Exhibit 10.1 Credit Agreement


    EXHIBIT
      10.1

     

    

      EXECUTION
        COPY

       

      
        

        

      

      

         

        SECOND
          LIEN CREDIT AGREEMENT

        


        dated
          as
          of 

        


        July
          21,
          2005,

        


        


        among

        


        CARRIZO
          OIL & GAS, INC.,

        


        CCBM,
          INC.,

        


        THE
          LENDERS PARTY HERETO

        


        and

        


        CREDIT
          SUISSE,

        as
          Administrative Agent and Collateral Agent

        


                                                                 

         

        


        CREDIT
          SUISSE 

        


        as
          Sole
          Bookrunner and Sole Lead Arranger

      

       

       

      
        

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      TABLE
        OF CONTENTS

       

      
        	
                Page

              
	 
	
                ARTICLE
                  I

              
	 	 	 
	
                DEFINITIONS
                  AND ACCOUNTING TERMS

              
	 	 	 
	
                SECTION
                  1.01.

              	
                Defined
                  Terms

              	
                1

              
	
                SECTION
                  1.02.

              	
                Accounting
                  Terms

              	
                18

              
	
                SECTION
                  1.03.

              	
                Terms
                  Generally

              	
                18

              
	
                SECTION
                  1.04.

              	
                Classification
                  of Loans and Borrowings

              	
                18

              
	 	 	 
	
                ARTICLE
                  II

              
	 	 	 
	
                THE
                  CREDITS

              
	 
	
                SECTION
                  2.01.

              	
                Commitments

              	
                18

              
	
                SECTION
                  2.02.

              	
                Loans

              	
                18

              
	
                SECTION
                  2.03.

              	
                Borrowing
                  Procedure

              	
                19

              
	
                SECTION
                  2.04.

              	
                Evidence
                  of Debt; Repayment of Loans

              	
                20

              
	
                SECTION
                  2.05.

              	
                Fees

              	
                21

              
	
                SECTION
                  2.06.

              	
                Interest
                  on Loans

              	
                21

              
	
                SECTION
                  2.07.

              	
                Default
                  Interest

              	
                21

              
	
                SECTION
                  2.08.

              	
                Alternate
                  Rate of Interest

              	
                21

              
	
                SECTION
                  2.09.

              	
                Termination
                  of Commitments

              	
                22

              
	
                SECTION
                  2.10.

              	
                Conversion
                  and Continuation of
                  Borrowings

              	
                22

              
	
                SECTION
                  2.11.

              	
                Repayment
                  of Borrowings

              	
                23

              
	
                SECTION
                  2.12.

              	
                Optional
                  Prepayment

              	
                24

              
	
                SECTION
                  2.13.

              	
                Reserve
                  Requirements; Change in
                  Circumstances

              	
                25

              
	
                SECTION
                  2.14.

              	
                Change
                  in Legality

              	
                26

              
	
                SECTION
                  2.15.

              	
                Indemnity

              	
                27

              
	
                SECTION
                  2.16.

              	
                Pro
                  Rata Treatment

              	
                27

              
	
                SECTION
                  2.17.

              	
                Sharing
                  of Setoffs

              	
                27

              
	
                SECTION
                  2.18.

              	
                Payments

              	
                28

              
	
                SECTION
                  2.19.

              	
                Taxes

              	
                28

              
	
                SECTION
                  2.20.

              	
                Assignment
                  of Commitments Under Certain Circumstances; Duty
                  to Mitigate

              	
                30

              
	 	 	 
	
                ARTICLE
                  III

              
	 	 	 
	
                CONDITIONS
                  PRECEDENT

              
	 
	
                SECTION
                  3.01.

              	
                Conditions
                  Precedent to Making of Loans

              	
                31

              


      

      



      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

      


      


      
        	
                ARTICLE
                  IV

              
	 	 	 
	
                REPRESENTATIONS
                  AND WARRANTIES

              
	 
	
                SECTION
                  4.01.

              	
                Corporate
                  Authority of the Borrower

              	
                34

              
	
                SECTION
                  4.02.

              	
                Financial
                  Statements

              	
                35

              
	
                SECTION
                  4.03.

              	
                Title
                  to Mortgaged Properties

              	
                35

              
	
                SECTION
                  4.04.

              	
                Litigation

              	
                36

              
	
                SECTION
                  4.05.

              	
                Approvals

              	
                36

              
	
                SECTION
                  4.06.

              	
                Required
                  Insurance

              	
                36

              
	
                SECTION
                  4.07.

              	
                Licenses

              	
                37

              
	
                SECTION
                  4.08.

              	
                Adverse
                  Agreements

              	
                37

              
	
                SECTION
                  4.09.

              	
                Default
                  or Event of Default

              	
                37

              
	
                SECTION
                  4.10.

              	
                Employee
                  Benefit Plans

              	
                37

              
	
                SECTION
                  4.11.

              	
                Investment
                  Company Act

              	
                37

              
	
                SECTION
                  4.12.

              	
                Public
                  Utility Holding Company Act

              	
                37

              
	
                SECTION
                  4.13.

              	
                Regulations
                  X, T and U

              	
                37

              
	
                SECTION
                  4.14.

              	
                Location
                  of Offices and Records

              	
                37

              
	
                SECTION
                  4.15.

              	
                Information

              	
                38

              
	
                SECTION
                  4.16.

              	
                Environmental
                  Matters

              	
                38

              
	
                SECTION
                  4.17.

              	
                Solvency
                  of the Borrower

              	
                40

              
	
                SECTION
                  4.18.

              	
                Governmental
                  Requirements

              	
                40

              
	
                SECTION
                  4.19.

              	
                Corporate
                  Authority of the Guarantors

              	
                40

              
	
                SECTION
                  4.20.

              	
                Security
                  Agreement

              	
                41

              
	
                SECTION
                  4.21.

              	
                Tax
                  Returns

              	
                41

              
	
                SECTION
                  4.22.

              	
                Labor
                  Matters

              	
                41

              
	
                SECTION
                  4.23.

              	
                Survival
                  of Representations and
                  Warranties

              	
                41

              
	 	 	 
	
                ARTICLE
                  V

              
	 	 	 
	
                AFFIRMATIVE
                  COVENANTS

              
	 
	
                SECTION
                  5.01.

              	
                Financial
                  Statements; Other Reporting
                  Requirements

              	
                42

              
	
                SECTION
                  5.02.

              	
                Notice
                  of Default; Litigation; ERISA
                  Matters

              	
                44

              
	
                SECTION
                  5.03.

              	
                Maintenance
                  of Existence, Properties and
                  Liens

              	
                44

              
	
                SECTION
                  5.04.

              	
                Taxes

              	
                45

              
	
                SECTION
                  5.05.

              	
                Compliance
                  with Environmental Laws

              	
                45

              
	
                SECTION
                  5.06.

              	
                Further
                  Assurances

              	
                46

              
	
                SECTION
                  5.07.

              	
                Financial
                  Covenants

              	
                46

              
	
                SECTION
                  5.08.

              	
                Operations

              	
                47

              
	
                SECTION
                  5.09.

              	
                Change
                  of Location

              	
                47

              
	
                SECTION
                  5.10.

              	
                Employee
                  Benefit Plans

              	
                48

              
	
                SECTION
                  5.11.

              	
                Field
                  Audits; Other Information

              	
                48

              
	
                SECTION
                  5.12.

              	
                Insurance

              	
                48

              
	
                SECTION
                  5.13.

              	
                Subsidiaries

              	
                48

              
	
                SECTION
                  5.14.

              	
                Additional
                  Mortgaged Properties

              	
                49

              
	
                SECTION
                  5.15.

              	
                Maintenance
                  of Hedging Agreements

              	
                49

              


      

      



      
        
          
          

        

        
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                ARTICLE
                  VI

              
	 	 	 
	
                NEGATIVE
                  COVENANTS

              
	 
	
                SECTION
                  6.01.

              	
                Limitations
                  on Fundamental Changes

              	
                49

              
	
                SECTION
                  6.02.

              	
                Disposition
                  of Assets

              	
                49

              
	
                SECTION
                  6.03.

              	
                Repurchase
                  of Stock; Restricted
                  Payments

              	
                50

              
	
                SECTION
                  6.04.

              	
                Encumbrances;
                  Negative Pledge

              	
                51

              
	
                SECTION
                  6.05.

              	
                Debts

              	
                53

              
	
                SECTION
                  6.06.

              	
                Investments,
                  Loans and Advances

              	
                54

              
	
                SECTION
                  6.07.

              	
                Other
                  Agreements

              	
                56

              
	
                SECTION
                  6.08.

              	
                Transactions
                  with Affiliates

              	
                56

              
	
                SECTION
                  6.09.

              	
                Use
                  of Loan Proceeds

              	
                57

              
	
                SECTION
                  6.10.

              	
                Commodity
                  Transactions

              	
                57

              
	
                SECTION
                  6.11.

              	
                Other
                  Debt and Agreements

              	
                57

              
	
                SECTION
                  6.12.

              	
                Business
                  of the Borrower and
                  Subsidiaries

              	
                57

              
	 	 	 
	
                ARTICLE
                  VII

              
	 	 	 
	
                EVENTS
                  OF DEFAULT

              
	 
	
                SECTION
                  7.01.

              	
                Events
                  of Default

              	
                57

              
	
                SECTION
                  7.02.

              	
                Waivers

              	
                60

              
	
                SECTION
                  7.03.

              	
                Notice
                  to Delta Farms Lessors

              	
                60

              
	 	 	 
	
                ARTICLE
                  VIII

              
	 	 	 
	
                THE
                  ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

              
	 
	
                ARTICLE
                  IX

              
	 	 	 
	
                MISCELLANEOUS

              
	 
	
                SECTION
                  9.01.

              	
                Notices

              	
                63

              
	
                SECTION
                  9.02.

              	
                Survival
                  of Agreement

              	
                63

              
	
                SECTION
                  9.03.

              	
                Binding
                  Effect

              	
                64

              
	
                SECTION
                  9.04.

              	
                Successors
                  and Assigns

              	
                64

              
	
                SECTION
                  9.05.

              	
                Expenses;
                  Indemnity

              	
                68

              
	
                SECTION
                  9.06.

              	
                Right
                  of Setoff

              	
                69

              
	
                SECTION
                  9.07.

              	
                Applicable
                  Law

              	
                69

              
	
                SECTION
                  9.08.

              	
                Waivers;
                  Amendment

              	
                70

              
	
                SECTION
                  9.09.

              	
                Interest
                  Rate Limitation

              	
                70

              
	
                SECTION
                  9.10.

              	
                Entire
                  Agreement

              	
                71

              
	
                SECTION
                  9.11.

              	
                WAIVER
                  OF JURY TRIAL

              	
                71

              
	
                SECTION
                  9.12.

              	
                Severability

              	
                71

              
	
                SECTION
                  9.13.

              	
                Counterparts

              	
                71

              


      

    

     

    
      
        
        

      

      
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                SECTION
                  9.14.

              	
                Headings

              	
                72

              
	
                SECTION
                  9.15.

              	
                Jurisdiction;
                  Consent to Service of
                  Process

              	
                72

              
	
                SECTION
                  9.16.

              	
                Confidentiality

              	
                72

              
	
                SECTION
                  9.17.

              	
                USA
                  Patriot Act Notice

              	
                73

              
	
                SECTION
                  9.18.

              	
                Intercreditor
                  Agreement

              	
                73

              
	 	 	 
	 	 	 
	 	 	 
	
                SCHEDULES

              	 	 
	 	 	 
	
                Schedule
                  2.01

              	
                Lenders
                  and Commitments

              	 
	
                Schedule
                  4.01

              	
                No
                  Violation

              	 
	
                Schedule
                  4.03

              	
                Exceptions
                  to Title

              	 
	
                Schedule
                  4.04

              	
                Litigation

              	 
	
                Schedule
                  6.04

              	
                Encumbrances

              	 
	
                Schedule
                  6.05

              	
                Existing
                  Debt

              	 
	
                Schedule
                  6.08

              	
                Transactions
                  with Affiliates

              	 
	 	 	 
	 	 	 


      

    

     

    
      
        	
                EXHIBITS

              	 
	 	 
	
                Exhibit
                  A

              	
                Form
                  of Administrative Questionnaire

              
	
                Exhibit
                  B

              	
                Form
                  of Assignment and Acceptance

              
	
                Exhibit
                  C

              	
                Form
                  of Borrowing Request

              
	
                Exhibit
                  D

              	
                Form
                  of Intercreditor Agreement

              
	
                Exhibit
                  E

              	
                Form
                  of Mortgages

              
	
                Exhibit
                  F

              	
                Form
                  of Revolving Credit Agreement Amendment

              
	
                Exhibit
                  G

              	
                Form
                  of Compliance Certificate

              
	
                Exhibit
                  H

              	
                Form
                  of Perfection Certificate

              


      

    

     

    


     

    
      
        
           

        

        iv

      

      
        
        

        
          

        

      

      
        Table
          of Contents

        
        

      

    

    


     

    

      SECOND
        LIEN CREDIT AGREEMENT dated as of July 21, 2005, among CARRIZO OIL
&
        GAS, INC., a Texas corporation (the “Borrower”),
        CCBM,
        INC., a Delaware corporation (“CCBM”),
        the
        Lenders (as defined in Article I),
        and
        CREDIT SUISSE, as administrative agent (in such capacity, the “Administrative
        Agent”)
        and as
        collateral agent (in such capacity, the “Collateral
        Agent”)
        for
        the Lenders.

       

      The
        Borrower has requested the Lenders to extend credit in the form of term loans
        on
        the Closing Date (such term and each other capitalized term used but not
        defined
        in this introductory statement having the meaning given it in Article I),
        in an
        aggregate principal amount not in excess of $150,000,000. The proceeds of
        such
        term loans are to be used (a) to repay all amounts outstanding under
        the
        Revolving Credit Agreement, (b) to redeem and repay all amounts outstanding
        or due under the Existing Notes, (c) to pay fees and expenses incurred
        in
        connection with the Transactions, including prepayment premiums in connection
        with the prepayment of the Senior Subordinated Notes, in an aggregate amount
        not
        to exceed $6,000,000 and (d) for general corporate purposes, including
        acquisitions permitted hereunder.

       

      The
        Lenders are willing to extend such credit to the Borrower on the terms and
        subject to the conditions set forth herein. Accordingly, the parties hereto
        agree as follows:

       

      ARTICLE
        I  

       

      Definitions
        and Accounting Terms

       

      SECTION
        1.01.   Defined
        Terms.
        As used
        in this Agreement, and unless the context requires a different meaning, the
        following terms have the meanings indicated:

       

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

       

      “Adjusted
        LIBO Rate”
        shall
        mean, with respect to any Eurodollar Borrowing for any Interest Period, an
        interest rate per annum equal to the product of (a) the LIBO Rate
        in effect
        for such Interest Period and (b) Statutory Reserves.

       

      “Administrative
        Agent”
        shall
        have the meaning assigned to such term in the preamble hereto.

       

      “Administrative
        Questionnaire”
        shall
        mean an Administrative Questionnaire in the form of Exhibit
        A,
        or such
        other form as may be supplied from time to time by the Administrative
        Agent.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
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      “Agreement”
        shall
        mean this Second Lien Credit Agreement, as the same may from time to time
        be
        amended, modified, supplemented, or restated and in effect from time to
        time.

       

      “Alternate
        Base Rate”
        shall
        mean, for any day, a rate per annum equal to the greater of (a) the
        Prime
        Rate in effect on such day and (b) the Federal Funds Effective Rate
        in
        effect on such day plus 1/2 of 1%. If the Administrative Agent shall
        have
        determined (which determination shall be conclusive absent manifest error)
        that
        it is unable to ascertain the Federal Funds Effective Rate for any reason,
        including the inability or failure of the Administrative Agent to obtain
        sufficient quotations in accordance with the terms of the definition thereof,
        the Alternate Base Rate shall be determined without regard to clause (b)
        of the
        preceding sentence until the circumstances giving rise to such inability
        no
        longer exist. Any change in the Alternate Base Rate due to a change in the
        Prime
        Rate or the Federal Funds Effective Rate shall be effective on the effective
        date of such change in the Prime Rate or the Federal Funds Effective Rate,
        as
        the case may be.

       

      “Applicable
        Percentage”
        shall
        mean, for any day, (a) with respect to any Eurodollar Loan, 6.00%,
        or
        (b) with respect to any ABR Loan, 5.00%.

       

      “Assignment
        and Acceptance”
        shall
        mean an assignment and acceptance entered into by a Lender and an assignee,
        and
        accepted by the Administrative Agent, in the form of Exhibit B
        or such
        other form as shall be approved by the Administrative Agent.

       

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

       

      “Borrower”
        shall
        mean Carrizo Oil & Gas, Inc., a Texas corporation, together with its
        successors and assigns.

       

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

       

      “Borrowing
        Request”
        shall
        mean a request by the Borrower in accordance with the terms of Section 2.03
        and
        substantially in the form of Exhibit C,
        or such
        other form as shall be approved by the Administrative Agent.

       

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

       

      “Capital
        Lease Obligations”
        shall
        mean any Debt represented by obligations under a lease that is required to
        be
        capitalized for financial reporting purposes 

       

      
        
          
          

        

        
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        in
          accordance with GAAP, and the amount of such obligations shall be the
          capitalized amount thereof determined in accordance with
          GAAP.

      

       

      “CCBM”
        shall
        mean CCBM, INC., a Delaware corporation and a Subsidiary of the Borrower,
        together with its successors and assigns.

       

      A
        “Change
        in Control”
        shall
        be deemed to have occurred if (a) any “person” or “group” (within the
        meaning of Rule 13d-5 of the Securities Exchange Act of 1934 as in
        effect
        on the date hereof) other than the Permitted Investors shall own, directly
        or
        indirectly, beneficially or of record, shares representing more than 50%
        of the
        aggregate ordinary voting power represented by the issued and outstanding
        capital stock of the Borrower, (b) a majority of the seats (other
        than
        vacant seats) on the board of directors of the Borrower shall at any time
        be
        occupied by persons who were neither (i) nominated by the board of
        directors of the Borrower nor (ii) appointed by directors so nominated,
        or
        (c) any change in control (or similar event, however denominated)
        with
        respect to the Borrower or any Subsidiary shall occur under (and not be waived
        in accordance with) and as defined in the Revolving Credit Agreement or any
        material indenture or other loan or credit agreement or any other material
        debt
        instrument to which the Borrower or any Subsidiary is a party.

       

      “Change
        in Law”
        shall
        mean (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, for purposes
        of
Section 2.13,
        by any
        lending office of such Lender or by such Lender’s holding company, if any) with
        any request, guideline or directive (whether or not having the force of law)
        of
        any Governmental Authority made or issued after the date of this
        Agreement.

       

      “Closing
        Date”
        shall
        mean July 21, 2005.

       

      “Collateral”
        shall
        mean the Mortgaged Properties and any interest in any kind of property or
        assets
        pledged, mortgaged or otherwise subject to an Encumbrance in favor of the
        Secured Parties pursuant to the Collateral Documents.

       

      “Collateral
        Agent”
        shall
        have the meaning assigned to such term in the preamble hereto.

       

      “Collateral
        Documents”
        shall
        collectively refer to the Mortgages, the Security Agreement, the Guarantee,
        the
        Intercreditor Agreement and any and all other documents now existing or
        hereafter entered into in which an Encumbrance is created on any property
        of the
        Borrower or of any other Person to secure all Obligations of the Borrower
        and
        each Guarantor under this Agreement, the Guarantee and any Hedging Agreement
        entered into with Credit Suisse in its capacity as Arranger hereunder, the
        Administrative Agent, a Lender or any affiliate of any of the
        foregoing.

       

      “Commitment”
        shall
        mean, with respect to each Lender, the commitment of such Lender to make
        Loans
        hereunder as set forth on Schedule 2.01,
        or in
        the Assignment and Acceptance pursuant to which such Lender assumed its
        Commitment, as 

       

      
        
          
          

        

        
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        applicable,
          as the same may be reduced or increased from time to time pursuant to
          assignments by or to such Lender pursuant to Section 9.04.

      

       

      “Competitor”
        shall
        mean (a) any Person who is actively engaged in the Subject Business
        and
        (b) any affiliate of a Person identified in clause (a) above
        (it being
        agreed that an investment firm shall not be deemed to control a Person described
        in clause (a) above merely as a result of owning a minority interest
        in
        such Person if it does not otherwise control such Person).

       

      “Consolidated
        Current Assets”
        shall
        mean the total of the Borrower’s consolidated current assets (excluding assets
        of Unrestricted Subsidiaries), including the amounts available for borrowing
        under the Revolving Credit Agreement, determined in accordance with GAAP.
        Current assets will not include non-cash assets, if any, arising from the
        marking to market of Hedging Agreements pursuant to SFAS No. 133 and
        related pronouncements.

       

      “Consolidated
        Current Liabilities”
        shall
        mean the total of the Borrower’s consolidated current liabilities (excluding
        liabilities of Unrestricted Subsidiaries), excluding outstanding principal
        amounts due under the Revolving Credit Agreement, determined in accordance
        with
        GAAP. Current liabilities will not include (a) non-cash obligations,
        if
        any, arising from the marking to market of Hedging Agreements pursuant to
        SFAS
        No. 133 and related pronouncements or (b) the non-cash effects,
        if
        any, of the non-cash stock option re-pricing accrual.

       

      “Core
        Operating Regions”
        shall
        mean, collectively, Texas and Louisiana (in each case, other than offshore
        areas).

       

      “Current
        Ratio”
        shall
        mean the ratio of Consolidated Current Assets to Consolidated Current
        Liabilities.

       

      “Debt”
        shall
        mean without duplication: (a) indebtedness for borrowed money; (b) the
        face amounts of all outstanding standby and commercial letters of credit
        and
        bankers acceptances, matured or unmatured, issued on behalf of Borrower;
        (c) guarantees of the Debt of any other Person, whether direct or
        indirect,
        whether by agreement to purchase the indebtedness of any other Person or
        by
        agreement for the furnishing of funds to any other Person through the purchase
        or lease of goods, supplies or services (or by way of stock purchase, capital
        contribution, advance or loan) in each case for the purpose of paying or
        discharging the Debt of any other Person; and (d) the present value
        of all
        obligations for the payment of rent or hire of property of any kind (real
        or
        personal) under leases or lease agreements required to be capitalized under
        GAAP.

       

      “Default”
        shall
        mean an event which with the giving of notice or the lapse of time (or both)
        would constitute an Event of Default hereunder.

       

      “Defensible
        Title”
        shall
        mean, with respect to the assets of the Borrower (a) the title of
        the
        Borrower to such assets is free and clear of all Encumbrances of any kind
        whatsoever (except to the extent permitted by the Loan Documents), and
        (b) as to 

       

      
        
          
          

        

        
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        those
          wells for which a “working interest” and a “net revenue interest” are set forth
          on Schedule 4.03
          (except
          to the extent disposed of or abandoned in accordance with the Loan Documents),
          the Borrower is entitled to receive the percentage of all Hydrocarbons
          produced,
          saved and marketed from such wells in an amount not less than the net revenue
          interest set forth therein, without reduction, suspension or termination
          throughout the duration of the productive life of such wells, and the Borrower
          is obligated to bear the percentage of costs and expenses related to the
          maintenance, development and operation of such wells in an amount not greater
          than the working interest set forth on such Schedule, without increase
          throughout the productive life of such wells, except increases that also
          result
          in a proportionate increase in net revenue interest and as set forth on
          such
          Schedule.

      

       

      “Designated
        Title Exceptions”
        has the
        meaning given to such term in Section 4.03.

       

      “Dispose”
        and
“Disposition”
        shall
        have the meanings assigned to such terms in Section 6.02(a).

       

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

       

      “EBITDA”
        shall
        mean the Borrower’s consolidated earnings determined in accordance with GAAP
        (excluding earnings of Unrestricted Subsidiaries) before interest expense,
        income taxes, depreciation, amortization, depletion, oil and gas asset
        impairment write downs, lease impairment expense, gains and losses from the
        sale
        of capital assets, and other non-cash charges. EBITDA shall not include non-cash
        effects of (i) the early extinguishment of long-term debt, (ii) CCBM’s
        equity investment in Pinnacle and (iii) stock option re-pricing
        expense.

       

      “Encumbrances”
        shall
        mean any interest in property securing an obligation owed to, or a claim
        by, a
        Person other than the owner of the property, whether such interest is based
        on
        common law, statute or contract. The term “Encumbrance” shall also include
        reservations, exceptions, encroachments, easements, rights-of-way, covenants,
        conditions, restrictions, leases and other title exceptions and encumbrances
        affecting property. For the purpose of the Agreement, the Borrower shall
        be
        deemed to be the owner of any property which it has acquired or holds subject
        to
        a conditional sale agreement or other arrangements pursuant to which title
        to
        the property has been retained by or vested in some other Person for security
        purposes; provided,
        however,
        that
        the term “Encumbrance” shall not include a trust or similar arrangement
        established for the purpose of defeasing any indebtedness pursuant to the
        terms
        evidencing or providing for the issuance of such indebtedness but only to
        the
        extent that such defeasance is permitted under this Agreement.

       

      “Environmental
        Laws”
        shall
        mean any federal, state, local or tribal statute, law, rule, regulation,
        ordinance, code, permit, consent, approval, license, written policy or rule
        of
        common law now or hereafter in effect and in each case as amended, and any
        judicial or administrative interpretation thereof, including any judicial
        or
        administrative 

       

      
        
          
          

        

        
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        order,
          injunction, consent decree or judgment, or other authorization or requirement
          whenever promulgated, issued or modified, including the requirement to
          register
          underground storage tanks, well plugging and abandonment requirements,
          and oil
          and gas waste disposal requirements relating to:

      

       

      (i)
        emissions, discharges, spills, migration, movement, Releases or threatened
        Releases of pollutants, contaminants, Hazardous Materials, or hazardous or
        toxic
        materials or wastes into or onto soil, land, ambient air, surface water,
        ground
        water, watercourses, publicly owned treatment works, drains, sewer systems,
        wetlands or septic systems;

       

      (ii)
        the
        use, treatment, storage, disposal, handling, manufacturing, transportation,
        or
        shipment of Hazardous Materials or hazardous and/or toxic wastes, material,
        products or by-products containing Hazardous Materials (or of equipment or
        apparatus containing Hazardous Materials); or

       

      (iii)
        otherwise relating to pollution or the protection of human health or the
        environment, including the Comprehensive Environmental Response, Compensation,
        and Liability Act of 1980, 42 U.S.C. §§ 9601 et
        seq.,
        as
        amended, the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et
        seq.,
        as
        amended, the Hazardous Materials Transportation Act, 49 U.S.C. §§ 1801
et
        seq.,
        as
        amended, the Clean Water Act, 33 U.S.C. §§ 1251 et
        seq.,
        as
        amended, the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et
        seq.,
        as
        amended, the Clean Air Act, 42 U.S.C. §§ 7401 et
        seq.,
        as
        amended, the federal Water Pollution Control Act, 33 U.S.C. §§ 1251
et
        seq.,
        as
        amended, the Safe Drinking Water Act, 42 U.S.C. §§ 300f et
        seq.,
        as
        amended, the Atomic Energy Act, 42 U.S.C. §§ 2011 et
        seq.,
        as
        amended, the Natural Gas Pipeline Safety Act of 1968, 49 U.S.C. §§ 1671
et
        seq.,
        as
        amended, the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
        §§ 136 et
        seq.,
        as
        amended, and the Occupational Safety and Health Act, 29 U.S.C. §§ 651
et
        seq.,
        as
        amended, and all comparable statutes of the States of Louisiana and Texas,
        and
        all comparable local Governmental Requirements in such states, and other
        environmental, conservation or protection laws in effect in any jurisdiction
        where any of the Mortgaged Properties of the Borrower are located.

