exv10w3






Exhibit 10.3




EXECUTION




SECOND AMENDED AND RESTATED CREDIT AGREEMENT




Among



POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower,



POSTROCK MIDCONTINENT PRODUCTION, LLC,

as a Borrower,



ROYAL BANK OF CANADA,

as Administrative Agent and Collateral Agent



and



The Lenders Party Hereto



$350,000,000



BORROWING BASE FACILITY



Initial Borrowing Base $225,000,000



Dated as of September 21, 2010



 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
	 	 	3	 
	1.01. Defined Terms
	 	 	3	 
	1.02. Other Interpretive Provisions
	 	 	27	 
	1.03. Accounting Terms
	 	 	28	 
	1.04. Rounding
	 	 	28	 
	1.05. References to Agreements, Persons and Laws; Rules of Construction
	 	 	28	 
	 
	 	 	 	 
	ARTICLE II. THE REVOLVING COMMITMENTS AND BORROWINGS
	 	 	28	 
	2.01. Revolving Loans
	 	 	28	 
	2.02. Borrowing Base
	 	 	29	 
	2.03. Borrowings, Conversions and Continuations of Loans
	 	 	32	 
	2.04. Prepayments
	 	 	33	 
	2.05. Reduction or Termination of Revolving Commitments
	 	 	34	 
	2.06. Repayment of Revolving Loans.
	 	 	35	 
	2.07. Interest
	 	 	35	 
	2.08. Fees
	 	 	36	 
	2.09. Computation of Interest and Fees
	 	 	36	 
	2.10. Evidence of Debt
	 	 	36	 
	2.11. Payments Generally
	 	 	37	 
	2.12. Sharing of Payments
	 	 	39	 
	2.13. Pari Passu Lien Securing Lender Hedging Obligations
	 	 	39	 
	2.14. Letters of Credit
	 	 	39	 
	 
	 	 	 	 
	ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
	 	 	46	 
	3.01. Taxes
	 	 	46	 
	3.02. Illegality
	 	 	48	 
	3.03. Inability to Determine Rates
	 	 	48	 
	3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on
Eurodollar Rate Loans
	 	 	49	 
	3.05. Compensation for Losses
	 	 	50	 
	3.06. Matters Applicable to all Requests for Compensation
	 	 	50	 
	3.07. Survival
	 	 	50	 
	3.08. Mitigation Obligations
	 	 	50	 
	 
	 	 	 	 
	ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSION
	 	 	51	 
	4.01. Conditions Precedent to Initial Credit Extension
	 	 	51	 
	4.02. Conditions to all Credit Extensions
	 	 	53	 
	4.03. Conditions Precedent to Funding Loans for Permitted Acquisitions
	 	 	54	 
	 
	 	 	 	 
	ARTICLE V. REPRESENTATIONS AND WARRANTIES
	 	 	54	 
	5.01. Existence; Qualification and Power; Compliance with Laws
	 	 	54	 
	5.02. Authorization; No Contravention
	 	 	55	 
	5.03. Governmental Authorization
	 	 	55	 
	5.04. Binding Effect
	 	 	55	 
	5.05. Financial Statements; No Material Adverse Effect
	 	 	56	 
	5.06. Litigation
	 	 	56	 
	5.07. No Default
	 	 	56	 






i









 






	 	 	 	 	 
	 	 	Page
	5.08. Title; Liens; Priority of Liens
	 	 	56	 
	5.09. Environmental Compliance
	 	 	57	 
	5.10. Insurance
	 	 	57	 
	5.11. Taxes
	 	 	57	 
	5.12. ERISA Compliance
	 	 	57	 
	5.13. Subsidiaries and other Investments
	 	 	58	 
	5.14. Margin Regulations; Investment Company Act; Use of Proceeds
	 	 	58	 
	5.15. Disclosure; No Material Misstatements
	 	 	58	 
	5.16. Location of Business and Offices
	 	 	58	 
	5.17. Compliance with Laws
	 	 	58	 
	5.18. Third Party Approvals
	 	 	59	 
	5.19. Solvency
	 	 	59	 
	5.20. Oil and Gas Leases
	 	 	59	 
	5.21. Oil and Gas Contracts
	 	 	59	 
	5.22. Producing Wells
	 	 	59	 
	5.23. Purchasers of Production
	 	 	60	 
	5.24. Swap Contracts
	 	 	60	 
	 
	 	 	 	 
	ARTICLE VI. AFFIRMATIVE COVENANTS
	 	 	60	 
	6.01. Financial Statements
	 	 	60	 
	6.02. Certificates; Other Information
	 	 	61	 
	6.03. Notices
	 	 	61	 
	6.04. Payment of Obligations
	 	 	62	 
	6.05. Preservation of Existence, Etc.
	 	 	62	 
	6.06. Maintenance of Assets and Business
	 	 	62	 
	6.07. Maintenance of Insurance
	 	 	63	 
	6.08. Compliance with Laws and Contractual Obligations
	 	 	63	 
	6.09. Books and Records
	 	 	63	 
	6.10. Inspection Rights
	 	 	63	 
	6.11. Compliance with ERISA
	 	 	64	 
	6.12. Use of Proceeds
	 	 	64	 
	6.13. Material Agreements
	 	 	64	 
	6.14. Guaranties; New Subsidiaries’ Collateral Documents
	 	 	64	 
	6.15. Further Assurances; Additional Collateral; In Lieu Letters
	 	 	65	 
	6.16. Title Defects
	 	 	66	 
	6.17. Leases
	 	 	66	 
	6.18. Operation of Borrowing Base Oil and Gas Properties
	 	 	66	 
	6.19. Change of Purchasers of Production
	 	 	66	 
	6.20. Fiscal Year
	 	 	67	 
	6.21. Liens on Oil and Gas Properties; Title Information
	 	 	67	 
	6.22. Capital Expenditures
	 	 	67	 
	 
	 	 	 	 
	ARTICLE VII. NEGATIVE COVENANTS
	 	 	67	 
	7.01. Liens
	 	 	67	 
	7.02. Investments
	 	 	70	 
	7.03. Hedging Agreements
	 	 	71	 
	7.04. Indebtedness
	 	 	72	 
	7.05. Lease Obligations
	 	 	73	 
	7.06. Fundamental Changes
	 	 	73	 
	7.07. Dispositions
	 	 	74	 
	7.08. Transfer Payments; Restricted Payments; Distributions and Redemptions
	 	 	75	 






ii









 






	 	 	 	 	 
	 	 	Page
	7.09. ERISA
	 	 	76	 
	7.10. Nature of Business; Risk Management
	 	 	76	 
	7.11. Transactions with Affiliates
	 	 	76	 
	7.12. Burdensome Agreements
	 	 	77	 
	7.13. Use of Proceeds
	 	 	77	 
	7.14. Material Agreements
	 	 	77	 
	7.15. Pooling or Unitization
	 	 	77	 
	7.16. Financial Covenants
	 	 	77	 
	 
	 	 	 	 
	ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES
	 	 	78	 
	8.01. Events of Default
	 	 	78	 
	8.02. Remedies Upon Event of Default
	 	 	81	 
	8.03. Application of Funds
	 	 	81	 
	 
	 	 	 	 
	ARTICLE IX. ADMINISTRATIVE AGENT
	 	 	82	 
	9.01. Appointment and Authorization of Agents; Lender Hedging Agreements
	 	 	82	 
	9.02. Delegation of Duties
	 	 	82	 
	9.03. Default; Collateral
	 	 	82	 
	9.04. Liability of Agents
	 	 	84	 
	9.05. Reliance by Administrative Agent
	 	 	84	 
	9.06. Notice of Default
	 	 	85	 
	9.07. Credit Decision; Disclosure of Information by Administrative Agent
	 	 	85	 
	9.08. Indemnification of Agents
	 	 	86	 
	9.09. Administrative Agent in its Individual Capacity
	 	 	86	 
	9.10. Successor Administrative Agent and Collateral Agent
	 	 	86	 
	9.11. Other Agents
	 	 	87	 
	9.12. Administrative Agent May File Proofs of Claim
	 	 	87	 
	9.13. Hedging Agreements
	 	 	88	 
	 
	 	 	 	 
	ARTICLE X. MISCELLANEOUS
	 	 	88	 
	10.01. Amendments, Release of Collateral, Etc.
	 	 	88	 
	10.02. Notices and Other Communications; Facsimile Copies
	 	 	90	 
	10.03. No Waiver; Cumulative Remedies
	 	 	91	 
	10.04. Attorney Costs; Expenses and Taxes
	 	 	91	 
	10.05. Indemnification
	 	 	92	 
	10.06. Payments Set Aside
	 	 	93	 
	10.07. Successors and Assigns
	 	 	93	 
	10.08. Confidentiality
	 	 	96	 
	10.09. Set-off
	 	 	96	 
	10.10. Interest Rate Limitation
	 	 	97	 
	10.11. Counterparts
	 	 	97	 
	10.12. Integration
	 	 	97	 
	10.13. Survival of Representations and Warranties
	 	 	97	 
	10.14. Severability
	 	 	97	 
	10.15. Replacement of Lenders
	 	 	98	 
	10.16. Defaulting Lender
	 	 	98	 
	10.17. Governing Law
	 	 	100	 
	10.18. Waiver of Right to Trial by Jury, Etc.
	 	 	101	 
	10.19. Release
	 	 	101	 
	10.20. Time of the Essence
	 	 	102	 
	10.21. Release of Liens on KPC Pipeline
	 	 	102	 






iii









 






	 	 	 	 	 
	 	 	Page
	10.22. Amendment and Restatement
	 	 	102	 
	10.23. Termination of Revolving Commitments Under Original Credit Agreement
	 	 	102	 
	10.24. No Novation, Etc.
	 	 	102	 
	10.25. Joint and Several Liability
	 	 	103	 
	10.26. ENTIRE AGREEMENT
	 	 	105	 






SCHEDULES




	 	 	 

	1.01A

	 	Litigation Associated with EBITDA Adjustments for Related Litigation and Settlement Costs
	 
	 	 
	1.01B

	 	Other Consolidated EBITDA Adjustments for Specified Quarters
	 
	 	 
	2.01

	 	Revolving Commitments
	5.06

	 	Litigation
	5.12

	 	ERISA
	5.13

	 	Subsidiaries and Equity Investments
	5.21

	 	Take-or Pay and Gas Balancing Obligations
	5.23

	 	Purchasers of Production
	5.24

	 	Swap Contracts
	7.01

	 	Existing Liens
	7.04

	 	Indebtedness
	7.11

	 	Transactions with Affiliates
	10.02

	 	Addresses for Notices to Borrower, Guarantors and Administrative Agent






EXHIBITS




Exhibit: Form of:




	 	 	 

	A-1

	 	Borrowing Notice
	A-2

	 	Conversion/Continuation Notice
	A-3

	 	Repayment Notice
	B

	 	Revolving Note
	C

	 	Compliance Certificate pursuant to Section 6.01(a)
	D

	 	Assignment and Assumption






iv









 





SECOND AMENDED AND RESTATED CREDIT AGREEMENT




     THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of September 21, 2010,
among POSTROCK ENERGY SERVICES CORPORATION, a Delaware corporation formerly known as Quest Resource
Corporation and successor by merger to Quest Resource Acquisition Corp., PostRock Midstream, LLC
(the successor by merger to Quest Midstream Partners, L.P. and Quest Midstream GP, LLC), Quest
Cherokee Oilfield Service, LLC, Quest Mergersub, Inc., Quest Midstream Holdings Corp., Quest Energy
Service, LLC and Energy & Midstream Partners JV, LLC (“PESC”), POSTROCK MIDCONTINENT PRODUCTION,
LLC, a Delaware limited liability company formerly known as Bluestem Pipeline, LLC, and successor
by merger to Quest Cherokee, LLC and to a related entity known as PostRock MidContinent Production,
LLC formerly known as Quest Energy Partners, L.P. (“MidContinent”; and together with PESC,
collectively, the “Borrowers” and individually a “Borrower”), each lender from time to time party
hereto (collectively, the “Lenders” and individually, “Lender”), ROYAL BANK OF CANADA, as
Administrative Agent and Collateral Agent.



PRELIMINARY STATEMENTS




     (1) Quest Resource Corporation (“QRC”) (now known as PESC) as initial co-borrower, Quest
Cherokee, LLC (“Quest Cherokee”), (now merged with a related entity named PostRock MidContinent
Production LLC (“MidContinent I”) and subsequently merged with and into Bluestem) as borrower,
Quest Energy Partners, L.P., a Delaware master limited partnership (which converted into
MidContinent I) (“QELP”) as guarantor, Royal Bank of Canada as administrative agent and collateral
agent and the other lenders party thereto entered into that certain Amended and Restated Credit
Agreement, dated November 15, 2007 (the “Initial First Lien Credit Agreement”).



     (2) The Initial First Lien Credit Agreement was amended by First Amendment to Amended and
Restated Credit Agreement, dated April 15, 2008, the Second Amendment to Amended and Restated
Credit Agreement, dated October 28, 2008; the Third Amendment to Amended and Restated Credit
Agreement dated May 29, 2009, the Fourth Amendment to Amended and Restated Credit Agreement, dated
June 30, 2009, and the Fifth Amendment to Amended and Restated Credit Agreement, dated December 17,
2009 (the Initial First Lien Credit Agreement as so amended, the “Prior First Lien Credit
Agreement”).



     (3) Quest Cherokee, LLC, as borrower, QELP, as guarantor, Royal Bank of Canada, as
administrative agent and collateral agent, KeyBank National Association, as syndication agent,
Société Générale, as Documentation Agent, and the lenders party thereto entered into a Second Lien
Senior Term Loan Agreement relating to a $45,000,000 Term Loan Facility, dated as of July 11, 2008
(the “Initial Second Lien Credit Agreement”).



     (4) The Initial Second Lien Credit Agreement was amended by First Amendment to Second Lien
Senior Term Loan Agreement, dated October 28, 2008, the Second Amendment to Second Lien Senior Term
Loan Agreement, dated June 30, 2009, the Third Amendment to Second Lien Senior Term Loan Agreement,
dated September 30, 2009, the Fourth Amendment to Second Lien Senior Term Loan Agreement, dated
October 30, 2009, the Fifth Amendment to Second Lien Senior Term Loan Agreement, dated November 16,
2009, the Sixth Amendment to Second Lien Senior Term Loan Agreement, dated November 20, 2009, the
Seventh Amendment to Second Lien Senior Term Loan Agreement, dated December 7, 2009, and the Eighth
Amendment to Second Lien Senior Term Loan Agreement, dated December 17, 2009 (the Initial Second
Lien Credit Agreement as so amended the “Prior Second Lien Credit Agreement”).



Borrowing Base

Credit Agreement




1









 





     (5) Quest Midstream Partners, L.P., a Delaware master limited partnership (which merged into
and became Quest Midstream Acquisition, LLC, which changed its name to PostRock Midstream, LLC,
which merged into PESC) and Bluestem Pipeline, LLC, as borrowers, and Royal Bank of Canada as
administrative and collateral agent, and the lenders party thereto, entered into a Credit
Agreement, dated as of January 31, 2007, providing for a $75,000,000 Senior Credit Facility (the
"Original Midstream Credit Agreement”). The Original Midstream Credit Agreement was secured by
mortgages filed against Bluestem’s Cherokee Basin pipeline system covering 11 counties in Kansas
and 2 counties in Oklahoma (the “Bluestem Gathering System”).



     (6) The Original Midstream Credit Agreement was amended and restated by an Amended and
Restated Credit Agreement dated as of November 1, 2007 among Quest Midstream Partners, L.P. and
Bluestem Pipeline, LLC, as borrowers, Royal Bank of Canada, as administrative and collateral agent,
and the lenders party thereto (the “Midstream Lenders”) providing for a $135,000,000 Senior Credit
Facility (the “First Amended and Restated Midstream Credit Agreement”).



     (7) In connection with the First Amended and Restated Midstream Credit Agreement, Quest
Midstream Partners, L.P. financed its acquisition of (i) 100% of the limited liability company
membership interest in each of (a) Midcoast Kansas Pipeline, L.L.C., a Delaware limited liability
company (whose name after its acquisition was changed to Quest Kansas Pipeline, L.L.C.), and (b)
Midcoast Kansas General Partner, L.L.C., a Delaware limited liability company (whose name after its
acquisition was changed to Quest Kansas General Partner, L.L.C.), each of whom collectively owned
100% of the general partner interest in Enbridge Pipelines (KPC), a Kansas general partnership
(whose name after its acquisition was changed to Quest Pipelines (KPC)) which owned an approximate
1,120 mile interstate natural gas pipeline, gathering systems, processing facilities and related
assets located in the States of Kansas, Oklahoma and Missouri (the “KPC Pipeline”).



     (8) The First Amended and Restated Midstream Credit Agreement was amended by First Amendment
to Amended and Restated Credit Agreement, dated November 1, 2007, Second Amendment to Amended and
Restated Credit Agreement, dated October 28, 2008, and Third Amendment to Amended and Restated
Credit Agreement,, dated December 17, 2009 (the First Amended and Restated Midstream Credit
Agreement as so amended the “Prior Midstream Credit Agreement”, and together with the Prior First
Lien Credit Agreement and the Prior Second Lien Credit Agreement, the “Prior Credit Agreements”).



     (9) Pursuant to assignments, the holders of the Indebtedness outstanding under the Prior
Credit Agreements have assigned such Indebtedness to the Lenders (in whole or in part as
aforesaid), together with all Liens securing such Indebtedness, except for the Liens on the KPC
Pipeline, which are being assigned in part to RBC as collateral agent on behalf of the KPC Lenders,
and which are being assigned in part to RBC as collateral agent on behalf of the Lenders and
subordinated to the first lien on the KPC Pipeline in favor of RBC as collateral agent on behalf of
the KPC Lenders.



     (10) The agents acting under the Prior Credit Agreements are hereby replaced by the
Administrative Agent;



     (11) Prior to the date hereof, there was a paydown on the Prior First Lien Credit Agreement in
an amount equal to $13,600,000 which reduced the outstanding principal balance thereof to
$125,000,000. The Borrowers agree, promptly upon the effectiveness of the assignments described in
Preliminary Statement (9), to prepay the Outstanding Amount of Indebtedness (i) under the Prior
First Lien Credit Agreement in an additional amount equal to $19,200,l00 from the proceeds of White
Deer Energy Investment; and (ii) under the Prior Midstream Credit Agreement in an amount equal to



Borrowing Base

Credit Agreement








2









 







$14,700,000 from the proceeds of the White Deer Energy Investment (the amount of such
prepayments herein collectively called the “Closing Date Prepayment Amount”).




     (12) The Borrowers, Administrative Agent, and Lenders have agreed to amend and restate in
their entirety the Prior First Lien Credit Agreement and the Prior Second Lien Credit Agreement and
to amend and restate in part the Prior Midstream Credit Agreement as regards the Collateral
previously owned by Bluestem and now owned by MidContinent, namely, the Bluestem Gathering System,
and the Indebtedness associated therewith, on the terms and conditions set forth herein and to
renew, restructure and rearrange such Indebtedness outstanding under the Prior Credit Agreements.



     (13) The Borrowers, Administrative Agent and Lenders have agreed that the Prior Midstream
Credit Agreement will also be amended and restated in part by the credit agreement that governs the
Secured Pipeline Loan of even date herewith executed by the Borrowers, RBC as administrative agent
and collateral agent thereto and the lenders party thereto.



     NOW THEREFORE, in consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree that the Prior First Lien Credit Agreement and the Prior Second
Lien Credit Agreement are hereby amended and restated in their entirety and that the Prior
Midstream Credit Agreement is hereby amended and restated in part as follows:



ARTICLE I.

DEFINITIONS AND ACCOUNTING TERMS



     1.01. Defined Terms. As used in this Agreement, the terms defined in the introductory paragraph
and the Preliminary Statements hereof shall have the meanings therein indicated and the following
terms shall have the meanings set forth below:




     Acquisition means any transaction or series of related transactions for the purpose of, or
resulting in, directly or indirectly, (a) the acquisition by a Company of all or substantially all
of the assets located in the United States of a Person or of any business or division of a Person;
(b) the acquisition by a Company of more than 50% of any class of Voting Stock (or similar
ownership interests) of any Domestic Person; or (c) a merger, consolidation, amalgamation, or other
combination by a Company with another Person if a Company is the surviving entity, provided that,
(i) in any merger involving a Borrower, such Borrower must be the surviving entity (unless the
surviving entity is a Borrower); and (ii) in any merger involving a Wholly-Owned Subsidiary and
another Subsidiary, a Wholly-Owned Subsidiary shall be the survivor.



     Adjusted Consolidated EBITDA means, for the period of determination, (i) Consolidated EBITDA,
minus (ii) the Consolidated EBITDA adjustments made pursuant to Section 7.16(d) plus (iii) the
Consolidated EBITDA adjustments made pursuant to Section 7.16(e).



     Administrative Agent means Royal Bank of Canada in its capacity as administrative agent under
any of the Loan Documents, or any successor administrative agent.



     Administrative Agent’s Office means the Administrative Agent’s address and, as appropriate,
account as set forth on Schedule 10.02, or such other address or account as the Administrative
Agent may from time to time notify to the Borrowers and the Lenders.



     Administrative Details Form means the Administrative Details Reply Form furnished by a Lender
to the Administrative Agent in connection with this Agreement.



Borrowing Base

Credit Agreement








3









 








     Affiliate means, as to any Person, any other Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such Person. A Person shall be
deemed to be controlled by any other Person if such other Person possesses, directly or indirectly,
power to direct or cause the direction of the management and policies of such Person whether by
contract or otherwise.



     Agent-Related Persons means the Administrative Agent (including any successor administrative
agent), the Collateral Agent (including any successor collateral agent) and their respective
Affiliates (including the officers, directors, employees, agents and attorneys-in-fact of such
Person).



     Aggregate Revolving Commitment means collectively the Revolving Commitments of all the
Lenders.



     Agreement means this Second Amended and Restated Credit Agreement.



     Amended QRC Facility means the $35,000,000 amended and restated term facility of even date
herewith provided to Eastern, as borrower, by Royal Bank of Canada and secured by such borrower’s
assets, namely, the non-producing Marcellus assets.



     Applicable Rate means, from time to time, the following percentages per annum, based upon the
Utilization Percentage:




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Pricing	 	Utilization	 	Eurodollar	 	 	 	 	 	Letters of	 	 
	Level
	 	Percentage	 	Rate	 	Base Rate	 	Credit	 	Commitment
	   1

	 	< 75%
	 	 	3.50	%	 	 	2.50	%	 	 	3.50	%	 	 	0.75	%
	   2

	 	> 75% but <90%
	 	 	3.75	%	 	 	2.75	%	 	 	3.75	%	 	 	0.75	%
	   3

	 	> 90%
	 	 	4.00	%	 	 	3.00	%	 	 	4.00	%	 	 	0.75	%






     Any increase or decrease in the Applicable Rate resulting from a change in the Utilization
Percentage shall become effective on the date such change occurs.



     Approved Fund means any Fund that is administered or managed by a Lender, an Affiliate of a
Lender, or an entity or an Affiliate of an entity that administers or manages a Lender.



     Approved Hedge Counterparty means (i) BP Corporation North America, Inc., which has entered
into an Approved Hedge Counterparty Swap Contract, and (ii) Royal Dutch Shell, Goldman Sachs, or
any of their respective Affiliates that enters into (A) a novation agreement or similar arrangement
with BP Corporation North America, Inc. or with any Lender or an Affiliate of a Lender and is
substituted as a counterparty for such Lender or Affiliate of a Lender under any Lender Hedging
Agreement or (B) an Approved Hedge Counterparty Swap Contract.



     Approved Hedge Counterparty Swap Contract means (i) any Lender Hedging Agreement to which the
Approved Hedge Counterparty has become a party by novation or otherwise and succeeded to the rights
and obligations of a Lender or an Affiliate of a Lender and (ii) any Swap Contract entered into by
the Approved Hedge Counterparty with a Company.



     Assignment and Assumption means an Assignment and Assumption substantially in the form of
Exhibit D.



     Assignment of First Lien Notes means those certain Assignment and Assumptions, dated of even
date herewith, between Royal Bank of Canada as administrative agent and each other lender party to
the



Borrowing Base

Credit Agreement








4









 







Prior First Lien Credit Agreement, as assignors, and Administrative Agent, as assignee, in form
and content satisfactory to Administrative Agent.




     Assignment of Midstream Notes, Liens and Security Interest means that certain Assignment of
Notes, Liens and Security Interests, dated of even date herewith, between Royal Bank of Canada, as
administrative agent and each other lender party to the Prior Midstream Credit Agreement, as
assignors, and Administrative Agent, as assignee, in form and content satisfactory to
Administrative Agent.



     Assignment of Second Lien Notes, Liens and Security Interest means that certain Assignment of
Notes, Liens and Security Interests, dated of even date herewith, between Royal Bank of Canada, as
administrative agent and each other lender party to the Prior Second Lien Credit Agreement, as
assignors, and Administrative Agent, as assignee, in form and content satisfactory to
Administrative Agent.



     Attorney Costs means and includes the reasonable fees and disbursements of any law firm or
other external counsel and the reasonable allocated cost of internal legal services and
disbursements of internal counsel.



     Attributable Indebtedness means, on any date, (a) in respect of any Capital Lease of any
Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared
as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the
capitalized amount of the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a capital lease.



     Authorizations means all filings, recordings, and registrations with, and all validations or
exemptions, approvals, orders, authorizations, consents, franchises, licenses, certificates, and
permits from, any Governmental Authority.



     Base Rate means for any day a fluctuating rate per annum equal to the greatest of (a) the
Federal Funds Rate plus one-half of one percent (0.5%), (b) the Prime Rate for such day, and (c)
the Eurodollar Rate for a one-month Interest Period on such day (or if such day is not a Business
Day, the immediately preceding Business Day) plus one and one-quarter percent (1.25%); provided
that, for the avoidance of doubt, the Eurodollar Rate for any day shall be based on the rate
appearing on the Reuters BBA Libor Rates Page 3750 (or on any successor or substitute page of such
page) at approximately 11:00 a.m. (London time) on such day. Any change in the Base Rate due to a
change in the Prime Rate, Federal Funds Rate or the Eurodollar Rate shall be effective
automatically and without notice to Borrower or any Lender on the effective date of such change in
the Prime Rate, Federal Funds Rate or Eurodollar Rate, respectively.



     Base Rate Loan means a Revolving Loan that bears interest based on the Base Rate.



     Basis Points means for one Basis Point, 1/100th of 1%.



     Bluestem means Bluestem Pipeline, LLC, a Delaware limited liability company.



     Bluestem Gathering System has the meaning specified in Preliminary Statement (5).



     Board means the Board of Governors of the Federal Reserve System of the United States.



     Borrower and Borrowers have the meanings specified in the introductory paragraph hereto.



Borrowing Base

Credit Agreement









5









 








     Borrower Affiliate means each Borrower’s respective Subsidiaries other than (i) the Excluded
Subsidiaries, (ii) KPC Pipeline, LLC, and (iii) and any Subsidiary that KPC Pipeline, LLC may
hereafter form.



     Borrowing means a borrowing consisting of simultaneous Revolving Loans of the same Type and
having the same Interest Period made by each of the Lenders pursuant to Section 2.01.



     Borrowing Base means the maximum loan amount that may be supported by the Borrowing Base Oil
and Gas Properties, as determined by the Administrative Agent and approved by the Lenders or
Required Lenders (as applicable) from time to time in accordance with Section 2.02 of this
Agreement.



     Borrowing Base Deficiency means the Total Outstandings at any time exceed the lesser of
Aggregate Revolving Commitments then in effect and the Borrowing Base then in effect.



     Borrowing Base Oil and Gas Properties means those Oil and Gas Properties of the Borrowers and
each of the other Loan Parties that are subject to the Liens created by the Collateral Documents.



     Borrowing Base Value means, with respect to any Collateral, the value attributed to such
collateral in the most recent Borrowing Base redetermination, as the loan amount that may be
supported by the Borrowing Base for such Collateral, as determined by the Administrative Agent and
approved by the Lenders or Required Lenders (as applicable) from time to time in accordance with
Section 2.02 of this Agreement; provided however that, by agreement of the parties, the Borrowing
Base Value for the Marcellus Assets equals $17,000,000.



     Borrowing Notice means a notice of (a) a Borrowing, (b) a conversion of Revolving Loans from
one Type to the other, or (c) a continuation of Revolving Loans as the same Type, pursuant to
Section 2.03(a), which, if in writing, shall be substantially in the form of Exhibit A-1 or A-2, as
applicable.



     Business Day means any day other than a Saturday, Sunday, or other day on which commercial
banks are authorized to close under the Laws of New York, or are in fact closed and, if such day
relates to any Eurodollar Rate Loan or the calculation of the Eurodollar Rate, means any such day
on which dealings in Dollar deposits are conducted by and between banks in the applicable offshore
Dollar interbank market.



     Capital Expenditure means all expenditures which, in accordance with GAAP (and including for
maintenance and growth), would be required to be capitalized and shown on the consolidating balance
sheet of Parent with reference to the Borrowers and their consolidated Subsidiaries (other than the
Excluded Subsidiaries), including expenditures in respect of Capital Leases, but excluding
expenditures made in connection with the replacement, substitution or restoration of assets to the
extent financed (a) from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (b) with awards of compensation
arising from the taking by eminent domain or condemnation of the assets being replaced. Capital
Expenditures shall include, without limitation, expenditures made in connection with acquisitions
(whether for cash or equity), drilling, gathering lines, and the maintenance or expansion of
acreage position. Capital Expenditures shall exclude capital expenditures relating to the
Borrowers’ Marcellus Assets.



     Capital Lease means any capital lease or sublease which should be capitalized on a balance
sheet in accordance with GAAP.



     Cash Adjusted Consolidated Funded Debt means, as of any date of determination, for the
Borrowers and their Subsidiaries (other than the Excluded Subsidiaries) on a consolidated basis,
the



Borrowing Base

Credit Agreement








6









 







excess of (a) Consolidated Funded Debt over (b) cash of the Borrowers and their Subsidiaries
(other than the Excluded Subsidiaries) deposited in an account with the Administrative Agent (or
another financial institution acceptable to the Administrative Agent) subject to a control
agreement in favor of the Administrative Agent or, at the Administrative Agent’s discretion, cash
of the Borrowers and their Subsidiaries (other than the Excluded Subsidiaries) reflected on
Parent’s consolidating balance sheet and otherwise subjected to a Lien in favor of the
Administrative Agent and not otherwise pledged or subject to any claim or encumbrance of any third
party.




     Cash Collateralize means to pledge and deposit with or deliver to the Administrative Agent or
Collateral Agent, for the benefit of the L/C Issuer and the Lenders and their Affiliates, as
collateral for the L/C Obligations, cash and deposit account balances pursuant to documentation in
form and substance satisfactory to the Administrative Agent and the L/C Issuer (which documents
hereby are consented to by the Lenders).



     Cash Equivalents means:




     (a) United States Dollars;




     (b) direct general obligations or obligations fully and unconditionally guaranteed as
to the timely payment of principal and interest by, the United States or any agency or
instrumentality thereof having remaining maturities of not more than thirteen (13) months,
but excluding any such securities whose terms do not provide for payment of a fixed dollar
amount upon maturity or call for redemptions;




     (c) certificates of deposit and eurodollar-time deposits with remaining maturities of
thirteen (13) months or less, bankers acceptances with remaining maturities not exceeding
one hundred eighty (180) days, overnight bank deposits and other similar short term
instruments, in each case with any domestic commercial bank having capital and surplus in
excess of $250,000,000 and having a rating of at least “A2” by Moody’s or at least “A” by
S&P;




     (d) repurchase obligations with a remaining term of not more than thirteen (13) months
for underlying securities of the types described in (b) and (c) above entered into with any
financial institution meeting the qualifications in (c) above;




     (e) commercial paper (having remaining maturities of not more than two hundred seventy
(270) days) of any Person rated “P-1” or better by Moody’s or “A-1” or the equivalent by
S&P;




     (f) money market funds that (i) comply with the criteria set forth in SEC Rule 2a-7
under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P or Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000; and




     (g) money market mutual or similar funds having assets in excess of $100,000,000, at
least 95% of the assets of which are comprised of assets specified in clause (a) through (f)
above, except that with respect to the maturities of the assets included in such funds the
requirements of clauses (a) through (f) shall not be applied to the individual assets
included in such funds but to the weighted-average maturity of all assets included in such
funds.



     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 L/C



Borrowing Base

Credit Agreement








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Issuer (or, for purposes of Section 3.04(b), by any Lending Office of such Lender
or by such Lender’s or the L/C Issuer’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.




     Change of Control means (i) Parent shall fail to own, directly or indirectly, or fail to have
voting control over, 100% of the equity interest of Borrowers or KPC Pipeline, LLC, or (ii) a
Parent Change of Control shall occur.



     Closing Date means the first date all the conditions precedent in Section 4.01 and Section
4.02 are satisfied or waived (or, in the case of Sections 4.01(e) and (f) waived by the Person
entitled to receive the applicable payment).



     Closing Date Prepayment Amount has the meaning specified in Preliminary Statement (9) hereto.



     Code means the Internal Revenue Code of 1986.



     Collateral means all property and interests in property and proceeds thereof now owned or
hereafter acquired by any Borrower and its respective Subsidiaries (other than the Excluded
Subsidiaries) in or upon which a Lien now or hereafter exists in favor of the Secured Parties, or
the Administrative Agent or Collateral Agent on behalf of the Secured Parties, including, but not
limited to the Borrowing Base Oil and Gas Properties, the Bluestem Gathering System , the KPC
Pipeline, and substantially all of the personal property (including stock and other equity
interests) of the Borrowers and their respective Subsidiaries (other than the Excluded
Subsidiaries) whether under this Agreement, the Collateral Documents, or under any other document
executed by any Borrower Affiliate or KPC Pipeline, LLC and delivered to the Administrative Agent,
Collateral Agent or any Secured Party. Collateral does not include any Excluded Assets, the
limited liability company membership interest in Eastern or the Three Little Pipes.



     Collateral Agent means Royal Bank of Canada in its capacity as collateral agent under any of
the Loan Documents, or any successor collateral agent.



     Collateral Documents means (a) each Guaranty, Security Agreement and Mortgage, and all other
security agreements, deeds of trust, mortgages, chattel mortgages, assignments, pledges,
guaranties, extension agreements and other similar agreements or instruments executed by any
Borrower, any Guarantor, or any of their respective Subsidiaries (other than the Excluded
Subsidiaries), for the benefit of the Secured Parties now or hereafter delivered to the Secured
Parties, the Administrative Agent or the Collateral Agent pursuant to or in connection with the
transactions contemplated hereby, and all financing statements (or comparable documents now or
hereafter filed in accordance with the Uniform Commercial Code or comparable Law) against the
Borrowers, any Guarantor, or any of their respective Subsidiaries (other than the Excluded
Subsidiaries), as debtor in favor of the Secured Parties, the Administrative Agent or the
Collateral Agent for the benefit of the Secured Parties, as secured party, to secure or guarantee
the payment of any part of the Obligations or the performance of any other duties and obligations
of Borrowers under the Loan Documents, whenever made or delivered, (b) any amendments, supplements,
modifications, renewals, replacements, consolidations, substitutions, restatements, continuations,
and extensions of any of the foregoing, (c) all the security documents covered by the Assignment of
First Lien Notes, Liens and Security Interests, subject to the release of any Liens prior to or
contemporaneously with the date hereof, (d) all the security documents covered by the Assignment of
Second Lien Notes, Liens
and Security Interests, subject to the release of any Liens prior to or contemporaneously with
the date hereof, and (e) all the security documents covered by the Assignment of Midstream Lien
Notes, Liens and Security Interests, subject to the release of any Liens prior to or
contemporaneously with the date hereof.



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Credit Agreement





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     Company and Companies means, on any date of determination thereof, the Borrowers and each
of the Borrower Affiliates (whether in existence on the date hereof or formed hereafter in
accordance with the terms of this Agreement).



     Compensation Period has the meaning set forth in Section 2.11(e)(ii).



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



     Consolidated EBITDA means, for any period, for the Borrowers and their Subsidiaries (other
than the Excluded Subsidiaries) on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount of taxes, based on or
measured by income, used or included in the determination of such Consolidated Net Income, (d) the
amount of depreciation, depletion and amortization expense deducted in determining such
Consolidated Net Income, (e) merger and acquisition costs required to be expensed under FAS 141(R),
(f) the amount of payments made to parties or placed in escrow, in each case during the period when
paid or placed in escrow, representing damages or settlement amounts associated with, and
attorney’s fees, court costs and other litigation expenses associated with, the litigation set
forth on Schedule 1.01A; (g) other amounts (without duplication) representing charges relating to
the fiscal quarters ended December 31, 2009, March 31, 2010, and June 30, 2010 set forth on the
Schedule 1.01B and described as “additional add-backs” thereon, in each case during the period when
the charge was incurred; and (h) other non-cash charges and expenses, including, without
limitation, non-cash charges and expenses relating to Swap Contracts or resulting from accounting
convention changes, of the Borrowers on a consolidated basis, all determined in accordance with
GAAP.



     Consolidated Funded Debt means, as of any date of determination, for the Borrowers and their
Subsidiaries (other than the Excluded Subsidiaries) on a consolidated basis, the sum of (a) the
outstanding principal amount of all obligations and liabilities, whether current or long-term, for
borrowed money (including Obligations hereunder, but excluding all reimbursement obligations
relating to outstanding but undrawn letters of credit), (b) Attributable Indebtedness pertaining to
Capital Leases, (c) Attributable Indebtedness pertaining to Synthetic Lease Obligations, and (d)
without duplication, all Guaranty Obligations with respect to Indebtedness of the type specified in
subsections (a) through (c) above.



     Consolidated Interest Charges means, for any period, for the Borrowers and their Subsidiaries
(other than the Excluded Subsidiaries) on a consolidated basis, the excess of (I) the sum of (a)
all interest, premium payments, fees, charges and related expenses of the Borrowers and their
Subsidiaries (other than the Excluded Subsidiaries) in connection with Indebtedness (net of
interest rate Swap Contract settlements) (including capitalized interest), in each case to the
extent treated as interest in accordance with GAAP, and (b) the portion of rent expense of the
Borrowers with respect to such period under Capital Leases that is treated as interest in
accordance with GAAP over (II) all interest income for such period.



     Consolidated Net Income means, for any period, for the Borrowers and their Subsidiaries (other
than the Excluded Subsidiaries) on a consolidated basis, the net income or net loss of Borrowers
and their Subsidiaries (other than the Excluded Subsidiaries) from continuing operations, provided
that there shall be excluded from such net income (to the extent otherwise included therein): (a)
the income (or loss) of any entity other than a Subsidiary in which a Borrower or one of its
Subsidiaries (other than the Excluded Subsidiaries) has an ownership interest, except to the extent
that any such income has been actually received by a Borrower or such Subsidiary in the form of
cash dividends or similar cash distributions; (b) net extraordinary gains and losses (other than,
in the case of losses, losses resulting from charges against net income to establish or increase
reserves for potential environmental liabilities and reserve for exposure under rate cases), (c)
any gains or losses attributable to non-cash write-ups or write-downs of




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9









 




assets, (d) proceeds of any insurance on property, plant or equipment other than business
interruption insurance, (e) any gain or loss net of taxes on the sale, retirement or other
disposition of assets (including the capital stock or other equity ownership of any other Person,
but excluding the sale of inventories in the ordinary course of business), and (f) the cumulative
effect of a change in accounting principles, net of taxes.




     Contractual Obligation means, as to any Person, any provision of any security issued by such
Person or of any agreement, instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.



     Credit Extension means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.



     Debtor Relief Laws means the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or
other applicable jurisdictions from time to time in effect and affecting the rights of creditors
generally.



     Default means any event that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.



     Default Rate means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate,
if any, applicable to Base Rate Loans plus (c) 2% per annum; provided, however, that with respect
to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate
(including any Applicable Rate) otherwise applicable to such Eurodollar Rate Loan plus 2% per
annum, in each case to the fullest extent permitted by applicable Laws.



