exv10w1






Exhibit 10.1




EXECUTION VERSION




 

 






Amended and Restated Credit Agreement




Dated as of

April 14, 2006




among




Resolute Aneth, LLC,




as Borrower,




Resolute Holdings Sub, LLC 

and




certain of its Subsidiaries,

as Guarantors




Wachovia Bank, National Association,

as Administrative Agent,




and




Citigroup Global Markets Inc.,

as Syndication Agent,




Deutsche Bank Securities Inc., Fortis Capital Corp. and U.S. Bank National
Association,

as Co-Documentation Agents,




and



The Lenders Party Hereto




Wachovia Capital Markets, LLC



and

Citigroup Global Markets Inc.




As Joint Lead Arrangers




 

 








 








 




EXECUTION VERSION



Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page:
	
ARTICLE I

DEFINITIONS AND ACCOUNTING MATTERS
	 
	 	 	 	 	 	 
	Section 1.01

	 	Terms Defined Above
	 	 	1	 
	Section 1.02

	 	Certain Defined Terms
	 	 	2	 
	Section 1.03

	 	Types of Loans and Borrowings
	 	 	24	 
	Section 1.04

	 	Terms Generally; Rules of Construction
	 	 	24	 
	Section 1.05

	 	Accounting Terms and Determinations; GAAP
	 	 	25	 
	 
	 	 	 	 	 	 
	
ARTICLE II

THE CREDITS
	Section 2.01

	 	Commitments
	 	 	25	 
	Section 2.02

	 	Loans and Borrowings
	 	 	25	 
	Section 2.03

	 	Requests for Borrowings
	 	 	26	 
	Section 2.04

	 	Interest Elections
	 	 	27	 
	Section 2.05

	 	Funding of Borrowings
	 	 	28	 
	Section 2.06

	 	Changes in The Aggregate Maximum Credit Amounts
	 	 	29	 
	Section 2.07

	 	Borrowing Base
	 	 	31	 
	Section 2.08

	 	Letters of Credit
	 	 	34	 
	 
	 	 	 	 	 	 
	
ARTICLE III

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
	 
	 	 	 	 	 	 
	Section 3.01

	 	Repayment of Loans
	 	 	39	 
	Section 3.02

	 	Interest
	 	 	39	 
	Section 3.03

	 	Alternate Rate of Interest
	 	 	40	 
	Section 3.04

	 	Prepayments
	 	 	40	 
	Section 3.05

	 	Fees
	 	 	42	 
	 
	 	 	 	 	 	 
	
ARTICLE IV

PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS.
	 
	 	 	 	 	 	 
	Section 4.01

	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs
	 	 	43	 
	Section 4.02

	 	Presumption of Payment by the Borrower
	 	 	44	 
	Section 4.03

	 	Certain Deductions by the Administrative Agent
	 	 	44	 
	Section 4.04

	 	Disposition of Proceeds
	 	 	44	 
	 
	 	 	 	 	 	 
	
ARTICLE V

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY
	Section 5.01

	 	Increased Costs
	 	 	45	 
	Section 5.02

	 	Break Funding Payments
	 	 	46	 
	Section 5.03

	 	Taxes
	 	 	47	 
	Section 5.04

	 	Mitigation Obligations
	 	 	48	 
	Section 5.05

	 	Illegality
	 	 	49	 
	 
	 	 	 	 	 	 
	
ARTICLE VI

CONDITIONS PRECEDENT
	 
	 	 	 	 	 	 
	Section 6.01

	 	Effective Date
	 	 	49	 
	Section 6.02

	 	Each Credit Event
	 	 	52	 







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ARTICLE VII

REPRESENTATIONS AND WARRANTIES
	 
	 	 	 	 	 	 
	Section 7.01

	 	Organization; Powers
	 	 	53	 
	Section 7.02

	 	Authority; Enforceability
	 	 	53	 
	Section 7.03

	 	Approvals; No Conflicts
	 	 	53	 
	Section 7.04

	 	Financial Condition; No Material Adverse Change
	 	 	54	 
	Section 7.05

	 	Litigation
	 	 	54	 
	Section 7.06

	 	Environmental Matters
	 	 	55	 
	Section 7.07

	 	Compliance with the Laws and Agreements; No Defaults
	 	 	56	 
	Section 7.08

	 	Investment Company Act
	 	 	56	 
	Section 7.09

	 	[Reserved]
	 	 	56	 
	Section 7.10

	 	Taxes
	 	 	56	 
	Section 7.11

	 	ERISA
	 	 	57	 
	Section 7.12

	 	Disclosure; No Material Misstatements
	 	 	58	 
	Section 7.13

	 	Insurance
	 	 	58	 
	Section 7.14

	 	Restriction on Liens
	 	 	58	 
	Section 7.15

	 	Subsidiaries
	 	 	59	 
	Section 7.16

	 	Location of Business and Offices
	 	 	59	 
	Section 7.17

	 	Properties; Titles, Etc
	 	 	59	 
	Section 7.18

	 	Maintenance of Properties
	 	 	60	 
	Section 7.19

	 	Gas Imbalances, Prepayments
	 	 	60	 
	Section 7.20

	 	Marketing of Production
	 	 	60	 
	Section 7.21

	 	Hedging Agreements
	 	 	61	 
	Section 7.22

	 	Use of Loans and Letters of Credit
	 	 	61	 
	Section 7.23

	 	Solvency
	 	 	61	 
	 
	 	 	 	 	 	 
	
ARTICLE VIII

AFFIRMATIVE COVENANTS
	 
	 	 	 	 	 	 
	Section 8.01

	 	Financial Statements; Ratings Change; Other Information
	 	 	62	 
	Section 8.02

	 	Notices of Material Events
	 	 	64	 
	Section 8.03

	 	Existence; Conduct of Business
	 	 	65	 
	Section 8.04

	 	Payment of Obligations
	 	 	65	 
	Section 8.05

	 	Performance of Obligations under Loan Documents
	 	 	65	 
	Section 8.06

	 	Operation and Maintenance of Properties
	 	 	65	 
	Section 8.07

	 	Insurance
	 	 	66	 
	Section 8.08

	 	Books and Records; Inspection Rights
	 	 	66	 
	Section 8.09

	 	Compliance with Laws
	 	 	66	 
	Section 8.10

	 	Environmental Matters
	 	 	67	 
	Section 8.11

	 	Further Assurances
	 	 	68	 
	Section 8.12

	 	Reserve Reports
	 	 	68	 
	Section 8.13

	 	Title Information
	 	 	69	 
	Section 8.14

	 	Additional Collateral; Additional Guarantors
	 	 	70	 
	Section 8.15

	 	ERISA Compliance
	 	 	71	 
	Section 8.16

	 	Hedging Agreements
	 	 	71	 
	Section 8.17

	 	Patriot Act
	 	 	71	 
	 
	 	 	 	 	 	 
	
ARTICLE IX

NEGATIVE COVENANTS
	 
	 	 	 	 	 	 
	Section 9.01

	 	Financial Covenants
	 	 	72	 
	Section 9.02

	 	Debt
	 	 	72	 







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	Section 9.03

	 	Liens
	 	 	73	 
	Section 9.04

	 	Restricted Payments
	 	 	73	 
	Section 9.05

	 	Investments
	 	 	74	 
	Section 9.06

	 	Nature of Business; International Operations
	 	 	75	 
	Section 9.07

	 	Limitation on Leases
	 	 	75	 
	Section 9.08

	 	Proceeds of Notes/Loans
	 	 	75	 
	Section 9.09

	 	ERISA Compliance
	 	 	76	 
	Section 9.10

	 	Sale or Discount of Receivables
	 	 	77	 
	Section 9.11

	 	Mergers, Etc
	 	 	77	 
	Section 9.12

	 	Sale of Properties
	 	 	77	 
	Section 9.13

	 	Environmental Matters
	 	 	78	 
	Section 9.14

	 	Transactions with Affiliates
	 	 	78	 
	Section 9.15

	 	Subsidiaries
	 	 	78	 
	Section 9.16

	 	Restricted Subsidiary Indebtedness and Preferred Stock
	 	 	79	 
	Section 9.17

	 	Negative Pledge Agreements; Dividend Restrictions
	 	 	79	 
	Section 9.18

	 	Take-or-Pay or Other Prepayments
	 	 	79	 
	Section 9.19

	 	Hedging Agreements
	 	 	79	 
	Section 9.20

	 	Second Lien Documents
	 	 	80	 
	 
	 	 	 	 	 	 
	
ARTICLE X

EVENTS OF DEFAULT; REMEDIES
	 
	 	 	 	 	 	 
	Section 10.01

	 	Events of Default
	 	 	80	 
	Section 10.02

	 	Remedies
	 	 	82	 
	 
	 	 	 	 	 	 
	
ARTICLE XI

THE AGENTS
	 
	 	 	 	 	 	 
	Section 11.01

	 	Appointment; Powers
	 	 	83	 
	Section 11.02

	 	Duties and Obligations of Administrative Agent
	 	 	83	 
	Section 11.03

	 	Action by Administrative Agent
	 	 	83	 
	Section 11.04

	 	Reliance by Administrative Agent
	 	 	84	 
	Section 11.05

	 	Subagents
	 	 	84	 
	Section 11.06

	 	Resignation or Removal of Agents
	 	 	85	 
	Section 11.07

	 	Agents as Lenders
	 	 	85	 
	Section 11.08

	 	No Reliance
	 	 	85	 
	Section 11.09

	 	Authority to Release Guarantors, Collateral and Liens
	 	 	86	 
	Section 11.10

	 	The Arrangers and Agents
	 	 	86	 
	Section 11.11

	 	Filing of Proofs of Claim
	 	 	86	 
	Section 11.12

	 	Intercreditor Agreement
	 	 	87	 
	 
	 	 	 	 	 	 
	
ARTICLE XII

MISCELLANEOUS
	 
	 	 	 	 	 	 
	Section 12.01

	 	Notices
	 	 	87	 
	Section 12.02

	 	Waivers; Amendments
	 	 	88	 
	Section 12.03

	 	Expenses, Indemnity; Damage Waiver.
	 	 	89	 
	Section 12.04

	 	Successors and Assigns
	 	 	92	 
	Section 12.05

	 	Survival; Revival; Reinstatement
	 	 	95	 
	Section 12.06

	 	Counterparts; Integration; Effectiveness
	 	 	96	 
	Section 12.07

	 	Severability
	 	 	96	 
	Section 12.08

	 	Right of Setoff
	 	 	96	 
	Section 12.09

	 	Governing Law; Jurisdiction; Consent to Service of Process
	 	 	97	 






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EXECUTION VERSION



	 	 	 	 	 	 	 
	Section 12.10

	 	Headings
	 	 	98	 
	Section 12.11

	 	Confidentiality
	 	 	98	 
	Section 12.12

	 	Exculpation Provisions
	 	 	99	 
	Section 12.13

	 	No Third Party Beneficiaries
	 	 	99	 
	Section 12.14

	 	Collateral Matters; Hedging Agreements
	 	 	99	 
	Section 12.15

	 	US Patriot Act Notice
	 	 	99	 
	Section 12.16

	 	Existing Credit Agreement; Existing Facility Termination
	 	 	100	 






ANNEXES, EXHIBITS AND SCHEDULES




	 	 	 
	Exhibit A

	 	Form of Note
	Exhibit B

	 	Form of Borrowing Request
	Exhibit C

	 	Form of Interest Election Request
	Exhibit D

	 	Form of Compliance Certificate
	Exhibit E

	 	Form of Assignment and Assumption
	Exhibit F-1

	 	Form of Maximum Credit Amount Increase Certificate
	Exhibit F-2

	 	Form of Additional Lender Certificate
	Exhibit G

	 	Security Instruments
	Exhibit H

	 	Account Designation Letter
	 
	 	 
	Schedule 1.02

	 	Approved Counterparties
	Schedule 2.08

	 	Existing Letters of Credit
	Schedule 7.03

	 	Post Closing Consents
	Schedule 7.05

	 	Litigation
	Schedule 7.15

	 	Subsidiaries and Partnerships
	Schedule 7.16

	 	Location of Business and Offices
	Schedule 7.17

	 	Properties
	Schedule 7.19

	 	Gas Imbalances
	Schedule 7.20

	 	Marketing Contracts
	Schedule 7.21

	 	Hedging Agreements
	Schedule 8.13

	 	Unrecorded Documents
	Schedule 8.16

	 	Hedging Requirements
	Schedule 9.05

	 	Investments






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Amended & Restated Credit Agreement









 




EXECUTION VERSION



     This Amended and Restated Credit Agreement, dated as of April 14, 2006, is among
Resolute Aneth, LLC, a Delaware limited liability company (the “Borrower”),
Resolute Holdings Sub, LLC, a Delaware limited liability company (in its individual
capacity, “Parent”) and certain of its Subsidiaries as guarantors, each of the Lenders from
time to time party hereto, Wachovia Bank, National Association (in its individual
capacity, “Wachovia”), as administrative agent for the Lenders (in such capacity, together
with its successors in such capacity, the “Administrative Agent”), Citigroup Global
Markets Inc., as syndication agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Syndication Agent”), and Deutsche Bank Securities
Inc., Fortis Capital Corp. and U.S. Bank National Association, as co-documentation agents for
the Lenders (in such capacity, together with their successors in such capacity, the
“Co-Documentation Agents”).



R E C I T A L S




     A. Resolute Natural Resources Company, a Delaware corporation (in its individual capacity,
“RNRC”), the Administrative Agent and the lenders party thereto entered into that certain
Credit Agreement, dated as of September 24, 2004, which was amended by that certain First Amendment
to Credit Agreement, dated as of November 14, 2004, and by that certain Second Amendment to Credit
Agreement, dated as of April 6, 2005 (as amended, the “Prior Credit Agreement”).



     B. RNRC assigned all of its rights and obligations under the Prior Credit Agreement to the
Borrower, and with the consent of the Lenders, the parties entered into that certain Amended and
Restated Credit Agreement, dated as of September 15, 2005, between the Borrower, the Agents party
thereto and the Lenders, which was amended by that certain First Amendment to the Amended and
Restated Credit Agreement, dated as of September 15, 2005 (as amended, the “Existing Credit
Agreement”).



     C. In connection with an acquisition of certain properties from ExxonMobil and internal
restructuring of the Borrower and its Affiliates, the Borrower and the Lenders have agreed to amend
and restate the Existing Credit Agreement to increase the facility amount, to finance the Exxon
Acquisition and to repay the Existing Credit Agreement.



     D. The Lenders have agreed to amend and restate the Existing Credit Agreement and to make
loans and extensions of credit subject to the terms and conditions of this Agreement.



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



ARTICLE I

DEFINITIONS AND ACCOUNTING MATTERS




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



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EXECUTION VERSION



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



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



     “Account Designation Letter” means the Notice of Account Designation Letter dated the
date hereof from the Borrower to the Administrative Agent in substantially the form attached hereto
as Exhibit H.



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



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



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



     “Administrative Agent” has the meaning given in the introductory paragraph.



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



     “Affected Loans” has the meaning assigned to such term in Section 5.05.



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



     “Agents” mean, collectively, the Administrative Agent, the Syndication Agent and the
Co-Documentation Agents; and “Agent” shall mean any of them, as the context requires.



     “Aggregate Maximum Credit Amounts” at any time shall equal the sum of the Maximum
Credit Amounts, as the same may be increased, reduced or terminated pursuant to Section 2.06. The
initial Aggregate Maximum Credit Amount of the Lenders is $300,000,000.



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



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



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Amended & Restated Credit Agreement









 




EXECUTION VERSION



     “Amended and Restated Promissory Note” means that certain Amended and Restated
Promissory Note, dated as of September 15, 2005, made by Holdings in favor of the Borrower in the
original principal amount of $2,200,000.



     “Applicable Margin” means, for any day, with respect to any ABR Loan or Eurodollar
Loan, or with respect to the Commitment Fee Rate, as the case may be, the rate per annum set forth
in the Borrowing Base Utilization Grid below based upon the Borrowing Base Utilization Percentage
then in effect:



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Borrowing Base Utilization Grid
	Borrowing Base	 	 	 	 	 	 	 	 	 	 
	Utilization	 	 	 	 	 	>50%, but	 	>75%, but	 	 
	Percentage	 	£50%	 	£75%	 	£90%	 	>90%
	ABR Loans
	 	 	0.000	%	 	 	0.000	%	 	 	0.250	%	 	 	0.375	%
	Eurodollar Loans
	 	 	1.250	%	 	 	1.500	%	 	 	1.750	%	 	 	1.875	%
	Commitment Fee
	 	 	0.250	%	 	 	0.300	%	 	 	0.375	%	 	 	0.500	%






     Each change in the Applicable Margin shall apply during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective date of the next
such change; provided, however, that if at any time the Borrower fails to deliver a
Reserve Report pursuant to Section 8.12(a), then the “Applicable Margin” means the rate per
annum set forth on the grid when the Borrowing Base Utilization Percentage is at its highest level;
provided further that the Applicable Margin shall revert to the previous Applicable
Margin upon the Borrower’s delivery of such Reserve Report.



     “Applicable Percentage” means, with respect to any Lender, the percentage of the
Aggregate Maximum Credit Amounts represented by such Lender’s Maximum Credit Amount.



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



     “Approved Fund” means (a) a CLO and (b) with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment advisor as such Lender
or by an Affiliate of such investment advisor.



     “Approved Petroleum Engineers” mean Sproule Associates Inc. or such other independent
petroleum engineers proposed by the Borrower and reasonably acceptable to the Administrative Agent.



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EXECUTION VERSION



     “Arrangers” mean Wachovia Capital Markets, LLC and Citigroup Global Markets Inc., in
their capacities as joint lead arrangers hereunder.



     “Assessment Rate” means, for any day, the annual assessment rate in effect on such day
that is payable by a member of the Bank Insurance Fund classified as “well-capitalized” and within
supervisory subgroup “B” (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance Corporation for
insurance by such Corporation of time deposits made in dollars at the offices of such member in the
United States of America; provided that if, as a result of any change in any law, rule or
regulation, it is no longer possible to determine the Assessment Rate as aforesaid, then the
Assessment Rate shall be such annual rate as shall be reasonably determined by the Administrative
Agent to be representative of the cost of such insurance to the Lenders.



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



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



     “Base CD Rate” means the sum of (a) the Three-Month Secondary CD Rate multiplied by
the Statutory Reserve Rate plus (b) the Assessment Rate.



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



     “Borrower” has the meaning given in the introductory paragraph.



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



     “Borrowing Base” means at any time an amount equal to the amount determined in
accordance with Section 2.07, as the same may be adjusted from time to time pursuant to Section
8.13(d) or Section 9.12(d).



     “Borrowing Base Utilization Percentage” means, as of any day, the fraction expressed
as a percentage, the numerator of which is the sum of the Credit Exposures of the Lenders on such
day, and the denominator of which is the Borrowing Base in effect on such day.



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



     “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York, New York, are authorized or required by law to remain closed; and if
such day relates to a Borrowing or continuation of, a payment or prepayment of principal of or
interest on, or a conversion of or into, or the Interest Period for, a Eurodollar Loan or a



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EXECUTION VERSION





notice by the Borrower with respect to any such Borrowing or continuation, payment,
prepayment, conversion or Interest Period, any day which is also a day on which dealings in dollar
deposits are carried out in the London interbank market.



     “BWNR” means BWNR, LLC, a Delaware limited liability company.



