participation
      to
      such Participant is made with the Borrower’s prior written consent. Any
      Participant that is a Non-U.S. Lender shall not be entitled to the benefits
      of
      Section 5.03 unless such Participant complies with Section 5.03(d).


    (d)
      Any Lender may at any time
      pledge or assign a security interest in all or any portion of its rights under
      this Agreement to secure obligations of such Lender, including any pledge or
      assignment to secure obligations to a Federal Reserve Bank, and this Section
      shall not apply to any such pledge or assignment of a security interest;
provided that no such pledge or assignment of a security interest shall
      release a Lender from any of its obligations hereunder or substitute any such
      pledgee or Assignee for such Lender as a party hereto. 

    (e)
      Notwithstanding the foregoing,
      any Conduit Lender may assign any or all of the Loans it may have funded
      hereunder to its designating Lender without the consent of the Borrower or
      the
      Administrative Agent and without regard to the limitations set forth in
      Section 12.04(b). Each of the Parent Guarantor, the Borrower, each Lender
      and the Administrative Agent hereby confirms that it will not institute against
      a Conduit Lender or join any other Person in instituting against a Conduit
      Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
      proceeding under any state bankruptcy or similar law, for one year and one
      day
      after the payment in full of the latest maturing commercial paper note issued
      by
      such Conduit Lender; provided, however, that each Lender
      designating any Conduit Lender hereby agrees to indemnify, save and hold
      harmless each other party hereto for any loss, cost, damage or expense arising
      out of its inability to institute such a proceeding against such Conduit Lender
      during such period of forbearance. 

    Section
      12.05 Survival; Revival;
      Reinstatement. 

    (a)
      All covenants, agreements,
      representations and warranties made by the Parent Guarantor and the Borrower
      herein and by the Loan Parties in the certificates or other instruments
      delivered in connection with or pursuant to this Agreement or any other Loan
      Document shall be considered to have been relied upon by the other parties
      hereto and shall survive the execution and delivery of this Agreement and the
      making of any Loans and issuance of any Letters of Credit, regardless of any
      investigation made by any such other party or on its behalf and notwithstanding
      that the Administrative Agent, any other Agent, the Issuing Bank or any Lender
      may have had notice or knowledge of any Default or incorrect representation
      or
      warranty at the time any credit is extended hereunder, and shall continue in
      full force and effect as long as the principal of or any accrued interest on
      any
      Loan or any fee or any other amount payable under this Agreement is outstanding
      and unpaid or any 

     

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    Letter
      of Credit is outstanding and
      so long as the Commitments have not expired or terminated. The provisions of
      Section 5.01, Section 5.02, Section 5.03 and Section 12.03
      and ARTICLE XI shall survive and remain in full force and effect regardless
      of
      the consummation of the transactions contemplated hereby, the repayment of
      the
      Loans, the expiration or termination of the Letters of Credit and the
      Commitments or the termination of this Agreement, any other Loan Document or
      any
      provision hereof or thereof. 

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

    Section
      12.06 Counterparts;
      Integration; Effectiveness. 

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

    (b)
      This Agreement, the other Loan
      Documents and any separate letter agreements with respect to fees payable to
      the
      Administrative Agent constitute the entire contract among the parties relating
      to the subject matter hereof and thereof and supersede any and all previous
      agreements and understandings, oral or written, relating to the subject matter
      hereof and thereof. This Agreement and the other Loan Documents represent the
      final agreement among the parties hereto and thereto and may not be contradicted
      by evidence of prior, contemporaneous or subsequent oral agreements of the
      parties. There are no unwritten oral agreements between the parties.


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

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

    Section
      12.08 Right of
      Setoff. If an Event of Default shall have occurred and be continuing, each
      Lender and each of its Affiliates is hereby authorized at any time and from
      time
      to time, to the fullest extent permitted by law, to set off and apply any and
      all deposits (general or special, time or demand, provisional or final) at
      any
      time held and other obligations (of whatsoever kind, including, without
      limitations obligations under Swap Agreements) at any time owing by such Lender
      or Affiliate to or for 

     

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    the
      credit or the account of the
      Parent Guarantor or any Subsidiary against any of and all the obligations of
      the
      Parent Guarantor or any Subsidiary owed to such Lender now or hereafter existing
      under this Agreement or any other Loan Document, irrespective of whether or
      not
      such Lender shall have made any demand under this Agreement or any other Loan
      Document and although such obligations may be unmatured. The rights of each
      Lender under this Section 12.08 are in addition to other rights and
      remedies (including other rights of setoff) which such Lender or its Affiliates
      may have. 

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

    (a)
      THIS AGREEMENT AND THE NOTES
      SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
      OF
      NEW YORK EXCEPT TO THE EXTENT THAT UNITED STATES FEDERAL LAW PERMITS ANY LENDER
      TO CONTRACT FOR, CHARGE, RECEIVE, RESERVE OR TAKE INTEREST AT THE RATE ALLOWED
      BY THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED. 

    (b)
      ANY LEGAL ACTION OR PROCEEDING
      WITH RESPECT TO THE LOAN DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE
      OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF
      NEW
      YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY
      ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS
      PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
      COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
      LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
      FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
      ANY
      SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION
      TO
      JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING
      JURISDICTION OVER ANOTHER PARTY IN ANY COURT OTHERWISE HAVING JURISDICTION.
      

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

    (d)
      EACH PARTY HEREBY
      (i) IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
      AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN;
      (ii) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
      RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL,
      EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN
      ADDITION TO, ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY
      REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED,
      EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT
      OF


     

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    LITIGATION,
      SEEK TO ENFORCE THE
      FOREGOING WAIVERS, AND (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER
      INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY
      AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
      CONTAINED IN THIS SECTION 12.09. 