     Defaulting Lender means any Lender that (a) has failed to fund any portion of the Revolving
Loans or participations in L/C Obligations required to be funded by it under this Agreement within
one Business Day of the date required to be funded by it under this Agreement, (b) has otherwise
failed to pay over to Administrative Agent or any other Lender any other amount required to be paid
by it under this Agreement within one Business Day of the date when due, unless the subject of a
good faith dispute, (c) has notified the Borrowers, the Administrative Agent or any Lender that it
does not intend to comply with its funding obligations or has made a public statement to that
effect with respect to its funding obligations hereunder or generally under other agreements in
which it commits to extend credit; (d) has failed, within three Business Days after request by the
Administrative Agent, to confirm in a manner satisfactory to the Administrative Agent that it will
comply with its funding obligations hereunder; or (e) has, or has a direct or indirect parent
company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had a
receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar
Person charged with reorganization or liquidation of its business or a custodian appointed for it,
or (iii) taken any action in furtherance of, or indicated its consent to, approval of or
acquiescence in any such proceeding or appointment; provided that a Lender shall not be a
Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that
Lender or any direct or indirect parent company thereof by a Governmental Authority.



     Disposition or Dispose means the sale (excluding the sale of inventory in the ordinary course
of business), transfer, license or other disposition (including any sale and leaseback transaction)
of any property (including stock, partnership and other equity interests) by any Person of property
owned by such Person, including any sale, assignment, transfer or other disposal, with or without
recourse, of any notes or accounts receivable or any rights and claims associated therewith. For
the avoidance of doubt, a Restricted Payment is not a Disposition.



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     Dollar and $ means lawful money of the United States.



     Domestic Person means any corporation, general partnership, limited partnership, limited
liability partnership, or limited liability company that is organized under the laws of the United
States or any state thereof or the District of Columbia.



     Eastern means Quest Eastern Resource LLC.



     Eligible Assignee means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and
(d) any other Person (other than a natural Person) approved by the Administrative Agent and, unless
an Event of Default has occurred and is continuing, the Borrowers (neither the Administrative
Agent’s nor the Borrowers’ approval to be unreasonably withheld, conditioned or delayed); provided
that notwithstanding the foregoing, “Eligible Assignee” shall not include White Deer Energy, any
Borrower, any PostRock Party, or any of their respective Affiliates or Subsidiaries.



     Environmental Law means any applicable Law that relates to (a) the condition or protection of
air, groundwater, surface water, soil, or other environmental media, (b) the environment, including
natural resources or any activity which affects the environment, (c) the regulation of any
pollutants, contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
§9601 et seq.) (“CERCLA”), the Clean Air Act (42 U.S.C. § 7401 et seq.), the Federal Water
Pollution Control Act, as amended by the Clean Water Act (33 U.S.C. § 1251 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. § 136 et seq.), the Emergency Planning and
Community Right to Know Act of 1986 (42 U.S.C. § 1100 1 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. § 1801 et seq.), the National Environmental Policy Act of 1969 (42
U.S.C. § 4321 et seq.), the Oil Pollution Act (33 U.S.C. § 2701 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. § 6901 et seq.), the Rivers and Harbors Act (33 U.S.C. §401 et seq.),
the Safe Drinking Water Act (42 U.S.C. § 201 and § 300f et seq.), the Solid Waste Disposal Act, as
amended by the Resource Conservation and Recovery Act of 1976 and the Hazardous and Solid Waste
Amendments of 1984 (42 U.S.C. § 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. § 2601
et seq.), and analogous state and local Laws, as any of the foregoing may have been and may be
amended or supplemented from time to time, and any analogous enacted or adopted Law, or (d) the
Release or threatened Release of Hazardous Substances.



     ERISA means the Employee Retirement Income Security Act of 1974 and any regulations issued
pursuant thereto.



     ERISA Affiliate means any trade or business (whether or not incorporated) under common control
with the Borrowers within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and
(o) of the Code for purposes of provisions of this Agreement relating to obligations imposed under
Section 412 of the Code).



     ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by
the Borrowers or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a
plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a
cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a
complete or partial withdrawal by the Borrowers or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent
to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer
Plan; (e) an event or condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan or



Borrowing Base
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Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than
PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrowers or any ERISA
Affiliate.




     Eurodollar Rate means for any Interest Period with respect to any Eurodollar Rate Loan, a rate
per annum described below:




     (a) the rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on the page of the LIBOR I screen (or any successor thereto)
that displays an average British Bankers Association Interest Settlement Rate for deposits
in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or




     (b) if the rate referenced in the preceding subsection (a) is not available, the rate
per annum determined by the Administrative Agent as the rate of interest (rounded upward to
the next 1/100th of 1%) at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan
being made, continued or converted by the Administrative Agent and with a term equivalent to
such Interest Period would be offered by the Administrative Agent’s London Branch to major
banks in the offshore Dollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period.



     Eurodollar Rate Loan means a Revolving Loan that bears interest at a rate based on the
Eurodollar Rate.



     Event of Default means any of the events or circumstances specified in Article VIII.



     Evergreen Letter of Credit has the meaning specified in Section 2.14(b)(iii).



     Excluded Assets means any contracts, agreements or permits as to which the granting of a
security interest in same would cause a default, termination or penalty thereunder or under any
applicable requirement of a Governmental Authority.



     Excluded Subsidiaries means collectively, (i) Eastern and any Subsidiary of Eastern that
Eastern may form after the date of this Agreement; and (ii) any Subsidiary of Parent that Parent
may form after the date of this Agreement that is not also a Subsidiary of a Borrower.



     Existing Letter of Credit means that certain standby letter of credit no. 1185/S24044 issued
by Royal Bank of Canada to Cullen Allen Holdings, L.P., as beneficiary, for the account of
MidContinent, f/k/a Bluestem Pipeline, LLC, in the face amount of $31,151.75 having an expiration
date of March 11, 2011.



     FA Costs means and includes the reasonable fees and disbursements of any financial advisory or
consulting firm to Lenders or the Administrative Agent.



     Facility means, prior to the date of this Agreement, the term loan credit facility under this
Agreement, and on and after the date of this Agreement, the revolving credit facility as described
in and subject to the limitations set forth in Section 2.01.



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     Federal Funds Rate means, for any day, the rate per annum (rounded upwards to the nearest
1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank on the Business Day next succeeding such day; provided that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent on
such day on such transactions as determined by the Administrative Agent.



     Foreign Lender means any Lender that is organized under the laws of a jurisdiction other than
that in which the Borrowers are resident for tax purposes. For purposes of this definition, the
United States, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.



     Fund means any Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business.



     G&A Formula means the Modified Massachusetts Formula, which establishes a three-part factor
using assets, payroll (labor/headcount), and revenue to allocate general and administrative
expenses. The G&A Formula will be adjusted annually subsequent to Parent’s annual audit and
applied to the entire year following such audit. For the remainder of 2010, general and
administrative expenses will be allocated based on the G&A formula for the first seven months of
2010. The applicable percentages are 2.4% to Eastern; 15.5% to KPC Pipeline, LLC and 82.1% to
PESC.



     GAAP means generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting Standards Board and the
Public Company Accounting Oversights Board or such other principles as may be approved by a
significant segment of the accounting profession, that are applicable to the circumstances as of
the date of determination, consistently applied. If at any time any change in GAAP would affect
the computation of any financial ratio or requirement set forth in any Loan Document, and either
the Borrowers or the Required Lenders shall so request, the Administrative Agent, the Lenders and
the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein and (b) the Borrowers shall provide
to the Administrative Agent and the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to such change in
GAAP.



     General Partner means Quest Energy GP, LLC, a Delaware limited liability company, the sole
general partner of the MLP prior to the Recombination, which in connection with the Recombination
was merged into MLP after the MLP had been converted to a limited liability company and its general
partner interest in the MLP cancelled for no consideration.



     Governmental Authority means any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative
tribunal, central bank or other legal entity exercising executive, legislative, judicial, taxing,
regulatory or administrative powers or functions of or pertaining to government.



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     Guarantors means Parent and every present and future Subsidiary of the Borrowers (other than
the Excluded Subsidiaries and KPC Pipeline, LLC and any Subsidiary it may hereafter form), which
undertakes to be liable for all or any part of the Obligations by execution of a Guaranty.



     Guaranty means a Guaranty now or hereafter made by any Guarantor in favor of the
Administrative Agent on behalf of the Lenders, including the Parent Guaranty, each in form and
substance acceptable to the Administrative Agent.



     Guaranty Obligation means, as to any Person, (a) any obligation, contingent or otherwise, of
such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other
payment obligation of another Person (the “primary obligor”) in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness or other payment
obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring
the obligee in respect of such Indebtedness or other payment obligation of the payment of such
Indebtedness or other payment obligation, (iii) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other payment obligation, or (iv) entered into for the purpose
of assuring in any other manner the obligees in respect of such Indebtedness or other payment
obligation of the payment thereof or to protect such obligees against loss in respect thereof (in
whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other
payment obligation of any other Person, whether or not such Indebtedness or other payment
obligation is assumed by such Person; provided, however, that the term “Guaranty Obligation” shall
not include endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty Obligation shall be deemed to be the lesser of (a) an amount
equal to the stated or determinable outstanding amount of the related primary obligation and (b)
the maximum amount for which such guaranteeing Person may be liable pursuant to the terms of the
instrument embodying such Guaranty Obligation, unless the outstanding amount of such primary
obligation and the maximum amount for which such guaranteeing Person may be liable are not stated
or determinable, in which case the amount of such Guaranty Obligation shall be the maximum
reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in
good faith.



     Hazardous Substance means any substance that poses a threat to, or is regulated to protect,
human health, safety, public welfare, or the environment, including without limitation: (a) any
“hazardous substance,” “pollutant” or “contaminant,” and any “petroleum” or “natural gas liquids”
as those terms are defined or used under Section 101 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended ( 42 U.S.C. §§ 9601 et seq.) (CERCLA), (b)
“solid waste” as defined by the federal Solid Waste Disposal Act (42 U. S.C. § § 6901 et seq.), (c)
asbestos or a material containing asbestos, (d) any material that contains lead or lead-based
paint, (e) any item or equipment that contains or is contaminated by polychlorinated biphenyls, (f)
any radioactive material, (g) urea formaldehyde, (h) putrescible materials, (i) infectious
materials, (j) toxic microorganisms, including mold, or (k) any substance the presence or Release
of which requires reporting, investigation or remediation under any Environmental Law.



     Honor Date has the meaning set forth in Section 2.14(c)(i).



     Hydrocarbons means crude oil, condensate, natural gas, natural gas liquids, coal bed methane
and other hydrocarbons and all products refined or separated therefrom.



     Indebtedness means, as to any Person at a particular time, all of the following:



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     (a) all obligations of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;




     (b) the face amount of all letters of credit (including standby and commercial),
banker’s acceptances, surety bonds, and similar instruments issued for the account of such
Person, and, without duplication, all drafts drawn and unpaid thereunder;




     (c) whether or not so included as liabilities in accordance with GAAP, all obligations
of such Person to pay the deferred purchase price of property or services, other than trade
accounts payable in the ordinary course of business not overdue by more than 90 days, and
Indebtedness of others (excluding prepaid interest thereon) secured by a Lien on property
owned or being purchased by such Person, whether or not such Indebtedness shall have been
assumed by such Person or is limited in recourse;




     (d) all obligations of such Person under conditional sales or other title retention
agreements relating to property acquired by such Person;




     (e) Capital Leases and Synthetic Lease Obligations of such Person; and




     (f) all Guaranty Obligations of such Person in respect of any of the foregoing.



     For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general partner, unless such Indebtedness is
expressly made non-recourse to such Person except for customary exceptions acceptable to the
Required Lenders. The amount of any Capital Lease or Synthetic Lease Obligation as of any date
shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.
In addition, the determination of Indebtedness of the Borrowers and/or their Subsidiaries (other
than the Excluded Subsidiaries) shall be made on a consolidated basis without taking into account
any Indebtedness owed by any such Person to any other such Person.



     Indemnified Liabilities has the meaning set forth in Section 10.05.



     Indemnitees has the meaning set forth in Section 10.05.



     Intercreditor Agreement means that certain Second Amended and Restated Intercreditor and
Collateral Agency Agreement, dated of even date herewith, among Borrowers, KPC Pipeline, LLC, Royal
Bank of Canada, as administrative agent and collateral agent for the Lenders under this Agreement,
Royal Bank of Canada, as administrative agent and lenders party to the credit agreement governing
the Secured Pipeline Loan, Royal Bank of Canada, as collateral agent, and any Approved Hedge
Counterparty, which at all times shall provide that (i) no Approved Hedge Counterparty has any
voting rights under any Loan Document as a result of the existence of obligations owed to it under
any Approved Hedge Counterparty Swap Contract and (ii) each Approved Hedge Counterparty has a pro
rata vote in connection with any action or proposed action to enforce any Lien upon any Collateral.



     Interest Coverage Ratio means for any four quarter period and as of any determination date, as
calculated based on the quarterly Compliance Certificate most recently delivered pursuant to
Section 6.02(a) for the Borrowers, the ratio of (a) Adjusted Consolidated EBITDA for such trailing
four quarter period ending on the determination date to (b) Consolidated Interest Charges for such
four quarter period.



     Interest Payment Date means, (a) as to any Revolving Loan other than a Base Rate Loan, the
last day of each Interest Period applicable to such Revolving Loan; provided, however, that if any
Interest



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Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every
three months after the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and
the Maturity Date.




     Interest Period means, as to each Eurodollar Rate Loan, the period commencing on the date such
Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending
on the date one, two, three or six months thereafter, as selected by the applicable Borrower (and
in the case of the initial Borrowing Notice, by PESC) in its Borrowing Notice; provided that:




     (i) any Interest Period that would otherwise end on a day that is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next preceding
Business Day;




     (ii) any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of the calendar month at the end of such Interest Period; and




     (iii) no Interest Period shall extend beyond the Maturity Date.



     Investment means, as to any Person, any acquisition or investment by such Person, whether by
means of (a) the purchase or other acquisition of capital stock or other securities of another
Person, (b) a loan, advance or capital contribution to, guaranty of Indebtedness of, or purchase or
other acquisition of any other Indebtedness or equity participation or interest in, another Person,
including any partnership or joint venture interest in such other Person, or (c) the purchase or
other acquisition (in one transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of any Investment shall
be the amount actually invested, without adjustment for subsequent increases or decreases in the
value of such Investment, less all returns of principal or equity thereon, and shall, if made by
the transfer or exchange of property other than cash be deemed to have been made in an amount equal
to the fair market value of such property.



     IRS means the United States Internal Revenue Service.



     ISDA means the International Swaps and Derivatives Association, Inc



     KPC Lenders means the lenders party to the Secured Pipeline Loan.



     KPC Pipeline means an approximate 1,120 mile interstate natural gas pipeline, gathering
systems, processing facilities and related assets located in the States of Kansas, Oklahoma and
Missouri.



     KPC Pipeline, LLC means PostRock KPC Pipeline, LLC, a Delaware limited liability company and
owner of the KPC Pipeline.



     Laws means, collectively, all applicable international, foreign, federal, state and local
statutes, treaties, rules, regulations, ordinances, codes and administrative or judicial precedents
or authorities, including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, licenses, authorizations and permits of, any Governmental
Authority.



     L/C Advance means, with respect to each Lender, such Lender’s participation in any L/C
Borrowing in accordance with its Pro Rata Share.



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     L/C Borrowing means an extension of credit resulting from a drawing under any Letter of Credit
which has not been reimbursed on the date when made or refinanced as a Borrowing.



     L/C Credit Extension means, with respect to any Letter of Credit, the issuance thereof or
extension of the expiry date thereof, or the renewal or increase of the amount thereof.



     L/C Issuer means Royal Bank of Canada in its capacity as issuer of Letters of Credit
hereunder, or any successor issuer of Letters of Credit hereunder which is a Lender or an Affiliate
of a Lender.



     L/C Obligations means, as at any date of determination, the aggregate undrawn face amount of
all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C
Borrowings.



     Leases means oil and gas leases and all oil, gas and mineral leases constituting any part of
the Borrowing Base Oil and Gas Properties.



     Lender and Lenders have the meanings specified in the introductory paragraph hereto and, as
the context requires, includes the L/C Issuer.



     Lender Hedging Agreement means (i) a Swap Contract between a Company and a Lender or an
Affiliate of a Lender and (ii) an Approved Hedge Counterparty Swap Contract.



     Lending Office means, as to any Lender, the office or offices of such Lender set forth on its
Administrative Details Form, or such other office or offices as a Lender may from time to time
notify the Borrower and the Administrative Agent.



     Letter of Credit means the Existing Letter of Credit and any standby letter of credit issued
hereunder.



     Letter of Credit Application means an application and agreement for the issuance or amendment
of a letter of credit in the form from time to time in use by the L/C Issuer.



     Letter of Credit Expiration Date means the fifth Business Day prior to the Maturity Date.



     Letter of Credit Sublimit means an amount equal to the lesser of (i) the Aggregate Revolving
Commitment and (ii) $26,000,000.



     Leverage Ratio means, for the Borrowers on a consolidated basis, the ratio, as calculated
based on the quarterly Compliance Certificate most recently delivered pursuant to Section 6.02(a),
of (a) Cash Adjusted Consolidated Funded Debt as of the determination date to (b) Adjusted
Consolidated EBITDA for the four (4) fiscal quarters ending on the applicable determination date.



     Lien means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), charge, or preference, priority or other security interest or
preferential arrangement of any kind or nature whatsoever to secure or provide for payment of any
obligation of any Person (including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or comparable Laws of any
jurisdiction, other than any financing statement filed as a notice filing), including the interest
of a purchaser of accounts receivable.



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     Loan Documents means this Agreement, each Revolving Note, each of the Collateral Documents,
each Borrowing Notice, each Compliance Certificate, the Guaranties, each Letter of Credit
Application, and each other agreement, document or instrument delivered by any Loan Party or any of
their respective Subsidiaries from time to time in connection with this Agreement and the Revolving
Notes.



     Loan Party means each of the Borrowers, each Guarantor, and each other entity that is an
Affiliate of the Borrowers that executes one or more Loan Documents. For the avoidance of doubt,
the term “Loan Party” does not include any Excluded Subsidiary.



     Marcellus Assets means the producing Marcellus shale gas properties owned by MidContinent and
located in New York and West Virginia that constitute part of the Borrowing Base Oil and Gas
Properties that were initially acquired by Eastern from PetroEdge Resource (WV) LLC and transferred
to Quest Cherokee by Eastern and acquired by MidContinent by merger.



     Marcellus Gathering System means that portion of the gathering system relating to the
Marcellus Assets that is owned by Eastern.



     Marketable Title means good and indefeasible title, free and clear of all Liens other than
Permitted Liens.



     Material Acquisition means any acquisition of Oil and Gas Properties or series of related
acquisitions of Oil and Gas Properties that involves the payment of consideration (including,
without limitation, the issuance of equity) by any Borrower and its Subsidiaries in excess of five
percent (5%) of the then current Borrowing Base.



     Material Adverse Effect means: (a) a material adverse change in, or a material adverse effect
upon, the operations, business, properties or financial condition of the Borrowers and their
Subsidiaries (other than the Excluded Subsidiaries) taken as a whole; (b) a material adverse effect
on the ability of any Loan Party to perform its obligations under the Loan Documents to which it is
a party; (c) a material adverse effect upon the legality, validity, binding effect or
enforceability against a Borrower or any other Loan Party of any Loan Documents; or (d) a material
adverse change in, or a material adverse effect upon, the Borrowing Base Oil and Gas Properties,
taken as a whole, excluding changes in commodity prices; provided however, that with respect to
each case described in (a)-(d), Material Adverse Effect shall take into account the impact of the
White Deer Energy Investment and any White Deer Energy Additional Investment and the closing of the
transactions occurring contemporaneously with this Agreement and shall exclude events that have
been the subject of public filings of Parent prior to the date of this Agreement or of which
Lenders otherwise have knowledge as of the date of this Agreement.



     Material Agreements means the following: (a) the Organization Documents of MidContinent; and
(b) the Organization Documents of PESC and any agreement or agreements entered into in replacement
or substitution of any of the foregoing.



     Material Disposition means any sale, transfer or other disposition of Borrowing Base Oil and
Gas Properties or other Collateral (other than the Marcellus Assets) or series of related sales,
transfers or other dispositions of Borrowing Base Oil and Gas Properties that yields gross proceeds
to the Borrowers or their respective Subsidiaries in excess of five percent (5%) of the then
current Borrowing Base or, if other Collateral, has a Borrowing Base Value in excess of five
percent (5%) of the then current Borrowing Base.



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     Maturity Date means the earliest of (a) June 30, 2013, (b) the date of any refinancing of the
credit facility set forth in this Agreement; or (c) the effective date of any other termination,
cancellation, or acceleration of the Aggregate Revolving Commitment under this Agreement.



     Maximum Amount and Maximum Rate respectively mean, for each Lender, the maximum non-usurious
amount and the maximum non-usurious rate of interest which, under applicable Law, such Lender is
permitted to contract for, charge, take, reserve, or receive on the Obligations.



     Midstream Businesses means gathering, transportation, fractionation, processing, marketing,
and storage of natural gas, crude oil, natural gas liquids and other liquid and gaseous
hydrocarbons and businesses closely related to the foregoing.



     Midstream General Partner means Quest Midstream GP, LLC, a Delaware limited liability company,
the sole general partner of the Midstream MLP prior to the Recombination, which in connection with
the Recombination was merged into Quest Midstream Acquisition, LLC and its general partner interest
in the Midstream MLP cancelled.



     Midstream Lenders has the meaning set forth in Preliminary Statement ( 6).



     Midstream MLP means PostRock Midstream, LLC, a Delaware limited liability company, which has,
as part of the Restructure Transactions, been merged into PESC.



     Misappropriation Transaction collectively means the alleged series of unauthorized fund
transfers occurring over a multi-year period initiated by the former chairman and chief executive
officer (“CEO”) of Quest Cherokee (now known as MidContinent) whereby funds of the MLP, Quest
Cherokee or one or more of their Subsidiaries were transferred to an entity controlled by the
former CEO and periodically repaid but in such a manner that the transactions were not timely
discovered and over time resulted in the former CEO having allegedly misappropriated and converted
to his personal use, approximately $10 million.



     MLP means QELP as identified in Preliminary Statement (1).



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



     Mortgaged Properties means collectively all the Mortgaged Property as defined in the Mortgages
and Mortgaged Property individually means any one of such Mortgaged Properties.



     Mortgages means the mortgages, deeds of trust, or similar instruments executed by any of the
Loan Parties in favor of Administrative Agent or Collateral Agent, for the benefit of the Secured
Parties, including the Mortgages creating a first lien on the Borrowing Base Oil and Gas Properties
and the Bluestem Gathering System and the Mortgages creating a second lien on the KPC Pipeline, and
all supplements, assignments, amendments, and restatements thereto (or any agreement in
substitution therefor, and Mortgage means each of such Mortgages).



     Multiemployer Plan means any employee benefit plan of the type described in Section 4001(a)(3)
of ERISA, to which the Borrowers or any ERISA Affiliate makes or is obligated to make
contributions, or during the preceding three calendar years, has made or been obligated to make
contributions.



     Net Available Cash from a Disposition means cash payments received (including any cash
payments received by way of deferred payment of principal pursuant to a note or installment
receivable or



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otherwise and net proceeds from the Disposition of any securities received as consideration,
but only as and when received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating to the properties
or assets that are the subject of such Disposition or received in any other non-cash form)
therefrom, in each case net of:




     (1) all legal, accounting, investment banking, title and recording tax expenses, commissions
and other fees and expenses incurred including, without limitation, the commission to be paid to
Robert W. Baird & Company under a contract with Parent in which Robert W. Baird & Company is to
solicit bids for a sale of the Marcellus Assets (or 100% of the equity of Eastern), and all
federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability
under GAAP (after taking into account any available tax credits or deductions and any tax sharing
agreements), as a consequence of such Disposition;



     (2) all payments made on any Indebtedness (other than the Indebtedness governed by this
Agreement and the other Loan Documents) which is secured by any assets subject to such Disposition,
in accordance with the terms of any Lien upon such assets, or which must by its terms, or in order
to obtain a necessary consent to such Disposition, or by applicable Law be repaid out of the
proceeds from such Disposition;



     (3) all distributions and other payments required to be made to minority interest holders in
Subsidiaries or joint ventures or to holders of royalty or similar interests as a result of such
Disposition; and



     (4) the deduction of appropriate amounts to be provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the assets Disposed of in such
Disposition and retained by the Borrowers or any of their respective Subsidiaries after such
Disposition.



     Nonrenewal Notice Date has the meaning specified in Section 2.14(b)(iii).



     Obligations means all advances to, and debts, liabilities, obligations, covenants and duties
of, any Loan Party arising under any Loan Document, whether direct or indirect (including those
acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter
arising and including interest that accrues after the commencement by or against any Loan Party of
any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding. In
addition, all references to the “Obligations” in the Collateral Documents and in Sections 2.13 and
10.09 of this Agreement shall, in addition to the foregoing, also include all present and future
indebtedness, liabilities, and obligations (and all renewals and extensions thereof or any part
thereof) now or hereafter owed to any Lender or any Affiliate of a Lender arising pursuant to any
Lender Hedging Agreement and all present and future indebtedness, liabilities, and obligations (and
all renewals and extensions thereof or any part thereof) now or hereafter owed to the Approved
Hedge Counterparty arising pursuant to any Approved Hedge Counterparty Swap Contract.



     Obligor means the Borrowers and any other Person (other than the Administrative Agent,
Collateral Agent or any Lender) obligated under any Loan Document.



     Oil and Gas Properties means fee, leasehold or other interests in or under mineral estates or
Hydrocarbon leases with respect to properties situated in the United States, including overriding
royalty and royalty interests, leasehold estate interests, net profits interests, production
payment interests and mineral fee interests, together with contracts executed in connection
therewith and all tenements, hereditaments, appurtenances and properties, real or personal,
appertaining, belonging, affixed or incidental thereto.



Borrowing Base
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     Organization Documents means, (a) with respect to any corporation, the certificate or articles
of incorporation and the bylaws; (b) with respect to any limited liability company, the certificate
of formation and operating agreement; and (c) with respect to any partnership, joint venture, trust
or other form of business entity, the partnership, joint venture or other applicable agreement of
formation and any agreement, instrument, filing or notice with respect thereto filed in connection
with its formation with the secretary of state or other department in the state of its formation,
in each case as amended from time to time.



     Other Taxes has the meaning specified in Section 3.01(b).



     Outstanding Amount on any date (i) with respect to Revolving Loans, means the aggregate
principal amount thereof after giving effect to any Borrowings and prepayments or repayments
occurring on such date, (ii) with respect to any L/C Obligations, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and
any other changes in the aggregate amount of the L/C Obligations as of such date, including as a
result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any
reductions in the maximum amount available for drawing under Letters of Credit taking effect on
such date, and (iii) for purposes of Section 2.11(d) with respect to Obligations under a Lender
Hedging Agreement, means the amount then due and payable under such Lender Hedging Agreement.



     Parent means PostRock Energy Corporation, a Delaware corporation.



     Parent Change of Control means any Person or two or more Persons acting in concert (other than
White Deer Energy or its Affiliates) acquires beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of more
than 50% of the outstanding shares of, and warrants relating to ,Voting Stock of Parent; provided,
however, that a merger of Parent into another entity in which the other entity is the survivor
shall not be deemed a Parent Change of Control, if Parent’s stockholders of record as constituted
immediately prior to such acquisition hold more than 50% of the outstanding shares of, and warrants
relating to, Voting Stock of the surviving entity; and provided further however, that in no event
will the issuance of new equity by Parent constitute a Parent Change of Control.



     Parent Guaranty means the Guaranty, dated of even date herewith, executed by Parent for the
benefit of the Lenders.



     Participant has the meaning specified in Section 10.07(d).



     PBGC means the Pension Benefit Guaranty Corporation.



     Pension Plan means any “employee pension benefit plan” (as such term is defined in Section
3(2)(A) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is
sponsored or maintained by the Borrowers or any ERISA Affiliate or to which the Borrowers or any
ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five plan years.



     Permitted Liens means Liens permitted under Section 7.01 as described in such Section.



     Permitted Acquisition means any Acquisition by a Borrower or any of its Subsidiaries (other
than the Excluded Subsidiaries) resulting in ownership of assets inside the United States, or of
equity interests



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in a Domestic Person or a non-Domestic Person whose business operations and assets are located
in the U.S.; provided, however, that the following requirements have been satisfied:





     (i) if such Acquisition results in a Borrower’s ownership of a Subsidiary, the Borrower
shall have complied with the requirements of Sections 6.14 and 6.15 as of the date of such
Acquisition;




     (ii) with respect to Acquisitions involving acquisitions of an equity interest, such
Acquisition shall have been approved or consented to by the board of directors or similar
governing entity of the Person being acquired; and




     (iii) as of the closing of such Acquisition no Default or Event of Default shall exist
or occur as a result of, and after giving effect to, such Acquisition.



     Person means any individual, trustee, corporation, general partnership, limited partnership,
limited liability company, joint stock company, trust, unincorporated organization, bank, business
association, firm, joint venture or Governmental Authority.



     Plan means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA)
established by the Borrower or any ERISA Affiliate.



     PostRock Party means Parent or any direct or indirect Subsidiary of Parent.



     Preferred Dividend means the dividend required to be paid to White Deer Energy by Parent,
whether in cash or in kind, by reason of the White Deer Energy Investment.



     Prime Rate means for any day, the rate of interest in effect for such day as publicly
announced from time to time by the Administrative Agent as its U.S. “prime rate.” Such rate is a
rate set by the Administrative Agent based upon various factors including the Administrative
Agent’s costs and desired return, general economic conditions and other factors, and is used as a
reference point for pricing some loans, which may be priced at, above, or below such announced
rate.



     Prior Credit Agreements has the meaning specified in Preliminary Statement (6) hereto.



     Prior First Lien Credit Agreement has the meaning specified in Preliminary Statement (2)
hereto.



     Prior Midstream Credit Agreement has the meaning specified in Preliminary Statement (6)
hereto.



     Prior Second Lien Credit Agreement has the meaning specified in Preliminary Statement (4)
hereto.



     Pro Rata Share means with respect to each Lender, at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of which is the amount of the
Revolving Commitment of such Lender at such time and the denominator of which is the amount of the
Aggregate Revolving Commitments at such time; provided that if the Revolving Commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be determined
based on the Pro Rata Share of such Lender immediately prior to such termination and after giving
effect to any subsequent assignments made pursuant to Section 10.07. The initial Pro Rata Share of
each Lender is set out



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opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable.




     Proved Developed Producing Reserves means Proved Reserves which are categorized as both
"Developed” and “Producing” in the Definitions for Oil and Gas reserves promulgated by the Society
of Petroleum Engineers (or any generally recognized successor) as in effect at the time in
question.



     Proved Reserves means Proved Reserves as defined in the Definitions for Oil and Gas reserves
promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in
effect at the time in question.



     PV10 means the present worth of future net income, discounted to present value at the simple
interest rate of ten percent (10%) per year.



     Quest Cherokee means Quest Cherokee, LLC, which has merged into Bluestem with Bluestem being
the survivor and being now known as MidContinent.



     QRC has the meaning specified in Preliminary Statement (1).



     QRC Credit Agreement means the Second Amended and Restated Credit Agreement, dated November
15, 2007, among Quest Resource Corporation, the QRC Subsidiaries (as defined therein, and RBC.



     RBC means Royal Bank of Canada.



     Recombination means the transactions specified in the Recombination Agreement, pursuant to
which the equity owners of QRC, the MLP and QMLP exchanged their equity in such entities for equity
in Parent.



     Recombination Agreement means that certain Agreement and Plan of Merger, dated as of July 2,
2009, among Parent, QRC, QMLP, MLP, QMLPGP, the General Partner, Quest Resource Acquisition Corp.,
Quest Energy Acquisition, LLC, Quest Midstream Holdings Corp. and Quest Midstream Acquisition, LLC,
as the same may be amended, modified or waived from time to time in accordance with Section 7.14,
pursuant to which the Recombination was consummated.



     Reference Period has the meaning set forth in Section 7.16.



     Register has the meaning set forth in Section 10.07(c).



     Reinvested means used for capital expenditures or Acquisitions in connection with the
Midstream Businesses of a Company or the exploration, production and marketing of Hydrocarbons and
related activities.



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



     Release means any spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, dumping, disposal, deposit, dispersal, migrating, or other movement
into the air, ground, or surface water, or soil.



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     Repayment Notice means a notice of repayment of a Borrowing pursuant to Section 2.04(a),
which, if in writing, shall be substantially in the form of Exhibit A-3.



     Reportable Event means any of the events set forth in Section 4043(c) of ERISA, other than
events for which the 30 day notice period has been waived.



     Request for Credit Extension means (a) with respect to a Borrowing, conversion or continuation
of Revolving Loans, a Borrowing Notice, and (b) with respect to an L/C Extension, a Letter of
Credit Application.



     Required Lenders means, as of any date of determination, Lenders having more than 66+2/3% of
the Aggregate Revolving Commitments or, if the Revolving Commitment of each Lender to make
Revolving Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been
terminated pursuant to Section 8.02, Lenders holding in the aggregate more than 66+2/3% of the
Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded
participation in L/C Obligations being deemed “held” by such Lender for purposes of this
definition); provided that the Revolving Commitment of, and the portion of the Total Outstandings
held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.



     Reserve Report means a report regarding the Proved Reserves attributable to the Borrowing Base
Oil and Gas Properties, using the criteria and parameters required by and acceptable to the
Securities and Exchange Commission and incorporating the present cost of appropriate plugging and
abandonment obligations to be incurred in the future, taking into account any plugging and
abandonment fund required to be accrued or established by Borrowers out of cash flow from the
Borrowing Base Oil and Gas Properties covered by such report with respect to such future
obligations.



     Responsible Officer means the president, chief executive officer, executive vice president,
senior vice president, vice president, chief financial officer, controller, treasurer or assistant
treasurer of a Person. Any document delivered hereunder that is signed by a Responsible Officer of
a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate,
partnership, limited liability company, and/or other action on the part of such Loan Party and such
Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.



     Restricted Payment by a Person means any dividend or other distribution (whether in cash,
securities or other property) with respect to any equity interest in such 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 interest or of any option, warrant or other right to acquire any such equity interest.



     Restructure Transactions means the series of corporate transactions involving PESC and
Affiliates of PESC concluding on the date of this Agreement that includes the amendment of the
relevant Organization Documents and the amendment or termination of various Material Agreements
that relate to the entities and their intercompany transactions or are impacted by such corporate
transactions, including the following: (i) PESC Corporation converts to a Delaware close
corporation; (ii) Quest Transmission Company, LLC conveys the Three Little Pipes to Bluestem
(provided timely approval to do so is obtained from the Kansas Corporation Commission); (iii) Quest
Transmission Company, LLC is merged into PostRock Midstream, LLC; (iv).Quest Pipelines (KPC)
converts to a Delaware limited liability company named “PostRock KPC Pipeline, LLC,” which is KPC
Pipeline, LLC, a grantor of a mortgage hereunder; (v) Quest Kansas Pipeline, L.L.C. and Quest
Kansas General Partner, L.L.C. are merged into KPC Pipeline, LLC; (vi) Quest Energy Service, LLC,
Quest Mergersub, Inc., Energy & Midstream Partners JV, LLC and Quest Midstream Holdings Corp. are
each merged into PESC; (vii). MidContinent is



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merged into Quest Cherokee, Quest Cherokee survives, and the EIN remains that of Quest
Cherokee; (viii) Quest Cherokee Oilfield Service, LLC and PostRock Midstream, LLC are each merged
into PESC; (ix) Quest Oil & Gas, LLC is merged into Quest Cherokee; (x) Bluestem conveys all
vehicles and equipment to PESC; (x) Quest Cherokee merges into Bluestem, Bluestem’s EIN remains,
and Bluestem takes the name “PostRock MidContinent Production, LLC” which entity is one of the
Borrowers hereunder; and (xi) the White Deer Energy Investment in Parent occurs.




     Revolving Commitment means, as to each Lender, its obligation to (a) make Revolving Loans to
Borrower pursuant to Section 2.01, and (b) purchase participations in L/C Obligations, in an
aggregate principal amount at any one time outstanding not to exceed the lesser of (i) the amount
set out opposite such Lender’s name on Schedule 2.01, or in the Assignment and Assumption pursuant
to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from
time to time in accordance with this Agreement and (ii) such Lender’s Pro Rata Share of the
Borrowing Base then in effect.



     Revolving Loan means an extension of revolving credit by a Lender to the Borrowers pursuant to
Section 2.01, which prior to the date of this Agreement had been converted to a term loan, which
term loan shall be automatically converted to a revolving loan.



     Revolving Note means a revolving promissory note of the Borrowers in substantially the form of
Exhibit B, evidencing the obligation of Borrowers to repay the Revolving Loans and all renewals and
extensions of all or any part thereof and “Revolving Notes” collectively means all of such
promissory notes.



     Rights means rights, remedies, powers, privileges, and benefits.



     S&P means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc.



     Secured Parties means the Lenders party to this Agreement, the Lenders and/or any Affiliate of
a Lender party to a Lender Hedging Agreement and the Approved Hedge Counterparty party to an
Approved Hedge Counterparty Swap Contract. The term “Secured Parties” shall include a former
Lender or an Affiliate of a former Lender that is party to a Swap Contract with any Borrower or
Borrower Affiliate; provided that such former Lender or Affiliate was a Lender or an Affiliate of a
Lender at the time it entered into such Swap Contract.



     Secured Pipeline Loan means the term loan facility in the amount of $15,000,000 entered into
of even date herewith by KPC Pipeline, LLC and PESC, as borrowers, and RBC as administrative agent
for the lenders party thereto, secured by a first lien on the KPC Pipeline and by a second lien on
the Collateral on which the Lenders under this Agreement have a first lien.



     Security Agreements means, collectively, the security agreements, or similar instruments,
executed by any of the Loan Parties in favor of the Administrative Agent or the Collateral Agent
for the benefit of the Secured Parties, creating a first lien on all assets securing the Prior
First Lien Credit Agreement and the Prior Midstream Credit Agreement on the Closing Date and a
second lien on the KPC Pipeline, in form and substance acceptable to the Administrative Agent, and
all supplements, assignments, amendments, and restatements thereto (or any agreement in
substitution therefor), and “Security Agreement” means each of such Security Agreements.



     STP means STP Newco, Inc., an Oklahoma corporation.



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     Subsidiary of a Person means a corporation, partnership, joint venture, limited liability
company or other business entity of which a majority of the shares of securities or other interests
having ordinary voting power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a contingency) are at
the time beneficially owned, or the management of which is otherwise controlled, directly, or
indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary
or Subsidiaries of the Borrowers.



     Subsidiary Guaranty means any Subsidiary Guaranty made by a Subsidiary of the Borrowers (other
than the Excluded Subsidiaries and KPC Pipeline, LLC and any Subsidiary it may hereafter form) in
favor of the Administrative Agent on behalf of the Lenders, in form and substance acceptable to the
Administrative Agent.



     Swap Contract means (a) any and all interest rate swap transactions, basis swaps, credit
derivative transactions, forward rate transactions, commodity swaps, commodity options, forward
commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest
rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions, currency options,
spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions of any kind, and
the related confirmations, which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such
obligations or liabilities under any Master Agreement.



     Swap Termination Value means, in respect of any one or more Swap Contracts, after taking into
account the effect of any legally enforceable netting agreement relating to such Swap Contracts,
(a) for any date on or after the date such Swap Contracts have been closed out and termination
value(s) determined in accordance therewith, such termination value(s).



     Synthetic Lease Obligation means the monetary obligation of a Person under (a) a so-called
synthetic or tax retention lease, or (b) an agreement for the use or possession of property
creating obligations that do not appear on the balance sheet of such Person but which are
depreciated for tax purposes by such Person.



     Taxes has the meaning set forth in Section 3.01(a).



     Three Little Pipes means the three (3) small ancillary pipelines identified as the Augusta
System, the OCF System and the Quindaro System, located in Kansas, owned by Quest Transmission
Company and contemplated to be conveyed to MidContinent as part of the Restructure Transactions,
subject to timely approval to do so being obtained from the Kansas Corporation Commission.



     Total Outstandings means the aggregate Outstanding Amount of all Revolving Loans and all L/C
Obligations.