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



     “Casualty Event” means any loss, casualty or other insured damage to, or any
nationalization, taking under power of eminent domain or by condemnation or similar proceeding of,
any Property of the Loan Parties having a fair market value in excess of $1,000,000.



     “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) other than the
Permitted Holders, of Equity Interests representing a larger percentage of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests of Holdings than the
percentages held by the Permitted Holders, (b) after an initial public offering by Holdings, the
occupation of a majority of the seats (other than vacant seats) on the board of directors of
Holdings by Persons who were neither (i) nominated by the board of directors of Holdings nor (ii)
appointed by directors so nominated, (c) Holdings shall cease to own, directly or indirectly, 100%
of the Equity Interests of Parent or (d) Parent shall cease to own, directly or indirectly, 100% of
the Equity Interests of Borrower.



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



     “CLO” means any entity (whether a corporation, partnership, trust or otherwise) that
is engaged in making, purchasing, holding or otherwise investing in bank loans and similar
extensions of credit in the ordinary course of its business and is administered or managed by a
Lender or an Affiliate of such Lender.



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



     “Co-Documentation Agents” has the meaning given in the introductory paragraph.



     “Commitment” means, with respect to each Lender, the commitment of such Lender to make
Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount



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EXECUTION VERSION





representing the maximum aggregate amount of such Lender’s Credit Exposure hereunder, as such
commitment may be (a) modified from time to time pursuant to Section 2.06 and (b) modified from
time to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b), and
“Commitments” means the aggregate amount of the Commitments of all the Lenders. The amount
representing each Lender’s Commitment shall at any time be the lesser of (i) such Lender’s Maximum
Credit Amount and (ii) such Lender’s Applicable Percentage of the then effective Borrowing Base.



     “Commitment Fee Rate” has the meaning set forth in the definition of “Applicable
Margin”.



     “Consolidated Net Income” means with respect to Parent and its Consolidated
Subsidiaries, for any period, the aggregate of the net income (or loss) of Parent and its
Consolidated Subsidiaries after allowances for taxes for such period determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded from such net income
(to the extent otherwise included therein) the following: (a) the net income of any Person in which
Parent or its Consolidated Subsidiaries has an interest (which interest does not cause the net
income of such other Person to be consolidated with the net income of Parent and its Consolidated
Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or
distributions actually paid in cash during such period by such other Person to Parent or any
Consolidated Subsidiary; (b) the net income (but not loss) during such period of any Consolidated
Subsidiary to the extent that the declaration or payment of dividends or similar distributions or
transfers or loans by that Consolidated Subsidiary is not at the time permitted by operation of the
terms of its charter or any agreement, instrument (other than the Loan Documents and the Second
Lien Loan Documents) or Governmental Requirement applicable to such Consolidated Subsidiary or is
otherwise restricted or prohibited, in each case determined in accordance with GAAP; (c) the net
income (or loss) of any Person acquired in a pooling-of-interests transaction for any period prior
to the date of such transaction; (d) any extraordinary gains or losses during such period; (e) the
cumulative effect of a change in accounting principles and any gains or losses attributable to
writeups or writedowns of assets; (f) any writeups or writedowns of non-current assets; and (g)
non-cash gain and loss under FAS133.



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



     “Control” means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through the ability to
exercise voting power, by contract or otherwise. For the purposes of this definition, and without
limiting the generality of the foregoing, any Person that owns directly or indirectly 20% or more
of the Equity Interests having ordinary voting power for the election of the directors or other
governing body of a Person (other than as a limited partner of such other Person) will be deemed to
“control” such other Person. “Controlling” and “Controlled” have meanings
correlative thereto.



     “Cooperative Agreement” means that certain Cooperative Agreement between the Borrower
and NNOG, dated October 22, 2004, as amended by that certain First Amendment to



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Cooperative Agreement, dated October 21, 2005, as the same may, from time to time, be amended,
modified, supplemented or restated as permitted by the terms of such agreement.



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



     “Cumulative Tax Rate” means the higher of the combined U.S. federal and state income
tax rates applicable to an individual taxpayer or to a corporate taxpayer, as determined for each
taxable year (x) using the highest marginal U.S. federal income tax rate applicable to ordinary
income of an individual or corporate taxpayer, and the highest state income tax rate applicable to
any individual or corporate member in Holdings (or individual or corporate partner or member in any
pass-through entity to which income from Holdings is allocated), and (y) assuming the deductibility
of such state income taxes for U.S. federal income tax purposes, if in such taxable year deductions
for state income taxes are then available under the Code.



     “Debt” means, for any Person, the sum of the following (without duplication): (a) all
obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances,
debentures, notes or other similar instruments; (b) all obligations of such Person (whether
contingent or otherwise) in respect of letters of credit, surety or other bonds and similar
instruments (excluding Debt associated with worker’s compensation claims, performance, bid, surety
or similar bonds or surety obligations required by Governmental Requirements or third parties in
connection with the operation of the Oil and Gas Properties); (c) all accounts payable and all
accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase
price of Property or services (excluding accounts payable incurred in the ordinary course of
business which are not greater than ninety (90) days past the date of invoice or which are being
contested in good faith by appropriate action and for which adequate reserves have been maintained
in accordance with GAAP); (d) all obligations under Capital Leases; (e) all obligations under
Synthetic Leases; (f) all Debt (as defined in the other clauses of this definition) of others
secured by a Lien on any Property of such Person, whether or not such Debt is assumed by such
Person; (g) all Debt (as defined in the other clauses of this definition) of others guaranteed by
such Person or in which such Person otherwise assures a creditor against loss of the Debt
(howsoever such assurance shall be made) to the extent of the lesser of the amount of such Debt and
the maximum stated amount of such guarantee or assurance against loss; (h) all obligations or
undertakings of such Person to maintain or cause to be maintained the financial position or
condition of others or to purchase the Debt or Property of others for such purpose; (i) obligations
to deliver commodities, goods or services, including, without limitation, Hydrocarbons, in
consideration of one or more advance payments, other than gas balancing arrangements in the
ordinary course of business; (j) any Debt of a partnership for which such Person is liable either
by agreement, by operation of law or by a Governmental Requirement but only to the extent of such
liability; (k) Disqualified Capital Stock; and (l) the undischarged balance of any production
payment created by such Person or for the creation of which such Person directly or indirectly
received payment. The Debt of any Person shall include all obligations of such Person of the
character described above to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is not included as a liability of such Person under GAAP.



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



     “Disqualified Capital Stock” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible or for which it is exchangeable) or upon the
happening of any event, matures or is mandatorily redeemable for any consideration other than other
Equity Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking
fund obligation or otherwise, or is convertible or exchangeable for Debt or redeemable for any
consideration other than other Equity Interests (which would not constitute Disqualified Capital
Stock) at the option of the holder thereof, in whole or in part, on or prior to the date that is
one year after the earlier of (a) the Maturity Date and (b) the date on which there are no Loans,
LC Exposure or other obligations hereunder outstanding and all of the Commitments are terminated.



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



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



     “EBITDA” means, for any period, the sum of Consolidated Net Income for such period
plus the following expenses or charges to the extent deducted from Consolidated Net Income in such
period: interest, income and franchise taxes, depreciation, depletion, amortization, and other
non-cash charges, minus all non-cash income added to Consolidated Net Income;
provided that, for the purposes of Section 9.01(c) only, (a) for the three-month period
ending September 30, 2005, EBITDA shall be $19,905,418; (b) for the three-month period ending
December 31, 2005, EBITDA shall be $15,011,661;and (c) for the three-month period ending March 31,
2006, EBITDA shall be $15,011,661.



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



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



     “Environmental Laws” mean any and all Governmental Requirements pertaining in any way
to health, safety, the environment or the preservation or reclamation of natural resources, in
effect in any and all jurisdictions in which any Loan Party or any Subsidiary is conducting or at
any time has conducted business, or where any Property of any Loan Party or any Subsidiary is
located, including without limitation, the Oil Pollution Act of 1990 (“OPA”), as amended,
the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and
Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the
Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986,
as amended, the Hazardous Materials Transportation Act, as amended, and other environmental
conservation or protection Governmental Requirements. The term “oil” shall have the meaning
specified in OPA, the terms “hazardous substance” and “release” (or “threatened
release”) have the meanings specified in CERCLA, the terms “solid 



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waste” and “disposal” (or “disposed”) have the meanings specified in
RCRA and the term “oil and gas waste” shall have the meaning specified in Section 91.1011
of the Texas Natural Resources Code (“Section 91.1011”); provided, however,
that (a) in the event either OPA, CERCLA, RCRA or Section 91.1011 is amended so as to broaden the
meaning of any term defined thereby, such broader meaning shall apply subsequent to the effective
date of such amendment and (b) to the extent the laws of the state or other jurisdiction in which
any Property of any Loan Party or any Subsidiary is located establish a meaning for “oil,”
“hazardous substance,” “release,” “solid waste,” “disposal” or
“oil and gas waste” which is broader than that specified in either OPA, CERCLA, RCRA or
Section 91.1011, such broader meaning shall apply.




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



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



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



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



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



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



     “Excepted Liens” mean: (a) Liens for Taxes, assessments or other governmental charges
or levies which are not delinquent or which are being contested in good faith by appropriate action
and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in
connection with workers’ compensation, unemployment insurance or other social security, old age
pension or public liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been



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



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     “Excluded Taxes” mean, with respect to any Agent, any Lender, any Issuing Bank or any
other recipient of any payment to be made by or on account of any obligation of a Loan Party
hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured
by) its net income by the United States of America or such other jurisdiction under the laws of
which such recipient is organized or in which its principal office is located or, in the case of
any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed
by the United States of America or any similar tax imposed by any other jurisdiction in which a
Loan Party is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 5.04(b)), 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 5.03(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 with respect to such withholding tax pursuant to Section 5.03(a) or Section 5.03(c).



     “Existing Credit Agreement” has the meaning given in the recitals.



     “Existing Letters of Credit” mean the letters of credit issued under the Existing
Credit Agreement and described on Schedule 2.08.



     “Exploration Subsidiaries” means BWNR and WYNR.



     “Exxon Acquisition” means the acquisition by the Borrower of 75% of ExxonMobil’s
interest in the Greater Aneth Field pursuant to the Exxon Acquisition Documents.



     “Exxon Acquisition Documents” mean (a) the Purchase and Sale Agreement and (b) all
bills of sale, assignments, agreements, instruments and documents executed and delivered by or to
any Loan Party in connection therewith; in each case, as the same may be amended or modified.



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



     “Fee Letter” means that certain letter agreement between the Borrower, Wachovia,
Wachovia Capital Markets, LLC and Citigroup Global Markets Inc. related to the payment of certain
fees by the Borrower.



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



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     “Financial Statements” mean the financial statement or statements of the Borrower and
its Subsidiaries referred to in Section 7.04(a).



     “First Redetermination Date” means the date that the first redetermination of the
Borrowing Base becomes effective.



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



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



     “Funded Debt” means as of any date of determination all Debt of Parent and its
Consolidated Subsidiaries (including any Debt proposed to be incurred on such date and excluding
all Debt to be paid on such date with the proceeds thereof); provided that Debt identified
in clauses (b), (f), (g) or (h) (unless such Debt benefits or supports the debt or obligations of
an Unrestricted Subsidiary) or in clause (c) of the definition thereof shall be excluded.



     “GAAP” means generally accepted accounting principles in the United States of America
as in effect from time to time subject to the terms and conditions set forth in Section 1.05.



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



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



     “Guarantors” mean Parent and each Domestic Subsidiary of Parent (other than the
Borrower) that guarantees the Indebtedness pursuant to Section 8.14(b).



     “Guaranty Agreement” means the Guaranty and Collateral Agreement executed by the Loan
Parties, in a form reasonably approved by the Administrative Agent and its counsel unconditionally
guarantying on a joint and several basis by the Guarantors, payment of the Indebtedness, as the
same may be amended, modified or supplemented from time to time.



     “Hedging Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement, whether exchange traded, “over-the-counter”
or otherwise, involving, or settled by reference to, one or more rates, currencies,



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commodities, equity or debt instruments or securities, or economic, financial or pricing
indices or measures of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions; provided that no phantom stock or similar plan
providing for payments only on account of services provided by current or former directors,
officers, employees or consultants of the Loan Parties shall be a Hedging Agreement.



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



     “Holdings” means Resolute Holdings, LLC, a Delaware limited liability company.



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



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



     “Indebtedness” means any and all amounts owing or to be owing by a Loan Party or any
Subsidiary: (a) to any Agent, any Issuing Bank or any Lender under any Loan Document; (b) to any
Secured Hedging Provider under any Hedging Agreement, including any Hedging Agreement in existence
prior to the date hereof, but excluding any additional transactions or confirmations entered into
(i) after such Secured Hedging Provider ceases to be a Lender or an Affiliate of a Lender or (ii)
by another Secured Hedging Provider that is not a Lender or an Affiliate of a Lender after
assignment by a Secured Hedging Provider to such other Secured Hedging Provider that is not a
Lender or an Affiliate of a Lender and (c) all renewals, extensions and/or rearrangements of any of
the above whether such Person (or in the case of its Affiliate, the Person affiliated therewith)
remains a Lender hereunder.



     “Indemnified Taxes” mean Taxes other than Excluded Taxes.



     “Initial Reserve Report” means the report dated as of January 1, 2006, prepared by
RNRC and audited by Sproule Associates Inc., with respect to certain Oil and Gas Properties of the
Loan Parties as of January 1, 2006, pro forma for the Exxon Acquisition.



     “Intercreditor Agreement” means the Intercreditor Agreement, dated of even date
herewith among the Borrower, the Administrative Agent and the administrative agent for the lenders
under the Second Lien Facility, as the same may, from time to time, be amended, modified,
supplemented or restated as permitted by the terms of this Agreement.



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



     “Interest Expense” means, for any period, the sum (determined without duplication) of
(i) the aggregate gross interest expense of Parent and its Consolidated Subsidiaries for such
period, including to the extent included in interest expense under GAAP: (a) amortization of debt
discount, (b) capitalized interest and (c) the portion of any payments or accruals under Capital
Leases allocable to interest expense, plus (ii) the portion of any payments or accruals under
Synthetic Leases allocable to interest expense whether or not the same constitutes interest expense
under GAAP.



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



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



     “Interim Redetermination” means any redetermination of the Borrowing Base under
Section 2.07(b)(ii).



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



     “Investment” means, for any Person: (a) the acquisition (whether for cash, Property,
services or securities or otherwise) of Equity Interests of any other Person or any agreement to
make any such acquisition (including, without limitation, any “short sale” or any sale of any
securities at a time when such securities are not owned by the Person entering into such short
sale) or any capital contribution to any other Person; (b) the making of any deposit with, or
advance, loan or capital contribution to, assumption of Debt of, purchase or other acquisition of
any other Debt or equity participation or interest in, or other extension of credit to, any other
Person (including the purchase of Property from another Person subject to an understanding or



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agreement, contingent or otherwise, to resell such Property to such Person); (c) the entering
into of any guarantee of, or other contingent obligation (including the deposit of any Equity
Interests to be sold, and including the issuance of a letter of credit for the account of such
Person) with respect to, Debt of any other Person or with respect to Debt or other liability of any
Unrestricted Subsidiary and (without duplication) any amount committed to be advanced, lent or
extended to such other Person; or (d) the purchase or acquisition (in one or a series of
transactions) of Property of another Person that constitutes a business unit.



     “Issuing Bank” means Wachovia and each Lender that agrees to act as an issuer
of Letters of Credit hereunder at the request of the Borrower, in each case, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section
2.08(i). Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be
issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such Affiliate.



     “LC Commitment” at any time means Twenty-Five Million dollars ($25,000,000).



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



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



     “Lenders” mean the lenders signatory to this Agreement, any Person that shall have
become a party hereto pursuant to an Assignment and Assumption, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Assumption, and any Person that shall
have become a party hereto as an Additional Lender pursuant to Section 2.06(c).



     “Letter of Credit” means any letter of credit issued pursuant to this Agreement, and
the letters of credit described on Schedule 2.08.



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



     “LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Page 3750 of the Dow Jones Market Service (or on any successor or substitute
page of such Service, or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that such rate



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is not available at such time for any reason, then the “LIBO Rate” with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of
$1,000,000 and for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period.



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



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



     “Loan Parties” mean, without duplication, the Borrower, each Guarantor and each
Restricted Subsidiary.



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



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



     “Material Adverse Effect” means a material adverse effect on (a) the business,
operations, Property, condition (financial or otherwise) or prospects of the Loan Parties taken as
a whole, (b) the ability of any Loan Party to perform any of its obligations under any Loan
Document, (c) the validity or enforceability of any Loan Document or (d) the rights and remedies of
or benefits available to the Administrative Agent, any other Agent, any Issuing Bank or any Lender
under any Loan Document.



     “Material Indebtedness” means Debt (other than the Loans and Letters of Credit), or
obligations in respect of one or more Hedging Agreements, of any one or more of the Loan Parties in
an aggregate principal amount exceeding $1,000,000. For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of a Loan Party in respect of



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any Hedging Agreement at any time shall be the aggregate amount (giving effect to any netting
agreements) that the Loan Party would be required to pay if such Hedging Agreement were terminated
at such time.



     “Maturity Date” means April 13, 2011.



     “Maximum Credit Amount” means, as to each Lender, the amount as agreed between the
Administrative Agent and such Lender, as the same may be (a) reduced or terminated from time to
time in connection with a reduction or termination of the Aggregate Maximum Credit Amounts pursuant
to Section 2.06(b), (b) increased from time to time pursuant to Section 2.06(c) or (c) modified
from time to time pursuant to any assignment permitted by Section 12.04(b).



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



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



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



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



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



     “NNOG” means Navajo Nation Oil and Gas Company, a federally chartered corporation.



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



     “Oil and Gas Properties” mean (a) Hydrocarbon Interests; (b) the Properties now or
hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future
unitization, pooling agreements and declarations of pooled units and the units created thereby
(including without limitation all units created under orders, regulations and rules of any
Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all
operating agreements, contracts and other agreements, including production sharing contracts and
agreements, which relate to any of the Hydrocarbon Interests or the production, sale, purchase,
exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all
Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon
Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues
and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements,
hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or
incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and
estates described or referred to above, including any and all Property, real or personal, now owned
or hereinafter acquired and situated upon, used, held for use or



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useful in connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other
personal Property which may be on such premises for the purpose of drilling a well or for other
similar temporary uses) and including any and all oil wells, gas wells, injection wells or other
wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings,
machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements,
cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and
servitudes together with all additions, substitutions, replacements, accessions and attachments to
any and all of the foregoing.



     “Organizational Documents” mean, (a) with respect to any corporation, the certificate
or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents
with respect to any non US jurisdiction); (b) with respect to any limited liability company, the
certificate or articles of formation or organization and operating agreement; and (c) with respect
to any partnership, joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any agreement, instrument,
filing or notice with respect thereto filed in connection with its formation or organization with
the applicable Governmental Authority in the jurisdiction of its formation or organization and, if
applicable, any certificate or articles of formation or organization of such entity.



     “Other Taxes” 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 hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement and
any other Loan Document.



     “Parent” has the meaning given in the introductory paragraph.



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



     “Patriot Act” has the meaning set forth in Section 12.15.



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



     “Permitted Holders” mean (a) Natural Gas Partners VII, L.P. and its affiliates and
management, (b) Nicholas J. Sutton, James M. Piccone, Richard F. Betz, Dale E. Cantwell, Theodore
Gazulis, James L. Kincaid and Janet W. Pasque, (c) the spouses, descendants, estates, heirs,
devisees and legatees of the Persons described in the preceding clause (b), and (d) any trust
established for the benefit of any Person described in the preceding clauses (b) or (c).