       

      “Environmental
        Liabilities”
        shall
        mean with respect to any Person, any and all liabilities, responsibilities,
        losses, sums paid in settlement of claims, obligations, charges, actions
        (formal
        or informal), claims (including claims for personal injury or for property
        damage), liens, administrative proceedings, damages (including loss or damage
        resulting from the occurrence of an Event of Default), punitive damages,
        consequential damages, treble damages, penalties, fines, monetary sanctions,
        interest, court costs, response and remediation costs, stabilization costs,
        encapsulation costs, treatment, storage, or disposal costs, groundwater
        monitoring or environmental sampling costs, other causes of action and any
        other
        costs and expenses (including reasonable attorneys’, experts’, and consultants’
        fees, costs of investigation and feasibility studies and disbursements in
        connection with any investigative, administrative or judicial proceeding),
        whether direct or indirect, known or unknown, absolute or contingent, past,
        

       

      
        
          
          

        

        
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        present
          or future arising under, pursuant to or in connection with any Environmental
          Law, or any other binding obligation of such Person requiring abatement
          of
          pollution or protection of human health and the environment.

      

       

      “Environmental
        Lien”
        shall
        mean an Encumbrance in favor of any Governmental Authority for (a) any
        liability under Environmental Laws or (b) damages arising from, or
        costs
        incurred by such Governmental Authority in response to, a Release or threatened
        Release of a Hazardous Materials into the environment.

       

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

       

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

       

      “Event
        of Default”
        shall
        mean individually, collectively and interchangeably any of the Events of
        Default
        set forth below in Article VII.

       

      “Excluded
        Taxes”
        shall
        mean, with respect to the Administrative Agent, any Lender or any other
        recipient of any payment to be made by or on account of any obligation of
        the
        Borrower hereunder, (a) income or franchise taxes imposed on (or measured
        by) its net income by the United States of America, or by the jurisdiction
        under
        the laws of which such recipient is organized or in which its principal office
        is located or, in the case of any Lender, in which its applicable lending
        office
        is located, (b) any branch profits taxes imposed by the United States
        of
        America or any similar tax imposed by any other jurisdiction described in
        clause (a)
        above
        and (c) in the case of a Foreign Lender (other than an assignee pursuant
        to
        a request by the Borrower under Section 2.20(a)),
        any
        withholding tax that is imposed on amounts payable to such Foreign Lender
        at the
        time such Foreign Lender becomes a party to this Agreement (or designates
        a new
        lending office) or is attributable to such Foreign Lender’s failure to comply
        with Section 2.19(e),
        except
        to the extent that such Foreign Lender (or its assignor, if any) was entitled,
        at the time of designation of a new lending office (or assignment), to receive
        additional amounts from the Borrower with respect to such withholding tax
        pursuant to Section 2.19(a).

       

      “Existing
        Notes”
        shall
        mean the Senior Subordinated Notes and the Senior Subordinated Secured
        Notes.

       

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

       

      
        
          
          

        

        
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      “Fee
        Letter”
        shall
        mean the Fee Letter dated June 27, 2005, between the Borrower and
        the
        Administrative Agent.

       

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

       

      “GAAP”
        shall
        mean, at any time, accounting principles generally accepted in the United
        States
        as then in effect.

       

      “Governmental
        Authority”
        shall
        mean any nation or government, any state or other political subdivision thereof,
        or entity exercising executive, legislative, judicial, regulatory or
        administrative functions of or pertaining to government.

       

      “Governmental
        Requirement”
        shall
        mean any applicable state, federal or local law, statute, ordinance, code,
        rule,
        regulation, order or decree.

       

      “Granting
        Lender”
        shall
        have the meaning assigned to such term in Section 9.04(i).

       

      “Guarantee”
        shall
        mean individually and collectively that certain Second Lien Commercial Guarantee
        of even date with this Agreement by CCBM in favor of the Administrative Agent
        for the ratable benefit of the Lenders, as amended and/or restated from time
        to
        time and in effect, and any Commercial Guarantee executed after the date
        of this
        Agreement by a Subsidiary in favor of the Administrative Agent for the ratable
        benefit of the Lenders, as amended and/or restated from time to time and
        in
        effect.

       

      “Guarantor”
        shall
        mean individually and collectively, CCBM, and its successors and assigns,
        and
        any Subsidiary (excluding Unrestricted Subsidiaries) of the Borrower that
        executes a Guarantee.

       

      “Hazardous
        Materials”
        shall
        mean (a) hazardous materials, hazardous wastes, and hazardous substances
        including, but not limited to, those substances, materials and wastes listed
        in
        the United States Department of Transportation Hazardous Materials Table,
        49
        C.F.R. § 172.101, as amended, or listed by the federal Environmental
        Protection Agency as hazardous substances under or pursuant to 40 C.F.R.
        Part 302, as amended, or substances, materials, contaminants or wastes
        which are or become regulated under any Environmental Law, including those
        substances, materials, contaminants or wastes as defined in the following
        statutes and their implementing regulations: the Hazardous Materials
        Transportation Act, 49 U.S.C. §§ 1801 et
        seq.,
        as
        amended, the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901
et
        seq.,
        as
        amended, the Comprehensive Environmental Response, Compensation and Liability
        Act, 42 U.S.C. §§ 9601 et
        seq.,
        as
        amended, the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et
        seq.,
        as
        amended, the Clean Air Act, 42 U.S.C. §§ 7401 et
        seq.,
        as
        amended, the federal Water Pollution Control Act, 33 U.S.C. §§ 1251
et
        seq.,
        as
        amended, the Occupational Safety and Health Act, 2 U.S.C. §§ 651
et
        seq.,
        as
        amended, the Safe Drinking Water Act, 42 U.S.C. §§ 300f et
        seq.,
        as
        amended and the Natural Gas Pipeline 

       

      
        
          
          

        

        
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        Safety
          Act of 1968, 49 U.S.C. §§ 1671 et
          seq.,
          as
          amended, (b) all substances, materials, contaminants or wastes listed
          in
          all comparable statutes of the States of Louisiana and Texas and in comparable
          local Requirements of Law in such states, (c) acid gas, sour water
          streams
          or sour water vapor streams containing hydrogen sulfide or other forms
          of
          sulphur, sodium hydrosulfide and ammonia, (d) Hydrocarbons,
          (e) natural gas, synthetic gas, and any mixtures thereof, (f) asbestos
          and/or any material which contains 1% or more, by weight, of any hydrated
          mineral silicate, including but not limited to chrysotile, amosite, crocidolite,
          tremolite, anthophylite and/or actinolite, whether friable or non-friable,
          (g) PCB’s, or PCB containing materials or fluids, (h) radon,
          (i) naturally occurring radioactive material, radioactive substances
          or
          waste, (j) salt water and other oil and gas wastes and (k) any
          other
          hazardous or noxious substance, material, pollutant, emission, or solid,
          liquid
          or gaseous waste.

      

       

      “Hedging
        Agreement”
        shall
        mean (a) any interest rate or currency swap, rate cap, rate floor,
        rate
        collar, forward agreement, or other exchange or rate protection agreement
        or any
        option with respect to any such transaction and (b) any swap agreement,
        cap, floor, collar, exchange transaction, forward agreement, or other exchange
        or protection agreement relating to Hydrocarbons or any option with respect
        to
        any such transaction.

       

      “Hydrocarbons”
        shall
        mean oil, gas, casing head gas, condensate, distillate, liquid hydrocarbons,
        gaseous hydrocarbons and all products separated, settled and dehydrated
        therefrom and all products refined therefrom, including kerosene, liquefied
        petroleum gas, refined lubricating oils, diesel fuel, drip gasoline, natural
        gasoline, helium, sulphur and all other materials derived
        therefrom.

       

      “Indebtedness”
        shall
        mean, at any time, (a) all obligations, indebtedness, and liabilities,
        whether now existing or arising in the future, of the Borrower and/or any
        Guarantor to the Lenders or any of them (or in the case of a Hedging Agreement
        or Rate Management Transaction, any affiliate thereof) pursuant to a Hedging
        Agreement or other commodity or price management transaction,
        (b) obligations of the Borrower under Rate Management Transactions
        (including all renewals, extensions, modifications, and substitution thereof
        and
        therefor) and all cancellations, buy backs, reversals, terminations, or
        assignments of Rate Management Transactions, and (c) the indebtedness
        of
        the Borrower under this Agreement, including principal, interest, costs,
        expenses and reasonable attorneys’ fees and all other fees, charges, costs and
        expenses for which the Borrower and/or any Guarantor is responsible under
        this
        Agreement or under any of the Related Documents. 

       

      “Indemnified
        Taxes”
        shall
        mean Taxes other than Excluded Taxes.

       

      “Initial
        Reserve Reports”
        shall
        mean the reserve reports of Ryder Scott Company L.P., Fairchild & Wells,
        Inc. and DeGolyer and MacNaughton, in each case setting forth, among other
        things, (a) the oil and gas properties owned directly by the Borrower and
        CCBM
        (other than immaterial properties excluded consistent with past practice)
        as of
        December 31, 2004, (b) the proved reserves attributable to
        such oil
        and gas 

       

      
        
          
          

        

        
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        properties
          and (c) a projection of the rate of production and net income of such proved
          reserves as of December 31, 2004.

      

       

      “Intercreditor
        Agreement”
        shall
        mean the Intercreditor Agreement, dated of even date herewith, substantially
        in
        the form of Exhibit D,
        among
        the Borrower, the First Lien Collateral Agent (as defined therein) and the
        Collateral Agent, as the same may from time to time be amended, restated,
        supplemented or otherwise modified.

       

      “Interest
        Expense”
        shall
        mean, for any period, total interest expense (including that portion
        attributable to Capital Lease Obligations and capitalized interest), net
        of
        interest income, of the Borrower and its Subsidiaries (other than Unrestricted
        Subsidiaries) on a consolidated basis with respect to all outstanding
        Obligations of the Borrower and its Subsidiaries (other than Non-Recourse
        Debt
        and Obligations of Unrestricted Subsidiaries) to the extent the promissory
        notes, leases or other instruments or agreements evidencing such Obligations
        require the payment of such interest in cash during such period.

       

      “Interest
        Payment Date”
        shall
        mean (a) with respect to any ABR Loan, the last Business Day of each
        March,
        June, September and December, and (b) with respect to any Eurodollar
        Loan,
        the last day of the Interest Period applicable to the Borrowing of which
        such
        Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
        Period of more than three months’ duration, each day that would have been an
        Interest Payment Date had successive Interest Periods of three months’ duration
        been applicable to such Borrowing.

       

      “Interest
        Period”
        shall
        mean, with respect to any Eurodollar Borrowing, the period commencing
        on
        the date of such Borrowing and ending on the numerically corresponding day
        (or,
        if there is no numerically corresponding day, on the last day) in the calendar
        month that is 1, 2, 3 or 6 months thereafter, as the Borrower may
        elect;
provided,
        however,
        that if
        any Interest Period would end on a day other than a Business Day, such Interest
        Period shall be extended to the next succeeding Business Day unless such
        next
        succeeding Business Day would fall in the next calendar month, in which case
        such Interest Period shall end on the next preceding Business Day. Interest
        shall accrue from and including the first day of an Interest Period to but
        excluding the last day of such Interest Period. For purposes hereof, the
        date of
        a Borrowing initially shall be the date on which such Borrowing is made and
        thereafter shall be the effective date of the most recent conversion or
        continuation of such Borrowing.

       

      “Leases”
        shall
        mean all present and future oil, gas and mineral leases or interests therein
        now
        owned or hereafter acquired by the Borrower that form part of the Mortgaged
        Properties.

       

      “Lenders”
        shall
        mean (a) the Persons listed on Schedule 2.01
        (other
        than any such Person that has ceased to be a party hereto pursuant to an
        Assignment and Acceptance) and (b) any Person that has become a party
        hereto pursuant to an Assignment and Acceptance.

       

      
        
          
          

        

        
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      “Liabilities”
        shall
        mean, as to any Person, all indebtedness, liabilities and obligations of
        such
        Person, whether matured or unmatured, liquidated or unliquidated, primary
        or
        secondary, direct or indirect, absolute, fixed or contingent, and whether
        or not
        required to be considered pursuant to GAAP.

       

      “LIBO
        Rate”
        shall
        mean, with respect to any Eurodollar Borrowing for any Interest Period, the
        rate
        per annum determined by the Administrative Agent at approximately
        11:00 a.m. (London time) on the date that is two Business Days prior
        to the
        commencement of such Interest Period by reference to the British Bankers’
        Association Interest Settlement Rates for deposits in Dollars (as set forth
        by
        any service selected by the Administrative Agent that has been nominated
        by the
        British Bankers’ Association as an authorized information vendor for the purpose
        of displaying such rates) for a period equal to such Interest Period;
provided
        that, to
        the extent that an interest rate is not ascertainable pursuant to the foregoing
        provisions of this definition, the “LIBO Rate” shall be the interest rate per
        annum determined by the Administrative Agent to be the average of the rates
        per
        annum at which deposits in Dollars are offered for such relevant Interest
        Period
        to major banks in the London interbank market in London, England by the
        Administrative Agent at approximately 11:00 a.m. (London time) on
        the date
        that is two Business Days prior to the beginning of such Interest
        Period.

       

      “Loan
        Documents”
        shall
        mean this Agreement, the Guarantee, the Collateral Documents, the promissory
        notes, if any, executed and delivered pursuant to Section 2.04(e)
        and any
        other Related Documents.

       

      “Loans”
        shall
        mean the term loans made by the Lenders to the Borrower pursuant to Section 2.01.

       

      “Material
        Adverse Effect”
        shall
        mean, with respect to the Borrower and/or any Guarantor, as the case may
        be, an
        event which causes a material adverse effect on the business, assets, operations
        or condition (financial or otherwise) of such Person.

       

      “Maturity
        Date”
        shall
        mean July 21, 2010.

       

      “Mortgaged
        Properties”
        shall
        mean the property and interests of the Borrower and/or any Guarantor that
        are
        encumbered by the Mortgages.

       

      “Mortgages”
        shall
        mean the mortgages, deeds of trust, leasehold mortgages, assignments of leases
        and rents and other security documents encumbering the properties referred
        to in
        the last sentence of Section 4.03
        and
        delivered pursuant to Section 3.01(a),
        each
        substantially in the form of Exhibit E,
        and any
        and all mortgages, deeds of trust, leasehold mortgages, assignments of leases
        and rents and other security documents executed after the date of this Agreement
        by Borrower and/or any Guarantor as security for the Indebtedness, in each
        case,
        as the same may be amended, supplemented and/or restated from time to time
        and
        in effect.

       

      “Non-Recourse
        Debt”
        shall
        mean Obligations owed by CCBM to Rocky Mountain Gas, Inc., and Obligations
        of
        the Borrower and/or any Guarantor for which the 

       

      
        
          
          

        

        
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        Borrower
          and/or any Guarantor, as the case may be, are not personally liable for
          payment
          of the Obligations.

      

       

      “Obligations”
        of any
        Person shall mean Liabilities in any of the following categories:
        (a) Liabilities for borrowed money, (b) Liabilities constituting
        an
        obligation to pay the deferred purchase price of property or services,
        (c) Liabilities evidenced by a bond, debenture, note or similar instrument,
        (d) Liabilities which (i) would under GAAP be shown on such
        Person’s
        balance sheet as a liability, and (ii) are payable more than one year
        from
        the date of creation thereof (other than reserves for taxes and reserves
        for
        contingent obligations), (e) Liabilities arising under Hedging Agreements,
        (f) Liabilities constituting principal under leases capitalized in
        accordance with GAAP, (g) Liabilities arising under conditional sales
        or
        other title retention agreements, (h) Liabilities owing under direct
        to
        indirect guarantees of Obligations of any other Person or otherwise constituting
        obligations to purchase or acquire or to otherwise protect or insure a creditor
        against loss in respect of Obligations of any other Person (such as obligations
        under working capital maintenance agreements, agreements to keep-well, or
        agreements to purchase Obligations, assets, goods, securities or services),
        but
        excluding endorsements in the ordinary course of business of negotiable
        instruments in the course of collection, (i) Liabilities (for example,
        repurchase agreements and sale/leaseback agreements) consisting of an obligation
        to purchase or lease securities or other property, if such Liabilities arises
        out of or in connection with the sale of the same or similar securities or
        property, (j) Liabilities with respect to letters of credit or applications
        or reimbursement agreements therefor, (k) Liabilities with respect
        to
        payments received in consideration of oil, gas or other minerals yet to be
        acquired or produced at the time of payment (including obligations under
        “take-or-pay” contracts to deliver gas in return for payments already received
        and the undischarged balance of any production payment created by such Person
        or
        for the creation of which such Person directly or indirectly received payment),
        or (l) Liabilities with respect to other obligations to deliver goods
        or
        services in consideration of advance payments therefor; provided,
        however,
        that
        the “Obligations” of any Person shall not include Liabilities that were incurred
        by such Person on ordinary trade terms to vendors, suppliers, or other Persons
        providing goods and services for use by such Person in the ordinary course
        of
        its business, unless and until such Liabilities are outstanding more than
        120 days past original invoice or billing date therefor.

       

      “Other
        Taxes”
        shall
        mean any and all present or future stamp or documentary taxes or any other
        excise or property taxes, charges or similar levies arising from any payment
        made under any Loan Document or from the execution, delivery or enforcement
        of,
        or otherwise with respect to, any Loan Document.

       

      “Perfection
        Certificate”
        shall
        mean the Perfection Certificate substantially in the form of Exhibit
        H.

       

      “Permitted
        Disposition”
        shall
        mean any Disposition (a) of equipment which is worthless or obsolete,
        (b) of inventory (including oil and gas sold as produced and seismic
        data)
        which is sold in the ordinary course of business, (c) of interests
        in oil
        and gas leases, or portions thereof (if released or abandoned but not otherwise
        sold or transferred), so long as no well situated on any such lease, or located
        on any unit 

       

      
        
          
          

        

        
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        containing
          all or any part thereof, is capable (or is subject to being made capable
          through
          commercially feasible operations) of producing oil, gas or other hydrocarbons
          or
          minerals in commercial quantities, (d) of cash and cash equivalents
          otherwise permitted under this Agreement, (e) constituting dividends
          and
          distributions permitted by Section
          6.03,
          (f) constituting Permitted Encumbrances, and (g) constituting
          investments, loans and advances permitted by Section
          6.06.

      

       

      “Permitted
        Encumbrances”
        shall
        have the meaning ascribed to such term in Section 6.04.

       

      “Permitted
        Investors”
        shall
        mean the directors, officers and other management employees of the Borrower
        that
        are shareholders of the Borrower on the Closing Date and their respective
        affiliates.

       

      “Person”
        shall
        mean an individual or a corporation, partnership, trust, joint venture,
        incorporated or unincorporated association, joint stock company, government,
        or
        an agency or political subdivision thereof, or other entity of any
        kind.

       

      “Pinnacle”
        shall
        mean Pinnacle Gas Resources, Inc., a Delaware corporation.

       

      “Prime
        Rate”
        shall
        mean the rate of interest per annum determined from time to time by Credit
        Suisse as its prime rate in effect at its principal office in New York City
        and
        notified to the Borrower.

       

      “Proved
        Reserves”
        shall
        have the meaning assigned to such term in Section 6.02(a).

       

      “Purchase
        Money Debt”
        shall
        mean Debt incurred to finance the acquisition, construction or improvement
        of
        any fixed or capital assets, including Debt assumed in connection with the
        acquisition of any such assets or secured by an Encumbrance on any such assets
        prior to the acquisition thereof, and any extension, renewal or replacement
        of
        any such Debt.

       

      “PV-10
        Value”
        shall
        mean, as of any date of determination, the present value of estimated future
        revenues to be generated from the production of proved reserves on the
        Borrower’s and the Guarantors’ oil and gas properties as set forth in the most
        recent Reserve Reports delivered pursuant hereto, calculated in accordance
        with
        the Securities and Exchange Commission guidelines and using the previous
        90-day
        average of the Three-Year Strip Price for crude oil (WTI Cushing) and natural
        gas (Henry Hub), quoted on the New York Mercantile Exchange (or its successor),
        net of estimated production and future development costs, using prices and
        costs
        as of the date of estimation without future escalation, without giving effect
        to
        non-property related expenses such as general and administrative expenses,
        debt
        service, future income tax expense and depreciation, depletion and amortization,
        and discounted using an annual discount rate of 10%. PV-10 Value shall be
        adjusted to give effect to the Hedging Agreements of the Borrower and the
        Guarantors then in effect.

       

      
        
          
          

        

        
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      “Rate
        Management Transaction”
        shall
        mean any transaction (including an agreement with respect thereto) now existing
        or hereafter entered into between the Borrower and any Lender or affiliate
        thereof which is (a) an interest rate protection agreement, foreign
        currency exchange agreement or other interest or interest rate hedging agreement
        entered into in the ordinary course and not for speculative purposes or
        (b) a commodity price hedging agreement or arrangement entered into
        in the
        ordinary course and not for speculative purposes.

       

      “Register”
        shall
        have the meaning assigned to such term in Section 9.04(d).

       

      “Related
        Documents”
        shall
        mean and include individually, collectively, interchangeably and without
        limitation all promissory notes, credit agreements, loan agreements, guarantees,
        security agreements, mortgages, collateral mortgages, deeds of trust, and
        all
        other instruments and documents, whether now existing or hereafter entered
        into,
        executed in connection with the Indebtedness.

       

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

       

      “Release”
        shall
        mean any release, spill, emission, leak, injection, deposit, disposal,
        discharge, dispersal, leaching or migration of any Hazardous Materials into
        the
        environment or into or out of any real property of the Borrower, including
        the
        movement of Hazardous Materials through or in the air, soil, surface water,
        groundwater and/or land which could reasonably be expected to form the basis
        of
        an Environmental Liability against the Borrower.

       

      “Remedial
        Action”
        shall
        mean any action to (a) clean up, remove, treat or in any other way
        address
        Hazardous Materials in the environment, (b) prevent the Release or
        threat
        of Release or minimize the further Release of Hazardous Materials so they
        mitigate or do not endanger or threaten to endanger public health or welfare
        or
        the environment or (c) perform pre-remedial studies and investigations
        and
        post-remedial monitoring and care.

       

      “Repayment
        Date”
        shall
        have the meaning assigned to such term in Section 2.11.

       

      “Required
        Lenders”
        shall
        mean, at any time, Lenders having Loans and Commitments representing more
        than
        50% of the sum of all Loans outstanding and Commitments at such
        time.

       

      “Reserve
        Reports”
        shall
        mean the reports delivered to the Administrative Agent pursuant to Sections 5.01(e)
        and
(g).
        Until
        the Reserve Report dated as of June 30, 2005 is delivered to the
        Administrative Agent pursuant to Section
        5.01(g),
        “Reserve Reports” shall mean the Initial Reserve Reports.

       

      
        
          
          

        

        
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      “Restricted
        Person”
        shall
        mean the Borrower and each Subsidiary, excluding Unrestricted
        Subsidiaries.

       

      “Revolving
        Credit Agreement”
        shall
        mean the Second Amended and Restated Credit Agreement dated as of
        September 30, 2004, by and among the Borrower, CCBM, Hibernia National
        Bank, as administrative agent, Union Bank of California, N.A., as co-agent
        and
        Hibernia National Bank and Union Bank of California, N.A., as lenders, as
        amended by the First Amendment thereto dated as of October 29, 2004,
        and by
        the Second Amendment thereto dated as of April 27, 2005, and as further
        amended on the date hereof, as the same may be further amended, supplemented,
        refinanced, replaced or otherwise modified from time to time in accordance
        with
        this Agreement and the Intercreditor Agreement.

       

      “Secured
        Parties”
        shall
        have the meaning assigned to such term in the Collateral Documents.

       

      “Security
        Agreement”
        shall
        mean that certain Second Lien Stock Pledge and Security Agreement executed
        by
        the Borrower in favor of the Collateral Agent for the ratable benefit of
        the
        Secured Parties, of even date with this Agreement, affecting 100% of the
        outstanding stock of CCBM, as the same may be amended, supplemented, and/or
        restated from time to time and in effect.

       

      “Senior
        Subordinated Notes”
        shall
        mean the Debt represented by that certain Amended and Restated Note
        dated
        June 7, 2004, in the original principal amount of $27,702,426.55,
        executed
        by the Borrower in favor of Steelhead Investments Ltd. pursuant to the
        Securities Purchase Agreement dated as of December 15, 1999, as amended by
        the
        First Amendment thereto dated as of June 7, 2004 and by the Second
        Amendment thereto dated as of October 29, 2004.

       

      “Senior
        Subordinated Secured Notes”
        shall
        mean the Debt represented by those certain Notes dated May 31, 2005 in the
        original aggregate principal amount of $22,000,000, executed by the Borrower
        in
        favor of Steelhead Investments Ltd. pursuant to the Note Purchase Agreement
        dated as of October 29, 2004, as modified by the Assignment Agreement
        dated
        as of May 31, 2005.

       

      “Solvent”
        shall
        mean, when used with respect to any Person on a particular day, that on such
        date (a) the fair value of the property of such Person is greater
        than the
        total amount of liabilities, including contingent liabilities, of such Person,
        (b) the present fair salable value of the assets of such Person is
        not less
        than the amount that will be required to pay the probable liability of such
        Person on its debts as they become absolute and matured, (c) such
        Person is
        able to realize upon its assets and pay its debts and other liabilities,
        contingent obligations and other commitments as they mature in the ordinary
        course of business, (d) such Person does not intend to, and does not
        believe that it will, incur debts and liabilities beyond such Person’s ability
        to pay as such debts and liabilities mature, and (e) such Person is
        not
        engaged in business or a transaction, and is not about to engage in business
        or
        a transaction, for which such Person’s property would constitute unreasonably
        small capital after giving due consideration to the prevailing 

       

      
        
          
          

        

        
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        practice
          in the industry in which such person is engaged. In computing the amount
          of
          contingent liabilities at any time, it is intended that such liabilities
          will be
          computed at the amount which, in light of all of the facts and circumstances
          existing at such time, represents the amount that can be reasonably expected
          to
          become an actual or matured liability.

      

       

      “SPC”
        shall
        have the meaning assigned to such term in Section 9.04(i).

       

      “Statutory
        Reserves”
        shall
        mean a fraction (expressed as a decimal), the numerator of which is the number
        one and the denominator of which is the number one minus the aggregate of
        the
        maximum reserve percentages (including any marginal, special, emergency or
        supplemental reserves) expressed as a decimal established by the Board and
        any
        other banking authority, domestic or foreign, to which the Administrative
        Agent
        or any Lender (including any branch, affiliate, or other fronting office
        making
        or holding a Loan) is subject for Eurocurrency Liabilities (as defined in
        Regulation D of the Board). Eurodollar Loans shall be deemed to constitute
        Eurocurrency Liabilities (as defined in Regulation D of the Board)
        and to
        be subject to such reserve requirements without benefit of or credit for
        proration, exemptions or offsets that may be available from time to time
        to any
        Lender under such Regulation D. Statutory Reserves shall be adjusted
        automatically on and as of the effective date of any change in any reserve
        percentage.