     Transfer Payments means any payment made to Parent, any of the Excluded Subsidiaries, or to
KPC Pipeline, LLC.



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     Type means, with respect to a Revolving Loan, its character as a Base Rate Loan or a
Eurodollar Rate Loan.



     Unfunded Pension Liability means the excess of a Pension Plan’s benefit liabilities under
Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the
Code for the applicable plan year.



     United States or U.S. means the United States of America, its fifty states and the District of
Columbia.



     Unreimbursed Amount has the meaning set forth in Section 2.14(c)(i).



     Utilization Percentage means, on any day, the ratio, stated as a percentage of the aggregate
principal amount of the Total Outstandings to the Aggregate Revolving Commitments.



     Voting Stock means the capital stock (or equivalent thereof) of any class or kind, of a
Person, the holders of which are entitled to vote for the election of directors, managers, or other
voting members of the governing body of such Person.



     White Deer Energy means any one or more of White Deer Energy L.P. a Cayman Islands exempted
limited partnership, White Deer Energy TE L.P., and White Deer Energy FI L.P.



     White Deer Energy Additional Investment means any amount in excess of $50,000,000 paid to
Parent by White Deer Energy to purchase additional equity in Parent.



     White Deer Energy Investment means the purchase, on or prior to the date hereof, by White Deer
Energy of shares of Series A Cumulative Redeemable Preferred Stock issued by Parent, together with
warrants to purchase common stock and Series B Preferred Stock, for at least $50,000,000 as an
initial investment, with White Deer Energy reserving $30,000,000 of additional capital to be
invested in equity of Parent under the terms and conditions of that certain Securities Purchase
Agreement, by and among Parent and White Deer Energy.



     Wholly-Owned when used in connection with a Person means any Subsidiary of such Person of
which all of the issued and outstanding equity interests (except shares required as directors’
qualifying shares) shall be owned by such Person or one or more of its Wholly-Owned Subsidiaries.



     1.02. Other Interpretive Provisions.



     (a) The meanings of defined terms are equally applicable to the singular and plural forms of
the defined terms.



     (b) (i) The words “herein” and “hereunder” and words of similar import when used in any Loan
Document shall refer to such Loan Document as a whole and not to any particular provision thereof.




     (ii) Unless otherwise specified herein, Article, Section, Exhibit and Schedule
references are to this Agreement.




     (iii) The term “including” is by way of example and not limitation.



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     (iv) The term “documents” includes any and all instruments, documents, agreements,
certificates, notices, reports, financial statements and other writings, however
evidenced.



     (c) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including;” the words “to” and “until” each mean "to but excluding;”
and the word “through” means “to and including.”



     (d) Section headings herein and in the other Loan Documents are included for convenience of
reference only and shall not affect the interpretation of this Agreement or any other Loan
Document.



     1.03. Accounting Terms. All accounting terms not specifically or completely defined herein shall
be construed in conformity with, and all financial data required to be submitted pursuant to this
Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing the audited financial
statements, except as otherwise specifically prescribed herein.



     1.04. Rounding. Any financial ratios required to be maintained by the Borrowers pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a rounding-up if there is no
nearest number).



     1.05. References to Agreements, Persons and Laws; Rules of Construction. Unless otherwise
expressly provided herein, (a) references to agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are not prohibited by any
Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law; and (c) any reference
herein to any Person shall be construed to include such Person’s successors and assigns (subject to
the restrictions contained in the Loan Documents). No provision of this Agreement or any other
Loan Document shall be interpreted or construed against any Person solely because such Person or
its legal representatives drafted such provision.



ARTICLE II.

THE REVOLVING COMMITMENTS AND BORROWINGS




     2.01. Revolving Loans. Subject to and in reliance upon the terms, conditions, representations, and
warranties in the Loan Documents, each Lender severally, but not jointly, agrees to make revolving
loans (each such revolving loan a “Revolving Loan”) to Borrowers from time to time on any Business
Day during the period from the Closing Date to the Maturity Date, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Revolving Commitment as set forth on
Schedule 2.01; provided that, that after giving effect to any Borrowing, (a) the Total Outstandings
shall not exceed the lesser of (i) Aggregate
Revolving Commitments and (ii) the Borrowing Base, and (b) the aggregate Outstanding Amount of the
Revolving Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all
L/C Obligations shall not exceed such Lender’s Revolving Commitment; provided further that on and
after the date of this Agreement, all outstanding Revolving Loans, which had previously been
converted to term loans, shall automatically be converted to revolving loans and each Lender’s
Revolving Commitment shall be revived, renewed, and amended, in accordance with the terms of this
Agreement, as Lender’s Revolving Commitment hereunder and the Aggregate Revolving Commitment shall
be revived, renewed, and amended, in accordance with the terms of this



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Agreement, as the Aggregate
Revolving Commitment hereunder. Within the limits of each Lender’s Revolving Commitment, and
subject to the other terms and conditions hereof, Borrowers may borrow under this Section 2.01,
prepay under Section 2.04, and reborrow under this Section 2.01. Revolving Loans may be Base Rate
Loans or Eurodollar Rate Loans, as further provided herein.




     2.02. Borrowing Base.



     (a) The Borrowing Base in effect as of the date of this Agreement is $225,000,000 and without
the consent of all Lenders shall not exceed such amount and each Lender may exercise its sole and
absolute discretion in determining whether to agree to any increase above $225,000,000. Upon a
sale of the Marcellus Assets, the Borrowing Base will be automatically reduced by $17,000,000
pursuant to Section 2.02(l). The Borrowing Base in existence at any time may not be increased
without the consent of one hundred percent (100%) of the Lenders.



     (b) Borrower shall deliver to Administrative Agent on or before March 31, 2011 for
distribution to each Lender the Reserve Report relating to the Proved Reserves attributable to the
Borrowing Base Oil and Gas Properties as of December 31, 2010 which shall be prepared by Cawley
Gillespie & Associates, Inc. or other independent reservoir engineers reasonably acceptable to
Administrative Agent. This Reserve Report will not be used for purposes of redetermining the
Borrowing Base pursuant to Section 2.02(c) except to the extent the March 31, 2011 Reserve Report
will be prepared on a roll forward basis using the December 31, 2010 Reserve Report,



     (c) The first redetermined Borrowing Base will be based upon a Reserve Report dated effective
as of March 31, 2011 which shall set out the Proved Reserves attributable to the Borrowing Base Oil
and Gas Properties. This Reserve Report may be prepared by one of the Borrower’s own internal
petroleum engineers, shall be certified by the President or other Responsible Officer of such
Borrower, and shall be prepared on a roll forward basis from the December 31, 2010 Reserve Report
prepared by Cawley & Gillespie & Associates, Inc. or other independent reservoir engineers
reasonably acceptable to Administrative Agent and shall include a reconciliation from the December
31, 2010 Reserve Report. This Reserve Report shall be delivered to the Administrative Agent on or
before June 30, 2011. The Administrative Agent shall make a determination of the first
redetermined Borrowing Base and submit the first redetermined Borrowing Base to the Lenders for
approval, with such first redetermined Borrowing Base to become effective on July 31, 2011, and, in
the case of an increase in the Borrowing Base, upon approval of all Lenders and the L/C Issuer, and
in the case of maintaining or decreasing the Borrowing Base, upon approval of the Administrative
Agent and the Required Lenders and in any case with the subsequent written notification from the
Administrative Agent to the Borrowers. Administrative Agent shall announce the first redetermined
Borrowing Base on or about July 31, 2011 (but no later than August 15, 2011). Such redetermined
Borrowing Base, subject to the other provisions of this Agreement, shall be the Borrowing Base
until the effective date of the next redetermination of the Borrowing Base as set out in Section
2.02(d), subject to being automatically reduced by $17,000,000 upon the sale of the
Marcellus Assets pursuant to Section 2.02(l) (if not previously reduced in accordance with
Section 2.02(l)).



     (d) After the first redetermination of the Borrowing Base to become effective July 31, 2011,
the Borrowing Base shall thereafter be redetermined from time to time pursuant to the provisions of
this Section 2.02(d) relative to the Proved Reserves attributable to the Borrowing Base Oil and Gas
Properties. On or before each March 31 and September 30 thereafter until the Maturity Date,
commencing March 31, 2012, the Borrowers shall furnish to the Administrative Agent a Reserve
Report, which shall set out, as of each preceding December 31 or June 30, as applicable, the Proved
Reserves attributable to the Borrowing Base Oil and Gas Properties. Each June 30 Reserve Report
may be prepared by one of the Borrower’s own internal petroleum engineers, shall be certified by
the President or other Responsible



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Officer of such Borrower, and shall be internally generated and
prepared on a roll forward basis from the prior Reserve Report. Each Reserve Report relating to
the Proved Reserves attributable to the Borrowing Base Oil and Gas Properties as of December 31
shall be prepared by Cawley Gillespie & Associates, Inc. or other independent reservoir engineers
acceptable to Administrative Agent. Each Reserve Report as of June 30 shall include a
reconciliation from the prior December 31 Reserve Report. Upon receipt of each such Reserve Report
commencing with the Reserve Report as of December 31, 2011 delivered on or before March 31, 2012,
the Administrative Agent shall make a determination of the Borrowing Base which shall become
effective on or about April 30 or October 31 of each year, and, in the case of an increase in the
Borrowing Base, upon approval of all Lenders and the L/C Issuer, and in the case of maintaining or
decreasing the Borrowing Base, upon approval of the Administrative Agent and the Required Lenders
and in any case with the subsequent written notification from the Administrative Agent to the
Borrowers. Administrative Agent shall announce the redetermined Borrowing Base on or about October
31 (but no later than November 15) with respect to the June 30 Reserve Report (delivered in
September) and on or about April 30 of each year (but no later than May 15 of each year) with
respect to the December 31 Reserve Report (delivered in March). Such redetermined Borrowing Base,
subject to the other provisions of this Agreement, shall be the Borrowing Base until the effective
date of the next redetermination of the Borrowing Base as set out in this Section 2.02.



     (e) After the second redetermination of the Borrowing Base effective on April 30, 2012, during
each successive period between scheduled redeterminations of the Borrowing Base, the Administrative
Agent shall have the right to initiate, and shall initiate at the request of Required Lenders, one
(1) unscheduled redetermination of the Borrowing Base by requesting in writing that the Borrowers
provide an unscheduled internally generated Reserve Report regarding the Proved Reserves
attributable to the Borrowing Base Oil and Gas Properties with an effective date not more than
sixty (60) days prior to the Borrower’s delivery of such Reserve Report to the Administrative
Agent, and such Reserve Report shall be delivered to the Administrative Agent within thirty (30)
days after the Borrower’s receipt of such written request; provided, however, that there shall not
be any more than two (2) unscheduled redeterminations of the Borrowing Base under this Section
2.02(e) during any twelve (12) month period.



     (f) In addition to the redetermination provided for in Section 2.02(e), upon a Material
Disposition or any material (in the judgment of the Administrative Agent or the Required Lenders)
defect in title, or failure of title to, five percent (5%) or more of the PV-10 of the Borrowing
Base Oil and Gas Properties, the Administrative Agent may, and upon the request of the Required
Lenders shall, redetermine the Borrowing Base by requesting in writing that the Borrowers provide
an unscheduled internally generated Reserve Report regarding the Proved Reserves attributable to
the Borrowing Base Oil and Gas Properties with an effective date not more than sixty (60) days
prior to the Borrowers’ delivery of such Reserve Report to the Administrative Agent, and such
Reserve Report shall be delivered to the Administrative Agent within thirty days after the
Borrowers’ receipt of such written request.



     (g) If prior to December 31, 2011 any Swap Contracts are amended, modified, terminated or
unwound and after taking into account the effect of any such amendment or modification and the
effect of any new Swap Contracts entered into, the Borrowing Base would be reduced by more than
$11,250,000, then the Borrowing Base will be automatically reduced by an amount equal to the excess
of such reduction in the Borrowing Base over $11,250,000.



     (h) During each period between scheduled redeterminations of the Borrowing Base, the Borrowers
shall have the right to request, by written notice to the Administrative Agent, one (1) unscheduled
redetermination of the Borrowing Base, subject to contemporaneously providing to the Administrative
Agent a Reserve Report with an effective date not more than sixty days prior to the date of such
notice; provided, however, that there shall not be any more than two (2) unscheduled
redeterminations of the Borrowing Base under this Section 2.02(h) during any twelve (12) month
period.



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     (i) In addition to the redetermination provided for in Section 2.02(f), upon a Material
Acquisition, the Borrowers may, from time to time upon written notice to the Administrative Agent,
propose to add Oil and Gas Properties to the Borrowing Base Oil and Gas Properties and other
Collateral to the Borrowing Base. Any such proposal to add Oil and Gas Properties to the Borrowing
Base Oil and Gas Properties shall be accompanied by a Reserve Report applicable to such properties
that conforms to the requirements of Section 2.02, and evidence sufficient to establish that the
Borrowers or the other applicable Loan Party has Marketable Title to such Oil and Gas Properties or
other Collateral, and any such addition shall become effective at such time as: (a) the
Administrative Agent, with the approval of all the Lenders, has made a determination of the amount
by which the Borrowing Base would be increased as the result of such addition and (b) the
conditions set out in Article IV hereof, to the extent they are applicable to such additional Oil
and Gas Properties or other Collateral of the Borrowers, have been satisfied. In determining the
increase in the Borrowing Base pursuant to this Section, the Administrative Agent and the Lenders
shall apply the parameters and other credit factors set out in this Section 2.02.



     (j) If in connection with a redetermination of the Borrowing Base maintaining or decreasing
the Borrowing Base, the Required Lenders cannot otherwise agree on the new Borrowing Base, then the
Borrowing Base shall be the Administrative Agent’s calculation of the “weighted arithmetic average”
(as hereinafter calculated) of the Borrowing Base, as determined by each individual Lender and
communicated to the Administrative Agent in writing. However, the amount of the Borrowing Base
shall never be increased at any time without the unanimous consent of all the Lenders,
notwithstanding anything else herein to the contrary. For purposes of this paragraph, the
“weighted arithmetic average” of the Borrowing Base shall be determined by first multiplying the
Borrowing Base proposed in writing to Administrative Agent by each Lender by such Lender’s Pro Rata
Share, and then adding the results of each such calculation, with the resultant sum being the
Borrowing Base.



     (k) The Borrowing Base shall represent the Required Lenders’ approval (except where unanimous
consent is required) of the Administrative Agent’s determination, in accordance with their
customary oil and gas lending practices, of the maximum Credit Extensions that may be supported by
the Borrowing Base Oil and Gas Properties and the Borrowers acknowledge, for purposes of this
Agreement, such determination by the Administrative Agent as being the maximum Credit Extensions
that may be supported by the Borrowing Base Oil and Gas Properties. In making any redetermination
of the Borrowing Base, the Administrative Agent and the Lenders shall apply the parameters and
other credit factors consistently applied then generally being utilized by the Administrative Agent
and each such Lender, respectively, for Borrowing Base redeterminations for other similarly
situated borrowers. The Borrowers, Lenders and the Administrative Agent acknowledge that (i) due
to the uncertainties of the oil and gas extraction process, the Borrowing Base Oil and Gas
Properties are not subject to evaluation with a high degree of accuracy and are subject to
potential rapid deterioration in value, (ii) for this reason and
the difficulties and expenses involved in liquidating and collecting against the Borrowing
Base Oil and Gas Properties, the Administrative Agent’s determination of the maximum Credit
Extensions with respect to the Borrowing Base Oil and Gas Properties contains an equity cushion,
which equity cushion is acknowledged by the Borrowers as essential for the adequate protection of
the Lenders, and (iii) decisions regarding the Borrowing Base shall be made by the Lenders in their
sole discretion.



     (l) Upon the sale of the Marcellus Assets, and contemporaneously therewith, the Borrowing Base
will be reduced by $17,000,000.



     (m) Upon Borrowers’ failure to make the minimum Capital Expenditures required by the dates
specified in Section 6.22, the Borrowing Base will be reduced by an amount equal to such shortfall
as provided in Section 6.22.



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     2.03. Borrowings, Conversions and Continuations of Loans.



     (a) Each Borrowing, each conversion of Revolving Loans from one Type to the other, and each
continuation of Revolving Loans as the same Type shall be made upon a Borrower’s irrevocable notice
to the Administrative Agent, which may be given by telephone. Each such notice must be received by
the Administrative Agent not later than noon, New York time, (i) three Business Days prior to the
requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans, and
(ii) one Business Day prior to the conversion of Eurodollar Rate Loans to Base Rate Loans, or the
requested date of any Borrowing of Base Rate Loans. Each such telephonic notice must be confirmed
promptly by delivery to the Administrative Agent of a written Borrowing Notice, appropriately
completed and signed by a Responsible Officer of a Borrower. Each Borrowing of, conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $1,000,000 in excess thereof. Each Borrowing of or conversion to Base Rate Loans shall
be in a principal amount of $500,000 or a whole multiple of $500,000 in excess thereof; provided
that any Base Rate Loan may be in an aggregate amount that is equal to the entire unused balance of
the Aggregate Revolving Commitment or that is required to finance the Unreimbursed Amount as
provided in Section 2.14(c)(i). Each Borrowing Notice (whether telephonic or written) shall
specify (i) whether a Borrower is requesting a Borrowing, a conversion of Revolving Loans from one
Type to the other, or a continuation of Revolving Loans as the same Type, (ii) the requested date
of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day),
(iii) the principal amount of Revolving Loans to be borrowed, converted or continued, (iv) the Type
of Loans to be borrowed or to which existing Revolving Loans are to be converted, and (v) if
applicable, the duration of the Interest Period with respect thereto. If a Borrower fails to
specify a Type of Revolving Loan in a Borrowing Notice or if a Borrower fails to give a timely
notice requesting a conversion or continuation, then the applicable Revolving Loans shall be made
or continued as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate
Loans shall be effective as of the last day of the Interest Period then in effect with respect to
the applicable Eurodollar Rate Loans. If a Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any such Borrowing Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one month.



     (b) Following receipt of a Borrowing Notice, the Administrative Agent shall promptly notify
each Lender of its Pro Rata Share of the applicable Borrowing, and if no timely notice of a
conversion or continuation is provided by such Borrower, the Administrative Agent shall notify each
Lender of the details of any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its Revolving Loan
available to the Administrative Agent in immediately available funds at the Administrative Agent’s
Office not later than noon, New York
time, on the Business Day specified in the applicable Borrowing Notice. Upon satisfaction of
the applicable conditions set forth in Sections 4.01 and 4.02, as applicable, the Administrative
Agent shall make all funds so received available to such Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of such Borrower on the books of the
Administrative Agent with the amount of such funds or (ii) wire transfer of such funds, in each
case in accordance with instructions provided to the Administrative Agent by such Borrower;
provided, however, that if, on the date of the Borrowing there are L/C Borrowings outstanding, then
the proceeds of such Borrowing shall be applied, first, to the payment in full of any such L/C
Borrowings, and second, to such Borrower as provided above.



     (c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted
only on the last day of the Interest Period for such Eurodollar Rate Loan. During the existence of
an Event of Default, no Revolving Loans may be requested as, converted to or continued as
Eurodollar Rate Loans without the consent of the Required Lenders, and the Required Lenders may
demand that any or all of the then outstanding Eurodollar Rate Loans be converted immediately to
Base Rate Loans. The



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Administrative Agent shall promptly notify the Borrowers and the Lenders of
the interest rate applicable to any Eurodollar Rate Loan upon determination of such interest rate.
The determination of the Eurodollar Rate by the Administrative Agent shall be conclusive in the
absence of manifest error.



     (d) After giving effect to all Borrowings, all conversions of Revolving Loans from one Type to
the other, and all continuations of Revolving Loans as the same Type, there shall not be more than
six (6) Interest Periods in effect at any given time with respect to Revolving Loans.



     2.04. Prepayments.



     (a) Optional Prepayments. The Borrowers (or one or more of them) may, upon delivery
of a Repayment Notice to the Administrative Agent, at any time or from time to time voluntarily
prepay in whole or in part Revolving Loans outstanding under the Facility without premium or
penalty; provided that (i) such notice must be received by the Administrative Agent not later than
noon, New York time, (A) three Business Days prior to any date of prepayment of Eurodollar Rate
Loans, and (B) the date of prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; and (iii) any prepayment of Base Rate Loans shall be in a principal amount of $1,000,000
or a whole multiple of $1,000,000 in excess thereof. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Revolving Loans to be prepaid. The Administrative
Agent will promptly notify each Lender of its receipt of each such notice, and of such Lender’s Pro
Rata Share of such prepayment. If such notice is given by a Borrower, such Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and payable on the
date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all
accrued interest thereon, together with any additional amounts required pursuant to Section 3.05.
Each such prepayment shall be applied to the Revolving Loans of the Lenders in accordance with
their respective Pro Rata Shares.



     Unless a Default or Event of Default has occurred and is continuing or would arise as a result
thereof, any payment or prepayment of the Revolving Loans may be reborrowed by Borrowers, subject
to the terms and conditions hereof.



     (b) Mandatory Prepayments. If for any reason (including a redetermination of the
Borrowing Base) a Borrowing Base Deficiency exists (other than (x) as a result of a Credit
Extension having been mistakenly or impermissibly made which causes the Total Outstandings to
exceed the lesser of (A)
Aggregate Revolving Commitments and (B) the Borrowing Base and (y) as a result of a sale of
the Marcellus Assets, in both of which cases any Borrowing Base Deficiency is required to be cured
by prepayment, in the case of clause (x), on the Business Day after the Borrower is advised of the
Borrowing Base Deficiency, and in the case of clause (y), on the date of the sale of the Marcellus
Assets), the Borrowers shall within thirty (30) days after being notified of such Borrowing Base
Deficiency by the Administrative Agent indicate in writing the Borrowers’ election to do one or
more of the following to eliminate such Borrowing Base Deficiency:




     (i) prepay Revolving Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such Borrowing Base Deficiency within thirty (30) days of such
election,




     (ii) prepay Revolving Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such Borrowing Base Deficiency in six (6) equal monthly
installments beginning on or before the thirtieth (30th) day after being notified of the
Borrowing Base Deficiency; and



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     (iii) add to the Borrowing Base Oil and Gas Properties additional Oil and Gas
Properties of the Borrowers or another Loan Party sufficient in value, as determined
pursuant to Section 2.02, or add other Collateral to increase the Borrowing Base to equal
or exceed the Total Outstandings.



     (c) Mandatory Prepayments of Borrowing Base Value from Net Available Cash. An amount
equal to Borrowing Base Value of any Collateral sold in a Material Disposition (other than a
disposition of the Marcellus Assets which shall be governed by subsection (d)) shall be prepaid by
the selling Borrower or any of its Subsidiaries (other than the Excluded Subsidiaries) out of the
Net Available Cash received by such Borrower or such Subsidiary. On any date on which a Borrower
or another Loan Party makes a Material Disposition of any of the Borrowing Base Oil and Gas
Properties, the Borrowing Base shall be automatically reduced by the Borrowing Base Value of the
properties so Disposed. Net Available Cash received by the Borrower or such Subsidiary shall be
used to prepay outstanding Revolving Loans in an amount at least equal to the excess of Total
Outstandings over the reduced Borrowing Base (or to Cash Collateralize Letters of Credit, if no
Revolving Loans are outstanding). Following any such prepayment and reduction of the Borrowing
Base, any Borrower shall have the right to request a Borrowing Base redetermination (which right
shall be in addition to any Borrower’s right to request a redetermination of the Borrowing Base
pursuant to Section 2.02(h)). (For clarification, a prepayment of the Revolving Loans may be
reborrowed, if, after a Borrowing Base redetermination, there is sufficient Borrowing Base to
permit such reborrowing.)



     (d) Mandatory Prepayments from Sale of Marcellus Assets. Net Available Cash received
by MidContinent from the Disposition of the Marcellus Assets shall be prepaid contemporaneously
with the closing of any such Disposition. On the date MidContinent Disposes of the Marcellus
Assets, the Borrowing Base shall be automatically reduced by $17,000,000 pursuant to Section
2.02(l). Net Available Cash received by MidContinent from the Disposition of the Marcellus Assets
shall be used to prepay outstanding Revolving Loans in an amount at least equal to the excess of
Total Outstandings over the reduced Borrowing Base (or to Cash Collateralize Letters of Credit, if
no Revolving Loans are outstanding). For the avoidance of doubt, any prepayment resulting in Total
Outstandings being less than the reduced Borrowing Base may be reborrowed.



     (e) Closing Date Prepayment Amount and Outstandings. On the Closing Date,
MidContinent or PESC shall make a prepayment of the Indebtedness outstanding (i) under the Prior
First Lien Credit Agreement in an amount equal to the Closing Date Prepayment Amount relating
thereto; and
under the Prior Midstream Agreement in an amount equal to the Closing Date Prepayment Amount
relating thereto.



     (f) Change of Control. Upon a Change of Control, the Borrowers shall repay to the
Lenders the aggregate principal amount of Revolving Loans outstanding, together with all accrued
and unpaid interest and fees and Cash Collateralize the L/C Obligations contemporaneously with such
Change of Control.



     (g) Prepayments: Interest/Consequential Loss. All prepayments under this Section 2.04
shall be made together with accrued interest to the date of such prepayment on the principal amount
prepaid and any amounts due under Section 3.05.



     2.05. Reduction or Termination of Revolving Commitments. The Borrowers may, upon notice to the
Administrative Agent, terminate the Aggregate Revolving Commitment or permanently reduce the
Aggregate Revolving Commitment to an amount not less than the sum of the Outstanding Amount of the
then existing (i) unpaid principal balance of the Revolving Loans and (ii) L/C Obligations;
provided that (i) any such notice shall be received by the Administrative Agent not later than
noon, three



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Business Days prior to (or if all the outstanding Borrowings are Base Rate Loans, no
later than noon on) the date of termination or reduction, and (ii) any such partial reduction shall
be in an aggregate amount of $1,000,000 or any whole multiple of $1,000,000 in excess thereof. The
Administrative Agent shall promptly notify the Lenders of any such notice of reduction or
termination. Once reduced in accordance with this Section, the Aggregate Revolving Commitment may
not be increased. Any reduction of the Aggregate Revolving Commitment shall be applied to the
Revolving Commitment of each Lender according to its Pro Rata Share. Except in connection with a
termination or reduction of the entire Aggregate Revolving Commitment, all commitment fees on the
portion of the Aggregate Revolving Commitment so terminated which have accrued to the effective
date of any termination of the Aggregate Revolving Commitment shall at Administrative Agent’s
option either be paid on the effective date of such termination or on the date when such commitment
fee would otherwise be due.




     2.06. Repayment of Revolving Loans. The Borrowers shall repay to the Lenders on the Maturity Date
the aggregate principal amount of Revolving Loans outstanding on such date, together with all
accrued and unpaid interest and fees.



     2.07. Interest. (a) Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate
Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a
rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate and
(ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.



     (b) If any amount payable by the Borrowers under any Loan Document is not paid when due (after
the expiration of any applicable grace periods), whether at stated maturity by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
Furthermore, while any Event of Default exists or after acceleration (i) the Borrowers shall pay
interest on the principal amount of all outstanding Obligations at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by applicable Law, and
(ii) accrued and unpaid interest on past due amounts
(including interest on past due interest, to the extent allowed by Law) shall be due and
payable upon demand.



     (c) Interest on each Revolving Loan shall be due and payable in arrears on each Interest
Payment Date applicable thereto and at such other times as may be specified herein. Interest
hereunder shall be due and payable in accordance with the terms hereof before and after judgment,
and before and after the commencement of any proceeding under any Debtor Relief Law.



     (d) If the designated rate applicable to any Borrowing exceeds the Maximum Rate, the rate of
interest on such Borrowing shall be limited to the Maximum Rate, but any subsequent reductions in
such designated rate shall not reduce the rate of interest thereon below the Maximum Rate until the
total amount of interest accrued thereon equals the amount of interest which would have accrued
thereon if such designated rate had at all times been in effect. In the event that at maturity
(stated or by acceleration), or at final payment of the Outstanding Amount of any Revolving Loans
or L/C Obligations, the total amount of interest paid or accrued is less than the amount of
interest which would have accrued if such designated rates had at all times been in effect, then,
at such time and to the extent permitted by Law, the Borrowers shall pay an amount equal to the
difference between (a) the lesser of the amount of interest which would have accrued if such
designated rates had at all times been in effect and the amount of interest which would have
accrued if the Maximum Rate had at all times been in effect, and (b) the amount of interest
actually paid or accrued on such Outstanding Amount.



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     2.08. Fees. (a) Commitment Fee. The Borrowers shall pay to the Administrative Agent for
the account of each Lender (other than a Defaulting Lender) in accordance with its Pro Rata Share,
a commitment fee equal to the Applicable Rate times the actual daily amount by which the lesser of
(i) the Aggregate Revolving Commitment (subject to reduction pursuant to Sections 2.04 and 2.05)
and (ii) the Borrowing Base exceeds the sum of (1) the Outstanding Amount of Revolving Loans plus
(2) the Outstanding Amount of L/C Obligations. The commitment fee shall accrue at all times from
the Closing Date until the Maturity Date (except as to any Defaulting Lender, during any period in
which a Lender is a Defaulting Lender) and shall be due and payable quarterly in arrears on the
last Business Day of each March, June, September and December, commencing with the first such date
to occur after the Closing Date, and on the Maturity Date. The commitment fee shall accrue at all
times (except as respects a Defaulting Lender), including at any time during which one or more of
the conditions in Article IV is not met.



     (b) Amendment Fees. On the Closing Date, the Borrowers irrevocably agree to pay the
amendment fees previously incurred under the Prior First Lien Credit Agreement and the Prior Second
Lien Credit Agreement in cash. Such previously incurred amendment fees equal $725,000 to be paid
to the lenders party to the Prior First Lien Credit Agreement and $157,000 to be paid to the
lenders party to the Prior Second Lien Credit Agreement. No new or additional amendment fees shall
accrue by reason of the amendment and restatement of the Prior First Lien Credit Agreement and the
Prior Second Lien Credit Agreement evidenced by this Agreement.



     (c) Processing Fee. No Section 10.07(b)(iii) processing and recordation fee shall be
due with reference to any assignment of any indebtedness and liens under the Prior Credit
Agreements effective on the Closing Date.



     2.09. Computation of Interest and Fees. Computation of interest on Base Rate Loans shall be
calculated on the basis of a year of 365 or 366 days, as the case may be, and the actual number of
days elapsed. Computation of all other types of
interest (including interest on Eurodollar Rate Loans) and all fees shall be calculated on the
basis of a year of 360 days and the actual number of days elapsed, which results in a higher yield
to the payee thereof than a method based on a year of 365 or 366 days. Interest shall accrue on
each Revolving Loan for the day on which the Revolving Loan is made, and shall not accrue on a
Revolving Loan, or any portion thereof, for the day on which the Revolving Loan or such portion is
paid; provided that any Revolving Loan that is repaid on the same day on which it is made shall
bear interest for one day.



     2.10. Evidence of Debt. (a) The Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent and
each Lender shall be conclusive absent manifest error of the amount of the Revolving Loans made by
the Lenders to the Borrowers and the interest and payments thereon. Any failure so to record or
any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrowers
hereunder to pay any amount owing with respect to the Revolving Loans or the L/C Obligations. In
the event of any conflict between the accounts and records maintained by any Lender and the
accounts and records of the Administrative Agent in respect of such matters, the accounts and
records of such Lender shall control absent manifest error. Upon the request of any Lender made
through the Administrative Agent, such Lender’s Revolving Loans may be evidenced by one or more
Revolving Notes. Each Lender may attach schedules to its Revolving Note(s) and endorse thereon the
date, Type (if applicable), amount and maturity of the applicable Revolving Loans and payments with
respect thereto.



     (b) In addition to the accounts and records referred to in subsection (a), each Lender and the
Administrative Agent shall maintain in accordance with its usual practice accounts or records
evidencing



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Credit Agreement


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the purchases and sales by such Lender of participations in Letters of Credit. In the
event of any conflict between the accounts and records maintained by the Administrative Agent and
the accounts and records of any Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control.



     2.11. Payments Generally.



     (a) All payments to be made by the Borrowers shall be made without condition or deduction for
any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein,
all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account
of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in
Dollars and in immediately available funds not later than noon, New York time, on the date
specified herein. The Administrative Agent will promptly distribute to each Lender its Pro Rata
Share (or other applicable share as provided herein) of such payment in like funds as received by
wire transfer to such Lender’s Lending Office. All payments received by the Administrative Agent
after noon, New York time, shall be deemed received on the next succeeding Business Day and any
applicable interest or fee shall continue to accrue.



     (b) Subject to the definition of “Interest Period,” if any payment to be made by the Borrowers
shall come due on a day other than a Business Day, payment shall be made on the next following
Business Day, and such extension of time shall be reflected in computing interest or fees, as the
case may be.



     (c) If no Event of Default exists and if no order of application is otherwise specified in the
Loan Documents, payments and prepayments of the Obligations shall be applied first to fees, second
to accrued interest then due and payable on the Outstanding Amount of Revolving Loans and L/C
Obligations, and then to the remaining Obligations in the order and manner as Borrowers may direct.



     (d) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully the Obligations, or if an Event of Default exists, any payment or prepayment
shall be applied in the following order: (i) to the payment of enforcement expenses incurred by the
Administrative Agent, including Attorney Costs; (ii) to the ratable payment of all fees, expenses
and indemnities (including amounts payable under Article III) for which the Administrative Agent,
Lenders or Approved Hedge Counterparty have not been paid or reimbursed in accordance with the Loan
Documents or Approved Hedge Counterparty Swap Contract (as used in this Section 2.11(d)(ii), a
"ratable payment” for any Lender, the Administrative Agent or Approved Hedge Counterparty shall be,
on any date of determination, that proportion which the portion of the total fees, expenses and
indemnities owed to such Lender, the Administrative Agent or Approved Hedge Counterparty bears to
the total aggregate fees, expenses and indemnities owed to all Lenders, the Administrative Agent
and Approved Hedge Counterparty on such date of determination); (iii) to the ratable payment of
accrued and unpaid Letter of Credit fees, the Outstanding Amount of L/C Borrowings, accrued and
unpaid interest on, and principal of, the Outstanding Amount of Revolving Loans and the Outstanding
Amount of Obligations under Lender Hedging Agreements; (it being understood that for purposes of
this clause (iii) the Outstanding Amount of Obligations under Lender Hedging Agreements refers to
payments owing in connection with an Early Termination Date as defined in the 2002 Master Agreement
form promulgated by the ISDA (or equivalent type payment obligation if some other form of Swap
Contract is in effect)(as used in this Section 2.11(d)(iii), “ratable payment” means for any Lender
(or Lender Affiliate, in the case of Lender Hedging Agreements or the Approved Hedge Counterparty,
in the case of an Approved Hedge Counterparty Swap Contract), on any date of determination, that
proportion which the accrued and unpaid Letter of Credit fees, the Outstanding Amount of L/C
Borrowings, accrued and unpaid interest on, and principal of, the Outstanding Amount of Revolving
Loans and the Outstanding Amount of Obligations under Lender Hedging Agreements owed to such Lender
(or Lender Affiliate, in the case of Lender Hedging



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Agreements or the Approved Hedge Counterparty,
in the case of an Approved Hedge Counterparty Swap Contract) bears to the accrued and unpaid Letter
of Credit fees, the Outstanding Amount of L/C Borrowings, accrued and unpaid interest on, and
principal of, the Outstanding Amount of Revolving Loans and the Outstanding Amount of Obligations
under Lender Hedging Agreements owed to all Lenders) (and Affiliates, in the case of Lender Hedging
Agreements or the Approved Hedge Counterparty, in the case of an Approved Hedge Counterparty Swap
Contract)); (iv) to Cash Collateralize the Letters of Credit; and (v) to the payment of the
remaining Obligations, if any, in the order and manner the Required Lenders deem appropriate.
Subject to Section 2.14(g), amounts used to Cash Collateralize the aggregate undrawn amount of
Letters of Credit pursuant to clause (iv) above shall be applied to satisfy drawings under such
Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all
Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied
to the other Obligations, if any, in the order set forth above.



     (e) Unless any Borrower or any Lender has notified the Administrative Agent prior to the date
any payment is required to be made by it to the Administrative Agent hereunder, that such Borrower
or such Lender, as the case may be, will not make such payment, the Administrative Agent may assume
that such Borrower or such Lender, as the case may be, has timely made such payment and may (but
shall not be so required to), in reliance thereon, make available a corresponding amount to the
Person entitled thereto. If and to the extent that such payment was not in fact made to the
Administrative Agent in immediately available funds, then:




     (i) if a Borrower failed to make such payment, each Lender shall forthwith on demand
repay to the Administrative Agent the portion of such assumed payment that was made
available to such Lender in immediately available funds, together with interest thereon in
respect of each day from and including the date such amount was made available by the
Administrative Agent to such Lender to the date such amount is repaid to the
Administrative Agent in immediately available funds, at the Federal Funds Rate from time
to time in effect; and




     (ii) if any Lender failed to make such payment, such Lender shall forthwith on demand
pay to the Administrative Agent the amount thereof in immediately available funds,
together with interest thereon for the period from the date such amount was made available
by the Administrative Agent to the Borrowers to the date such amount is recovered by the
Administrative Agent (the “Compensation Period”) at a rate per annum equal to the Federal
Funds Rate from time to time in effect. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Revolving Loan,
included in the applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent’s demand therefor, the Administrative Agent may make a
demand therefor upon the Borrowers, and the Borrowers shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period at a rate
per annum equal to the rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to fulfill its Revolving
Commitment or to prejudice any rights which the Administrative Agent or the Borrowers may
have against any Lender as a result of any default by such Lender hereunder.



     A notice of the Administrative Agent to any Lender with respect to any amount owing under this
subsection (e) shall be conclusive, absent manifest error.



     (f) If any Lender makes available to the Administrative Agent funds for any Revolving Loan to
be made by such Lender as provided in the foregoing provisions of this Article II, and the
conditions to the applicable Borrowing set forth in Article IV are not satisfied or waived in
accordance with the terms



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Credit Agreement


38









 







hereof, the Administrative Agent shall return such funds (in like funds
as received from such Lender) to such Lender, without interest.



     (g) The obligations of the Lenders hereunder to make Revolving Loans are several and not
joint. The failure of any Lender to make any Revolving Loan on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Revolving Loan or purchase
its participation.



     (h) Nothing herein shall be deemed to obligate any Lender to obtain the funds for any
Revolving Loan in any particular place or manner or to constitute a representation by any Lender
that it has obtained or will obtain the funds for any Revolving Loan in any particular place or
manner.



     2.12. Sharing of Payments. If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Revolving Loans made by it, or the participations in the L/C Obligations,
any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such
Lender shall immediately (a) notify the Administrative Agent, of such fact, and (b) purchase from
the other Lenders such participations in the Revolving Loans made by them, and/or such
subparticipations in the participations in L/C Obligations held by them, as shall be necessary to
cause such purchasing Lender to share the excess payment in respect of such Revolving Loan or such
participations, as the case may be, pro rata with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and each other Lender shall
repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to
such paying Lender’s ratable share (according to the proportion of (i) the amount of such paying
Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. The Borrowers agree that any Lender so purchasing a participation from
another Lender may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off, but subject to Section 10.09) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrowers in the amount of such
participation. The Administrative Agent will keep records (which shall be conclusive and binding
in the absence of manifest error) of participations purchased under this Section and will in each
case notify the Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have the right to give
all notices, requests, demands, directions and other communications under this Agreement with
respect to the portion of the Obligations purchased to the same extent as though the purchasing
Lender were the original owner of the Obligations purchased.


     2.13. Pari Passu Lien Securing Lender Hedging Obligations. All Obligations arising under the Loan
Documents, including, without limitation, Obligations under this Agreement and Obligations under
any Lender Hedging Agreement (but not Indebtedness of any Borrower or Borrower Affiliate owing to
any non-Lender, non-Lender Affiliate or any Person other than the Approved Hedge Counterparty which
enters into a Swap Contract with any Borrower or any Borrower Affiliate), shall be secured pari
passu by the Collateral. No Lender, any Affiliate of a Lender or the Approved Hedge Counterparty
shall have any voting rights under any Loan Document as a result of the existence of obligations
owed to it under any such Lender Hedging Agreement.