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

    Section
      12.11
Confidentiality. Each of the Administrative Agent and each Lender agrees
      to keep confidential all non-public information provided to it by the Parent
      Guarantor, the Borrower or any of their Subsidiaries, the Administrative Agent
      or any Lender pursuant to or in connection with this Agreement that is
      designated by the provider thereof as confidential; provided that nothing
      herein shall prevent the Administrative Agent or any Lender from disclosing
      any
      such information (a) to the Administrative Agent, any other Lender or any
      affiliate thereof, (b) subject to an agreement to comply with the
      provisions of this Section, to any actual or prospective Transferee or any
      direct or indirect counterparty to any Swap Agreement (or any professional
      advisor to such counterparty), (c) to its employees, directors, agents,
      attorneys, accountants and other professional advisors or those of any of its
      affiliates, (d) upon the request or demand of any Governmental Authority,
      (e) in response to any order of any court or other Governmental Authority
      or as may otherwise be required pursuant to any Governmental Requirement,
      (f) if requested or required to do so in connection with any litigation or
      similar proceeding, (g) that has been publicly disclosed, (h) to the
      National Association of Insurance Commissioners or any similar organization
      or
      any nationally recognized rating agency that requires access to information
      about a Lender’s investment portfolio in connection with ratings issued with
      respect to such Lender, or (i) in connection with the exercise of any
      remedy hereunder or under any other Loan Document. 

    Each
      Lender acknowledges that
      information furnished to it pursuant to this Agreement or the other Loan
      Documents may include material non-public information concerning the Borrower
      and its Affiliates and their related parties or their respective securities,
      and
      confirms that it has developed compliance procedures regarding the use of
      material non-public information and that it will handle such material non-public
      information in accordance with those procedures and applicable law, including
      Federal and state securities laws. 

    All
      information, including requests
      for waivers and amendments, furnished by the Borrower or the Administrative
      Agent pursuant to, or in the course of administering, this Agreement or the
      other Loan Documents will be syndicate-level information, which may contain
      material non-public information about the Borrower and its Affiliates and their
      related parties or their respective securities. Accordingly, each Lender
      represents to the Borrower and the Administrative Agent that it has identified
      in its Administrative Questionnaire a credit contact who may receive information
      that may contain material non-public information in accordance with its
      compliance procedures and applicable law, including Federal and state securities
      laws. 

    Section
      12.12 Interest Rate
      Limitation. It is the intention of the parties hereto that each Lender shall
      conform strictly to usury laws applicable to it. Notwithstanding anything herein
      to the contrary, if at any time the interest rate applicable to any Loan,
      together with all fees, charges and other amounts which are treated as interest
      on such Loan under applicable law (collectively the “Charges”), shall
      exceed the maximum lawful rate (the “Maximum Rate”) which may be
      contracted for, charged, taken, received or reserved by the Lender holding
      such
      Loan in accordance with applicable law, the rate of interest payable in respect
      of such Loan, together with all Charges payable in respect thereof, shall be
      limited to the 

     

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    Maximum
      Rate and, to the extent
      lawful, the interest and Charges that would have been payable in respect of
      such
      Loan but were not payable as a result of the operation of this Section shall
      be
      cumulated and the interest and Charges payable to such Lender in respect of
      other Loans or periods shall be increased (but not above the Maximum Rate
      therefor) until such cumulated amount, together with interest thereon at the
      Federal Funds Effective Rate to the date of repayment, shall have been received
      by such Lender. 

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

    Section
      12.14 Collateral Matters;
      Swap Agreements. The benefit of the Security Instruments and of the
      provisions of this Agreement relating to any collateral securing the
      Indebtedness shall also extend to and be available to those Lenders or their
      Affiliates which are counterparties to any Swap Agreement with the Parent
      Guarantor, the Borrower or any of its Subsidiaries on a pro rata basis in
      respect of any obligations of the Parent Guarantor, the Borrower or any of
      its
      Subsidiaries which arise under any such Swap Agreement while such Person or
      its
      Affiliate is a Lender, but only while such Person or its Affiliate is a Lender,
      including any Swap Agreements between such Persons in existence prior to the
      date hereof. No Lender or any Affiliate of a Lender shall have any voting rights
      under any Loan Document as a result of the existence of obligations owed to
      it
      under any such Swap Agreements. 

    Section
      12.15
Acknowledgements. Each of the Parent Guarantor and the Borrower hereby
      acknowledges that: 

    (a)
      it has been advised by counsel
      in the negotiation, execution and delivery of this Agreement and the other
      Loan
      Documents; 

    (b)
      neither the Administrative Agent
      nor any Lender has any fiduciary relationship with or duty to the Parent
      Guarantor or the Borrower arising out of or in connection with this Agreement
      or
      any of the other Loan Documents, and the relationship between Administrative
      Agent and Lenders, on one hand, and the Parent Guarantor and the Borrower,
      on
      the other hand, in connection herewith or therewith is solely that of debtor
      and
      creditor; and 

    no
      joint venture is created hereby
      or by the other Loan Documents or otherwise exists by virtue of the transactions
      contemplated hereby among the Lenders or among the Parent Guarantor, the
      Borrower and the Lenders. 

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

    [SIGNATURES
      BEGIN NEXT PAGE]


     

    85


    

    
    

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


     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            	
            	
            
	BORROWER:	 	
            	 	ATLAS
              ENERGY OPERATING COMPANY, LLC
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	
              Atlas
                Energy Resources,
                LLC,

              its
                sole
                member

            
	
            	
            	
            	
            	
            	
            
	
            	 	
            	 	
            	 	
            	 	By:	 	/s/
              Matthew A.
              Jones
	
            	 	
            	 	
            	 	
            	 	
            	 	
              Matthew
                A. Jones

              Chief
                Financial
                Officer

            
	
            	
            	
            
	PARENT
              GUARANTOR:	 	
            	 	
              ATLAS
                ENERGY
                RESOURCES, LLC, 

              a
                Delaware limited liability
                company

            
	
            	
            	
            	
            	
            	
            
	
            	 	
            	 	
            	 	
            	 	By:	 	/s/
              Matthew A.
              Jones
	
            	 	
            	 	
            	 	
            	 	
            	 	
              Matthew
                A. Jones

              Chief
                Financial
                Officer

            


    

     

    [Signature
      Page 1 - Credit
      Agreement] 

    

    
    

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	ADMINISTRATIVE
              AGENT:	 	
            	 	
              JPMORGAN
                CHASE BANK,
                N.A.,

              as
                a Lender and as
                Administrative Agent

            
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	
            	 	Title:	 	
            


    

     

    [Signature
      Page 2 - Credit
      Agreement] 

    

    
    

    ANNEX
      I


    LIST
      OF MAXIMUM CREDIT
      AMOUNTS 

     

    
      	
            	
            	
            	
            	
            	
            	
            
	
              Name
                of
                Lender

            	  	Applicable Percentage	 	 	Maximum Credit Amount
	
              JPMorgan
                Chase Bank,
                N.A.