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



     “Plan” means any employee pension benefit plan, as defined in section 3(2) of ERISA,
which is subject to Title IV of ERISA and which (a) is currently or hereafter sponsored, maintained
or contributed to by a Loan Party, a Subsidiary or an ERISA Affiliate or (b) was at



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any time during the six calendar years preceding the date hereof, sponsored, maintained or
contributed to by a Loan Party or a Subsidiary or an ERISA Affiliate.



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



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



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



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



     “Purchase Agreement” means that certain Purchase and Sale Agreement, dated effective
January 1, 2005 among the Borrower, NNOG, ExxonMobil and certain Affiliates of ExxonMobil.



     “PV” means the net present value, discounted at 10% per annum, of the future net
revenues expected to accrue to the Loan Parties’ collective interests in proved reserves expected
to be produced from Oil and Gas Properties evaluated in the most recently delivered Reserve Report
during the remaining expected economic lives of such reserves. Each calculation of such expected
future net revenues shall take into account (a) appropriate deductions (including an annual cost
escalation factor of 3% for operating expenses for the four years ending after the current year)
for severance and ad valorem taxes, and for operating, gathering, transportation and marketing
costs required for the production and sale of such reserves, (b) appropriate adjustments for
Hedging Agreements, provided that Hedging Agreements with non-investment grade counterparties shall
not be taken into account to the extent that such Hedging Agreements improve the position of or
otherwise benefit the Loan Parties, (c) appropriate adjustments for contracts to sell production
from such reserves, to the extent such contracts provide for fixed prices or for fixed basis
differentials, (d) the pricing assumptions used in determining PV for any particular reserves shall
be based upon the following price decks: (i) for crude oil, the quotation for deliveries of crude
oil for each such calendar year from the New York Mercantile Exchange for Cushing, Oklahoma,
provided that with respect to quotations for calendar years after the fifth calendar year, the
quotation for the fifth calendar year shall be applied and (ii) for natural gas, the quotation for
deliveries of natural gas for each such year from the New York Mercantile Exchange for Henry Hub,
provided that with respect to quotations for calendar years after the fifth calendar year, the
quotation for the fifth calendar year shall be applied and (e) the cash-flows derived from the
pricing assumptions set forth above shall be further adjusted as



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appropriate (taking into account any basis differentials fixed by contract described in clause
(c) above) to account for the historical basis differentials for each month during the preceding
12-month period calculated by comparing the crude oil and natural gas prices actually realized by
the Loan Parties to Cushing, Oklahoma and Henry Hub NYMEX prices for each month during such period.
Based on the Initial Reserve Report, PV as of the Effective Date is 719,800,000.



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



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



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



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



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



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



     “Required Lenders” mean, at any time while no Loans or LC Exposure is outstanding,
Lenders having at least seventy-five percent (75%) of the Aggregate Maximum Credit Amounts; and at
any time while any Loans or LC Exposure is outstanding, Lenders holding at least seventy-five
percent (75%) of the outstanding aggregate principal amount of the Loans or participation interests
in such Letters of Credit (without regard to any sale by a Lender of a participation in any Loan
under Section 12.04(c)).



     “Reserve Report” means a report, in form and substance reasonably satisfactory to the
Administrative Agent, setting forth, as of each January 1st or July 1st (or such other date in the
event of an Interim Redetermination) the oil and gas reserves attributable to the proved Oil and
Gas Properties of the Loan Parties (or as for Interim Redeterminations, the proved Oil and Gas
Properties of the Loan Parties acquired since the last redetermination of the Borrowing Base),
together with a projection of the rate of production and future net income, taxes, operating
expenses, transportation expenses and capital expenditures with respect thereto as of such date,
based upon assumptions consistent with SEC reporting requirements other than with respect to those
adjustments set out in the second sentence of the definition of PV.



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



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



     “Restricted Subsidiaries” mean all Subsidiaries that are not Unrestricted
Subsidiaries.



     “RNRC” means Resolute Natural Resources Company, a Delaware corporation.



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



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



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



     “Second Lien Facility” means the credit facility represented by that certain Senior
Second Lien Credit Agreement, dated of even date herewith among the Borrower, the Guarantors,
Citigroup Global Markets Inc., as administrative agent and the other agents and lenders party
thereto, as the same may, from time to time, be amended, modified, supplemented or restated in
accordance with the terms of the Intercreditor Agreement.



     “Second Lien Loan Documents” mean the Second Lien Facility, the notes, and the
security instruments related thereto.



     “Secured Hedging Provider” means any (a) Person that is a party to a Hedging Agreement
with a Loan Party or any Subsidiary that entered into such Hedging Agreement while such Person was
or before such Person becomes a Lender or an Affiliate of a Lender, whether or not such Person at
any time ceases to be a Lender or an Affiliate of a Lender, as the case may be, or (b) assignee of
any Person described in clause (a) above so long as such assignee is an Approved Counterparty.



     “Security Instruments” mean any Guaranty Agreement, mortgages, deeds of trust,
security agreements, pledge agreements, the Intercreditor Agreement, the Subordination Agreement
and any and all other agreements, instruments, certificates or certificates now or hereafter
executed and delivered by any Loan Party or any other Person (other than Hedging Agreements with
the Lenders or any Affiliate of a Lender or participation or similar agreements between any Lender
and any other lender or creditor with respect to any Indebtedness pursuant to this Agreement) to
guarantee or provide security for the payment or performance of the Indebtedness, the Notes, this
Agreement, or reimbursement obligations under the Letters of Credit, as such agreements may be
amended, modified, supplemented or restated from time to time.



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



     “Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject (a)
with respect to the Base CD Rate, for new negotiable non-personal time deposits in dollars of over
$100,000 with maturities approximately equal to three months and (b) with respect to the Adjusted
LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.



     “Subordination Agreement” means that certain Subordination Agreement, dated of even
date herewith among the Administrative Agent (acting on behalf of the Lenders), the Borrower and
NNOG in which NNOG subordinates certain of its rights under the Cooperative Agreement to the rights
of the Lenders under the Loan Documents, as the same may, from time to time, be amended, modified,
supplemented or restated as permitted by the terms of this Agreement.



     “Subsidiary” means: (a) any Person of which at least a majority of the outstanding
Equity Interests having by the terms thereof ordinary voting power to elect a majority of the board
of directors, manager or other governing body of such Person (irrespective of whether or not at the
time Equity Interests of any other class or classes of such Person shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or indirectly owned or
controlled by another Person (the “parent”) or one or more subsidiaries of the parent or by the
parent and one or more of the subsidiaries of the parent and (b) any partnership of which the
parent or any of its subsidiaries is a general partner.



     “Syndication Agent” has the meaning given in the introductory paragraph.



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



     “Tax Distributions” mean distributions paid by Parent to Holdings with respect to each
taxable year in an amount not to exceed the product of (i) the net taxable income of Parent and its
Subsidiaries for such taxable year computed as if Parent and its Subsidiaries were a single



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partnership, times (ii) a percentage equal to the Cumulative Tax Rate. Tax Distributions with
respect to any year may be estimated in good faith and paid quarterly so that the members of
Holdings may timely pay their estimated income tax payments for such year. Any estimated Tax
Distributions will be trued up after the end of each taxable year when the U.S. federal income tax
return of Holdings for such year has been filed. Tax Distributions shall equal zero for any period
in which either Parent or the Borrower is taxed as a corporation for federal income tax purposes.
Upon request by the Administrative Agent, Parent and the Borrower shall provide to the
Administrative Agent supporting documentation for the amount distributed.



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



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



     “Three-Month Secondary CD Rate” means, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day (or, if such day is not
a Business Day, the next preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York, New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for three-month certificates
of deposit of major money center banks in New York, New York received at approximately 10:00 a.m.,
New York, New York time, on such day (or, if such day is not a Business Day, on the next preceding
Business Day) by the Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.



     “Transactions” mean the execution, delivery and performance of this Agreement, each
other Loan Document, the Exxon Acquisition Documents and the Second Lien Loan Documents, the
borrowing of loans under this Agreement and under the Second Lien Credit Agreement, , the use of
the proceeds of such loans, the issuance of Letters of Credit hereunder, and the grant of Liens on
Mortgaged Properties and other Properties pursuant to the Security Instruments.



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



     “Unrestricted Subsidiary” means:



          (1) any Subsidiary that at the time of determination shall be designated an Unrestricted
Subsidiary by a Financial Officer of a Loan Party in the manner provided below; and




          (2) any Subsidiary of an Unrestricted Subsidiary.




     A Financial Officer of a Loan Party may designate any Subsidiary of it (including any newly
acquired or newly formed Subsidiary and any Restricted Subsidiary) to be an Unrestricted



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Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity Interests or
Indebtedness of, or owns or holds any Lien on any Property of, a Loan Party or any other Subsidiary
of a Loan Party that is not a Subsidiary of the Subsidiary to be so designated. A Financial
Officer of a Loan Party may designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that (i) giving effect to such designation shall not result in the
occurrence and continuance of a Default and (ii) any Indebtedness of such Subsidiary shall not be
secured by Liens at the time of such designation except for Liens permitted by Section 9.03. Any
such designation by such Financial Officer shall be evidenced to the Administrative Agent by
promptly filing with the Administrative Agent a copy of the resolution of such Financial Officer
giving effect to such designation and an Officers’ Certificate certifying that such designation
complied with the foregoing provisions.



     “Wachovia” has the meaning given in the introductory paragraph.



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



     “WYNR” means WYNR, LLC, a Delaware limited liability company.



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



     Section 1.04 Terms Generally; Rules of Construction. The definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to
have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a)
any definition of or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to any law shall be
construed as referring to such law as amended, modified, codified or reenacted, in whole or in
part, and in effect from time to time, (c) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions contained herein), (d)
the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision hereof, (e) with
respect to the determination of any time period, the word “from” means “from and including” and the
word “to” means “to and including” and (f) any reference herein to Articles, Sections, Annexes,
Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Annexes,
Exhibits and Schedules to, this Agreement. No provision of this Agreement or any other Loan
Document shall be interpreted or construed against any Person solely because such Person or its
legal representative drafted such provision.

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     Section 1.05 Accounting Terms and Determinations; GAAP. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters required to be furnished to the
Agents or the Lenders hereunder shall be prepared, in accordance with GAAP, applied on a basis
consistent with the audited Financial Statements delivered pursuant to Section 7.04(a)(i) except
for changes in which Borrower’s independent certified public accountants concur and which are
disclosed to Administrative Agent on the next date on which financial statements are required to be
delivered to the Lenders pursuant to Section 8.01(a); provided that, unless the Borrower
and the Majority Banks shall otherwise agree in writing, no such change shall modify or affect the
manner in which compliance with the covenants contained herein is computed such that all such
computations shall be conducted utilizing financial information presented consistently with prior
periods. Any reference to financial information of Parent and its Consolidated Subsidiaries for
dates and periods ending on or before March 31, 2006 shall be deemed to be references to the
financial information of the Loan Parties on a combined basis.



ARTICLE II

THE CREDITS




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



     Section 2.02 Loans and Borrowings
        .



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




          (b) Types of Loans. Subject to Section 3.03, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each
Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that any exercise of such option shall
not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this
Agreement.




          (c) Minimum Amounts; Limitation on Number of Borrowings. At the commencement of each
Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $5,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of
$500,000 and not less than $2,500,000; provided that an ABR Borrowing may be in an
aggregate amount that is equal to the entire unused balance of the total




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Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.08(e).
Borrowings of more than one Type may be outstanding at the same time; provided that there
shall not at any time be more than a total of ten (10) Eurodollar Borrowings outstanding.
Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.




          (d) Notes. Any Lender may request that Loans made by it be evidenced by a single
promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a
promissory note payable to the order of such Lender in substantially the form of Exhibit A,
dated, in the case of (i) any Lender party hereto as of the date of this Agreement, as of the date
of this Agreement, (ii) any Lender that becomes a party hereto pursuant to an Assignment and
Assumption, as of the effective date of the Assignment and Assumption, or (iii) any Lender that
becomes a party hereto in connection with an increase in the Aggregate Maximum Credit Amounts
pursuant to Section 2.06(c), as of the effective date of such increase, payable to the order of
such Lender in a principal amount equal to its Maximum Credit Amount as in effect on such date, and
otherwise duly completed. If any Lender’s Maximum Credit Amount increases or decreases for any
reason (whether pursuant to Section 2.06, Section 12.04(b) or otherwise), the Borrower shall
deliver or cause to be delivered on the effective date of such increase or decrease, a new Note
payable to the order of any Lender who requested a Note hereunder in a principal amount equal to
its Maximum Credit Amount after giving effect to such increase or decrease, and otherwise duly
completed, and such Lender agrees to promptly thereafter return the previously issued Note held by
such Lender marked canceled or otherwise similarly defaced. The date, amount, Type, interest rate
and, if applicable, Interest Period of each Loan made by each Lender that receives a Note, and all
payments made on account of the principal thereof, shall be recorded by such Lender on its books
for its Note, and, prior to any transfer, may be endorsed by such Lender on a schedule attached to
such Note or any continuation thereof or on any separate record maintained by such Lender. Failure
to make any such notation or to attach a schedule shall not affect any Lender’s or the Borrower’s
rights or obligations in respect of such Loans or affect the validity of such transfer by any
Lender of its Note.




     Section 2.03 Requests for Borrowings To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone or by written Borrowing Request in substantially the form of Exhibit B and signed
by the Borrower (a “written Borrowing Request”): (a) in the case of a Eurodollar
Borrowing, not later than 12:00 noon, New York, New York time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York, New York time, on the Business Day of the proposed Borrowing; provided that no such
notice shall be required for any deemed request of an ABR Borrowing to finance the
reimbursement of an LC Disbursement as provided in Section 2.08(e). Each telephonic and written
Borrowing Request shall be irrevocable and each telephonic Borrowing Request shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request.
Each such telephonic and written Borrowing Request shall specify the following information in
compliance with Section 2.02:




     (i) the aggregate amount of the requested Borrowing;




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




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




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




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




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


If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar
Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s
duration. Each Borrowing Request shall constitute a representation that the amount of the
requested Borrowing shall not cause the total Credit Exposures to exceed the total Commitments
(i.e., the lesser of the Aggregate Maximum Credit Amounts and the then effective Borrowing Base).
Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the
Administrative Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.




     Section 2.04 Interest Elections
        .



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




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

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





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




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




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




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


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




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




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




     Section 2.05 Funding of Borrowings
        .



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




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New York and designated by the
Borrower in the applicable Borrowing Request; provided that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.08(e) shall be remitted by the
Administrative Agent to the Issuing Bank that made such LC Disbursement.




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




     Section 2.06 Changes in The Aggregate Maximum Credit Amounts.



          (a) Scheduled Termination of Commitments. Unless previously terminated, the
Commitments shall terminate on the Maturity Date. If at any time the Aggregate Maximum Credit
Amounts or the Borrowing Base is terminated or reduced to zero, then the Commitments shall
terminate on the effective date of such termination or reduction.




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





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




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



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2.06(c). Each reduction of the Aggregate
Maximum Credit Amounts shall be made ratably among the Lenders in accordance with each
Lender’s Applicable Percentage.



     (c) Optional Increase in Aggregate Maximum Credit Amounts.




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




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




     (A) such increase shall not be less than $10,000,000 unless the Administrative
Agent otherwise consents, and no such increase shall be permitted if after giving
effect thereto the aggregate amount of all such increases exceeds $100,000,000;




     (B) no Default shall have occurred and be continuing at the effective date of
such increase;




     (C) on the effective date of such increase, no Eurodollar Borrowings shall be
outstanding or if any Eurodollar Borrowings are outstanding, then the effective date
of such increase shall be the last day of the Interest Period in respect of such
Eurodollar Borrowings unless the Borrower pays compensation required by Section
5.02;




     (D) no Lender’s Maximum Credit Amount may be increased without the consent of
such Lender;




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




     (F) if the Borrower elects to increase the Aggregate Maximum Credit Amounts by
causing an Additional Lender to become a party to this Agreement, then the Borrower
and such Additional Lender shall execute and deliver to the Administrative Agent a
certificate substantially in the form of Exhibit F-2 (an “Additional
Lender Certificate”), together with an Administrative Questionnaire and a
processing and recordation fee of $3,500, and the Borrower shall, if requested by
the Additional Lender, deliver a Note payable to the order of such Additional Lender
in a principal amount equal to its Maximum Credit Amount, and otherwise duly
completed.

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     (iii) Subject to acceptance and recording thereof pursuant to Section 2.06(c)(iv), from
and after the effective date specified in the Maximum Credit Amount Increase Certificate or
the Additional Lender Certificate (or if any Eurodollar Borrowings are outstanding, then the
last day of the Interest Period in respect of such Eurodollar Borrowings, unless the
Borrower has paid compensation required by Section 5.02): (A) the amount of the Aggregate
Maximum Credit Amounts shall be increased as set forth therein, and (B) in the case of an
Additional Lender Certificate, any Additional Lender party thereto shall become a party to
this Agreement and have the rights and obligations of a Lender under this Agreement and the
other Loan Documents. In addition, the Lender or the Additional Lender, as applicable,
shall purchase a pro rata portion of the outstanding Loans (and participation interests in
Letters of Credit) of each of the other Lenders (and such Lenders hereby agree to sell and
to take all such further action to effectuate such sale) such that each Lender (including
any Additional Lender, if applicable) shall hold its Applicable Percentage of the
outstanding Loans (and participation interests) after giving effect to the increase in the
Aggregate Maximum Credit Amounts.




     (iv) Upon its receipt of a duly completed Maximum Credit Amount Increase Certificate or
an Additional Lender Certificate, executed by the Borrower and the Lender or the Borrower
and the Additional Lender party thereto, as applicable, the processing and recording fee
referred to in Section 2.06(c)(ii), the Administrative Questionnaire referred to in Section
2.06(c)(ii), if applicable, and the written consent of the Administrative Agent to such
increase required by Section 2.06(c)(i), the Administrative Agent shall accept such Maximum
Credit Amount Increase Certificate or Additional Lender Certificate and record the
information contained therein in the Register required to be maintained by the
Administrative Agent pursuant to Section 12.04(b)(iv). No increase in the Aggregate Maximum
Credit Amounts shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this Section 2.06(c)(iv).



     Section 2.07 Borrowing Base.



          (a) Initial Borrowing Base. For the period from and including the Effective Date to
but excluding the First Redetermination Date, the amount of the Borrowing Base shall be




          $180,000,000. Notwithstanding the foregoing, the Borrowing Base may be subject to further
adjustments from time to time pursuant to Section 8.13(d), Section 8.16 or Section 9.12.




          (b) Scheduled and Interim Redeterminations.





     (i) The Borrowing Base shall be redetermined semi-annually in accordance with this
Section 2.07 (a “Scheduled Redetermination”), and, subject to Section 2.07(d), such
redetermined Borrowing Base shall become effective and applicable to the Borrower, the
Agents, each Issuing Bank and the Lenders on April 1st and October 1st of each year,
commencing with October 1, 2006.




     (ii) The Administrative Agent may, at the direction of the Required Lenders, by
notifying the Borrower thereof, one time during any six-month period, elect



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to cause the Borrowing Base to be redetermined between Scheduled Redeterminations in accordance with this
Section 2.07.