     2.14. Letters of Credit. (a) The Letter of Credit Commitment.





     (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees,
in reliance upon the agreements of the other Lenders set forth in this Section 2.14, (1)
from time



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Credit Agreement


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to time on any Business Day during the period from the Closing Date until the
Letter of Credit Expiration Date, to issue Letters of Credit for the account of any
Borrower (and such Letters of Credit may be issued for the benefit of any Borrower, or any
of its Subsidiaries (other than the Excluded Subsidiaries)), and to amend or renew Letters
of Credit previously issued by it, in accordance with subsection (b) below, and (2) to
honor drafts under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the any Borrower; provided that
the L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any
Letter of Credit, and no Lender shall be obligated to participate in any Letter of Credit,
if as of the date of such L/C Credit Extension, (x) the Total Outstandings would exceed
the Aggregate Revolving Commitment, (y) the aggregate Outstanding Amount of the Revolving
Loans of any Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all
L/C Obligations would exceed such Lender’s Revolving Commitment, or (z) the Outstanding
Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within the
foregoing limits, and subject to the terms and conditions hereof, any Borrower’s ability
to obtain Letters of Credit shall be fully revolving, and accordingly any Borrower may,
during the foregoing period, obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. The Existing Letter of Credit
shall be deemed to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.




     (ii) The L/C Issuer shall be under no obligation to issue any Letter of Credit if:




     (A) any order, judgment or decree of any Governmental Authority or arbitrator
shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such
Letter of Credit, or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any Governmental Authority
with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer
refrain from, the issuance of letters of credit generally or such Letter of Credit
in particular or shall impose upon the L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the L/C Issuer is
not otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems material
to it; provided, however, if any of the forgoing occur, then the Borrowers may, at
their sole expense and effort, upon notice to L/C Issuer and Administrative Agent,
require the L/C Issuer to resign as L/C Issuer and a new replacement L/C Issuer be
appointed, which new replacement L/C Issuer shall be reasonably acceptable to the
Administrative Agent;




     (B) subject to Section 2.14(b)(iii), the expiry date of such requested Letter
of Credit would occur more than twelve months after the date of issuance or last
renewal, unless the Required Lenders have approved such expiry date;




     (C) the expiry date of such requested Letter of Credit would occur after the
Letter of Credit Expiration Date, unless all the Lenders have approved such expiry
date;




     (D) the issuance of such Letter of Credit would violate one or more policies of
the L/C Issuer generally applicable to all borrowers; or




     (E) such Letter of Credit is in a face amount less than $100,000 (unless upon a
Borrower’s request the L/C Issuer agrees to issue a Letter of Credit for a lesser



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amount), or is to be used for a purpose other than as described in Section 6.12 or
is denominated in a currency other than Dollars.




     (iii) The L/C Issuer shall be under no obligation to amend any Letter of Credit if
(A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in
its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit
does not accept the proposed amendment to such Letter of Credit.




     (iv) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of
Credit issued by it and the documents associated therewith, and the L/C Issuer shall have
all of the benefits and immunities (A) provided to the Administrative Agent in Article IX
with respect to any acts taken or omissions suffered by the L/C Issuer in connection with
Letters of Credit issued by it or proposed to be issued by it and L/C Issuer documents
pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as
used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B)
as additionally provided herein with respect to the L/C Issuer.



     (b) Procedures for Issuance and Amendment of Letters of Credit; Evergreen Letters of Credit.




     (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the
request of any Borrower delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application, appropriately completed and signed
by a Responsible Officer of such Borrower. Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than noon, New York
time, at least two Business Days (or such later date and time as the L/C Issuer may agree
in a particular instance in its sole discretion) prior to the proposed issuance date or
date of amendment, as the case may be. In the case of a request for an initial issuance
of a Letter of Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date
thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be
presented by such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing thereunder; and (G)
such other matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be
amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C)
the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may
require.




     (ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will
confirm with the Administrative Agent (by telephone or in writing) that the Administrative
Agent has received a copy of such Letter of Credit Application from a Borrower and, if
not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Upon
receipt by the L/C Issuer of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof, then, subject to
the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of such Borrower or enter into the applicable amendment,
as the case may be, in each case in accordance with the L/C Issuer’s usual and customary
business practices. Immediately upon the issuance of each Letter of Credit, each Lender
shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a participation in such Letter of



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Credit in an amount equal to the product
of such Lender’s Pro Rata Share times the amount of such Letter of Credit.




     (iii) If a Borrower so requests in any applicable Letter of Credit Application, the
L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit
that has automatic renewal provisions (each, an “Evergreen Letter of Credit”); provided
that any such Evergreen Letter of Credit must permit the L/C Issuer to prevent any such
renewal at least once in each twelve-month period (commencing with the date of issuance of
such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Nonrenewal Notice Date”) in each such twelve-month period to be agreed upon at
the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer,
the Borrowers shall not be required to make a specific request to the L/C Issuer for any
such renewal. Once an Evergreen Letter of Credit has been issued, the L/C Issuer shall
permit the renewal of such Letter of Credit unless the L/C Issuer has received notice on
or before the Business Day immediately preceding the Nonrenewal Notice Date from any
Lender stating that one or more of the applicable conditions specified in Section 4.02 is
not then satisfied or the L/C Issuer would not then be required to issue a replacement
Letter of Credit pursuant to this Section 2.14.




     (iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter
of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C
Issuer
will also deliver to the Borrowers and the Administrative Agent a true and complete
copy of such Letter of Credit or amendment.



     (c) Drawings and Reimbursements; Funding of Participations.




     (i) Upon any drawing under any Letter of Credit, the L/C Issuer shall notify the
Borrowers and the Administrative Agent thereof. Not later than noon, New York time, on
the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an
“Honor Date”), the Borrowers shall reimburse the L/C Issuer through the Administrative
Agent in an amount equal to the amount of such drawing. If the Borrowers fails to so
reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each
Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed
Amount”), and such Lender’s Pro Rata Share thereof. In such event, the Borrowers shall be
deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples
specified in Section 2.03 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Aggregate Revolving Commitment and the conditions
set forth in Section 4.02 (other than the delivery of a Borrowing Notice) and the failure
of the Borrowers to so reimburse the Administrative Agent shall not be deemed a Default or
an Event of Default. Any notice given by the L/C Issuer or the Administrative Agent
pursuant to this Section 2.14(c)(i) may be given by telephone if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.




     (ii) Each Lender (including the Lender acting as L/C Issuer) shall upon any notice
pursuant to Section 2.14(c)(i) make funds available to the Administrative Agent for the
account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its
Pro Rata Share of the Unreimbursed Amount not later than 11:00 a.m., New York time, on the
Business Day specified in such notice by the Administrative Agent, whereupon, subject to
the provisions of Section 2.14(c)(iii), each Lender that so makes funds available shall be
deemed to have made a



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Base Rate Loan to the Borrowers in such amount. The Administrative
Agent shall remit the funds so received to the L/C Issuer.




     (iii) With respect to any Unreimbursed Amount that is not fully refinanced by a
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be
satisfied or for any other reason, the Borrowers shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at the Default Rate. In such event, each Lender’s
payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section
2.14(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing
and shall constitute an L/C Advance from such Lender in satisfaction of its participation
obligation under this Section 2.14.




     (iv) Until each Lender funds its Revolving Loan or L/C Advance pursuant to this
Section 2.14(c) to reimburse the L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely
for the account of the L/C Issuer.




     (v) Each Lender’s obligation to make Revolving Loans or L/C Advances to reimburse the
L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section
2.14(c), shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the L/C Issuer, the Borrowers or any other Person
for any reason whatsoever; (B) the occurrence or continuance of a Default or Event of
Default, or (C) any other occurrence, event or condition, whether or not similar to any of
the foregoing. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrowers to reimburse the L/C Issuer for the amount of any payment made
by the L/C Issuer under any Letter of Credit, together with interest as provided herein.




     (vi) If any Lender fails to make available to the Administrative Agent for the
account of the L/C Issuer any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.14(c) by the time specified in Section 2.14(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the period from
the date such payment is required to the date on which such payment is immediately
available to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time
to time in effect. A certificate of the L/C Issuer submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under this clause (vi) shall be
conclusive absent manifest error.



     (d) Repayment of Participations.




     (i) At any time after the L/C Issuer has made a payment under any Letter of Credit
and has received from any Lender such Lender’s L/C Advance in respect of such payment in
accordance with Section 2.14(c), if the Administrative Agent receives for the account of
the L/C Issuer any payment related to such Letter of Credit (whether directly from the
Borrowers or otherwise, including proceeds of cash Collateral applied thereto by the
Administrative Agent), or any payment of interest thereon, the Administrative Agent will
distribute to such Lender its Pro Rata Share thereof in the same funds as those received
by the Administrative Agent.



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     (ii) If any payment received by the Administrative Agent for the account of the L/C
Issuer pursuant to Section 2.14(c)(i) is required to be returned, each Lender shall pay to
the Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on
demand of the Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned by such Lender, at a rate per annum equal to the Federal
Funds Rate from time to time in effect.



     (e) Obligations Absolute. The obligation of the Borrowers to reimburse the L/C Issuer
for each drawing under each Letter of Credit, and to repay each L/C Borrowing and each drawing
under a Letter of Credit that is refinanced by a Borrowing of Revolving Loans, shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including the following:




     (i) any lack of validity or enforceability of such Letter of Credit, this Agreement,
or any other agreement or instrument relating thereto;




     (ii) the existence of any claim, counterclaim, set-off, defense or other right that
the Borrowers may have at any time against any beneficiary or any transferee of such
Letter of Credit (or any Person for whom any such beneficiary or any such transferee may
be acting), the L/C Issuer or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by such Letter of Credit or any agreement or
instrument relating thereto, or any unrelated transaction;




     (iii) any draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a drawing under such
Letter of Credit;




     (iv) any payment by the L/C Issuer under such Letter of Credit against presentation
of a draft or certificate that does not strictly comply with the terms of such Letter of
Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit
of creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law; or




     (v) any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing, that might otherwise constitute a defense available to, or a discharge of,
the Borrowers.



     The relevant Borrower requesting a Letter of Credit shall promptly examine a copy of each
Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim
of noncompliance with such Borrowers’ instructions or other irregularity, such Borrower will
immediately notify the L/C Issuer. The Borrowers shall be conclusively deemed to have waived any
such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.



     (f) Role of L/C Issuer. Each Lender and the Borrowers agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly required by the Letter
of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. No Agent-Related Person nor any
of the respective correspondents,



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Participants or assignees of the L/C Issuer shall be liable to
any Lender for (i) any action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable, (ii) any action taken or omitted in
the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter of Credit or Letter
of Credit Application. The Borrowers hereby assume all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that
this assumption is not intended to, and shall not, preclude the Borrowers’ pursuing such rights and
remedies as it may have against the beneficiary or transferee at law or under any other agreement.
No Agent-Related Person, nor any of the respective correspondents, Participants or assignees of the
L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through
(v) of Section 2.14(e); provided, however, that anything in such clauses to the contrary
notwithstanding, the Borrowers may have a claim against the L/C Issuer, and the L/C Issuer may be
liable to the Borrowers, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrowers which the Borrowers prove were caused
by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear
on their face to be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity
or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason.



     (g) Cash Collateral. Upon the request of the Administrative Agent, (i) if the L/C
Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing
has resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit Expiration Date, any
Letter of Credit may for any reason remain outstanding and partially or wholly undrawn, the
Borrowers shall immediately Cash Collateralize the then Outstanding Amount of all L/C Obligations
(in an amount equal to such Outstanding Amount). The Borrowers hereby grant the Administrative
Agent, for the benefit of the L/C Issuer and the Lenders, a Lien on all such cash and deposit
accounts at any Lender.



     (h) Applicability of ISP98. Unless otherwise expressly agreed by the L/C Issuer and
the relevant Borrower requesting a Letter of Credit when a Letter of Credit is issued, the rules of
the “International Standby Practices 1998” published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of issuance) shall apply
to each Letter of Credit.



     (i) Letter of Credit Fees. The Borrowers shall pay to the Administrative Agent for
the account of each Lender in accordance with its Pro Rata Share a Letter of Credit fee for each
Letter of Credit issued equal to the Applicable Rate times the actual daily undrawn amount under
each Letter of Credit. Such fee for each Letter of Credit shall be due and payable on the last
Business Day of each March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, and on the Letter of Credit Expiration Date. If
there is any change in the Applicable Rate during any quarter, the actual amount of each Letter of
Credit shall be computed and multiplied by the Applicable Rate separately for each period during
such quarter that such Applicable Rate was in effect.



     (j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer. The
Borrowers shall pay directly to the L/C Issuer for its own account a fronting fee in an amount with
respect to each Letter of Credit issued equal to the greater of (i) $500 and (ii) 1/4 of 1% (25 Basis
Points) calculated on the face amount thereof. In addition, the Borrowers shall pay directly to
the L/C Issuer for



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45









 







its own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect. Such fees and charges are due and payable on demand and are
nonrefundable.



     (k) Conflict with Letter of Credit Application. In the event of any conflict between
the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.



     (l) Letters of Credit Issued for the Borrowers. Notwithstanding that a Letter of
Credit issued or outstanding hereunder is in support of any obligations of, or is for the account
of, a Borrower or any of its Subsidiaries (other than the Excluded Subsidiaries), the Borrowers
shall be jointly and severally obligated to reimburse the L/C Issuer hereunder for any and all
drawings under such Letter of Credit. Each Borrower hereby acknowledges that the issuance of
Letters of Credit in support of any obligation of, or for the account of the other Borrower or any
of such other Borrower’s Subsidiaries (other than the Excluded Subsidiaries) inures to the benefit
of both Borrowers, and that each other Borrower’s business derives substantial benefits from the
businesses of the other Borrower and its Subsidiaries (other than the Excluded Subsidiaries).



ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY




     3.01. Taxes.



     (a) Any and all payments by the Borrowers to or for the account of the Administrative Agent or
any Lender under any Loan Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and all liabilities with respect thereto; excluding, in the case
of the Administrative Agent and each Lender, taxes imposed on or measured by its net income
(including any franchise taxes imposed on or measured by its net income), by the jurisdiction (or
any political subdivision thereof) under the Laws of which the Administrative Agent or such Lender,
as the case may be, is organized or maintains its Lending Office (all such non-excluded taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as “Taxes”). If the Borrowers shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to additional sums payable
under this Section), each of the Administrative Agent and such Lender receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Laws.



     (b) In addition, the Borrowers agree to pay any and all present or future stamp, mortgage,
court or documentary taxes and any other excise or property taxes or charges or similar levies
which arise from any payment made under any Loan Document or from the execution, delivery,
performance, enforcement or registration of, or otherwise with respect to, any Loan Document
(hereinafter referred to as “Other Taxes”).



     (c) If the Borrowers shall be required to deduct or pay any Taxes or Other Taxes from or in
respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, the
Borrowers shall also pay to the Administrative Agent (for the account of such Lender) or to such
Lender, at the time interest is paid, such additional amount that such Lender specifies as
necessary to preserve the after-tax yield (after factoring in all taxes, including taxes imposed on
or measured by net income) such Lender would have received if such Taxes or Other Taxes had not
been imposed.



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     (d) The Borrowers agree to indemnify the Administrative Agent and each Lender for (i) the full
amount of Taxes and Other Taxes (including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the Administrative Agent and such
Lender, and (ii) amounts payable under Section 3.01(c) and (iii) any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto, except to the extent
such sums are determined by a court of competent jurisdiction by final and non-appealable judgment
to have resulted from the gross negligence or willful misconduct of the Administrative Agent, the
L/C Issuer or such Lender, as applicable. Neither the Administrative Agent, the L/C Issuer nor any
Lender shall be entitled to receive any payment with respect to any indemnity claim under this
Section 3.01 with respect to Taxes or Other Taxes that are incurred or accrued more than 180 days
prior to the date such party gives notice and demand with respect thereto to the Borrowers.
Payment under this subsection (d) shall be made within 30 days after the date the Lender or the
Administrative Agent makes a demand therefor.



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



     (f) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the Law of the jurisdiction in which any Borrower is resident for tax purposes, or any treaty
to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan
Document shall deliver to the Borrowers (with a copy to the Administrative Agent), at the time or
times prescribed by applicable Law or reasonably requested by the Borrowers or the Administrative
Agent, such properly completed and executed documentation prescribed by applicable Law, or
reasonably requested by Borrowers, as will permit such payments to be made without withholding or
at a reduced rate of withholding. In addition, any Lender, if requested by the Borrowers or the
Administrative Agent, shall deliver such other documentation prescribed by applicable Law or
reasonably requested by the Borrowers or the Administrative Agent as will enable the Borrowers or
the Administrative Agent to determine whether or not such Lender is subject to backup withholding
or information reporting requirements.



     Without limiting the generality of the foregoing, in the event that any Borrower is resident
for tax purposes in the United States, any Foreign Lender shall deliver to the Borrowers and the
Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior
to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to
time thereafter upon the request of the Borrowers or the Administrative Agent, but only if such
Foreign Lender is legally entitled to do so), whichever of the following is applicable:




     (i) duly completed copies of Internal Revenue Service Form W-8BEN claiming
eligibility for benefits of an income tax treaty to which the United States is a party;




     (ii) duly completed copies of Internal Revenue Service Form W-8ECI;




     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of any Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue Service Form
W-8BEN; or



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     (iv) any other form prescribed by applicable Law as a basis for claiming exemption
from or a reduction in United States Federal withholding tax duly completed together with
such supplementary documentation as may be prescribed by applicable Law to permit the
Borrowers to determine the withholding or deduction required to be made.



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



     3.02. Illegality. If any Lender determines that any Change in Law has made it unlawful for any
Lender or its applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or
materially restricts the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the applicable offshore Dollar market, or to determine or charge interest rates based
upon the Eurodollar Rate, then, on notice thereof by such Lender to the Borrowers through the
Administrative Agent, any obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrowers that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, the Borrowers shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of
such Lender to Base Rate Loans, either on the last day of the Interest Period thereof, if such
Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrowers shall also pay interest on the amount so prepaid or
converted and all amounts due under Section 3.05 in accordance with the terms thereof due to such
prepayment or conversion. Each Lender agrees to designate a different Lending Office if such
designation will avoid the need for such notice and will not, in the reasonable judgment of such
Lender, otherwise be materially disadvantageous to such Lender.



     3.03. Inability to Determine Rates. If (a) the Administrative Agent (or any Lender) determines in
connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof
that Dollar deposits are not being offered to banks (or such Lender) in the applicable offshore
Dollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, or
adequate and reasonable means do not exist for determining the Eurodollar Rate for such Eurodollar
Rate Loan, or (b) the Required Lenders (or any Lender) determine and notify the Administrative
Agent that the Eurodollar Rate for such Eurodollar Rate Loan does not adequately and fairly reflect
the cost to the Lenders (or such Lender) of funding such Eurodollar Rate Loan, then the
Administrative Agent will promptly notify the Borrowers and all Lenders. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended until all of
the Lenders agree the conditions specified in clauses (a) or (b) above no longer exist, whereupon
the Administrative Agent shall revoke such notice. Upon receipt of such notice, the Borrowers may
revoke any pending request for a Borrowing, conversion



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or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.




     3.04. Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans.



     (a) If any Lender or the L/C Issuer determines that as a result of a Change in Law, or such
Lender’s or L/C Issuer’s compliance therewith, there shall be any increase in the cost to such
Lender or L/C Issuer of agreeing to make or making, funding or maintaining Eurodollar Rate Loans or
to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining
any Letter of Credit,
or a reduction in the amount received or receivable by such Lender or L/C Issuer in connection
with any of the foregoing (excluding for purposes of this subsection (a) any such increased costs
or reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section 3.01 shall
govern), (ii) changes in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of either thereof under the
Laws of which such Lender or L/C Issuer is organized or has its Lending Office, and (iii) reserve
requirements contemplated by Section 3.04(c) utilized, as to Eurodollar Rate Loans, in the
determination of the Eurodollar Rate), then from time to time upon demand of such Lender or L/C
Issuer (with a copy of such demand to the Administrative Agent), the Borrowers shall pay to such
Lender or L/C Issuer, as the case may be, such additional amounts as will compensate such Lender or
L/C Issuer for such increased cost or reduction.



     (b) If any Lender determines a Change in Law has the effect of reducing the rate of return on
the capital of such Lender or any corporation controlling such Lender as a consequence of such
Lender’s obligations hereunder (taking into consideration its policies with respect to capital
adequacy and such Lender’s desired return on capital), then from time to time upon demand of such
Lender (with a copy of such demand to the Administrative Agent), the Borrowers shall pay to such
Lender such additional amounts as will compensate such Lender for such reduction.



     (c) The Borrowers shall pay to each Lender, as long as such Lender shall be required under
regulations of the Board to maintain reserves with respect to liabilities or assets consisting of
or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”),
additional costs on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual
costs of such reserves allocated to such Revolving Loan by such Lender (as determined by such
Lender in good faith, which determination shall be conclusive), which shall be due and payable on
each date on which interest is payable on such Revolving Loan; provided the Borrowers shall have
received at least 15 days’ prior notice (with a copy to the Administrative Agent) of such
additional interest from such Lender. If a Lender fails to give notice 15 days prior to the
relevant Interest Payment Date, such additional interest shall be due and payable 15 days from
receipt of such notice.



     (d) Failure or delay on the part of any Lender or the L/C Issuer to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the L/C Issuer’s right
to demand such compensation; provided that the Borrowers shall not be required to compensate a
Lender or the L/C Issuer pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the L/C Issuer, as the case may be,
notifies the Borrowers of the Change in Law giving rise to such increased costs or reductions and
of such Lender’s or the L/C Issuer’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 180-day period referred to above shall be extended to include the period of retroactive effect
thereof.



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



     (a) any assignment pursuant to Section 10.15 (except pursuant to clause (iii) and clause (iv)
of the second sentence in Section 10.15, to the extent clause (iv) includes clause (iii)) or any
continuation, conversion, payment, prepayment of any Revolving Loan other than a Base Rate Loan on
a day other than the last day of the Interest Period for such Revolving Loan (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise); or



     (b) any failure by the Borrowers (for a reason other than the failure of such Lender to make a
Revolving Loan) to prepay, borrow, continue or convert any Revolving Loan other than a Base Rate
Loan on the date or in the amount notified by the Borrowers; including any loss of anticipated
profits and any loss or expense arising from the liquidation or reemployment of funds obtained by
it to maintain such Revolving Loan or from fees payable to terminate the deposits from which such
funds were obtained. The Borrowers shall also pay any customary administrative fees charged by
such Lender in connection with the foregoing.



     For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section
3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the
Eurodollar Rate for such Revolving Loan by a matching deposit or other borrowing in the applicable
offshore Dollar interbank market for a comparable amount and for a comparable period, whether or
not such Eurodollar Rate Loan was in fact so funded.



     3.06. Matters Applicable to all Requests for Compensation. A certificate of the Administrative
Agent or any Lender claiming compensation under this Article III and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error.
In determining such amount, the Administrative Agent or such Lender may use any reasonable
averaging and attribution methods.



     3.07. Survival. All of the Borrowers’ obligations under this Article III shall survive termination
of the Aggregate Revolving Commitment and payment in full of all the other Obligations.



     3.08. Mitigation Obligations. If any Lender or L/C Issuer requests compensation under Section
3.04, or if the Borrowers are required to pay any additional amount to any Lender, L/C Issuer or
any Governmental Authority for the account of any Lender or L/C Issuer, as applicable, pursuant to
Section 3.01, then such Lender or L/C Issuer shall use reasonable efforts to designate a different
lending office for funding or booking its Revolving Loans or issuing Letters of Credit hereunder or
to assign its rights and obligations hereunder to another of its offices, branches or affiliates,
if, in the judgment of such Lender or L/C Issuer, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 3.01 or Section 3.04, as the case may be,
in the future and (ii) would not subject such Lender or L/C Issuer to any un-reimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or L/C Issuer. The Borrowers
hereby agree to pay all reasonable costs and expenses incurred by any Lender or L/C Issuer in
connection with any such designation or assignment.



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ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSION




     4.01. Conditions Precedent to Initial Credit Extension.



     A. To be fulfilled by Borrowers. The obligation of the L/C Issuer and each Lender to
make its initial Credit Extension hereunder is subject to satisfaction of the following conditions
precedent:



     (a) Evidence satisfactory to the Administrative Agent that a minimum of $50,000,000 has been
received by Parent from the White Deer Energy Investment, on terms reasonably satisfactory to the
Administrative Agent.



     (b) Receipt by the Administrative Agent of executed and acknowledged counterparts of (i) the
Assignments and Assumptions relating to the First Lien Credit Agreement, (ii) the Assignment of
Second Lien Notes, Liens and Security Interests, and (iii) the Assignment of Midstream Notes, Liens
and Security Interests.



     (c) The Administrative Agent’s receipt of the following, each of which shall be originals or
facsimiles (followed promptly by originals) and unless otherwise specified, each properly executed
by a Responsible Officer of the signing Loan Party or other Person party thereto, each dated the
Closing Date (or, in the case of certificates of governmental officials, a recent date before the
Closing Date), and each in form and substance reasonably satisfactory to the Administrative Agent
and its legal counsel:




     (i) executed counterparts dated as of the Closing Date of this Agreement, the Parent
Guaranty, and the other amended Collateral Documents including, without limitation, the
amended Collateral Documents covering all assets of each Loan Party including, without
limitation, the Borrowing Base Oil and Gas Properties and related Collateral, and all
other Loan Documents sufficient in number for distribution to the Administrative Agent
each Lender and Borrowers;




     (ii) Revolving Notes executed by the Borrowers in favor of each Lender requesting a
Revolving Note, each Revolving Note in a principal amount equal to such Lender’s Revolving
Commitment, and each Revolving Note dated as of the Closing Date;




     (iii) such certificates of resolutions or other action, incumbency certificates
and/or other certificates of officers of each Loan Party as the Administrative Agent may
require to establish the identities of and verify the authority and capacity of each
officer thereof authorized to act in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;




     (iv) such evidence as the Administrative Agent may reasonably require to verify that
each Loan Party is duly organized or formed, validly existing, and in good standing in the
jurisdiction of its organization and is qualified to engage in business in each
jurisdiction where its ownership, lease or operation of properties or the conduct of its
business requires such qualification;




     (v) a certificate signed by a Responsible Officer of each Borrower certifying (A)
that the representations and warranties contained in Article V are true and correct in all
respects on and as of the Closing Date, (B) no Default or Event of Default will exist
immediately after closing and the initial Credit Extension under this Agreement, (C) all
material governmental and third party approvals necessary or, in the discretion of the
Administrative Agent, advisable



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in connection with the financing contemplated by this
Agreement and the continuing operation of the Borrowers and their respective Subsidiaries
(other than the Excluded Subsidiaries) have been obtained and are in full force and
effect, and (D) no action, suit, investigation or proceeding (other than the litigation
disclosed on any schedule hereto) is pending or, to the knowledge of such Responsible
Officer, threatened in any court or before any arbitrator or governmental authority by or
against the Borrowers, Parent, or any of their respective properties, that (x) could
reasonably be expected to materially and adversely affect the Borrowers and their
respective Subsidiaries (other than the Excluded Subsidiaries), taken as a
whole, or (z) seeks to affect or pertains to any transaction contemplated hereby or
the ability of the Borrowers or any Guarantor to perform its obligations under the Loan
Documents;




     (vi) a certificate of a Responsible Officer of the Borrowers (a) as to the
satisfaction of all conditions specified in this Section 4.01 and Section 4.02, (b)
certifying that the Borrowers have entered into Swap Contracts covering at least 80% of
estimated net production from Proved Developed Producing Reserves through December 31,
2010 and at least 70% of estimated net production from Proved Developed Producing Reserves
through December 31, 2011 and attaching copies of any new Swap Contracts, and (c)
providing such other financial information as the Administrative Agent may reasonably
request;




     (vii) a Request for Borrowing; and




     (viii) such other assurances, certificates, documents, consents or opinions as the
Administrative Agent reasonably may require.



     (d) An opinion from counsel to each Loan Party, in form and substance satisfactory to the
Administrative Agent and its counsel, including where advisable local counsel.



     (e) The amendment fees specified in Section 2.08(b) shall have been paid by the Borrowers.



     (f) The Borrowers shall have paid Attorney Costs of the Administrative Agent to the extent
invoiced prior to, or on, the Closing Date, subject to the limitation set forth in Section 10.04
hereof.



     (g) The Administrative Agent’s receipt of Collateral Documents, executed by each Borrower,
STP, and, as regards a second lien on the KPC Pipeline, KPC Pipeline, LLC, in appropriate form for
recording, where necessary, together with:




     (i) such Lien searches as the Administrative Agent shall have reasonably requested,
and such amendment or termination statements or other documents as may be necessary to
confirm that the Collateral is subject to no other Liens (other than Permitted Liens) in
favor of any Persons; provided Administrative Agent may elect to obtain such Lien searches
post-closing to reflect appropriate filings have been made to take into account the
Restructure Transactions;




     (ii) funds sufficient to pay any filing or recording tax or fee in connection with
any and all UCC-1 financing statements and fees associated with the filing of the
Mortgages, including any mortgage tax;




     (iii) evidence that the Administrative Agent has been named as mortgagee or
additional insured under all policies of casualty insurance pertaining to the Collateral
and all general liability policies;



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     (iv) certificates evidencing all of the issued and outstanding shares of capital
stock or membership interests pledged pursuant thereto, which certificates shall in each
case be accompanied by undated stock powers duly executed in blank, or, if any securities
pledged pursuant thereto are uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that the security interest in such uncertificated
securities has been transferred to and perfected by the Administrative Agent for the
benefit of the Lenders in accordance with the Uniform Commercial Code; and




     (v) evidence that all other actions reasonably necessary or, in the opinion of the
Administrative Agent or the Lenders, desirable to perfect and protect the first priority
Lien created by the Collateral Documents (except to the extent otherwise permitted
hereunder), and to enhance the Administrative Agent’s ability to preserve and protect its
interests in and access to the Collateral, have been taken.



     (h) The Administrative Agent’s receipt (with sufficient copies for all Lenders) of the
certificate of formation of each Borrower, together with all amendments, certified by an
appropriate governmental officer in its jurisdiction of organization, as well as any other
information required by Section 326 of the USA Patriot Act or necessary for the Administrative
Agent or any Lender to verify the identity of Borrowers as required by Section 326 of the USA
Patriot Act; .



     (i) Payment by the Borrowers of the Closing Date Prepayment Amount; and



     (j) Closing of the Secured Pipeline Loan.


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




     B. Other Conditions Precedent:



     (a) Termination of PESC’s Guaranty of the Prior First Lien Credit Agreement, the Prior Second
Lien Credit Agreement, and the Midstream Credit Agreement;



     (b) Amendment of the Guaranty previously executed by Parent relating to the Prior First Lien
Credit Agreement, the Second Lien Credit Agreement, and the Midstream Credit Agreement;



     (c) Closing of the Amended QRC facility and execution by Lenders of the terminations and
guaranty releases associated therewith; and



     (d) Closing of the Secured Pipeline Loan.



     4.02. Conditions to all Credit Extensions. The obligation of each Lender to honor any Borrowing
Notice for a Credit Extension and the obligation of the L/C Issuer to issue any Letter of Credit is
subject to the following conditions precedent:



     (a) The representations and warranties of the Loan Parties contained in Article V (including,
without limitation, Sections 5.05(b) and 5.06), or which are contained in any document furnished at
any time under or in connection herewith, including, but not limited to the Collateral Documents,
shall be true and correct in all material respects on and as of the date such Revolving Loan is
made or such Letter of Credit is issued except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be true and correct in
all material respects as of such earlier date.



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     (b) No Borrowing Base Deficiency, Default or Event of Default shall exist or would result from
such proposed Revolving Loan or L/C Credit Extension.



     (c) The Administrative Agent and, if applicable, the L/C Issuer, shall have received a Request
for Credit Extension and, if applicable, a Letter of Credit Application in accordance with the
requirements hereof.



     (d) As of the time of funding any additional advances to the Borrowers that have been approved
by the Lenders pursuant to Section 2.01 and are made in conjunction with the addition of Oil and
Gas Properties or other Collateral owned by the Borrowers or other Loan Party to the Borrowing Base
Oil and Gas Properties, the Borrowers and each other applicable Loan Party shall have duly
delivered to the Administrative Agent: (i) the Collateral Documents that are necessary or
appropriate, in the reasonable opinion of the Administrative Agent, relating to such additional Oil
and Gas Properties or other Collateral, and (ii) evidence, reasonably satisfactory to Agent in its
sole discretion, that the Borrowers and the Borrowing Base Oil and Gas Properties will be in
material compliance with all Environmental Laws. Furthermore, Administrative Agent shall have
completed its title due diligence confirming that a Borrower or other Loan Party has satisfactory
title to the Leases.



     (e) The Administrative Agent shall have received, in form and substance reasonably
satisfactory to it, such other assurances, certificates, documents or consents related to the
foregoing as the Administrative Agent or the Required Lenders reasonably may require.



     Each Request for Credit Extension submitted by a Borrower shall be deemed to be a
representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.



     4.03. Conditions Precedent to Funding Loans for Permitted Acquisitions. The obligation of each
Lender to fund its portion of any Revolving Loan to finance a Permitted Acquisition shall be
subject to satisfaction of the conditions precedent set forth in Sections 4.02(a) and (b) and to
the additional condition precedent that if, such Permitted Acquisition involves the acquisition of
equity interests of a Person for a purchase price that exceeds $20,000,000 and the Borrowers intend
to fund, in whole or in part, the Permitted Acquisition with a Revolving Loan in excess of
$20,000,000, then the Borrowers shall deliver to the Administrative Agent and the Lenders at least
five Business Days before any requested Revolving Loan to fund a Permitted Acquisitions (i) audited
financial statements of the Person or business proposed to be acquired (or if audited financial
statements are unavailable, such unaudited financial statements pertaining to the Person or
business proposed to be acquired as shall be satisfactory in form and substance to the
Administrative Agent) and (ii) a Compliance Certificate demonstrating pro forma compliance with the
financial covenants set forth in Section 7.16. In the event that the Permitted Acquisition is
funded, in whole or in part, with the proceeds of equity and other cash sufficient in amount that
Borrowers do not require a Revolving Loan in an amount that exceeds $20,000,000 to finance a
Permitted Acquisition, then the Borrowers shall not be required to provide the information
described in clauses (i) and (ii) of this Section.



ARTICLE V.

REPRESENTATIONS AND WARRANTIES




     Each of the Borrowers represents and warrants to the Administrative Agent and the Lenders
that:



     5.01. Existence; Qualification and Power; Compliance with Laws. As of the Closing Date, PESC is a
direct wholly-owned subsidiary of Parent, and MidContinent, Eastern, and KPC Pipeline, LLC are
direct wholly—owned subsidiaries of PESC. Each Loan Party (a) is a corporation or limited
liability



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company duly organized or formed, validly existing and in good standing under the Laws of
the jurisdiction of its incorporation or organization, (b) has all requisite power and authority
and all governmental licenses, authorizations, consents and approvals to own its assets, carry on
its business and to execute, deliver, and perform its obligations under the Loan Documents to which
it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each
jurisdiction where
its ownership, lease or operation of properties or the conduct of its business requires such
qualification or license, except in each case referred to in clause (a), (b) or (c), to the extent
that failure to do so could not reasonably be expected to have a Material Adverse Effect, (d) is
not a Person (I) whose property or interest in property is blocked or subject to blocking pursuant
to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), or (II) who engages in any dealings or transactions prohibited by Section 2 of such
executive order, or is otherwise associated with any such Person in any manner violative of Section
2, or (III) on the list of Specially Designated Nationals and Blocked Persons or subject to the
limitations or prohibitions under any other U.S. Department of Treasury’s Office of Foreign Assets
Control regulation or executive order, and (e) is in compliance, in all material respects, with
(A) the Trading with the Enemy Act, as amended, and each of the foreign assets control regulations
of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other
enabling legislation or executive order relating thereto, and (B) the Uniting And Strengthening
America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot
Act of 2001). No part of the proceeds of the Revolving Loans or L/C Credit Extensions will be
used, directly or indirectly, for any payments to any governmental official or employee, political
party, official of a political party, candidate for political office, or anyone else acting in an
official capacity, in order to obtain, retain or direct business or obtain any improper advantage,
in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.



     5.02. Authorization; No Contravention. The execution, delivery and performance by each Loan Party
of each Loan Document to which such Person is party, have been duly authorized by all necessary
corporate or other organizational action, and do not and will not: (a) contravene the terms of any
of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention
of, or the creation of any Lien under, any material Contractual Obligation (other than the Liens
created under the Loan Documents) to which such Person is a party or any order, injunction, writ or
decree of any Governmental Authority to which such Person or its property is subject; or (c)
violate any Law except in each case referred to in clause (b) or (c), to the extent that any such
conflict, breach, contravention, creation or violation could not reasonably be expected to have a
Material Adverse Effect.



     5.03. Governmental Authorization. No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority, except for the filings in connection
with the granting or continuation of security interests pursuant to the Collateral Documents or
filings to maintain the existence, foreign qualification and good standing of the Loan Parties, is
necessary or required in connection with the execution, delivery or performance by any Loan Party
of this Agreement or any other Loan Document.



     5.04. Binding Effect. This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been duly executed and delivered by each Loan Party that is party thereto.
This Agreement constitutes, and each other Loan Document when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is
party thereto 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.



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     5.05. Financial Statements; No Material Adverse Effect.



     (a) The financial statements delivered to the Lenders pursuant to Sections 6.01(a) and (b) for
periods commencing with the period beginning January 1, 2010 have been, in the case of financial
statements delivered prior to the Closing Date, and will be, with respect to hereafter delivered
financial statements, prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein. Such financial statements will: (i)
fairly present in all material respects the financial condition of Parent and its consolidated
Subsidiaries as of the date thereof and their results of operations for the period covered thereby
in accordance in all material respects with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein, subject in the case of quarterly financial
statements delivered pursuant to Section 6.01(b) to year-end audit adjustments and the absence of
footnotes; and (ii) show all material indebtedness and other liabilities of Parent and its
consolidated Subsidiaries as of the date thereof required to be reflected therein in accordance
with GAAP consistently applied throughout the period covered thereby.



     (b) Since December 31, 2009, there has been no event or circumstance that has or could
reasonably be expected to have a Material Adverse Effect.



     5.06. Litigation. Except for actions, suits, proceedings, claims and disputes arising out of or
related to the Misappropriation Transaction or as disclosed on Schedule 5.06, there are no actions,
suits, proceedings, claims or disputes pending or, to the knowledge of Borrowers, threatened or
contemplated in writing, at law, in equity, in arbitration or before any Governmental Authority, by
or against Borrowers or any Borrower Affiliate or against any of their properties or revenues which
(a) seek to affect or pertain to this Agreement or any other Loan Document, the borrowing of
Revolving Loans, the use of the proceeds thereof, or the issuance of Letters of Credit hereunder,
or (b) could reasonably be expected to have a Material Adverse Effect.



     5.07. No Default. Neither the Borrowers nor any Borrower Affiliate is in default under or with
respect to any Contractual Obligation which could be reasonably expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other Loan Document. There
is no default under any Material Agreement, which could reasonably be expected to have a Material
Adverse Effect.



     5.08. Title; Liens; Priority of Liens. Each Loan Party (a) has Marketable Title in fee simple to,
or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its
business, except for such defects in title as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (b) owns the personal property granted by
it as Collateral under the Collateral Documents, free and clear of any and all Liens in favor of
third parties other than Permitted Liens, and (c) has Marketable Title to the working and net
revenue interests in the Borrowing Base Oil and Gas Properties as reflected on the Mortgage
encumbering such Borrowing Base Oil and Gas Properties, subject to the limitations and
qualifications set forth in such Mortgage. Except as reflected on the Mortgage encumbering such
Borrowing Base Oil and Gas Properties, all such shares of production which each Borrower and each
other applicable Loan Party is entitled to receive, and shares of expenses which each Borrower and
each other applicable Loan Party
is obligated to bear, are not subject to change, except for changes attributable to future
elections by each such Borrower and each other applicable Loan Party not to participate in
operations proposed pursuant to customary forms of applicable joint operating agreements, and
except for changes attributable to changes in participating areas under any federal units wherein
participating areas may be formed, enlarged or contracted in accordance with the rules and
regulations of the applicable Governmental Authority. Upon the proper filing of UCC financing
statements, the recording of the Mortgages, and the taking of the other actions required by the



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Administrative Agent, the Liens granted by Borrowers in property pursuant to the Collateral
Documents will constitute valid and enforceable first, prior and perfected Liens on the Collateral
constituting the Borrowing Base Oil and Gas Properties and the Bluestem Gathering System in favor
of the Administrative Agent, for the ratable benefit of the Lenders, subject to Permitted Liens
and, in the case of Collateral consisting of the KPC Pipeline, second perfected Liens in favor of
the Administrative Agent, for the ratable benefit of the Lenders, subject to the Permitted Liens
The property of the Loan Parties is subject to no Liens, other than Permitted Liens.