            	  	%	 	 	$	45,000,000
	
              Wachovia
                Bank, National
                Association

            	  	
            	
            	 	$	41,000,000
	
              Bank
                of America,
                N.A.

            	  	
            	
            	 	$	41,000,000
	
              BNP
                Paribas

            	  	
            	
            	 	$	41,000,000
	
              Royal
                Bank of
                Canada

            	  	
            	
            	 	$	41,000,000
	
              UBS
                AG, Stamford
                Branch

            	  	
            	
            	 	$	41,000,000
	
              Royal
                Bank of Scotland
                plc

            	  	
            	
            	 	$	40,000,000
	
              Bank
                of
                Montreal

            	  	
            	
            	 	$	35,000,000
	
              Scotia
                Capital

            	  	
            	
            	 	$	35,000,000
	
              Calyon
                New York
                Branch

            	  	
            	
            	 	$	35,000,000
	
              Bank
                of
                Scotland

            	  	
            	
            	 	$	35,000,000
	
              RZB
                Bank LLC

            	  	
            	
            	 	$	30,000,000
	
              Citibank,
                N.A.

            	  	
            	
            	 	$	30,000,000
	
              Societe
                Generale

            	  	
            	
            	 	$	30,000,000
	
              Wells
                Fargo Bank,
                N.A.

            	  	
            	
            	 	$	30,000,000
	
              U.S.
                Bank National
                Association

            	  	
            	
            	 	$	30,000,000
	
              WestLB
                AG New York
                Branch

            	  	
            	
            	 	$	30,000,000
	
              Compass
                Bank

            	  	
            	
            	 	$	27,500,000
	
              Comerica
                Bank

            	  	
            	
            	 	$	27,500,000
	
              DZ
                Bank

            	  	
            	
            	 	$	27,500,000
	
              KeyBanc

            	  	
            	
            	 	$	27,500,000
	
              Union
                Bank of California,
                N.A.

            	  	
            	
            	 	$	27,500,000
	
              Sumitomo

            	  	
            	
            	 	$	27,500,000
	
              Mizuho
                Corporate Bank,
                Ltd.

            	  	
            	
            	 	$	25,000,000
	
              Fortis
                Capital
                Corp.

            	  	
            	
            	 	$	25,000,000
	
              Guaranty
                Bank

            	  	
            	
            	 	$	25,000,000
	
              Total

            	  	100	%	 	$	850,000,000


    

     

    Annex
      I -1 

    

    
    

    ANNEX
      II


    SOURCES
      AND USES TABLE


     

    
      	
            	
            	
            	
            	
            
	Sources:	  	
            	
            	
            
	
              Senior
                Secured Revolving
                Facility

            	  	$	650,000,000	*
	
              Equity
                Commitment

            	  	$	600,000,000	 
	
              Total
                Sources

            	  	$	1,250,000,000	 
	Uses:	  	
            	
            	
            
	
              Purchase
                Price

            	  	$	1,225,000,000	 
	
              Payment
                of Fees and
                Expenses

            	  	$	25,000,000	 
	
              Total
                Uses

            	  	$	1,250,000,000	 


    

     

    
      	*	May
              be increased to $725,000,000. 


    

     

    Annex
      II - 1 

    

    
    

    EXHIBIT
      A


    [FORM
      OF] NOTE


     

    
      	
            	
            	
            
	$[                ]	 	[                ],
              200[__]


    

    FOR
      VALUE RECEIVED, Atlas Energy
      Operating Company, LLC, a Delaware limited liability company (the
“Borrower”) hereby promises to pay to the order of
      [            ]
      (the “Lender”), at the principal office of JPMorgan Chase Bank, N.A. (the
“Administrative Agent”), at
      [            ],
      the principal sum of
      [            ]
      Dollars
      ($[            ])
      (or such lesser amount as shall equal the aggregate unpaid principal amount
      of
      the Loans made by the Lender to the Borrower under the Credit Agreement, as
      hereinafter defined), in lawful money of the United States of America and in
      immediately available funds, on the dates and in the principal amounts provided
      in the Credit Agreement, and to pay interest on the unpaid principal amount
      of
      each such Loan, at such office, in like money and funds, for the period
      commencing on the date of such Loan until such Loan shall be paid in full,
      at
      the rates per annum and on the dates provided in the Credit Agreement.


    The
      date, amount, Type, interest
      rate, Interest Period and maturity of each Loan made by the Lender to the
      Borrower, and each payment made on account of the principal thereof, shall
      be
      recorded by the Lender on its books and, prior to any transfer of this Note,
      may
      be endorsed by the Lender on the schedules attached hereto or any continuation
      thereof or on any separate record maintained by the Lender. Failure to make
      any
      such notation or to attach a schedule shall not affect any Lender’s or the
      Borrower’s rights or obligations in respect of such Loans or affect the validity
      of such transfer by any Lender of this Note. 

    This
      Note is one of the Notes
      referred to in the Credit Agreement, dated as of June 29, 2007, among Atlas
      Energy Resources, LLC, as parent guarantor, the Borrower, the Administrative
      Agent, and the other agents and lenders signatory thereto (including the
      Lender), and evidences Loans made by the Lender thereunder (such Credit
      Agreement as the same may be amended, supplemented, restated or otherwise
      modified from time to time, the “Credit Agreement”). Capitalized terms
      used in this Note have the respective meanings assigned to them in the Credit
      Agreement. 