       

      “Subject
        Business”
        shall
        mean the exploration, development, exploitation and production of natural
        gas
        and crude oil.

       

      “Subsidiaries”
        shall
        mean at any date with respect to any Person all the corporations of which
        such
        Person at such date, directly or indirectly, owns more than 50% of the
        outstanding capital stock (excluding directors’ qualifying shares), and
“Subsidiary” means any one of the Subsidiaries. Unless otherwise specified, all
        references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a
        Subsidiary or Subsidiaries of the Borrower.

       

      “Tangible
        Net Worth”
        shall
        mean, with respect to any Person, the total assets of such Person (other
        than
        with respect to the Borrower, its Unrestricted Subsidiaries), on a consolidated
        basis, exclusive of (a) those assets classified as intangible, including
        goodwill, patents, trademarks, trade names, copyrights, franchises and deferred
        charges, (b) treasury stock and minority interests in any Person,
        (c) cash set apart and held in sinking or other analogous funds established
        for the purpose of redemption or other retirement of capital stock, (d) to
        the extent not already deducted from total assets, allowances for depreciation,
        depletion, obsolescence and/or amortization of properties, uncollectible
        accounts, and contingent but probable liabilities as to which an amount can
        be
        established, (e) deferred taxes and (f) all assets arising
        from
        advances to officers, former officers or sales representatives of such Person
        or
        any of its Subsidiaries (other than with respect to the Borrower, its
        Unrestricted Subsidiaries) made outside the ordinary course of business;
        less
        total liabilities of such Person and its Subsidiaries (other than with respect
        to the Borrower, its Unrestricted Subsidiaries), on a consolidated basis,
        all of
        the above being determined in accordance with GAAP and, with 

       

      
        
          
          

        

        
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        respect
          to the Borrower, excluding the effect of any cumulative after-tax amounts
          of
          ceiling test write-downs pursuant to Rule 4.10 of Regulation S-X
          promulgated by the Securities and Exchange Commission and any balance sheet
          impact arising from the early extinguishment of long-term
          debt.

      

       

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

       

      “Three-Year
        Strip Price”
        shall
        mean, as of any date of determination, (a) for the 36-month period
        commencing with the month immediately following the month in which the date
        of
        determination occurs, the monthly futures contract prices for crude oil and
        natural gas for the 36 succeeding months as quoted on the New York Mercantile
        Exchange (or its successor) and (b) for periods after such 36-month
        period,
        the average of such quoted prices for the period from and including the 25th
        month in such 36-month period though the 36th month in such period.

       

      “Total
        Net Debt”
        shall
        have the meaning assigned to such term in Section 5.07(b).

       

      “Transactions”
        shall
        mean, collectively, (a) the execution, delivery and performance by
        the
        Borrower and each Guarantor of the Loan Documents to which they are a party
        and
        the making of the Borrowings hereunder, (b) the repayment of all amounts
        outstanding under the Revolving Credit Agreement, (c) the redemption
        and
        repayment of all amounts due or outstanding under the Existing Notes,
        (d) the amendment of the Revolving Credit Agreement pursuant to an
        amendment in substantially the form of Exhibit F
        and
        (e) the payment of related fees and expenses, including prepayment
        premiums
        in connection with the prepayment of the Senior Subordinated Notes.

       

      “Type”,
        when
        used in respect of any Loan or Borrowing, shall refer to the Rate by reference
        to which interest on such Loan or on the Loans comprising such Borrowing
        is
        determined. For purposes hereof, the term “Rate”
        shall
        mean the Adjusted LIBO Rate and the Alternate Base Rate.

       

      “Unrestricted
        Subsidiary”
        shall
        mean (a) any Subsidiary designated as an Unrestricted Subsidiary by
        the Borrower’s Board of Directors in compliance with the following
        sentence, and (b) any Subsidiary of an Unrestricted Subsidiary. The
        Board
        of Directors of the Borrower may at any time and from time to time designate
        any
        Subsidiary (other than CCBM or any other Guarantor) as an Unrestricted
        Subsidiary; provided
        that
        (i) no Default or Event of Default has occurred or is continuing at
        the
        time of such designation and after giving effect to such designation,
        (ii) immediately after such designation, no Restricted Person has
        any
        Liability to pay any Obligations of such Subsidiary, has in any way guaranteed
        any Obligations of such Subsidiary, or has any assets or properties (excluding
        a
        pledge of the equity interest in such Subsidiary) which are subject to any
        Encumbrance securing any Obligations of such Subsidiary, and (iii) notice
        of any such designation is promptly given to the Administrative Agent in
        writing.

       

      
        
          
          

        

        
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      “USA
        Patriot Act”
        shall
        mean The Uniting and Strengthening America by Providing Appropriate Tools
        Required to Intercept and Obstruct Terrorism Act of 2001 (Title III
        of Pub.
        L. No. 107-56 (signed into law October 26, 2001)).

       

      SECTION
        1.02.   Accounting
        Terms.
        All
        accounting terms not specifically defined herein shall be construed in
        accordance with GAAP, and all financial data submitted pursuant to this
        Agreement shall be prepared in accordance with GAAP.

       

      SECTION
        1.03.   Terms
        Generally.
        The
        definitions in Section 1.01
        shall
        apply equally to both the singular and plural forms of the terms defined.
        Whenever the context may require, any pronoun shall include the corresponding
        masculine, feminine and neuter forms. The words “include”, “includes” and
“including” shall be deemed to be followed by the phrase “without limitation”.
        The word “will” shall be construed to have the same meaning and effect as the
        word “shall”; and the words “asset” and “property” shall be construed as having
        the same meaning and effect and to refer to any and all tangible and intangible
        assets and properties, including cash, securities, accounts and contract
        rights.
        All references herein to Articles, Sections, Exhibits and Schedules shall
        be
        deemed references to Articles and Sections of, and Exhibits and Schedules
        to,
        this Agreement unless the context shall otherwise require. Except as otherwise
        expressly provided herein, any reference in this Agreement to any Loan Document
        shall mean such document as amended, restated, supplemented or otherwise
        modified from time to time.

       

      SECTION
        1.04.   Classification
        of Loans and Borrowings.
        For
        purposes of this Agreement, Loans and Borrowings may be classified and referred
        to by Type (e.g.,
        a
“Eurocurrency Loan” or a “Eurocurrency Borrowing”). 

       

      ARTICLE
        II  

       

      The
        Credits

       

      SECTION
        2.01.   Commitments.
        Subject
        to the terms and conditions and relying upon the representations and warranties
        herein set forth, each Lender agrees, severally and not jointly, to make
        a Loan
        to the Borrower on the Closing Date in a principal amount not to exceed its
        Commitment. Amounts paid or prepaid in respect of Loans may not be
        reborrowed.

       

      SECTION
        2.02.   Loans. (a)
        Each
        Loan
        shall be made as part of a Borrowing consisting of Loans made by the Lenders
        ratably in accordance with their applicable Commitments; provided,
        however,
        that
        the failure of any Lender to make any Loan shall not in itself relieve any
        other
        Lender of its obligation to lend hereunder (it being understood, however,
        that
        no Lender shall be responsible for the failure of any other Lender to make
        any
        Loan required to be made by such other Lender). The Loans comprising any
        Borrowing shall be in an aggregate principal amount that is an integral multiple
        of $1,000,000 and not less than $4,000,000.

       

      
        (b)
            Subject
          to Sections
          2.08
          and
2.14,
          each
          Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans
          as the
          Borrower may request pursuant to 

         

        
          
            
            

          

          
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          Section
            2.03.
            Each
            Lender may at its option make any Eurodollar Loan by causing any domestic
            or
            foreign branch or affiliate of such Lender to make such Loan; provided
            that any
            exercise of such option shall not affect the obligation of the Borrower
            to repay
            such Loan in accordance with the terms of this Agreement. Borrowings
            of more
            than one Type may be outstanding at the same time; provided,
            however,
            that
            the Borrower shall not be entitled to request any Borrowing that, if
            made, would
            result in more than six Eurodollar Borrowings outstanding hereunder at
            any time.
            For purposes of the foregoing, Borrowings having different Interest Periods,
            regardless of whether they commence on the same date, shall be considered
            separate Borrowings.

        

      

       

      (c)
          Each
        Lender shall make each Loan to be made by it hereunder on the proposed date
        thereof by wire transfer of immediately available funds to such account in
        New
        York City as the Administrative Agent may designate not later than 1:00 p.m.,
        New York City time, and the Administrative Agent shall promptly credit the
        amounts so received to an account designated by the Borrower in the applicable
        Borrowing Request or, if a Borrowing shall not occur on such date because
        any
        condition precedent herein specified shall not have been met, return the
        amounts
        so received to the respective Lenders.

       

      (d)
          Unless
        the Administrative Agent shall have received notice from a Lender prior to
        the
        date of any Borrowing that such Lender will not make available to the
        Administrative Agent such Lender’s portion of such Borrowing, the Administrative
        Agent may assume that such Lender has made such portion available to the
        Administrative Agent on the date of such Borrowing in accordance with
paragraph (c)
        above
        and the Administrative Agent may, in reliance upon such assumption, make
        available to the Borrower on such date a corresponding amount. If the
        Administrative Agent shall have so made funds available, then, to the extent
        that such Lender shall not have made such portion available to the
        Administrative Agent, such Lender and the Borrower severally agree to repay
        to
        the Administrative Agent forthwith on demand such corresponding amount together
        with interest thereon, for each day from the date such amount is made available
        to the Borrower to but excluding the date such amount is repaid to the
        Administrative Agent at (i) in the case of the Borrower, a rate per
        annum
        equal to the interest rate applicable at the time to the Loans comprising
        such
        Borrowing and (ii) in the case of such Lender, a rate determined by
        the
        Administrative Agent to represent its cost of overnight or short term funds
        (which determination shall be conclusive absent manifest error). If such
        Lender
        shall repay to the Administrative Agent such corresponding amount, such amount
        shall constitute such Lender’s Loan as part of such Borrowing for purposes of
        this Agreement.

       

      SECTION
        2.03.   Borrowing
        Procedure.
        In order
        to request the Borrowing to be made on the Closing Date, the Borrower shall
        notify the Administrative Agent of such request by telephone (a) in
        the
        case of a Eurodollar Borrowing, not later than 1:00 p.m., New York
        City
        time, three Business Days before such proposed Borrowing, and (b) in the
        case of
        an ABR Borrowing, not later than 1:00 p.m., New York City time, one
        Business Day before such proposed Borrowing. Such telephonic Borrowing Request
        shall be irrevocable, and shall be confirmed promptly by hand delivery or
        fax to
        the Administrative Agent of a written Borrowing Request and shall specify
        the
        following 

       

      
        
          
          

        

        
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        information:
          (i) whether such Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing;
          (ii) the date of such Borrowing (which shall be a Business Day); (iii)
          the
          number and location of the account to which funds are to be disbursed;
          (iv) the
          amount of such Borrowing; and (v) if such Borrowing is to be a Eurodollar
          Borrowing, the Interest Period with respect thereto; provided,
          however,
          that,
          notwithstanding any contrary specification in any Borrowing Request, each
          requested Borrowing shall comply with the requirements set forth in Section
          2.02.
          If no
          election as to the Type of Borrowing is specified in any such notice, then
          the
          requested Borrowing shall be an ABR Borrowing. If no Interest Period with
          respect to any Eurodollar Borrowing is specified in any such notice, then
          the
          Borrower shall be deemed to have selected an Interest Period of one month’s
          duration. The Administrative Agent shall promptly advise the applicable
          Lenders
          of any notice given pursuant to this Section
          2.03
          (and the
          contents thereof), and of each Lender’s portion of the requested
          Borrowing.

      

       

      SECTION
        2.04.   Evidence
        of Debt; Repayment of Loans. (a)
        The
        Borrower hereby unconditionally promises to pay to the Administrative Agent
        for
        the account of each Lender the principal amount of each Loan of such Lender
        as
        provided in Section 2.11.

       

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

       

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

       

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

       

      (e)
          Any
        Lender may request that Loans made by it hereunder be evidenced by a promissory
        note. In such event, the Borrower shall execute and deliver to such Lender
        a
        promissory note payable to such Lender and its registered assigns and in
        a form
        and substance reasonably acceptable to the Administrative Agent and the
        Borrower. Notwithstanding any other provision of this Agreement, in the event
        any Lender shall request and receive such a promissory note, the interests
        represented by such note shall at all times (including after any assignment
        of
        all or part of such interests pursuant to 

       

      
        
          
          

        

        
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        Section
          9.04)
          be
          represented by one or more promissory notes payable to the payee named
          therein
          or its registered assigns.

      

       

      SECTION
        2.05.   Fees.
        The
        Borrower agrees to pay to the Administrative Agent, for its own account,
        the
        non-refundable administrative fees set forth in the Fee Letter at the times
        and
        in the amounts specified therein.

       

      SECTION
        2.06.   Interest
        on Loans. (a)
        Subject
        to the provisions of Section
        2.07,
        the
        Loans comprising each ABR Borrowing shall bear interest (computed on the
        basis
        of the actual number of days elapsed over a year of 365 or 366 days, as the
        case
        may be, when the Alternate Base Rate is determined by reference to the Prime
        Rate and over a year of 360 days at all other times and calculated from and
        including the date of such Borrowing to but excluding the date of repayment
        thereof) at a rate per annum equal to the Alternate Base Rate plus the
        Applicable Percentage.

       

      (b)
          Subject
        to the provisions of Section
        2.07,
        the
        Loans comprising each Eurodollar Borrowing shall bear interest (computed
        on the
        basis of the actual number of days elapsed over a year of 360 days) at a
        rate
        per annum equal to the Adjusted LIBO Rate for the Interest Period in effect
        for
        such Borrowing plus the Applicable Percentage.

       

      (c)
          Interest
        on each Loan shall be payable on the Interest Payment Dates applicable to
        such
        Loan except as otherwise provided in this Agreement. The applicable Alternate
        Base Rate or Adjusted LIBO Rate for each Interest Period or day within an
        Interest Period, as the case may be, shall be determined by the Administrative
        Agent, and such determination shall be conclusive absent manifest
        error.

       

      SECTION
        2.07.   Default
        Interest.
        If the
        Borrower shall default in the payment of any principal of or interest on
        any
        Loan or any other amount due hereunder, by acceleration or otherwise, or
        under
        any other Loan Document, then, until such defaulted amount shall have been
        paid
        in full, to the extent permitted by law, all amounts outstanding under this
        Agreement and the other Loan Documents shall bear interest (after as well
        as
        before judgment), payable on demand, (a) in the case of principal, at the
        rate
        otherwise applicable to such Loan pursuant to Section
        2.06
        plus
        2.00% per annum and (b) in all other cases, at a rate per annum (computed
        on the basis of the actual number of days elapsed over a year of 365 or 366
        days, as the case may be, when determined by reference to the Prime Rate
        and
        over a year of 360 days at all other times) equal to the rate that would
        be
        applicable to an ABR Loan plus 2.00% per annum.

       

      SECTION
        2.08.   Alternate
        Rate of Interest.
        In the
        event, and on each occasion, that on the day two Business Days prior to the
        commencement of any Interest Period for a Eurodollar Borrowing the
        Administrative Agent shall have determined that dollar deposits in the principal
        amounts of the Loans comprising such Borrowing are not generally available
        in
        the London interbank market, or that the rates at which such dollar deposits
        are
        being offered will not adequately and fairly reflect the cost to any Lender
        of
        making or maintaining its Eurodollar Loan during such Interest Period, or
        that
        reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
        Administrative Agent shall, as soon as practicable thereafter, give written
        or
        fax notice of such determination to 

       

      
        
          
          

        

        
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        the
          Borrower and the Lenders. In the event of any such determination, until
          the
          Administrative Agent shall have advised the Borrower and the Lenders that
          the
          circumstances giving rise to such notice no longer exist, any request by
          the
          Borrower for a Eurodollar Borrowing pursuant to Section
          2.03
          or
2.10
          shall be
          deemed to be a request for an ABR Borrowing. Each determination by the
          Administrative Agent under this Section
          2.08
          shall be
          conclusive absent manifest error.

      

       

      SECTION
        2.09.   Termination
        of Commitments.
        The
        Commitments shall automatically terminate upon the earlier to occur of
        (i) the making of the Loans on the Closing Date and (ii) 5:00
        p.m.,
        New York City time, on July 31, 2005.

       

      SECTION
        2.10.   Conversion
        and Continuation of Borrowings.
        The
        Borrower shall have the right at any time upon prior irrevocable written
        notice
        (delivered by hand or by fax) (or telephone notice promptly confirmed by
        written
        notice (delivered by hand or by fax)) to the Administrative Agent (a) not
        later
        than 1:00 p.m., New York City time, one Business Day prior to conversion,
        to convert any Eurodollar Borrowing into an ABR Borrowing, (b) not later
        than
        1:00 p.m., New York City time, three Business Days prior to conversion
        or
        continuation, to convert any ABR Borrowing into a Eurodollar Borrowing or
        to
        continue any Eurodollar Borrowing as a Eurodollar Borrowing for an additional
        Interest Period, and (c) not later than 1:00 p.m., New York City time,
        three Business Days prior to conversion, to convert the Interest Period with
        respect to any Eurodollar Borrowing to another permissible Interest Period,
        subject in each case to the following:

       

      (i)
          each
        conversion or continuation shall be made pro rata among the Lenders in
        accordance with the respective principal amounts of the Loans comprising
        the
        converted or continued Borrowing;

       

      (ii)
          if
        less
        than all the outstanding principal amount of any Borrowing shall be converted
        or
        continued, then each resulting Borrowing shall satisfy the limitations specified
        in Sections
        2.02(a)
        and
2.02(b)
        regarding the principal amount and maximum number of Borrowings of the relevant
        Type;

       

      (iii)
          each
        conversion shall be effected by each Lender and the Administrative Agent
        by
        recording for the account of such Lender the new Loan of such Lender resulting
        from such conversion and reducing the Loan (or portion thereof) of such Lender
        being converted by an equivalent principal amount; accrued interest on any
        Eurodollar Loan (or portion thereof) being converted shall be paid by the
        Borrower at the time of conversion;

       

      (iv)
          if
        any
        Eurodollar Borrowing is converted at a time other than the end of the Interest
        Period applicable thereto, the Borrower shall pay, upon demand, any amounts
        due
        to the Lenders pursuant to Section
        2.15;

       

      (v)
          any
        portion of a Borrowing maturing or required to be repaid in less than one
        month
        may not be converted into or continued as a Eurodollar Borrowing;

       

      
        
          
          

        

        
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      (vi)
          any
        portion of a Eurodollar Borrowing that cannot be converted into or continued
        as
        a Eurodollar Borrowing by reason of the immediately preceding clause shall
        be
        automatically converted at the end of the Interest Period in effect for such
        Borrowing into an ABR Borrowing;

       

      (vii)
          no
        Interest Period may be selected for any Eurodollar Borrowing that would end
        later than a Repayment Date occurring on or after the first day of such Interest
        Period if, after giving effect to such selection, the aggregate outstanding
        amount of (A) the Eurodollar Borrowings with Interest Periods ending on or
        prior
        to such Repayment Date and (B) the ABR Borrowings would not be at least equal
        to
        the principal amount of Borrowings to be paid on such Repayment Date;
        and

       

      (viii)
          upon
        notice to the Borrower from the Administrative Agent given at the request
        of the
        Required Lenders, after the occurrence and during the continuance of a Default
        or Event of Default, no outstanding Loan may be converted into, or continued
        as,
        a Eurodollar Loan.

       

      Each
        notice pursuant to this Section
        2.10
        shall be
        irrevocable and shall refer to this Agreement and specify (i) the identity
        and
        amount of the Borrowing that the Borrower requests be converted or continued,
        (ii) whether such Borrowing is to be converted to or continued as a Eurodollar
        Borrowing or an ABR Borrowing, (iii) if such notice requests a conversion,
        the
        date of such conversion (which shall be a Business Day) and (iv) if such
        Borrowing is to be converted to or continued as a Eurodollar Borrowing, the
        Interest Period with respect thereto. If no Interest Period is specified
        in any
        such notice with respect to any conversion to or continuation as a Eurodollar
        Borrowing, the Borrower shall be deemed to have selected an Interest Period
        of
        one month’s duration. The Administrative Agent shall advise the Lenders of any
        notice given pursuant to this Section
        2.10
        and of
        each Lender’s portion of any converted or continued Borrowing. If the Borrower
        shall not have given notice in accordance with this Section
        2.10
        to
        continue any Eurodollar Borrowing into a subsequent Interest Period (and
        shall
        not otherwise have given notice in accordance with this Section
        2.10
        to
        convert such Eurodollar Borrowing), such Eurodollar Borrowing shall, at the
        end
        of the Interest Period applicable thereto (unless repaid pursuant to the
        terms
        hereof), automatically be continued into an ABR Borrowing.

       

      SECTION
        2.11.   Repayment
        of Borrowings. (a)
        The
        Borrower shall pay to the Administrative Agent, for the account of the Lenders,
        on the dates set forth below, or if any such date is not a Business Day,
        on the
        next preceding Business Day (each such date being called a “Repayment
        Date”),
        a
        principal amount of the Loans (as adjusted from time to time pursuant to
        Sections
        2.11(b)
        and
2.12)
        equal to
        the amount set forth below for such date, together in each case with accrued
        and
        unpaid interest on the principal amount to be paid to but excluding the date
        of
        such payment:

       

      
        	
                Repayment
                  Date

              	
                Amount

              
	
                September
                  30, 2005

              	
                $375,000

              
	
                December
                  31, 2005

              	
                $375,000

              


      

       

       

      
        
          
          

        

        
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                  Repayment
                    Date

                	
                  Amount

                
	
                  March
                    31, 2006

                	
                  $375,000

                
	
                  June
                    30, 2006

                	
                  $375,000

                
	
                  September
                    30, 2006

                	
                  $375,000

                
	
                  December
                    31, 2006

                	
                  $375,000

                
	
                  March
                    31, 2007

                	
                  $375,000

                
	
                  June
                    30, 2007

                	
                  $375,000

                
	
                  September
                    30, 2007

                	
                  $375,000

                
	
                  December
                    31, 2007

                	
                  $375,000

                
	
                  March
                    31, 2008

                	
                  $375,000

                
	
                  June
                    30, 2008

                	
                  $375,000

                
	
                  September
                    30, 2008

                	
                  $375,000

                
	
                  December
                    31, 2008

                	
                  $375,000

                
	
                  March
                    31, 2009

                	
                  $375,000

                
	
                  June
                    30, 2009

                	
                  $375,000

                
	
                  September
                    30, 2009

                	
                  $375,000

                
	
                  December
                    31, 2009

                	
                  $375,000

                
	
                  March
                    31, 2010

                	
                  $375,000

                
	
                  June
                    30, 2010

                	
                  $375,000

                
	
                  Maturity
                    Date

                	
                  $142,500,000

                


        

      

       

      (b)
          In
        the
        event and on each occasion that the Commitments shall be reduced or shall
        expire
        or terminate other than as a result of the making of a Loan, the installments
        payable on each Repayment Date shall be reduced pro rata by an aggregate
        amount
        equal to the amount of such reduction, expiration or termination.

       

      (c)
          To
        the
        extent not previously paid, all Loans shall be due and payable on the Maturity
        Date together with accrued and unpaid interest on the principal amount to
        be
        paid to but excluding the date of payment.

       

      (d)
          All
        repayments pursuant to this Section
        2.11
        shall be
        subject to Section 2.15,
        but
        shall otherwise be without premium or penalty.

       

      SECTION
        2.12.   Optional
        Prepayment. (a)
        The
        Borrower shall have the right at any time and from time to time to prepay
        any
        Borrowing, in whole or in part, upon at least three Business Days’ prior written
        or fax notice (or telephone notice promptly confirmed by written or fax notice)
        in the case of Eurodollar Loans, or written or fax notice (or telephone notice
        promptly confirmed by written or fax notice) at least one Business Day prior
        to
        the date of prepayment in the case of ABR Loans, to the Administrative Agent
        before 1:00 p.m., New York City time; provided,
        however,
        that
        each partial prepayment shall be in an amount that is an integral multiple
        of
        $1,000,000 and not less than $4,000,000.

       

      (b)
          Optional
        prepayments of Loans shall be applied pro rata against the remaining scheduled
        installments of principal due in respect of the Loans under this Section 2.11.

       

      
        
          
          

        

        
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      (c)
          Optional
        prepayments of Loans at any time during the applicable periods set forth
        in this
Section
        2.12(c)
        shall be
        accompanied by a payment of a prepayment fee in an amount (expressed as a
        percentage of the principal amount of the Loans to be repaid) equal to
        (i) 2.00%, if such prepayment occurs on or prior to the date that
        is one
        year after the Closing Date or (ii) 1.00%, if such prepayment occurs
        after
        the date that is one year after the Closing Date, but on or prior to the
        date
        that is two years after the Closing Date.

       

      (d)
          Each
        notice of prepayment shall specify the prepayment date and the principal
        amount
        of each Borrowing (or portion thereof) to be prepaid, shall be irrevocable
        and
        shall commit the Borrower to prepay such Borrowing by the amount stated therein
        on the date stated therein. All prepayments under this Section
        2.12
        shall be
        subject to Section
        2.15
        but
        otherwise without premium or penalty, except as provided in Section
        2.12(c).
        All
        prepayments under this Section
        2.12
        shall be
        accompanied by accrued and unpaid interest on the principal amount to be
        prepaid
        to but excluding the date of payment. Notwithstanding anything to the contrary
        contained in this Agreement, the Borrower may rescind any notice of prepayment
        under this Section 2.12
        if such
        prepayment would have resulted from a refinancing of the Loans, which
        refinancing shall not be consummated or shall otherwise be delayed.

       

      SECTION
        2.13.   Reserve
        Requirements; Change in Circumstances. (a)
        Notwithstanding
        any other provision of this Agreement, if any Change in Law shall impose,
        modify
        or deem applicable any reserve, special deposit or similar requirement against
        assets of, deposits with or for the account of or credit extended by any
        Lender
        (except any such reserve requirement which is reflected in the Adjusted LIBO
        Rate) or shall impose on such Lender or the London interbank market any other
        condition affecting this Agreement or Eurodollar Loans made by such Lender,
        and
        the result of any of the foregoing shall be to increase the cost to such
        Lender
        of making or maintaining any Eurodollar Loan or to reduce the amount of any
        sum
        received or receivable by such Lender hereunder (whether of principal, interest
        or otherwise) by an amount deemed by such Lender to be material, then the
        Borrower will pay to such Lender such additional amount or amounts as will
        compensate such Lender for such additional costs incurred or reduction
        suffered.