     5.09. Environmental Compliance. The Borrowers have reasonably concluded that (a) there are no
claims alleging potential liability under or responsibility for violation of any Environmental Law
except any such claims that could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect, (b) there is no environmental condition or circumstance, such as
the presence or Release of any Hazardous Substance, on any property owned, operated or used by any
Borrower or any Borrower Affiliate that could reasonably be expected to have a Material Adverse
Effect, and (c) there is no violation by any Borrower or any Borrower Affiliate of any
Environmental Law, except for such violations as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.



     5.10. Insurance. The properties of the Borrowers and the Borrower Affiliates are insured with
financially sound and reputable insurance companies not Affiliates of the Borrowers, in such
amounts, with such deductibles and covering such risks as are consistent with past practice.



     5.11. Taxes. The Borrowers and the Borrower Affiliates have filed all federal, state and other
material tax returns and reports required to be filed, and have paid all federal, state and other
material taxes, assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP or to the extent that the failure to do so could not reasonably be
expected to result in a Material Adverse Effect. To the knowledge of the Borrowers, there is no
proposed tax assessment against the Borrowers or any Borrower Affiliate or any of their respective
Subsidiaries that would, if made, have a Material Adverse Effect.



     5.12. ERISA Compliance. The representations and warranties set forth in this Section 5.12 shall
apply only if any Borrower or an ERISA Affiliate establishes a Plan.



     (a) Each Plan is in compliance in all material respects with the applicable provisions of
ERISA, the Code and other federal or state Laws except to the extent that noncompliance could not
reasonably be expected to have a Material Adverse Effect and except to the extent disclosed on
Schedule 5.12. Each Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS, an application for such a letter is currently being
processed by the IRS with respect thereto or the Plan utilizes a prototype form plan document and
the prototype plan’s sponsor has received a favorable opinion or advisory letter from the IRS upon
which such Borrower or such ERISA Affiliate may rely, and, to the knowledge of the Borrowers,
nothing has occurred which would prevent, or cause the loss of, such qualification, except to the
extent that nonqualification could not reasonably be expected to have a Material Adverse Effect and
except to the extent disclosed on Schedule 5.12. Any such Borrower and each ERISA Affiliate have
made all required contributions to each Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan, except to the extent that nonpayment could not reasonably
be expected to have a Material Adverse Effect except to the extent disclosed on Schedule 5.12.



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     (b) There are no pending or, to the knowledge of the Borrowers, threatened claims, actions or
lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably
be expected to have a Material Adverse Effect or except to the extent disclosed on Schedule 5.12.
Neither any Borrower nor any ERISA Affiliate has engaged in or knowingly permitted to occur and, to
each Borrower’s knowledge, no other party has engaged in or permitted to occur any prohibited
transaction or violation of the fiduciary responsibility rules with respect to any Plan that has
resulted or could reasonably be expected to result in a Material Adverse Effect or except to the
extent disclosed on Schedule 5.12.



     (c) (i) No ERISA Event has occurred or is reasonably expected to occur that could reasonably
be expected to have a Material Adverse Effect; (ii) no Pension Plan has any Unfunded Pension
Liability that (when aggregated with any other Unfunded Pension Liability) has resulted or could
reasonably be expected to result in a Material Adverse Effect; and (iii) neither any Borrower nor
any ERISA Affiliate has engaged in a transaction that could be subject to Sections 4069 or 4212(c)
of ERISA that could reasonably be expected to have a Material Adverse Effect.



     5.13. Subsidiaries and other Investments. Except as set forth on Schedule 5.13, as of the Closing
Date, the Borrowers have no Subsidiaries and have no equity Investment in any other Person.



     5.14. Margin Regulations; Investment Company Act; Use of Proceeds.



     (a) Neither any Borrower nor any Borrower Affiliate is engaged nor will it engage, principally
or as one of its important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board), or extending credit for the purpose of
purchasing or carrying margin stock.



     (b) Neither any Borrower nor any Borrower Affiliate, no Person controlling any Borrower or any
Borrower Affiliate, or any Subsidiary thereof is or is required to be registered as an “investment
company” under the Investment Company Act of 1940.



     (c) The Borrowers will use all proceeds of Credit Extension in the manner set forth in Section
6.12.



     5.15. Disclosure; No Material Misstatements. All material factual information furnished in connection with this Agreement by or on behalf of
any Borrower in writing to the Administrative Agent or any Lender for purposes of or in connection
with this Agreement or any transaction contemplated hereby, as modified or supplemented by other
information so furnished, is true and accurate in all material respects, and such information is
not, or shall not be, as the case may be, incomplete by omitting to state any material fact
necessary to make such information, in light of the circumstances under which it was made, not
misleading. All estimates and projections delivered to the Administrative Agent or any Lender in
connection with this Agreement were based upon information that was available at the time such
estimates or projections were prepared and believed to be correct and upon assumptions believed to
be reasonable at that time; however, the Borrowers do not warrant that such estimates and
projections will ultimately prove to have been accurate.



     5.16. Location of Business and Offices. Each Loan Party’s (i) jurisdiction of organization, (ii)
organizational identification number, (iii) correct legal name, and (iv) principal place of
business and chief executive offices are as set forth in the Security Agreement from such Loan
Party.



     5.17. Compliance with Laws. Except with respect to Environmental Laws and Laws relating to taxes
and employee benefits (which are covered by Sections 5.09, 5.11 and 5.12, respectively), and



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except
as a consequence of or related to the Misappropriation Transaction, neither any Borrower nor any
Borrower Affiliate is in violation of any Laws, other than such violations which could not,
individually or collectively, reasonably be expected to have a Material Adverse Effect. Neither
any Borrower nor any Borrower Affiliate has received notice alleging any noncompliance with any
Laws, except for (i) such noncompliance which no longer exists, (ii) alleged noncompliance arising
out of or related to the Misappropriation Transaction, or (iii) noncompliance which could not
reasonably be expected to have a Material Adverse Effect.



     5.18. Third Party Approvals. No approval, consent, exemption, authorization, or other action by,
or notice to, or filing with, any party that is not a party to this Agreement is necessary or
required in connection with the execution, delivery or performance by any Loan Party of this
Agreement or any other Loan Document except where obtained or where the failure to receive such
approval, consent, exemption, authorization, or the failure to do such other action by, or provide
such notice could not reasonably be expected to have a Material Adverse Effect; and provided,
however, that the transfer of rights in certain Collateral consisting of rights under contracts to
a foreclosure purchaser may, in some instances, require the consent of third parties who have
rights in such Collateral.



     5.19. Solvency. The Borrowers on a consolidated basis are not “insolvent” as such term is used and
defined in (i) the United States Bankruptcy Code or (ii) the New York Uniform Fraudulent Transfer
Act.



     5.20. Oil and Gas Leases. The Leases which constitute any part of the Borrowing Base Oil and Gas
Properties are in full force and effect as to those portions thereof that comprise the Borrowing
Base Oil and Gas Properties, except to the extent the failure to be in full force and effect could
not reasonably be expected to have a Material Adverse Effect.



     5.21. Oil and Gas Contracts. Except (a) as set out on Schedule 5.21 attached hereto, and (b) as
may subsequently occur and be disclosed by Borrowers in the next Compliance Certificate delivered
by Borrowers after such occurrence, neither any Borrower nor any other Loan Party is obligated, by
virtue of any prepayment under any contract providing for the sale by any Borrower or any other
Loan Party of Hydrocarbons which contains a “take-or-pay” clause or under any similar prepayment
agreement or arrangement, including, “gas balancing agreements”, to deliver a material amount of
Hydrocarbons produced from the Borrowing Base Oil and Gas Properties at some future time without
then or thereafter receiving full payment therefor (i.e., in the case of oil, not in excess of
sixty days, and in the case of gas, not in excess of ninety days). Except (a) as set out on
Schedule 5.21 attached hereto, and (b) as may subsequently occur and be disclosed by Borrowers in
the next Compliance Certificate delivered by Borrowers after such occurrence, the Borrowing Base
Oil and Gas Properties are not subject to any contractual or other arrangement for the sale of
crude oil which cannot be canceled on ninety days’ (or less) notice, unless the price provided for
therein is equal to or greater than the prevailing market price in the vicinity. To the best of the
Borrowers’ knowledge, the Borrowing Base Oil and Gas Properties are not subject to any regulatory
refund obligation and no facts exist which might cause the same to be imposed.



     5.22. Producing Wells. All producing wells that constitute part of the Borrowing Base Oil and Gas
Properties (a) have been, during all times that any such wells were operated by any Borrower or any
Borrower Affiliate, and (b) to the knowledge of Borrowers, have been at all other times, drilled,
operated and produced in conformity with all applicable Laws, are subject to no penalties on
account of past production, and are bottomed under and are producing from, and the well bores are
wholly within, the Borrowing Base Oil and Gas Properties, or on Oil and Gas Properties which have
been pooled, unitized or communitized with the Borrowing Base Oil and Gas Properties, except to the
extent that any noncompliance with the representations set out in this Section 5.22 would not have
a Material Adverse Effect.



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     5.23. Purchasers of Production. The names and business addresses of the Persons who (a) have
purchased any of Borrowers’ or any other Loan Party’s interests in oil and gas produced from the
Borrowing Base Oil and Gas Properties during the six calendar months preceding the Closing Date,
and (b) as of the Closing Date, are considered by Borrowers or other Loan Party to be potential
future purchasers of any Borrower’s interest in oil and gas produced from the Borrowing Base Oil
and Gas Properties, are identified on Schedule 5.23 attached hereto.



     5.24. Swap Contracts. Schedule 5.24, as of the date hereof, sets forth, a true and complete list
of all Swap Contracts of each Loan Party, 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.



ARTICLE VI.

AFFIRMATIVE COVENANTS




     So long as any Lender shall have any Revolving Commitment hereunder, or any Revolving Loan or
other Obligation (other than contingent indemnity obligations and obligations under Lender Hedging
Agreements) shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
(unless
such Letter of Credit has been Cash Collateralized), each of the Borrowers shall, and shall
cause each of their Subsidiaries (other than the Excluded Subsidiaries) to:



     6.01. Financial Statements. Deliver to the Administrative Agent, in form and detail reasonably
satisfactory to the Administrative Agent and the Required Lenders (and the Administrative Agent
shall deliver to the Lenders):



     (a) as soon as available, but in any event within 90 days after the end of each fiscal year of
Parent (beginning with the 2010 fiscal year), consolidated balance sheets of Parent and its
Subsidiaries as at the end of such fiscal year, and the related statements of income and cash flows
for such fiscal year and consolidating financial statements of Parent and its Subsidiaries at the
end of such fiscal year (provided, that as long as Parent is a public company, such financial
statements shall be required to be furnished no later than the date that Parent is required to
timely file its annual report on Form 10-K with the Securities Exchange Commission (taking into
account any extension of time available under Rule 12b-25 under the Securities Exchange Act of
1934)), setting forth in each case in comparative form the figures for the previous fiscal year of
Parent, if any, all in reasonable detail, audited and accompanied by a report and opinion of UHY
LLP or other nationally recognized firm of independent certified public accountants reasonably
acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with
GAAP (except as otherwise noted herein) and, as it pertains to the Borrowers and each of their
respective Subsidiaries (other than the Excluded Subsidiaries), shall not be subject to any
qualifications or exceptions as to the scope of the audit nor to any qualifications and exceptions
not reasonably acceptable to the Required Lenders;



     (b) as soon as available, but in any event within 45 days after the end of each of the first
three fiscal quarters of each fiscal year of Parent, an unaudited consolidated balance sheet of
Parent and its Subsidiaries as at the end of such fiscal quarter, and the related statements of
income and cash flows for such fiscal quarter and for the portion of Parent’s fiscal year then
ended and unaudited consolidating financial statements of Parent and its Subsidiaries (provided,
that as long as Parent continue to be a public company, such financial statements shall be required
to be furnished no later than the date that Parent is required to timely file its quarterly report
on Form 10-Q with the Securities Exchange Commission (taking into account any extension of time
available under Rule 12b-25 under the Securities Exchange Act of 1934)), setting forth in each case
in comparative form the figures for the corresponding fiscal



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quarter of the previous fiscal year of
Parent and the corresponding portion of the previous fiscal year of Parent, if any, all in
reasonable detail and certified by a Responsible Officer of Parent, as fairly presenting in all
material respects the financial condition, results of operations and cash flows of Parent and its
Subsidiaries in accordance with GAAP (except as otherwise noted herein), subject only to normal
year-end audit adjustments and the absence of footnotes;



     (c) within 90 days after the end of each fiscal year, PESC shall deliver Parent’s one year
projection/budget for the year following such fiscal year; and



     (d) on a monthly basis, on or before the thirtieth (30th) day after the end of each month
except as to the end of each month that is also at the end of each quarter, in which case, on or
before the forty-fifth (45th) day after the end of such quarter, until the reporting package is
delivered on or before May 30, 2011, for the month ending April 30, 2011, PESC shall deliver to
Administrative Agent, Parent’s monthly internal financial reporting package, which includes (i) an
unaudited income statement, balance sheet and capital expenditures on a GAAP basis relating to the
assets in Appalachia (including the Marcellus Assets), the assets in the Cherokee Basin (including
the Oil and Gas Properties located there and the Bluestem Gathering System), the Central Oklahoma
oil properties, and the KPC Pipeline; (ii) a detail of general and administrative expenses; (iii) a
summary of open derivative positions, and (iv) with
respect to the financial reporting package delivered at the end of each month that is also at
the end of each quarter, press release tables and non-GAAP reconciliations.



     6.02. Certificates; Other Information. Deliver to the Administrative Agent, in form and detail
reasonably satisfactory to the Administrative Agent and the Required Lenders:



     (a) concurrently with the delivery of the financial statements referred to in Sections 6.01(a)
and (b), a duly completed Compliance Certificate in form of Exhibit C signed by a Responsible
Officer of Parent;



     (b) promptly upon request, copies of each annual report, proxy or financial statement or other
report or written communication sent to the equity owners of Parent, and copies of all annual,
regular, periodic and special reports and registration statements which Parent may file or be
required to file with the Securities and Exchange Commission under Section 13 or 15(d) of the
Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative
Agent pursuant hereto;



     (c) copies of Material Agreements and any material amendment thereto; and



     (d) promptly, such additional information (that is in the possession of the Borrowers or that
may be readily produced by the Borrowers without undue effort or expense) regarding the business,
financial or corporate affairs of any Loan Party as the Administrative Agent, at the request of any
Lender, may from time to time reasonably request, which information may include copies of any
detailed audit reports, if any, management letters or recommendations submitted to the board of
directors or managers (or the audit committee of the board of directors or managers) of Parent by
independent accountants in connection with the accounts or books of Parent or any of its
Subsidiaries, or any audit of any of them.



     6.03. Notices. Promptly notify the Administrative Agent:



     (a) of the occurrence of any Default or Event of Default, as soon as possible but in any event
within ten (10) days after the Borrowers have knowledge thereof;



     (b) of any matter that has resulted or could reasonably be expected to result in a Material
Adverse Effect, including any of the following events if such has resulted or could reasonably be



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expected to result in a Material Adverse Effect: (i) breach or non-performance of, or any default
under, a Contractual Obligation of any Loan Party; (ii) any litigation, investigation by or
required by a Governmental Authority, proceeding or suspension of licenses or permits between any
Loan Party and any Governmental Authority (other than any litigation disclosed on any schedule
hereto); and (iii) any dispute, litigation, investigation or proceeding involving any Loan Party
related to any Environmental Law;



     (c) of any litigation, investigation or proceeding (other than any litigation disclosed on any
schedule hereto) known to and affecting any Borrower or any Borrower Affiliate in which (i) the
amount involved exceeds (individually or collectively) $1,000,000, or (ii) injunctive relief or
other relief is sought, which could be reasonably expected to have a Material Adverse Effect;



     (d) of any material change in accounting policies or financial reporting practices by Parent
or the Borrowers; and



     (e) by means of written notice (except in the case of the Restructure Transactions) at least
ten (10) days before any proposed (A) relocation of any Loan Party’s principal place of business or
chief executive office, (B) change of any Loan Party’s name, identity, or corporate, partnership or
limited liability company structure, (C) relocation of the place where the books and records
concerning a Loan Party’s accounts are kept, (D) relocation of any Loan Party’s Collateral (other
than delivery of inventory in the ordinary course of business to third party contractors for
processing and sales of inventory in the ordinary course of business or as permitted by any Loan
Document) to a location not described on Annex A to the Security Agreement to which such Loan Party
is a party, and (E) change of any Loan Party’s jurisdiction of organization or organizational
identification number, as applicable.



     Each notice pursuant to this Section shall be accompanied by a statement of a Responsible
Officer of the notifying Borrower that is the relevant Loan Party or whose Subsidiary is the
relevant Loan Party, setting forth details of the occurrence referred to therein and stating what
action such Borrower has taken and proposes to take with respect thereto. Each notice pursuant to
Section 6.03(a) shall describe with particularity any and all provisions of this Agreement or other
Loan Document that have been breached.



     6.04. Payment of Obligations. Pay and discharge as the same shall become due and payable (a) the
Obligations, (b) all tax liabilities, assessments and governmental charges or levies upon it or its
properties or assets and (c) all lawful claims which, if unpaid, would by law become a Lien upon
its property; except, in the case of clause (b) or (c), where (x) the validity thereof are being
contested in good faith by appropriate proceedings and (y) adequate reserves in accordance with
GAAP are being maintained by the appropriate Loan Party.



     6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect
its legal existence and good standing under the Laws of the jurisdiction of its organization,
except in a transaction permitted by Sections 7.06 and 7.07 and the Restructure Transactions, and
(b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises
material to the conduct of its business, except in a transaction permitted by Sections 7.06 and
7.07, except where the failure to do so in each case could not reasonably be expected to have a
Material Adverse Effect.



     6.06. Maintenance of Assets and Business. (a) Keep all property material to the conduct of its
business in good working order and condition (ordinary wear and tear excepted) and make all
necessary repairs thereto and replacements thereof; provided that no item of operating equipment
need be repaired or replaced if the Borrowers shall determine in good faith that such action is not
necessary or desirable for the continued efficient and profitable operation of the business of the
Borrowers and their



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respective Subsidiaries (other than the Excluded Subsidiaries); (b) do all
things necessary to obtain, renew, extend, and continue in effect all Authorizations which may at
any time and from time to time be necessary for the operation of its business in compliance with
applicable Law, except where the failure to so maintain, renew, extend, or continue in effect could
not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care
typical in the industry in the operation and maintenance of its facilities.



     6.07. Maintenance of Insurance. (a) Maintain with responsible insurance companies insurance with
respect to its properties and business (including business interruption insurance) against such
casualties and contingencies and of such types
and in such amounts as is customary in the case of similar businesses and which is reasonably
acceptable to the Administrative Agent and will (i) furnish to the Administrative Agent on each
anniversary of the Closing Date a certificate or certificates of insurance from the applicable
insurance company evidencing the existence of insurance required to be maintained by this Agreement
and the other Loan Documents and evidencing that Administrative Agent is listed as mortgagee on
property insurance as to all properties serving as Collateral hereto and the Administrative Agent
and Lenders are additional insureds on liability insurance, and (ii) upon request of the
Administrative Agent, furnish to each Lender at reasonable intervals a certificate of an Authorized
Officer of the Borrowers setting forth the nature and extent of all insurance maintained in
accordance with this Section.



     (b) (i) Except as the Administrative Agent may otherwise consent to in writing, Borrowers
will, and will cause each of their respective Subsidiaries to, forthwith upon receipt, transmit
and deliver to the Administrative Agent, in the form received, all cash, checks, drafts, chattel
paper and other instruments or writings for the payment of money (properly endorsed, where
required, so that such items may be collected by the Administrative Agent) which may be received by
the Borrowers at any time in full or partial payment of amounts due under any insurance policy in
an amount in excess of $1,000,000. Except as the Administrative Agent may otherwise consent in
writing, any such items which may be received by the Borrowers in excess of $1,000,000 will not be
commingled with any other of its funds or property, but will be held separate and apart from its
own funds or property and upon express trust for the Administrative Agent until delivery is made to
the Administrative Agent.



     6.08. Compliance with Laws and Contractual Obligations. (a) Comply in all material respects with
the requirements of all Laws (including Environmental Laws) applicable to it or to its business or
property, except in such instances in which (i) such requirement of Law is being contested in good
faith or a bona fide dispute exists with respect thereto, (ii) the failure to comply therewith
arose out of or was related to the Misappropriation Transaction or (iii) the failure to comply
therewith could not be reasonably expected to have a Material Adverse Effect; and (b) comply with
all Contractual Obligations, except if the failure to comply therewith could not be reasonably
expected to have a Material Adverse Effect.



     6.09. Books and Records. Maintain (a) proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied (except as otherwise noted herein)
shall be made of all financial transactions and matters involving its assets and business, and (b)
maintain such books of record and account in material conformity with all applicable requirements
of any Governmental Authority having regulatory jurisdiction over it.



     6.10. Inspection Rights. Permit representatives and independent contractors of the Administrative
Agent and each Lender to visit and inspect any of its properties, to examine its corporate,
financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its
affairs, finances and accounts with its officers and independent public accountants, and make all
financial records and other records relating to the Borrowing Base Oil & Gas Properties available
for inspection at such



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reasonable times during normal business hours and as often as may be
reasonably desired, upon reasonable advance notice to the Borrowers; provided, however, that when
an Event of Default exists the Administrative Agent or any Lender (or any of their respective
representatives or independent contractors) may do any of the foregoing at the expense of the
Borrowers at any time during normal business hours and without advance notice. Additionally,
Administrative Agent may, at the request of the Required Lenders, conduct or cause to be
conducted a commercial field examination of the Borrowers’ and their respective Subsidiaries’
(other than the Excluded Subsidiaries and KPC Pipeline, LLC and any Subsidiary it may hereafter
form) financial and accounting records and Borrowers shall pay the cost of such commercial field
examination; provided so long as no Event of Default shall exist and be continuing, no more than
one such commercial field examination shall be undertaken at the Borrowers’ expense during any
period of twelve consecutive months and the Borrowers shall not be obligated to pay more than
$20,000 for any such annual commercial field examination.



     6.11. Compliance with ERISA. With respect to each Plan maintained by a Borrower or an ERISA
Affiliate, do each of the following: (a) maintain each Plan in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state Laws, (b) cause each
Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (c)
make all required contributions to any Plan subject to Section 412 of the Code, except to the
extent that noncompliance, with respect to each event listed above, could not be reasonably
expected to have a Material Adverse Effect and except to the extent disclosed on Schedule 5.12.



     6.12. Use of Proceeds. Use proceeds of the Facility on and after the Closing Date to (i) finance
working capital and general company purposes of the Borrowers and their respective Subsidiaries,
including in connection with the acquisition development, exploitation and exploration of Oil and
Gas Properties and the Midstream Businesses, (ii) finance Permitted Acquisitions; (iii) issue
Letters of Credit, (iv) pay fees, costs and expenses owed pursuant to this Agreement; (v) to pay
principal and interest on the Secured Pipeline Loan and make other Transfer Payments and Restricted
Payments permitted under Section 7.08.; and (vi) to renew, arrange and extend the Indebtedness
owing under the Prior First Lien Credit Agreement, the Prior Second Lien Credit Agreement, and in
part, under the Prior Midstream Credit Agreement.



     6.13. Material Agreements. Enforce the obligations of parties to the Material Agreements, except
where such failure could not reasonably be expected to have a Material Adverse Effect.



     6.14. Guaranties; New Subsidiaries’ Collateral Documents. As an inducement to the Administrative
Agent and Lenders to enter into this Agreement, cause Parent and each Subsidiary of the Borrowers
(other than the Excluded Subsidiaries and KPC Pipeline, LLC and any Subsidiary it may hereafter
form) to execute and deliver to Administrative Agent a Guaranty executed by the Parent and
Borrowers’ Subsidiaries (other than the Excluded Subsidiaries and KPC Pipeline, LLC and any
Subsidiary it may hereafter form), each in form and substance reasonably satisfactory to the
Administrative Agent, providing for the guaranty of payment and performance of the Obligations. In
addition, within thirty (30) days after the formation or acquisition of any Subsidiary of any
Borrower after the date hereof (other than the Excluded Subsidiaries and KPC Pipeline, LLC and any
Subsidiary it may hereafter form), cause such Subsidiary to execute and deliver to the
Administrative Agent (a) a Guaranty in form and substance reasonably satisfactory to the
Administrative Agent, providing for the guaranty of payment and performance of the Obligations, (b)
Collateral Documents in form and substance reasonably satisfactory to the Administrative Agent
creating Liens in all Borrowing Base Oil and Gas Properties and substantially all of the property
of such Subsidiary and in the equity interests in such Subsidiary, subject to Permitted Liens, and
(c) certified copies of such Subsidiary’s Organization Documents and opinions of counsel with
respect to such Subsidiary and such Guaranty, and
(d) such other documents and instruments as may be required with respect to such Subsidiary
pursuant to Section 6.15.

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     6.15. Further Assurances; Additional Collateral; In Lieu Letters. (a) The Borrowers shall cause
each of their respective Subsidiaries (other than the Excluded Subsidiaries) to take such actions
and to execute and deliver such documents and instruments as the Administrative Agent shall require
to ensure that the Administrative Agent or Collateral Agent on behalf of the Secured Parties shall,
at all times, have received currently effective duly executed Loan Documents granting Liens and
security interests in all Borrowing Base Oil and Gas Properties and in substantially all of the
property of the Borrowers and their Subsidiaries (other than (x) the Three Little Pipes (which
because of their minimal value have not been, and are not contemplated to be, subjected to a Lien),
(y) the limited liability company membership interest in Eastern and (z) the Excluded
Subsidiaries), including all capital stock, partnership, joint venture, membership interests, or
other equity interests except for (i) any motor vehicle or other equipment that has a certificate
of title and a fair market value of less than $50,000, (ii) Excluded Assets, and (iii) those
properties and assets as to which the Administrative Agent shall determine in its sole discretion
(in consultation with the Borrowers) that the costs of obtaining such security interest are
excessive in relation to the value of the security to be afforded thereby; provided, that with
respect to rights of way, easements, leases or other similar property interests acquired by any
Loan Party after the date hereof relating to the Bluestem Gathering System now owned by
MidContinent or other gathering system or pipeline hereafter acquired, the relevant Loan Party
shall promptly grant to the Collateral Agent as additional security for the Obligations, within 60
days after each June 30th and December 31st, a security interest in and
Mortgage on each right of way, easement, lease or other similar property interest acquired by it
during the six month period ended on such June 30 or December 31, as applicable, and not
constituting an Excluded Asset.



     (b) In connection with the actions required pursuant to the foregoing subsection (a), the
Borrowers shall cause each of their respective Subsidiaries (other than the Excluded Subsidiaries)
to execute and deliver such stock certificates, blank stock powers, evidence of corporate
authorization, opinions of counsel, current valuations, evidence of title, and other documents, and
shall use commercially reasonable efforts to obtain third party consents, as shall be reasonably
requested by the Administrative Agent, in each case in form and substance reasonably satisfactory
to the Administrative Agent.



     (c) Except for the second priority Liens in favor of the Administrative or Collateral Agent
for the benefit of the Lenders on the KPC Pipeline, the Liens required by this Section 6.15 shall
be first priority Liens in favor of the Administrative Agent or Collateral Agent for the benefit of
the Secured Parties, subject to no other Liens except Permitted Liens of the type described in
Section 7.01. The Liens required by this Section 6.15 shall be perfected Liens in favor of the
Administrative Agent or Collateral Agent for the benefit of the Secured Parties in all collateral
to the extent perfection has or will occur by (i) the filing of a Uniform Commercial Code financing
statement in the relevant jurisdiction, (ii) filing or recording a mortgage in real property
records of the county in which such real property or fixtures is located, (iii) possession or
control or (iv) the notation on a certificate of title. If the Administrative Agent shall
determine that, as of any date, the Borrowers shall have failed to comply with this Section 6.15,
the Administrative Agent may (and at the direction of the Required Lenders, shall) notify the
Borrowers in writing of such failure and, within 30 days from and after receipt of such written
notice by the Borrowers, the Borrowers shall execute and deliver to the Administrative Agent
supplemental or additional Loan Documents, in form and substance satisfactory to the Administrative
Agent and its counsel, securing payment of the Revolving Notes and the other Obligations and
covering additional assets and properties not then encumbered by any Loan Documents (together with
such other information, as may be requested by the Administrative Agent, each of which shall be in
form and substance reasonably satisfactory to the
Administrative Agent) such that the Administrative Agent shall have received currently
effective duly executed and perfected Collateral Documents encumbering substantially all of the
assets of the Borrowers and their respective Subsidiaries (other than the Excluded Subsidiaries)
as required by Section 6.15(a).

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     (d) If an Event of Default exists and is continuing, the Borrowers agree to deliver and to
cause each other Loan Party to deliver, whenever requested by Administrative Agent, in its sole and
absolute discretion, transfer orders or letters in lieu thereof with respect to the production and
proceeds of production from the Borrowing Base Oil and Gas Properties, in form and substance
satisfactory to Administrative Agent.



     6.16. Title Defects. Cure any title defects to the Borrowing Base Oil and Gas Properties material
in value, in the reasonable opinion of the Administrative Agent, within ninety days after receipt
of written notice thereof from Administrative Agent and, in the event any title defects are not
cured in a timely manner, pay all related costs and fees reasonably incurred by the Administrative
Agent for the account of the Lenders to do so; provided the Borrowers may remove any of its Oil and
Gas Properties from the Borrowing Base Oil and Gas Properties so long as the Indebtedness evidenced
by the Revolving Notes is less than or equal to the Borrowing Base (determined by the Lenders in
accordance with Section 2.02 exclusive of such Oil and Gas Properties). In the event that the
Borrowers are unable to cure a title defect, the Borrowers shall have the ability to substitute
additional collateral; provided that the Borrowers’ ability to substitute such collateral is
subject to the full satisfaction of the Administrative Agent, including, without limitation in full
compliance with the requirements described in Section 2.02. Furthermore, after identification and
prior to the cure of any such title defect, the Administrative Agent may, subject to approval of
the Required Lenders, and must, upon the request of the Required Lenders, redetermine the Borrowing
Base to reflect the amount of such title defect.



     6.17. Leases. Keep and continue all material Leases comprising the Borrowing Base Oil and Gas
Properties and related contracts and agreements relating thereto in full force and effect in
accordance with the terms thereof and not permit the same to lapse or otherwise become impaired for
failure to comply with the obligations thereof, whether express or implied; provided, however, that
this provision shall not prevent the Borrowers or any other Loan Party from abandoning and
releasing any such Leases upon their termination as the result of cessation of production in paying
quantities that did not result from any Borrower’s’ or any other Loan Party’s failure to maintain
such production as a reasonably prudent operator. Subject to approval by the Administrative Agent,
the Borrowers and each Loan Party shall have the right to replace Leases that lapse or become
impaired.



     6.18. Operation of Borrowing Base Oil and Gas Properties. Operate or, to the extent that the right
of operation is vested in others, exercise all reasonable efforts to require the operator to
operate the Borrowing Base Oil and Gas Properties and all wells drilled thereon and that may
hereafter be drilled thereon, continuously and in a prudent and workmanlike manner and in
accordance with all Laws of the state in which the Borrowing Base Oil and Gas Properties are
situated and the United States, as well as all rules, regulations, and Laws of any Governmental
Authority having jurisdiction to regulate the manner in which the operation of the Borrowing Base
Oil and Gas Properties shall be carried on, and comply with all terms and conditions of the Leases
it now holds, and any assignment or contract obligating any Borrower or any other Loan Party in any
way with respect to the Borrowing Base Oil and Gas Properties, except for any such non-compliance
that would not have a Material Adverse Effect; but nothing herein shall be construed to empower any
Borrower to bind the
Administrative Agent or any Lender to any contract obligation, or render the Administrative Agent
or any Lender in any way responsible or liable for bills or obligations incurred by any Borrower or
any other Loan Party.



     6.19. Change of Purchasers of Production. Concurrently with the delivery of (and as part of) the
annual Compliance Certificate, and at any other time that the Administrative Agent may reasonably
request in writing, the Borrowers shall notify the Administrative Agent in writing of the identity
and address of each Person who: (a) has purchased any of any Borrower’s or any other Loan Party’s
interests in oil and gas produced from the Borrowing Base Oil and Gas Properties during the six
calendar months preceding such anniversary of the Closing, and (b) are considered by Borrowers or
another Loan Party to



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be potential future purchasers of any Borrower’s or any other Loan Party’s
interest in oil and gas produced from the Borrowing Base Oil and Gas Properties.



     6.20. Fiscal Year. The Borrowers shall maintain its December 31 fiscal year end.



     6.21. Liens on Oil and Gas Properties; Title Information. (a) At all times have granted in favor
of the Administrative Agent for the benefit of the Lenders as security for the Obligations first
priority perfected Liens on no less than ninety percent (90%) of PV10 of the Proved Reserves that
are attributable to the Borrowing Base Oil and Gas Properties.



     (b) On or before the delivery to the Administrative Agent of each Reserve Report required by
Sections 2.02(c) and (d), the Borrowers will deliver (or have previously delivered to the
Administrative Agent) title information in form and substance acceptable to the Administrative
Agent comprising a minimum of eighty percent (80%) of the PV10 (based on the most recent Borrowing
Base evaluation by the Administrative Agent) of the Proved Reserves that are attributable to those
Borrowing Base Oil and Gas Properties evaluated by such Reserve Report (it being acknowledged that
landman title reports on proved but undeveloped Oil and Gas Properties shall be satisfactory to the
Administrative Agent and Lenders for the purpose of demonstrating the status of title to such Oil
and Gas Properties).



     6.22. Capital Expenditures. The Borrowers shall make minimum Capital Expenditures in the
cumulative aggregate amount of (i) $5.0 million for the six-month period ending December 31, 2010,
(ii) $10.0 million for the nine-month period ending March 31, 2011, (iii) $17.5 million for the
twelve-month period ending June 30, 2011, and (iv) $25.0 million for the fifteen-month period
ending September 30, 2011; provided however that if, in the time period described in clause (i),
the Borrowers (or any one or more of them) have not expended the minimum aggregate Capital
Expenditure amount required to be expended by December 31, 2010, the Borrowers shall be entitled to
an additional quarter to expend such amount, as long as by the end of the quarter ended March 31,
2011, $10.0 million in aggregate minimum Capital Expenditures has been expended. In the event the
Borrowers have not expended the minimum aggregate Capital Expenditure amount required to be
expended by March 31, 2011, June 30, 2011 or September 30, 2011, the sole result shall be a
reduction in the Borrowing Base by an amount equal to the shortfall, and Borrowers’ failure to
expend the required minimum Capital Expenditures amount shall not constitute a Default or an Event
of Default under this Agreement.



ARTICLE VII.

NEGATIVE COVENANTS




     So long as any Lender shall have any Revolving Commitment hereunder, or any Revolving Loan or
other Obligations (other than contingent indemnity obligations and obligations under Lender Hedging
Agreements) shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding
(unless such Letter of Credit has been Cash Collateralized), each of the Borrowers agrees that it
shall not, nor shall it permit any of its Subsidiaries (other than the Excluded Subsidiaries) to,
directly or indirectly:



     7.01. Liens. Create, incur, assume or suffer to exist, any Lien upon any of its Borrowing Base Oil
and Gas Properties, or any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following:



     (a) Liens pursuant to any Loan Document;



     (b) Liens existing on the Closing Date and listed on Schedule 7.01 to this Agreement and any
renewals or extensions thereof; provided that the property covered thereby is not increased, the



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amount of the Indebtedness secured thereby is not increased, and any renewal or extension of the
obligations secured or benefited thereby is permitted under this Agreement;



     (c) Liens for taxes, assessments, or other governmental charges or levies not yet due or which
are being contested in good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with GAAP;



     (d) landlord’s, royalty owner’s, supplier’s, constructor’s, operator’s, vendor’s, carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary
course of business or which are incident to the exploration, development, operation and maintenance
of the Borrowing Base Oil and Gas Properties or the Midstream Businesses not overdue for a period
of more than 30 days or which are being contested in good faith and by appropriate proceedings, if
adequate reserves with respect thereto are maintained on the books of the applicable Person;



     (e) pledges or deposits in the ordinary course of business in connection with workers’
compensation, unemployment insurance and other social security legislation;



     (f) deposits to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case incurred in the ordinary course of business;



     (g) easements, rights-of-way, restrictions, servitudes, permits, conditions, covenants,
exception or reservations and other similar encumbrances, defects, irregularities and deficiencies
in title affecting real property which, in the aggregate, are not substantial in amount, and which
do not, taken as a whole, materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the applicable Person;



     (h) judgment Liens not giving rise to an Event of Default;



     (i) any Lien existing on any asset (other than stock of a Subsidiary) prior to acquisition
thereof by the Borrowers or any of their respective Subsidiaries; provided that (i) no such Lien
shall be
extended to cover property other than the asset being acquired, and (ii) such Lien was not
created in contemplation of or in connection with such acquisition;



     (j) Liens securing Capital Lease obligations; provided that the Indebtedness in respect of
such Capital Lease obligations is permitted under Section 7.04(f);



     (k) purchase money Liens upon or in any property acquired, constructed or improved by any
Borrower or any of its Subsidiaries (placed on such property at the time of such acquisition or the
completion of the construction or improvement or within 90 days thereafter) to secure the deferred
portion of the purchase price of such property or to secure Indebtedness incurred to finance the
acquisition, construction or improvement of such property; provided that (i) no such Lien shall be
extended to cover property other than the property being acquired, constructed or improved and (ii)
the Indebtedness thereby secured is permitted by Section 7.04(e);



     (l) Liens reserved in or exercisable under any lease or sublease to which any Borrower or its
Subsidiary is a lessee which secure the payment of rent or compliance with the terms of such lease
or sublease; provided, that the rent under such lease or sublease is not then overdue and such
Borrower or Subsidiary is in material compliance with the terms and conditions thereof;



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     (m) any interest or title of a lessor under any lease entered into by any Borrower or any
Subsidiary in the ordinary course of its business and covering only the assets so leased, and any
interest of a landowner in the case of easements entered into by any Borrower or any of its
Subsidiaries in the ordinary course of its business and covering only the property subject to the
easement;



     (n) Liens securing obligations (other than obligations representing Indebtedness for borrowed
money) under operating, reciprocal easement or similar agreements entered into in the ordinary
course of business of the Borrowers and their respective Subsidiaries;



     (o) licenses of patents, trademarks and other intellectual property rights granted by each
Borrower or any of its Subsidiaries in the ordinary course of business and not interfering in any
material respect with the ordinary conduct of the business of each such Borrower and its
Subsidiaries;



     (p) 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;



     (q) Liens on any additions, improvements, replacements, repairs, fixtures, appurtenances or
component parts thereof attaching to or required to be attached to property or assets pursuant to
the terms of any mortgage, pledge agreement, security agreement or other similar instrument,
creating a Lien upon such property or asset otherwise permitted under this Section;



     (r) Liens securing an obligation of a third party neither created, assumed nor guaranteed by
the Borrowers or any Subsidiary upon lands over which easements or similar rights are acquired by
the Borrowers or any Subsidiary in the ordinary course of business of the Borrowers or any
Subsidiary;



     (s) any Liens arising out of the refinancing, extension, renewal or refunding of any
Indebtedness secured by any Lien permitted by any of the foregoing clauses of this Section,
provided that such Indebtedness is not increased except for increases in an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in
connection with such extension, renewal, refinancing, or replacement and in an amount equal to any
existing commitments unutilized thereunder, and is not secured by any additional assets;



     (t) Liens arising solely by virtue of cash collateralizing letters of credit issued by
non-Lender financial institutions in an aggregate amount not to exceed $4,000,000.