     (iii) The Borrower may elect to redetermine the Borrowing Base in connection with any
acquisition by any Loan Party of proved Oil and Gas Properties or any Person owning proved
Oil and Gas Properties (in each such case, if the fair market value of such proved Oil and
Gas Properties or such Person is in excess of $10,000,000) permitted hereunder in accordance
with this Section 2.07; provided that such redetermination of the Borrowing Base
shall not occur more than twice between Scheduled Redeterminations.



          (c) Scheduled and Interim Redetermination Procedure.





     (i) Each Scheduled Redetermination and each Interim Redetermination shall be
effectuated as follows: Upon receipt by the Administrative Agent of (A) the Reserve Report
and the certificate required to be delivered by the Borrower, in the case of a Scheduled
Redetermination, pursuant to Section 8.12(a) and (c), and, in the case of an Interim
Redetermination, pursuant to Section 8.12(b) and (c), and (B) such other reports, data and
supplemental information, including, without limitation, the information provided pursuant
to Section 8.12(c), as may, from time to time, be reasonably requested by the
Administrative Agent or the Majority Lenders (the Reserve Report, such certificate and such
other reports, data and supplemental information being the “Engineering Reports”),
the Administrative Agent shall evaluate the information contained in the Engineering
Reports and shall, in good faith, propose a new Borrowing Base (the “Proposed Borrowing
Base”) based upon such information and such other information (including, without
limitation, the status of title information with respect to the proved Oil and Gas
Properties as described in the Engineering Reports and the existence of any other Debt) as
the Administrative Agent deems appropriate in its sole discretion and consistent with its
normal oil and gas lending criteria as it exists at the particular time. In no event shall
the Proposed Borrowing Base exceed the Aggregate Maximum Credit Amounts.




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




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



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event within fifteen (15) days after the Administrative Agent has received the required Engineering Reports; and




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




     (iii) Any Proposed Borrowing Base that would increase the Borrowing Base then in
effect must be approved or deemed to have been approved by all of the Lenders as provided
in this Section 2.07(c)(iii); and any Proposed Borrowing Base that would decrease or
maintain the Borrowing Base then in effect must be approved or be deemed to have been
approved by the Required Lenders as provided in this Section 2.07(c)(iii). Upon receipt of
the Proposed Borrowing Base Notice, each Lender shall have fifteen (15) days to agree with
the Proposed Borrowing Base or disagree with the Proposed Borrowing Base by proposing an
alternate Borrowing Base. If at the end of such fifteen (15) days, any Lender has not
communicated its approval or disapproval in writing to the Administrative Agent, such
silence shall be deemed to be an approval of the Proposed Borrowing Base. If, at the end
of such 15-day period, all of the Lenders, in the case of a Proposed Borrowing Base that
would increase the Borrowing Base then in effect, or the Required Lenders, in the case of a
Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in effect,
have approved or deemed to have approved, as aforesaid, then the Proposed Borrowing Base
shall become the new Borrowing Base, effective on the date specified in Section 2.07(d).
If, however, at the end of such 15-day period, all of the Lenders or the Required Lenders,
as applicable, have not approved or deemed to have approved, as aforesaid, then the
Administrative Agent shall (A) notify the Borrower of the Proposed Borrowing Base and which
Lenders have not approved or been deemed to have approved of the Proposed Borrowing Base
and (B) poll the Lenders to ascertain the highest Borrowing Base then acceptable to a
number of Lenders sufficient to constitute the Required Lenders for purposes of this
Section 2.07 and, so long as such amount does not increase the Borrowing Base then in
effect, such amount shall become the new Borrowing Base, effective on the date specified in
Section 2.07(d).



          (d) Effectiveness of a Redetermined Borrowing Base. After a redetermined Borrowing
Base is approved or is deemed to have been approved by all of the Lenders or the Required Lenders,
as applicable, pursuant to Section 2.07(c)(iii), the Administrative Agent shall
notify the Borrower and the Lenders of the amount of the redetermined Borrowing Base (the
“New Borrowing Base Notice”), and such amount shall become the new Borrowing Base,
effective and applicable to the Borrower, the Agents, each Issuing Bank and the Lenders:





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



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be delivered by the Borrower pursuant to Section 8.12(a) and (c) in a timely and complete manner, then on the Business Day next
succeeding delivery of such notice; and




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


Such amount shall then become the Borrowing Base until the next Scheduled Redetermination Date, the
next Interim Redetermination Date or the next adjustment to the Borrowing Base under Section
8.13(d) or Section 9.12, whichever occurs first. Notwithstanding the foregoing, no Scheduled
Redetermination or Interim Redetermination shall become effective until the New Borrowing Base
Notice related thereto is received by the Borrower. And further notwithstanding, while the Second
Lien Facility is still outstanding, the Borrowing Base may never exceed the amount permitted under
Section 9.02(f) of the Second Lien Facility.




     Section 2.08 Letters of Credit.



          (a) General. The Loan Parties, the Administrative Agent, the Issuing Bank and the
Lenders agree that all Existing Letters of Credit shall be deemed to be issued under this Agreement
as of the Effective Date and shall constitute Letters of Credit hereunder for all purposes (except
that the Issuing Bank’s standard issuance fee shall not be payable on such deemed issuance).
Subject to the terms and conditions set forth herein, the Borrower may request any Issuing Bank to
issue Letters of Credit in dollars for its own account or for the account of any Loan Party, in a
form reasonably acceptable to the Administrative Agent and such Issuing Bank, at any time and from
time to time during the Availability Period. In the event of any inconsistency between the terms
and conditions of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by the Borrower with,
an Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall
control.




          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank) to any Issuing Bank and the
Administrative Agent (not less than three (3) Business Days in advance of the requested date of
issuance, amendment, renewal or extension) a notice: (i) requesting the issuance of a Letter of
Credit or identifying the outstanding Letter of Credit issued by such Issuing Bank to be amended, renewed or extended; (ii) specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day); (iii) specifying the date on which
such Letter of Credit is to expire (which shall comply with Section 2.08(c)); (iv) specifying the
amount of such Letter of Credit; (v) specifying the name and address of the beneficiary thereof and
such other information as shall be necessary to prepare, amend, renew or extend such Letter of
Credit; and (vi) specifying the amount of the then effective Borrowing Base, the current total
Credit Exposures (without regard to the requested Letter of Credit or the requested amendment,
renewal or extension of an outstanding Letter of Credit) and the pro forma total Credit Exposures
(giving effect to the requested Letter of Credit or the requested amendment, renewal or extension
of an outstanding Letter of Credit). If requested by any




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Issuing Bank, the Borrower shall submit a
letter of credit application on such Issuing Bank’s standard form in connection with any request
for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and with respect to each notice provided by the Borrower above and any issuance, amendment,
renewal or extension of each Letter of Credit, the Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or extension (A) the LC
Exposure shall not exceed the LC Commitment and (vii) the total Credit Exposures shall not exceed
the total Commitments (i.e. the lesser of the Aggregate Maximum Credit Amounts and the then
effective Borrowing Base).




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




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




          (e) Reimbursement. If any Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit issued by such Issuing Bank, the Borrower shall reimburse such LC Disbursement by
paying to the Administrative Agent an amount equal to such LC Disbursement
not later than 12:00 noon, New York, New York time, on the date that such LC Disbursement is
made, if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., New
York, New York time, on such date, or, if such notice has not been received by the Borrower prior
to such time on such date, then not later than 12:00 noon, New York, New York time, on (i) the
Business Day that the Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York, New York time, on the day of receipt, or (ii) the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not received prior to
such time on the day of receipt; provided that if such LC Disbursement is not less than
$1,000,000, the Borrower shall, subject to the conditions to Borrowing set forth herein, be deemed
to have requested, and the Borrower does hereby request under such circumstances,




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that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the
Borrower’s obligation to make such payment shall be discharged and replaced by the resulting ABR
Borrowing. If the Borrower fails to make such payment when due, the Administrative Agent shall
notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in
respect thereof and such Lender’s Applicable Percentage thereof. Promptly following receipt of
such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the
payment then due from the Borrower, in the same manner as provided in Section 2.05 with respect to
Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank
that issued such Letter of Credit the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the Borrower pursuant to this
Section 2.08(e), the Administrative Agent shall distribute such payment to the Issuing Bank that
issued such Letter of Credit or, to the extent that Lenders have made payments pursuant to this
Section 2.08(e) to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this Section 2.08(e) to reimburse
any Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as contemplated
above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.




          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in Section 2.08(e) shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit,
any Letter of Credit Agreement or this Agreement, or any term or provision therein, (ii) any draft
or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in
any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by
any Issuing Bank under a Letter of Credit issued by such Issuing Bank against presentation of a
draft or other document that does not comply with the terms of such Letter of Credit or any Letter
of Credit Agreement, or (iv) any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section 2.08(f), constitute a
legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations
hereunder. Neither the Administrative Agent, the Lenders nor any Issuing Bank, nor any of their
Related Parties shall have any liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of any Issuing Bank;
provided that the foregoing shall not be construed to excuse any Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by such Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
willful misconduct on the part of any Issuing Bank (as finally determined by a court of




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competent jurisdiction), such Issuing Bank shall be deemed to have exercised all requisite care in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank that issued such
Letter of Credit may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or information to the
contrary, or refuse to accept and make payment upon such documents if such documents are not in
strict compliance with the terms of such Letter of Credit.




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




          (h) Interim Interest. If any Issuing Bank shall make any LC Disbursement, then, until
the Borrower shall have reimbursed such Issuing Bank for such LC Disbursement (either with its own
funds or a Borrowing under Section 2.08(e)), the unpaid amount thereof shall bear interest, for
each day from and including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans.
Interest accrued pursuant to this Section 1.01(d) shall be for the account of such Issuing Bank,
except that interest accrued on and after the date of payment by any Lender pursuant to Section
1.01(a) to reimburse such Issuing Bank shall be for the account of such Lender to the extent of
such payment.




          (i) Replacement of an Issuing Bank. Any Issuing Bank may be replaced or resign at any
time by written agreement among the Borrower, the Administrative Agent, such resigning or replaced
Issuing Bank and, in the case of a replacement, the successor Issuing Bank. The Administrative
Agent shall notify the Lenders of any such resignation or replacement of an Issuing Bank. At the
time any such resignation or replacement shall become effective, the Borrower shall pay all unpaid
fees accrued for the account of the resigning or replaced Issuing Bank pursuant to Section 3.05(b).
In the case of the replacement of an Issuing Bank, from and after the effective date of such
replacement, (i) the successor Issuing Bank shall have all the
rights and obligations of the replaced Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank”
shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the resignation or replacement
of an Issuing Bank hereunder, the resigning or replaced Issuing Bank shall remain a party hereto
and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement
with respect to Letters of Credit issued by it prior to such resignation or replacement, but shall
not be required to issue additional Letters of Credit.

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          (j) Cash Collateralization. If (i) any Event of Default shall occur and be continuing
and the Borrower receives notice from the Administrative Agent or the Majority Lenders demanding
the deposit of cash collateral pursuant to this Section 1.01(f), or (ii) the Borrower is required
to pay to the Administrative Agent the excess attributable to an LC Exposure in connection with any
prepayment pursuant to Section 2.04(c), then the Borrower shall deposit, in an account with the
Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders,
an amount in cash equal to, in the case of an Event of Default, the LC Exposure, and in the case of
a payment required by Section 2.04(c), the amount of such excess as provided in Section 2.04(c), as
of such date plus any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such deposit shall become
immediately due and payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Borrower or any Restricted Subsidiary of the Borrower
described in Section 9.01(h) or Section 9.01(i). The Borrower hereby grants to the Administrative
Agent, for the benefit of each Issuing Bank and the Lenders, an exclusive first priority and
continuing perfected security interest in and Lien on such account and all cash, checks, drafts,
certificates and instruments, if any, from time to time deposited or held in such account, all
deposits or wire transfers made thereto, any and all investments purchased with funds deposited in
such account, all interest, dividends, cash, instruments, financial assets and other Property from
time to time received, receivable or otherwise payable in respect of, or in exchange for, any or
all of the foregoing, and all proceeds, products, accessions, rents, profits, income and benefits
therefrom, and any substitutions and replacements therefor. The Borrower’s obligation to deposit
amounts pursuant to this Section 1.01(f) shall be absolute and unconditional, without regard to
whether any beneficiary of any such Letter of Credit has attempted to draw down all or a portion of
such amount under the terms of a Letter of Credit, and, to the fullest extent permitted by
applicable law, shall not be subject to any defense or be affected by a right of set-off,
counterclaim or recoupment which the Borrower or any of its Subsidiaries may now or hereafter have
against any such beneficiary, any Issuing Bank, the Administrative Agent, the Lenders or any other
Person for any reason whatsoever. Such deposit shall be held as collateral securing the payment
and performance of the Borrower’s and the Guarantor’s obligations under this Agreement and the
other Loan Documents in a “securities account” (within the meaning of Article 8 of the Uniform
Commercial Code in effect from time to time in the State of New York, the “UCC”) over which
the Administrative Agent shall have “control” (within the meaning of the UCC). Notwithstanding the
foregoing, the Borrower may direct the Administrative Agent and the “securities intermediary”
(within the meaning of the UCC) to invest amounts credited to the securities account, at the
Borrower’s risk and expense, in Investments described in Section 8.05(c) through (g). Interest or
profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent to reimburse, on
a pro rata basis, each Issuing Bank for LC Disbursements for which it has not been reimbursed and,
to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations
of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been
accelerated, be applied to satisfy other obligations of the Borrower and the Guarantors under this
Agreement or the other Loan Documents. If the Borrower is required to provide an amount of cash
collateral hereunder as a result of the occurrence of an Event of Default, and the Borrower is not
otherwise required to pay to the Administrative Agent the excess attributable to an LC Exposure in
connection with any prepayment pursuant to Section 2.04(c), then such




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amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events
of Default have been cured or waived.




ARTICLE III

PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES




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



     Section 3.02 Interest.



          (a) ABR Loans. The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate.




          (b) Eurodollar Loans. The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin, but in no event to exceed the Highest Lawful Rate.




          (c) Post-Default Rate. Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Loan Parties hereunder or under any other
Loan Document is not paid when due, whether at stated maturity, upon acceleration or otherwise,
such overdue amount shall bear interest, after as well as before judgment, at a rate per annum
equal to two percent (2%) plus the rate applicable to ABR Loans as provided in Section 2.02(a), but
in no event to exceed the Highest Lawful Rate.




          (d) Interest Payment Dates. Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan and on the Termination Date; provided that (i)
interest accrued pursuant to Section 2.02(c) shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than an optional prepayment of an ABR Loan prior to the
Termination Date), accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment, and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.




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

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



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




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



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




     Section 3.04 Prepayments.



          (a) Optional Prepayments. The Borrower shall have the right at any time and from time
to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with
Section 2.04(b).




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




          (c) Mandatory Prepayments.





     (i) If, after giving effect to any termination or reduction of the Aggregate Maximum
Credit Amounts pursuant to Section 2.06(b), the total Credit Exposures exceeds the total
Commitments, then the Borrower shall (A) prepay the Borrowings on the date of such
termination or reduction in an aggregate principal amount equal to such excess, and (B) if
any excess remains after prepaying all of the Borrowings as a result of an LC Exposure, pay
to the Administrative Agent on behalf of the Lenders



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an amount equal to such excess to be held as cash collateral as provided in Section 1.01(f).




     (ii) Upon any redetermination of or adjustment to the amount of the Borrowing Base in
accordance with Section 2.07 or Section 7.13(d), if the total Credit Exposures exceeds the
redetermined or adjusted Borrowing Base, then the Borrower shall (A) prepay the Loans in an
aggregate principal amount equal to such excess, and (B) if any excess remains after
prepaying all of the Borrowings as a result of an LC Exposure, pay to the Administrative
Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral
as provided in Section 1.01(f). The Borrower shall be obligated to (1) pay fifty percent
(50%) of such prepayment and/or deposit of cash collateral amount within forty-five (45)
days following its receipt of the New Borrowing Base Notice in accordance with Section
2.07(d) or the date the adjustment occurs and (2) pay the remaining amount of such
prepayment and/or deposit of cash collateral within ninety (90) days following its receipt
of the New Borrowing Base Notice in accordance with Section 2.07(d) or the date the
adjustment occurs; provided that all payments required to be made pursuant to this
Section 2.04(c)(ii) must be made on or prior to the Termination Date; provided
further that if a sale of Property containing proved reserves constituting a portion
of the Borrowing Base occurs pursuant to Section 9.12 during such ninety (90) day period
when the total Credit Exposures exceeds the redetermined or adjusted Borrowing Base, then
the proceeds of such sale of Property, to the extent thereof and after deducting costs of
sale, shall be used first to prepay the Borrowings in an aggregate principal amount equal to
such excess.




     (iii) Upon any adjustments to the Borrowing Base pursuant to or Section 8.12, if the
total Credit Exposures exceeds the Borrowing Base as adjusted, then the Borrower shall (A)
prepay the Borrowings in an aggregate principal amount equal to such excess, and (B) if any
excess remains after prepaying all of the Borrowings as a result of an LC Exposure, pay to
the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held
as cash collateral as provided in Section 1.01(f). The Borrower shall be obligated to make
such prepayment and/or deposit of cash collateral on the date it receives cash proceeds as a
result of such disposition; provided that all payments required to be made pursuant
to this Section 2.04(c)(iii) must be made on or prior to the Termination Date.




     (iv) Each prepayment of Borrowings pursuant to this Section 2.04(c) shall be applied,
first, ratably to any ABR Borrowings then outstanding, and, second, to any Eurodollar
Borrowings then outstanding, and if more than one Eurodollar Borrowing is then outstanding,
to each such Eurodollar Borrowing in order of priority beginning with the Eurodollar
Borrowing with the least number of days remaining in the Interest Period applicable thereto
and ending with the Eurodollar Borrowing with the most number of days remaining in the
Interest Period applicable thereto.




     (v) Each prepayment of Borrowings pursuant to this Section 2.04(c) shall be applied
ratably to the Loans included in the prepaid Borrowings. Prepayments



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pursuant to this Section 2.04(c) shall be accompanied by accrued interest to the extent required by Section
2.02.



          (d) No Premium or Penalty. Prepayments permitted or required under this Section 2.04
shall be without premium or penalty, except as required under Section 4.02.




     Section 3.05 Fees.



          (a) Commitment Fees. The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at the applicable Commitment Fee Rate
on the average daily amount of the unused amount of the Commitment of such Lender during the period
from and including the date of this Agreement to but excluding the Termination Date. Accrued
commitment fees shall be payable in arrears on the last day of March, June, September and December
of each year and on the Termination Date, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days, unless such
computation would exceed the Highest Lawful Rate, in which case interest shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).