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

    THIS
      NOTE SHALL BE GOVERNED BY, AND
      CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 

     

    
      	
            	
            	
            
	ATLAS
              ENERGY OPERATING COMPANY, LLC
	
            	
            
	By:	 	Atlas
              Energy Resources, LLC, its sole member
	
            	
            
	By:	 	  
	Name:	 	  
	Title:	 	  


    

     

    Exhibit
      A - 1 

    

    
    

    EXHIBIT
      B


    FORM
      OF BORROWING REQUEST


    [                    ],
      200[__] 

    Atlas
      Energy Operating Company, LLC,
      a Delaware limited liability company (the “Borrower”), pursuant to
      Section 2.03 of the Credit Agreement dated as of June 29, 2007,
      (together with all amendments, restatements, supplements or other modifications
      thereto, the “Credit Agreement”), among the Parent Guarantor, the
      Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent and the other
      agents and lenders (the “Lenders”) which are or become parties thereto
      (unless otherwise defined herein, each capitalized term used herein is defined
      in the Credit Agreement), hereby requests a Borrowing as follows: 

    (i)
      Aggregate amount of the
      requested Borrowing is
      $[            ];


    (ii)
      Date of such Borrowing is
      [            ],
      200[__]; 

    (iii)
      Requested Borrowing is to be
      [an ABR Borrowing] [a Eurodollar Borrowing]; 

    (iv)
      In the case of a Eurodollar
      Borrowing, the initial Interest Period applicable thereto is
      [            ];


    (v)
      Amount of Borrowing Base [add if
      applicable: the Conforming Borrowing Base] in effect on the date hereof is
      $[            ];
      [$[            ]
      and
      $[            ]];


    (vi)
      Total Revolving Credit
      Exposures [add if applicable: the Conforming Borrowing Base] on the date hereof
      (i.e., outstanding principal amount of Loans and total LC Exposure) is
      $[            ];
      [$[            ]
      and
      $[            ]];and


    (vii)
      Pro forma total Revolving
      Credit Exposures [add if applicable: the Conforming Borrowing Base] (giving
      effect to the requested Borrowing) is
      $[            ];
      [$[            ]
      and
      $[            ]];and


    (viii)
      Location and number of the
      Borrower’s account to which funds are to be disbursed, which shall comply with
      the requirements of Section 2.05 of the Credit Agreement, is as follows:


    [                                      
                            ]


    [                                      
                            ]


    [                                      
                            ]


    [                                      
                            ]


    [                                      
                            ]


     

    Exhibit
      B - 1 

    

    
    

    The
      undersigned certifies that
      he/she is the
      [            ]
      of the Parent Guarantor and the Borrower, and that as such he/she is authorized
      to execute this certificate on behalf of each of them. The undersigned further
      certifies, represents and warrants on behalf of the Parent Guarantor and the
      Borrower that the Borrower is entitled to receive the requested Borrowing under
      the terms and conditions of the Credit Agreement. 

     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	PARENT
              GUARANTOR:	 	
            	 	ATLAS
              ENERGY RESOURCES, LLC
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	
            	 	Title:	 	
            
	
            	
            	
            
	BORROWER:	 	
            	 	ATLAS
              ENERGY OPERATING COMPANY, LLC
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	Atlas
              Energy Resources, LLC, its sole member
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	
            	 	Title:	 	
            


    

     

    Exhibit
      B - 2 

    

    
    

    EXHIBIT
      C


    FORM
      OF INTEREST ELECTION
      REQUEST 

    [            ],
      200[__] 

    Atlas
      Energy Operating Company, LLC,
      a Delaware limited liability company (the “Borrower”), pursuant to
      Section 2.04 of the Credit Agreement dated as of June 29, 2007,
      (together with all amendments, restatements, supplements or other modifications
      thereto, the “Credit Agreement”), among Atlas Energy Resources, LLC, as
      parent guarantor, the Borrower, JPMorgan Chase Bank, N.A., as Administrative
      Agent and the other agents and lenders (the “Lenders”) which are or
      become parties thereto (unless otherwise defined herein, each capitalized term
      used herein is defined in the Credit Agreement), hereby makes an Interest
      Election Request as follows: 

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


    (ii)
      The effective date of the
      election made pursuant to this Interest Election Request is
      [            ],
      200[__];[and] 

    (iii)
      The resulting Borrowing is to
      be [an ABR Borrowing] [a Eurodollar Borrowing][; and 

    [(iv)
      [If the resulting Borrowing is
      a Eurodollar Borrowing] The Interest Period applicable to the resulting
      Borrowing after giving effect to such election is
      [            ]].


    The
      undersigned certifies that
      he/she is the
      [            ]
      of the Parent Guarantor and the Borrower, and that as such he/she is authorized
      to execute this certificate on behalf of each of them. The undersigned further
      certifies, represents and warrants on behalf of the Parent Guarantor and the
      Borrower that the Borrower is entitled to receive the requested continuation
      or
      conversion under the terms and conditions of the Credit Agreement. 

     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	PARENT
              GUARANTOR:	 	
            	 	ATLAS
              ENERGY RESOURCES, LLC
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	
            	 	Title:	 	
            
	
            	
            	
            
	BORROWER:	 	
            	 	ATLAS
              ENERGY OPERATING COMPANY, LLC
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	Atlas
              Energy Resources, LLC, its sole member
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	
            	 	Title:	 	
            


    

     

    Exhibit
      C - 1 

    

    
    

    EXHIBIT
      D


    [FORM
      OF]


    COMPLIANCE
      CERTIFICATE


    The
      undersigned hereby certifies
      that he/she is the
      [            ]
      of Atlas Energy Resources, LLC, a Delaware limited liability company (the
“Parent Guarantor”), and that as such he/she is authorized to execute
      this certificate on behalf of the Parent Guarantor and Atlas Energy Operating
      Company, LLC, a Delaware limited liability company (the “Borrower”). With
      reference to the Credit Agreement dated as of June 29, 2007, (together with
      all amendments, restatements, supplements or other modifications thereto being
      the “Agreement”), among the Parent Guarantor, the Borrower, JPMorgan
      Chase Bank, N.A., as Administrative Agent, and the other agents and lenders
      (the
“Lenders”) which are or become a party thereto, and such Lenders, the
      undersigned represents and warrants as follows (each capitalized term used
      herein having the same meaning given to it in the Agreement unless otherwise
      specified): 

    (a)
      The representations and
      warranties of the Parent Guarantor and the Borrower contained in Article VII
      of
      the Agreement and in the Loan Documents and otherwise made in writing by or
      on
      behalf of either the Parent Guarantor or the Borrower pursuant to the Agreement
      and the Loan Documents were true and correct when made, and are repeated at
      and
      as of the time of delivery hereof and are true and correct in all material
      respects at and as of the time of delivery hereof, except to the extent such
      representations and warranties are expressly limited to an earlier date or
      the
      Majority Lenders have expressly consented in writing to the contrary.


    (b)
      The Parent Guarantor and the
      Borrower has performed and complied with all agreements and conditions contained
      in the Agreement and in the Loan Documents required to be performed or complied
      with by it prior to or at the time of delivery hereof [or specify default and
      describe]. 