     (u) 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 sale, purchase, transportation or exchange of
oil or natural gas, unitization and pooling declarations and agreements, area of mutual interest
agreements, royalty and 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;



     (v) Rights reserved to or vested in a Governmental Authority having jurisdiction to control or
regulate any Oil and Gas Property or other Collateral in any manner whatsoever and all laws of such
Governmental Authorities, so long as the Borrowers and their respective Subsidiaries (other than
the Excluded Subsidiaries) are in compliance with all such laws, except for any non-compliance that
would not result in a Material Adverse Effect;



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     (w) consents to assignment and similar contractual provisions affecting an Oil and Gas
Property or other Collateral to the extent, and only to the extent, such consents are not affected
by or required for the execution, delivery, performance and enforcement of any Loan Document;



     (x) preferential rights to purchase and similar contractual provisions affecting an Oil and
Gas Property or other Collateral to the extent, and only to the extent, such consents are not
affected by delivery of any Loan Document or, if affected, have been waived;



     (y) all defects and irregularities affecting title to an Oil and Gas Property or other
Collateral that could not operate to reduce the net revenue interest of any Borrower and its
Subsidiaries for such Oil and Gas Property (if any), increase the working interest of any Borrower
and its Subsidiaries for such Oil and Gas Property (if any) without a corresponding increase in the
corresponding net revenue interest, or otherwise interfere materially with the operation, value or
use of such Oil and Gas Property or other Collateral or cause a Material Adverse Effect;



     (z) Liens securing the Secured Pipeline Loan for the benefit of KPC Lenders;



     (aa) Liens incurred in the ordinary course of business in connection with margin requirements
(ii) under Swap Contracts not to exceed in the aggregate $2,000,000 at any time outstanding; and
(ii) under applicable Laws;



     (bb) Liens that KPC Pipeline, LLC and any of its Subsidiaries that may hereafter be formed are
permitted to grant under the credit agreement governing the Secured Pipeline Loan; and



     (cc) Liens on the equity of Eastern granted by PESC for the benefit of Royal Bank of Canada
securing Royal Bank of Canada’s credit agreement with Eastern.



     7.02. Investments. Make or own any Investments, except



     (a) Investments existing on the Closing Date and listed in Section (b) of Schedule 5.13;



     (b) Cash Equivalents;



     (c) Investments constituting Indebtedness permitted under Section 7.04(b);



     (d) Investments (i) by any Borrower or any other Loan Party in Subsidiaries formed to acquire
Oil and Gas Properties or in connection with the Midstream Businesses, and (ii) not exceeding
$5,000,000 in the aggregate resulting from any Borrower’s or any other Loan Party’s acquisition of
equity or joint venture interests in a Person primarily engaged in the ownership or development of
Oil and Gas Properties or in the Midstream Businesses;



     (e) Investments by any Borrower in another Borrower, Investments by any Borrower and its
Subsidiaries in any Subsidiary of such Borrower that, prior to such Investment, is a Loan Party,
and Investments by Subsidiaries in any Borrower;



     (f) acquisitions by any Borrower or its Subsidiaries of Oil and Gas Properties provided any
such acquired Oil and Gas Properties are pledged to secure, on a first lien basis, the Obligations,
and on a junior, second and subordinate lien basis, Indebtedness owing in connection with the
Secured Pipeline Loan;



     (g) Guarantees of Indebtedness permitted under Section 7.04;



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     (h) Swap Contracts permitted under Section 7.03;



     (i) Investments consisting of extensions of credit, including without limitation, in the
nature of accounts receivable, arising from the grant of trade credit or prepayments or similar
transactions entered into in the ordinary course of business and investments by any Borrower or any
of its Subsidiaries in satisfaction or partial satisfaction thereof from financially troubled
account debtors to prevent or limit financial loss;



     (j) endorsements for collection or deposit in the ordinary course of business;



     (k) Permitted Acquisitions by a Borrower or any of its Subsidiaries;



     (l) Investments not otherwise permitted by this Section 7.02 in an aggregate amount not to
exceed $5,000,000 at anytime outstanding;



     (m) Investments that KPC Pipeline, LLC and any of its Subsidiaries that may hereafter be
formed are permitted to make under the credit agreement governing the Secured Pipeline Loan;



     (n) Investments funded entirely using proceeds from equity issued by Parent, including
Investments funded with proceeds of any White Deer Energy Additional Investment; and



     (o) Investments consisting of loans by PESC to Eastern in an aggregate amount not to exceed
$3,000,000 at any one time outstanding to enable Eastern to pay direct costs and expenses on its
own behalf and to pay for general and administrative expenses to be paid by PESC on Eastern’s
behalf in accordance with the G&A Formula; provided, such loan is governed by an intercompany
agreement and evidenced by bookkeeping entries; provided further, by its terms such loan will be
repaid before the repayment of any Indebtedness for borrowed money owing by Eastern.



     7.03. Hedging Agreements. (a) Enter into any Swap Contracts other than in the ordinary course of business for the purpose
of protecting against fluctuations in interest rates, commodity prices, or foreign exchange rates
and not for purposes of speculation; provided:




     (i) that, except as required under applicable Law, the Swap Contract shall not
contain any provision (a) exonerating the non-defaulting party from its obligation to make
payments on outstanding transactions to the defaulting party other than pursuant to
netting and setoff provisions based on standard provisions in documentation promulgated by
the International Swaps and Derivatives Association or similar organization recognized as
providing standardized documentation for Swap Contracts; and (b) requiring any Company at
any time or under any circumstance to post any cash collateral or letter of credit or
grant a Lien on any collateral to secure any Company’s obligations under such Swap
Contract (except for Lender Hedging Agreements which shall be secured by a pari passu Lien
on the Collateral as provided in Section 2.13 but which shall not be secured by any other
or additional collateral) provided however that in no event may any Approved Hedge
Counterparty Swap Contract require any Company at any time or under any circumstance to
post any cash collateral or letter of credit as long as this Agreement is in effect)
provided further however, that notwithstanding the foregoing, if the Swap Contracts in
question are cleared (directly or ultimately) through clearing corporations or on an
exchange, the foregoing shall not prohibit the posting of initial or variance margins or
other amounts, if required by Law, in order for the Company to enter into Swaps Contracts
of a nature that, in the business judgment of the Company, represent an appropriate
pricing and structure as among available alternatives; provided, further however, a
Company may not elect to clear (directly or indirectly) through a clearing corporation or an



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exchange if an Event of Default has occurred and is continuing but if applicable Law
requires that a Company clear its Swap Contracts through a clearing corporation or be
exchanged traded and in connection therewith any margin is required to be posted, the
Company may do so in compliance with applicable Law.




     (ii) if the Swap Contract relates to Hydrocarbons, a Company enters into such Swap
Contract with or through a counterparty that has a credit rating of at least “A-” by S&P
or “A3” by Moody’s at the time that such Company enters into such Swap Contract;




     (iii) such Swap Contracts relating to Hydrocarbons cover monthly notional volumes of
Hydrocarbons that do not exceed the greater of (i) ninety percent (90%) of a Company’s
forecasted oil and gas production for the next five years for each of such Company’s crude
oil and natural gas properties calculated separately, from Proved Developed Producing
Reserves, and (ii) eighty-five percent (85%) of forecasted production for the next five
years from total Proved Reserves and seventy-five percent (75%) of forecasted production
from total Proved Reserves thereafter (such amounts computed on an annual basis and
applied to crude oil and natural gas properties calculated separately); provided that the
aggregate amount of all such Swap Contracts shall not exceed one hundred percent (100%) of
actual oil or gas production, calculated separately, in any given month (or if as a result
of a force majeure event the foregoing limitations are breached, then in any given three
consecutive month period); and




     (iv) that where only annual volumes are presented in the Reserve Report, monthly
volumes will be calculated by dividing the applicable volumes by the number of months
covered by the Reserve Report for the applicable year.



     7.04. Indebtedness. Create, incur, or assume any Indebtedness except:



     (a) Indebtedness incurred pursuant to the Loan Documents or existing on the date hereof and
disclosed on Schedule 7.04 attached hereto;



     (b) Indebtedness owed by a Borrower to another Borrower, by a Subsidiary of a Borrower to a
Borrower or to a Wholly-Owned Subsidiary (other than an Excluded Subsidiary) of a Borrower, or by a
Borrower to a Wholly-Owned Subsidiary (other than an Excluded Subsidiary) of another Borrower;
provided, that, in each such case such Indebtedness is governed by an intercompany agreement and
evidenced by bookkeeping entries;



     (c) Indebtedness owing in connection with the Secured Pipeline Loan;



     (d) obligations (contingent or otherwise) of the Borrowers or any of their respective
Subsidiaries existing or arising under any Swap Contract to the extent permitted by Section 7.03;



     (e) Indebtedness of the Borrowers and their respective Subsidiaries in respect of purchase
money obligations for fixed or capital assets within the limitations set forth in Section 7.01(k);
provided, however, that the aggregate amount of such Indebtedness at any one time outstanding shall
not exceed $10,000,000;



     (f) Indebtedness of the Borrowers or any of their respective Subsidiaries (other than any
Excluded Subsidiary) in respect of Capital Lease obligations; provided that, such Capital Lease
obligations will not require the payment of an aggregate amount in excess of $8,000,000 annually;
and provided that any Capital Lease obligation relating to compressors or compression equipment
shall be excluded from this subsection and dealt with in Section 7.05;



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     (g) Indebtedness consisting of surety bonds that the Borrowers or any of their respective
Subsidiaries is required to obtain in order to comply with applicable Law or the requirements of
any Governmental Authority;



     (h) Indebtedness secured by any Lien permitted under Section 7.01(i); provided, however, that
the aggregate amount of such Indebtedness at any one time outstanding shall not exceed $10,000,000;
and Indebtedness secured by any other Lien permitted under Section 7.01; and



     (i) other Indebtedness of the Borrowers and their respective Subsidiaries not to exceed
$10,000,000 in the aggregate principal amount outstanding at any time;



     (j) Indebtedness associated with bonds, surety obligations or sinking funds required by any
Governmental Authority or operators in connection with the operation of Oil and Gas Properties or
the Midstream Businesses; and



     (k) reimbursement obligations under letters of credit issued for any Loan Party under this
Agreement; and reimbursement obligations under letters of credit issued for any Loan Party by third
parties not to exceed $4,000,000 in the aggregate amount outstanding at any one time; and



     (l) Indebtedness that KPC Pipeline, LLC and any of its Subsidiaries that may hereafter be
formed are permitted to incur under the credit agreement governing the Secured Pipeline Loan;


provided, that if any Indebtedness is incurred pursuant to this Section 7.04, immediately after
such Indebtedness is created, incurred or assumed, no Default or Event of Default shall exist.




     7.05. Lease Obligations. Create or suffer to exist any obligations for the payment of rent for any property under
operating leases or agreements to lease (excluding leases of Oil and Gas Properties), except for
(i) operating leases (or Capital Lease obligations) for compressors and compression equipment and
services for which no dollar limitation shall be applicable; (ii) such other non-compressor and
non-compression equipment and services operating leases (or Capital Lease obligations) having an
annual aggregate payment amount not to exceed $20,000,000 (excluding escalations resulting from a
rise in the consumer price or similar index), exclusive of expenses for maintenance, repairs,
insurance, taxes, assessments and similar changes, and (iii) other operating leases (other than
those constituting Synthetic Lease Obligations) entered into or assumed by the Borrowers or any of
their respective Subsidiaries prior to the date hereof or after the date hereof in the ordinary
course of business or entered into or assumed in connection with any Permitted Acquisition provided
that, such other operating leases under this clause (iii) will not require the payment of an
aggregate amount of payments in excess of (excluding escalations resulting from a rise in the
consumer price or similar index) $4,000,000 annually, exclusive of expenses for maintenance,
repairs, insurance, taxes, assessments and similar changes.



     7.06. Fundamental Changes. Except in connection with the Restructure Transactions and except with
respect to KPC Pipeline, LLC any transaction permitted under this same section of the credit
agreement governing the Secured Pipeline Loan, merge, dissolve, liquidate, or consolidate with or
into, or convey, transfer, lease or otherwise Dispose of (whether in one transaction or in a series
of related transactions) all or substantially all of its assets (whether now owned or hereafter
acquired) to or in favor of any Person; except that, so long as no Default or Event of Default
exists or would result therefrom:



     (a) any Person (other than any Excluded Subsidiary, KPC Pipeline LLC or any of its
Subsidiaries) may merge, dissolve or liquidate into a Borrower; provided that such Borrower is the
surviving entity;



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     (b) any Subsidiary (other than any Excluded Subsidiary, KPC Pipeline LLC or any of its
Subsidiaries) may merge, dissolve or liquidate with (i) a Borrower; provided that such Borrower
shall be the continuing or surviving Person, or (ii) any one or more Subsidiaries; provided that
when any Wholly-Owned Subsidiary is merging with another Subsidiary, a Wholly-Owned Subsidiary
shall be the continuing or surviving Person;



     (c) any Subsidiary (other than any Excluded Subsidiary, KPC Pipeline LLC or any of its
Subsidiaries) may sell all or substantially all of its assets (upon voluntary liquidation or
otherwise), to a Borrower or to another Subsidiary; provided that if the seller in such a
transaction is a Wholly-Owned Subsidiary, then the purchaser must also be a Wholly-Owned
Subsidiary;



     (d) any Person (other than any Excluded Subsidiary, KPC Pipeline LLC or any of its
Subsidiaries or a Borrower) may merge, dissolve or liquidate into any Subsidiary; provided that
such Subsidiary is the surviving entity;



     (e) any Dispositions permitted under Section 7.07; and



     (f) any liquidation or dissolution of STP in accordance with applicable Law.



     7.07. Dispositions. Make any Disposition or enter into any agreement to make any Disposition,
except:



     (a) Dispositions by the Borrowers or any of their respective Subsidiaries of (i) Hydrocarbons
in the ordinary course of business for fair market value, or (ii) other inventory in the ordinary
course of business;



     (b) Dispositions of property by any Borrower to another Borrower, by any Subsidiary (other
than an Excluded Subsidiary) to a Borrower, or by any Subsidiary (other than an Excluded
Subsidiary) or by any Borrower, to a Wholly-Owned Subsidiary that is a Guarantor;



     (c) Dispositions of equipment and other real and personal property (including Oil and Gas
Properties) for fair market value by any Borrower or any Subsidiary to the extent that (i) such
property is exchanged for credit against the purchase price of similar replacement or exchanged
property, or (ii) the Net Available Cash of such Disposition is within 180 days Reinvested, and if
any portion of such Net Available Cash has not been Reinvested within 180 days from the receipt by
such Company of Net Available Cash (including receipt of any deferred payments for any such
Disposition, if and when received), then on the Business Day following such 180th day, the
Revolving Loans shall be prepaid, in an amount equal to the portion of the Net Available Cash that
is not so Reinvested,



     (d) other Dispositions for fair market value; provided no Default or Event of Default then
exists or arises as a result thereof; and provided that if the Disposition is for cash and a
prepayment is required by Section 2.04(c), the Borrowers shall make such prepayment in accordance
with such Section;



     (e) Dispositions of the Marcellus Assets provided that the Borrowers shall make the prepayment
required under Section 2.04(d) in accordance with such Section and Dispositions by Eastern to a
Borrower of the Marcellus Gathering System;



     (f) Dispositions of the KPC Pipeline in accordance with the terms of the Secured Pipeline
Loan;



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     (g) Dispositions of property that is no longer commercially viable to maintain or is obsolete,
surplus or worn-out property;



     (h) Dispositions permitted under Section 7.06;



     (i) any Disposition made as part of the Restructure Transactions;



     (j) Disposition by PESC of its membership interests in Eastern;



     (k) Disposition by PESC of its membership interests in KPC Pipeline, LLC in accordance with
the terms of the credit agreement governing the Secured Pipeline Loan,



     (l) Disposition by MidContinent of its equity interests in STP; and



     (m) Dispositions that KPC Pipeline, LLC and any of its Subsidiaries that may hereafter be
formed are permitted to make under the credit agreement governing the Secured Pipeline Loan.



     7.08. Transfer Payments; Restricted Payments; Distributions and Redemptions. Declare or make,
directly or indirectly, any Restricted Payment or Transfer Payment, or incur any obligation
(contingent or otherwise) to do so, except that:



     (a) each Subsidiary may make Transfer Payments and Restricted Payments to the Borrowers; and
to Wholly-Owned Subsidiaries of the Borrowers (other than Excluded Subsidiaries);



     (b) each Borrower and its Subsidiaries may make Transfer Payments and Restricted Payments to
PESC (or through a parent to PESC) of direct costs and expenses to be paid by PESC on its behalf
and PESC may make Transfer Payments to its Subsidiaries (other than Excluded Subsidiaries) to
enable such Subsidiaries to pay direct costs and expenses on their own behalf; provided, however,
PESC may make Transfer Payments and Restricted Payments to Eastern in the form of a loan to pay
direct costs and expenses incurred by Eastern subject to the limitations set forth in Section
7.02(o);



     (c) each Borrower and its Subsidiaries may make Transfer Payments and Restricted Payments to
PESC (or through a parent to PESC) for general and administrative expenses allocated to it in any
particular period in accordance with the G&A Formula; and PESC may make Transfer Payments and
Restricted Payments to its Subsidiaries (other than Excluded Subsidiaries) for general and
administrative expenses to be paid by such Subsidiary or may pay such general and administrative
expenses of such Subsidiary on such Subsidiary’s behalf in accordance with the G&A Formula;
provided, however, PESC may make Transfer Payments and Restricted Payments to Eastern in the form
of a loan to pay general and administrative expenses of Eastern on Eastern’s behalf in accordance
with the G&A Formula subject to the limitations set forth in Section 7.02(o);



     (d) each Borrower and its Subsidiaries may make Transfer Payments and Restricted Payments to
PESC (or through a parent to PESC) to fund drilling expenses of Eastern and expenses to keep lease
rights owned by Eastern from expiring, in an aggregate amount for all such expenses not to exceed
$5,000,000, and PESC may make Transfer Payments to Eastern in such aggregate amount; provided,
however any such Transfer Payments and/or Restricted Payments are funded using only proceeds of any
White Deer Energy Additional Investment;



     (e) each Borrower and its Subsidiaries may make Transfer Payments and Restricted Payments to
PESC (or through a parent to PESC) in an amount equal to its consolidated income tax



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liability (with the method of allocation of income tax obligations to be reasonably acceptable to the
Lenders);



     (f) MidContinent may make Transfer Payments and Restricted Payments to PESC, and PESC may make
Transfer Payments and Restricted Payments to KPC Pipeline, LLC, in the aggregate amount equal to
the principal and interest required to be paid during any period by KPC Pipeline, LLC under the
Secured Pipeline Loan;



     (g) MidContinent may make Transfer Payments and Restricted Payments to PESC, and PESC may make
Transfer Payments and Restricted Payments to Eastern in the aggregate equal to the amount of
principal and interest required to be paid during any period by Eastern under the Amended QRC
Facility; provided, however any such Transfer Payments and/or Restricted Payments are funded using
only proceeds of any White Deer Energy Additional Investment;



     (h) Borrowers and their Subsidiaries may make Transfer Payments and Restricted Payments to
PESC, and PESC may make Transfer Payments and Restricted Payments to Eastern or Parent, not to
exceed $7,500,000 in the aggregate, in connection with, and to the extent that, the Asset Sale
Agreement, of even date herewith, between RBC, Eastern, and Parent, relating to the Amended QRC
Facility, requires a payment to RBC as a result of the sale price for the sale of the non-producing
Marcellus assets owned by Eastern or of the equity of Eastern; provided, however any such Transfer
Payments and/or Restricted Payments are funded using only proceeds of any White Deer Energy
Additional Investment;



     (i) MidContinent and any of its Subsidiaries may make payments to Eastern as operator of the
Marcellus Assets, pursuant to that certain gas gathering agreement between MidContinent (f/k/a
Quest Cherokee) and Eastern relating to gas gathering in the Appalachian region; and



     (j) KPC Pipeline, LLC and any of its Subsidiaries that may hereafter be formed may make
Transfer Payments and Restricted Payments to the extent permitted under the credit agreement
governing the Secured Pipeline Loan.



     7.09. ERISA. At any time engage in a transaction which could be subject to Section 4069 or 4212(c)
of ERISA, or knowingly permit any Plan maintained by a Company to: (a) engage in any non-exempt
"prohibited transaction” (as defined in Section 4975 of the Code); (b) fail to comply with ERISA or
any other applicable Laws except as disclosed on Schedule 5.12; or (c) incur any material
"accumulated funding deficiency” (as defined in Section 302 of ERISA), which, with respect to each
event listed above, could be reasonably expected to have a Material Adverse Effect or except to the
extent disclosed on Schedule 5.12.



     7.10. Nature of Business; Risk Management. Engage in any line of business other than exploration,
production and marketing of Hydrocarbons and related activities and the Midstream Businesses or
make any capital expenditures or Permitted Acquisitions permitted by Section 7.02, except in
connection therewith. Without the written approval of the Administrative Agent, the Borrowers
shall not materially change their risk management policy.



     7.11. Transactions with Affiliates(a) . Sell, lease or otherwise transfer any property or
assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage
in any other transactions with, any of its Affiliates, except (i) transactions between or among the
Borrowers or between the Borrowers and their Wholly-Owned Subsidiaries (other than the Excluded
Subsidiaries) not involving any other Affiliate; (ii) any Investment permitted under Section 7.02;
(iii) any transaction involving Indebtedness permitted under Section 7.04; (iii) any transactions
permitted under Section 7.06; (iv) any Dispositions permitted under Section 7.07; (v) any Transfer
Payment, Restricted Payment,



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distribution or dividend permitted under Section 7.08; (vi) the
transactions under the agreements listed on Schedule 7.11; (vii) the transaction involving the Lien
on the equity of Eastern granted by PESC for the benefit of Royal Bank of Canada under a credit
agreement with Eastern; (viii) in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrowers or their respective Subsidiaries, as applicable,
than could be obtained on an arm’s length basis from unrelated third parties; and (ix) transactions
pursuant to the Material Agreements.



     7.12. Burdensome Agreements. Enter into any Contractual Obligation that limits the ability of any
Subsidiary to make Restricted Payments to a Borrower or to otherwise transfer property to a
Borrower; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by
applicable Law or by this Agreement, (ii) the foregoing shall not apply to customary restrictions
and conditions contained in agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such
sale is permitted hereunder, and (iii) the foregoing shall not apply to restrictions and conditions
contained in the documentation evidencing any Indebtedness permitted hereunder. Notwithstanding the
foregoing, (i) documents governing a Capitalized Lease or a purchase
money Lien permitted by Sections 7.01(j) and (k) may prohibit other Liens on the asset encumbered
by such Lien.



     7.13. Use of Proceeds. Use the proceeds of any Revolving Loan for purposes other than those
permitted by Section 6.12, or use the proceeds of any Revolving Loan, whether directly or
indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the Board) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.



     7.14. Material Agreements. Permit, except for amendments or assignments made to accommodate,
permit, or otherwise made in connection with, the Restructure Transactions (including the White
Deer Energy Investment), (a) any amendment to any Organization Document of any Borrower or any
Material Agreement if such amendment could reasonably be expected to (y) have a Material Adverse
Effect on the ability of any Borrower or any Guarantor to perform its obligations under the Loan
Documents to which it is a party or (z) otherwise materially adversely affect the Lenders, or (b)
any assignment of any Material Agreement if such assignment could reasonably be expected to
materially adversely affect the Lenders or have a Material Adverse Effect on the ability of any
Borrower or any other Loan Party to perform its obligations under the Loan Documents to which it is
a party.



     7.15. Pooling or Unitization. Voluntarily pool or unitize all or any part of the Borrowing Base
Oil and Gas Properties where the pooling or unitization would result in any material diminution of
any Borrower’s or any other Loan Party’s net revenue interest in production from the pooled or
unitized lands, without the Required Lenders’ prior consent, which will not be unreasonably
withheld. Any unitization, pooling or communitization or other action or instrument in violation
of this Section 7.15 shall be of no force or effect against any Lender.



     7.16. Financial Covenants. For purposes of determining compliance with the financial covenants
contained in this Agreement any election by the Borrowers to measure an item of Indebtedness using
fair value (as permitted by Statement of Financial Accounting Standards No. 159 or any similar
accounting standard) shall be disregarded and such determination shall be made as if such election
had not been made.



     (a) Current Ratio. Permit the ratio (calculated based on the Compliance Certificate most
recently delivered pursuant to Section 6.02(a)) of the Borrowers’ consolidated current assets
(including the unused amount of the Borrowing Base, but excluding non-cash assets under FAS 133) to
consolidated current liabilities (excluding non-cash obligations under FAS 133, asset and asset
retirement obligations



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and current maturities of Indebtedness under this Agreement and the Secured
Pipeline Loan Agreement) at any fiscal quarter-end, commencing with the quarter-ended September 30,
2010, to be less than or equal to 1.0 to 1.0; provided, however, that for purposes of this
covenant, current assets and current liabilities shall exclude mark-to-market values of Swap
Contracts, to the extent such values are included in current assets and current liabilities.



     (b) Interest Coverage Ratio. Permit the Interest Coverage Ratio at any fiscal quarter-end to
be less than or equal to 3.0 to 1.0.



     (c) Leverage Ratio. Permit the Leverage Ratio at any fiscal quarter-end (i) commencing with
the quarter ending September 30, 2010 and ending on the quarter ending March 31, 2011, to be
greater than or equal to 4.5 to 1.0; (ii) commencing with the quarter-ending June 30, 2011 and
ending with the quarter ending March 31, 2012, to be greater than or equal to 4.0 to 1.0; and (iii)
commencing with the quarter-ending June 30, 2012 and continuing until the Maturity Date, to be
greater than or equal to 3.5 to 1.0.



     (d) Adjustments for Material Dispositions. For the purposes of calculating Adjusted
Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a “Reference Period”)
pursuant to any determination of the covenants set forth in this Section 7.16 (which calculation
shall, in all respects, be acceptable to, and approved by the Administrative Agent), if at any time
after the first day of such Reference Period any Borrower or its consolidated Subsidiary (other
than the Excluded Subsidiaries) shall have made any Material Disposition, the Adjusted Consolidated
EBITDA for such Reference Period shall be reduced by an amount equal to the Adjusted Consolidated
EBITDA (if positive) attributable to the Oil and Gas Property or other Collateral that is the
subject of such Material Disposition for such Reference Period. Except as otherwise indicated, the
ratios set out above shall be calculated at the end of each reporting period for which this
Agreement requires Borrowers to deliver financial statements pursuant to Sections 6.01(a) and (b),
using the results of the twelve-month period ending with that reporting period.



     (e) Adjustments for Permitted Acquisitions and Material Acquisitions. For purposes of
determining compliance with Sections 7.16(b) and (c)):




     (i) Adjusted Consolidated EBITDA shall be calculated after giving effect, on a pro
forma basis (in a manner reasonably acceptable to the Administrative Agent) for the four
consecutive fiscal quarters most recently completed, to any Permitted Acquisition or
Material Acquisition occurring during such period, as if such Permitted Acquisition or
Material Acquisition occurred on the first day of such period.




     (ii) If, in connection with a Permitted Acquisition or a Material Acquisition, any
Indebtedness is incurred or assumed by a Company, then Consolidated Interest Charges shall
be calculated, on a pro forma basis (in a manner reasonably acceptable to the
Administrative Agent) for the four quarters most recently completed, as if such
Indebtedness had been incurred on the first day of such period.



ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES




     8.01. Events of Default. Any of the following shall constitute an Event of Default:



     (a) Non-Payment. The Borrowers fail to pay (i) when and as required to be paid
herein, any amount of principal of any Revolving Loan or any L/C Obligation or (ii) within three
Business Days after



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the same becomes due, any interest on any Revolving Loan, any L/C Obligation,
any commitment or other fee due hereunder, or any other amount payable hereunder or under any other
Loan Document; or



     (b) Specific Covenants. The Borrowers fail to perform or observe any term, covenant
or agreement contained in any of Section 6.03(a), 6.05 (with respect to the respective Borrower’s
existence), 6.12, or Article VII; or



     (c) Other Defaults. Any Loan Party fails to perform or observe any other covenant or
agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part
to be performed or observed and such failure continues for 30 days after the date notice has been
given to the Borrowers by the Administrative Agent or the Required Lenders; or



     (d) Representations and Warranties. Any representation or warranty made or deemed
made by the Borrowers or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith proves to have been incorrect in any
material respect when made or deemed made; or



     (e) Cross-Default. (i) The Borrowers or any Borrower Affiliate or, solely as regards
a default under the Secured Pipeline Loan, KPC Pipeline, LLC (A) fails to make any payment when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect
of any Indebtedness or Guaranty Obligation in respect of Indebtedness (other than Indebtedness
under Swap Contracts) under the Secured Pipeline Loan or having an aggregate principal amount (or,
in the case of a Capitalized Lease or a Synthetic Lease Obligation, Attributable Indebtedness)
(including undrawn or available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than (individually or collectively) $5,000,000,
or (B) fails to observe or perform any other agreement or condition relating to any such
Indebtedness or Guaranty Obligation in respect of Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders of such Indebtedness, the
lessor under such Synthetic Lease Obligation or the beneficiary or beneficiaries of such Guaranty
Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or
to become due or to be repurchased or redeemed (automatically or otherwise) prior to its stated
maturity, or such Guaranty Obligation to become payable or cash collateral in respect thereof to be
demanded; provided that this clause (e)(i)(B) shall not apply to secured Indebtedness that becomes
due as a result of the voluntary sale or transfer of the property or assets securing such
Indebtedness; or (ii) (A) there occurs under any Swap Contract an Early Termination Date (as
defined in such Swap Contract) resulting from any event of default under such Swap Contract as to
which a Borrower or any Borrower Affiliate is the Defaulting Party (as defined in such Swap
Contract) and the Swap Termination Value owed by a Borrower or any Borrower Affiliate as a result
thereof is greater than (individually or collectively) $5,000,000, or (B) there occurs under any
Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from any
Termination Event (as so defined) under such Swap Contract as to which a Borrower or any Borrower
Affiliate is an Affected Party (as so defined) and the Early Termination Amount owed by a Borrower
and Borrower Affiliate as a result thereof is greater than (individually or collectively)
$5,000,000 and such amount is not paid when due under such Swap Contract; or



     (f) Insolvency Proceedings, Etc. (i) A Borrower or any Borrower Affiliate institutes
or consents to the institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or
for all or any material part of its property or takes any action to effect any of the foregoing; or
(ii) any receiver, trustee, custodian, conservator,



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liquidator, rehabilitator or similar officer is
appointed without the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or (iii) any proceeding under any Debtor Relief Law
relating to any such Person or to all or any part of its property is instituted without the consent
of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief
is entered in any such proceeding; or



     (g) Inability to Pay Debts; Attachment. (i) A Borrower or any Borrower Affiliate
becomes unable or admits in writing its inability or fails generally to pay its debts as they
become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or
levied against property which is a material part of the property of the Borrowers and their
Subsidiaries (other than the Excluded Subsidiaries) taken as a whole, and is not released, vacated
or fully bonded within 45 days after its issue or levy; or



     (h) Judgments. There is entered against a Borrower or any Borrower Affiliate (i) a
final non-appealable judgment or order for the payment of money in an aggregate amount exceeding
(individually or collectively) $5,000,000 (to the extent not covered by third-party insurance as to
which the insurer does not dispute coverage), or (ii) any non-monetary final non-appealable
judgment that has or could reasonably be expected to have a Material Adverse Effect and, in either
case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order and is
not released, vacated or fully bonded within 60 days after its attachment or levy; or (B) there is
a period of 60 consecutive days during which a stay of enforcement of such judgment, by reason of a
pending appeal or otherwise, is not in effect; or



     (i) ERISA. (i) If a Borrower, any Borrower Affiliate or any of their ERISA Affiliates
maintains any Pension Plan or any Multiemployer Plan, an ERISA Event occurs with respect to a
Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in
liability of a Borrower or any Borrower Affiliate under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $1,000,000, or (ii) if there is
any Multiemployer Plan, a Borrower, any Borrower Affiliate or any ERISA Affiliate thereof fails to
pay when due, after the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an
aggregate amount in excess of $1,000,000; or



     (j) Invalidity of Loan Documents. Any Loan Document, at any time after its execution
and delivery and for any reason other than the agreement of the Required Lenders or termination of
all Revolving Commitments and satisfaction in full of all the Obligations, ceases to be in full
force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid
or unenforceable in any material respect; or any Loan Party denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any
Loan Document; provided, however, that the foregoing shall not apply to the Guaranty and other
Collateral Documents of any Subsidiary that is Disposed of by a Borrower in accordance with the
provisions of this Agreement; or



     (k) Change of Control. There occurs any Change of Control; or



     (l) Dissolution. A Borrower or any Borrower Affiliate shall dissolve, liquidate, or
otherwise terminate its existence, except as permitted in Section 7.06; or



     (m) Collateral; Impairment of Security, etc. (i) Any provision of any Loan Document
shall for any reason cease to be valid and binding on or enforceable against a Loan Party or any
Loan Party shall so state in writing or bring an action to limit its obligations or liabilities
thereunder; or (ii) any Collateral Document shall for any reason (other than pursuant to the terms
thereof) cease to create a valid



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security interest in the Collateral purported to be covered
thereby or such security interest shall for any reason (other than as permitted herein or in any
Collateral Document and except as to the second Lien for the benefit of the Lenders on the KPC
Pipeline) cease to be a perfected and first priority security interest subject to Permitted Liens;
provided, however, that the foregoing shall not apply to the Guaranty and other Collateral
Documents of any Subsidiary that is Disposed of by the Borrowers in accordance with the provisions
of this Agreement; or



     (n) Borrowing Base Deficiency. If any Borrowing Base Deficiency continues to exist
beyond the applicable time periods permissible under Section 2.04 .



     8.02. Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the
Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders:



     (a) declare the Revolving Commitment of each Lender to make Revolving Loans and any obligation
of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such Revolving
Commitments and obligations shall be terminated;



     (b) declare the unpaid principal amount of all outstanding Revolving Loans, all interest
accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other
Loan Document to be immediately due and payable, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby
expressly waived by the Borrowers;



     (c) declare that an amount equal to the then Outstanding Amount of all L/C Obligations be
immediately due and payable by the Borrowers, without presentment, demand, protest, notice of
intent to accelerate, notice of acceleration or other notice of any kind, all of which are hereby
expressly waived by the Borrowers, and require that the Borrowers deliver such payments to the
Administrative Agent to Cash Collateralize the L/C Obligations (in an amount equal to the then
Outstanding Amount thereof); and



     (d) exercise on behalf of itself and the Lenders all rights and remedies available to it and
the Lenders under the Loan Documents or applicable Law;


provided, however, that upon the occurrence of any event specified in subsection (f) of Section
8.01, the obligation of each Lender to make Revolving Loans and any obligation of the L/C Issuer to
make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all
outstanding Revolving Loans and all interest and other amounts as aforesaid shall automatically
become due and payable, and an amount equal to the then Outstanding Amount of all L/C Obligations
shall be deemed to be forthwith due and owing by the Borrowers to the L/C Issuer and the Lenders as
of the date of such occurrence and the Borrowers’ obligation to pay such amounts 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 Borrowers may now or hereafter
have against any such beneficiary, the L/C Issuer, the Administrative Agent, the Lenders or any
other Person for any reason whatsoever. Such payments shall be delivered to and held by the
Administrative Agent as cash collateral securing the L/C Obligations.




     8.03. Application of Funds. After the exercise of remedies provided for in Section 8.02 (or after
the Revolving Loans have automatically become immediately due and payable and the L/C Obligations
have automatically been required to be Cash Collateralized as set forth in the proviso to Section
8.02), any amounts received on account of the Obligations shall be applied by the Administrative
Agent as set forth in Section 2.11(d).



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ARTICLE IX.

ADMINISTRATIVE AGENT




     9.01. Appointment and Authorization of Agents; Lender Hedging Agreements. (a) Each Lender hereby
irrevocably (subject to Section 9.10) appoints, designates and authorizes the Administrative Agent
to take such action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement or any other Loan Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, the Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Administrative Agent have or be deemed to
have any fiduciary relationship with any Lender or Participant, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement
or any other Loan Document or otherwise exist against the Administrative Agent. Without limiting
the generality of the foregoing sentence, the use of the term “agent” herein and in the other Loan
Documents with reference to the Administrative Agent or Collateral Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, 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 L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit
issued by it and the documents associated therewith until such time (and except for so long) as the
Administrative Agent may agree at the request of the Required Lenders to act for the L/C Issuer
with respect thereto; provided, however, that the L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this Article IX with respect to any acts
taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or
proposed to be issued by it and the application and agreements for letters of credit pertaining to
the Letters of Credit as fully as if the term “Administrative Agent” as used in this Article IX
included the L/C Issuer with respect to such acts or omissions, and (ii) as additionally provided
herein with respect to the L/C Issuer.



     (c) To the extent any Lender or any Affiliate of a Lender is a party to a Lender Hedging
Agreement and accepts the benefits of the Liens in the Collateral arising pursuant to the
Collateral Documents, such Lender (for itself and on behalf of any such Affiliates) shall be deemed
(i) to appoint the Administrative Agent and Collateral Agent, as its nominee and agent, to act for
and on behalf of such Lender or Affiliate thereof in connection with the Collateral Documents and
(ii) to be bound by the terms of this Article IX.



     9.02. Delegation of Duties. The Administrative Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents (including the Collateral Agent),
employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or
experts concerning all matters pertaining to such duties. Neither the Administrative Agent nor
Collateral Agent shall be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.



     9.03. Default; Collateral. (a) Upon the occurrence and continuance of a Default or Event of
Default, the Lenders agree to promptly confer in order that Required Lenders or the Lenders, as the
case may be, may agree upon a
course of action for the enforcement of the rights of the Lenders; and the Administrative Agent
shall be entitled to refrain from taking any action (without incurring any liability to any Person
for so refraining) unless and until the Administrative Agent shall have received instructions from
Required Lenders. All rights of action under the Loan Documents and all right to the Collateral,
if any, hereunder may be enforced by the Administrative Agent (or Collateral Agent) and any suit or



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proceeding instituted by the Administrative Agent (or Collateral Agent) in furtherance of such
enforcement shall be brought in its name as the Administrative Agent (or Collateral Agent) without
the necessity of joining as plaintiffs or defendants any other Lender, and the recovery of any
judgment shall be for the benefit of the Lenders (and, with respect to Lender Hedging Agreements,
Affiliates, if applicable) subject to the expenses of the Administrative Agent and Collateral
Agent. In actions with respect to any property of the Borrowers or any other Obligor, the
Administrative Agent (and the Collateral Agent) is acting for the ratable benefit of each Lender
(and, with respect to Lender Hedging Agreement, Affiliates, if applicable). Any and all agreements
to subordinate (whether made heretofore or hereafter) other indebtedness or obligations of
Borrowers to the Obligations shall be construed as being for the ratable benefit of each Lender
(and, with respect to Lender Hedging Agreement, Affiliates, if applicable).



     (b) Each Lender authorizes and directs the Administrative Agent and the Collateral Agent to
enter into the Collateral Documents on behalf of and for the benefit of the Lenders (and, with
respect to Lender Hedging Agreements, Affiliates, if applicable)(or if previously entered into,
hereby ratifies the Administrative Agent’s and Collateral Agent’s previously entering into such
agreements and Collateral Documents).



     (c) Except to the extent unanimity (or other percentage set forth in Section 10.01) is
required hereunder, each Lender agrees that any action taken by the Required Lenders in accordance
with the provisions of the Loan Documents, and the exercise by the Required Lenders of the power
set forth herein or therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders.



     (d) The Administrative Agent and Collateral Agent are each hereby authorized on behalf of the
Lenders, without the necessity of any notice to or further consent from any Lender, from time to
time to take any action with respect to any Collateral or Collateral Documents which may be
necessary to perfect and maintain perfected the Liens upon the Collateral granted pursuant to the
Collateral Documents.