          (b) Letter of Credit Fees. The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its participations in Letters of
Credit, which shall accrue at the same Applicable Margin used to determine the interest rate
applicable to Eurodollar Loans on the average daily amount of such Lender’s LC Exposure (excluding
any portion thereof attributable to unreimbursed LC Disbursements) during the period from and
including the date of this Agreement to but excluding the later of the date on which such Lender’s
Commitment terminates and the date on which such Lender ceases to have any LC Exposure, (ii) to
each Issuing Bank, for its own account, a fronting fee, which shall accrue at the rate of 0.200%
per annum on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and including the date of
this Agreement to but excluding the later of the date of termination of the Commitments and the
date on which there ceases to be any LC Exposure, provided that in no event shall such fee
be less than $500 during any quarter, and (iii) to each Issuing Bank, for its own account, its
standard and customary fees with respect to the issuance, amendment, renewal or extension of any
Letter of Credit issued by such Issuing Bank or processing of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall be payable on the
third Business Day following such last day, commencing on the first such date to occur after the
date of this Agreement and fronting fees with respect to any Letter of Credit shall be payable at
the time of issuance of such Letter of Credit; provided that all such fees shall be payable
on the Termination Date and any such fees accruing after the Termination Date shall be payable on
demand. Any other fees payable to an Issuing Bank pursuant to this Section 3.05(b) shall be
payable within 10 days after demand. All participation fees and fronting fees shall be computed on
the basis of a year of 360 days, unless such computation would exceed the Highest Lawful Rate, in
which case interest shall be computed on the basis of a year of 365 days (or 366 days in




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a leap year), and shall be payable for the actual number of days elapsed (including the first day but
excluding the last day).




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




          (d) Borrowing Base Increase Fees. The Borrower agrees to pay to the Administrative
Agent, for the account of each Lender then party to this Agreement, ratably in accordance with its
Applicable Percentage, a Borrowing Base increase fee equal to 0.25% on the amount of any increase
of the Borrowing Base over the highest Borrowing Base previously in effect, payable on the
effective date of any such increase to the Borrowing Base.




ARTICLE IV

PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS.




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



          (a) Payments by the Borrower. The Borrower shall make each payment required to be
made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or
of amounts payable under Section 4.01, Section 4.02, Section 4.03 or otherwise) prior to 12:00
noon, New York, New York time, on the date when due, in dollars that constitute immediately
available funds, without defense, deduction, recoupment, set-off or counterclaim. Fees, once paid,
shall not be refundable under any circumstances absent manifest error (e.g., as a result of a
clerical mistake). Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made to the Administrative
Agent at its offices specified in Section 11.01, except payments to be made directly to an Issuing
Bank as expressly provided herein and except that payments pursuant to Section 4.01, Section 4.02,
Section 4.03 and Section 11.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.
All payments hereunder shall be made in dollars.




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

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




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



     Section 4.03 Certain Deductions by the Administrative Agent. If any Lender shall fail to make any payment required to be made by it pursuant to Section
2.05(b), Section 2.08(d), Section 1.01(a) or Section 3.02 then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received
by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid.



     Section 4.04 Disposition of Proceeds. The Security Instruments contain an assignment by the Loan Parties unto and in favor of the
Administrative Agent for the benefit of the Lenders



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



ARTICLE V

INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY




     Section 5.01 Increased Costs.



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





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




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


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




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




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          (c) Certificates. A certificate of a Lender or any Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company,
as the case may be, as specified in Section 4.01(a) or (b) and reasonably detailed calculations
therefor shall be delivered to the Borrower and shall be conclusive absent manifest error. The
Loan Parties shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as
due on any such certificate within 10 days after receipt thereof.




          (d) Effect of Failure or Delay in Requesting Compensation. Failure or delay on the
part of any Lender or any Issuing Bank to demand compensation pursuant to this Section 4.01 shall
not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation;
provided that the Loan Parties shall not be required to compensate a Lender or an Issuing
Bank pursuant to this Section 4.01 for any increased costs or reductions incurred more than 180
days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided further
that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of retroactive effect
thereof.




     Section 5.02 Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan into an ABR Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar
Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of
a request by the Borrower pursuant to Section 4.04(b), then, in any such event, the Loan Parties
shall compensate each Lender for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the amount of interest which
would have accrued on the prepaid or otherwise affected principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would bid were it to bid,
at the commencement of such period, for dollar deposits of a comparable amount and period from
other banks in the eurodollar market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section 4.02 and reasonably
detailed calculations therefor shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Loan Parties shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.

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     Section 5.03 Taxes.



          (a) Payments Free of Taxes. Any and all payments by or on account of any obligation
of the Loan Parties under any Loan Document shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if a Loan Party 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 5.03(a)), the Agent, Lender or Issuing
Bank (as the case may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Loan Parties shall make such deductions and (iii) the Loan Parties
shall pay the full amount deducted to the relevant Governmental Authority in accordance with
applicable law.




          (b) Payment of Other Taxes by the Borrower. The Loan Parties shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.




          (c) Indemnification by the Borrower. The Loan Parties shall indemnify each Agent,
each Lender and each Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by such Agent, such Lender or such Issuing
Bank, as the case may be, on or with respect to any payment by or on account of any obligation of a
Loan Party hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section 5.03) 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 of such Agent, a Lender or an Issuing Bank as to the amount of such payment or
liability under this Section 5.03 shall be delivered to the Borrower and shall be conclusive absent
manifest error.




          (d) Evidence of Payments. As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by a Loan Party 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) Foreign Lenders. 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 or
any other Loan Document 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) Tax Refunds. If an Agent or a Lender determines, in its reasonable discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by
the Loan Parties or with respect to which the Loan Parties have paid additional amounts pursuant to
this Section 4.03, it shall pay over such refund to such Loan Party (but only to the extent of
indemnity payments made, or additional amounts paid, by such Loan Party under




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this Section 4.03 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of such 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 Loan
Parties, upon the request of such Agent or such Lender, agree to repay the amount paid over to the
Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to such Agent or such Lender in the event such Agent or such Lender is required to repay
such refund to such Governmental Authority. This Section 4.03 shall not be construed to require
any Agent or any Lender to make available its tax returns (or any other information relating to its
taxes which it deems confidential) to any Loan Party or any other Person.




     Section 5.04 Mitigation Obligations.



          (a) Designation of Different Lending Office. If any Lender requests compensation
under Section 4.01, or if a Loan Party is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 4.03, then such Lender
shall use reasonable efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 4.01 or Section 4.03, as the case may
be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Loan Parties hereby agree to pay all
reasonable costs and expenses incurred by any Lender in connection with any such designation or
assignment.




          (b) Replacement of Lenders. If (i) any Lender requests compensation under Section
5.01 or gives notice of “Affected Loans” under Section 5.05, (ii) the Loan Parties are required to
pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.03, (iii) any Lender defaults in its obligation to fund Loans hereunder, or
(iv) any Lender has not approved (or is not deemed to have approved) an increase in the Borrowing
Base proposed by the Administrative Agent pursuant to Section 2.07(c)(iii), then the Borrower may,
at its sole expense and effort, upon notice to such Lender and the Administrative Agent, (A)
require such Lender to assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 11.04(b)), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may be another Lender,
if a Lender accepts such assignment) or (B) require such Lender to be removed as a Lender under
this Agreement and the other Loan Documents with a corresponding reduction in the Aggregate Maximum
Credit Amount equal to the Maximum Credit Amount of such Lender; provided that (1) if a
Lender is removed as a Lender hereunder, the Loan Parties have paid such Lender all amounts due and
owing under this Agreement and the other Loan Documents, including, without limitation, all
principal, accrued interest, fees and breakage costs, (2) in the case of a required assignment of
interest, the Borrower shall have received the prior written consent of the Administrative Agent,
which consent shall not unreasonably be withheld, (3) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the




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extent of such outstanding principal and accrued interest and fees) or a Loan
Party (in the case of all other amounts) and (4) in the case of any such assignment resulting from
a claim for compensation under Section 4.01 or payments required to be made pursuant to Section
4.03, such assignment will result in a reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation cease to apply.




     Section 5.05 Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for
any Lender or its applicable lending office to honor its obligation to make or maintain Eurodollar
Loans either generally or having a particular Interest Period hereunder, then (a) such Lender shall
promptly notify the Borrower and the Administrative Agent thereof and such Lender’s obligation to
make such Eurodollar Loans shall be suspended (the “Affected Loans”) until such time as
such Lender may again make and maintain such Eurodollar Loans and (b) all Affected Loans which
would otherwise be made by such Lender shall be made instead as ABR Loans (and, if such Lender so
requests by notice to the Borrower and the Administrative Agent, all Affected Loans of such Lender
then outstanding shall be automatically converted into ABR Loans on the date specified by such
Lender in such notice) and, to the extent that Affected Loans are so made as (or converted into)
ABR Loans, all payments of principal which would otherwise be applied to such Lender’s Affected
Loans shall be applied instead to its ABR Loans.



ARTICLE VI

CONDITIONS PRECEDENT




     Section 6.01 Effective Date. This Agreement shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 11.02) each of which shall be
satisfactory to the Administrative Agent in form and substance:



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




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




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such certificate until the
Administrative Agent receives notice in writing from the applicable Loan Party to the contrary.




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




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




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




          (f) The Administrative Agent shall have received a certificate of insurance coverage of the
Borrower evidencing that the Loan Parties are carrying insurance in accordance with Section 6.13.




          (g) The Administrative Agent shall have received a certificate of a Responsible Officer of the
Borrower certifying that the Loan Parties have received all consents
and approvals required by Section 6.03, including the consent of the Navajo Nation to the
assignments from ExxonMobil to the Borrower pursuant to the Exxon Acquisition Documents.




          (h) The Administrative Agent shall have received the financial statements referred to in
Section 6.04(a).




          (i) The Administrative Agent shall have received duly executed Notes payable to the order of
each Lender that has requested a Note in a principal amount equal to its Maximum Credit Amount
dated as of the date hereof.




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





     (i) be reasonably satisfied that the Security Instruments create first priority,
perfected Liens (subject only to Excepted Liens, but subject to the proviso at the end of
such definition) on at least 95% of the total value of the Oil and Gas Properties evaluated
in the Initial Reserve Report; and




     (ii) have received any notes or instruments to be pledged duly endorsed to the
Administrative Agent, including the Amended and Restated Promissory Note;




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     (iii) have received certificates, together with undated, blank stock powers for each
such certificate, representing all of the issued and outstanding Equity Interests of each of
the Loan Parties other than Parent and RNRC.



          (k) The Administrative Agent (acting on behalf of the Lenders), the Borrower and NNOG shall
have executed and delivered the Subordination Agreement, in form and substance reasonably
satisfactory to the Administrative Agent.




          (l) The Administrative Agent shall be reasonably satisfied with title to, and the
environmental condition of, the Oil and Gas Properties of the Loan Parties and the Subsidiaries
including any properties acquired as part of the Exxon Acquisition.




          (m) The Administrative Agent shall have received the Initial Reserve Report, accompanied by a
certificate signed by a Responsible Officer of the Borrower covering the matters described in
Section 7.12(c).




          (n) The Administrative Agent shall have received appropriate UCC search certificates
reflecting no prior Liens encumbering the Properties of the Loan Parties or any Subsidiary for all
jurisdictions requested by the Administrative Agent; other than those being assigned or
released on or prior to the Effective Date or Liens permitted by Section 8.03.




          (o) The Administrative Agent shall have received (a) an opinion of (i) Thompson & Knight, LLP,
special counsel to the Loan Parties; (ii) James M. Piccone, general
counsel of the Loan Parties; (iii) R. Dennis Ickes, special counsel to the Loan Parties; and
(iv) Fulbright & Jaworski L.L.P. addressing title to the Properties acquired in the Exxon
Acquisition and (b) a memo from R. Dennis Ickes addressing certain legal issues concerning Navajo
lands.




          (p) The Administrative Agent shall have received (i) a certificate of a Responsible Officer of
the Borrower certifying: (A) that the Borrower is concurrently consummating the Exxon Acquisition
in accordance with the terms of the Exxon Acquisition Documents (with all of the material
conditions precedent thereto having been satisfied in all material respects by the parties thereto)
and acquiring substantially all of the Properties described in the Purchase and Sale Agreement, (B)
as to the final purchase price for the Exxon Acquisition after giving effect to all adjustments as
of the closing date contemplated by the Exxon Acquisition Documents and specifying, by category,
the amount of such adjustment and (C) that the Properties which have been excluded from the Exxon
Acquisition pursuant to the terms of the Exxon Acquisition Documents do not exceed $2,000,000 in
the aggregate; (ii) a true and complete photocopy of each of the executed Exxon Acquisition
Documents; and (iii) such other related documents and information as the Administrative Agent shall
have reasonably requested.




          (q) The Administrative Agent shall have received satisfactory evidence that the commitment of
the Permitted Holders described in clauses (a) and (b) of the definition of such term to provide
capital to the Borrower or its Affiliates has been extended from January 23, 2006 to December 31,
2006.




          (r) The closing of the Second Lien Facility, in form, structure and substance satisfactory to
the Administrative Agent.




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          (s) The execution and delivery of the Intercreditor Agreement.




          (t) The Administrative Agent shall have received acceptable evidence of the appointment of
National Corporate Research, Ltd. as authorized agent for service of process on each Loan Party
under each Loan Document to which it is a party.




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




          (v) The Administrative Agent shall have received an executed counterpart of the Account
Designation Letter.




          (w) The Administrative Agent shall have received all information and instructions requested
for the flow of funds memorandum.



The Administrative Agent shall notify the Lenders of the Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, this Agreement shall not take effect, and
the Existing Credit Agreement shall remain in effect, unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 12.02) at or prior to 2:00 p.m., New York City time, on
April 15, 2006 (and, in the event such conditions are not so satisfied or waived, the Commitments
shall terminate at such time).




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



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




          (b) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no event, development or
condition that has or could reasonably be expected to have a Material Adverse Effect shall have
occurred.




          (c) The representations and warranties of the Loan Parties set forth in this Agreement and in
the other Loan Documents shall be true and correct on and as of the date of such Borrowing or the
date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except
to the extent any such representations and warranties are expressly limited to an earlier date, in
which case, on and as of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, such representations and warranties shall
continue to be true and correct as of such specified earlier date.




          (d) The making of such Loan or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, would not conflict with, or cause any Lender or




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any Issuing Bank to violate
or exceed, any applicable Governmental Requirement, and no Change in Law shall have occurred, and
no litigation shall be pending or threatened, which does or, with respect to any threatened
litigation, seeks to, enjoin, prohibit or restrain, the making or repayment of any Loan, the
issuance, amendment, renewal, extension or repayment of any Letter of Credit or any participations
therein or the consummation of the transactions contemplated by this Agreement or any other Loan
Document.




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




     Each request for a Borrowing and each issuance, amendment, renewal or extension of any Letter
of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date
thereof as to the matters specified in Section 5.02(a) through (e).



ARTICLE VII

REPRESENTATIONS AND WARRANTIES




     Each Loan Party represents and warrants to the Lenders that after giving effect to the Exxon
Acquisition:



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



     Section 7.02 Authority; Enforceability. The Transactions are within each Loan Party’s corporate or LLC powers and have been duly
authorized by all necessary action (including, without limitation, any action required to be taken
by any class of directors (or its equivalent) or owners or other Person, whether interested or
disinterested, in order to ensure the due authorization of the Transactions). Each Loan Document
to which a Loan Party is a party has been duly executed and delivered by such Loan Party and
constitutes a legal, valid and binding obligation of such Loan Party, as applicable, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.



     Section 7.03 Approvals; No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority or any other third Person (including shareholders
or any class of directors, whether interested or disinterested, of any Loan Party or any other
Person), nor is any such consent, approval, registration, filing or other action necessary for the
validity or enforceability of any Loan Document or the consummation of the transactions
contemplated thereby, except such as have been obtained or made and are in full force and effect
other than (i) the recording and filing of



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the Security Instruments as required by this Agreement, (ii) those third party approvals or consents which, if not made or obtained, would not cause a
Default hereunder, could not reasonably be expected to have a Material Adverse Effect and (iii)
those consents of Governmental Authorities that are customarily obtained after the Effective Date,
including without limitation those consents set forth on Schedule 7.03, (b) will not
violate any applicable law or regulation or Organizational Documents of any Loan Party or any
Subsidiary or any order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon any Loan Party or its Properties,
or give rise to a right thereunder to require any payment to be made by any Loan Party and (d) will
not result in the creation or imposition of any Lien on any Property of any
Loan Party (other than the Liens created by the Loan Documents or the Second Lien Loan Documents).



     Section 7.04 Financial Condition; No Material Adverse Change.



          (a) The Borrower has heretofore furnished to the Lenders its (i) audited consolidated
financial statements of RNRC and its Subsidiaries (including the Borrower) for the fiscal year
ended December 31, 2004, (ii) unaudited combined financial statements of RNRC and the Borrower and
their Subsidiaries for the three fiscal quarters ending September 30, 2005 and (iii) pro forma
consolidated balance sheet for Parent and its Subsidiaries after giving effect to the Transactions,
all in form and substance reasonably satisfactory to the Administrative Agent. Such financial
statements described in clauses (i) and (ii) above present fairly, in all material respects, the
financial position and results of operations and cash flows of such Persons as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the unaudited quarterly financial statements. Such financial statements
described in clause (iii) above present fairly, in all material respects, the financial position
and results of operations and cash flows of such Persons as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the
case of the unaudited quarterly financial statements.




          (b) Since the date of the last delivery of financial statements pursuant to Section 7.04(a) or
Section 8.01, (i) there has been no event, development or circumstance that has had or could
reasonably be expected to have a Material Adverse Effect and (ii) the business of each Loan Party
and each Subsidiary has been conducted only in the ordinary course consistent with past business
practices.




          (c) Except as set forth on Schedule 7.21, on the most recent financial statement
delivered pursuant to Section 7.04(a) or Section 8.01(a) or (b), or in a certificate delivered
pursuant to Section 7.01(d), no Loan Party nor any Subsidiary has any Debt (including Disqualified
Capital Stock) not permitted under Section 9.02, or any material contingent liabilities,
off-balance sheet liabilities or partnerships, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments.




     Section 7.05 Litigation.



          (a) Except as set forth on Schedule 7.05, there are no actions, suits, investigations
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of any Loan Party, threatened in writing against or affecting any




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Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination that, if
adversely determined, could reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect or (ii) that involve any Loan Document or the Transactions.




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




     Section 7.06 Environmental Matters. Except as could not reasonably be expected to have a Material Adverse Effect (or with respect to
(c), (d) and (e) below, where the failure to take such actions could not be reasonably expected to
have a Material Adverse Effect):



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




          (b) no Property of a Loan Party or any Subsidiary nor the operations currently conducted
thereon or, to the knowledge of any Loan Party, by any prior owner or operator of such Property or
operation, are in violation of or subject to any existing, pending or threatened action, suit,
investigation, inquiry or proceeding by or before any court or Governmental Authority or to any
remedial obligations under Environmental Laws.




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




          (d) to the knowledge of each Loan Party, all hazardous substances, solid waste and oil and gas
waste, if any, generated at any and all Property of each Loan Party or any Subsidiary have in the
past been transported, treated and disposed of in accordance with Environmental Laws and so as not
to pose an imminent and substantial endangerment to public health or welfare or the environment,
and all such transport carriers and treatment and disposal facilities have been and are operating
in compliance with Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and are not the subject of any
existing, pending or threatened action, investigation or inquiry by any Governmental Authority in
connection with any Environmental Laws.




          (e) each Loan Party has taken all steps reasonably necessary to determine and has determined
that no oil, hazardous substances, solid waste or oil and gas waste, have been disposed of or
otherwise released and there has been no threatened release of any oil, hazardous substances, solid
waste or oil and gas waste on or to any Property of each Loan Party or any Subsidiary except in
compliance with Environmental Laws and so as not to pose an imminent and substantial endangerment
to public health or welfare or the environment.




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




          (g) no Loan Party nor any Subsidiary has any known contingent liability or Remedial Work in
connection with any release or threatened release of any oil, hazardous substance, solid waste or
oil and gas waste into the environment.