    (c)
      Since December 31, 2006, no
      change has occurred, either in any case or in the aggregate, in the condition,
      financial or otherwise, of the Parent Guarantor, the Borrower or any Subsidiary
      which could reasonably be expected to have a Material Adverse Effect [or specify
      event]. 

    (d)
      There exists no Default or Event
      of Default [or specify Default and describe]. 

    (e)
      Attached hereto are the detailed
      computations necessary to determine whether the Parent Guarantor is in
      compliance with Section 9.01 as of the end of the [fiscal quarter][fiscal
      year] ending
      [            ].


    EXECUTED
      AND DELIVERED this
      [            ]
      day of
      [                    ].


     

    
      	
            	
            	
            
	ATLAS
              ENERGY RESOURCES, LLC
	
            	
            
	By:	 	  
	Name:	 	  
	Title:	 	  


    

     

    Exhibit
      D - 1 

    

    
    

    EXHIBIT
      E


    FORM
      OF LEGAL OPINION


     

    Exhibit
      E - 1 

    

    
    

    EXHIBIT
      E-2


    FORM
      OF LEGAL OPINION OF
      LOCAL COUNSEL 

    [                    ]
      [            ],
      2007 

    JPMorgan
      Chase Bank, N.A.


    as
      Administrative Agent


     

    
      	 	Re:	Credit
              Agreement dated as of June 29, 2007 among Atlas Energy
              Resources, LLC, a Delaware limited liability company, as parent guarantor,
              Atlas Energy Operating Company, LLC, a Delaware limited liability company
              (the “Borrower”), the banks now or hereafter signatory thereto (the
              “Lenders”), and JPMorgan Chase Bank, N.A., as administrative agent for the
              Lenders (in such capacity the “Administrative Agent”), and other
              agents for the Lenders (the “Credit Agreement”).
              


    

    Gentlemen:


    We
      have acted as special
      [            ]
      counsel to the Borrower and its Subsidiaries, including
      [            ],
      a
      [            ]
      (“Mortgagor”), in connection with the execution and delivery of that
      certain Deed of Trust, Mortgage, Assignment of As-Extracted Collateral, Security
      Agreement and Financing Statement dated June 29, 2007 by the Mortgagor in
      favor of the Administrative Agent, for its benefit and the benefit of the
      Lenders and others (the “Mortgage”). This opinion is being furnished to
      you pursuant to Section 6.01(g) of the Credit Agreement. All capitalized
      terms not defined herein shall have the same meanings assigned to them in the
      Credit Agreement. In connection with the opinions set forth herein, we have
      examined originals, or copies certified or otherwise identified to our
      satisfaction, of the following documents (the “Loan Documents”):


     

    
      	 	[(A)]	the
              Mortgage[; and] 


    

     

    
      	 	
              [(B)

            	
              the
                UCC-1 Financing Statement
                covering as-extracted collateral and goods that are or are to become
                fixtures prepared in connection with the Mortgage (the “Financing
                Statement”)].1

            


    

    In
      rendering the opinions set forth
      herein, we have relied upon certificates of officers of the Mortgagor,
      certificates or telegrams of public officials and such other documents, records
      and information as we have deemed necessary or appropriate. We have assumed
      that
      all signatures are genuine; that all documents submitted to us as originals
      are
      authentic; that all documents submitted to us as copies conform to the
      originals; and that the facts stated in all such documents are true and correct.
      In rendering this opinion, we have not made any independent investigation as
      to
      accuracy or completeness of any facts or representations, warranties, data
      or
      other information, whether written or oral, that may have been made by or on
      behalf of the parties, except as specifically set forth herein. 

    

    
      	
              1

            	
              Under
                Section 9.502 of UCC, a record of our form of mortgage is effective
                as a financing statement filed as a fixture filing or as a financing
                statement covering as-extracted collateral or timber to be cut. Some
                counties, however, maintain separate indexes for UCC filings, and
                in such
                case, a UCC-1 financing statement covering such collateral should
                be
                prepared and filed separately. 

            


    

     

    Exhibit
      E-2 -1 

    

    
    

    Based
      upon the foregoing, and
      subject to the qualifications set forth herein, it is our opinion that:


    1.
      The form of the Mortgage,
      including the form of acknowledgments thereto, [and the Financing Statement,]
      comply with the laws of the State of
      [            ],
      including all applicable recording, filing and registration laws and
      regulations, and are adequate and legally sufficient for the purposes intended
      to be accomplished thereby. 

    2.
      The descriptions of those
      portions of the Mortgaged Property located within the State of
      [            ]
      which are shown on Exhibit “A” attached to the Mortgage are legally sufficient
      descriptions for the purpose of creating and maintaining the Liens purported
      to
      be created by the Mortgage and for the purposes of all applicable recording,
      filing and registration laws in the State of
      [            ].


    3.
      So far as the law of the State of
      [            ]
      is concerned, the Mortgage constitutes legal, valid and binding obligations
      of
      the Mortgagor enforceable against it in accordance with their terms except
      as
      limited by bankruptcy, insolvency, reorganization, moratorium or other similar
      laws of general application relating to or affecting creditors’ rights generally
      and to general principles of equity. 

    4.
      The Mortgage is effective to
      create in favor of the Administrative Agent (or the Trustee named therein,
      as
      applicable) for the benefit of the Administrative Agent and the Lenders, for
      the
      payment of the obligations described therein, a valid mortgage Lien on all
      of
      the Mortgagor’s right, title and interest in and to the portion of the Mortgaged
      Property constituting real property described in the Mortgage as being mortgaged
      thereby and a valid security interest in all of the Mortgagor’s right, title and
      interest in and to as-extracted collateral located in the county in which the
      Mortgaged Property is situated and all fixtures located on the real property
      described in the Mortgage. 

    5.
      Fully executed counterparts of
      the Mortgage and the Financing Statement should be filed for record in each
      county in the State of
      [            ]
      where any portion of the Mortgaged Property is located [or if other, please
      specify]. Other than the foregoing, no authorization, consent, approval, license
      or exemption of, or filing or registration with, any Governmental Authority
      of
      the State of
      [            ]
      is necessary for either the due execution and delivery by the Mortgagor of
      the
      Mortgage, the perfection of the Liens intended to be created thereby or with
      the
      holding and enforcement by the Administrative Agent of the Mortgage or the
      obligations secured thereby. 