       

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

       

      (c)
          If
        any
        Lender claims compensation under this Section 2.13, such Lender shall
        simultaneously furnish to the Borrower a certificate of such Lender setting
        

       

      
        
          
          

        

        
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        forth
          (i) the amount or amounts necessary to compensate such Lender or
          its
          holding company, as applicable, as specified in paragraph
          (a)
          or
(b)
          above
          and (ii) in reasonable detail the basis for, and the calculation
          of, such
          additional amount or amounts, which certificate shall be conclusive absent
          manifest error. The Borrower shall pay such Lender the amount shown as
          due on
          any such certificate delivered to the Borrower within 15 days after its
          receipt
          of the same.

      

       

      (d)
          Failure
        or delay on the part of any Lender to demand compensation for any increased
        costs or reduction in amounts received or receivable or reduction in return
        on
        capital shall not constitute a waiver of such Lender’s right to demand such
        compensation; provided
        that the
        Borrower shall not be under any obligation to compensate any Lender under
        paragraph (a)
        or
(b)
        above
        with respect to increased costs or reductions with respect to any period
        prior
        to the date that is 120 days prior to such request; provided further
        that the
        foregoing limitation shall not apply to any increased costs or reductions
        arising out of the retroactive application of any Change in Law within such
        120-day period. 

       

      SECTION
        2.14.   Change
        in Legality. (a)
        Notwithstanding
        any other provision of this Agreement, if any Change in Law shall make it
        unlawful for any Lender to make or maintain any Eurodollar Loan or to give
        effect to its obligations as contemplated hereby with respect to any Eurodollar
        Loan, then, by written notice to the Borrower and to the Administrative
        Agent:

       

      (i)
          such
        Lender may declare that Eurodollar Loans will not thereafter (for the duration
        of such unlawfulness) be made by such Lender hereunder (or be continued for
        additional Interest Periods and ABR Loans will not thereafter (for such
        duration) be converted into Eurodollar Loans), whereupon any request for
        a
        Eurodollar Borrowing (or to convert an ABR Borrowing to a Eurodollar Borrowing
        or to continue a Eurodollar Borrowing for an additional Interest Period)
        shall,
        as to such Lender only, be deemed a request for an ABR Loan (or a request
        to
        continue an ABR Loan as such for an additional Interest Period or to convert
        a
        Eurodollar Loan into an ABR Loan, as the case may be), unless such declaration
        shall be subsequently withdrawn; and

       

      (ii)
          such
        Lender may require that all outstanding Eurodollar Loans made by it be converted
        to ABR Loans, in which event all such Eurodollar Loans shall be automatically
        converted to ABR Loans as of the effective date of such notice as provided
        in
paragraph
        (b)
        below.

       

      In
        the
        event any Lender shall exercise its rights under (i) or (ii) above, all payments
        and prepayments of principal that would otherwise have been applied to repay
        the
        Eurodollar Loans that would have been made by such Lender or the converted
        Eurodollar Loans of such Lender shall instead be applied to repay the ABR
        Loans
        made by such Lender in lieu of, or resulting from the conversion of, such
        Eurodollar Loans.

       

      (b)
          For
        purposes of this Section
        2.14,
        a
        notice to the Borrower by any Lender shall be effective as to each Eurodollar
        Loan made by such Lender, if lawful, on 

       

      
        
          
          

        

        
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        the
          last
          day of the Interest Period then applicable to such Eurodollar Loan; in
          all other
          cases such notice shall be effective on the date of receipt by the
          Borrower.

      

       

      SECTION
        2.15.   Indemnity.
        The
        Borrower shall indemnify each Lender against any loss or expense that such
        Lender may sustain or incur as a consequence of (a) any event, other
        than a
        default by such Lender in the performance of its obligations hereunder, which
        results in (i) such Lender receiving or being deemed to receive any
        amount
        on account of the principal of any Eurodollar Loan prior to the end of the
        Interest Period in effect therefor, (ii) the conversion of any Eurodollar
        Loan to an ABR Loan, or the conversion of the Interest Period with respect
        to
        any Eurodollar Loan, in each case other than on the last day of the Interest
        Period in effect therefor, or (iii) any Eurodollar Loan to be made
        by such
        Lender (including any Eurodollar Loan to be made pursuant to a conversion
        or
        continuation under Section 2.10)
        not
        being made after notice of such Loan shall have been given by the Borrower
        hereunder (any of the events referred to in this clause (a)
        being
        called a “Breakage
        Event”)
        or
        (b) any default in the making of any payment or prepayment required
        to be
        made hereunder. In the case of any Breakage Event, such loss shall include
        an
        amount equal to the excess, as reasonably determined by such Lender, of (i)
        its
        cost of obtaining funds for the Eurodollar Loan that is the subject of such
        Breakage Event for the period from the date of such Breakage Event to the
        last
        day of the Interest Period in effect (or that would have been in effect)
        for
        such Loan over (ii) the amount of interest likely to be realized by such
        Lender
        in redeploying the funds released or not utilized by reason of such Breakage
        Event for such period. A certificate of any Lender setting forth any amount
        or
        amounts which such Lender is entitled to receive pursuant to this Section
        2.15
        shall be
        delivered to the Borrower and shall be conclusive absent manifest error.
        The
        Borrower shall pay such Lender the amount shown as due on any such certificate
        delivered to the Borrower within 15 days after its receipt of the
        same.

       

      SECTION
        2.16.   Pro
        Rata Treatment.
        Except
        as required under Section 2.14,
        each
        Borrowing, each payment or prepayment of principal of any Borrowing, each
        payment of interest on the Loans, each reduction of the Commitments and each
        conversion of any Borrowing to or continuation of any Borrowing as a Borrowing
        of any Type shall be allocated pro rata among the Lenders in accordance with
        their respective Commitments (or, if such Commitments shall have expired
        or been
        terminated, in accordance with the respective principal amounts of their
        outstanding Loans). Each Lender agrees that in computing such Lender’s portion
        of any Borrowing to be made hereunder, the Administrative Agent may, in its
        discretion, round each Lender’s percentage of such Borrowing to the next higher
        or lower whole dollar amount.

       

      SECTION
        2.17.   Sharing
        of Setoffs.
        Each
        Lender agrees that if it shall, through the exercise of a right of banker’s
        lien, setoff or counterclaim against the Borrower or any Guarantor, or pursuant
        to a secured claim under Section 506 of Title 11 of the United
        States
        Code or other security or interest arising from, or in lieu of, such secured
        claim, received by such Lender under any applicable bankruptcy, insolvency
        or
        other similar law or otherwise, or by any other means, obtain payment (voluntary
        or involuntary) in respect of any Loan or Loans as a result of which the
        unpaid
        principal portion of its Loans shall be proportionately less than the unpaid
        principal portion of the Loans of any other Lender, it shall be deemed
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        such
          other Lender at face value, and shall promptly pay to such other Lender
          the
          purchase price for, a participation in the Loans of such other Lender,
          so that
          the aggregate unpaid principal amount of the Loans and participations in
          Loans
          held by each Lender shall be in the same proportion to the aggregate unpaid
          principal amount of all Loans then outstanding as the principal amount
          of its
          Loans prior to such exercise of banker’s lien, setoff or counterclaim or other
          event was to the principal amount of all Loans outstanding prior to such
          exercise of banker’s lien, setoff or counterclaim or other event; provided,
          however,
          that if
          any such purchase or purchases or adjustments shall be made pursuant to
          this
Section
          2.17
          and the
          payment giving rise thereto shall thereafter be recovered, such purchase
          or
          purchases or adjustments shall be rescinded to the extent of such recovery
          and
          the purchase price or prices or adjustment restored without interest. The
          Borrower expressly consents to the foregoing arrangements and agrees that
          any
          Lender holding a participation in a Loan deemed to have been so purchased
          may
          exercise any and all rights of banker’s lien, setoff or counterclaim with
          respect to any and all moneys owing by the Borrower to such Lender by reason
          thereof as fully as if such Lender had made a Loan directly to the Borrower
          in
          the amount of such participation.

      

       

      SECTION
        2.18.   Payments. (a)
        The
        Borrower shall make each payment (including principal of or interest on any
        Borrowing or any fees or other amounts) hereunder and under any other Loan
        Document not later than 1:00 p.m., New York City time, on the date
        when due
        in immediately available Dollars, without setoff, defense or counterclaim.
        Each
        such payment shall be made to the Administrative Agent at its offices at
        Eleven
        Madison Avenue, New York, NY 10010. The Administrative Agent shall
        promptly
        distribute to each Lender any payments received by the Administrative Agent
        on
        behalf of such Lender.

       

      (b)
          Except
        as
        otherwise expressly provided herein, whenever any payment (including principal
        of or interest on any Borrowing or any fees or other amounts) hereunder or
        under
        any other Loan Document shall become due, or otherwise would occur, on a
        day
        that is not a Business Day, such payment may be made on the next succeeding
        Business Day, and such extension of time shall in such case be included in
        the
        computation of interest or fees, if applicable.

       

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

       

      
        
          
          

        

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

       

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

       

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

       

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

       

      (f)
          If
        the
        Administrative Agent or a Lender determines that it has received a refund
        of any
        Indemnified Taxes or Other Taxes as to which it has been indemnified by the
        Borrower or with respect to which the Borrower has paid additional amounts
        pursuant to this Section
        2.19,
        it
        shall pay over such refund to the Borrower (but only to the extent of indemnity
        payments made, or additional amounts paid, by the Borrower under this
Section
        2.19
        with
        respect to the Indemnified Taxes or Other Taxes giving rise to such refund),
        net
        of all out-of-pocket expenses of the Administrative Agent or such Lender
        and
        without interest (other than any interest paid by the relevant Governmental
        Authority with respect to such refund); provided,
        that
        the Borrower, upon the request of the Administrative Agent or such Lender,
        agrees to repay the amount paid over to the Borrower (plus any penalties,
        interest or other charges imposed by the relevant Governmental Authority)
        to the
        Administrative Agent or such Lender in the event the Administrative Agent
        or
        such Lender is required to repay such refund to such Governmental Authority.
        This Section 2.19
        shall
        not be construed to require the Administrative Agent or any Lender to make
        available its tax returns (or any other 

       

      
        
          
          

        

        
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        information
          relating to its taxes which it deems confidential) to the Borrower or any
          other
          Person.

      

       

      SECTION
        2.20.   Assignment
        of Commitments Under Certain Circumstances; Duty to Mitigate. (a)
        In
        the
        event (i) any Lender delivers a certificate requesting compensation pursuant
        to
Section
        2.13,
        (ii)
        any Lender delivers a notice described in Section
        2.14,
        (iii)
        the Borrower is required to pay any additional amount to any Lender or any
        Governmental Authority on account of any Lender pursuant to Section 2.19
        or (iv)
        any Lender refuses to consent to any amendment, waiver or other modification
        of
        any Loan Document requested by the Borrower that requires the consent of
        a
        greater percentage of the Lenders than the Required Lenders and such amendment,
        waiver or other modification is consented to by the Required Lenders, the
        Borrower may, at its sole expense and effort (including with respect to the
        processing and recordation fee referred to in Section
        9.04(b)),
        upon
        notice to such Lender and the Administrative Agent, require such Lender to
        transfer and assign, without recourse (in accordance with and subject to
        the
        restrictions contained in Section 9.04),
        all of
        its interests, rights and obligations under this Agreement to an assignee
        that
        shall assume such assigned obligations (which assignee may be another Lender,
        if
        a Lender accepts such assignment); provided
        that
        (x) such assignment shall not conflict with any law, rule or regulation
        or
        order of any court or other Governmental Authority having jurisdiction,
        (y) the Borrower shall have received the prior written consent of
        the
        Administrative Agent, which consent shall not unreasonably be withheld or
        delayed, and (z) the Borrower or such assignee shall have paid to
        the
        affected Lender in immediately available funds an amount equal to the sum
        of the
        principal of and interest accrued to the date of such payment on the outstanding
        Loans of such Lender plus all other amounts accrued for the account of such
        Lender hereunder with respect thereto (including any amounts under Sections 2.13
        and
2.15);
        provided further
        that, if
        prior to any such transfer and assignment the circumstances or event that
        resulted in such Lender’s claim for compensation under Section 2.13,
        notice
        under Section 2.14
        or the
        amounts paid pursuant to Section 2.19,
        as the
        case may be, cease to cause such Lender to suffer increased costs or reductions
        in amounts received or receivable or reduction in return on capital, or cease
        to
        have the consequences specified in Section 2.14,
        or
        cease to result in amounts being payable under Section 2.19,
        as the
        case may be (including as a result of any action taken by such Lender pursuant
        to paragraph (b)
        below),
        or if such Lender shall waive its right to claim further compensation under
        Section 2.13
        in
        respect of such circumstances or event or shall withdraw its notice under
        Section 2.14
        or shall
        waive its right to further payments under Section 2.19
        in
        respect of such circumstances or event or shall consent to the proposed
        amendment, waiver, consent or other modification, as the case may be, then
        such
        Lender shall not thereafter be required to make any such transfer and assignment
        hereunder. Each Lender hereby grants to the Administrative Agent an irrevocable
        power of attorney (which power is coupled with an interest) to execute and
        deliver, on behalf of such Lender as assignor, any Assignment and Acceptance
        necessary to effectuate any assignment of such Lender’s interests hereunder in
        the circumstances contemplated by this Section 2.20(a).

       

      (b)
          If
        (i) any Lender shall request compensation under Section 2.13,
        (ii) any Lender delivers a notice described in Section 2.14
        or
        (iii) the Borrower is 

       

      
        
          
          

        

        
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        required
          to pay any additional amount to any Lender or any Governmental Authority
          on
          account of any Lender, pursuant to Section 2.19,
          then
          such Lender shall use reasonable efforts (which shall not require such
          Lender to
          incur an unreimbursed loss or unreimbursed cost or expense or otherwise
          take any
          action inconsistent with its internal policies or legal or regulatory
          restrictions or suffer any disadvantage or burden deemed by it to be
          significant) (x) to file any certificate or document reasonably
          requested
          in writing by the Borrower or (y) to assign its rights and delegate
          and
          transfer its obligations hereunder to another of its offices, branches
          or
          affiliates, if such filing or assignment would reduce its claims for
          compensation under Section 2.13
          or
          enable it to withdraw its notice pursuant to Section 2.14
          or would
          reduce amounts payable pursuant to Section 2.19,
          as the
          case may be, in the future. The Borrower hereby agrees to pay all reasonable
          costs and expenses incurred by any Lender in connection with any such filing
          or
          assignment, delegation and transfer.

      

       

      ARTICLE
        III  

       

      Conditions
        Precedent

       

      SECTION
        3.01.   Conditions
        Precedent to Making of Loans.
        The
        obligation of the Lenders to make Loans hereunder shall be subject to the
        satisfaction of the following conditions precedent on or prior to the Closing
        Date:

       

      (a)
          The
        Borrower and each Guarantor that is to be a party thereto shall have executed
        and delivered to the Administrative Agent this Agreement, the Mortgages,
        the
        Security Agreement and all other documents required by this Agreement (including
        a promissory note that complies with the requirements of Section 2.04(e)
        in favor
        of each Lender that has requested a promissory note), all in form and substance
        and in such number of counterparts as may be required by the Administrative
        Agent;

       

      (b)
          CCBM
        shall have executed and delivered to the Administrative Agent this Agreement,
        the Guarantee, and all other documents required by this Agreement, all in
        form
        and substance and in such number of counterparts as may be required by the
        Administrative Agent;

       

      (c)
          The
        representations, warranties, and covenants of the Borrower as set forth in
        this
        Agreement, or in any Related Document furnished to the Administrative Agent
        and/or any Lender in connection herewith, shall be and remain true and correct
        as of such date (except to the extent specifically limited to a specified
        date);

       

      (d)
          The
        Administrative Agent shall have received favorable legal opinions of
        (i) counsel to the Borrower and CCBM covering the transactions contemplated
        by this Agreement and (ii) special Louisiana counsel to the Administrative
        Agent and Collateral Agent covering the enforceability and recordability
        of the
        Mortgage relating to properties in Louisiana, in each case, in form, scope
        and
        substance satisfactory to the Administrative Agent;

       

      
        
          
          

        

        
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      (e)
          The
        Administrative Agent shall have received certified resolutions of the Borrower
        and CCBM authorizing the execution of all documents and instruments contemplated
        by this Agreement;

       

      (f)
          The
        Administrative Agent shall have received all fees, charges and expenses which
        are due and payable as specified in this Agreement and any Related Documents
        to
        be entered into on or prior to the Closing Date, including, to the extent
        invoiced, reimbursement or payment of all out-of-pocket expenses required
        to be
        reimbursed or paid by the Borrower hereunder, under any Related Document
        to be
        entered into on or prior to the Closing Date or under any engagement or fee
        letter between the Borrower and the Administrative Agent relating to the
        credit
        facilities contemplated hereby;

       

      (g)
          No
        Default or Event of Default shall exist or shall result from the making of
        a
        Loan;

       

      (h)
          The
        Administrative Agent shall have received the articles of incorporation and
        bylaws, as amended, of each of the Borrower and CCBM ((x) in the case
        of
        such articles of incorporation, certified as of a recent date by the Secretary
        of State of the state of its organization and together with a certificate
        as to
        the good standing of each of the Borrower and CCBM as of a recent date, from
        such Secretary of State and (y) in the case of such bylaws, certified
        by
        the Secretary or Assistant Secretary of the Borrower and CCBM and together
        with
        such incumbency certificates as the Administrative Agent shall reasonably
        request), and the Administrative Agent’s counsel shall have reviewed the
        foregoing documents and shall be satisfied with the validity, due authorization
        and enforceability thereof and of all Related Documents and with all other
        legal
        matters incident to this Agreement, the Borrowings and extensions of credit
        hereunder and the Related Documents;

       

      (i)
          The
        Administrative Agent shall have received evidence acceptable to it and its
        counsel that the security interests created pursuant to the Collateral Documents
        shall have a first priority position, subject only to Permitted Encumbrances
        and
        the Intercreditor Agreement;

       

      (j)
          The
        Borrower shall have complied with the procedures set forth in this Agreement
        for
        the making of Loans, including delivery to the Administrative Agent of a
        notice
        of Borrowing as required by Section 2.03;

       

      (k)
          There
        shall have occurred no Material Adverse Effect since December 31,
        2004;

       

      (l)
          The
        Lenders shall be reasonably satisfied with their review prior to the date
        hereof
        of all environmental matters related to the Borrower and the Mortgaged
        Properties;

       

      
        
          
          

        

        
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      (m)
          The
        Borrower shall have delivered to the Administrative Agent evidence reasonably
        satisfactory to the Administrative Agent that the Borrower is carrying insurance
        as required by Section 4.06;

       

      (n)
          To
        the
        extent requested by Administrative Agent and required by the Loan Documents,
        the
        Borrower shall have executed and delivered to the Administrative Agent blank
        form letters in lieu of division orders, in form and substance satisfactory
        to
        the Administrative Agent;

       

      (o)
          The
        Administrative Agent shall have received a copy of the Initial Reserve Reports,
        and the substance of such reports shall be satisfactory to the
        Lenders;

       

      (p)
          The
        Administrative Agent shall have received title opinions from counsel to the
        Borrower (or other title information reasonably acceptable to the Administrative
        Agent), dated as of a date reasonably acceptable to the Administrative Agent
        and
        covering the oil and gas properties of the Borrower and CCBM for which title
        opinions or other title information has been provided pursuant to the Revolving
        Credit Agreement, which opinions (or other title information reasonably
        acceptable to the Administrative Agent) must satisfy (in the Administrative
        Agent’s reasonable discretion) the first sentence of Section 4.03;

       

      (q)
          The
        Administrative Agent shall have received evidence acceptable to it and its
        counsel that all principal, premium, if any, interest, fees and other amounts
        due or outstanding under the Existing Notes shall have been paid in full
        and all
        guarantees and security, if any, in support thereof discharged and released.
        Immediately after giving effect to the Transactions and the other transactions
        contemplated hereby, the Borrower and its Subsidiaries shall have outstanding
        no
        Debt or preferred stock other than (i) Indebtedness outstanding under
        this
        Agreement, (ii) Debt outstanding under the Revolving Credit Agreement
        (it
        being acknowledged and agreed that the Borrower intends to repay all amounts
        outstanding under the Revolving Credit Agreement on or about the Closing
        Date)
        and (iii) Debt set forth on Schedule 6.05;

       

      (r)
          The
        Administrative Agent shall have received evidence acceptable to the
        Administrative Agent and its counsel that the Revolving Credit Agreement
        has
        been amended pursuant to an amendment in substantially the form of Exhibit F;

       

      (s)
          The
        Administrative Agent shall have received a certificate, dated the date hereof
        and signed by the chief financial officer of the Borrower, confirming compliance
        with the conditions precedent set forth in paragraphs (c)
        and
(g)
        of this
Section 3.01;

       

      (t)
          The
        Lenders shall have received, to the extent requested, all documentation and
        other information required by regulatory authorities under 

       

      
        
          
          

        

        
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        applicable
          “know your customer” and anti-money laundering rules and regulations, including
          the USA Patriot Act; 

      

       

      (u)
          The
        Intercreditor Agreement shall have been duly executed by each of the parties
        thereto, and shall be in full force and effect; and

       

      (v)
          The
        Collateral Agent shall have received a Perfection Certificate with respect
        to
        the Borrower and the Guarantors dated the Closing Date and duly executed
        by the
        chief financial officer of the Borrower, and shall have received the results
        of
        a search of the Uniform Commercial Code filings (or equivalent filings) made
        with respect to the Borrower and the Guarantors in the states (or other
        jurisdictions) of formation of such Persons, in which the chief executive
        office
        of each such Person is located and in the other jurisdictions in which such
        persons maintain Mortgaged Properties, in each case as indicated on such
        Perfection Certificate, together with copies of the financing statements
        (or
        similar documents) disclosed by such search, and accompanied by evidence
        satisfactory to the Collateral Agent that the Encumbrances indicated in any
        such
        financing statement (or similar document) would be permitted under Section 6.04
        or have
        been or will be contemporaneously released or terminated.

       

      The
        Administrative Agent and the Lenders reserve the right, in their sole
        discretion, to waive any one or more of the foregoing conditions
        precedent.

       

      ARTICLE
        IV  

       

      Representations
        and Warranties

       

      The
        Borrower represents and warrants as of the Closing Date to the Administrative
        Agent and the Lenders as follows:

       

      SECTION
        4.01.   Corporate
        Authority of the Borrower.
        The
        Borrower is a corporation duly created, validly existing, and in good standing
        under the laws of the state its incorporation, and is duly qualified and
        in good
        standing as foreign corporation in Louisiana and all other jurisdictions
        where
        the failure to qualify would have an adverse effect upon its ability to perform
        its obligations under this Agreement and all Related Documents to which it
        is a
        party. The Borrower has the corporate power to enter into this Agreement,
        execute the Mortgages, the Security Agreement, the Intercreditor Agreement
        and
        each other Loan Document to which it is a party and to grant the liens and
        security interests in the Collateral in the manner and for the purpose
        contemplated by the Collateral Documents. The Borrower has the corporate
        power
        to perform its obligations hereunder and under the Loan Documents and Related
        Documents. The execution, delivery, and performance by the Borrower of the
        Loan
        Documents and Related Documents have all been duly authorized by all necessary
        corporate or company action, and do not and will not result in any violation
        by
        the Borrower of any provision of any law, rule, regulation, order, writ,
        judgment, decree, determination or award presently in effect having
        applicability to the Borrower, or the articles of incorporation and bylaws
        of
        the Borrower. Except as set forth in Schedule 4.01
        attached
        hereto, the making and 

       

      
        
          
          

        

        
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        performance
          by the Borrower of the Loan Documents and Related Documents do not and
          will not
          result in a breach of or constitute a default under the Revolving Credit
          Agreement or any material indenture or other loan or credit agreement or
          any
          other material agreement or instrument to which the Borrower is a party
          or by
          which it may be bound or affected, or result in, or require, the creation
          or
          imposition of any mortgage, deed of trust, pledge, lien, security interest
          or
          other charge or encumbrance of any nature (other than as contemplated by
          the
          Related Documents) upon or with respect to any of the properties now owned
          or
          hereafter acquired by the Borrower. Each of the Loan Documents and Related
          Documents to which the Borrower is a party constitutes a legal, valid and
          binding obligation of the Borrower, enforceable in accordance with its
          terms,
          subject to applicable bankruptcy, insolvency, reorganization, moratorium
          or
          other laws affecting creditors’ rights generally and subject to general
          principles of equity, regardless of whether considered in a proceeding
          in equity
          or at law.

      

       

      SECTION
        4.02.   Financial
        Statements.
        The
        balance sheet of the Borrower at December 31, 2004 and the related
        statements of income and retained earnings for the year then ended, copies
        of
        which have been delivered to the Administrative Agent, fairly present in
        all
        material respects the financial condition of the Borrower at the date and
        for
        the period thereof. Such financial statements were audited by and accompanied
        by
        the unqualified opinion of Pannell Kerr Forster of Texas, P.C., independent
        public accountants. Such financial statements were prepared in conformity
        with
        GAAP and, except as otherwise disclosed to the Administrative Agent in writing
        prior to the date hereof, applied on a basis consistent with the preceding
        year.
        No Material Adverse Effect with respect to the Borrower and its Subsidiaries,
        taken as a whole, has occurred since December 31, 2004.

       

      SECTION
        4.03.   Title
        to Mortgaged Properties.
        Except
        as set forth on Schedule 4.03
        attached
        hereto, the Borrower has Defensible Title to each Mortgaged Property having
        a
        book cost in excess of $200,000 (except to the extent that (a) such
        assets
        have thereafter been disposed of in compliance with this Agreement or
        (b) leases for such property have expired pursuant to their terms),
        in each
        case free and clear of all Encumbrances (other than Permitted Encumbrances),
        except (i) Encumbrances for taxes not yet due and payable or, if payable,
        that are being contested in good faith in the ordinary course of business,
        (ii) statutory Encumbrances (including materialmen’s, mechanic’s,
        repairmen’s, landlord’s and other similar encumbrances) arising in the ordinary
        course of business to secure payments not yet due and payable or, if payable,
        that are being contested in good faith in the ordinary course of business,
        (iii) easements, restrictions, reservations or other encumbrances,
        as well
        as such imperfections or irregularities of title, if any, as are not material,
        (iv) obligations or duties to any municipality or public authority
        with
        respect to any franchise, grant, license or permit and all applicable laws,
        rules, regulations and orders of any Governmental Authority, (v) all
        lessors’ royalties, overriding royalties, net profits interests, production
        payments, carried interests, reversionary interests and other burdens on
        or
        deductions from the proceeds of production, (vi) the terms and conditions
        of joint operating agreements and other oil and gas contracts, (vii) all
        rights to consent by, required notices to, and filings with or other actions
        by
        governmental or tribal entities, if any, in connection with the change of
        ownership or control of an interest in federal, state, tribal or other domestic
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        oil
          and
          gas leases, if the same are customarily obtained subsequent to such change
          of
          ownership or control, but only insofar as such consents, notices, filings
          and
          other actions relate to the transactions contemplated by this Agreement,
          (viii) any preferential purchase rights, (ix) required third
          party
          consents to assignment, (x) conventional rights of reassignment
          prior to
          abandonment and (xi) the terms and provisions of oil and gas leases,
          unit
          agreements, pooling agreements, and other documents creating interests
          comprising the oil and gas properties; provided,
          however,
          the
          exceptions described in clauses (iv)
          through
(xi)
          inclusive above are qualified to include only those exceptions in each
          case
          which do not operate to (A) reduce the net revenue interest of the
          Borrower
          below that set forth on Schedule 4.03,
          (B) increase the proportionate share of costs and expenses of leasehold
          operations attributable to or to be borne by the working interest of the
          Borrower above that set forth on Schedule 4.03
          without
          a proportionate increase in the net revenue interest of the Borrower or
          (C) increase the working interest of the Borrower above that set
          forth on
Schedule 4.03
          without
          a proportionate increase in the net revenue interest of the Borrower, and,
          provided further
          that the
          foregoing defects, limitations, liens and encumbrances, whether individually
          material or not, do not in the aggregate create a Material Adverse Effect
          upon
          the Borrower (the categories of exceptions in clauses (iv)
          through
(xi),
          as so
          qualified and as any such exceptions may exist from time to time, being
          referred
          to as the “Designated
          Title Exceptions”).
          The
          Mortgages constitute legal, valid and perfected first Encumbrances on the
          property interests covered thereby, subject only to Designated Title Exceptions,
          Permitted Encumbrances, the Intercreditor Agreement, and matters disclosed
          on
Schedule 4.03.
          Further, as of the Closing Date, all oil and gas properties subject to
          mortgages
          pursuant to the Revolving Credit Agreement are Mortgaged
          Properties.