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



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




          (b) No Loan Party is in default nor has any event or circumstance occurred which, but for the
expiration of any applicable grace period or the giving of notice, or both, would constitute a
default or would require any Loan Party to Redeem or make any offer to Redeem under any indenture,
note, credit agreement or instrument pursuant to which any Material Indebtedness is outstanding or
by which the Loan Party or any of their Properties is bound.




          (c) No Default has occurred and is continuing.




     Section 7.08 Investment Company Act. No Loan Party nor any Subsidiary is an “investment company” or a company “controlled” by an
“investment company,” within the meaning of, or subject to regulation under, the Investment Company
Act of 1940, as amended.



     Section 7.09 [Reserved].



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




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     Section 7.11 ERISA.



          (a) Each Loan Party, each Subsidiary and each ERISA Affiliate have complied in all material
respects with ERISA and, where applicable, the Code regarding each Plan.




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




          (c) Except as could not reasonably be expected to result in liability in excess of $500,000,
no act, omission or transaction has occurred which could result in imposition on each Loan Party,
any Subsidiary or any ERISA Affiliate (whether directly or indirectly) of (i) either a civil
penalty assessed pursuant to subsections (c), (i) or (l) of section 502 of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary duty liability damages
under section 409 of ERISA.




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




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




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




          (g) No Loan Party, no Subsidiary nor any ERISA Affiliate sponsors, maintains, or contributes
to an employee welfare benefit plan, as defined in section 3(1) of ERISA, including, without
limitation, any such plan maintained to provide benefits to former employees of such entities, that
may not be terminated by a Loan Party, a Subsidiary or any ERISA Affiliate in its sole discretion
at any time without any material liability.




          (h) No Loan Party, no Subsidiary nor any ERISA Affiliate sponsors, maintains or contributes
to, or has at any time in the six-year period preceding the date hereof sponsored, maintained or
contributed to, any Multiemployer Plan.




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          (i) No Loan Party, no Subsidiary nor any ERISA Affiliate is required to provide security under
section 401(a)(29) of the Code due to a Plan amendment that results in an increase in current
liability for the Plan.




     Section 7.12 Disclosure; No Material Misstatements. Each Loan Party has disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all
other matters known to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. Taken as a whole, none of the other reports, financial
statements, certificates or other information furnished by or on behalf of any Loan Party or any
Subsidiary to the Administrative Agent or any Lender or any of their Affiliates in connection with
the negotiation of this Agreement or any other Loan Document or delivered hereunder or under any
other Loan Document (as modified or supplemented by other information so furnished) contain
material misstatements of fact or omit to state material facts necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, prospect information,
geological and geophysical data and engineering projections, each Loan Party represents only that
such information was prepared in good faith based upon assumptions believed to be reasonable at the
time. To the knowledge of each Loan Party, there is no fact peculiar to such party or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect or in the future is
reasonably likely to have a Material Adverse Effect and which has not been set forth in this
Agreement or the Loan Documents or the other documents, certificates and statements furnished to
the Administrative Agent or the Lenders by or on behalf of each Loan Party or any Subsidiary prior
to, or on, the date hereof in connection with the transactions contemplated hereby. There are no
statements or conclusions known to any Loan Party in any Reserve Report which are based upon or
include misleading information or fail to take into account material information regarding the
matters reported therein, it being understood that projections concerning volumes attributable to
the Oil and Gas Properties and production and cost estimates contained in each Reserve Report are
necessarily based upon professional opinions, estimates and projections and that each Loan Party
and each Subsidiary do not warrant that such opinions, estimates and projections will ultimately
prove to have been accurate.



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



     Section 7.14 Restriction on Liens. Other than the Second Lien Loan Documents and the Intercreditor Agreement, no Loan Party is a
party to any material agreement or arrangement (other than Capital Leases creating Liens permitted
by Section 8.03(c), but then only on the Property subject of such Capital Lease), or subject to any
order, judgment, writ or decree, which



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either restricts or purports to restrict its ability to
grant Liens to the Administrative Agent and the Lenders on or in respect of their Properties to
secure the Indebtedness and the Loan Documents.



     Section 7.15 Subsidiaries. Except as set forth on Schedule 7.15 or as disclosed in writing to the Administrative
Agent (which shall promptly furnish a copy to the Lenders), which shall be a supplement to
Schedule 7.15, (a) each Loan Party has no Subsidiaries, (b) each Subsidiary is a
Wholly-Owned Subsidiary and (c) no Loan Party nor any Subsidiary of the Borrower has any Foreign
Subsidiaries.



     Section 7.16 Location of Business and Offices. The jurisdiction of organization, the name as listed in the public records of the state of
organization and the organizational identification number of each Loan Party is set forth on
Schedule 7.16 (or, in each case, as set forth in a notice delivered to the Administrative
Agent pursuant to Section 7.01(l) in accordance with Section 11.01). Each Loan Party’s principal
place of business is located at the address specified in Section 11.01 (or as set forth in a notice
delivered pursuant to Section 7.01(l) and Section 11.01(c)).



     Section 7.17 Properties; Titles, Etc.



          (a) Except as disclosed in Schedule 7.17, the Loan Parties have good and defensible
title in all material respects to the proved Oil and Gas Properties evaluated in the most recently
delivered Reserve Report (excluding, to the extent this representation and warranty is deemed to be
made after the Effective Date, any such Oil and Gas Properties sold or transferred in compliance
with Section 8.12) and good title in all material respects to all their personal Properties, in
each case, free and clear of all Liens except Liens permitted by Section 8.03. After giving full
effect to the Excepted Liens, each Loan Party specified as the owner owns the net interests in
production attributable to the Hydrocarbon Interests as reflected in the most recently delivered
Reserve Report, and the ownership of such Properties shall not in any material respect obligate any
Loan Party to bear the costs and expenses relating to the maintenance, development and operations
of each such Property in an amount in excess of the working interest of each Property set forth in
the most recently delivered Reserve Report that is not offset by a corresponding proportionate
increase in the Loan Party’s net revenue interest in such Property.




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




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




          (d) All of the material Properties of each Loan Party which are reasonably necessary for the
operation of their businesses are in good working condition and are maintained in accordance with
prudent business standards.




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




     Section 7.18 Maintenance of Properties. Except for such acts or failures to act as could not be reasonably expected to have a Material
Adverse Effect, the Oil and Gas Properties of the Loan Properties (and Properties unitized
therewith) have been maintained, operated and developed in a good and workmanlike manner and in
conformity with all Government Requirements and in conformity with the provisions of all leases,
subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties of the Loan Parties. Specifically in
connection with the foregoing, except for those as could not be reasonably expected to have a
Material Adverse Effect, (i) no Oil and Gas Property of the Loan Parties is subject to having
allowable production reduced below the full and regular allowable (including the maximum
permissible tolerance) because of any overproduction (whether or not the same was permissible at
the time) and (ii) to the knowledge of each Loan Party, none of the wells comprising a part of the
Oil and Gas Properties (or Properties unitized therewith) of the Loan Parties is deviated from the
vertical more than the maximum permitted by Government Requirements, and such wells are, in fact,
bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas
Properties (or in the case of wells located on Properties unitized therewith, such unitized
Properties) of the Loan Properties. All pipelines, wells, gas processing plants, platforms and
other material improvements, fixtures and equipment owned in
whole or in part by each Loan Party that are necessary to conduct normal operations are being
maintained in a state adequate to conduct normal operations, and with respect to such of the
foregoing that are operated by each Loan Party, in a manner consistent with each Loan Party’s past
practices (other than those the failure of which to maintain in accordance with this Section 6.18
could not reasonably be expect to have a Material Adverse Effect).



     Section 7.19 Gas Imbalances, Prepayments. As of the date hereof, except as set forth on Schedule 7.19 or on the most recent
certificate delivered pursuant to Section 7.12(c), on a net basis there are no gas imbalances, take
or pay or other prepayments which would require any Loan Party to deliver Hydrocarbons produced
from the Oil and Gas Properties at some future time without then or thereafter receiving full
payment therefor exceeding 150 mmcf equivalent in the aggregate for all Loan Parties.



     Section 7.20 Marketing of Production. Except for contracts listed and in effect on the date hereof on Schedule 7.20, and
thereafter either disclosed in writing to the Administrative Agent or included in the most recently
delivered Reserve Report (with respect to all of which



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contracts each Loan Party represents that it
is receiving a price for all production sold thereunder which is computed substantially in
accordance with the terms of the relevant contract and are not having deliveries curtailed
substantially below the subject Property’s delivery capacity), no material agreements exist which
are not cancelable on 60 days notice or less without penalty or detriment for the sale of
production from its Hydrocarbons (including, without limitation, calls on or other rights to
purchase, production, whether or not the same are currently being exercised) that (a) pertain to
the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six
(6) months from the date hereof.



     Section 7.21 Hedging Agreements. Schedule 7.21 sets forth, (i) as of the date hereof, a true and complete list of all
Hedging Agreements of the Loan Parties, the material terms thereof (including the type, term,
effective date, termination date and notional amounts or volumes), the net mark-to-market value
thereof, all credit support agreements relating thereto other than the Loan Documents (including
any margin required or supplied) and the counterparty to each such agreement and (ii) after the
date hereof, each report required to be delivered by the Borrower pursuant to Section 7.01(d).



     Section 7.22 Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used to finance the Exxon
Acquisition, to refinance the loans outstanding on the Existing Credit Agreement and for general
corporate purposes of the Borrower, including the acquisition of exploration and production and
midstream properties and to benefit the other Loan Parties and the Unrestricted Subsidiaries as
allowed by Section 9.05. The Loan Parties and the Subsidiaries are not engaged principally, or as
one of its or their important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning
of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of
Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the
Board.



     Section 7.23 Solvency. Before and after giving effect to the transactions contemplated hereby, (a) the aggregate
assets, at a fair valuation, of the Loan Parties, taken as a whole, will exceed the aggregate Debt
of the Loan Parties on a consolidated basis, as the Debt becomes absolute and matures, (b) each of
the Loan Parties will not have incurred or intended to incur, and will not believe that it will
incur, Debt beyond its ability to pay such Debt as such Debt becomes absolute and matures and (c)
each of the Loan Parties will not have (and will have no reason to believe that it will have
thereafter) unreasonably small capital for the conduct of its business.



ARTICLE VIII

AFFIRMATIVE COVENANTS




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



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     Section 8.01 Financial Statements; Ratings Change; Other Information. The Borrower will furnish to the Administrative Agent and each Lender:



          (a) Parent’s Annual Financial Statements. As soon as available, but in any event in
accordance with then applicable law and not later than 120 days after the end of each fiscal year
of Parent, its audited consolidated (and unaudited consolidating) financial statements including
the balance sheet and related statements of operations, equity and cash flows as of the end of and
for such year, setting forth in each case in comparative form, the figures for the previous fiscal
year as such information becomes available but not later than for the fiscal quarter ending March
31, 2007, (i) all (other than any such consolidating financial statements) reported on by Erhardt
Keefe Steiner & Hottman PC or another firm of independent public accountants proposed by Parent and
approved by the Administrative Agent (without a “going concern” or like qualification or exception
and without any qualification or exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material respects the financial condition
and results of operations of Parent and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied and (ii) in the case of such unaudited consolidating
financial statements, certified by a Financial Officer as presenting fairly in all material
respects the financial condition of each such Person reported.




          (b) Parent’s Quarterly Financial Statements. As soon as available, but in any event
in accordance with then applicable law and not later than 60 days after the end of each of the
first three fiscal quarters of each fiscal year of Parent, its consolidated (and unaudited
consolidating) financial statements including the balance sheet and related statements of
operations, equity and cash flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form, the figures for
the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year as such information becomes available but not later than for the fiscal
quarter ending March 31, 2007, all certified by a Financial Officer as presenting fairly in all
material respects the financial condition and results of operations of the Person reported on a
consolidated and consolidating basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes.




          (c) Certificate of Financial Officer — Compliance. Concurrently with any delivery of
financial statements under Section 8.01(a) or Section 8.01(b), a certificate of a Financial Officer
in substantially the form of Exhibit D hereto (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 7.13(b) and Section 9.01 and (iii) stating whether any change
in GAAP or in the application thereof has occurred since the date of the audited financial
statements referred to in Section 6.04 and, if any such change has occurred, specifying the effect
of such change on the financial statements accompanying such certificate.




          (d) Certificate of Financial Officer — Hedging Agreements. Concurrently with the
delivery of each Reserve Report hereunder, a certificate of a Financial Officer, in form and
substance reasonably satisfactory to the Administrative Agent, setting forth as of a recent date, a
true and complete list of all Hedging Agreements of the Loan Parties, the material terms thereof





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(including the type, term, effective date, termination date and notional amounts or volumes), the
net mark-to-market value therefor, any new credit support agreements (other than the Loan
Documents) relating thereto not listed on Schedule 7.21, any margin required or supplied
under any credit support document, and the counterparty to each such agreement.




          (e) Certificate of Insurer — Insurance Coverage. Concurrently with any delivery of
financial statements under Section 8.01(a), a certificate of insurance coverage from each insurer
with respect to the insurance required by Section 7.07, in form and substance satisfactory to the
Administrative Agent, and, if requested by the Administrative Agent or any Lender, all copies of
the applicable policies.




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




          (g) SEC and Other Filings; Reports to Shareholders. Promptly after the same become
publicly available, copies of all periodic and other reports, proxy statements and other materials
filed by any Loan Party or any Subsidiary with the SEC, or with any national securities exchange,
or distributed by any Loan Party to its shareholders generally, as the case may be.




          (h) Notices Under Material Instruments. Promptly after the furnishing thereof, copies
of any financial statement, report or notice furnished to or by any Person pursuant
to the terms of the Second Lien Facility or any preferred stock designation, indenture, loan
or credit or other similar agreement, other than this Agreement and not otherwise required to be
furnished to the Lenders pursuant to any other provision of this Section 7.01.




          (i) Lists of Purchasers. Concurrently with the delivery of any Reserve Report to the
Administrative Agent pursuant to Section 7.12, a list of Persons purchasing Hydrocarbons from any
Loan Party accounting for at least 95% of the revenues resulting from the sale of all Hydrocarbons
of all the Loan Parties in the one-year period prior to the “as of” date of such Reserve Report.




          (j) Notice of Sales of Oil and Gas Properties. In the event any Loan Party intends to
sell, transfer, assign or otherwise dispose of any Oil or Gas Properties or any Equity Interests in
any Loan Party in accordance with Section 8.12(d), prior written notice of such disposition, the
price thereof and the anticipated date of closing.




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




          (l) Information Regarding Loan Parties. Prompt written notice of (and in any event
within ten (10) Business Days after) any change (i) in any Loan Party’s name or in any trade name
used to identify such Person in the conduct of its business or in the ownership of its




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Properties, (ii) in the location of any Loan Party’s chief executive office or principal place of business,
(iii) in any Loan Party’s identity or corporate structure or in the jurisdiction in which such
Person is incorporated or formed, (iv) in any Loan Party’s jurisdiction of organization or such
Person’s organizational identification number in such jurisdiction of organization, and (v) in any
Loan Party’s federal taxpayer identification number.




          (m) Production Report and Lease Operating Statements. Within 90 days after the end of
each fiscal quarter, a report setting forth, for each calendar month during the then current fiscal
year to date, the volume of production and sales attributable to production (and the prices at
which such sales were made and the revenues derived from such sales) for each such calendar month
from the Oil and Gas Properties of the Loan Parties, and setting forth the related ad valorem,
severance and production taxes and lease operating expenses attributable thereto and incurred for
each such calendar month.




          (n) Notices of Certain Changes. Promptly, but in any event within five (5) Business
Days after the execution thereof, copies of any amendment, modification or supplement to the
Organizational Documents of any Loan Party.




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




          (p) Notices Under Exxon Acquisition Documents. Promptly after the giving of any
notice under the Exxon Acquisition Documents (other than ministerial or other routine notices given
in the ordinary course), whether by or to the Borrower or any Affiliate, a copy of such notice.
Promptly after any officer of the Borrower or any Affiliate obtains knowledge thereof, notice of
any material claim (for indemnification or otherwise) made under the Exxon Acquisition Documents,
whether by or against the Borrower.




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



          (a) the occurrence of any Default;




          (b) the filing or commencement of, or the threat in writing of, any action, suit, proceeding,
investigation or arbitration by or before any arbitrator or Governmental Authority against any Loan
Party or any of its Affiliates not previously disclosed in writing to the Lenders or any material
adverse development in any action, suit, proceeding, investigation or arbitration previously
disclosed to the Lenders that, if adversely determined, could reasonably be expected to result in
liability in excess of $1,000,000;




          (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of a Loan Party in an aggregate
amount exceeding $1,000,000; and





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



Each notice delivered under this Section 7.02 shall be accompanied by a statement of a Responsible
Officer of such Loan Party setting forth the details of the event or development requiring such
notice and any action taken or proposed to be taken with respect thereto.




     Section 8.03 Existence; Conduct of Business. Each Loan Party will, do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business and maintain, if necessary, its qualification to
do business in each other jurisdiction in which its Oil and Gas Properties are located or the
ownership of its Properties requires such qualification, except where the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect; provided that the
foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under
Section 8.11.



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



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



     Section 8.06 Operation and Maintenance of Properties. Except, in each case, where the failure to comply could not reasonably be expected to have a
Material Adverse Effect, each Loan Party, at its own expense, will, to:



          (a) operate its Oil and Gas Properties and other material Properties or cause such Oil and Gas
Properties and other material Properties to be operated in a careful and efficient manner in
accordance with the practices of the industry and in compliance with all applicable contracts and
agreements and in compliance with all Governmental Requirements, including, without limitation,
applicable proration requirements and Environmental Laws, and all applicable laws, rules and
regulations of every other Governmental Authority from time to time constituted to regulate the
development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons
and other minerals therefrom.




          (b) keep and maintain all Property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted preserve and maintain and keep in good repair,
working order and efficiency (ordinary wear and tear excepted) all of its




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material producing Oil and Gas Properties and other material Properties, including, without limitation, all equipment,
machinery and facilities.




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




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




          (e) operate its Oil and Gas Properties and other material Properties or cause or make
reasonable and customary efforts to cause such Oil and Gas Properties and other material Properties
to be operated in accordance with the practices of the industry and in material compliance with all
applicable contracts and agreements and in compliance in all material respects with all
Governmental Requirements.




          (f) to the extent such Loan Party is not the operator of any Property, such Loan Party shall
use reasonable efforts to cause the operator to comply with this Section 7.06.




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



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



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



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     Section 8.10 Environmental Matters.