    6.
      After the recordings and filings
      specified in paragraph 5 have occurred, the Liens created by the Mortgage will
      be perfected. 

    7.
      After the recordings and filings
      specified in paragraph 5 have occurred, no instruments need be recorded,
      registered or filed or re-recorded, re-registered or re-filed in any public
      office in the State of
      [            ]
      in connection with the execution and delivery of the Mortgage in order to
      maintain the perfection and priority of the Liens created thereby after the
      date
      of recordation, other than [state rule if necessary] and continuation statements
      as required by the Uniform Commercial Code as in effect in the State of
      [            ].


    8.
      No state or local recording tax,
      stamp tax or other similar fee, tax or governmental charge (other than statutory
      filing and recording fees to be paid upon the filing of the Mortgage [or the
      Financing Statement]) is required to be paid in connection with the filing
      and
      recording of [either] the Mortgage [or the Financing Statement][, except as
      follows: explain if necessary]. 

    9.
      The execution, delivery and
      performance by the Mortgagor of its obligations under the Mortgage will not
      result in a violation of any laws, rules and regulations of the State of
      [            ]


     

    Exhibit
      E-2 -2 

    

    
    

    which,
      in our experience, exercising
      customary professional diligence, are normally applicable to transactions of
      the
      type provided for in the Loan Documents. 

    10.
      A
      [            ]
      state court of competent jurisdiction or a federal court sitting in the State
      of
      [            ]
      of competent jurisdiction and applying conflicts of laws principles of the
      State
      of
      [            ],
      if properly presented with a choice of law issue, will honor the choice of
      New
      York law to govern the Credit Agreement, the Notes and the Mortgage that state
      such documents shall be governed by the laws of the State of New York.


    The
      foregoing opinions are subject
      to the following additional assumptions and qualifications: 

    [add
      appropriate qualifications, if
      any]. 

    The
      opinions rendered herein are for
      the sole benefit of, and may only be relied upon by, the addressee and the
      Persons from time to time Lenders under the Credit Agreement, and the opinions
      herein expressed are not to be used, circulated or otherwise referred to in
      connection with any transaction other than those contemplated by the Loan
      Documents. This opinion is specifically limited to the presently effective
      laws
      of the State of
      [            ].
      We have not been asked to, and we do not, render any opinion as to any matter
      except as specifically set forth herein. 

    Very
      truly yours, 

     

    Exhibit
      E-2 - 3 

    

    
    

    EXHIBIT
      F-1


    SECURITY
      INSTRUMENTS


    1)
      Guaranty and Collateral Agreement
      dated as of June 29, 2007 by the Parent Guarantor, the Borrower, and each
      other Guarantors in favor of the Administrative Agent and the Lenders.


    2)
      Financing Statements in respect
      of item 1. 

    3)
      Stock Powers delivered in respect
      of item 1. 

    a)
      AER Pipeline Construction, Inc.


    4)
      Open-End Mortgage dated June 29,
      2007 by Atlas Gas & Oil Company, LLC, a Michigan limited liability company,
      as Mortgagor (filed in various Michigan counties). 

    5)
      Financing Statement in respect of
      item 4. 

    6)
      Open-End Mortgage, Indenture,
      Security Agreement, Financing Statement, Fixture Filing and Assignment of
      Production dated June 29, 2007 from Resource Energy, LLC, a Delaware limited
      liability company, and Viking Resources, LLC, a Pennsylvania limited liability
      company, as Mortgagors (filed in various Ohio counties). 

    7)
      Financing Statements in respect
      of item 6. 

    8)
      Open-End Mortgage, Security
      Agreement, Financing Statement, Fixture Filing and Assignment of Production
      dated June 29, 2007 by Atlas Resources, LLC, a Pennsylvania limited liability
      company, Atlas America, LLC, a Pennsylvania limited liability company, and
      Viking Resources, LLC, a Pennsylvania limited liability company, as Mortgagors
      (filed in various Pennsylvania counties). 

    9)
      Financing Statements in respect
      of item 8. 

    10)
      Open-End Mortgage, Indenture,
      Security Agreement, Financing Statement and Assignment of Production dated
      June
      29, 2007 from Resource Energy, LLC, a Delaware limited liability company,
      REI-NY, LLC, a Delaware limited liability company, as Mortgagors (filed in
      Chautauqua County, New York). 

    11)
      Financing Statements in respect
      of item 10. 

    12)
      Fee Letter dated May 18, 2007
      among the Parent Guarantor, the Administrative Agent and the Arranger.


     

    Exhibit
      F-1 - 1 

    

    
    

    EXHIBIT
      F-2


    FORM
      OF GUARANTY AND
      COLLATERAL AGREEMENT 

     

    Exhibit
      F-2 - 1 

    

    
    

    EXHIBIT
      G


    FORM
      OF ASSIGNMENT AND
      ASSUMPTION 

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

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

     

    
      	1.    Assignor:	                                    


    

     

    
      	2.    Assignee:	                                    


    

    
      	
               

            	
              [and
                is an Affiliate/Approved
                Fund of [identify Lender]2]


            


    

     

    
      	3.    Borrower:	Atlas
              Energy Operating Company, LLC



    

     

    
      	4.    Administrative	Agent:
              JPMorgan Chase Bank, N.A., as the administrative agent under
              the Credit Agreement 


    

     

    
      	5.    Credit	Agreement:
              The Credit Agreement dated as of June 29, 2007
              among Atlas Energy Resources, LLC, as parent guarantor, Atlas Energy
              Operating Company, LLC, as borrower, the Lenders parties thereto, JPMorgan
              Chase Bank, N.A., as Administrative Agent, and the other agents parties
              thereto 


    

     

    
      	6.    Assigned Interest:	 


    

    

    
      	
              2

            	
              Select
                as
                applicable. 