      

       

      SECTION
        4.04.   Litigation.
        Other
        than as set forth in Schedule 4.04,
        there
        are no legal actions, suits or proceedings pending or, to the best knowledge
        of
        the Borrower, threatened against or affecting the Borrower, or any of its
        properties before any court or administrative agency (federal, state or local),
        which could reasonably be expected to constitute a Material Adverse Effect,
        and
        there are no judgments or decrees affecting the Borrower, or its property
        (including the Collateral) which are or could reasonably be expected to become
        an Encumbrance against such property (other than a Designated Title Exception
        or
        a Permitted Encumbrance); provided
        that no
        breach of this Section
        4.04
        shall
        occur if the same is discharged within 30 days after the date of entry thereof
        or an appeal or appropriate proceeding for review thereof is taken within
        such
        period and a stay of execution pending such appeal is obtained.

       

      SECTION
        4.05.   Approvals.
        No
        authorization, consent, approval or formal exemption of, nor any filing or
        registration with, any governmental body or regulatory authority (federal,
        state
        or local), and no vote, consent or approval of the shareholders of the Borrower
        is or will be required in connection with the execution and delivery by the
        Borrower of the Related Documents or the performance by the Borrower of its
        obligations hereunder and under the other Related Documents, except to the
        extent obtained.

       

      SECTION
        4.06.   Required
        Insurance.
        The
        Borrower maintains insurance with insurance companies in such amounts and
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        owners
          of
          similar businesses and properties in the same general areas in which the
          Borrower operates.

      

       

      SECTION
        4.07.   Licenses.
        The
        Borrower possesses adequate franchises, licenses and permits to own its
        properties and to carry on its business as presently conducted, except where
        the
        failure to do so could not reasonably be expected to have a Material Adverse
        Effect.

       

      SECTION
        4.08.   Adverse
        Agreements.
        The
        Borrower is not a party to any agreement or instrument, nor subject to any
        charter or other restriction, materially and adversely affecting the business,
        properties, assets, or operations of the Borrower or its condition (financial
        or
        otherwise), and the Borrower is not in default in the performance, observance
        or
        fulfillment of any of the obligations, covenants or conditions contained
        in any
        agreement or instrument to which it is a party, which default would constitute
        a
        Material Adverse Effect.

       

      SECTION
        4.09.   Default
        or Event of Default.
        No
        Default or Event of Default hereunder has occurred and is continuing or will
        occur as a result of the giving effect hereto.

       

      SECTION
        4.10.   Employee
        Benefit Plans.
        Each
        employee benefit plan as to which the Borrower may have any liability complies
        in all material respects with all applicable requirements of law and
        regulations, and (a) no Reportable Event (as defined in ERISA) has occurred
        and
        is continuing with respect to any such plan, (b) the Borrower has not withdrawn
        from any such plan or initiated steps to do so, and (c) no steps have been
        taken
        to terminate any such plan.

       

      SECTION
        4.11.   Investment
        Company Act.
        The
        Borrower is not an “investment company” or a company “controlled” by an
“investment company,” within the meaning of the Investment Company Act of 1940,
        as amended.

       

      SECTION
        4.12.   Public
        Utility Holding Company Act.
        The
        Borrower is not a “holding company,” or a “subsidiary company” of a “holding
        company,” within the meaning of the Public Utility Holding Company Act of 1935,
        as amended.

       

      SECTION
        4.13.   Regulations
        X, T and U.
        The
        Borrower is not engaged principally, or as one of its important activities,
        in
        the business of extending credit for the purpose of purchasing or carrying
        margin stock (within the meaning of Regulations X, T and U of the
        Board of
        Governors of the Federal Reserve System), and none of the proceeds of the
        Loans
        will be used for the purpose of purchasing or carrying such margin
        stock.

       

      SECTION
        4.14.   Location
        of Offices and Records.
        As of
        the date hereof, the chief place of business of the Borrower, and the office
        where the Borrower keeps all of its records concerning the Collateral, is
        1000
        Louisiana Street, Suite 1500, Houston, Texas 77002.

       

      
        
          
          

        

        
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      SECTION
        4.15.   Information.
        All
        written information heretofore or contemporaneously herewith furnished by
        the
        Borrower to the Administrative Agent and/or the Lenders for the purposes
        of or
        in connection with this Agreement or any transaction contemplated hereby
        (excluding projections, estimates, and engineering reports) is, and all such
        information hereafter furnished by or on behalf of the Borrower to the
        Administrative Agent and/or the Lenders will be, true and accurate in every
        material respect on the date as of which such information is dated or certified;
        and none of such information is or will be incomplete by omitting to state
        any
        material fact necessary to make such information not misleading as of such
        date,
        in light of the circumstances under which the statements contained in such
        information were made, taken as a whole. To the best knowledge of the Borrower,
        the engineering reports delivered to the Administrative Agent and/or the
        Lenders
        in connection with this Agreement do not contain any material inaccuracies
        and/or omissions. The said engineering reports, however, are based upon
        professional opinions, estimates and projections and the Borrower does not
        warrant that such opinions, estimates and projections will ultimately prove
        to
        have been accurate. All other projections and estimates by the Borrower
        delivered hereunder or in connection herewith were prepared in good faith
        on the
        basis of the assumptions believed by the Borrower in good faith to be reasonable
        in light of the then current and foreseeable business conditions of the Borrower
        and its Subsidiaries at the time of preparation thereof, it being understood
        by
        the Administrative Agent and the Lenders that actual results may vary from
        projected results.

       

      SECTION
        4.16.   Environmental
        Matters.
        Except
        as previously disclosed to the Administrative Agent in writing or as could
        not
        reasonably be expected to result, individually or in the aggregate, in a
        Material Adverse Effect:

       

      (a)
          To
        the
        best of the Borrower’s knowledge and belief after due inquiry, the Borrower is
        in compliance with all applicable Environmental Laws and is not subject to
        any
        Environmental Liabilities;

       

      (b)
          To
        the
        best of the Borrower’s knowledge and belief after due inquiry, the Borrower has
        obtained all consents and permits required under all applicable Environmental
        Laws to operate its business as presently conducted or as proposed to be
        conducted and all such consents and permits are in full force and effect
        and the
        Borrower is in compliance with all terms and conditions of such consents
        and
        permits;

       

      (c)
          Neither
        the Borrower nor any of the present property or operations of the Borrower
        is
        subject to any order from or agreement with any Governmental Authority or
        private party respecting (i) failure to comply with any Environmental Law,
        (ii)
        any Remedial Action or (iii) any Environmental Liabilities except those orders
        and agreements with which the Borrower has complied;

       

      (d)
          None
        of
        the operations of the Borrower is subject to any judicial or administrative
        proceeding alleging a violation of, or liability under, any Environmental
        Law;

       

      
        
          
          

        

        
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      (e)
          None
        of
        the operations of the Borrower, to the best of its knowledge after due inquiry,
        is the subject of any investigation by any Governmental Authority evaluating
        whether any Remedial Action is needed to respond to a Release or threatened
        Release;

       

      (f)
          The
        Borrower has not been required to file any notice under any Environmental
        Law
        indicating past or present treatment, storage or disposal of a hazardous
        waste
        as defined by 40 C.F.R. Part 261 or any state or local equivalent;

       

      (g)
          The
        Borrower has not been required to file any notice under any applicable
        Environmental Law reporting a Release;

       

      (h)
          There
        is
        not now, nor, to the best knowledge of the Borrower, has there ever been,
        on or
        in any property of the Borrower:

       

      (i)
          any
        unauthorized generation, treatment, recycling, storage or disposal of any
        hazardous waste as defined by 40 C.F.R. Part 261 or any state
        or local
        equivalent,

       

      (ii)
          any
        underground storage tanks or surface impoundments without proper
        permits,

       

      (iii)
          any
        asbestos - containing material, or

       

      (iv)
          any
        polychlorinated biphenyls (PCBs) used in hydraulic oils, electrical transformers
        or other equipment.

       

      (i)
          There
        have been no written commitments or agreements involving the Borrower from
        or
        with any Governmental Authority or any private entity (including the owner
        of
        the Mortgaged Properties or any portion thereof) relating to the generation,
        storage, treatment, presence, Release, or threatened Release on or into any
        of
        the properties of the Borrower or the environment (including off-site disposal
        of Hazardous Materials) or any Remedial Action with respect
        thereto;

       

      (j)
          The
        Borrower has not received any written notice or claim to the effect that
        it is
        or may be liable to any Person as a result of the Release or threatened Release
        of Hazardous Materials;

       

      (k)
          To
        the
        best of the Borrower’s knowledge and belief after due inquiry, the Borrower has
        no liability in connection with any Release or threatened Release of Hazardous
        Materials;

       

      (l)
          No
        Environmental Lien has attached (and continues to attach) to any properties
        of
        the Borrower; and

       

      (m)
          There
        have been no environmental investigations, studies, audits, tests, reviews
        or
        other analyses conducted by or which are in the possession of the 

       

      
        
          
          

        

        
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        Borrower
          in relation to any violation of Environmental Laws or Environmental Liabilities
          in relation to any properties or facility now or previously owned or leased
          by
          the Borrower which have not been made available to the Administrative
          Agent.

      

       

      SECTION
        4.17.   Solvency
        of the Borrower.
        The
        Borrower is and after consummation of the Transactions and the other
        transactions contemplated by this Agreement (including the making of the
        Loans),
        and after giving effect to all obligations incurred by the Borrower in
        connection herewith, will be, Solvent.

       

      SECTION
        4.18.   Governmental
        Requirements.
        The
        Collateral is in compliance with all current Governmental Requirements affecting
        the said property, except where failure to so comply could not reasonably
        be
        expected to have a Material Adverse Effect.

       

      SECTION
        4.19.   Corporate
        Authority of the Guarantors.
        Each
        Guarantor is a corporation duly created, validly existing, and in good standing
        under the laws of the state of its incorporation, and is duly qualified and
        in
        good standing as foreign corporation in all other jurisdictions where the
        failure to qualify would have an adverse effect upon its ability to perform
        its
        obligations under this Agreement and all Related Documents to which it is
        a
        party. Each Guarantor has the corporate power to enter into this Agreement
        and
        the Guarantee. Each Guarantor has the power to perform its obligations hereunder
        and under the Loan Documents and Related Documents to which it is a party.
        The
        making and performance by each Guarantor of the Loan Documents and Related
        Documents to which it is a party have all been duly authorized by all necessary
        corporate or company action, and do not and will not violate any provision
        of
        any law, rule, regulation, order, writ, judgment, decree, determination or
        award
        presently in effect having applicability to any Guarantor, or the articles
        of
        incorporation and bylaws of any Guarantor. The making and performance by
        each
        Guarantor of the Loan Documents and Related Documents to which it is a party
        do
        not and will not result in a breach of or constitute a default under the
        Revolving Credit Agreement or any material indenture or loan or credit agreement
        or any other material agreement or instrument to which any Guarantor is a
        party
        or by which it may be bound or affected, or result in, or require, the creation
        or imposition of any mortgage, deed of trust, pledge, lien, security interest
        or
        other charge or encumbrance of any nature (other than as contemplated by
        the
        Related Documents) upon or with respect to any of the properties now owned
        or
        hereafter acquired by any Guarantor, and no Guarantor is in default under
        or in
        violation of any such order, writ, judgment, decree, determination, award,
        indenture, agreement or instrument to the extent any such default or violation
        could reasonably be expected to have a Material Adverse Effect. Each of the
        Loan
        Documents and Related Documents to which any Guarantor is a party constitutes
        a
        legal, valid and binding obligation of such Guarantor, enforceable in accordance
        with its terms, subject to applicable bankruptcy, insolvency, reorganization,
        moratorium or other laws affecting creditors’ rights generally and subject to
        general principles of equity, regardless of whether considered in a proceeding
        in equity or at law. The Guarantee ranks pari passu
        to the
        guarantee of the Guarantors provided pursuant to the Revolving Credit Agreement.
        As of Closing Date, CCBM is the only Subsidiary.

       

      
        
          
          

        

        
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      SECTION
        4.20.   Security
        Agreement.
        The
        Security Agreement creates a second priority security interest in one hundred
        percent (100%) of the issued and outstanding stock of each Guarantor. There
        are
        no other Encumbrances affecting the said stock except for a first priority
        Encumbrance granted by the Borrower as security to the First Lien Secured
        Parties (as defined in the Intercreditor Agreement) to secure the First Lien
        Obligations (as defined in the Intercreditor Agreement).

       

      SECTION
        4.21.   Tax
        Returns.
        Each of
        the Borrower and its Subsidiaries has filed or caused to be filed all federal
        and all state, local and foreign tax returns or materials required to have
        been
        filed by it and has paid or caused to be paid all taxes due and payable by
        it
        and all assessments received by it, except taxes that are being contested
        in
        good faith by appropriate proceedings and for which the Borrower or such
        Subsidiary, as applicable, shall have set aside on its books adequate reserves
        and except to the extent that failure to do so could not reasonably be expected
        to have a Material Adverse Effect.

       

      SECTION
        4.22.   Labor
        Matters.
        As of
        the Closing Date, there are no strikes, lockouts or slowdowns against the
        Borrower or any of its Subsidiaries pending or, to the knowledge of the
        Borrower, threatened. Except for those matters that could not reasonably
        be
        expected to have a Material Adverse Effect, (a) the hours worked by
        and
        payments made to employees of the Borrower and its Subsidiaries have not
        been in
        violation in any material respect of the Fair Labor Standards Act or any
        other
        applicable federal or material applicable state, local or foreign law dealing
        with such matters, and (b) all payments due from the Borrower or any
        of its
        Subsidiaries, or for which any claim may be made against the Borrower or
        any of
        its Subsidiaries, on account of wages and employee health and welfare insurance
        and other benefits, have been paid or accrued as a liability on the books
        of the
        Borrower or such Subsidiary.

       

      SECTION
        4.23.   Survival
        of Representations and Warranties.
        The
        Borrower understands and agrees that the Administrative Agent and the Lenders
        are relying upon the above representations and warranties in making the Loans
        to
        the Borrower. The Borrower further agrees that the foregoing representations
        and
        warranties shall be true and correct in all material respects as of the date(s)
        made or deemed made and shall remain in full force and effect until such
        time as
        the Indebtedness included in clause (c) of the definition thereof shall be
        paid
        in full, or until this Agreement shall be terminated, whichever is the last
        to
        occur.

       

      
        
          
          

        

        
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      ARTICLE
        V  

       

      Affirmative
        Covenants

       

      In
        addition to the covenants contained in the Collateral Documents, which covenants
        are hereby ratified and confirmed by the Borrower, the Borrower covenants
        and
        agrees as follows:

       

      SECTION
        5.01.   Financial
        Statements; Other Reporting Requirements.
        The
        Borrower shall furnish or cause to be furnished to the Administrative Agent
        who
        will deliver to each Lender:

       

      (a)
          as
        soon
        as available and in any event within 120 days following the close
        of fiscal
        year of the Borrower, audited consolidated financial statements of the Borrower
        consisting of a balance sheet as at the end of such fiscal year and statements
        of income, and statement of cash flow for such fiscal year, setting forth
        in
        each case in comparative form the corresponding figures for the preceding
        fiscal
        year, certified by independent certified public accountants of recognized
        standing acceptable to the Administrative Agent (such acceptance not to be
        unreasonably withheld),

       

      (b)
          as
        soon
        as available and in any event within 45 days following the close of
        each
        calendar quarter, interim consolidated financial statements of the Borrower,
        consisting of a balance sheet as of the end of such quarter and statements
        of
        income and cash flow, certified as true and correct by the Borrower’s chief
        financial officer as having been prepared in accordance with GAAP consistently
        applied,

       

      (c)
          upon
        each
        submission of the financial statements required by clauses
        (a)
        and
(b)
        above, a
        compliance certificate signed by the chief financial officer of the Borrower
        in
        the form of Exhibit
        G,
        certifying (i) that he has reviewed this Agreement and to the best
        of his
        knowledge no Default or Event of Default has occurred, or if such Default
        or
        Event of Default has occurred, specifying the nature and extent thereof and
        the
        corrective action (if any) taken or proposed to be taken with respect thereto,
        (ii) that all financial covenants in this Agreement have been met,
        and
        providing a computation of all financial covenants contained herein, and
        (iii) (x) (A) the fair market value of any Proved Reserves
        Disposed of
        pursuant to Section
        6.02(a)
        and
        (B) the fair market value of any Proved Reserves acquired as contemplated
        by clause (ii)(3)
        of
Section 6.02(a),
        in each
        case during the immediately preceding fiscal quarter, and that all such Proved
        Reserves acquired during the immediately preceding fiscal quarter were acquired
        within the time period permitted by such clause (ii)(3)
        and
        (y) (A) the fair market value of all assets disposed of pursuant
        to
Section
        6.02(b)
        and
        (B) the fair market value of all assets acquired as contemplated by
        clause (ii)(2)
        of
Section 6.02(b),
        in each
        case during the immediately preceding fiscal quarter, and that all such assets
        acquired during the immediately preceding fiscal quarter were acquired within
        the time period permitted by such clause
        (ii)(2),
        and
        said certificate shall include a 

       

      
        
          
          

        

        
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        schedule
          of all Hedging Agreements to which the Borrower or any Guarantor is a
          party,

      

       

      (d)
          as
        soon
        as available and in any event within 30 days after filing, a copy
        of the
        Borrower’s federal tax returns,

       

      (e)
          by
        March 31st of each year, a third party engineering report (prepared
        at the
        Borrower’s expense) from one or more independent petroleum engineering firms of
        recognized standing reasonably acceptable to the Administrative Agent (which
        shall be deemed to include the firms issuing the Initial Reserve Reports)
        dated
        as of the preceding December 31 covering the proved oil and gas properties
        owned by the Borrower and the Guarantors (other than immaterial properties
        excluded consistent with past practice), in form reasonably satisfactory
        to the
        Administrative Agent and containing pricing assumptions consistent with the
        definition of the term “PV-10 Value”,

       

      (f)
          as
        soon
        as available and in any event within 45 days after the end of each
        quarter,
        the following reports and data: reports of production (attributable to the
        proved oil and gas properties owned by the Borrower and the Guarantors (other
        than immaterial properties excluded consistent with past practice)), commodity
        prices, sales revenues, operating expenses for the Leases, and production
        taxes,
        in form reasonably acceptable to the Administrative Agent and containing
        pricing
        assumptions consistent with the definition of the term “PV-10
        Value”,

       

      (g)
          as
        soon
        as available and in any event within 70 days after the end of each
        of the
        first three quarters of each year, an internally prepared engineering report
        covering the proved oil and gas properties owned by the Borrower and the
        Guarantors (other than immaterial properties excluded consistent with past
        practice), and dated as of no earlier than 30 days prior to the end
        of such
        quarter, in form reasonably satisfactory to the Administrative Agent and
        containing pricing assumptions consistent with the definition of the term
“PV-10
        Value”,

       

      (h)
          promptly
        after the furnishing thereof, copies of any financial statement, report or
        notice of default or material event furnished to or by any Person pursuant
        to
        the terms of any preferred stock designation, indenture, loan or credit or
        other
        similar agreement (including the Revolving Credit Agreement and all documents
        relating thereto), other than this Agreement, and not otherwise required
        to be
        furnished to the Administrative Agent pursuant to any other provision of
        this
Section 5.01,

       

      (i)
          subject
        to Section
        5.11,
        such
        other financial information or other information concerning the Borrower
        as the
        Administrative Agent and/or the Lenders may reasonably request from time
        to
        time, and

       

      (j)
          promptly
        after the request by any Lender, all documentation and other information
        that
        such Lender reasonably requests in order to comply with its 

       

      
        
          
          

        

        
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        ongoing
          obligations under applicable “know your customer” and anti-money laundering
          rules and regulations, including the USA Patriot Act.

      

       

      SECTION
        5.02.   Notice
        of Default; Litigation; ERISA Matters.
        The
        Borrower shall give written notice to the Administrative Agent as soon as
        reasonably possible and in no event more than five Business Days of (a) the
        occurrence of any Default or Event of Default hereunder of which it has
        knowledge, specifying the nature and extent thereof and the corrective action
        (if any) taken or proposed to be taken with respect thereto, (b) the
        filing
        of any actions, suits or proceedings against the Borrower or any Subsidiary
        in
        any court or before any governmental authority or tribunal of which it has
        knowledge, which could reasonably be expected to cause a Material Adverse
        Effect
        with respect to the Borrower, (c) the occurrence of a reportable event
        under, or the institution of steps by the Borrower to withdraw from, or the
        institution of any steps to terminate, any employee benefit plan as to which
        the
        Borrower may have liability, or (d) the occurrence of any other action,
        event or condition of any nature of which it has knowledge which could
        reasonably be expected to cause, or lead to, or result in, any Material Adverse
        Effect with respect to the Borrower.

       

      SECTION
        5.03.   Maintenance
        of Existence, Properties and Liens. (a)
        The
        Borrower shall (i) continue to engage in the Subject Business and
        other
        business activities reasonably related thereto, (ii) maintain its
        existence
        and good standing in each jurisdiction in which it is required to be qualified,
        (iii) keep and maintain all franchises, licenses and properties necessary
        in the conduct of its business in good order and condition, except to the
        extent
        the failure to do so could not reasonably be expected to cause a Material
        Adverse Effect, (iv) duly observe and conform to all material requirements
        of any governmental authorities relative to the conduct of its business or
        the
        operation of its properties or assets, except to the extent the failure to
        do so
        could not reasonably be expected to cause a Material Adverse Effect, and
        (v)  maintain in favor of the Collateral Agent for the ratable benefit
        of
        the Secured Parties a perfected lien and security interest in the Collateral,
        subject only to Permitted Encumbrances and Designated Title
        Exceptions.

       

      (b)
          Within
        90
        days after the Closing Date (or such longer period of time as may be agreed
        by
        the Administrative Agent in its reasonable discretion), the Borrower shall
        furnish to the Administrative Agent title opinions and/or title information
        as
        of a date not earlier than the Closing Date, which title opinions and/or
        title
        information shall cover not less than 80% of the net present value of the
        proved
        oil and gas reserves owned by the Borrower and each Guarantor, taken as a
        whole,
        as set forth in the Initial Reserve Reports.

       

      (c)
          Within
        90
        days after the making a request therefor by the Administrative Agent (or
        such
        longer period of time as may be agreed by the Administrative Agent in its
        reasonable discretion), the Borrower shall furnish the Administrative Agent
        with
        (i) title opinions and/or title information reasonably satisfactory
        to the
        Administrative Agent covering not less than 80% of the net present value
        of the
        proved oil and gas reserves owned by the Borrower and each Guarantor, taken
        as a
        whole, as set forth in the most recent Reserve Report delivered pursuant
        to


       

      
        
          
          

        

        
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        Section 5.01(e)
          or
(g)
          or
          (ii) a certificate of the chief financial officer of the Borrower
          confirming that there has been no change in such information since the
          prior
          request.

      

       

      SECTION
        5.04.   Taxes.
        The
        Borrower shall pay or cause to be paid when due, all taxes, local and special
        assessments, and governmental charges of every type and description, that
        may
        from time to time be imposed, assessed and levied against its properties.
        The
        Borrower further agrees to furnish the Administrative Agent with evidence
        that
        such taxes, assessments, and governmental and other charges due by the Borrower
        have been paid in full and in a timely manner, if such data is requested
        by the
        Administrative Agent. Notwithstanding the foregoing, the Borrower may withhold
        any such payment or elect to contest any lien if the Borrower is in good
        faith
        conducting an appropriate proceeding to contest the obligation to pay and
        so
        long as the Collateral Agent’s interest in the Collateral is not
        jeopardized.

       

      SECTION
        5.05.   Compliance
        with Environmental Laws.
        The
        Borrower shall comply with all Environmental Laws and shall use reasonable
        commercial efforts to cause all of its employees, agents, invitees or sublessees
        (while such Persons are acting within the scope of their relationship with
        the
        Borrower) to (a) comply with all Environmental Laws with respect to
        the
        disposal of Hazardous Materials, (b) pay immediately when due the
        cost of
        removal of any such Hazardous Materials, and (c) keep the Borrower’s
        properties free of any lien imposed pursuant to any Environmental Laws;
provided
        that no
        breach of this Section 5.05
        shall
        occur if (i) such breach is cured within 30 days after the
        Borrower is
        notified of non-compliance or an appeal or appropriate proceedings for review
        thereof is taken within such period and the Borrower is not obligated to
        comply
        pending such appeal or other appropriate proceedings or (ii) such
        breach
        could not reasonably be expected to have a Material Adverse Effect.

       

      The
        Borrower shall give notice to the Administrative Agent as soon as reasonably
        possible and in no event more than five days after it receives any compliance
        orders, environmental citations, or other notices from any Governmental
        Authority relating to any Environmental Liabilities relating to its properties
        or elsewhere which may reasonably be expected to result in a Default or Event
        of
        Default; the Borrower agrees to take any and all reasonable steps, and to
        perform any and all reasonable actions necessary or appropriate to promptly
        respond to and comply with any such compliance orders, citations or notices,
        and, upon the Administrative Agent’s request, to provide the Administrative
        Agent with satisfactory evidence of such compliance that requires expenditures
        in excess of $500,000; provided,
        however,
        that
        nothing contained herein shall preclude the Borrower from contesting any
        such
        compliance orders, citations or notices if such contest is made in good faith,
        appropriate reserves are established for the payment for the cost of compliance
        therewith, and the Collateral Agent’s security interest in any such property
        affected thereby (or the priority thereof) is not jeopardized.