          (a) Each Loan Party shall at its sole expense: (i) comply, and shall cause its Properties and
operations and each Subsidiary and each Subsidiary’s Properties and operations to comply, with all
applicable Environmental Laws, the breach of which could be reasonably expected to have a Material
Adverse Effect; (ii) not dispose of or otherwise release, and shall cause each Subsidiary not to
dispose of or otherwise release, any oil, oil and gas waste,
hazardous substance, or solid waste on, under, about or from any of its or any Subsidiaries’
Properties or any other Property to the extent caused by such Loan Party or any Subsidiary’s
operations except in compliance with applicable Environmental Laws, the disposal or release of
which could reasonably be expected to have a Material Adverse Effect; (iii) timely obtain or file,
and shall cause each of the Subsidiaries to timely obtain or file, all notices, permits, licenses,
exemptions, approvals, registrations or other authorizations, if any, required under applicable
Environmental Laws to be obtained or filed in connection with the operation or use of its or any
Subsidiary’s Properties, which failure to obtain or file could reasonably be expected to have a
Material Adverse Effect; (iv) promptly commence and diligently prosecute to completion, and shall
cause each Subsidiary to promptly commence and diligently prosecute to completion, any assessment,
evaluation, investigation, monitoring, containment, cleanup, removal, repair, restoration,
remediation or other remedial obligations (collectively, the “Remedial Work”) in the event
any Remedial Work is required or reasonably necessary under applicable Environmental Laws because
of or in connection with the actual or suspected past, present or future disposal or other release
of any oil, oil and gas waste, hazardous substance or solid waste on, under, about or from any of
its or any Subsidiary’s Properties, which failure to commence and diligently prosecute to
completion could reasonably be expected to have a Material Adverse Effect; and (v) establish and
implement, and shall cause each Subsidiary to establish and implement, such procedures as may be
necessary to continuously determine and assure that the Loan Parties’ and the Subsidiaries’
obligations under this Section 8.10(a) are timely and fully satisfied, which failure to establish
and implement could reasonably be expected to have a Material Adverse Effect




          (b) Each Loan Party will promptly, but in no event later than five Business Days of the
occurrence of a triggering event, notify the Administrative Agent in writing of any threatened
action, investigation or inquiry by any Governmental Authority or any threatened demand or lawsuit
by any landowner or other third party against such Loan Party or any Subsidiary or their Properties
of which such Loan Party has knowledge in connection with any applicable Environmental Laws
(excluding routine testing and corrective action) if such Loan Party reasonably anticipates that
such action will result in liability (whether individually or in the aggregate for all Loan Parties
and the Subsidiaries) in excess of $1,000,000, not fully covered by insurance, subject to normal
deductibles.




          (c) Each Loan Party will, and will cause each Subsidiary to, undertake reasonable
environmental audits and tests upon reasonable request by the Administrative Agent no more than
once per year in the absence of any Event of Default (or as otherwise required to be obtained by
the Administrative Agent or the Lenders by any Governmental Authority), in connection with any
future acquisitions of Oil and Gas Properties or other Properties.





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     Section 8.11 Further Assurances.



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




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




     Section 8.12 Reserve Reports.



          (a) On or before March 1st and September 1st of each year, commencing September 1, 2006, the
Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report. The Reserve
Report as of January 1 to be delivered on March 1 of each year shall be prepared by the Loan
Parties and reviewed or audited by one or more Approved Petroleum Engineers, and the July 1 Reserve
Report to be delivered on September 1 of each year shall be prepared by or under the supervision of
the chief engineer of the Loan Parties. In each case, the chief engineer of the Loan Parties shall
certify that such Reserve Report is based on information that was prepared in good faith based upon
assumptions believed to be reasonable at the time and to have been prepared in accordance with the
procedures used in the immediately preceding Reserve Report.




          (b) In the event of an Interim Redetermination, the Borrower shall furnish to the
Administrative Agent and the Lenders a Reserve Report prepared by or under the supervision of the
chief engineer of the Loan Parties who shall certify such Reserve Report to be based on information
that was prepared in good faith based upon assumptions believed to be reasonable at the time and to
have been prepared in accordance with the procedures used in the immediately preceding Reserve
Report except that the Properties covered by such report may, in the discretion of the Borrower, be
limited to the proved Oil and Gas Properties acquired since the last redetermination of the
Borrowing Base. For any Interim Redetermination requested by the Administrative Agent or the
Borrower pursuant to Section 2.07(b)(ii), the Borrower shall provide such Reserve Report with an
“as of” date as required by the Administrative Agent as soon as possible, but in any event no later
than forty-five (45) days following the receipt of such request.





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




     Section 8.13 Title Information.



          (a) On or before the delivery to the Administrative Agent and the Lenders of each Reserve
Report required by Section 7.12(a), the Borrower will deliver title information in form and
substance acceptable to the Administrative Agent covering enough of the proved Oil and Gas
Properties evaluated by such Reserve Report that were not included in the immediately preceding
Reserve Report, so that the Administrative Agent shall have received together with title
information previously delivered, satisfactory title information on at least 80% of the total value
of the proved Oil and Gas Properties evaluated by such Reserve Report.




          (b) If the Borrower has provided title information for additional Properties under Section
7.13(a), the Borrower shall, within 60 days of notice from the Administrative Agent that title
defects or exceptions exist with respect to such additional Properties, either (i) cure any such
title defects or exceptions (including defects or exceptions as to priority) which are not
permitted by Section 8.03 raised by such information, (ii) substitute acceptable Mortgaged
Properties with no title defects or exceptions except for Excepted Liens (other than Excepted Liens
described in clauses (e), (g) and (h) of such definition) having an equivalent value or (iii)
deliver title information in form and substance acceptable to the Administrative Agent so that they
shall have received, together with title information previously delivered, satisfactory title
information on at least 80% of the value of the Oil and Gas Properties evaluated by such Reserve
Report.





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          (c) The Borrower shall have 60 days from the Effective Date to record in San Juan County, Utah
(i) all of the leases, assignments, easements and rights-of-way that make up
part of the Mortgaged Property on the Effective Date that are not yet recorded in San Juan
County, Utah and (ii) the merger, change of name and similar documentation necessary to demonstrate
the chain of title of such Property into the Borrower. Schedule 8.13 sets forth a list of
such unrecorded documents as now known by the Administrative Agent. Failure to comply with this
covenant will subject the Borrower to Section 8.13(d).




          (d) If the Borrower is unable to cure any title defect requested to be cured within the 60-day
period or the Borrower does not comply with the requirements to provide acceptable title
information covering 80% of the value of the Oil and Gas Properties evaluated in the most recent
Reserve Report, such default shall not be a Default, but instead the Administrative Agent and/or
the Majority Lenders shall have the right to exercise the following remedy in their sole discretion
from time to time, and any failure to so exercise this remedy at any time shall not be a waiver as
to future exercise of the remedy by any Agent or the Lenders. To the extent that the
Administrative Agent or the Majority Lenders are not satisfied with title to any Mortgaged Property
after the 60-day period has elapsed, such unacceptable Mortgaged Property shall not count towards
the 80% requirement, and the Administrative Agent may send a notice to the Borrower and the Lenders
that the then outstanding Borrowing Base shall be reduced by an amount as determined by the
Majority Lenders to cause the Borrower to be in compliance with the requirement to provide
acceptable title information on 80% of the value of the Oil and Gas Properties. This new Borrowing
Base shall become effective immediately after receipt of such notice.




     Section 8.14 Additional Collateral; Additional Guarantors.



          (a) In connection with each redetermination of the Borrowing Base, the Borrower shall review
the Reserve Report and the list of current Mortgaged Properties (as described in Section
7.12(c)(vi)) to ascertain whether the Mortgaged Properties represent at least 95% of the total
value of the proved Oil and Gas Properties evaluated in the most recently completed Reserve Report
after giving effect to exploration and production activities, acquisitions, dispositions and
production. In the event that the Mortgaged Properties do not represent at least 95% of such total
value, then each Loan Party shall grant to the Administrative Agent as security for the
Indebtedness a first-priority Lien interest (subject only to Excepted Liens of the type described
in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of
such definition) on additional proved Oil and Gas Properties not already subject to a Lien of the
Security Instruments such that after giving effect thereto, the Mortgaged Properties will represent
at least 95% of such total value. All such Liens will be created and perfected by and in
accordance with the provisions of mortgages, deeds of trust, security agreements and financing
statements or other Security Instruments, all in form and substance satisfactory to the
Administrative Agent and in sufficient executed (and acknowledged where necessary or appropriate)
counterparts for recording purposes.




          (b) Parent shall promptly cause each Domestic Subsidiary (other than any Subsidiary classified
as such based on any Loan Party or any other Subsidiary being a general partner thereof, unless
such Subsidiary is a Wholly-Owned Subsidiary) now existing or hereafter




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created or acquired that is not an Unrestricted Subsidiary to guarantee the Indebtedness
pursuant to the Guaranty Agreement. In connection with any such guaranty, Parent shall, or shall
cause each such Domestic Subsidiary to, (A) assume the obligations under the Guaranty Agreement and
this Agreement applicable to a Guarantor, by executing and delivering a supplement to the Guaranty
Agreement, (B) pledge all of the Equity Interests that it owns in any Loan Party (including,
without limitation, delivery of any original stock certificates or other certificates evidencing
the Equity Interests of such Loan Party, together with an appropriate undated stock powers for each
certificate duly executed in blank by the registered owner thereof) and (C) execute and deliver
such other additional closing documents, certificates and legal opinions as shall reasonably be
requested by the Administrative Agent.




     Section 8.15 ERISA Compliance. Except as could not reasonably be expected to result in liability to any Loan Party and any
Subsidiary of more than $1,000,000 individually or in the aggregate for all Loan Parties and the
Subsidiaries, such Loan Party will promptly furnish and will cause the Subsidiaries and any ERISA
Affiliate to promptly furnish to the Administrative Agent (i) promptly after the filing thereof
with the United States Secretary of Labor, the Internal Revenue Service or the PBGC, copies of each
annual and other report with respect to each Plan or any trust created thereunder, (ii) promptly
upon becoming aware of the occurrence of any ERISA Event or of any “prohibited transaction,” as
described in section 406 of ERISA or in section 4975 of the Code, in connection with any Plan or
any trust created thereunder, a written notice signed by the President or the principal Financial
Officer, the Subsidiary or the ERISA Affiliate, as the case may be, specifying the nature thereof,
what action such Loan Party, the Subsidiary or the ERISA Affiliate is taking or proposes to take
with respect thereto, and, when known, any action taken or proposed by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto, and (iii) promptly upon receipt
thereof, copies of any notice of the PBGC’s intention to terminate or to have a trustee appointed
to administer any Plan. With respect to each Plan (other than a Multiemployer Plan) except as
could not reasonably be expected to result in liability to any Loan Party and any Subsidiary of
less than $500,000 individually or in the aggregate for all Loan Parties and all Subsidiaries, such
Loan Party will, and will cause each Subsidiary and ERISA Affiliate to, (i) satisfy in full and in
a timely manner, without incurring any late payment or underpayment charge or penalty and without
giving rise to any lien, all of the contribution and funding requirements of section 412 of the
Code (determined without regard to subsections (d), (e), (f) and (k) thereof) and of section 302 of
ERISA (determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay, or cause to
be paid, to the PBGC in a timely manner, without incurring any late payment or underpayment charge
or penalty, all premiums required pursuant to sections 4006 and 4007 of ERISA.



     Section 8.16 Hedging Agreements. The Borrower shall, within 45 days following the Effective Date, enter into one or more Hedging
Agreements with volumes and prices in accordance with the requirements of Schedule 8.16 and
shall comply with any redetermination of the Borrowing Base required by such Schedule.



     Section 8.17 Patriot Act. Each Loan Party shall promptly, following a request by the Administrative Agent or any Lender,
provide all documentation and other information that the Administrative Agent or such Lender
reasonably requests in order to comply with its ongoing



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



ARTICLE IX

NEGATIVE COVENANTS




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



     Section 9.01 Financial Covenants.



          (a) Current Ratio. The Loan Parties will not, as of the last day of any fiscal
quarter commencing with the quarter ending June 30, 2006, permit the ratio of (i) consolidated
current assets of Parent and its Consolidated Subsidiaries (including the unused amount of the
total Commitments, but excluding non-cash assets under FAS 133) to (ii) consolidated current
liabilities of Parent and its Consolidated Subsidiaries (excluding non-cash obligations under FAS
133) to be less than 1.0 to 1.0.




          (b) Minimum Interest Coverage Ratio. The Loan Parties will not, as of the last day of
any fiscal quarter commencing with the quarter ending June 30, 2006, permit the ratio of EBITDA of
Parent and its Consolidated Subsidiaries for the four quarter period ending on such date to
Interest Expense for the same period to be less than 2.75:1.00.




          (c) Maximum Leverage Ratio. Commencing as of June 30, 2006, the Loan Parties will
not, at any time, permit the ratio of Funded Debt as of such time to EBITDA of Parent and its
Consolidated Subsidiaries for the four quarter period ending on the last day of the immediately
preceding fiscal quarter for which financial statements have been provided pursuant to Section
8.01(a) to be greater than 4.75:1.00 with respect to the periods ending on or before December 31,
2006; 4.25:1.00 with respect to the periods ending after December 31, 2006 and on or before
December 31, 2007; and 3.75:1.00 for all periods ending thereafter.




          (d) PV to Funded Debt Ratio. The Loan Parties will not, at any time, permit the ratio
of PV as then most recently determined to Funded Debt as of such time to be less than 1.65:1.00;
provided that such covenant will terminate and no longer apply when the Second Lien Loan
Documents have been terminated and all Debt issued thereunder has been paid in full.




     Section 9.02 Debt. Each Loan Party will not incur, create, assume or suffer to exist any Debt, except:



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





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          (b) Debt of the Loan Parties existing on the date hereof that is reflected in the Financial
Statements.




          (c) Debt under Capital Leases for compressors or other oil field equipment (excluding drilling
rigs but not work-over rigs) in aggregate principal amount not to exceed ten percent (10%) of the
Borrowing Base at the time of the incurrence of such Debt.




          (d) Intercompany Debt between any Loan Party and any other Loan Party or between any Loan
Party and any Subsidiary to the extent permitted by Section 8.05(h); provided that any such
Debt owed by any Loan Party shall be subordinated to the Indebtedness on terms set forth in the
Guaranty Agreement.




          (e) Endorsements of negotiable instruments for collection in the ordinary course of business.




          (f) The loans outstanding under the Second Lien Facility not to exceed $125,000,000 in
principal amount outstanding at any time minus any prepayments thereunder or any guaranty
or suretyship arrangement of such Debt arising under the Second Lien Loan Documents;
provided that such Debt is subject to the Intercreditor Agreement.




          (g) Other Debt not to exceed $2,000,000 in the aggregate at any one time outstanding.




     Section 9.03 Liens. Each Loan Party will not create, incur, assume or permit to exist any Lien on any of its
Properties (now owned or hereafter acquired), except:



          (a) Liens securing the payment of any Indebtedness.




          (b) Excepted Liens.




          (c) Liens securing Capital Leases for compressors or other oil field equipment (excluding
drilling rigs but not work-over rigs) permitted by Section 8.02(c) but only on the Property under
lease.




          (d) Liens on Property not constituting collateral for the Indebtedness and not otherwise
permitted by the foregoing clauses of this Section 8.03; provided that the principal or
face amount of all Debt secured under this Section 8.03(d) shall not exceed $1,000,000 in the
aggregate for all Loan Parties.




          (e) Liens securing the payment of indebtedness under the Second Lien Facility.




     Section 9.04 Restricted Payments. Each Loan Party will not, and will not permit any Subsidiary to, declare or make, or agree to
pay or make, directly or indirectly, any Restricted Payment, return any capital to its stockholders
or make any distribution of its Property to its Equity Interest holders, except (a) Loan Parties
may make Restricted Payments to each other, (b) Parent may make Tax Distributions (other than upon
the occurrence of and during the



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continuation of any Event of Default with respect to matters
specified in Sections 9.01(a), (b), (f), (g), (h), (i), (j) or (k)); provided,
however, that any excess distribution relating to any trueup (as referred to in the
definition of “Tax Distributions”) for estimated taxes in any period shall be deducted
dollar-for-dollar from the amount of any distributions pursuant to this Section 9.04 made or to be
made immediately subsequent to such excess distribution and (c) Parent may make additional
Restricted Payments up to $500,000 in the aggregate during the term of this Agreement.



     Section 9.05 Investments. Each Loan Party will not make or permit to remain outstanding any Investments in or to any
Person, except that the foregoing restriction shall not apply to:



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




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




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




          (d) commercial paper maturing within one year from the date of creation thereof rated in the
highest grade by S&P or Moody’s.




          (e) deposits maturing within one year from the date of creation thereof with, including
certificates of deposit issued by, any Lender or any office located in the United States of any
other bank or trust company which is organized under the laws of the United States or any state
thereof, has capital, surplus and undivided profits aggregating at least $100,000,000 (as of the
date of such bank or trust company’s most recent financial reports) and has a short term deposit
rating of no lower than A2 or P2, as such rating is set forth from time to time, by S&P or Moody’s,
respectively or, in the case of any Foreign Subsidiary, a bank organized in a jurisdiction in which
the Foreign Subsidiary conducts operations having assets in excess of $500,000,000 (or its
equivalent in another currency).




          (f) deposits in money market funds investing exclusively in Investments described in Section
8.05(c), Section 8.05(d) or Section 8.05(e).




          (g) Repurchase agreements of a commercial bank in the United States and Canada if the
commercial paper of such bank or of the bank holding company of which such bank is a wholly owned
subsidiary is rated in the highest rating categories of S&P, Moody’s, or any other rating agency
satisfactory to the Required Lenders, that are fully secured by securities described in Section
8.05(c).




          (h) Investments (i) made by a Loan Party in or to any other Loan Party or (ii) made by a Loan
Party or any Restricted Subsidiary in or to any Unrestricted Subsidiary that is a Domestic
Subsidiary; provided that the amounts invested by a Loan Party and all Restricted




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Subsidiaries in the aggregate at any one time outstanding in all such Unrestricted Subsidiaries
shall not exceed $1,000,000.




          (i) subject to the limits in Section 8.06, Investments in direct ownership interests in, or to
acquire new Subsidiaries that own, additional Oil and Gas Properties, gas gathering, processing and
transportation systems and all other assets related to the business permitted under Section 9.06
located within the geographic boundaries of the United States of America including the outer
continental shelf thereof.




          (j) loans and advances to directors, officers and employees in connection with the acquisition
of equity interests in Holdings and loans and advances to directors, officers and employees of
Parent or any Restricted Subsidiary permitted by applicable law not to exceed $250,000 in the
aggregate at any time.




          (k) other Investments not to exceed $1,000,000 in the aggregate at any time.




          (l) Investments arising from the endorsement of financial instruments in the ordinary course
of business.




     Section 9.06 Nature of Business; International Operations. Each Loan Party will not, and will not permit any Subsidiary to, allow any material change to be
made in the character of its business as an independent oil and gas exploration and production
company with midstream assets. Each Loan Party will not, and will not permit any Subsidiary to
engage in the business of trading Hydrocarbons. From and after the date hereof, each Loan Party
and each Subsidiary will not acquire or make any other expenditure (whether such expenditure is
capital, operating or otherwise) in or related to any Oil and Gas Properties not located within the
geographical boundaries of the United States including the outer continental shelf thereof.



     Section 9.07 Limitation on Leases. Each Loan Party will not create, incur, assume or suffer to exist any obligation for the payment
of rent or hire of Property of any kind whatsoever (real or personal but excluding Capital Leases
and leases of Hydrocarbon Interests), under leases or lease agreements which would cause the
aggregate amount of all payments made by all Loan Parties pursuant to all such leases or lease
agreements, including, without limitation, any residual payments at the end of any lease, to exceed
$5,000,000 in any period of twelve consecutive calendar months during the life of such
leases.



     Section 9.08 Proceeds of Notes/Loans. Each Loan Party will not permit the Loans or the proceeds of the Notes to be used for any
purpose other than those permitted by Section 6.22. Neither a Loan Party nor any Person acting on
behalf of a Loan Party has taken or will take any action which might cause any of the Loan
Documents to violate Regulations T, U or X or any other regulation of the Board or to violate
Section 7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case
as now in effect or as the same may hereinafter be in effect. If requested by the Administrative
Agent, such Loan Party will furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 or such other form referred to
in Regulation U, Regulation T or Regulation X of the Board, as the case may be.