     (e) Neither the Administrative Agent nor the Collateral Agent shall have any obligation
whatsoever to any Lender or to any other Person to assure that the Collateral exists or is owned by
any Obligor or is cared for, protected, or insured or has been encumbered or that the Liens granted
to the Administrative Agent and/or Collateral Agent herein or pursuant thereto have been properly
or sufficiently or lawfully created, perfected, protected, or enforced, or are entitled to any
particular priority, or to exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the Rights granted or available to the
Administrative Agent or Collateral Agent in this Section 9.03 or in any of the Collateral
Documents; it being understood and agreed that in respect of the Collateral, or any act, omission,
or event related thereto, the Administrative Agent may act in any manner it may deem appropriate,
in its sole discretion, given the Administrative Agent’s own interest in the Collateral as one of
the Lenders and that the Administrative Agent shall have no duty or liability whatsoever to any
Lender, other than to act without gross negligence or willful misconduct and the same shall apply
to the Collateral Agent so long as the Administrative Agent is also the Collateral Agent.



     (f) The Lenders hereby irrevocably authorize the Administrative Agent and/or Collateral Agent,
at its option and in its discretion, to release any Lien granted to or held by the Administrative
Agent or Collateral Agent upon any Collateral: (i) constituting property in which no Obligor
owned an interest at the time the Lien was granted or at any time thereafter; (ii) constituting
property leased or granted to an Obligor under a lease, easement or right-of-way which has expired
or been terminated in a transaction permitted under the Loan Documents or is about to expire and
which has not been, and is not



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intended by such Obligor to be, renewed; and (iii) consisting of an
instrument evidencing Indebtedness pledged to the Administrative Agent or Collateral Agent (for the
benefit of the Lenders), if the Indebtedness evidenced thereby has been paid in full. In addition,
the Lenders irrevocably authorize the Administrative Agent and Collateral Agent to release Liens
upon Collateral as contemplated in Section 10.01(c) or (d), or if approved, authorized, or ratified
in writing by the requisite Lenders. Upon request by the Administrative Agent (or Collateral
Agent) at any time, the Lenders will confirm in writing the Administrative Agent’s (or Collateral
Agent’s) authority to release particular types or items of Collateral pursuant to this Section
9.03.



     (g) In furtherance of the authorizations set forth in this Section 9.03, each Lender hereby
irrevocably appoints the Administrative Agent and Collateral Agent its attorney-in-fact, with full
power of substitution, for and on behalf of and in the name of each such Lender (i) to enter into
Collateral Documents (including, without limitation, any appointments of substitute trustees under
any Collateral Documents and any appointment of a collateral agent under the Intercreditor
Agreement), (ii) to take action with respect to the Collateral and Collateral Documents to perfect,
maintain, and preserve Lenders’ Liens, and (iii) to execute instruments of release or to take other
action necessary to release Liens upon any Collateral to the extent authorized in paragraph (f)
hereof. This power of attorney shall be liberally, not restrictively, construed so as to give the
greatest latitude to the Administrative Agent’s and the Collateral Agent’s power, as attorney,
relative to the Collateral matters described in this Section 9.03. The powers and authorities
herein conferred on the Administrative Agent and Collateral Agent may be exercised by the
Administrative Agent or Collateral Agent through any Person who, at the time of the execution of a
particular instrument, is an officer of the Administrative Agent or Collateral Agent (or any Person
acting on behalf of the Administrative Agent or Collateral Agent pursuant to a valid power of
attorney). The power of attorney conferred by this Section 9.03(g) to the Administrative Agent and
Collateral Agent is granted for valuable consideration and is coupled with an interest and is
irrevocable so long as the Obligations, or any part thereof, shall remain unpaid or the Lenders
have any Revolving Commitment hereunder.



     9.04. Liability of Agents. No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Agreement or any other Loan
Document or the transactions contemplated hereby (except for its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein), or (b) be responsible in any
manner to any Lender or Participant for any recital, statement, representation or warranty made by
any Loan Party or any officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in, or received by
Administrative Agent or Collateral Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for the creation, perfection or priority of any Liens
purported to be created by any of the Loan Documents, or the validity, genuineness, enforceability,
existence, value or sufficiency of any collateral security, or to make any inquiry respecting the
performance by the Borrowers of their obligations hereunder or under any other Loan Document, or
for any failure of any Loan Party or any other party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any
Lender or Participant to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party or any Affiliate thereof.



     9.05. Reliance by Administrative Agent. (a) The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, facsimile, electronic mail message
or telephone message, statement or other document or conversation believed by it to be genuine and
correct



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and to have been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to any Loan Party), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders or all the Lenders, if required hereunder, and such
request and any action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and Participants. Where this Agreement expressly permits or prohibits an action unless the
Required Lenders otherwise determine, the Administrative Agent shall, and in all other instances,
the Administrative Agent may, but shall not be required to, initiate any solicitation for the
consent or a vote of the Lenders.



     (b) For purposes of determining compliance with the conditions specified in Section 4.01, each
Lender that has funded its Pro Rata Share of the Borrowing on the Closing Date shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document or other matter
either sent by the Administrative Agent to such Lender (or otherwise made available for such Lender
on Intralinks or any similar website) for consent, approval, acceptance or satisfaction, or
required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender.



     9.06. Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice
of the occurrence of any Default or Event of Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the Administrative Agent for the
account of the Lenders, unless the Administrative Agent shall have received written notice from a
Lender or the Borrowers referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a “notice of default.” The Administrative Agent will notify the
Lenders of its receipt of any such notice. The Administrative Agent shall take such action with
respect to such Default or Event of Default as may be directed by the Required Lenders in
accordance with Article VIII; provided, however, that unless and until the Administrative Agent has
received any such direction, the Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or Event of Default as it
shall deem advisable or in the best interest of the Lenders.



     9.07. Credit Decision; Disclosure of Information by Administrative Agent. Each Lender acknowledges
that no Agent-Related Person has made any representation or warranty to it, and that no act by the
Administrative Agent hereinafter taken, including any consent to and acceptance of any assignment
or review of the affairs of any Loan Party or any Affiliate thereof, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender as to any matter,
including whether Agent-Related Persons have disclosed material information in their possession.
Each Lender represents to the Administrative Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business, prospects, operations,
property, financial and
other condition and creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to the Borrowers hereunder.
Each Lender also represents that it will, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the



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Borrowers and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by the Administrative
Agent herein, the Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any Agent Related Person.



     9.08. Indemnification of Agents. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Loan Party and without limiting the obligation of any Loan Party
to do so), pro rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified Liabilities to the extent
determined in a final, nonappealable judgment by a court of competent jurisdiction to have been
caused primarily by such Agent-Related Person’s own gross negligence or willful misconduct;
provided, however, it being agreed by all Lenders that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross negligence or willful
misconduct for purposes of this Section. Without limitation of the foregoing, each Lender shall
reimburse the Administrative Agent upon demand for its ratable share of any costs or out-of-pocket
expenses (including Attorney Costs, costs and expenses in connection with the use of Intralinks,
Inc. or other similar information transmission systems in connection with this Agreement and FA
Costs) incurred by the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether through negotiations,
legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to
the extent that the Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrowers. The undertaking in this Section shall survive termination of the Revolving Commitments,
the payment of all Obligations hereunder and the resignation or replacement of the Administrative
Agent.



     9.09. Administrative Agent in its Individual Capacity. RBC and its Affiliates may make loans to,
accept deposits from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with each of the Loan Parties and their
respective Affiliates as though RBC were not the Administrative Agent, Collateral Agent or the L/C
Issuer hereunder and without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, RBC or its Affiliates may receive information regarding any Loan Party
or its Affiliates (including information that may be subject to confidentiality obligations in
favor of such Loan Party or such Affiliate) and acknowledge that the Administrative Agent shall be
under no obligation to provide such information to them. With respect to its Revolving Loans, RBC
shall have the same rights and powers under this Agreement as any other Lender and may exercise
such rights and powers as though it were not the Administrative Agent, Collateral Agent or the L/C
Issuer, and the terms “Lender” and “Lenders” include RBC in its individual capacity.



     9.10. Successor Administrative Agent and Collateral Agent.



     (a) The Administrative Agent may resign as Administrative Agent and Collateral Agent upon 30
days’ notice to the Lenders with a copy of such notice to the Borrowers. If the Administrative
Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a
successor administrative agent and collateral agent for the Lenders which successor administrative
agent shall be consented to by the Borrowers at all times other than during the existence of an
Event of Default (which consent of the Borrowers shall not be unreasonably withheld, conditioned or
delayed). If no successor administrative agent is appointed prior to the effective date of the
resignation of the



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Administrative Agent, the Administrative Agent may appoint, after consulting
with the Lenders and the Borrowers, a successor administrative agent from among the Lenders who
shall also succeed to the role of successor collateral agent. Upon the acceptance of its
appointment as successor administrative agent hereunder, such successor administrative agent shall
succeed to all the rights, powers and duties of the retiring Administrative Agent and the term
"Administrative Agent” shall mean such successor administrative agent and the retiring
Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Article IX and Sections 10.04 and 10.13 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
If no successor administrative agent has accepted appointment as Administrative Agent by the date
which is 30 days following a retiring Administrative Agent’s notice of resignation, the retiring
Administrative Agent’s resignation shall nevertheless thereupon become effective and the Lenders
shall perform all of the duties of the Administrative Agent and Collateral Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as provided for above.



     (b) The Collateral Agent may resign as Collateral Agent upon 30 days’ notice to the
Administrative Agent with a copy of such notice to the Borrowers. If the Collateral Agent resigns
under this Agreement, the Administrative Agent shall designate a successor collateral agent. Upon
the acceptance of its appointment as successor collateral agent hereunder, such successor
collateral agent shall succeed to all the rights, powers and duties of the retiring Collateral
Agent and the term “Collateral Agent” shall mean such successor collateral agent and the retiring
Collateral Agent’s appointment, powers and duties as Collateral Agent shall be terminated. After
any retiring Collateral Agent’s resignation hereunder as Collateral Agent, the provisions of this
Article IX and Sections 10.04 and 10.13 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent under this Agreement.



     9.11. Other Agents. None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a “syndication agent,” as a “documentation agent,” any other
type of agent (other than the Administrative Agent and Collateral Agent), shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other than those
applicable to all Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so identified in
deciding to enter into this Agreement or in taking or not taking action hereunder.



     9.12. Administrative Agent May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any
Loan Party, the Administrative Agent (irrespective of whether the principal of any Revolving Loan
or L/C Obligation 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 Borrowers)
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 Revolving Loans, L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders, the L/C Issuer and the
Administrative Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and
their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer
and the Administrative Agent under Sections 2.14(i) and 2.14(j), 2.08, 10.04 and 10.05)
allowed in such judicial proceeding; and



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     (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 and the L/C Issuer 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 and the L/C Issuer, 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 Sections 2.08, 10.04 and 10.05.




     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 or the L/C Issuer any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations 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.



     9.13. Hedging Agreements. To the extent any Affiliate of a Lender is a party to a Swap Contract
with a Borrower or any Borrower Affiliate and thereby becomes a beneficiary of the Liens pursuant
to the Collateral Document, such Affiliate of a Lender shall be deemed to appoint the
Administrative Agent and Collateral Agent its nominee and agent to act for and on behalf of such
Affiliate in connection with the Collateral Documents and to be bound by the terms of this Article
IX, and Section 10.01(e).



ARTICLE X.

MISCELLANEOUS




     10.01. Amendments, Release of Collateral, Etc. (a) No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the Borrowers or any other
Loan Party therefrom shall be effective to do any of the following unless in writing signed by the
Required Lenders and the Borrowers or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given; provided, however, that in
connection with subsections (i), (ii) and (iii) below, no such amendment,
waiver or consent shall, unless in writing and signed by each of the Lenders directly affected
thereby and by the Borrowers, and acknowledged by the Administrative Agent, and in connection with
subsections (iv), (v), (vi), (vii), and (viii) below, no such amendment, waiver or consent shall,
unless in writing and signed by all of the Lenders and by the Borrowers, and acknowledged by the
Administrative Agent:




     (i) extend or increase the Revolving Commitment of any Lender (or reinstate any
Revolving Commitment terminated pursuant to Section 8.02);




     (ii) extend the Maturity Date or extend, postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment or mandatory prepayment of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any
other Loan Document;




     (iii) reduce the principal of, or the rate of interest specified herein on, any
Revolving Loan or L/C Borrowing or any fees or other amounts payable hereunder or under
any other Loan Document; provided, however, that only the consent of the Required Lenders
shall be necessary to (A) amend the definition of “Default Rate” or to waive any
obligation of the Borrowers to pay interest at the Default Rate or (B) to amend any
financial covenant hereunder



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(or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Revolving Loan or L/C Borrowing
or to reduce any fee payable hereunder;




     (iv) change the percentage of the Aggregate Revolving Commitment or of the aggregate
unpaid principal amount of the Revolving Loans and L/C Obligations which is set forth in
the definition of “Required Lenders”;




     (v) change the Pro Rata Share of any Lender;




     (vi) release a material amount of Collateral or release any Guarantor from a Guaranty
(except in connection with a Disposition permitted under Section 7.07 or as otherwise
permitted under this Section 10.01 and except for any releases contemplated in Section
4.01, which shall not require any Lender consents other than Lenders’ execution of this
Agreement);




     (vii) amend the definition of the term “Borrowing Base” or amend the requirement that
the Borrowing Base may be increased only with the consent of all Lenders; or




     (viii) amend this Section, or Section 2.04(b) or 2.12, or any provision herein
providing for unanimous consent or other action by all the Lenders;


and, provided further: (i) no amendment, waiver or consent shall, unless in writing and signed by
the L/C Issuer in addition to the Required Lenders or all the Lenders, as the case may be, affect
the rights or duties of the L/C Issuer under this Agreement or any Letter of Credit Application
relating to any Letter of Credit issued or to be issued by it; and (ii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or duties of the Administrative
Agent under this Agreement or any other Loan Document. Notwithstanding anything to the contrary
herein, any Lender that has failed to fund any portion of the Revolving Loans or participation in
L/C Obligations required to be funded by it hereunder shall not have any right to approve or
disapprove any amendment, waiver or consent hereunder, except that the Pro Rata Share of such
Lender may not be increased without the consent of such Lender.



The right of each Lender to receive in connection with the Revolving Loan owed to it interest on
each Interest Payment Date and to receive principal on the Maturity Date shall not be impaired or
affected without the consent of such Lender, nor shall such Lender’s right to institute suit
against the Borrowers or Guarantors for payment of such amounts on or after the due dates thereof
be impaired or affected without the consent of such Lender; provided the foregoing shall not give
any Lender any right to proceed against Collateral or take any actions described in Section 8.02
that are vested in the Administrative Agent or Required Lenders.




     (b) Any amendment to any Loan Document which purports to (i) decrease the amount of any
mandatory prepayment or commitment reduction required by Section 2.04(c) or (ii) change this
Section 10.01(b), must be by an instrument in writing executed by the Borrowers, the Administrative
Agent, and the Required Lenders.



     (c) Upon any sale, transfer, or Disposition of Collateral which is permitted pursuant to the
Loan Documents, and upon 5 Business Days’ prior written request by the Borrowers (which request
must be accompanied by (i) true and correct copies of all material documents of transfer or
Disposition, including any contract of sale, (ii) a preliminary closing statement and instructions
to the title company, if any, (iii) all requested release instruments in form and substance
satisfactory to the Administrative Agent and (iv) if required, written consent of the requisite
Lenders), the Administrative Agent and/or Collateral



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Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be necessary to evidence the release of
Liens granted to the Administrative Agent and/or Collateral Agent for the benefit of the Secured
Parties pursuant hereto in such Collateral. Neither the Administrative Agent nor the Collateral
Agent shall be required to execute any release instruments on terms which, in the Administrative
Agent’s (or Collateral Agent’s) opinion, would expose the Administrative Agent or Collateral Agent
to liability or create any obligation or entail any consequence other than the release of Liens
without recourse or warranty. No such release shall impair the Administrative Agent’s and/or
Collateral Agent’s Lien on the proceeds of sale of such Collateral.



     (d) If all outstanding Revolving Loans and other Obligations (other than contingent indemnity
obligations) have been indefeasibly paid in full (or, with respect to L/C Obligations, Cash
Collateralized) and the Revolving Commitments have terminated or have been reduced to zero, and,
subject to Section 10.01(e) all Lender Hedging Agreement have terminated, the Administrative Agent
agrees to, and the Lenders hereby instruct the Administrative Agent and Collateral Agent to, at the
Borrowers’ expense, execute and authorize such releases of the Collateral Documents as the
Borrowers shall reasonably request and this Agreement shall be deemed terminated except that such
termination shall not relieve the Borrowers of any obligation to make any payments to the
Administrative Agent or any Lender required by any Loan Document to the extent accruing, or
relating to an event occurring, prior to such termination.



     (e) Notwithstanding any provision herein to the contrary, if the Revolving Commitments have
been terminated, and the only outstanding Obligations (other than contingent indemnity obligations
and L/C Obligations that are Cash Collateralized) are amounts owed pursuant to one or more Lender
Hedging Agreements, the Administrative Agent and/or Collateral Agent will, and is hereby authorized
to, (A) release the Liens created under the Loan Documents and (B) release all Guaranties of the
Guarantors; provided, that contemporaneously with such release, (i) the Borrowers (and, if
applicable, any Borrower Affiliate that is a party to such Lender Hedging Agreements) (A) execute a
margin agreement in form and substance acceptable to such Lender(s) (or its Affiliates) that are
parties to such Lender Hedging Agreements (the “Lender Counterparties”) and (B), if required,
provide collateral in the form of cash or a letter of credit having an aggregate value acceptable
to such Lender Counterparties, and (ii) if such Lender Hedging Agreement is executed by a
Subsidiary of the Borrowers and the Borrowers are not parties thereto, the Borrowers execute a
guaranty covering such Subsidiary’s obligations thereunder, such
guaranty to be in form and substance satisfactory to the Lender Counterparties. Any release
under this Section 10.01(e) must be in writing and signed by the Administrative Agent.



     (f) The Lenders and the Administrative Agent hereby waive (i) notice of the Restructure
Transactions, (ii) any notice period requirements relating to the Restructure Transactions; (iii)
any contents of the notice or other requirements associated with notice relating to the Restructure
Transactions; (iv) any provisions of the Prior Midstream Credit Agreement in regards to the
Restructure Transactions that would have the effect of prohibiting any or all of the Restructure
Transactions; and (v) any amendment or termination of Material Agreements (as defined in the Prior
Credit Agreements) that occurs in connection with the Restructure Transactions.



     10.02. Notices and Other Communications; Facsimile Copies.



     (a) General. Unless otherwise expressly provided herein, all notices and other
communications provided for hereunder and under the other Loan Documents shall be in writing
(including by facsimile transmission) and mailed, faxed or delivered, to the address, facsimile
number or (subject to subsection (c) below) electronic mail address specified for notices on
Schedule 10.02 (for the Borrowers, any Guarantor and the Administrative Agent) or on the
Administrative Details Form (for the other Lenders); or, in the case of the Borrowers, the
Guarantors, the Administrative Agent, or the L/C



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Issuer, to such other address as shall be
designated by such party in a notice to the other parties, and in the case of any other party, to
such other address as shall be designated by such party in a notice to the Borrowers, the
Administrative Agent and the L/C Issuer. All such notices and other communications shall be deemed
to be given or made upon the earlier to occur of (i) actual receipt by the intended recipient and
(ii) (A) if delivered by hand or by courier, when signed for by the intended recipient; (B) if
delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered
by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by
electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when
delivered; provided, however, that notices and other communications to the Administrative Agent or
the L/C Issuer pursuant to Article II shall not be effective until actually received by such
Person. Any notice or other communication permitted to be given, made or confirmed by telephone
hereunder shall be given, made or confirmed by means of a telephone call to the intended recipient
at the number specified in accordance with this Section, it being understood and agreed that a
voicemail message shall in no event be effective as a notice, communication or confirmation
hereunder.



     (b) Effectiveness of Facsimile Documents and Signatures. Loan Documents may be
transmitted and/or signed by facsimile or other electronic means. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force and effect as
manually-signed originals and shall be binding on all Loan Parties, the Administrative Agent and
the Lenders. The Administrative Agent may also require that any such documents and signatures be
confirmed by a manually-signed original thereof; provided, however, that the failure to request or
deliver the same shall not limit the effectiveness of any facsimile document or signature.



     (c) Limited Use of Electronic Mail. Electronic mail and internet and intranet
websites may be used only to distribute routine communications, such as financial statements and
other information, and to distribute Loan Documents for execution by the parties thereto, and shall
not be recognized hereunder for any other purpose.



     (d) Reliance by Administrative Agent and Lenders. The Administrative Agent and the
Lenders shall be entitled to rely and act upon any notices (including telephonic Borrowing Notices)
purportedly given by or on behalf of the Borrowers even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrowers shall indemnify each Agent-Related Person and each Lender from
all losses, costs, expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrowers. All telephonic notices to and other
communications with the Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.



     10.03. No Waiver; Cumulative Remedies. No failure by any Lender or the Administrative Agent to
exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein
or therein provided are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.



     10.04. Attorney Costs; Expenses and Taxes. The Borrowers agree (a) to pay or reimburse the
Administrative Agent for all reasonable costs and expenses incurred in connection with the
development, preparation, negotiation, syndication, administration and execution of this Agreement
and the other Loan Documents, including the filing, recording, refiling or rerecording of any
Mortgage, any



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pledge agreement and any Security Agreement and/or any Uniform Commercial Code
financing statements relating thereto and all amendments, supplements and modifications to any
thereof and any and all other documents or instruments of further assurance required to be filed or
recorded or refiled or rerecorded by the terms hereof or of any mortgage, any pledge agreement or
any security agreement, and any amendment, waiver, consent or other modification of the provisions
hereof and thereof (whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs and FA Costs and reasonable costs and expenses in connection
with the use of Intralinks, Inc. or other similar information transmission systems in connection
with this Agreement; provided however that all such costs and expenses, Attorney Costs and FA Costs
of the Administrative Agent and Lenders relating to this Agreement, together with all such costs
and expenses, Attorney Costs and FA Costs as defined in, and as provided for in, the credit
agreements of even date herewith relating to the Secured Pipeline Loan and the Amended QRC Facility
shall not exceed in the aggregate $1,000,000, and (b) to pay or reimburse the Administrative Agent
and each Lender for all costs and expenses incurred in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or the other Loan
Documents (including all such costs and expenses incurred during any workout or restructuring in
respect of the Obligations and during any legal proceeding, including any proceeding under any
Debtor Relief Law), including all Attorney Costs and FA Costs. The foregoing costs and expenses
shall include all search, filing, recording, title insurance and appraisal charges and fees and
taxes related thereto, and other out-of-pocket expenses incurred by the Administrative Agent and
the cost of independent public accountants and other outside experts retained by the Administrative
Agent or any Lender (if such Lender is otherwise entitled to recover such costs under the terms of
this Agreement). The agreements in this Section shall survive the termination of the Aggregate
Revolving Commitment and repayment of all the other Obligations.



     10.05. Indemnification. Whether or not the transactions contemplated hereby are consummated, each of the Borrowers and
each other Guarantor (by execution of a Guaranty), jointly and severally, agrees to indemnify, save
and hold harmless each Agent-Related Person, the Administrative Agent, the Collateral Agent, each
Lender, the L/C Issuer and their respective Affiliates, directors, officers, employees, counsel,
agents and attorneys-in-fact (collectively the “Indemnitees”) from and against: (a) any and all
claims, demands, actions or causes of action that are asserted against any Indemnitee by any Person
(other than the Administrative Agent or any Lender) relating directly or indirectly to a claim,
demand, action or cause of action that such Person asserts or may assert against any Loan Party,
any Affiliate of any Loan Party or any of their respective officers or directors, arising out of or
relating to, the Loan Documents, the Aggregate Revolving Commitment, the use or contemplated use of
the proceeds of any Revolving Loans, or the relationship of any Loan Party, the Administrative
Agent, the Collateral Agent, the Lenders and the L/C Issuer under this Agreement or any other Loan
Document; (b) any and all claims, demands, actions or causes of action that may at any time
(including at any time following repayment of the Obligations and the resignation of the
Administrative Agent or the replacement of any Lender) be asserted or imposed against any
Indemnitee by any Person or by a Borrower or any other Loan Party, arising out of or relating to,
the Loan Documents, the Revolving Commitments, the use or contemplated use of the proceeds of any
Revolving Loans, or the relationship of any Loan Party, the Administrative Agent, the Collateral
Agent, the Lenders and the L/C Issuer under this Agreement or any other Loan Document; (c) without
limiting the foregoing, any and all claims, demands, actions or causes of action, judgments and
orders, penalties and fines that are asserted or imposed against any Indemnitee, (i) under the
application of any Environmental Law applicable to the Borrowers or any of their respective
Subsidiaries (other than the Excluded Subsidiaries) or any of their properties or assets, including
the treatment or disposal of Hazardous Substances on any of their properties or assets, (ii) as a
result of the breach or non-compliance by the Borrowers or any of their respective Subsidiaries
(other than the Excluded Subsidiaries) with any Environmental Law applicable to the Borrowers or
any of their respective Subsidiaries (other than the Excluded Subsidiaries), (iii) due to past
ownership by the



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Borrowers or any of their respective Subsidiaries (other than the Excluded
Subsidiaries) of any of their properties or assets or past activity on any of their properties or
assets which, though lawful and fully permissible at the time, could result in present liability,
(iv) due to the presence, use, storage, treatment or disposal of Hazardous Substances on or under,
or the escape, seepage, leakage, spillage, discharge, emission or Release from, any of the
properties owned or operated by the Borrowers or any of their respective Subsidiaries (other than
the Excluded Subsidiaries) (including any liability asserted or arising under any Environmental
Law), regardless of whether caused by, or within the control of, the Borrowers or any of their
respective Subsidiaries (other than the Excluded Subsidiaries), or (v) due to any other
environmental, health or safety condition in connection with the Loan Documents; (d) any
administrative or investigative proceeding by any Governmental Authority arising out of or related
to a claim, demand, action or cause of action described in subsection (a), (b) or (c) above; and
(e) any and all liabilities (including liabilities under indemnities), losses, costs, damages or
expenses (including Attorney Costs and settlement costs) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action, cause of action or proceeding, or
as a result of the preparation of any defense in connection with any foregoing claim, demand,
action, cause of action or proceeding, in all cases, WHETHER OR NOT ARISING OUT OF THE STRICT
LIABILITY OR NEGLIGENCE OF AN INDEMNITEE, and whether or not an Indemnitee is a party to such
claim, demand, action, cause of action or proceeding (all the foregoing, collectively, the
“Indemnified Liabilities”); provided that such indemnity shall not, as to any Indemnitees, be
available to the extent that such liabilities, obligations, losses, damages, penalties, claims,
demands, actions, judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee. The agreements in this Section shall survive
and continue for the benefit of the Indemnitees at all times after the Borrowers’ acceptance of the
Lenders’ Revolving Commitments under this Agreement, whether or not the Closing Date shall occur
and shall survive the termination of the Revolving Commitments and repayment of all the other
Obligations.



     10.06. Payments Set Aside. To the extent that the Borrowers make a payment to the Administrative
Agent or any Lender, or the Administrative Agent or any Lender exercises its right of setoff, and
such payment or the proceeds of such set-off or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid
to a trustee, receiver or any other party, in connection with any proceeding under any Debtor
Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred, and (b) each Lender severally
agrees to pay to the Administrative Agent upon demand its applicable share of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such
demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from
time to time in effect.



     10.07. 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, except that no
Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the
provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of paragraph (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and void). 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, Participants to the extent provided in



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paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.



     (b) Any Lender may at any time assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of its Revolving
Commitment and the Revolving Loans (including for purposes of this subsection (b), participations
in L/C Obligations) at the time owing to it); provided that:


except in the case of an assignment of the entire remaining amount of the assigning Lender’s
Revolving Commitment and the Revolving Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender,
the aggregate amount of the Revolving Commitment (which for this purpose includes Revolving Loans
outstanding thereunder) or, if the applicable Revolving Commitment is not then in effect, the
outstanding principal balance of the Revolving Loan 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 or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5,000,000, unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is continuing, the
Borrowers otherwise consent (neither the Administrative Agent’s nor Borrowers’ consent to be
unreasonably withheld, conditioned or delayed);





     (i) each partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with respect to the
Revolving Loan or the Revolving Commitment assigned;




     (ii) any assignment of a Revolving Commitment must be approved by the Administrative
Agent and L/C Issuer unless the Person that is the proposed assignee is itself a Lender
(whether or not the proposed assignee would otherwise qualify as an Eligible Assignee);
and




     (iii) 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 the Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Details Form.




Subject to acceptance and recording thereof by the Administrative Agent pursuant to
paragraph (c) of this Section, from and after the effective date specified in each
Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement 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 3.07, 10.04 and 10.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment. Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d) of this
Section.



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     (c) The Administrative Agent, acting solely for this purpose as an agent of the Borrowers,
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 Revolving
Commitment of, and principal amounts of the Revolving Loans and L/C Obligations owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the
Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent 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 Borrowers and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.



     (d) Any Lender may at any time, without the consent of, or notice to, the Borrowers or the
Administrative Agent, sell participations to any Person (other than a natural person or the
Borrowers or any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion
of its Revolving Commitment and/or the Revolving Loans (including such Lender’s participation in
L/C Obligations) owing to it); provided that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that would (i) postpone any date upon
which any payment of money is scheduled to be paid to such Participant, (ii) reduce the principal,
interest, fees or other amounts payable to such Participant, or (iii) release Parent from its
Guaranty. Subject to subsection (e) of this Section, the Borrowers agree that each Participant
shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section;
provided said Participant agrees to be subject to Sections 3.08 and 10.15 as though it were a
Lender. To the extent permitted by Law, each Participant also shall be entitled to the benefits of
Section 10.09 as though it were a Lender; provided such Participant agrees to be subject to Section
2.12 as though it were a Lender.



     (e) A Participant shall not be entitled to receive any greater payment under Section 3.01 or
3.04 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 Borrowers’ prior written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 3.01 unless the Borrowers are
notified of the participation sold to such Participant and such Participant agrees, for the benefit
of the Borrowers, to comply with Section 3.01 as though it were a Lender.



     (f) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement (including under its Revolving Notes, if any) to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank;
provided that no such pledge or assignment shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.



     (g) If the consent of the Borrowers to an assignment or to an Eligible Assignee is required
hereunder (including a consent to an assignment which does not meet the minimum assignment
threshold specified in clause (i) of the proviso to the first sentence of Section 10.07(b)), the
Borrowers shall be



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deemed to have given their consent five Business Days after the date notice
thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrowers prior to such fifth Business Day.



     (h) Notwithstanding anything to the contrary contained herein, if at any time RBC assigns all
of its Revolving Commitment and Revolving Loans pursuant to subsection (b) above, RBC may, upon 30
days’ notice to the Borrowers and the Lenders, resign as L/C Issuer. In the event of any such
resignation as L/C Issuer, the Borrowers shall be entitled to appoint from among the Lenders a
successor L/C Issuer hereunder; provided, however, that any such successor L/C Issuer have accepted
such appointment; provided further, however, that no failure by the Borrowers to appoint any such
successor shall affect the resignation of RBC as L/C Issuer. RBC shall retain all the rights and
obligations of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Base Rate Loans or fund participations in
Unreimbursed Amounts pursuant to Section 2.14(c)).



     10.08. Confidentiality. Each Lender agrees that it will not disclose without the prior consent of
the Borrowers (other than to directors, officers, employees, auditors, accountants, counsel or
other professional advisors of the Administrative Agent or any Lender) any information with respect
to the Borrowers or any of their respective Subsidiaries, which is furnished pursuant to this
Agreement; provided that any Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required
or appropriate in any report, statement or testimony submitted to or required by any municipal,
state or federal regulatory body having or claiming to have jurisdiction over such Lender or
submitted to or required by the Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in response to any summons or subpoena in connection with any litigation,
(d) in order to comply with any law, order, regulation or ruling applicable to such Lender, (e) to
any Eligible Assignee of or Participant in, or any prospective Eligible Assignee of or Participant
in, any of its rights or obligations under this Agreement; provided that such Eligible Assignee or
Participant or prospective Eligible Assignee or Participant executes an agreement containing
provisions substantially similar to those contained in this Section 10.08, (f) in connection with
the exercise of any remedy by such Lender if an Event of Default pertaining to the Loan Documents
has occurred and is continuing, (g) in connection with any litigation involving such Lender
pertaining to the Loan Documents, (h) to any Lender or the Administrative Agent, or (i) to any
Affiliate of any Lender (it being understood that the Persons to whom such disclosure is made will
be informed of the confidential nature of such information and obligated to keep such information
confidential).



     10.09. Set-off. In addition to any rights and remedies of the Lenders provided by Law, upon the
occurrence and during the continuance of any Event of Default, each Lender is authorized at any
time and from time to time, without prior notice to the Borrowers or any other Guarantor, any such
notice being waived by the Borrowers (each on its own behalf and on behalf of each Guarantor) 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 by, and other indebtedness at any time owing
by, such Lender to or for the credit or the account of the respective Borrowers or Guarantor, as
applicable, against any and all Obligations owing to the Administrative Agent and the Lenders, now
or hereafter existing, irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although such Obligations may
be contingent or unmatured. Each Lender agrees promptly to notify the Borrowers and the
Administrative Agent after any such set-off and application made by such Lender; provided, however,
that the failure to give such notice shall not affect the validity of such set-off and application.



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     10.10. Interest Rate Limitation. Regardless of any provision contained in any Loan Document,
neither the Administrative Agent nor any Lender shall ever be entitled to contract for, charge,
take, reserve, receive, or apply, as interest on all or any part of the Obligations, any amount in
excess of the Maximum Rate, and, if any Lender ever does so, then such excess shall be deemed a
partial prepayment of principal and treated hereunder as such and any remaining excess shall be
refunded to the Borrowers. In determining if the interest paid or payable exceeds the Maximum
Rate, the Borrowers and the Lenders shall, to the maximum extent permitted under applicable Law,
(a) treat all Borrowings as but a single extension of credit (and the Lenders and the Borrowers
agree that such is the case and that provision herein for multiple Borrowings is for convenience
only), (b) characterize any nonprincipal payment as an expense, fee, or premium rather than as
interest, (c) exclude voluntary prepayments and the effects thereof, and (d) amortize, prorate,
allocate, and spread the total amount of interest throughout the entire contemplated term of the
Obligations. However, if the Obligations are paid and performed in full prior to the end of the
full contemplated term thereof, and if the interest received for the actual period of existence
thereof exceeds the Maximum Amount, the Lenders shall refund such excess, and, in such event, the
Lenders shall not, to the extent permitted by Law, be subject to any penalties provided by any Laws
for contracting for, charging, taking, reserving or receiving interest in excess of the Maximum
Amount.



     10.11. Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page of this Agreement by telecopy, facsimile,
photocopy or by sending a scanned copy by electronic mail shall be effective as delivery of a
manually executed counterpart of this Agreement. Any signature page of a counterpart may be
detached therefrom without impairing the legal effect of the signatures thereon and attached to
another counterpart identical in form thereto but having attached to it one or more additional
signature pages signed by other parties.



     10.12. Integration. This Agreement, together with the other Loan Documents, comprises the complete
and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all
prior agreements, written or oral, on such subject matter. In the event of any conflict between
the provisions of this Agreement and those of any other Loan Document, the provisions of this
Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of
the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict
with this Agreement. Each Loan Document was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favor of any party, but rather in
accordance with the fair meaning thereof.



     10.13. Survival of Representations and Warranties. All representations and warranties made
hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or
in connection herewith or therewith shall survive the execution and delivery hereof and thereof.
Such representations and warranties have been or will be relied upon by the Administrative Agent
and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or
on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice
or knowledge of any Default or Event of Default at the time of any Borrowing, and shall continue in
full force and effect as long as any Revolving Loan or any other Obligation shall remain unpaid or
unsatisfied.



     10.14. Severability. Any provision of this Agreement and the other Loan Documents to which any
Borrower is a party that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the



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remaining provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.



     10.15. Replacement of Lenders. If Required Lenders and the Administrative Agent have approved an
identical increase of the Borrowing Base, the Borrowers shall have the right to replace any Lenders
that have failed to approve such Borrowing Base increase pursuant to the provisions of the
following sentence. If (i) any Lender fails or refuses to consent to any requested amendment or
waiver pursuant to Section 10.01, (ii) any Lender requests compensation under Section 3.04, or if
the Borrowers are required to pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 3.01, (iii) any Lender is in breach of any of its
obligations under this Agreement or is otherwise a Defaulting Lender, or (iv) any other
circumstance exists hereunder that gives the Borrowers the right to replace a
Lender as a party hereto, then the Borrowers may, at their 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, and consents required
by, Section 10.07), all of its interests, rights and obligations under this Agreement and the
related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that:



     (a) the Borrowers shall have paid to the Administrative Agent the assignment fee specified in
Section 10.07(b)(iii);



     (b) such Lender shall have received payment of an amount equal to the outstanding principal of
its Revolving Loans, L/C Advances, L/C Borrowings, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder and under the other Loan Documents (including any amounts
under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrowers (in the case of all other amounts) such payment being at par,
with no premium or discount;



     (c) in the case of any such assignment resulting from a claim for compensation under Section
3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a
reduction in such compensation or payments thereafter; and



     (d) such assignment does not conflict with applicable Laws.



     A Lender shall not be required to make any such assignment or delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to
require such assignment and delegation cease to apply.



     10.16. Defaulting Lender.



     (a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender
becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender,
to the extent permitted by applicable law:




     (i) That Defaulting Lender’s right to approve or disapprove any amendment, waiver or
consent with respect to this Agreement shall be restricted.




     (ii) Any payment of principal, interest, fees or other amounts received by the
Administrative Agent for the account of that Defaulting Lender (whether voluntary or
mandatory, at maturity, pursuant to Section 2.04 (Prepayments) or otherwise, and including
any amounts made available to the Administrative Agent by the Defaulting Lender pursuant
to a



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right of set-off, shall be applied at such time or times as may be determined by the
Administrative Agent as follows:




first, to the payment of any amounts owing by that Defaulting Lender to the Administrative
Agent hereunder;




second, to the payment on a pro rata basis of any amounts owing by that Defaulting Lender to
an L/C Issuer hereunder;

third, if so determined by the Administrative Agent or requested by the L/C Issuer, to be
held as cash collateral for future funding obligations of that Defaulting Lender of any
participation in any Letter of Credit;




fourth, as the Borrowers may request (so long as no Default or Event of Default exists), to
the funding of any Loan in respect of which that Defaulting Lender has failed to fund its
portion thereof as required by this Agreement, as determined by the Administrative Agent;




fifth, if so determined by the Administrative Agent and the Borrowers, to be held in a
deposit account and released in order to satisfy obligations of that Defaulting Lender to
fund Loans under this Agreement;




sixth, to the payment of any amounts owing to the Lenders, the L/C Issuer as a result of any
judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer against
that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations
under this Agreement;




seventh, so long as no Default or Event of Default exists, to the payment of any amounts
owing to the Borrowers as a result of any judgment of a court of competent jurisdiction
obtained by the Borrowers against that Defaulting Lender as a result of that Defaulting
Lender’s breach of its obligations under this Agreement; and




eighth, to that Defaulting Lender or as otherwise directed by a court of competent
jurisdiction; provided that if (x) such payment is a payment of the principal amount of any
Loans or reimbursement obligations in respect of which that Defaulting Lender has not fully
funded its appropriate share and (y) such Loans or reimbursement obligations were made at a
time when the conditions set forth in Section 4.02 were satisfied or waived, such payment
shall be applied solely to pay the Loans of, and reimbursement obligations owed to, all
non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any
Loans of, or reimbursement obligations owed to, that Defaulting Lender.


Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied
(or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this
Section 10.16 shall be deemed paid to and redirected by that Defaulting Lender, and each Lender
irrevocably consents hereto.





     (iii) That Defaulting Lender (x) shall not be entitled to receive any commitment fee
for any period during which that Lender is a Defaulting Lender (and the Borrowers shall
not be required to pay any such fee that otherwise would have been required to have been
paid to that Defaulting Lender) and (y) shall be limited in its right to receive fees in
respect of Letter of Credit (if any).