       

      Regardless
        of whether any Event of Default hereunder shall have occurred and be continuing,
        the Borrower (A) releases and waives any present or future claims against
        the
        Administrative Agent, the Collateral Agent, each Lender and each Related
        Party
        of any of the foregoing Persons for indemnity or contribution in the event
        the
        Borrower becomes liable for any Environmental Lien and/or Remedial Action
        and/or


       

      
        
          
          

        

        
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        other
          Environmental
          Liability, and (B) agrees to defend, indemnify and hold harmless
          the
          Administrative Agent, the Collateral Agent, each Lender and each Related
          Party
          of any of the foregoing Persons from any and all Environmental Liabilities,
          including all liabilities (including strict liability), actions, demands,
          penalties, losses, costs or expenses (including reasonable attorneys fees
          and
          remedial costs), suits, administrative orders, agency demand letters, costs
          of
          any settlement or judgment and claims of any and every kind whatsoever
          which may
          now or in the future (whether before or after the termination of this Agreement)
          be paid, incurred, or suffered by, or asserted against the Lenders by any
          person
          or entity or governmental agency for, with respect to, or as a direct or
          indirect result of, the presence on or under, or the escape, seepage, leakage,
          spillage, discharge, emission, or Release from or onto the property of
          the
          Borrower of any Hazardous Materials, regulated by any Environmental Laws,
          contamination resulting therefrom, or arising out of, or resulting from,
          the
          environmental condition of such property or the applicability of any
          Environmental Laws relating to hazardous materials (including Comprehensive
          Environmental Response, Compensation and Liability Act or any so called
          federal,
          state or local “super fund” or “super lien” laws, statute, ordinance, code,
          rule, regulation, order or decree) regardless of whether or not caused
          by or
          within the control of the Lender. THE COVENANTS AND INDEMNITIES CONTAINED
          IN
          THIS SECTION 5.05
          SHALL
          SURVIVE THE TERMINATION OF THIS AGREEMENT, PROVIDED
          THAT
          SUCH INDEMNITIES SHALL NOT, AS TO ANY INDEMNIFIED PARTY, BE AVAILABLE TO
          THE
          EXTENT THAT SUCH INDEMNITY MATTERS ARE DETERMINED BY A COURT OF COMPETENT
          JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM
          THE GROSS
          NEGLIGENCE OR WILFUL MISCONDUCT ON THE PART OF SUCH INDEMNIFIED PARTY;
          AND,
PROVIDED,
          HOWEVER,
          NO
          RELEASE, WAIVER, DEFENSE OR INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION
          5.05
          IN
          RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE ARISING FROM THE ACTS OR OMISSIONS
          OF
          THE COLLATERAL AGENT, THE ADMINISTRATIVE AGENT AND/OR THE LENDERS OR THEIR
          AGENTS OR REPRESENTATIVES DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS
          SUCCESSORS OR ASSIGNS, OR ITS AGENTS OR REPRESENTATIVES, SHALL HAVE OBTAINED
          OWNERSHIP, OPERATION OR POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE
          OR
          DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR
          OTHERWISE).

      

       

      SECTION
        5.06.   Further
        Assurances.
        The
        Borrower shall, at any time and from time to time, execute and deliver such
        further instruments and take such further action as may reasonably be requested
        by the Administrative Agent, in order to cure any defects in the execution
        and
        delivery of, or to comply with or accomplish the covenants and agreements
        contained in this Agreement or the Collateral Documents.

       

      SECTION
        5.07.   Financial
        Covenants.
        The
        Borrower shall comply with the following covenants and ratios:

       

      (a)
          Minimum
        Current Ratio.
        The
        Borrower shall at all times maintain a minimum Current Ratio of 1.00 to
        1.00.

       

      
        
          
          

        

        
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      (b)
          Maximum
        Leverage Ratio.
        The
        Borrower shall maintain as of the last day of each fiscal quarter a ratio
        of
        Total Net Debt to EBITDA of not more than (i) 3.50 to 1.00 in the
        case of
        periods ending on June 30, 2005 through and including June 30,
        2006
        and (ii) 3.25 to 1.0 in the case of any period thereafter, calculated
        on a
        rolling four quarters basis. For the purposes of this covenant, EBITDA shall
        not
        include the net revenue attributable to assets pledged to secure Non-Recourse
        Debt. The term “Total
        Net Debt”
        shall
        mean, on any date of determination, the Borrower’s consolidated Debt excluding
        Non-Recourse Debt and Debt of any Unrestricted Subsidiary on such date, less
        the
        amount of unrestricted cash and cash equivalents on hand at the Borrower
        and the
        Guarantors.

       

      (c)
          Minimum
        Proved Reserve Coverage Ratio.
        The
        Borrower shall maintain as of the last day of each fiscal quarter a ratio
        of
        (x) PV-10 Value as of a date not earlier than 30 days prior to the
        end of
        such fiscal quarter to (y) Total Net Debt on the last day of such
        fiscal
        quarter of not less than (i) 1.50 to 1.00 in the case of the last
        day of
        any fiscal quarter (commencing with the fiscal quarter ending on June 30,
        2005) ending on or before September 30, 2006 and (ii) 2.00
        to 1.00 in
        the case of the last day of any fiscal quarter thereafter.

       

      (d)
          Interest
        Coverage Ratio.
        The
        Borrower shall maintain as of the last day of each fiscal quarter (commencing
        with the fiscal quarter ending on June 30, 2005) a ratio of EBITDA
        for the
        four fiscal quarter period ending on such day to Interest Expense for such
        period of at least (i) 2.75 to 1.00 in the case of any fiscal quarter
        ending on or before June 30, 2006 and (ii) 3.00 to 1.00
        in the
        case of any fiscal quarter thereafter.

       

      SECTION
        5.08.   Operations.
        The
        Borrower shall conduct its business affairs in a reasonable and prudent manner
        and in compliance with all applicable federal, state and municipal laws,
        ordinances, rules and regulations respecting its properties, charters,
        businesses and operations, including compliance with all minimum funding
        standards and other requirements of ERISA, and other laws applicable to any
        employee benefit plans which they may have, except to the extent the failure
        to
        do so could not reasonably be expected to cause a Material Adverse
        Effect.

       

      SECTION
        5.09.   Change
        of Location. (a)
        The
        Borrower shall, within ten (10) Business Days prior to any such change, notify
        the Administrative Agent in writing of any proposed change in the location
        of
        its chief executive office.

       

      (b)
          The
        Borrower shall, each year, at the time of delivery of the annual financial
        statements with respect to the preceding fiscal year pursuant to Section 5.01(a),
        deliver
        to the Administrative Agent a certificate of the chief financial officer
        of the
        Borrower setting forth the information required pursuant to Section 2
        of
        the Perfection Certificate or confirming that there has been no change in
        such
        information since the date of the Perfection Certificate delivered on the
        Closing Date or the date of the most recent certificate delivered pursuant
        to
        this Section 5.09(b).

       

      
        
          
          

        

        
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      SECTION
        5.10.   Employee
        Benefit Plans.
        The
        Borrower shall maintain each employee benefit plan as to which it may have
        any
        liability, in material compliance with all applicable requirements of law
        and
        regulations.

       

      SECTION
        5.11.   Field
        Audits; Other Information.
        Upon
        reasonable prior notice, the Borrower shall allow the Administrative Agent’s
        employees and agents access to its books and records and properties during
        normal business hours to perform field audits from time to time (provided,
        that so
        long as no Event of Default has occurred and is continuing, there may be
        no more
        than two such field audits in any calendar year). The Borrower shall pay
        all
        reasonable costs and expenses associated with such field audits. The Borrower
        shall provide the Administrative Agent with such other information as the
        Administrative Agent may reasonably request from time to time, subject in
        all
        cases to any confidentiality restrictions that may be applicable to the Borrower
        and its Subsidiaries and to any confidentiality restrictions that the Borrower
        reasonably imposes on the Persons receiving such information; provided,
        however,
        that
        neither the Borrower nor any of its Subsidiaries shall be required to disclose
        to the Administrative Agent or any agents or representatives thereof any
        information which is the subject of attorney-client privilege or attorney’s work
        product privilege properly asserted by the applicable Person to prevent the
        loss
        of such privilege in connection with such information; and provided,
        further,
        that
        the Borrower will use commercially reasonable efforts to furnish such
        information (excluding information covered by confidentiality restrictions
        in
        agreements relating to seismic, geologic or geophysical data or similar
        technical and business matters relating to the exploration for oil and gas),
        which requirement shall be satisfied if the Administrative Agent is offered
        the
        opportunity to review such confidential information by executing or otherwise
        becoming a party to the confidentiality restrictions on substantially the
        same
        terms (including any standstill provisions) as are applicable to the
        Borrower.

       

      SECTION
        5.12.   Insurance.
        The
        Borrower shall maintain in effect all insurance required by this Agreement
        and
        the Collateral Documents, and the Borrower agrees to comply with the
        requirements of Section
        4.06
        above.
        The Borrower agrees to provide the Administrative Agent with certificates
        or
        binders evidencing such insurance coverage on an annual basis, and, if requested
        by the Administrative Agent, the Borrower further agrees to promptly furnish
        the
        Administrative Agent with copies of all renewal notices and copies of receipts
        for paid premiums. The Borrower shall provide the Administrative Agent with
        certificates or binders evidencing insurance coverage pursuant to all renewal
        or
        replacement policies of insurance no later than the seventh day before any
        such
        existing policy or policies should expire (or, in the event such certificates
        or
        binders are unavailable to the Borrower on such day, within one Business
        Day of
        receipt of such certificates or binders by the Borrower).

       

      SECTION
        5.13.   Subsidiaries.
        The
        Borrower agrees that any Subsidiary (excluding Unrestricted Subsidiaries,
        if
        any) of the Borrower formed by or on behalf of, or acquired by, the Borrower
        after the date of this Agreement shall, promptly upon such formation or
        acquisition, execute a Guarantee of the Indebtedness (in a form substantially
        similar to the Guarantee).

       

      
        
          
          

        

        
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      SECTION
        5.14.   Additional
        Mortgaged Properties. (a)
        Within
        60 days after the Closing Date (or such longer period of time as may
        be
        agreed by the Administrative Agent in its reasonable discretion), the Borrower
        agrees to execute and deliver such documents (and the Borrower agrees to
        execute
        and deliver such additional documents from time to time thereafter as are
        reasonably requested by the Administrative Agent) to provide that at least
        the
        greater of (i) 90% and (ii) the percentage threshold established
        in
        the Revolving Credit Agreement, of the net present value of the proved oil
        and
        gas reserves owned by the Borrower and each Guarantor, taken as a whole,
        are
        Mortgaged Properties.

       

      (b)
          In
        the
        event the Tangible Net Worth of any Guarantor (calculated with respect to
        CCBM
        without including the capital stock of Pinnacle so long as Pinnacle is not
        a
        Subsidiary) exceeds 3% or more of the Tangible Net Worth of the Borrower
        and its
        Subsidiaries, on a consolidated basis, the Borrower shall cause such Guarantor
        to execute and deliver to the Administrative Agent, for the ratable benefit
        of
        the Secured Parties, Mortgages in form and substance reasonably acceptable
        to
        the Administrative Agent together with such other assignments, conveyances,
        amendments, agreements and other writings (each duly authorized and executed)
        as
        the Administrative Agent shall reasonably deem necessary or appropriate to
        grant, evidence and perfect the Encumbrances in the assets and properties
        of
        such Guarantor (provided in no event shall the capital stock of Pinnacle
        be
        pledged so long as Pinnacle is not a Subsidiary).

       

      SECTION
        5.15.   Maintenance
        of Hedging Agreements.
        The
        Borrower shall maintain in effect Hedging Agreements with one or more
        counterparties reasonably acceptable to the Administrative Agent that establish
        minimum fixed prices reasonably acceptable to the Administrative Agent on
        a
        volume of Hydrocarbons production equal to not less than 40% of the total
        volume
        of such production projected from proved producing reserves for the succeeding
        twelve calendar months on a rolling twelve calendar month basis, to come
        from
        the Borrower’s proved developed producing reserves during such
        period.

       

      ARTICLE
        VI  

       

      Negative
        Covenants

       

      In
        addition to the negative covenants contained in the Collateral Documents,
        which
        covenants are hereby ratified and confirmed by the Borrower, the Borrower
        covenants and agrees as follows:

       

      SECTION
        6.01.   Limitations
        on Fundamental Changes.
        The
        Borrower shall not form any Subsidiary (excluding Unrestricted Subsidiaries)
        that does not execute a guaranty of the Indebtedness, nor shall the Borrower
        consummate any transaction of merger or consolidation unless the Borrower
        is the
        surviving entity, or liquidate or dissolve itself (or suffer any liquidation
        or
        dissolution).

       

      SECTION
        6.02.   Disposition
        of Assets. (a)
        The
        Borrower shall not, and shall not permit any Guarantor to, convey, sell,
        lease,
        assign, transfer or otherwise 

       

      
        
          
          

        

        
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        dispose
          of (any of the foregoing, to “Dispose”,
          with
          Disposition having a correlative meaning) any of its property or assets
          constituting proved oil and gas reserves on the Borrower’s and the Guarantors’
          oil and gas properties (“Proved
          Reserves”)
          (other
          than assignments of customary overrides, royalties, working interests in
          exchange for a commitment of the transferee to bear a disproportionate
          share of
          the costs attributable to the oil and gas properties to which such interests
          relate, and similar ordinary course transactions and Dispositions or series
          of
          related Dispositions of Proved Reserves with a fair market value not in
          excess
          of $1,000,000), unless (i) the fair market value of the consideration for
          any
          such Disposition is at least equal to the fair market value of the property
          or
          assets Disposed of (as conclusively determined by the Borrower in good
          faith)
          and (ii) the fair market value of all such Proved Reserves Disposed of
          pursuant
          to this Section
          6.02(a),
          net of
          (1) the fair market value of all Proved Reserves (which, in the case of
          a
          Disposition of Proved Reserves located in a Core Operating Region, are
          located
          in one or more Core Operating Regions) constituting consideration to the
          Borrower for any such Disposition, (2) any Disposition the proceeds of
          which
          (net of costs and expenses associated therewith) are used to repay loans
          under
          the Revolving Credit Agreement to the extent required by Section
          13.2
          thereof,
          and (3) the fair market value of any Proved Reserves located in Core Operating
          Regions acquired by the Borrower or any Guarantor within 365 days of such
          Disposition, does not exceed (x) $15,000,000 in any fiscal year or (y)
          $60,000,000 in the aggregate.

      

       

      (b)
          The
        Borrower shall not, and shall not permit any Guarantor to, Dispose of any
        of its
        property or assets (other than Proved Reserves) (other than (I) assignments
        of
        customary overrides, royalties, working interests in exchange for a commitment
        of the transferee to bear a disproportionate share of the costs attributable
        to
        the oil and gas properties to which such interests relate and similar ordinary
        course transactions and Dispositions or series of related Dispositions of
        property and assets with a fair market value not in excess of $1,000,000
        and
        (II) Permitted Dispositions) unless (i) such consideration is at least equal
        to
        the fair market value of the assets Disposed of (as conclusively determined
        by
        the Borrower in good faith) and (ii) the fair market value of all property
        or
        assets Disposed of pursuant to this Section
        6.02(b),
        net of
        (1) the fair market value of all properties constituting consideration to
        the
        Borrower for any such Disposition, and (2) the fair market value of all assets
        useful to the business of the Borrower acquired by the Borrower or any Guarantor
        within 365 days of such Disposition, does not exceed (x) $12,000,000 in any
        fiscal year or (y) $40,000,000 in the aggregate.

       

      SECTION
        6.03.   Repurchase
        of Stock; Restricted Payments.
        The
        Borrower shall not (a) repurchase or redeem for cash any of its common
        stock or (b) pay any dividends or distributions, without the prior
        written
        consent of the Required Lenders; provided,
        however,
        that
        (i) the Borrower may declare and pay dividends consisting entirely
        of
        capital stock of the Borrower, (ii) the Borrower may make cash payments
        in
        lieu of fractional shares in an aggregate amount not exceeding $200,000,
        and
        (iii) the Borrower may declare and pay distributions effecting “poison
        pill” rights plans provided that any securities or rights so distributed have
        a
        nominal fair market value at the time of declaration.

       

      
        
          
          

        

        
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        SECTION
          6.04.   Encumbrances;
          Negative Pledge.
          The
          Borrower shall not create, incur, assume or permit to exist any Encumbrances
          on
          any of its property now owned or hereafter acquired, except for the following
          (hereinafter referred to as the “Permitted
          Encumbrances”):

         

        (a)
            Encumbrances
          for taxes, assessments, or other governmental charges not yet due or which
          are
          being contested in good faith by appropriate action promptly initiated
          and
          diligently conducted, if such reserves as shall be required by GAAP shall
          have
          been made therefor;

         

        (b)
            Encumbrances
          of landlords, vendors, carriers, warehousemen, mechanics, laborers, materialmen
          and other Encumbrances arising by law in the ordinary course of business
          for
          sums either not yet due or being contested in good faith by appropriate
          action
          promptly initiated and diligently conducted, if such reserve as shall be
          required by GAAP shall have been made therefor;

         

        (c)
            inchoate
          liens arising under ERISA to secure the contingent liabilities, if any,
          permitted by this Agreement;

         

        (d)
            Encumbrances
          created by the Collateral Documents and any other Encumbrances in favor
          of the
          Collateral Agent and/or the Secured Parties to secure the
          Indebtedness;

         

        (e)
            Encumbrances
          granted prior to the date of this Agreement to secure Non-Recourse Debt,
          and/or
          Encumbrances granted after the date of this Agreement to secure Non-Recourse
          Debt;

         

        (f)
            Encumbrances
          existing on the date hereof and set forth in Schedule
          6.04;
          provided
          that
          such Encumbrances shall secure only those obligations which they secure
          on the
          date hereof;

         

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

         

        (h)
            deposits
          to secure the performance of bids, trade contracts (other than for
          Indebtedness), leases (other than capital lease obligations), statutory
          obligations, surety and appeal bonds, performance bonds and other obligations
          of
          a like nature incurred in the ordinary course of business;

         

        (i)
            zoning
          restrictions, easements, licenses, covenants, conditions, rights-of-way,
          restrictions on use of real property and other similar encumbrances incurred
          in
          the ordinary course of business and minor irregularities of title that,
          in the
          aggregate, are not substantial in amount and do not materially detract
          from the
          value of the property subject thereto or interfere with the ordinary conduct
          of
          the business of the Borrower or any Subsidiary;

         

        
          
            
            

          

          
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        (j)
            deposits,
          encumbrances or pledges to secure payments of workmen’s compensation and other
          payments, public liability, unemployment and other insurance, old-age pensions
          or other social security obligations, or the performance of bids, tenders,
          leases, contracts (other than contracts for the payment of money), public
          or
          statutory obligations, surety, stay or appeal bonds, or other similar
          obligations arising in the ordinary course of business;

         

        (k)
            any
          Designated Title Exceptions which are incurred in the ordinary course of
          business and would not materially adversely affect the operations of the
          Borrower or otherwise in the aggregate have a Material Adverse
          Effect;

         

        (l)
            any
          Encumbrance securing Purchase Money Debt; provided
          that
          (i) such security interest is incurred, and the Debt secured thereby
          is
          created, within 180 days after the acquisition (or completion of construction)
          of the property or assets subject thereto, (ii) the Debt secured thereby
          does
          not include any other Debt that is not from the same financing source,
          (iii) such security interest do not apply to any other property
          or assets
          of the Borrower or any Subsidiary except any such property or assets which
          are
          the subject of any Encumbrance securing Debt from such financing source,
          and
          (iv) such Encumbrance does not affect any of the Mortgaged
          Properties;

         

        (m)
            any
          Encumbrance existing on any property or asset (together with any receivables,
          intangibles and proceeds related thereto) prior to the acquisition thereof
          by
          the Borrower or any Subsidiary; provided
          that
          (i) such Encumbrance is not created in contemplation of or in connection
          with such acquisition and (ii) such Encumbrance does not apply to
          any other
          property or assets of the Borrower or any Subsidiary; and provided further,
          that
          (x) such Encumbrances do not secure any Debt or other obligation
          not
          permitted under this Agreement, and (y) such Encumbrances do not
          affect any
          of the Mortgaged Properties;

         

        (n)
            Encumbrances
          securing Purchase Money Debt and Capital Lease Obligations in real property,
          improvements thereto or equipment hereafter acquired (or, in the case of
          improvements, constructed) by the Borrower or any Subsidiary (together
          with any
          receivables, intangibles and proceeds related thereto); provided
          that
          (i) such security interests secure Debt permitted by Section 6.05(k)(i),
          (ii) such security interests are incurred, and the Debt secured
          thereby is
          created, within 180 days after such acquisition (or completion of
          construction), (iii) such security interests do not apply to any
          other
          property or assets of the Borrower or any Subsidiary, and (iv) such
          security interests do not affect any of the Mortgaged Properties;

         

        (o)
            Encumbrances
          arising out of judgments or awards in respect of which the Borrower shall
          in
          good faith be prosecuting an appeal or proceedings for review and in respect
          of
          which it shall have secured a subsisting stay of execution pending such
          appeal
          or proceedings for review; provided
          that the
          Borrower shall have set aside on its books adequate reserves, in accordance
          with
          GAAP, with respect to such judgment or award;

         

        
          
            
            

          

          
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        (p)
            Encumbrances
          on the property or assets of any Person existing at the time such Person
          becomes
          a Subsidiary and not incurred as a result of (or in connection with or
          in
          anticipation of) such Person’s becoming a Subsidiary; provided
          that
          such Encumbrances do not extend to or cover any property or assets of the
          Borrower or any Subsidiary other than the property or assets encumbered
          at the
          time such Person becomes a Subsidiary; and provided further,
          that
          (i) such Encumbrances do not secure any Debt or other obligation not permitted
          under this Agreement, and (ii) such Encumbrances do not affect any
          of the
          Mortgaged Properties;

         

        (q)
            Encumbrances
          securing Debt permitted to be incurred under Section 6.05(i);

         

        (r)
            Encumbrances
          securing (x) Debt that is permitted to be incurred under Section 6.05(e)
          and (y)
          all other First Lien Obligations (as defined in the Intercreditor Agreement);
          provided
          that,
          (i) such Encumbrances shall not encumber any property that is not
          subject
          to an Encumbrance of the appropriate priority in favor of, or for the benefit
          of, the Secured Parties to secure the Indebtedness, and (ii) Encumbrances
          securing (x) Debt that is permitted to be incurred under Section 6.05(e)
          and (y)
          all other First Lien Obligations (as defined in the Intercreditor Agreement)
          may
          be contractually senior to the Encumbrances created pursuant to the Collateral
          Documents on the terms set forth in the Intercreditor Agreement or on terms
          otherwise reasonably satisfactory to the Administrative Agent, but all
          such
          Encumbrances shall be pari passu
          with
          each other; and

         

        (s)
            Encumbrances
          affecting the Borrower’s equity interest in an Unrestricted
          Subsidiary.

         
SECTION
        6.05.   Debts.
        The
        Borrower, without the prior written consent of the Required Lenders, shall
        not
        incur, create, assume or in any manner become or be liable in respect of
        any
        Debt, except for:

       

      (a)
          the
        Indebtedness;

       

      (b)
          trade
        payables or operating and facility leases from time to time incurred in the
        ordinary course of business;

       

      (c)
          Non-Recourse
        Debt not to exceed $25,000,000 at any time outstanding; provided
        that for
        any Non-Recourse Debt incurred by the Borrower subsequent to the execution
        of
        this Agreement, the Borrower must obtain the Required Lenders’ prior written
        consent to the relevant documentation establishing/evidencing the non-recourse
        nature and amount of such Non-Recourse Debt, which consent will not be
        unreasonably withheld;

       

      (d)
          Taxes,
        assessments or other government charges which are not yet due or are being
        contested in good faith by appropriate action promptly initiated and


       

      
        
          
          

        

        
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        diligently
          conducted, if such reserve as shall be required by generally accepted accounting
          principles shall have been made therefor;

      

       

      (e)
          Debt
        incurred under the Revolving Credit Agreement in an aggregate principal amount
        not to exceed the amount permitted under the Intercreditor Agreement at any
        time
        outstanding;

       

      (f)
          Debt
        (excluding Non-Recourse Debt) existing as of the date of this Agreement as
        set
        forth in Schedule 6.05,
        together with extensions or refinancings;

       

      (g)
          Indebtedness
        arising under any performance bond, or letter of credit obtained for similar
        purposes, or any reimbursement obligations in respect thereof, entered into
        in
        the ordinary course of business;

       

      (h)
          Debt
        of
        the Borrower to any wholly owned Subsidiary and Debt of any wholly owned
        Subsidiary to the Borrower or any other wholly owned Subsidiary;

       

      (i)
          Debt
        represented by Hedging Agreements permitted by this Agreement;

       

      (j)
          guarantees
        by the Borrower of Debt of any Subsidiary and by any Subsidiary of Debt of
        the
        Borrower or any other Subsidiary; and

       

      (k)
          subject
        to a maximum aggregate principal amount at any time outstanding not in excess
        of
        $5,000,000, the following: (i) Purchase Money Debt and Capital Lease
        Obligations; (ii) additional unsecured Debt; and (iii) Debt
        of any
        Person that becomes a Subsidiary after the date hereof; provided
        that
        such Debt exists at the time such Person becomes a Subsidiary and is not
        created
        in contemplation of or in connection with such Person becoming a
        Subsidiary.