            


    

     

    Exhibit
      G - 1 

    

    
    

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	
              Commitment
                Assigned

            	  	
              Aggregate Amount of

              Commitment/Loans
for
                all
                Lenders

            	  	
              Amount of

              Commitment/Loans
Assigned

            	  	
              Percentage

              Assigned of
Commitment/Loans3

            
	
            	  	$	 	  	$	 	  	%
	
            	  	$	 	  	$	 	  	%
	
            	  	$	 	  	$	 	  	%


    

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

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

     

    
      	
            	
            	
            
	ASSIGNOR
	
            
	[NAME
              OF ASSIGNOR]
	
            	
            
	By:	 	  
	Title:	 	
            
	
            
	ASSIGNEE
	
            
	[NAME
              OF ASSIGNEE]
	
            	
            
	By:	 	  
	Title:	 	
            


    

    The
      undersigned hereby consent to
      the within assignment:4

     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	ATLAS
              ENERGY OPERATING COMPANY, LLC	 	
            	 	JPMORGAN
              CHASE BANK, N.A., as Administrative Agent
	
            	
            	
            
	By:
              Atlas Energy Resources, LLC, its sole member	 	
            	 	
            
	
            	
            	
            	
            	
            
	By:	 	  	 	
            	 	By:	 	  
	
            	 	
              Name:

              Title:

            	 	
            	 	
            	 	
              Name:

              Title:

            


    

    

    
      	
              3

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

            


    

     

    
      	
              4

            	
              Consents
                to be
                included to the extent required by Section 12.04(b) of the Credit
                Agreement. 

            


    

     

    Exhibit
      G - 2 

    

    
    

    ANNEX
      1 

    STANDARD
      TERMS AND CONDITIONS FOR


    ASSIGNMENT
      AND ASSUMPTION


    1.
Representations
      and
      Warranties. 

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


    1.2.
Assignee.
      The Assignee
      (a) represents and warrants that (i) it has full power and authority,
      and has taken all action necessary, to execute and deliver this Assignment
      and
      Assumption and to consummate the transactions contemplated hereby and to become
      a Lender under the Credit Agreement, (ii) it satisfies the requirements, if
      any, specified in the Credit Agreement that are required to be satisfied by
      it
      in order to acquire the Assigned Interest and become a Lender, (iii) from
      and after the Effective Date, it shall be bound by the provisions of the Credit
      Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
      shall have the obligations of a Lender thereunder, (iv) it has received a
      copy of the Credit Agreement, together with copies of the most recent financial
      statements delivered pursuant to Section 8.01 thereof, as applicable, and
      such other documents and information as it has deemed appropriate to make its
      own credit analysis and decision to enter into this Assignment and Assumption
      and to purchase the Assigned Interest on the basis of which it has made such
      analysis and decision independently and without reliance on the Administrative
      Agent or any other Lender, and (v) if it is a Non-US Lender, attached to
      the Assignment and Assumption is any documentation required to be delivered
      by
      it pursuant to the terms of the Credit Agreement, duly completed and executed
      by
      the Assignee; and (b) agrees that (i) it will, independently and
      without reliance on the Administrative Agent, the Assignor or any other Lender,
      and based on such documents and information as it shall deem appropriate at
      the
      time, continue to make its own credit decisions in taking or not taking action
      under the Loan Documents, and (ii) it will perform in accordance with their
      terms all of the obligations which by the terms of the Loan Documents are
      required to be performed by it as a Lender. 

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

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

     

    Exhibit
      G - 3 

    

    
    

    EXHIBIT
      H-1


    FORM
      OF MAXIMUM CREDIT
      AMOUNT INCREASE CERTIFICATE 

    [                ],
      200[__] 

     

    
      	To:	JPMorgan
              Chase Bank, N.A., 


    

    
      	    	as
              Administrative Agent 


    

    The
      Parent Guarantor, the Borrower,
      the Administrative Agent and the other Agents and certain Lenders have
      heretofore entered into the Credit Agreement, dated as of June 29, 2007, as
      amended, restated, supplemented or otherwise modified from time to time (the
      “Credit Agreement”). Capitalized terms not otherwise defined herein shall
      have the meaning given to such terms in the Credit Agreement. 

    This
      Maximum Credit Amount Increase
      Certificate is being delivered pursuant to Section 2.06(c) of the Credit
      Agreement. 

    Please
      be advised that the
      undersigned has agreed to (a) increase its Maximum Credit Amount under the
      Credit Agreement effective
      [            ],
      200[__] from
      $[            ]
      to
      $[            ]
      and (b) that it shall continue to be a party in all respect to the Credit
      Agreement and the other Loan Documents. 

    The
      [Borrower/Lender] shall pay the
      fee payable to the Administrative Agent pursuant to Section 2.06(c)(ii) of
      the Credit Agreement. 

     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	
            	 	
            	 	Very
              truly yours,
	
            	
            	
            
	PARENT
              GUARANTOR:	 	
            	 	ATLAS
              ENERGY RESOURCES, LLC
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	
            	 	Title:	 	
            
	
            	
            	
            
	BORROWER:	 	
            	 	ATLAS
              ENERGY OPERATING COMPANY, LLC
	
            	
            	
            
	
            	 	
            	 	By:
              Atlas Energy Resources, LLC, its sole member
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	
            	 	Title:	 	
            


    

     

    Exhibit
      H-1 - 1 

    

    
    

    
      	
            	
            	
            
	Accepted
              and Agreed:
	
            
	
              JPMORGAN
                CHASE BANK,
                N.A.,
as Administrative Agent

            
	
            	
            
	By:	 	  
	Name:	 	  
	Title:	 	  
	
            
	Accepted
              and Agreed:
	
            
	[                                       
                   ]
	
            	
            
	By:	 	  
	Name:	 	  
	Title:	 	  


    

     

    Exhibit
      H-1 - 2 

    

    
    

    EXHIBIT
      H-2


    FORM
      OF ADDITIONAL LENDER
      CERTIFICATE 

    [                ],
      200[__] 

     

    
      	To:	JPMorgan
              Chase Bank, N.A., 


    

    
      	  	as
              Administrative Agent 


    

    The
      Parent Guarantor, the Borrower,
      the Administrative Agent and the other Agents and certain Lenders have
      heretofore entered into the Credit Agreement, dated as of June 29, 2007, as
      amended, restated, supplemented or otherwise modified from time to time (the
      “Credit Agreement”). Capitalized terms not otherwise defined herein shall
      have the meaning given to such terms in the Credit Agreement. 

    This
      Additional Lender Certificate
      is being delivered pursuant to Section 2.06(c) of the Credit Agreement.


    Please
      be advised that the
      undersigned has agreed (a) to become a Lender under the Credit Agreement
      effective
      [            ],
      200[__] with a Maximum Credit Amount of
      $[            ]
      and (b) that it shall be a party in all respect to the Credit Agreement and
      the other Loan Documents. 