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     (iv) During any period in which there is a Defaulting Lender, for purposes of
computing the amount of the obligation of each non-Defaulting Lender to acquire, refinance
or fund participations in Letters of Credit the ratable portion of each non-Defaulting
Lender shall be computed without giving effect to the Revolving Commitments of that
Defaulting Lender; provided, that, (i) each such reallocation shall be given effect only
if, at the date the Lender becomes a Defaulting Lender, no Default or Event of Default
exists; and (ii) the aggregate obligation of each non-Defaulting Lender to acquire,
refinance or fund participations in Letters of Credit shall not exceed the positive
difference, if any, of (1) the Revolving Commitments of that non-Defaulting Lender minus
(2) the aggregate Outstandings of that Lender.



     (b) If the Borrowers, the Administrative Agent, and the L/C Issuer agree in writing in their
sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the
Administrative Agent will so notify the parties hereto, whereupon as of the effective date
specified in such notice and subject to any conditions set forth therein (which may include
arrangements with respect to any cash collateral), that Lender will, to the extent applicable,
purchase that portion of outstanding Loans of the other Lenders or take such other actions as the
Administrative Agent may determine to be necessary to cause the Loans and participations in Letters
of Credit to be held on a pro rata basis by the Lenders in accordance with their ratable portions
(without giving effect to clause (a)(iv) above), whereupon that Lender will cease to be a
Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting
Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected
parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release
of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.



     (c) If any Lender is a Defaulting Lender, then the Borrowers may, at their sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such Lender to be replaced
in accordance with Section 10.15.



     10.17. Governing Law.



     (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE;
PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING
UNDER UNITED STATES FEDERAL LAW.



     (b) EACH COMPANY AND OTHER PARTY HERETO, AND EACH GUARANTOR, BY EXECUTION OF A GUARANTY,
AGREES TO THIS SECTION 10.17(b). ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE
BOROUGH OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE
COURTS FROM ANY THEREOF, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWERS, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, AND BY EXECUTION OF A GUARANTY, EACH GUARANTOR
CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. THE BORROWERS, EACH GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER (1) IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING 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 ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF



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ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO,
AND (2) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS FOR NOTICES DESIGNATED HEREIN. THE BORROWERS, EACH
GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH
STATE.



     10.18. Waiver of Right to Trial by Jury, Etc. EACH PARTY TO THIS AGREEMENT AND EACH GUARANTOR, BY
EXECUTION OF A GUARANTY, HEREBY (a) EXPRESSLY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES TO THE LOAN DOCUMENTS OR ANY
OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE;
AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF
EACH PARTY TO THIS AGREEMENT AND EACH GUARANTOR TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY; AND
(b) EXPRESSLY AND IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY
HAVE TO CLAIM OR RECOVER IN ANY SUCH ACTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; PROVIDED THAT THE WAIVER
CONTAINED IN THIS SECTION 10.18 SHALL NOT APPLY TO THE EXTENT THAT THE PARTY AGAINST WHOM DAMAGES
ARE SOUGHT HAS ENGAGED IN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.



     10.19. Release. As additional consideration for the execution, delivery and performance of
this Agreement by the parties hereto and to induce the Administrative Agent, the Collateral Agent
and the Lenders to enter into this Agreement, the Borrowers warrant and represent to the
Administrative Agent, the Collateral Agent and the Lenders that no facts, events, statuses or
conditions exist or have existed which, either now or with the passage of time or giving of notice,
or both, constitute or will constitute a basis for any claim or cause of action against the
Administrative Agent, the Collateral Agent or any Lender or any defense to (i) the payment of
Obligations under the Revolving Notes and/or the Loan Documents, or (ii) the performance of any of
its obligations with respect to the Revolving Notes and/or the Loan Documents. In the event any
such facts, events, statuses or conditions exist or have existed, Borrowers unconditionally and
irrevocably hereby RELEASE, RELINQUISH and forever DISCHARGE Administrative Agent, the Collateral
Agent and the Lenders, as well as their predecessors, successors, assigns, agents, officers,
directors, shareholders, employees and representatives, of and from any and all claims, demands,
actions and causes of action of any and every kind or character, past or present, which any
Borrower may have against any of them or their predecessors, successors, assigns, agents, officers,
directors, shareholders, employees and representatives arising out of or with respect to (a) any
right or power to bring any claim for usury or to pursue any cause of action based on any claim of
usury, and (b) any and all transactions relating to the Loan Documents occurring prior to the date
hereof, including any loss, cost or damage, of any kind or character, arising out of or in any way
connected with or in any way resulting from the acts, actions or omissions of any of them, and
their predecessors, successors, assigns, agents, officers, directors, shareholders, employees and
representatives, including any breach of fiduciary duty, breach of any duty of fair dealing, breach
of confidence, breach of funding



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commitment, undue influence, duress, economic coercion, conflict
of interest, negligence, bad faith, malpractice, intentional or negligent infliction of mental
distress, tortious interference with contractual relations, tortious interference with corporate
governance or prospective business advantage, breach of contract, deceptive trade practices, libel,
slander or conspiracy, but in each case only to the extent permitted by applicable Law.



     10.20. Time of the Essence. Time is of the essence of the Loan Documents.



     10.21. Release of Liens on KPC Pipeline. The Administrative Agent and the Lenders agree to release
and discharge, from any lien securing the Indebtedness under this Agreement, the KPC Pipeline and
the KPC Pipeline LLC equity contemporaneously with the release of the first lien held by RBC as
collateral agent (or its successor) for the benefit of the KPC Lenders.



     10.22. Amendment and Restatement. Pursuant to (i) the Assignment of First Lien Notes, on the
Closing Date, $105,741,852.80 of the outstanding amount of principal and interest owing by
MidContinent under the Prior First Lien Credit Agreement and the notes issued pursuant thereto has
been refinanced, renewed, rearranged and extended by Loans under this Agreement, (ii) the
Assignment of Second Lien Notes, Liens and Security Interest, on the Closing Date, $30,220,618.53
of the outstanding amount of principal and interest owing by MidContinent under the Prior Second
Lien Credit Agreement and the notes issued pursuant thereto has been refinanced, renewed,
rearranged and extended by Loans under this Agreement and (iii) the Assignment of Midstream Notes,
Liens and Security Interest, on the Closing Date, $89,001,098.16 of the outstanding amount of
principal and interest owing by PESC and MidContinent (successor by merger to Bluestem) under the
Prior Midstream Credit Agreement and the notes issued pursuant thereto has been refinanced,
renewed, rearranged and extended by Loans under this Agreement.



     (a) This Agreement amends and restates in its entirety the Prior First Lien Credit Agreement
and the Prior Second Lien Credit Agreement and amends and restates in part the Prior Midstream
Credit Agreement. The Revolving Notes amend, restate, rearrange, extend and renew the Indebtedness
under the Prior First Lien Credit Agreement, Prior Second Lien Credit Agreement and in part under
the Prior Midstream Credit Agreement. The Lenders are subrogated to the rights of the lenders
under the Prior First Lien Credit Agreement, Prior Second Lien Credit Agreement and the Prior
Midstream Credit Agreement to the extent of the Indebtedness rearranged hereby. All liens and
security interests created and existing under the Prior First Lien Credit Agreement, the Prior
Second Lien Credit Agreement and, accept for a first lien on the KPC Pipeline, the Prior Midstream
Credit Agreement shall continue in force and effect to secure the Obligations of the Borrowers to
the Lenders pursuant to the Revolving Notes and this Agreement, and each Borrower hereby ratifies,
adopts and confirms all such prior liens and security interests.



     10.23. Termination of Revolving Commitments Under Original Credit Agreement. As of the Closing
Date, the Revolving Commitments under the Prior Credit Agreements are terminated and the
Administrative Agent and the Lenders hereby waive any right to receive prior notice of such
termination. Each Lender agrees upon the Closing Date to return to the Borrowers with reasonable
promptness all “Notes” as defined under the Prior Credit Agreements which were delivered by the
Borrowers (or any of their predecessors) in exchange for new Notes to be issued pursuant to this
Agreement.



     10.24. No Novation, Etc. To the extent of the Aggregate Commitment outstanding under the First
Lien Credit Agreement in the amount of $250,000,000, under the Second Lien Credit Agreement in the
amount of $30,220,618.53 and
under the Midstream Credit Agreement in the amount of $89,001,098.16, nothing contained herein
shall be deemed a novation of or a repayment or new advance



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of any obligation of any Borrower
thereunder. Only to the extent of an increase in the Aggregate Revolving Commitment over that
amount shall there be deemed to be a new advance by the Lenders to the Borrowers under this
Agreement. The Indebtedness owing under the Prior Credit Agreements is renewed, rearranged,
extended and carried forward by this Agreement (to the extent aforesaid) and all of the liens and
security interests securing the “Obligations” as defined in the Prior Credit Agreements are carried
forward and secure, without interruption or loss or priority, the Obligations under this Agreement.



     10.25. Joint and Several Liability. (a) Each of the Borrowers acknowledges and agrees that it is
the intent of the parties that each such Borrower be primarily liable for the Obligations as a
joint and several obligor. It is the intention of the parties that with respect to liability of any
Borrower hereunder arising solely by reason of its being jointly and severally liable for Credit
Extensions, the obligations of such Borrower shall be absolute, unconditional and irrevocable
irrespective of:




     (i) any lack of validity, legality or enforceability of this Agreement, any Revolving
Note, or any other Loan Document as to any Borrower, as the case may be;




     (ii) the failure of the Administrative Agent, Collateral Agent or any Lender or any
holder of any Revolving Note;




     (a) to enforce any right or remedy against any Borrower, as the case may be, or
any other Person (including any Guarantor) under the provisions of this Agreement,
such Revolving Note, any other Loan Document or otherwise; or




     (b) to exercise any right or remedy against any Guarantor of, or Collateral
securing, the Obligations;




     (iii) any change in the time, manner or place of payment of, or in any other term of,
all or any of the Obligations, or any other extension, compromise or renewal of any
Obligations;




     (iv) any reduction, limitation, impairment or termination of any Obligations with
respect to any Borrower, as the case may be, for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject to (and
each of the Borrowers hereby waives any right to or claim of) any defense (other than the
defense of payment in full of the Obligations) or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence affecting,
any Obligations with respect to any Borrower, as the case may be;




     (v) any addition, exchange, release, surrender or nonperfection of any Collateral, or
any amendment to or waiver or release or addition of, or consent to departure from, any
Guaranty, held by any Lender or any holder of the Revolving Notes or any security interest
or Lien securing any of the Obligations; or




     (vi) any other circumstance which might otherwise constitute a defense (other than
the defense of payment in full of the Obligations) available to, or a legal or equitable
discharge of, any Borrower, as the case may be, or any Guarantor.



     (b) Each of the Borrowers agrees that its joint and several liability hereunder shall continue
to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in
part) of any of the Obligations is rescinded or must be restored by any Lender or any holder of any
Revolving Note,



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upon the insolvency, bankruptcy or reorganization of any Borrower, as the case may
be, as though such payment had not been made;



     (c) Each of the Borrowers hereby expressly waives: (i) notice of the Lenders’ acceptance of
this Agreement; (ii) notice of the existence or creation or non-payment of all or any of the
Obligations other than notices expressly provided for in this Agreement; (iii) presentment, demand,
notice of dishonor, protest, and all other notices whatsoever other than notices expressly provided
for in this Agreement; (iv) any claim or defense based on an election of remedies; and (v) all
diligence in collection or protection of or realization upon the Obligations or any part thereof,
any obligation hereunder, or any security for or guaranty of any of the foregoing.



     (d) No delay on any of the Administrative Agent’s, Collateral Agent’s or any Secured Party’s
part in the exercise of any right or remedy shall operate as a waiver thereof, and no single or
partial exercise by any of the foregoing of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy. No action of any of the
Administrative Agent, Collateral Agent or Secured Parties permitted hereunder shall in any way
affect or impair any such party’s rights or any Obligations under this Agreement.



     (e) Each of the Borrowers hereby represents and warrants to each of the Administrative Agent
and Lenders that it now has and will continue to have independent means of obtaining information
concerning the other Borrower’s affairs, financial condition and business. Neither the
Administrative Agent nor any Lender shall have any duty or responsibility to provide any Borrower
with any credit or other information concerning such other Borrower’s affairs, financial condition
or business which may come into the Administrative Agent’s or Lender’s possession.



     (f) Each of the Borrowers represents and warrants (i) that the business operations of the
Borrowers are interrelated and that the business operations of the Borrowers complement one
another, and such entities have a common business purpose, and (ii) that, to permit their
uninterrupted and continuous operations, such entities now require and will from time to time
hereafter require funds and credit accommodations for general business purposes and (iii) that the
proceeds of Credit Extensions hereunder will directly or indirectly benefit the Borrowers
hereunder, severally and jointly, regardless of which Borrower receives part or all of the proceeds
of such Credit Extension.



     (g) Notwithstanding anything to the contrary contained herein, it is the intention of the
Borrowers, the Administrative Agent and the Lenders that the amount of the respective Borrower’s
obligations hereunder shall be in, but not in excess of, the maximum amount thereof not subject to
avoidance or recovery by operation of any applicable Debtor Relief Law. To that end, but only in
the event and to the extent that the Borrowers’ respective obligations hereunder or any payment
made pursuant thereto would, but for the operation of the foregoing proviso, be subject to
avoidance or recovery under any applicable Debtor Relief Law, the amount of the Borrowers’
respective obligations hereunder shall be limited to the largest amount which, after giving effect
thereto, would not, under applicable Debtor Relief Laws, render the Borrower’s respective
obligations hereunder unenforceable or avoidable or subject to recovery under applicable Debtor
Relief Laws. To the extent any payment actually made hereunder exceeds the limitation contained in
this Section 10.25(g), then the amount of such excess shall, from and after the time of payment by
the Borrowers (or any of them), be reimbursed by the Lenders upon demand by such Borrowers. The
foregoing proviso is intended solely to preserve the rights of the Administrative Agent and the
Lenders hereunder against the Borrowers to the maximum extent permitted by applicable Debtor Relief
Laws and neither any Borrower nor any Guarantor nor any other Person shall
have any right or claim under this Section 10.25(g) that would not otherwise be available
under applicable Debtor Relief Laws.

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     10.26. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES 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.



REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.




SIGNATURE PAGES FOLLOW.



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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the
date first above written.




	 	 	 	 	 

	POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower
	 
	 	 	 	 
	By:
	 	/s/ David C. Lawler
	 	 	 
	 	 	David C. Lawler, President and Chief Executive Officer
	 
	 	 	 	 
	POSTROCK MIDCONTINENT PRODUCTION, LLC,

as a Borrower,
	 
	 	 	 	 
	By:	 	POSTROCK ENERGY SERVICES CORPORATION,

Its sole member
	 
	 	 	 	 
	 

	 	By:	 	/s/ David C. Lawler
	 

	 	 	 	 
	 

	 	 	 	David C. Lawler, President

and Chief Executive Officer






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Signature Page 1









 





	 	 	 

	ROYAL BANK OF CANADA,

as Administrative Agent and Collateral Agent
	 
	 	 
	By:
	 	/s/ Susan Khokher
	 

	 	 
	Name:
	 	Susan Khokher
	 

	 	 
	Title:
	 	Manager, Agency
	 

	 	 





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	ROYAL BANK OF CANADA, as Lender

and L/C Issuer
	 
	 	 
	By:
	 	/s/ Leslie P. Vowell
	 

	 	 
	 

	 	Leslie P. Vowell
	 

	 	Attorney-in-Fact






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	SUNTRUST BANK,

as Lender
	 
	 	 
	By:
	 	/s/ Janet R. Naifeh
	 

	 	 
	Name:
	 	Janet R. Naifeh
	 

	 	 
	Title:
	 	Senior Vice President
	 

	 	 





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Signature Page 4









 





	 	 	 

	KEYBANK NATIONAL ASSOCIATION,

as Lender
	 
	 	 
	By:
	 	/s/ Robert F. Pollis, Jr.
	 

	 	 
	Name:
	 	Robert F. Pollis, Jr.
	 

	 	 
	Title:
	 	Senior Vice President
	 

	 	 





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Signature Page 5









 










	 	 	 

	U.S. BANK NATIONAL ASSOCIATION,

as Lender
	 
	 	 
	By:
	 	/s/ Saqib Khawaja
	 

	 	 
	Name:
	 	Saqib Khawaja
	 

	 	 
	Title:
	 	Vice President
	 

	 	 









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Signature Page 6









 





	 	 	 

	SOCIÉTÉ GÉNÉRALE,

as Lender
	 
	 	 
	By:
	 	/s/ Cameron Null
	 

	 	 
	Name:
	 	Cameron Null 
	 

	 	 
	Title:
	 	Vice President 
	 

	 	 





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Signature Page 7









 





	 	 	 

	WELLS FARGO BANK, N.A.,

as Lender
	 
	 	 
	By:
	 	/s/ Ronald F. Bentien, Jr. 
	 

	 	 
	Name:
	 	Ronald F. Bentien, Jr. 
	 

	 	 
	Title:
	 	Director 
	 

	 	 





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	COMERICA BANK, as Lender
	 
	 	 
	By:
	 	/s/ James A. Morgan 
	 

	 	 
	Name:
	 	James A. Morgan 
	 

	 	 
	Title:
	 	Vice President 
	 

	 	 





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Signature Page 9









 





	 	 	 

	RZB FINANCE, LLC, as Lender
	 
	 	 
	By:
	 	/s/ John A. Valiska
	 

	 	 
	Name:
	 	John A. Valiska
	 

	 	 
	Title:
	 	First Vice President
	 

	 	 
	 
	 	 
	By:
	 	/s/ Christoph Hoedl
	 

	 	 
	Name:
	 	Christoph Hoedl
	 

	 	 
	Title:
	 	First Vice President
	 

	 	 





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	COMPASS BANK, as Lender
	 
	 	 
	By:
	 	/s/ John W. Wood
	 

	 	 
	Name:
	 	John W. Wood
	 

	 	 
	Title:
	 	Vice President
	 

	 	 





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Signature Page 11









 





	 	 	 

	BNP PARIBAS,

as Lender
	 
	 	 
	By:
	 	/s/ Larry Robinson
	 

	 	 
	Name:
	 	Larry Robinson
	 

	 	 
	Title:
	 	Director
	 

	 	 
	 
	 	 
	By:
	 	/s/ Betsy Jocher
	 

	 	 
	Name:
	 	Betsy Jocher
	 

	 	 
	Title:
	 	Director
	 

	 	 





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	BANK OF OKLAHOMA, N.A.,

as a Lender
	 
	 	 
	By:
	 	/s/ Timothy F. Sheehan
	 

	 	 
	Name:
	 	Timothy F. Sheehan
	 

	 	 
	Title:
	 	Senior Vice President
	 

	 	 





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	AMEGY BANK NATIONAL ASSOCIATION,

as Lender
	 
	 	 
	By:
	 	/s/ Terry Owen McCarter
	 

	 	 
	Name:
	 	Terry Owen McCarter
	 

	 	 
	Title:
	 	Senior Vice President
	 

	 	 






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EXHIBIT A-1




FORM OF BORROWING NOTICE




Date:                     , _____





			
	To:	 	Royal Bank of Canada, as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
______, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among PostRock Energy Services Corporation, a Delaware corporation, and PostRock MidContinent
Production, LLC, a Delaware limited liability company (collectively, the “Borrowers”), and Royal
Bank of Canada, as Administrative Agent, and the Lenders from time to time party thereto.



     The undersigned hereby requests:




	I.	 	FACILITY






	 	1.	 	Status Information for the Facility






	 	(a)	 	Amount of Facility: $350,000,000
	 
	 	(b)	 	Revolving Loans outstanding prior to the
Borrowing requested herein: $                    
	 
	 	(c)	 	Letters of Credit outstanding prior to the
Borrowing requested herein; $                    
	 
	 	(d)	 	Principal amount of Revolving Loans available
to be borrowed is (A) the lesser of 1(a) and the Borrowing Base as of
the most recent determination date minus (B) the sum of (1(b) and 1(c):
$                    






	 	2.	 	Amount of Borrowing: $                    
	 
	 	3(a) 	 	Initial Borrowing Base as of Closing Date: $225,000,000
	 
	 	3(b)	 	 Borrowing Base as of most recent redetermination: $                    
	 
	 	4.	 	Requested date of Borrowing:                     , 201_; must be prior to Maturity Date.
	 
	 	5.	 	Requested Type of Loan and applicable Dollar amount:






	 	(a)	 	Base Rate Loan for $                    
	 
	 	(b)	 	Eurodollar Rate Loan with Interest Period of:





	 	 	 	 

	(i) one month for

	 	$                    	 
	 
	(ii) two months for

	 	$                    	 
	 
	(iii) three months for

	 	$                    	 
	 
	(iv) six months for

	 	$                    	 






Exhibit A-1

Form of Borrowing Notice



Page 1









 







	 	6.	 	Purpose of Revolving Loan:






	 	___	 	To finance working capital and general company
purposes of the Borrowers, including the acquisition, development,
exploitation and exploration of Oil and Gas Properties and the
Midstream Businesses
	 
	 	___	 	To pay fees, costs and expenses owed pursuant
to the Agreement
	 
	 	___	 	To finance Permitted Acquisitions
	 
	 	___	 	To issue Letters of Credit
	 
	 	___	 	To pay principal and interest on the Secured
Pipeline Loan or to make permitted Transfer Payments and Restricted
Payments
	 
	 	___	 	To rearrange Indebtedness.





     The undersigned hereby certifies that the following statements will be true on the date of the
proposed Borrowing(s) after giving effect thereto and to the application of the proceeds therefrom:



          (a) the representations and warranties of the Borrowers contained in Article V of the
Agreement are true and correct in all material respects as though made on and as of such date
(except such representations and warranties which expressly refer to an earlier date, which are
true and correct in all material respects as of such earlier date);




          (b) the amount of the requested Borrowing, when added to Revolving Loans outstanding prior to
the Borrowing and Letters of Credit will not exceed the lesser of (i) Borrowing Base and (ii) the
Aggregate Revolving Commitment; and




          (c) no Default or Event of Default has occurred and is continuing, or would result from such
proposed Borrowing(s).




Exhibit A-1

Form of Borrowing Notice



Page 2









 





     The Borrowing requested herein complies with Sections 2.01, 2.02 and 2.03 of the Agreement, as
applicable.



	 	 	 	 	 	 	 

	 	 	POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

David C. Lawler, President and Chief Executive Officer 
	 	 






	 	 	 	 	 	 	 	 	 

	 	 	POSTROCK MIDCONTINENT PRODUCTION, LLC,

as a Borrower,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	POSTROCK ENERGY SERVICES CORPORATION,

Its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	David C. Lawler, President	 	 
	 

	 	 	 	 	 	and Chief Executive Officer	 	 






Exhibit A-1

Form of Borrowing Notice



Page 3









 





EXHIBIT A-2




FORM OF CONVERSION/CONTINUATION NOTICE




Date:                     , ____





			
	TO:	 	Royal Bank of Canada, as Administrative Agent




Ladies and Gentlemen:




     Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
______, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among PostRock Energy Services Corporation, a Delaware corporation, and PostRock MidContinent
Production, LLC, a Delaware limited liability company (collectively, the “Borrowers”), and Royal
Bank of Canada, as Administrative Agent, and the Lenders from time to time party thereto.



     The undersigned hereby requests:




	I.	 	FACILITY






	 	1.	 	Amount of [conversion] [continuation]: $                    
	 
	 	2.	 	Existing rate: Check applicable blank






	 	(a)	 	Base Rate                                                                 
	 
	 	(b)	 	Eurodollar Rate Loan with
	 
	 	 	 	Interest Period of:





	 	 	 

	(i) one month
	 	 
	 

	 	 
	 
	(ii) two months
	 	 
	 

	 	 
	 
	(iii) three months
	 	 
	 

	 	 
	 
	(iv) six months
	 	 
	 

	 	 






	 	3.	 	If a Eurodollar Rate Loan, date of the last day of the Interest
Period for such Loan:                     , 201_.
	 
	 	 	 	The Revolving Loan described above is to be [converted] [continued] as follows:
	 
	 	4.	 	Requested date of [conversion] [continuation]:                     , 201_.
	 
	 	5.	 	Requested Type of Loan and applicable Dollar amount:






	 	(a)	 	Base Rate Loan for $                    
	 
	 	(b)	 	Eurodollar Rate Loan with Interest Period of:





	 	 	 

	(i) one month for

	 	$                    
	 
	(ii) two months for

	 	$                    
	 
	(iii) three months for

	 	$                    
	 
	(iv) six months for

	 	$                    






Exhibit A-2

Form of Conversion/Continuation Notice



Page 1









 






     The [conversion] [continuation] requested herein complies with Sections 2.01 and 2.03 of the
Agreement, as applicable.



          For all Borrowings (applicable Borrower only):




	 	 	 	 	 	 	 

	 	 	POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

David C. Lawler, President and Chief Executive Officer
	 	 






	 	 	 	 	 	 	 	 	 

	 	 	POSTROCK MIDCONTINENT PRODUCTION, LLC,

as a Borrower,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	POSTROCK ENERGY SERVICES CORPORATION,

Its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	David C. Lawler, President	 	 
	 

	 	 	 	 	 	and Chief Executive Officer	 	 






Exhibit A-2

Form of Conversion/Continuation Notice




Page 2











 





EXHIBIT A-3




FORM OF REPAYMENT NOTICE




Date: ____________,  _____




To: Royal Bank of Canada, as Administrative Agent



Ladies and Gentlemen:




     Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
______, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among PostRock Energy Services Corporation, a Delaware corporation and PostRock MidContinent
Production, LLC, a Delaware limited liability company (collectively, the “Borrowers”), and Royal
Bank of Canada, as Administrative Agent, and the Lenders from time to time party thereto.



     The undersigned applicable Borrower/s hereby are repaying the Facility as follows:




	I.	 	FACILITY






	 	1.	 	Revolving Loans outstanding prior to the repayment referred to
herein: $__________
	 
	 	2.	 	Amount of repayment: $__________
	 
	 	3.	 	Date of repayment: _______________, 201_.
	 
	 	4.	 	Type of Loan and amount to which repayment applies:






	 	(a)	 	Base Rate Loan for $__________
	 
	 	(b)	 	Eurodollar Rate Loan with Interest Period of:






	 	(i)	 	one month           $__________
	 
	 	(ii)	 	two months         $__________
	 
	 	(iii)	 	three months       $__________
	 
	 	(iv)	 	six months          $__________






	 	 	The repayment referred to herein complies with Section 2.04 of the Agreement.





For all Borrowings (applicable Borrower/s only):




	 	 	 	 	 
	 	POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower

 
	 	By:  	 
	 	 	         David C. Lawler, President and
Chief Executive Officer 
	 	 	 	 
	 



Exhibit A-3

Form of Repayment Notice




Page 1









 








	 	 	 	 	 	 	 	 	 

	 	 	POSTROCK MIDCONTINENT PRODUCTION, LLC,

as a Borrower,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	POSTROCK ENERGY SERVICES CORPORATION,
	 	 	 	 	Its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

David C. Lawler, President

and Chief Executive Officer
	 	 






Exhibit A-3

Form of Repayment Notice




Page 2









 








EXHIBIT B




FORM OF REVOLVING NOTE




			
	 	 	 
	$_____________________
	 	_________, 2010






     FOR VALUE RECEIVED, the undersigned (the “Borrowers”), hereby jointly and severally promise to
pay to the order of _____________________ (the “Lender”), on the Maturity Date (as defined in the
Credit Agreement referred to below) the principal amount of _______________ Dollars ($__________),
or such lesser principal amount of Revolving Loans made by Lender under the Facility (both as
defined in such Credit Agreement) due and payable by the Borrowers to the Lender on the Maturity
Date under that certain Second Amended and Restated Credit Agreement, dated as of even date
herewith (as amended, restated, extended, supplemented or otherwise modified in writing from time
to time, the “Credit Agreement”; the terms defined therein being used herein as therein defined),
among PostRock Energy Services Corporation, a Delaware corporation, and PostRock MidContinent
Production, LLC, a Delaware limited liability company, as Borrowers and Royal Bank of Canada, as
Administrative Agent and Collateral Agent, and the Lenders from time to time party thereto.



     The Borrowers promise to pay interest on the unpaid principal amount of each Revolving Loan
from the date of such Revolving Loan until such principal amount is paid in full, at such interest
rates, and at such times as are specified in the Credit Agreement. All payments of principal and
interest shall be made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds to the account designated by the Administrative Agent in the Credit
Agreement. If any amount is not paid in full when due hereunder, such unpaid amount shall bear
interest, to be paid upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in the Credit Agreement.



     This Revolving Note is one of the Revolving Notes referred to in the Credit Agreement, is
entitled to the benefits thereof and is subject to optional and mandatory prepayment in whole or in
part as provided therein. This Revolving Note is also entitled to the benefits of each Guaranty
and the Collateral Documents. Upon the occurrence and continuation of one or more of the Events of
Default specified in the Credit Agreement, all amounts then remaining unpaid on this Revolving Note
shall become, or may be declared to be, immediately due and payable all as provided in the Credit
Agreement. Revolving Loans made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The Lender may also attach
schedules to this Revolving Note and endorse thereon the date, amount and maturity of its Revolving
Loans and payments with respect thereto.



     This Revolving Note is a Loan Document and is subject to Section 10.10 of the Credit
Agreement, which is incorporated herein by reference the same as if set forth herein verbatim.



     Each Borrower, for itself, its successors and assigns, hereby waives diligence, presentment,
protest and demand and notice of protest, notice of intent to accelerate, notice of acceleration,
demand, dishonor and non-payment of this Revolving Note.



Exhibit B

Form of Revolver Note





Page 1









 








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



	 	 	 	 	 	 	 	 	 

	 	 	POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	David C. Lawler, President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	POSTROCK MIDCONTINENT PRODUCTION, LLC,

as a Borrower,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	POSTROCK ENERGY SERVICES CORPORATION,
	 	 	 	 	Its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

David C. Lawler, President

and Chief Executive Officer
	 	 






Exhibit B

Form of Revolver Note





Page 2









 








EXHIBIT C




FORM OF COMPLIANCE CERTIFICATE

(Pursuant to Section 6.02 of the Agreement)



Financial Statement Date: ___________, ____



To: Royal Bank of Canada, as Administrative Agent



Ladies and Gentlemen:




     Reference is made to that certain Second Amended and Restated Credit Agreement, dated as of
______, 2010 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Agreement;” the terms defined therein being used herein as therein defined),
among PostRock Energy Services Corporation, a Delaware corporation, and PostRock MidContinent
Production, LLC, a Delaware limited liability company (collectively, the “Borrowers”), and Royal
Bank of Canada, as Administrative Agent, and the Lenders from time to time party thereto.



     Capitalized terms used herein but not defined herein shall have the meaning set forth in the
Agreement.



     The undersigned Responsible Officers hereby certify as of the date hereof that they are the
___________________________ of the Borrowers, and that, as such, they are authorized to execute and
deliver this Certificate to the Administrative Agent on the behalf of the Borrowers, and that:



     [Use the following for fiscal year-end financial statements]



     Attached hereto as Schedule 1 are the year-end audited consolidated financial statements of
Parent and its Subsidiaries and the consolidating financial statements of Parent and its
Subsidiaries required by Section 6.01(a) of the Agreement for the fiscal year of Parent ended as of
the above date, together with the report and opinion of an independent certified public accountant
required by such section; and



     [Use the following for fiscal quarter-end financial statements]



     Attached hereto as Schedule 1 are, the unaudited consolidated financial statements of Parent
and its Subsidiaries and the consolidating financial statements of Parent and its Subsidiaries
required by Section 6.01(b) of the Agreement for the fiscal quarter of Parent ended as of the above
date and the portion of Parent’s fiscal year then ended, together with a certificate of a
Responsible Officer of Parent, stating that such financial statements fairly present the financial
condition, results of operations and cash flows of Parent and its Subsidiaries (including the
Borrowers), as applicable, in accordance with GAAP as at such date and for such period, subject
only to normal year-end audit adjustments and the absence of footnotes.



     [Use the following for both fiscal year-end and quarter-end financial statements]



     1. The undersigned has reviewed and is familiar with the terms of the Agreement and has made,
or has caused to be made under his/her supervision, a detailed review of the transactions and
condition (financial or otherwise) of Parent and the Borrowers during the accounting period covered
by the attached financial statements.



Exhibit C

Form of Compliance Certificate





Page 1









 








     2. A review of the activities of Parent and the Borrowers during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether during such fiscal
period Parent and the Borrowers performed and observed all their respective Obligations under the
Loan Documents, and no Default or Event of Default has occurred and is continuing except as follows
(list of each such Default or Event of Default and include the information required by Section 6.03
of the Credit Agreement):



     3. The covenant analyses and information set forth on Schedule 2 attached hereto are true and
accurate on and as of the date of this Certificate.



     IN WITNESS WHEREOF, the undersigned has executed this Certificate as of ___________, _______.



	 	 	 	 	 	 	 	 	 

	 	 	POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	     David C. Lawler, President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	POSTROCK MIDCONTINENT PRODUCTION, LLC,

as a Borrower,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	POSTROCK ENERGY SERVICES CORPORATION,
	 	 	 	 	Its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

David C. Lawler, President

and Chief Executive Officer
	 	 






Exhibit C

Form of Compliance Certificate






Page 2









 








For the Quarter/Year ended

_______________________ (“Statement Date”)




SCHEDULE 2

to the Compliance Certificate

($ in 000’s)



	 	 	 	 	 	 	 

	I.	 	Section 7.16(a) — Current Ratio	 	 
	 

	 	A.	 	Consolidated current assets (plus unused Borrowing Base availability) as at most recent Financial Statement Date:
	 	$_________
	 

	 	B.	 	Consolidated current liabilities as at most recent Financial Statement Date:
	 	$_________
	 

	 	C.	 	Is ratio of I.A. to I.B greater than to 1.0 to 1.0
	 	Yes/No         
	II.	 	Section 7.16(b) — Interest Coverage Ratio.	 	 
	 
	 	 	 	 	 	 
	A.	 	Adjusted Consolidated EBITDA for four consecutive fiscal quarters ending on the Statement Date (“Subject Period”) (see Credit Agreement definition of “Consolidated EBITDA” and “Adjusted Consolidated EBITDA”):	 	 
	 

	 	1.	 	Consolidated EBITDA for Subject Period (prior to pro forma adjustments for Material Dispositions pursuant to Section 7.15 (d) and Permitted Acquisitions and Material Acquisitions pursuant to Section 7.15(e)):
	 	$_________
	 

	 	2.	 	Pro forma adjustments to EBITDA for Material Dispositions during the Subject Period (Section 7.15(d)), giving effect to such Material Dispositions on a pro forma basis for the Subject Period as if such Material Dispositions occurred on the first day of the Subject Period:
	 	$_________
	 

	 	3.	 	Pro forma adjustments to EBITDA for Permitted Acquisitions and Material Acquisitions during the Subject Period (Section 7.15(e)), giving effect to such Permitted Acquisitions and Material Acquisitions on a pro forma basis for the Subject Period as if such Permitted Acquisitions and Material Acquisitions occurred on the first day of the Subject Period:
	 	$_________
	 

	 	4.	 	Consolidated EBITDA including pro forma adjustments for Material Dispositions, Permitted Acquisitions, and Material Acquisitions (Lines II.A. 1-4):
	 	$_________
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	$_________
	B.
	 	 	 	 	 	 
	 

	 	1.	 	Adjusted Consolidated EBITDA (Line II.A.4):
	 	$_________
	 

	 	2.	 	Consolidated Interest Charges (Line II.B.2):
	 	$_________
	 

	 	3.	 	Imputed interest charges on Synthetic Lease Obligations of Borrowers and their Subsidiaries for the Subject Period: (Line II.B.3)
	 	$_________
	 

	 	4.	 	Interest Coverage Ratio: (Line II.B.1) divided by (Lines II.B.2 + II.B.3):
	 	____ to 1.0
	 
	 	 	 	 	 	 
	 

	 	 	 	Is the Interest Coverage Ratio greater than 3.0 to 1.0?
	 	Yes/No         
	 
	 	 	 	 	 	 
	III.	 	Section 7.16(c) — Leverage Ratio.	 	 






Exhibit C

Form of Compliance Certificate




Page 3









 






	 	 	 	 	 	 	 

	A.	 	Cash Adjusted Consolidated Funded Debt	 	 
	 

	 	1.	 	Cash Adjusted Consolidated Funded Debt on Statement Date (borrowed money Indebtedness, letter of credit reimbursement obligations, Capital Leases, Synthetic Leases, Guaranty Obligations less cash on deposit under control agreement)
	 	$_________
	 
	 	 	 	 	 	 
	B.	 	Adjusted Consolidated EBITDA	 	 
	 

	 	1.	 	Adjusted Consolidated EBITDA (Line II.A.4 above)	 	 
	 

	 	2	 	Total Leverage Ratio: (Line III.A.1) divided by (Line III.B.1):	 	____ to 1.0
	 
	 	 	 	 	 	 
	 

	 	3.	 	Is the Leverage Ratio less than 4.5 to 1.0 in Q3 2010 to Q1 2011, less than 4.0 to 1.0 in Q2 2011 to Q1 2012, or less than 3.5 to 1.0 from Q2-2012 to Maturity? 	 	Yes/No         






Exhibit C

Form of Compliance Certificate






Page 4









 








EXHIBIT D




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 may be 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 I 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 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, but not limited to, 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]
	 
	 	 	 	 	 	 	 	 
	 

	 	 	3.	 	 	Borrowers:
	 	PostRock Energy Services Corporation, a Delaware corporation, and
PostRock MidContinent Production, LLC, a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 

	 	 	4.	 	 	Administrative Agent:
	 	Royal Bank of Canada, as the administrative agent under
the Credit Agreement
	 
	 	 	 	 	 	 	 	 
	 

	 	 	5.	 	 	Credit Agreement:
	 	Second Amended and Restated Credit Agreement, dated as of
______, 2010 among the Borrowers, and Royal Bank of Canada, as Administrative Agent,
and the Lenders from time to time party thereto






Exhibit D




 









 






	 	 	 	 	 	 	 	 	 

	 

	 	 	6.	 	 	Assigned Interest:	 	 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Amount of	 	Amount of	 	 
	 	 	Commitment/Loans for	 	Commitment/Loans	 	Percentage Assigned of
	 	 	all Lenders*	 	Assigned*	 	Commitment/Loans
	Revolving Loans:
	 	$	 	 	 	$	 	 	 	 	%	 
	Total:
	 	$	 	 	 	$	 	 	 	 	%	 





[7. Trade Date: ________________ ]



Effective Date: __________ ____, 201_ [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:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE	 	 
	 	 	[NAME OF ASSIGNEE]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 








 




			
	*	 	Amount to be adjusted by the counterparties to take into account any payments or prepayments made
between the Trade Date and the Effective Date.





	 	 	 	 	 	 	 

	Consented to and Accepted:	 	 	 	 
	 
	 	 	 	 	 	 
	[NAME OF ADMINISTRATIVE AGENT], as	 	[NAME OF L/C ISSUER], as
	Administrative Agent	 	L/C Issuer
	 
	 	 	 	 	 	 
	By
	 	 	 	By	 	 
	 

	 	 
	 	 	 	 
	 

	 	Title:	 	 	 	 






Exhibit D




 









 







[Consented to:]




	 	 	 	 	 	 	 	 	 

	 	 	POSTROCK ENERGY SERVICES CORPORATION,

as a Borrower	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	David C. Lawler, President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	POSTROCK MIDCONTINENT PRODUCTION, LLC,	 	 
	 	 	as a Borrower,	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	POSTROCK ENERGY SERVICES CORPORATION,
	 	 	 	 	Its sole member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	David C. Lawler, President
and Chief Executive Officer	 	 







Exhibit D




 









 







ANNEX 1

TO ASSIGNMENT AND ASSUMPTION

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 Borrowers, any of their Subsidiaries or Affiliates or any other Person obligated
in respect of any Loan Document or (iv) the performance or observance by the Borrowers, any of
their 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 meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit Agreement), (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 6.01 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 Foreign Lender, attached to the
Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms
of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it
will, independently and without reliance on the Administrative Agent, the Assignor 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 D