       

      SECTION
        6.06.   Investments,
        Loans and Advances.
        The
        Borrower shall not make or permit to remain outstanding any loans or advances
        to
        or make investments or acquire an equity interest in any Person, except
        for:

       

      (a)
          Direct
        obligations of, or obligations the principal of and interest on which are
        unconditionally guaranteed by, the United States of America (or by any agency
        thereof to the extent such obligations are backed by the full faith and credit
        of the United States of America), in each case maturing within one year from
        the
        date of acquisition thereof;

       

      (b)
          Investments
        in commercial paper maturing within 270 days from the date of acquisition
        thereof and having, at such date of acquisition, one of the two highest credit
        rating obtainable from Standard & Poor’s Ratings Service or from Moody’s
        Investors Service, Inc.;

       

      (c)
          Investments
        in certificates of deposit, banker’s acceptances, repurchase agreements and time
        deposits maturing within one year from the date 

       

      
        
          
          

        

        
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        of
          acquisition thereof issued or guaranteed by or placed with, and money market
          deposit accounts issued or offered by, any domestic office of any commercial
          bank organized under the laws of the United States of America or any State
          thereof that has a combined capital and surplus and undivided profits of
          not
          less than $250,000,000;

      

       

      (d)
          Shares
        of
        funds registered under the Investment Company Act of 1940, as amended, that
        have
        assets of at least $100,000,000 and invest only in obligations described
        in
clauses (a)
        through (c)
        above to
        the extent that such shares are rated by Moody’s Investors Service, Inc. or
        Standard & Poor’s Ratings Service in one of the two highest rating
        categories assigned by such agency for shares of such nature;

       

      (e)
          Loans
        by
        the Borrower to the Guarantors and any other Subsidiary of the Borrower that
        is
        a guarantor of the Indebtedness or capital contributions or investments by
        the
        Borrower in any Guarantor and any other Subsidiary of Borrower that is a
        guarantor of the Indebtedness; provided,
        however,
        the
        following loans, investments or capital contributions are excluded from this
        part (e): loans, investments or capital contributions by the Borrower
        to
        any Guarantor or any other Subsidiary of Borrower that is a guarantor of
        the
        Indebtedness, if such Guarantor or other said Subsidiary uses the proceeds
        of
        such loan, contribution or investment to invest in Pinnacle Gas Resources,
        Inc.
        or any other entity in which the Borrower, such Guarantor or other said
        Subsidiary owns an equity interest;

       

      (f)
          Loans
        or
        advances to employees in the ordinary course of business in an aggregate
        amount
        for all employees of the Borrower and the Subsidiaries not in excess of $750,000
        at any one time outstanding;

       

      (g)
          Trade
        credits and accounts arising in the ordinary course of business;

       

      (h)
          Investments
        made as a result of the receipt of non-cash consideration from a Disposition
        that was made pursuant to and in compliance with this Agreement;

       

      (i)
          Investments
        made in any debtor of the Borrower as a result of the receipt of stock,
        obligations or securities in settlement of debts created in the ordinary
        course
        of business and owing to the Borrower or any Subsidiary;

       

      (j)
          Investments
        made pursuant to the requirements of farm-out, farm-in, joint operating,
        joint
        venture or area of mutual interest agreements, gathering systems, pipelines
        or
        other similar or customary arrangements entered into in the ordinary course
        of
        business (including advances to operators under operating agreements entered
        into by the Borrower in the ordinary course of business); provided
        that any
        such single investment in excess of $1,000,000 shall be approved by the Board
        of
        Directors of the Borrower;

       

      
        
          
          

        

        
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      (k)
          Investments
        made in connection with the purchase, lease, or other acquisition of tangible
        assets of any Person and investments made in connection with the purchase,
        lease
        or other acquisition of all or substantially all of the business, of any
        Person,
        or all of the capital stock or other equity interests of any Person, or any
        division, line of business or business unit of any Person (including (i) by
        the merger or consolidation of such Person into the Borrower or any Subsidiary
        or by the merger of a Subsidiary into such Person and (ii) the purchase
        of
        proved reserves); provided
        that any
        newly acquired Subsidiary shall promptly comply with the requirements of
        Section
        5.13;
        and

       

      (l)
          Any
        other
        investments in any Person having an aggregate fair market value (measured
        on the
        date each such investment was made and without giving effect to subsequent
        changes in value), when taken together with all other investments made pursuant
        to this clause (l)
        not to
        exceed the greater of (i) $2,000,000 and (ii) the basket from
        time to
        time set forth in the Revolving Credit Agreement for such
        investments.

       

      SECTION
        6.07.   Other
        Agreements.
        Except
        as set forth in Schedule 4.01,
        the
        Borrower shall not enter into any agreement containing any provision which
        would
        be violated or breached by the performance of its obligations hereunder or
        under
        any instrument or document delivered or to be delivered by it hereunder or
        in
        connection herewith; provided
        that the
        Borrower may agree to the redemption or repurchase of its securities upon
        a
        change of control or dissolution, winding-up or liquidation of, or the merger
        or
        sale of substantially all the assets of, the Borrower (provided further
        that
        nothing in this Section 6.07
        shall
        permit any action otherwise prohibited by Sections 6.01
        and
6.02).

       

      SECTION
        6.08.   Transactions
        with Affiliates.
        Except
        as set forth on Schedule 6.08
        attached
        hereto, the Borrower shall not sell or transfer any property or assets to,
        or
        purchase or acquire any property or assets from, or otherwise engage in any
        other transactions with, any of its affiliates unless such transaction is
        on
        terms that are no less favorable to the Borrower or such Subsidiary, as the
        case
        may be, than those that could be obtained at the time of such transaction
        on an
        arm’s-length basis from a Person who is not an affiliate and if such transaction
        involves an amount in excess of $500,000, such transaction has been approved
        by
        a majority of the members of the Board of Directors of the Borrower having
        no
        personal stake in such transaction; provided,
        however,
        that
        this Section 6.08
        (i) shall not apply to transactions between a Subsidiary and the Borrower
        or any other Subsidiary, or between Pinnacle and the Borrower or a Subsidiary,
        (ii) shall not prohibit any person serving as an officer, director,
        employee or consultant of the Borrower or any Subsidiary from (A) receiving
        reasonable compensation, benefits or indemnification in connection with his
        or
        her services in such capacity, provided
        that any
        such compensation, benefits or indemnification are approved by a majority
        of the
        disinterested members of the Board of Directors of the Borrower or by the
        Compensation Committee of the Borrower, (B) receiving advances for
        travel
        or other business expenses made in the ordinary course of business or
        (C) participating in any benefit or compensation plan; and (iii) shall
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        to
          any
          director or its affiliates when due on its scheduled maturity dates any
          indebtedness for borrowed money permitted to be incurred in accordance
          with this
          Agreement.

      

       

      SECTION
        6.09.   Use
        of
        Loan Proceeds.
        The
        Borrower shall not use any Loan proceeds to finance investments in marketable
        securities.

       

      SECTION
        6.10.   Commodity
        Transactions.
        The
        Borrower shall not enter into any speculative commodity transactions of any
        type
        or Hedging Agreement relating to the sale of aggregate Hydrocarbons production
        in excess of 85% of the total volume of such production projected in the
        most
        recent Reserve Report delivered to the Administrative Agent pursuant to
Section 5.01(e)
        or
Section 5.01(g),
        as
        applicable, to come from the Borrower’s proved developed reserves during the
        term of such Hedging Agreement (it being understood and agreed that for purposes
        of determining compliance with such 85% cap, the Borrower may in good faith
        take
        into account the pro forma effect on such projected production of new wells
        that
        are not included in the most recent Reserve Report and may enter into Hedging
        Agreements affecting such new wells subject to compliance with such 85% cap).
        Notwithstanding
        the foregoing, the maximum duration of any permitted Hedging Agreement shall
        not
        exceed 48 months;
        provided
        that,
        with respect to any Hedging Agreement with a duration in excess of 24 months,
        no
        more than 50% of the amount of the projected production to come from proved
        developed producing reserves may be subject to hedging arrangements pursuant
        to
        such Hedging Agreement during the period from and including the twenty-fifth
        month of such Hedging Agreement to and including the forty-eighth month of
        such
        Hedging Agreement.

       

      SECTION
        6.11.   Other
        Debt and Agreements.
        The
        Borrower shall not permit any waiver, supplement, modification or amendment
        of
        any of the terms of the Revolving Credit Agreement or any document relating
        thereto that is not permitted under the Intercreditor Agreement.

       

      SECTION
        6.12.   Business
        of the Borrower and Subsidiaries.
        The
        Borrower shall not, and shall not permit any Subsidiary to, engage at any
        time
        in any business or business activity other than the Subject Business and
        other
        business activities reasonably related thereto.

       

      ARTICLE
        VII  

       

      Events
        of Default

       

      SECTION
        7.01.   Events
        of Default.
        The
        occurrence of any one or more of the following shall constitute an Event
        of
        Default:

       

      (a)
          Default
        Under the Indebtedness.
        Should
        the Borrower default in the payment of principal under the Indebtedness included
        in clause (c) of the definition thereof of the Borrower to the Lenders, or
        should the Borrower default in the payment of interest under the Indebtedness
        of
        the Borrower to the Lenders within 10 days after any such interest payment
        is
        due.

       

      
        
          
          

        

        
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      (b)
          Default
        Under This Agreement.
        Should
        the Borrower violate or fail to comply fully with any of the terms and
        conditions of, or default under, this Agreement, and such default not be
        cured
        within 30 days of the occurrence thereof; provided,
        however,
        that
        the cure period available for a default in the obligation to maintain insurance
        coverages required hereby shall be 10 days.

       

      (c)
          Default
        Under Other Agreements.
        Should
        any event of default occur or exist under any of the Related Documents or
        should
        the Borrower and/or any Guarantor violate, or fail to comply fully with,
        any
        terms and conditions of any of the Collateral Documents or Related Documents,
        and such default not be cured within 20 days of the occurrence
        thereof.

       

      (d)
          Default
        in Favor of Third Parties.
        Should
        the Borrower or any Guarantor (i) fail to pay Debt having a principal
        amount in excess of $1,500,000 in the aggregate (other than the amounts referred
        to in Section 7.01(a)),
        or any
        interest or premium thereon, when due (or, if permitted by the terms of the
        relevant document, within any applicable grace period), whether such Debt
        shall
        become due by scheduled maturity, by required prepayment, by acceleration,
        by
        demand or otherwise; or (ii) fail to perform any term, covenant or
        condition on its part to be performed under any agreement or instrument
        evidencing, securing or relating to Debt having a principal amount in excess
        of
        $1,500,000 in the aggregate, when required to be performed, and such failure
        shall continue after the applicable grace period, if any, specified in such
        agreement or instrument, if the effect of such failure is to accelerate,
        or to
        permit the holder or holders of such Debt to accelerate, the maturity of
        such
        Debt.

       

      (e)
          Insolvency.
        The
        following occurrences, in addition to the failure or suspension of the Borrower,
        shall constitute an Event of Default hereunder:

       

      (i)
          Filing
        by
        the Borrower and/or any Guarantor of a voluntary petition or any answer seeking
        reorganization, arrangement, readjustment of its debts or for any other relief
        under any applicable bankruptcy act or law, or under any other insolvency
        act or
        law, now or hereafter existing, or any action by the Borrower and/or any
        Guarantor consenting to, approving of, or acquiescing in, any such petition
        or
        proceeding; the application by the Borrower and/or any Guarantor for, or
        the
        appointment by consent or acquiescence of, a receiver or trustee of the Borrower
        and/or any Guarantor for all or a substantial part of the property of the
        Borrower and/or any Guarantor; the making by the Borrower and/or any Guarantor,
        of an assignment for the benefit of creditors; the inability of the Borrower
        and/or any Guarantor or the admission by the Borrower and/or any Guarantor
        in
        writing, of its inability to pay its debts as they mature (the term
“acquiescence” means the failure to file a petition or motion in opposition to
        such petition or proceeding or to vacate or discharge any order, judgment
        or
        decree providing for such appointment within 60 days after the appointment
        of a
        receiver or trustee); or

       

      
        
          
          

        

        
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      (ii)
          Filing
        of
        an involuntary petition against the Borrower and/or any Guarantor in bankruptcy
        or seeking reorganization, arrangement, readjustment of its debts or for
        any
        other relief under any applicable bankruptcy act or law, or under any other
        insolvency act or law, now or hereafter existing and such petition remains
        undismissed or unanswered for a period of 60 days from such filing; or the
        insolvency appointment of a receiver or trustee of the Borrower and/or any
        Guarantor for all or a substantial part of the property of the Borrower and/or
        any Guarantor and such appointment remains unvacated or unopposed for a period
        of 60 days from such appointment, execution or similar process against any
        substantial part of the property of the Borrower and/or any Guarantor and
        such
        warrant remains unbonded or undismissed for a period of 60 days from notice
        to
        the Borrower or any Guarantor of its issuance.

       

      (f)
          Dissolution
        Proceedings.
        Should
        proceedings for the dissolution or appointment of a liquidator of the Borrower
        and/or any Guarantor be commenced.

       

      (g)
          False
        Statements.
        Should
        any representation or warranty of the Borrower made by the Borrower to the
        Administrative Agent and/or the Lenders in this Agreement or any other Loan
        Document or in any certificate or statement furnished thereunder prove to
        be
        incorrect or misleading in any material respect when made or
        reaffirmed.

       

      (h)
          Change
        in Control.
        Should a
        Change in Control occur.

       

      Notwithstanding
        the foregoing, the occurrence of an “Event of Default” by the Borrower or any
        Subsidiary under the Revolving Credit Agreement or any indenture, loan or
        credit
        agreement or similar document governing Debt permitted to be incurred under
        Section
        6.05(e)
        shall
        not constitute an Event of Default hereunder until the earlier of (i) 45
        days of the occurrence of the event resulting in such “Event of Default” under
        the Revolving Credit Agreement or such other instrument, so long as such
        Event
        of Default shall not have been cured or waived during such 45-day period,
        and
        (ii) acceleration of any portion of the Debt under the Revolving Credit
        Agreement or such other instrument.

       

      Upon
        the
        occurrence of an Event of Default, at the Lenders’ option, all Indebtedness
        included in clause (c) of the definition thereof of the Borrower will become
        immediately due and payable, except that in the case of an Event of
        Default
        of the type described in the “Insolvency” subsection above, such acceleration
        shall be automatic and not optional. For any other Event of Default, the
        Administrative Agent, upon request of the Required Lenders, shall by notice
        to
        the Borrower declare the principal of, and all interest then accrued on,
        the
        Loans any other liabilities hereunder to be forthwith due and payable, whereupon
        the same shall forthwith become due and payable without presentment, demand,
        protest, notice of intent to accelerate, notice of acceleration or other
        notice
        of any kind, all of which the Borrower and each Guarantor hereby expressly
        waive, anything contained herein or in any other Loan Document to the contrary
        notwithstanding. Upon the occurrence of an Event of Default and upon the
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        Required
          Lenders, the Administrative Agent shall exercise any and all rights and
          remedies
          under the Loan Documents, or any of them, granted to the Administrative
          Agent
          hereunder or granted to the Administrative Agent at law or in equity, including
          foreclosure of the Collateral. Nothing contained in this Article VII
          shall be
          construed to limit or amend in any way the Events of Default enumerated
          in any
          Loan Document, or any other document executed in connection with the transaction
          contemplated herein.

      

       

      Upon
        the
        occurrence and during the continuance of any Event of Default, the Lenders
        are
        hereby authorized at any time and from time to time, without notice to the
        Borrower or the Guarantors (any such notice being expressly waived by the
        Borrower and the Guarantors), to set off and apply any and all deposits (general
        or special, time or demand, provisional or final) at any time held and other
        indebtedness at any time owing by any of the Lenders to or for the credit
        or the
        account of the Borrower against any and all of the indebtedness of the Borrower
        under the Loan Documents, including this Agreement, irrespective of whether
        or
        not the Lenders shall have made any demand under the Loan Documents, including
        this Agreement and although such indebtedness may be unmatured. Any amount
        set
        off by the Lenders shall be applied against the indebtedness owed the Lenders
        by
        the Borrower pursuant to this Agreement. The Lenders agree promptly to notify
        the Borrower after any such setoff and application; provided
        that the
        failure to give such notice shall not affect the validity of such set-off
        and
        application. The rights of the Lenders under this Section
        7.01
        are in
        addition to other rights and remedies (including other rights of set-off)
        which
        the Lenders may have.

       

      SECTION
        7.02.   Waivers.
        Except
        as otherwise provided for in this Agreement and by applicable law, the Borrower
        and each Guarantor waive to the extent permitted by applicable law (i)
        presentment, demand and protest and notice of presentment, dishonor, notice
        of
        intent to accelerate, notice of acceleration, protest, default, nonpayment,
        maturity, release, compromise, settlement, extension or renewal of any or
        all
        commercial paper, accounts, contract rights, documents, instruments, chattel
        paper and Guarantees at any time held by the Administrative Agent for the
        benefit of the Lenders on which the Borrower and the Guarantors may in any
        way
        be liable and hereby ratify and confirm whatever the Administrative Agent
        and/or
        the Lenders may do in this regard, (ii) all rights to notice and a hearing
        prior
        to the Administrative Agent’s taking possession or control of, or to the
        Administrative Agent’s replevy, attachment or levy upon, the Collateral or any
        bond or security which might be required by any court prior to allowing the
        Administrative Agent to exercise any of its remedies, and (iii) the
        benefit
        of all valuation, appraisal and exemption laws. The Borrower and each Guarantor
        acknowledge that they have been advised by counsel of their choice with respect
        to this Agreement, the other Collateral Documents, and the transactions
        evidenced by this Agreement and other Collateral Documents.

       

      SECTION
        7.03.   Notice
        to Delta Farms Lessors.
        The
        Borrower and each Guarantor hereby authorize and direct the Administrative
        Agent
        to provide the lessors of the oil, gas and mineral leases granted by Delta
        Farms
        to the Borrower (the “Delta
        Farms Lessors”)
        with a
        copy of any notice of the occurrence of any Event of Default which the
        Administrative Agent may choose or be required to send to the Borrower and/or
        each Guarantor under this Agreement. The Borrower and each Guarantor hereby
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        Administrative
          Agent and the Lenders and hold the Administrative Agent and the Lenders
          harmless
          from any liability occasioned by the giving of or the failure to give any
          such
          notice, it being understood that the Administrative Agent shall use its
          best
          efforts to provide such notice to the Delta Farms Lessors, but shall have
          no
          obligation or liability to Delta Farms Lessors for its failure to do so.
          Under
          no circumstances shall Delta Farms Lessors be considered as a third party
          beneficiary of this Agreement.

      

       

      ARTICLE
        VIII  

       

      The
        Administrative Agent and the Collateral Agent

       

      Each
        of
        the Lenders hereby irrevocably appoints the Administrative Agent and the
        Collateral Agent (for purposes of this Article
        VIII,
        the
        Administrative Agent and the Collateral Agent are referred to collectively
        as
        the “Agents”)
        its
        agent and authorizes the Agents to take such actions on its behalf and to
        exercise such powers as are delegated to such Agent by the terms of the Loan
        Documents, together with such actions and powers as are reasonably incidental
        thereto. Without limiting the generality of the foregoing, the Agents are
        hereby
        expressly authorized to execute any and all documents (including releases)
        with
        respect to the Collateral and the rights of the Secured Parties with respect
        thereto, as contemplated by and in accordance with the provisions of this
        Agreement and the Security Documents.

       

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

       

      Neither
        Agent shall have any duties or obligations except those expressly set forth
        in
        the Loan Documents. Without limiting the generality of the foregoing, (a)
        neither Agent shall be subject to any fiduciary or other implied duties,
        regardless of whether a Default has occurred and is continuing, (b) neither
        Agent shall have any duty to take any discretionary action or exercise any
        discretionary powers, except discretionary rights and powers expressly
        contemplated hereby that such Agent is instructed in writing to exercise
        by the
        Required Lenders (or such other number or percentage of the Lenders as shall
        be
        necessary under the circumstances as provided in Section
        9.08),
        and
        (c) except as expressly set forth in the Loan Documents, neither Agent shall
        have any duty to disclose, nor shall it be liable for the failure to disclose,
        any information relating to the Borrower or any Subsidiary that is communicated
        to or obtained by the bank serving as Administrative Agent and/or Collateral
        Agent or any of its affiliates in any capacity. Neither Agent shall be liable
        for any action taken or not taken by it with the consent or at the request
        of
        the Required Lenders (or such other number or percentage of the Lenders as
        shall
        be necessary under the circumstances as provided in Section
        9.08)
        or in
        the absence of its own gross negligence or willful misconduct. Neither Agent
        shall be deemed to have knowledge of any Default unless and until written
        notice
        thereof is given to such Agent by the Borrower or a Lender, and 

       

      
        
          
          

        

        
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        neither
          Agent shall be responsible for or have any duty to ascertain or inquire
          into (i)
          any statement, warranty or representation made in or in connection with
          any Loan
          Document, (ii) the contents of any certificate, report or other document
          delivered thereunder or in connection therewith, (iii) the performance
          or
          observance of any of the covenants, agreements or other terms or conditions
          set
          forth in any Loan Document, (iv) the validity, enforceability, effectiveness
          or
          genuineness of any Loan Document or any other agreement, instrument or
          document,
          or (v) the satisfaction of any condition set forth in Article
          III
          or
          elsewhere in any Loan Document, other than to confirm receipt of items
          expressly
          required to be delivered to such Agent.

      

       

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

       

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

       

      Subject
        to the appointment and acceptance of a successor Agent as provided below,
        either
        Agent may resign at any time by notifying the Lenders and the Borrower. Upon
        any
        such resignation, the Required Lenders shall have the right, in consultation
        with the Borrower, to appoint a successor. If no successor shall have been
        so
        appointed by the Required Lenders and shall have accepted such appointment
        within 30 days after the retiring Agent gives notice of its resignation,
        then the retiring Agent may, on behalf of the Lenders, appoint a successor
        Agent
        which shall be a bank with an office in New York, New York, or an affiliate
        of
        any such bank. Upon the acceptance of its appointment as Agent hereunder
        by a
        successor, such successor shall succeed to and become vested with all the
        rights, powers, privileges and duties of the retiring Agent, and the retiring
        Agent shall be discharged from its duties and obligations hereunder. The
        fees
        payable by the Borrower to a successor Agent shall be the same as those payable
        to its predecessor unless otherwise agreed between the Borrower and such
        successor. After an Agent’s resignation hereunder, the provisions of this
Article
        VIII
        and
Section 9.05
        shall
        continue in effect for the benefit of such retiring Agent, its sub-agents
        and
        their respective Related Parties in respect of any actions taken or omitted
        to
        be taken by any of them while acting as Agent.

       

      
        
          
          

        

        
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      Each
        Lender acknowledges that it has, independently and without reliance upon
        the
        Agents or any other Lender and based on such documents and information as
        it has
        deemed appropriate, made its own credit analysis and decision to enter into
        this
        Agreement. Each Lender also acknowledges that it will, independently and
        without
        reliance upon the Agents or any other Lender and based on such documents
        and
        information as it shall from time to time deem appropriate, continue to make
        its
        own decisions in taking or not taking action under or based upon this Agreement
        or any other Loan Document, any related agreement or any document furnished
        hereunder or thereunder.

       

      ARTICLE
        IX  

       

      Miscellaneous

       

      SECTION
        9.01.   Notices.
        Notices
        and other communications provided for herein shall be in writing and shall
        be
        delivered by hand or overnight courier service, mailed by certified or
        registered mail or sent by fax, as follows:

       

      (a)
          if
        to the
        Borrower or any Guarantor, to it at 1000 Louisiana Street, Suite 1500,
        Houston, TX 77002, Attention of Paul F. Boling  (Fax No. (713)
        328-1060);

       

      (b)
          if
        to the
        Administrative Agent, to Credit Suisse, Eleven Madison Avenue, New York,
        NY
        10010, Attention of Agency Group (Fax No. (212) 325-8304); and

       

      (c)
          if
        to a
        Lender, to it at its address (or fax number) set forth on Schedule
        2.01
        or in
        the Assignment and Acceptance pursuant to which such Lender shall have become
        a
        party hereto.

       

      Any
        party
        hereto may change its address or fax number for notices and other communications
        hereunder by notice to the other parties hereto. All notices and other
        communications given to any party hereto in accordance with the provisions
        of
        this Agreement shall be deemed to have been given on the date of receipt
        if
        delivered by hand or overnight courier service or sent by fax or on the date
        five Business Days after dispatch by certified or registered mail if mailed,
        in
        each case delivered, sent or mailed (properly addressed) to such party as
        provided in this Section 9.01
        or in
        accordance with the latest unrevoked direction from such party given in
        accordance with this Section 9.01.
        As may
        be agreed to among the Borrower, each Guarantor, the Administrative Agent
        and
        the applicable Lenders from time to time, notices and other communications
        may
        also be delivered by e-mail to the e-mail address of a representative of
        the
        applicable person provided from time to time by such person.

       

      SECTION
        9.02.   Survival
        of Agreement.
        All
        covenants, agreements, representations and warranties made by the Borrower
        and
        the Guarantors herein and in the certificates or other instruments prepared
        or
        delivered in connection with or pursuant to this Agreement or any other Loan
        Document shall be considered to have been relied upon by the Lenders and
        shall
        survive the making by the Lenders of the Loans, regardless 

       

      
        
          
          

        

        
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        of
          any
          investigation made by the Lenders or on their behalf, and shall continue
          in full
          force and effect as long as the principal of or any accrued interest on
          any Loan
          or any fee or any other amount payable under this Agreement or any other
          Loan
          Document is outstanding and unpaid and so long as the Commitments have
          not been
          terminated. The provisions of Sections
          2.13,
          2.15,
          2.19
          and
9.05
          shall
          remain operative and in full force and effect regardless of the expiration
          of
          the term of this Agreement, the consummation of the transactions contemplated
          hereby, the repayment of any of the Loans, the expiration of the Commitments,
          the invalidity or unenforceability of any term or provision of this Agreement
          or
          any other Loan Document, or any investigation made by or on behalf of the
          Administrative Agent, the Collateral Agent or any Lender.

      

       

      SECTION
        9.03.   Binding
        Effect.
        This
        Agreement shall become effective when it shall have been executed by the
        Borrower, each Guarantor, and the Administrative Agent and when the
        Administrative Agent shall have received counterparts hereof which, when
        taken
        together, bear the signatures of each of the other parties hereto.

       

      SECTION
        9.04.   Successors
        and Assigns. (a)
        Whenever
        in this Agreement any of the parties hereto is referred to, such reference
        shall
        be deemed to include the permitted successors and assigns of such party;
        and all
        covenants, promises and agreements by or on behalf of the Borrower, each
        Guarantor, the Administrative Agent, the Collateral Agent or the Lenders
        that
        are contained in this Agreement shall bind and inure to the benefit of their
        respective successors and assigns.

       

      (b)
          Each
        Lender may assign to one or more assignees (other than any Competitor) all
        or a
        portion of its interests, rights and obligations under this Agreement (including
        all or a portion of its Commitment and the Loans at the time owing to it),
        with
        notice to the Borrower (unless such assignment is made in connection with
        the
        primary syndication of the Loans to Persons previously identified to the
        Borrower or is made to an existing Lender or an affiliate thereof) and with
        the
        prior written consent of the Administrative Agent (not to be unreasonably
        withheld or delayed); provided,
        however,
        that
        (i) the amount of the Commitment or Loans of the assigning Lender
        subject
        to each such assignment (determined as of the date the Assignment and Acceptance
        with respect to such assignment is delivered to the Administrative Agent
        and
        determined on an aggregate basis in the event of concurrent assignments to
        Related Funds (as defined below)) shall not be less than $1,000,000 (or,
        if
        less, the entire remaining amount of such Lender’s Commitment or Loans),
        (ii) the parties to each such assignment shall (A) electronically
        execute and deliver to the Administrative Agent an Assignment and Acceptance
        via
        an electronic settlement system acceptable to the Administrative Agent (which
        initially shall be ClearPar, LLC) or (B) manually execute and deliver
        to
        the Administrative Agent an Assignment and Acceptance, together with a
        processing and recordation fee of $3,500 (which, for the avoidance of doubt,
        shall not be for the account of the Borrower, other than in respect of an
        assignment initiated by the Borrower pursuant to Section 2.20),
        and
        (iii) the assignee, if it shall not be a Lender, shall deliver to
        the
        Administrative Agent an Administrative Questionnaire and all applicable tax
        forms. Upon acceptance and recording pursuant to paragraph (e)
        of this
Section 9.04,
        from
        and after the effective date specified in each Assignment and Acceptance,
        (A)
        the assignee 

       

      
        
          
          

        

        
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        thereunder
          shall be a party hereto and, to the extent of the interest assigned by
          such
          Assignment and Acceptance, have the rights and obligations of a Lender
          under
          this Agreement and (B) the assigning Lender thereunder shall, to
          the extent
          of the interest assigned by such Assignment and Acceptance, be released
          from its
          obligations under this Agreement (and, in the case of an Assignment and
          Acceptance covering all or the remaining portion of an assigning Lender’s rights
          and obligations under this Agreement, such Lender shall cease to be a party
          hereto but shall continue to be entitled to the benefits of Sections 2.13,
          2.15,
          2.19
          and
9.05,
          as well
          as to any fees accrued for its account prior to the effective date specified
          in
          such Assignment and Acceptance and not yet paid). The term “Related
          Funds”
          shall
          mean with respect to any Lender that is a fund or combined investment vehicle
          that invests in bank loans, any other fund that invests in bank loans and
          is
          managed or advised by the same investment advisor as such Lender or by
          an
          affiliate of such investment advisor.