    This
      Additional Lender Certificate
      is being delivered to the Administrative Agent together with (i) if the
      Additional Lender is a Non-US Lender, any documentation required to be delivered
      by such Additional Lender pursuant to Section 5.03(d) of the Credit
      Agreement, duly completed and executed by the Additional Lender, and
      (ii) an Administrative Questionnaire in the form supplied by the
      Administrative Agent, duly completed by the Additional Lender. The
      [Borrower/Additional Lender] shall pay the fee payable to the Administrative
      Agent pursuant to Section 2.06(c)(ii) of the Credit Agreement.


     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	
            	 	
            	 	Very
              truly yours,
	
            	
            	
            
	PARENT
              GUARANTOR:	 	
            	 	ATLAS
              ENERGY RESOURCES, LLC
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	Title:	 	
            


    

     

    Exhibit
      H-2 - 1 

    

    
    

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            
	BORROWER:	 	
            	 	ATLAS
              ENERGY OPERATING COMPANY, LLC
	
            	
            	
            
	
            	 	
            	 	By:
              Atlas Energy Resources, LLC, its sole member
	
            	
            	
            	
            
	
            	 	
            	 	By:	 	  
	
            	 	
            	 	
            	 	Name:	 	
            
	
            	 	
            	 	Title:	 	
            


    

     

    
      	
            	
            	
            
	Accepted
              and Agreed:
	
            
	
              JPMORGAN
                CHASE BANK,
                N.A.,
as Administrative Agent

            
	
            	
            
	By:	 	  
	Name:	 	  
	Title:	 	  
	
            
	Accepted
              and Agreed:
	
            
	[                                       
                   ]
	
            	
            
	By:	 	  
	Name:	 	  
	Title:	 	  


    

     

    Exhibit
      H-2 - 2 

    

    
    

    EXHIBIT
      I


    FORM
      OF RESERVE REPORT
      CERTIFICATE 

    [September]/[March]
      1,
      [year] 

    This
      Reserve Report Certificate
      (“Certificate”) is executed and delivered pursuant to Section 8.12
      (c) of that certain Credit Agreement dated as of June 29, 2007 among
      Atlas Energy Resources, LLC (“Parent Guarantor”), Atlas Energy Operating
      Company, LLC (“Borrower”), JPMorgan Chase Bank, N.A., as administrative
      agent (“Administrative Agent”) and the Lenders named therein and as may
      be amended, restated, supplemented or otherwise modified from time to time
      (the
“Credit Agreement”). Unless otherwise defined herein, all capitalized
      terms shall have the meaning set forth in the Credit Agreement. 

    The
      undersigned, a Responsible
      Officer of the Borrower, hereby certifies to the Administrative Agent and
      Lenders that in all material respects: 

    (i)
      the information contained in the
      Reserve Report attached hereto as Attachment 1 to this Certificate
      (“Reserve Report”) and any other information delivered in connection
      therewith is true and correct; 

    (ii)
      the Borrower or its
      Subsidiaries owns good and defensible title to the Oil and Gas Properties
      evaluated in the Reserve Report and such Properties are free of all Liens except
      for Liens permitted by Section 9.03 of the Credit Agreement; 

    (iii)
      except as set forth in
Attachment 2 to this Certificate, on a net basis there are no gas
      imbalances, take or pay or other prepayments in excess of the volume specified
      in Section 7.19 of the Credit Agreement with respect to its Oil and Gas
      Properties evaluated in the Reserve Report which would require the Borrower
      or
      any Subsidiary to deliver Hydrocarbons either generally or produced from such
      Oil and Gas Properties at some future time without then or thereafter receiving
      full payment therefor; 

    (iv)
      except as listed in
Attachment 3 to this Certificate, no Oil and Gas Properties have been
      sold since the date of the last Borrowing Base determination; 

    (v)
      attached hereto as Attachment
      4 to this Certificate is a list of all marketing agreements entered into
      subsequent to the later of the date hereof or the most recently delivered
      Reserve Report which the Borrower could reasonably be expected to have been
      obligated to list on Schedule 7.20 of the Credit Agreement had such agreement
      been in effect on the date hereof; and 

    (vi)
      attached hereto as
Attachment 5 to this Certificate is a schedule of the Oil and Gas
      Properties evaluated by the Reserve Report that are Mortgaged Properties and
      showing the percentage of the Borrowing Base that the value of such Mortgaged
      Properties represent. 

     

    Exhibit
      I - 1 

    

    
    

    IN
      WITNESS WHEROF, I have hereunto
      signed this Certificate as of the
            
      day of [Month], [Year]. 

     

    
      	
            	
            	
            	
            	
            	
            	
            	
            	
            	
            	
            
	
              Address
                for
                Notice:

               

              West
                Point Corporate Center
                I

              1550
                Coraopolis Heights
                Road

            	 	
            	 	
              BORROWER:

               

                ATLAS
                ENERGY OPERATING COMPANY, LLC

                By:
                Atlas Energy
                Resources, LLC, its sole member

            
	
              Moon
                Township, Pennsylvania
                15108

              Attention:
                Matthew A.
                Jones

            	 	
            	 	
            	 	By:	 	  
	
              Fax
                No.:
                215.546.4785

              E-mail:mjones@atlasamerica.com

            	 	
            	 	
            	 	
            	 	
              Matthew
                A. Jones

              Chief
                Financial
                Officer

            


    

     

    Exhibit
      I - 2 

    

    
    

    ATTACHMENT
      1


    RESERVE
      REPORT


     

    Exhibit
      I - 3 

    

    
    

    ATTACHMENT
      2


    GAS
      IMBALANCES, TAKE OR PAY,
      OR OTHER PREPAYMENTS 

     

    Exhibit
      I - 4 

    

    
    

    ATTACHMENT
      3


    OIL &
GAS
      PROPERTIES SOLD 

     

    Exhibit
      I - 5 

    

    
    

    ATTACHMENT
      4


    MARKETING
      AGREEMENTS ENTERED
      INTO SUBSEQUENT TO [date]


     

    Exhibit
      I - 6 

    

    
    

    ATTACHMENT
      5


    OIL &
GAS
      PROPERTIES that are MORTGAGED PROPERTIES 

     

    
      	
            	
            	
            
	
              Mortgaged
                Property
                Name

            	  	
              Percentage of the Borrowing Base that the

              value
                of Mortgaged
                Property represents

            


    

     

    Exhibit
      I - 7