      

       

      (c)
          By
        executing and delivering an Assignment and Acceptance, the assigning Lender
        thereunder and the assignee thereunder shall be deemed to confirm to and
        agree
        with each other and the other parties hereto as
        follows:  (i) such assigning Lender warrants that it
        is the legal
        and beneficial owner of the interest being assigned thereby free and clear
        of
        any adverse claim and that its Commitment, and the outstanding balances of
        its
        Loans, in each case without giving effect to assignments thereof which have
        not
        become effective, are as set forth in such Assignment and Acceptance,
        (ii) except as set forth in (i) above, such assigning Lender
        makes no
        representation or warranty and assumes no responsibility with respect to
        any
        statements, warranties or representations made in or in connection with this
        Agreement, or the execution, legality, validity, enforceability, genuineness,
        sufficiency or value of this Agreement, any other Loan Document or any other
        instrument or document furnished pursuant hereto, or the financial condition
        of
        the Borrower or any Subsidiary or the performance or observance by the Borrower
        or any Subsidiary of any of its obligations under this Agreement, any other
        Loan
        Document or any other instrument or document furnished pursuant hereto;
        (iii) such assignee represents and warrants that it is legally authorized
        to enter into such Assignment and Acceptance and that it is not a Competitor;
        (iv) such assignee confirms that it has received a copy of this Agreement,
        together with copies of the most recent financial statements referred to
        in
Section 4.02
        or
        delivered pursuant to Section 5.01,
        the
        Intercreditor Agreement and such other documents and information as it has
        deemed appropriate to make its own credit analysis and decision to enter
        into
        such Assignment and Acceptance; (v) such assignee will independently
        and
        without reliance upon the Administrative Agent, the Collateral Agent, such
        assigning Lender 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 this Agreement; (vi) such
        assignee appoints and authorizes the Administrative Agent and the Collateral
        Agent to take such action as agent on its behalf and to exercise such powers
        under this Agreement as are delegated to the Administrative Agent and the
        Collateral Agent, respectively, by the terms hereof, together with such powers
        as are reasonably incidental thereto; and (vii) such assignee agrees
        that
        it will perform in accordance with their terms all the obligations which
        by the
        terms of this Agreement are required to be performed by it as a Lender and
        will
        be bound by and will take no actions contrary to the provisions of the
        Intercreditor Agreement. The Administrative Agent shall be entitled


       

      
        
          
          

        

        
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        to
          rely,
          without any independent investigation, on the representations and warranties
          and
          other statements deemed to be made by the assigning Lender and the assignee
          pursuant to this Section 9.04(c)
          and
          shall not incur any liability for relying thereon.

      

       

      (d)
          The
        Administrative Agent, acting for this purpose as an agent of the Borrower,
        shall
        maintain at one of its offices in The City of New York a copy of each Assignment
        and Acceptance delivered to it and a register for the recordation of the
        names
        and addresses of the Lenders, and the Commitment of, and principal amount
        of the
        Loans owing to, each Lender pursuant to the terms hereof from time to time
        (the
“Register”).
        The
        entries in the Register shall be conclusive and the Borrower, each Guarantor,
        the Administrative Agent, the Collateral 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 Borrower,
        each Guarantor, the Collateral Agent and any Lender, at any reasonable time
        and
        from time to time upon reasonable prior notice.

       

      (e)
          Upon
        its
        receipt of, and consent to, a duly completed Assignment and Acceptance executed
        by an assigning Lender and an assignee, an Administrative Questionnaire
        completed in respect of the assignee (unless the assignee shall already be
        a
        Lender hereunder), the processing and recordation fee referred to in
paragraph (b)
        above,
        if applicable, and the written consent of the Administrative Agent and, if
        required, the Borrower to such assignment and any applicable tax forms, the
        Administrative Agent shall (i) accept such Assignment and Acceptance
        and
        (ii) record the information contained therein in the Register. No
        assignment shall be effective unless it has been recorded in the Register
        as
        provided in this paragraph (e).

       

      (f)
          Each
        Lender may without the consent of the Borrower or the Administrative Agent
        sell
        participations to one or more banks or other Persons (other than Competitors)
        in
        all or a portion of its rights and obligations under this Agreement (including
        all or a portion of its Commitment and the Loans owing to it); provided,
        however,
        that
        (i) such Lender’s obligations under this Agreement shall remain unchanged,
        (ii) such Lender shall remain solely responsible to the other parties
        hereto for the performance of such obligations, (iii) the participating
        banks or other persons shall be entitled to the benefit of the cost protection
        provisions contained in Sections 2.13,
        2.15
        and
2.19
        to the
        same extent as if they were Lenders (but, with respect to any particular
        participant, to no greater extent than the Lender that sold the participation
        to
        such participant) and (iv) the Borrower, the Administrative Agent
        and the
        Lenders shall continue to deal solely and directly with such Lender in
        connection with such Lender’s rights and obligations under this Agreement, and
        such Lender shall retain the sole right to enforce the obligations of the
        Borrower relating to the Loans and to approve any amendment, modification
        or
        waiver of any provision of this Agreement (other than amendments, modifications
        or waivers decreasing any fees payable to such participating bank or person
        hereunder or the amount of principal of or the rate at which interest is
        payable
        on the Loans in which such participating bank or person has an interest,
        extending any scheduled principal payment date or date fixed for the payment
        of
        interest on the Loans in which such participating bank or person has an
        interest, increasing or 

       

      
        
          
          

        

        
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        extending
          the Commitments in which such participating bank or person has an interest
          or
          releasing any Guarantor or all or substantially all of the
          Collateral).

      

       

      (g)
          Any
        Lender or participant may, in connection with any assignment or participation
        or
        proposed assignment or participation pursuant to this Section 9.04,
        disclose to the assignee or participant or proposed assignee or participant
        any
        information relating to the Borrower furnished to such Lender by or on behalf
        of
        the Borrower; provided
        that,
        prior to any such disclosure of information designated by the Borrower as
        confidential, each such assignee or participant or proposed assignee or
        participant shall execute an agreement whereby such assignee or participant
        shall agree (subject to customary exceptions) to preserve the confidentiality
        of
        such confidential information on terms no less restrictive than those applicable
        to the Lenders pursuant to Section 9.16.

       

      (h)
          Any
        Lender may at any time assign all or any portion of its rights under this
        Agreement to secure extensions of credit to such Lender or in support of
        obligations owed by such Lender; provided
        that no
        such assignment shall release a Lender from any of its obligations hereunder
        or
        substitute any such assignee for such Lender as a party hereto.

       

      (i)
          Notwithstanding
        anything to the contrary contained herein, any Lender (a “Granting
        Lender”)
        may
        grant to a special purpose funding vehicle (an “SPC”),
        identified as such in writing from time to time by the Granting Lender to
        the
        Administrative Agent and the Borrower, the option to provide to the Borrower
        all
        or any part of any Loan that such Granting Lender would otherwise be obligated
        to make to the Borrower on the Closing Date pursuant to this Agreement;
provided
        that (i) nothing herein shall constitute a commitment by any
        SPC to
        make any Loan and (ii) if an SPC elects not to exercise such option
        or
        otherwise fails to provide all or any part of such Loan, the Granting Lender
        shall be obligated to make such Loan pursuant to the terms hereof. The making
        of
        a Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
        to the same extent, and as if, such Loan were made by such Granting Lender.
        Each
        party hereto hereby agrees that no SPC shall be liable for any indemnity
        or
        similar payment obligation under this Agreement (all liability for which
        shall
        remain with the Granting Lender). In furtherance of the foregoing, each party
        hereto hereby agrees (which agreement shall survive the termination of this
        Agreement) that, prior to the date that is one year and one day after the
        payment in full of all outstanding commercial paper or other senior indebtedness
        of any SPC, it will not institute against, or join any other person in
        instituting against, such SPC any bankruptcy, reorganization, arrangement,
        insolvency or liquidation proceedings under the laws of the United States
        or any
        State thereof. In addition, notwithstanding anything to the contrary contained
        in this Section
        9.04,
        any SPC
        may (i) with notice to, but without the prior written consent of,
        the
        Borrower and the Administrative Agent and without paying any processing fee
        therefor, assign all or a portion of its interests in any Loans to the Granting
        Lender or to any financial institutions (consented to by the Borrower and
        Administrative Agent) providing liquidity and/or credit support to or for
        the
        account of such SPC to support the funding or maintenance of Loans and
        (ii) disclose on a confidential basis any non-public information relating
        to its Loans to any rating agency, commercial paper dealer or provider of
        any
        surety, guarantee or credit or liquidity enhancement to such SPC.

       

      
        
          
          

        

        
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      (j)
          Neither
        the Borrower nor any Guarantor shall assign or delegate any of its rights
        or
        duties hereunder without the prior written consent of the Administrative
        Agent
        and each Lender, and any attempted assignment without such consent shall
        be null
        and void.

       

      SECTION
        9.05.   Expenses;
        Indemnity. (a)
        The
        Borrower agrees to pay all reasonable out-of-pocket expenses incurred by
        the
        Administrative Agent and the Collateral Agent, including the reasonable fees,
        charges and disbursements of Cravath, Swaine & Moore LLP, in connection
        with the syndication of the credit facilities provided for herein and the
        preparation and administration of this Agreement and the other Loan Documents
        or
        in connection with any amendments, modifications or waivers of the provisions
        hereof or thereof (whether or not the transactions hereby or thereby
        contemplated shall be consummated) or incurred by the Administrative Agent,
        the
        Collateral Agent or any Lender, including the reasonable fees, charges and
        disbursements of any counsel for the Administrative Agent, the Collateral
        Agent
        or any Lender, in connection with the enforcement or protection of its rights
        in
        connection with this Agreement and the other Loan Documents or in connection
        with the Loans made.

       

      (b)
          The
        Borrower and each Guarantor agree, jointly and severally, to indemnify the
        Administrative Agent, the Collateral Agent, each Lender and each Related
        Party
        of any of the foregoing persons (each such person being called an “Indemnitee”)
        against, and to hold each Indemnitee harmless from, any and all losses, claims,
        damages, liabilities and related expenses, including reasonable counsel fees,
        charges and disbursements, incurred by or asserted against any Indemnitee
        arising out of, in any way connected with, or as a result of (i) the
        execution or delivery of this Agreement or any other Loan Document or any
        agreement or instrument contemplated thereby, the performance by the parties
        thereto (and
        regardless of whether such matter is instituted by a third party or by the
        Borrower or any Guarantor or any of their respective affiliates)
        of their
        respective obligations thereunder or the consummation of the Transactions
        and
        the other transactions contemplated thereby, (ii) the use of the proceeds
        of the Loans or (iii) any claim, litigation, investigation or proceeding
        relating to any of the foregoing, whether or not any Indemnitee is a party
        thereto; provided
        that
        such indemnity shall not, as to any Indemnitee, be available to the extent
        that
        such losses, claims, damages, liabilities or related expenses are determined
        by
        a court of competent jurisdiction by final and nonappealable judgment to
        have
        resulted from the gross negligence or wilful misconduct of such Indemnitee
        (including, in the case of any matter initiated by the Borrower or any of
        its
        affiliates against any Indemnitee, any judgment so rendered against such
        Indemnitee, or any legal fees and expenses related to such matter). No
        Indemnitee may settle any claim to be indemnified without the consent of
        the
        Borrower and each Guarantor (collectively, the “Indemnitors”),
        such
        consent not to be unreasonably withheld; provided
        that no
        Indemnitor may withhold consent to any settlement that an Indemnitee proposes
        if
        such Indemnitor does not have the financial ability to pay all its obligations
        outstanding and asserted against such Indemnitor at that time, including
        the
        maximum potential claims pending or, to the knowledge of such Indemnitee,
        threatened against such Indemnitee to be indemnified pursuant to this
Section 9.05.

       

      
        
          
          

        

        
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      (c)
          To
        the
        extent that the Borrower or any Guarantor fail to pay any amount required
        to be
        paid by them to the Administrative Agent or the Collateral Agent under
paragraph
        (a)
        or
(b)
        of this
Section 9.05,
        each
        Lender severally agrees to pay to the Administrative Agent or the Collateral
        Agent, as the case may be, such Lender’s pro rata share (determined as of the
        time that the applicable unreimbursed expense or indemnity payment is sought)
        of
        such unpaid amount; provided
        that the
        unreimbursed expense or indemnified loss, claim, damage, liability or related
        expense, as the case may be, was incurred by or asserted against the
        Administrative Agent or the Collateral Agent in its capacity as such. For
        purposes hereof, a Lender’s “pro rata share” shall be determined at any time
        based upon its share of the sum of the outstanding Loans and unused Commitments
        at such time.

       

      (d)
          To
        the
        extent permitted by applicable law, neither the Borrower nor any Guarantor
        shall
        assert, and each hereby waives, any claim against any Indemnitee, on any
        theory
        of liability, for special, indirect, consequential or punitive damages (as
        opposed to direct or actual damages) arising out of, in connection with,
        or as a
        result of, this Agreement or any agreement or instrument contemplated hereby,
        the Transactions or any Loan or the use of the proceeds thereof.

       

      (e)
          The
        provisions of this Section 9.05
        shall
        remain operative and in full force and effect regardless of the expiration
        of
        the term of this Agreement, the consummation of the transactions contemplated
        hereby, the repayment of any of the Loans, the expiration of the Commitments,
        the invalidity or unenforceability of any term or provision of this Agreement
        or
        any other Loan Document, or any investigation made by or on behalf of the
        Administrative Agent, the Collateral Agent or any Lender. All amounts due
        under
        this Section 9.05
        shall be
        payable on written demand therefor.

       

      SECTION
        9.06.   Right
        of Setoff.
        As
        security for the prompt and punctual payment of the Indebtedness, the Borrower
        collaterally pledges and assigns to each Lender any rights which the Borrower
        may have to funds which the Borrower maintains on deposit with such Lender,
        and
        each Lender is hereby authorized at any time and from time to time, if an
        Event
        of Default shall have occurred and be continuing, except to the extent
        prohibited by law, to set off and apply any and all deposits (general or
        special, time or demand, provisional or final) at any time held and other
        indebtedness at any time owing by such Lender to or for the credit or the
        account of the Borrower or any Guarantor against any of and all the obligations
        of the Borrower or any Guarantor now or hereafter existing under this Agreement
        and other Loan Documents held by such Lender, irrespective of whether or
        not
        such Lender shall have made any demand under this Agreement or such other
        Loan
        Document and although such obligations may be unmatured. The rights of each
        Lender under this Section 9.06
        are in
        addition to other rights and remedies (including other rights of setoff)
        which
        such Lender may have.

       

      SECTION
        9.07.   Applicable
        Law.
        THIS
        AGREEMENT AND THE OTHER LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH
        IN
        OTHER LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
        BY THE
        LAWS OF THE STATE OF NEW YORK. 

       

      
        
          
          

        

        
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      SECTION
        9.08.   Waivers;
        Amendment. (a)
        No
        failure or delay of the Administrative Agent, the Collateral Agent or any
        Lender
        in exercising any power or right hereunder or under any other Loan Document
        shall operate as a waiver thereof, nor shall any single or partial exercise
        of
        any such right or power, or any abandonment or discontinuance of steps to
        enforce such a right or power, preclude any other or further exercise thereof
        or
        the exercise of any other right or power. The rights and remedies of the
        Administrative Agent, the Collateral Agent and the Lenders hereunder and
        under
        the other Loan Documents are cumulative and are not exclusive of any rights
        or
        remedies that they would otherwise have. No waiver of any provision of this
        Agreement or any other Loan Document or consent to any departure by the Borrower
        or any Guarantor therefrom shall in any event be effective unless the same
        shall
        be permitted by paragraph (b)
        below,
        and then such waiver or consent shall be effective only in the specific instance
        and for the purpose for which given. No notice or demand on the Borrower
        or any
        Guarantor in any case shall entitle the Borrower or any Guarantor to any
        other
        or further notice or demand in similar or other circumstances.

       

      (b)
          Neither
        this Agreement nor any provision hereof may be waived, amended or modified
        except pursuant to an agreement or agreements in writing entered into by
        the
        Borrower, each Guarantor and the Required Lenders; provided,
        however,
        that no
        such agreement shall (i) decrease the principal amount of,
        or extend
        the maturity of or any scheduled principal payment date or date for the payment
        of any interest on any Loan, or waive or excuse any such payment or any part
        thereof, or decrease the rate of interest on any Loan, without the prior
        written
        consent of each Lender directly adversely affected
        thereby, (ii) increase or extend the Commitment or decrease
        or extend
        the date for payment of any fees of any Lender without the prior written
        consent
        of such Lender, (iii) amend or modify the pro rata requirements
        of
Section 2.16,
        the
        provisions of Section
        9.04(j)
        or the
        provisions of this Section 9.08
        or
        release any Guarantor or all or substantially all of the Collateral, without
        the
        prior written consent of each Lender, (iv) modify the protections
        afforded
        to an SPC pursuant to the provisions of Section 9.04(i)
        without
        the written consent of such SPC or (v) reduce the percentage contained
        in
        the definition of the term “Required Lenders” or reduce the percentage contained
        in Section 5.14(a)
        without
        the prior written consent of each Lender (it being understood that with the
        consent of the Required Lenders, additional extensions of credit pursuant
        to
        this Agreement may be included in the determination of the Required Lenders
        on
        substantially the same basis as the Commitments on the date hereof);
provided further
        that no
        such agreement shall amend, modify or otherwise affect the rights or duties
        of
        the Administrative Agent or the Collateral Agent hereunder or under any other
        Loan Document without the prior written consent of the Administrative Agent
        or
        the Collateral Agent, as applicable.

       

      SECTION
        9.09.   Interest
        Rate Limitation.
        Notwithstanding anything herein to the contrary, if at any time the interest
        rate applicable to any Loan, together with all fees, charges and other amounts
        which are treated as interest on such Loan under applicable law (collectively
        the “Charges”),
        shall
        exceed the maximum lawful rate (the “Maximum
        Rate”)
        which
        may be contracted for, charged, taken, received or reserved by the Lender
        holding such Loan or participation in accordance with applicable law, the
        rate
        of interest payable in respect of such Loan or participation hereunder, together
        with all 

       

      
        
          
          

        

        
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        Charges
          payable in respect thereof, shall be limited to the Maximum Rate and, to
          the
          extent lawful, the interest and Charges that would have been payable in
          respect
          of such Loan or participation but were not payable as a result of the operation
          of this Section 9.09
          shall be
          cumulated and the interest and Charges payable to such Lender in respect
          of
          other Loans or participations or periods shall be increased (but not above
          the
          Maximum Rate therefor) until such cumulated amount, together with interest
          thereon at the Federal Funds Effective Rate to the date of repayment, shall
          have
          been received by such Lender.

      

       

      SECTION
        9.10.   Entire
        Agreement.
        This
        Agreement, the Fee Letter and the other Loan Documents constitute the entire
        contract between the parties relative to the subject matter hereof. Any other
        previous agreement among the parties with respect to the subject matter hereof
        is superseded by this Agreement and the other Loan Documents. Nothing in
        this
        Agreement or in the other Loan Documents, expressed or implied, is intended
        to
        confer upon any person (other than the parties hereto and thereto, their
        respective successors and assigns permitted hereunder and, to the extent
        expressly contemplated hereby, the Related Parties of each of the Administrative
        Agent, the Collateral Agent and the Lenders) any rights, remedies, obligations
        or liabilities under or by reason of this Agreement or the other Loan
        Documents.

       

      SECTION
        9.11.   WAIVER
        OF JURY TRIAL.
        EACH
        PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
        LAW,
        ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
        OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT
        OR ANY
        OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT
        NO
        REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
        OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
        SEEK
        TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
        OTHER
        PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
        LOAN
        DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
        CERTIFICATIONS IN THIS SECTION 9.11.

       

      SECTION
        9.12.   Severability.
        In the
        event any one or more of the provisions contained in this Agreement or in
        any
        other Loan Document should be held invalid, illegal or unenforceable in any
        respect, the validity, legality and enforceability of the remaining provisions
        contained herein and therein shall not in any way be affected or impaired
        thereby (it being understood that the invalidity of a particular provision
        in a
        particular jurisdiction shall not in and of itself affect the validity of
        such
        provision in any other jurisdiction). The parties shall endeavor in good-faith
        negotiations to replace the invalid, illegal or unenforceable provisions
        with
        valid provisions the economic effect of which comes as close as possible
        to that
        of the invalid, illegal or unenforceable provisions.

       

      SECTION
        9.13.   Counterparts.
        This
        Agreement may be executed in counterparts (and by different parties hereto
        on
        different counterparts), each of which 

       

      
        
          
          

        

        
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        shall
          constitute an original but all of which when taken together shall constitute
          a
          single contract, and shall become effective as provided in Section 9.03.
          Delivery of an executed signature page to this Agreement by facsimile
          transmission shall be as effective as delivery of a manually signed counterpart
          of this Agreement.

      

       

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

       

      SECTION
        9.15.   Jurisdiction;
        Consent to Service of Process. (a)
        Each
        of
        the Borrower and each Guarantor hereby irrevocably and unconditionally submits,
        for itself and its property, to the nonexclusive jurisdiction of any
        New York State court or federal court of the United States of America
        sitting in New York City, and any appellate court from any thereof,
        in any
        action or proceeding arising out of or relating to this Agreement or the
        other
        Loan Documents, or for recognition or enforcement of any judgment, and each
        of
        the parties hereto hereby irrevocably and unconditionally agrees that all
        claims
        in respect of any such action or proceeding may be heard and determined in
        such
        New York State or, to the extent permitted by law, in such federal
        court.
        Each of the parties hereto agrees that a final judgment in any such action
        or
        proceeding shall be conclusive and may be enforced in other jurisdictions
        by
        suit on the judgment or in any other manner provided by law. Nothing in this
        Agreement shall affect any right that the Administrative Agent, the Collateral
        Agent or any Lender may otherwise have to bring any action or proceeding
        relating to this Agreement or the other Loan Documents against the Borrower,
        any
        Guarantor or their respective properties in the courts of any
        jurisdiction.

       

      (b)
          Each
        of
        the Borrower and each Guarantor hereby irrevocably and unconditionally waives,
        to the fullest extent it may legally and effectively do so, any objection
        which
        it may now or hereafter have to the laying of venue of any suit, action or
        proceeding arising out of or relating to this Agreement or the other Loan
        Documents in any New York State or federal court. Each of the parties
        hereto hereby irrevocably waives, to the fullest extent permitted by law,
        the
        defense of an inconvenient forum to the maintenance of such action or proceeding
        in any such court.

       

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

       

      SECTION
        9.16.   Confidentiality.
        Each of
        the Administrative Agent, the Collateral Agent and the Lenders agrees to
        maintain the confidentiality of the Information (as defined below), except
        that
        Information may be disclosed (a) to its and its affiliates’ officers,
        directors, employees and agents, including accountants, legal counsel and
        other
        advisors (it being understood that the persons to whom such disclosure is
        made
        will be informed of the confidential nature of such Information and instructed
        to keep such Information confidential), (b) to the extent requested
        by any
        regulatory authority or 

       

      
        
          
          

        

        
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        quasi-regulatory
          authority (such as the National Association of Insurance Commissioners),
          (c) to the extent required by applicable laws or regulations or
          by any
          subpoena or similar legal process, (d) in connection with the exercise
          of any
          remedies hereunder or under the other Loan Documents or any suit, action
          or
          proceeding relating to the enforcement of its rights hereunder or thereunder,
          (e) subject to an agreement containing provisions substantially
          the same as
          those of this Section 9.16,
          to
          (i) any actual or prospective assignee of or participant in any
          of its
          rights or obligations under this Agreement and the other Loan Documents
          or
          (ii) any actual or prospective counterparty (or its advisors) to
          any swap
          or derivative transaction relating to the Borrower or any Subsidiary or
          any of
          their respective obligations, (f) with the consent of the Borrower
          or
          (g) to the extent such Information becomes publicly available other
          than as
          a result of a breach of this Section 9.16.
          For the
          purposes of this Section 9.16,
          “Information”
          shall
          mean all information received from the Borrower or any Guarantor and related
          to
          the Borrower or any Guarantor or their business, other than any such information
          that was available to the Administrative Agent, the Collateral Agent or
          any
          Lender on a nonconfidential basis prior to its disclosure by the Borrower
          or any
          Guarantor. Any person required to maintain the confidentiality of Information
          as
          provided in this Section 9.16
          shall be
          considered to have complied with its obligation to do so if such person
          has
          exercised the same degree of care to maintain the confidentiality of such
          Information as such person would accord its own confidential
          information.

      

       

      SECTION
        9.17.   USA
        Patriot Act Notice.
        Each
        Lender and the Administrative Agent (for itself and not on behalf of any
        Lender)
        hereby notifies the Borrower and each Guarantor that pursuant to the
        requirements of the USA Patriot Act, it is required to obtain, verify and
        record
        information that identifies the Borrower and each Guarantor, which information
        includes the name and address of the Borrower and each Guarantor and other
        information that will allow such Lender or the Administrative Agent, as
        applicable, to identify the Borrower and each Guarantor in accordance with
        the
        USA Patriot Act.

       

      SECTION
        9.18.   Intercreditor
        Agreement.
        Each
        Lender hereunder (a) acknowledges that it has received a copy of the
        Intercreditor Agreement, (b) consents to the subordination of Encumbrances
        provided for in the Intercreditor Agreement, (c) agrees that it will
        be
        bound by and will take no actions contrary to the provisions of the
        Intercreditor Agreement and (d) authorizes and instructs the Collateral
        Agent to enter into the Intercreditor Agreement as agent for and representative
        of such Lender. The foregoing provisions are intended as an inducement to
        the
        lenders under the Revolving Credit Agreement to extend credit to the Borrower
        and such lenders are intended third-party beneficiaries of such
        provisions.

       

      
        
          
          

        

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

       

       

      
        	 	 	 
	 	CARRIZO
                OIL & GAS, INC.,
	 
 	 
 	 
 
	 	by:  	
                /s/
                  Paul F. Boling

              
	 	Title: 
                Chief Financial Officer


      

       

      
        	 	 	 
	 	
                CCBM,
                  Inc.,

              
	 
 	 
 	 
 
	 	by:  	
                /s/
                  Paul F. Boling

              
	 	
                
                  
 Name: 
                  Paul F. Boling

              
	 	
                
                  
 Title: Chief
                  Financial Officer

              


      

      


      
        	 	 	 
	 	
                CREDIT
                  SUISSE, CAYMAN
                  ISLANDS BRANCH,
                  individually
                  and as Administrative Agent and Collateral Agent

              
	 
 	 
 	 
 
	 	by:  	
                /s/
                  James Morgan

              
	 	
                
                  
 Title: Managing
                  Director

              


      

      
        	 	 	 
	 	 
	 	by:  	
                /s/
                  Denise L. Alvarez

              
	 	
                
                  
 Title: Associate

              


      

      


       

      
        
          
          

        

        
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