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     Section 9.09 ERISA Compliance. Except as could not reasonably be expected to result in liability to the Loan Parties and the
Subsidiaries of more than $500,000 individually or in the aggregate, each Loan Party and the
Subsidiaries will not at any time:



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




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




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




          (d) permit to exist, or allow any ERISA Affiliate to permit to exist, any accumulated funding
deficiency within the meaning of section 302 of ERISA or section 412 of the Code, whether or not
waived, with respect to any Plan which exceeds $250,000.




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




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




          (g) acquire, or permit any ERISA Affiliate to acquire, an interest in any Person that causes
such Person to become an ERISA Affiliate with respect to a Loan Party or a Subsidiary or with
respect to any ERISA Affiliate of a Loan Party or a Subsidiary if such Person sponsors, maintains
or contributes to, or at any time in the six-year period preceding such acquisition has sponsored,
maintained, or contributed to, (i) any Multiemployer Plan, or (ii) any other Plan that is subject
to Title IV of ERISA under which the actuarial present value of the benefit liabilities under such
Plan exceeds the current value of the assets (computed on a plan termination basis in accordance
with Title IV of ERISA) of such Plan allocable to such benefit liabilities by any amount in excess
of $250,000.




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




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          (i) contribute to or assume an obligation to contribute to, or permit any ERISA Affiliate to
contribute to or assume an obligation to contribute to, any employee welfare benefit plan, as
defined in section 3(1) of ERISA, including, without limitation, any such plan maintained to
provide benefits to former employees of such entities, that may not be terminated by such entities
in their sole discretion at any time without any material liability.




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




     Section 9.10 Sale or Discount of Receivables. Except for receivables obtained by a Loan Party out of the ordinary course of business or the
settlement of joint interest billing accounts in the ordinary course of business or discounts
granted to settle collection of accounts receivable or the sale of defaulted accounts arising in
the ordinary course of business in connection with the compromise or collection thereof and not in
connection with any financing transaction, no Loan Party will discount or sell (with or without
recourse) to any other Person that is not a Loan Party any of its notes receivable or accounts
receivable.



     Section 9.11 Mergers, Etc. No Loan Party nor any Subsidiary will merge into or with or consolidate with any other Person,
or sell, lease or otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property to any other Person (any such transaction, a
“consolidation”); provided that any Restricted Subsidiary may participate in a
consolidation with such Loan Party (provided that a Loan Party shall be the continuing or
surviving corporation) or any other Restricted Subsidiary that is a Domestic Subsidiary
(provided that if one of such parties to the consolidation is a Foreign Subsidiary, such
Domestic Subsidiary shall be the
continuing or surviving Person) and if one of such Restricted Subsidiaries is a Wholly-Owned
Subsidiary, then the surviving Person shall be a Wholly-Owned Subsidiary.



     Section 9.12 Sale of Properties. Each Loan Party will not sell, assign, farm-out, convey or otherwise transfer any Property
containing proved reserves constituting a portion of the Borrowing Base except for (a) the sale of
Hydrocarbons in the ordinary course of business; (b) farmouts, sales or other dispositions of
undeveloped acreage and assignments in connection with such transactions; (c) the sale or transfer
of equipment in the ordinary course of business or that is no longer necessary for the business of
the such Loan Party or is replaced by equipment of at least comparable value and use; (d) the sale
or other disposition of any Oil and Gas Property or any interest therein or any Restricted
Subsidiary owning Oil and Gas Properties; provided that (i) no Event of Default exists at
the time or as a result of such sale, (ii) 100% of the consideration received in respect of such
sale or other disposition shall be cash, (iii) the consideration received in respect of such sale
or other disposition shall be equal to or greater than the fair market value of the Oil and Gas
Property, interest therein or Restricted Subsidiary subject of such sale or other disposition (as
reasonably determined by the board of directors (or its equivalent) of such Loan Party and, if
requested by the Administrative Agent, such Loan Party shall deliver a certificate of a Responsible
Officer of such Loan Party certifying to that effect), (iv) if such sale or other disposition of
Oil and Gas Property or Restricted Subsidiary owning Oil and Gas Properties included in the most
recently delivered Reserve Report during any period between two



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successive Scheduled Redetermination Dates has a fair market value in excess of 10% of the Borrowing Base then in effect
as determined by the Majority Lenders, individually or in the aggregate, the Borrowing Base shall
be reduced, effective immediately upon such sale or disposition, by an amount equal to the value,
if any, assigned such Property in the most recently delivered Reserve Report and any mandatory
prepayments required by Section 3.04(c)(iii) shall be made concurrently and (v) if any such sale or
other disposition is of a Restricted Subsidiary owning Oil and Gas Properties, such sale or other
disposition shall include all the Equity Interests of such Restricted Subsidiary; (e) sales and
other dispositions of Properties not regulated by Section 8.12(a)-(d) having a fair market value
not to exceed $1,000,000 during any 6-month period; and (f) the sale, trade or other disposition of
seismic, geologic or other data, licenses and similar rights; provided that the cash
proceeds (net of costs of sale) of any sale, assignment, farm-out, conveyance or other transfer of
any Property containing proved reserves constituting a portion of the Borrowing Base (A) when any
Event of Default exists shall be used to prepay the Borrowings and (B) when the total Credit
Exposures exceeds the redetermined or adjusted Borrowing Base shall be used to prepay the
Borrowings in accordance with Section 3.04(c)(ii). The Administrative Agent will upon request and
at the expense of the Borrower release its Liens on any Property (and release the Guaranty
Agreement of any Guarantor) permitted to be sold or otherwise transferred under this Section 9.12,
effective as of the time of such sale or transfer. Casualty Events shall not be considered
transfers restricted by or subject to this Section 9.12.



     Section 9.13 Environmental Matters. Each Loan Party will not, and will not permit any Subsidiary to, cause or permit any of its
Property to be in violation of, or do anything or permit anything to be done which will subject any
such Property to any Remedial Work under any applicable Environmental Laws, assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and circumstances, if any,
pertaining to such Property where such violations or remedial obligations could reasonably be
expected to have a Material Adverse Effect.



     Section 9.14 Transactions with Affiliates. Each Loan Party will not enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of Property or the rendering of any service, with any Affiliate
(other than the Loan Parties) unless such transactions are otherwise permitted under this Agreement
or are upon fair and reasonable terms no less favorable to it than it would obtain in a comparable
arm’s length transaction with a Person not an Affiliate.



     Section 9.15 Subsidiaries. Each Loan Party shall not, and shall not permit any Subsidiary to, create or acquire any
additional Subsidiaries, except that Parent and any of its Subsidiaries may create or acquire any
additional Subsidiaries if Parent or such Subsidiary gives prior written notice to the
Administrative Agent of such creation or acquisition and complies with Section 7.14(b). Parent
shall not, and shall not permit any of its Restricted Subsidiaries to, sell, assign or otherwise
dispose of any Equity Interests in any Restricted Subsidiary except in compliance with Section
8.12(d) or (e). No Loan Party nor any Subsidiary shall have any Foreign Subsidiaries.



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     Section 9.16 Restricted Subsidiary Indebtedness and Preferred Stock. Each Loan Party will not issue preferred stock or create, incur or assume any Debt, except for
Debt permitted under Section 8.02.



     Section 9.17 Negative Pledge Agreements; Dividend Restrictions. Each Loan Party will not create, incur, assume or suffer to exist any contract, agreement or
understanding which in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property in favor of the Administrative Agent and the Lenders
or restricts any Restricted Subsidiary from paying dividends or making distributions to any Loan
Party, or which requires the consent of or notice to other Persons in connection therewith;
provided, however, that the preceding restrictions will not apply to encumbrances
or restrictions arising under or by reason of (a) the Loan Documents or the Second Lien Loan
Documents, (b) any leases or licenses or similar contracts as they affect any Property or Lien
subject to a lease or license, (c) any contract, agreement or understanding creating Liens on
Capital Leases or to secure purchase money Debt permitted by Section 8.03(c) (but only to the
extent related to the Property on which such Liens were created), or (d) any restriction with
respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the direct or
indirect sale or disposition of all or substantially all the equity or Property of such Restricted
Subsidiary (or the Property that is subject to such restriction) pending the closing of such sale
or disposition.



     Section 9.18 Take-or-Pay or Other Prepayments. Each Loan Party will not allow take-or-pay or other prepayments with respect to the Oil and Gas
Properties of a Loan Party or any Subsidiary.



     Section 9.19 Hedging Agreements. Each Loan Party will not enter into any Hedging Agreements with any Person other than:



          (a) Hedging Agreements in respect of commodities (i) with an Approved Counterparty and (ii)
which, when aggregated with all other commodity Hedging Agreements of the Loan Parties then in
effect (but excluding all basis differential swaps on volumes already hedged pursuant to other
Hedging Agreements), do not have the net effect of constituting a call (whether under physical or
derivative contracts) on more than 80% of the reasonably anticipated projected production from
proved, developed, producing Oil and Gas Properties for each year during the period during which
such Hedging Agreements are in effect for each of crude oil and natural gas, calculated separately,
and




          (b) Hedging Agreements in respect of interest rates with an Approved Counterparty, as follows:
(i) Hedging Agreements effectively converting interest rates from fixed to floating, the notional
amounts of which (when aggregated and netted with all other Hedging Agreements of the Borrower and
its Restricted Subsidiaries then in effect) do not exceed the then outstanding principal amount of
the Borrower’s Debt for borrowed money which bears interest at a fixed rate and (ii) Hedging
Agreements effectively converting interest rates from floating to fixed, the notional amounts of
which (when aggregated and netted with all other Hedging Agreements of the Borrower and its
Restricted Subsidiaries then in effect) do not exceed (A) for revolving loans, 75% of the then
outstanding principal amount of the Borrower’s Debt for revolving loans which bear interest at a
floating rate and (B) for term loans, 100% of the




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then outstanding principal amount of the Borrower’s Debt for term loans which bear interest at a floating rate.



In no event shall any Hedging Agreement to which the Borrower or any of its Restricted Subsidiaries
is a party contain any requirement, agreement or covenant for the Borrower or any Restricted
Subsidiary to post cash or other collateral or margin other than pursuant to the Security
Instruments to secure their obligations under such Hedging Agreement or to cover market exposures.
The Loan Parties will not modify or terminate the hedging arrangements required by Section 8.16
unless such termination or modification results in the same or higher floor prices for the same
notional volumes, taken as a whole.




     Section 9.20 Second Lien Documents. Each Loan Party will not (a) amend, modify, restate or replace the Second Lien Documents as
permitted by the terms of the Intercreditor Agreement or (b) prepay the outstanding loans under the
Second Lien Credit Agreement at any time when an Event of Default has occurred and is continuing or
at any time when, after giving effect to such prepayments, the Borrowing Base Utilization
Percentage exceeds ninety percent (90%).



ARTICLE X

EVENTS OF DEFAULT; REMEDIES




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



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




          (b) Any Loan Party shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in Section 9.01(a)) payable under any Loan Document, when and as
the same shall become due and payable, and such failure shall continue unremedied for a period of
three Business Days.




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




          (d) Any Loan Party or any Subsidiary shall fail to observe or perform any covenant, condition
or agreement contained in Section 7.01(h), Section 7.01(l), Section 7.02, Section 7.03, Section
7.15, Section 8.16 or in ARTICLE VIII (other than Section 9.19).




          (e) Any Loan Party or any Subsidiary shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those specified in




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Section 9.01(a), Section
9.01(b) or Section 9.01(d)) or any other Loan Document, and such failure shall continue unremedied
for a period of 30 days after the earlier to occur of (i) notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender) or (ii) a
Responsible Officer of the Borrower or such Subsidiary otherwise becoming aware of such default.




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




          (g) Any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or to require the
Redemption thereof or any offer to Redeem to be made in respect thereof, prior to its scheduled
maturity, or require a Loan Party to make an offer in respect thereof.




          (h) An involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or its debts, or
of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for a Loan Party or for a
substantial part of its assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be
entered.




          (i) A Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in
Section 9.01(h), (iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for a Loan Party or for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any
action for the purpose of effecting any of the foregoing.




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




          (k) One or more judgments for the payment of money in an aggregate amount in excess of
$1,000,000 (to the extent not covered by independent third party insurance provided by insurers
acceptable to the Administrative Agent as to which the insurer does not dispute coverage and is not
subject to an insolvency proceeding) shall be rendered against a Loan Party or any combination
thereof and the same shall remain undischarged for a period of 60 consecutive days during which
execution shall not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of a Loan Party to enforce any such judgment.





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          (l) The Loan Documents after delivery thereof shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid, binding and
enforceable in accordance with their terms against a Loan Party or the collateral agent,
administrative agent or any lender under the Second Lien Loan Documents or shall be repudiated, or
cease to create a valid and perfected Lien of the priority required thereby on any of the
collateral purported to be covered thereby, except to the extent permitted by the terms of this
Agreement, or a Loan Party or any of its Affiliates shall so state in writing.




          (m) An ERISA Event shall have occurred that, in the opinion of the Majority Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably be expected to
result in liability of a Loan Party and any Subsidiary in an aggregate amount exceeding $1,000,000
in any year.




          (n) A Change in Control shall occur.




     Section 10.02 Remedies.



          (a) In the case of an Event of Default other than one described in Section 9.01(h) or Section
9.01(i), at any time thereafter during the continuance of such Event of Default, the Administrative
Agent may, and at the request of the Majority Lenders shall, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate the Commitments,
and thereupon the Commitments shall terminate immediately, and (ii) declare the Notes and the Loans
then outstanding to be due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued interest thereon
and all fees and other obligations of the Loan Parties accrued hereunder and under the Notes and
the other Loan Documents (including, without limitation, the payment of cash collateral to secure
the LC Exposure as provided in Section 1.01(f)), shall become due and payable immediately, without
presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other
notice of any kind, all of which are hereby waived by each Loan Party; and in case of an Event of
Default described in Section 9.01(h) or Section 9.01(i), the Commitments shall automatically
terminate and the Notes and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and the other obligations of the Loan Parties accrued hereunder and
under the Notes and the other Loan Documents (including, without limitation, the payment of cash
collateral to secure the LC Exposure as provided in Section 1.01(f)), shall automatically become
due and payable, without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Loan Party.




          (b) In the case of the occurrence of an Event of Default, the Administrative Agent and the
Lenders will have all other rights and remedies available at law and equity.




          (c) All proceeds realized from the liquidation or other disposition of collateral or otherwise
received after maturity of the Loans or the Notes, whether by acceleration or otherwise, shall be
applied: first, to reimbursement of expenses and indemnities provided for in this Agreement and
the Security Instruments; second, to accrued interest on the Loans; third, to fees; fourth, pro
rata to principal outstanding on the Loans and Indebtedness referred to in Clause


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(b) of the definition of Indebtedness owing to a Lender or an Affiliate of a Lender; fifth, to any other
Indebtedness; sixth, to serve as cash collateral to be held by the Administrative Agent to secure
the LC Exposure; and any excess shall be paid to the Borrower or as otherwise required by the
Intercreditor Agreement or any Governmental Requirement.




ARTICLE XI

THE AGENTS




     Section 11.01 Appointment; Powers. Each of the Lenders and each Issuing Bank hereby irrevocably (subject to Section 10.06) appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof and the other Loan Documents, together with such actions and powers as
are reasonably incidental thereto.



     Section 11.02 Duties and Obligations of Administrative Agent. The Administrative Agent shall not have any duties or obligations except those expressly set
forth in the Loan Documents. Without limiting the generality of the foregoing, the Administrative
Agent (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) shall not have any duty to take any discretionary
action or exercise any discretionary powers, except as provided in Section 10.03, and (c) except as
expressly set forth herein, shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Loan Parties or any Subsidiary that is
communicated to or obtained by the bank serving as an Agent or any of its Affiliates in any
capacity. The Administrative Agent shall be deemed not to have knowledge of any Default unless and
until written notice thereof is given to it by a Loan Party or a Lender, and shall not be
responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or under any other Loan
Document or in connection herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any other Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, (v) the satisfaction of any condition set
forth in ARTICLE V or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to it or as to those conditions precedent specifically required to be to its
satisfaction, (vi) the existence, value, perfection or priority of any collateral security or the
financial or other condition of the Loan Parties and the Subsidiaries or any other obligor or
guarantor, or (vii) any failure by any Loan Party or any other Person (other than itself) to
perform any of its obligations hereunder or under any other Loan Document or the performance or
observance of any covenants, agreements or other terms or conditions set forth herein or therein.



     Section 11.03 Action by Administrative Agent. The Administrative Agent shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly contemplated hereby that
it is required to exercise in writing as directed by the Majority Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in Section
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shall be fully justified in failing or refusing to act hereunder or
under any other Loan Documents unless it shall (a) receive written instructions from the Majority
Lenders or the Lenders, as applicable, (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 11.02) specifying the action to be
taken and (b) be indemnified to its satisfaction by the Lenders against any and all liability and
expenses which may be incurred by it by reason of taking or continuing to take any such action.
The instructions as aforesaid and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. If a Default has occurred and is continuing, then the
Administrative Agent shall take such action with respect to such Default as shall be directed by
the requisite Lenders in the written instructions (with indemnities) described in this Section
10.03, provided that, unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem advisable in the
best interests of the Lenders. In no event, however, shall the Administrative Agent be required to
take any action which exposes the Administrative Agent to personal liability or which is contrary
to this Agreement, the Loan Documents or applicable law. If a Default has occurred and is
continuing, neither the Arrangers, the Syndication Agent nor either Co-Documentation Agent shall
have any obligation to perform any act in respect thereof. No Agent shall be liable for any action
taken or not taken by it with the consent or at the request of the Majority Lenders or the Lenders
(or such other number or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02), and otherwise no Agent shall be liable for any action taken or not
taken by it hereunder or under any other Loan Document or under any other document or instrument
referred to or provided for herein or therein or in connection herewith or therewith INCLUDING ITS
OWN ORDINARY NEGLIGENCE, except for its own gross negligence or willful misconduct.



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



     Section 11.05 Subagents. The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by it. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding Sections of this ARTICLE X
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



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activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.



     Section 11.06 Resignation or Removal of Agents. Subject to the appointment and acceptance of a successor Agent as provided in this Section
10.06, any Agent may resign at any time by notifying the Lenders, each Issuing Bank and the
Borrower, and any Agent may be removed at any time with or without cause by the Majority Lenders.
Upon any such resignation or removal, the Majority Lenders shall have the right, in consultation
with and upon the approval of the Borrower (so long as no Event of Default has occurred and is
continuing), which approval shall not be unreasonably withheld, to appoint a successor. If no
successor shall have been so appointed by the Majority Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its resignation or removal of
the retiring Agent, then the retiring Agent may, on behalf of the Lenders and each Issuing Bank,
appoint a successor Agent which shall be a bank with an office in New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. 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 the Agent’s resignation hereunder, the provisions of this ARTICLE X and Section
11.03 shall continue in effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Agent.



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



     Section 11.08 No Reliance. Each Lender acknowledges that it has, independently and without reliance upon the Administrative
Agent, any other Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement and each
other Loan Document to which it is a party. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Agent, any other Agent or any other
Lender and based on such documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document, any related agreement or any document furnished hereunder or
thereunder. The Agents shall not be required to keep themselves informed as to the performance or
observance by the Loan Parties or any Subsidiary of this Agreement, the Loan Documents or any other
document referred to or provided for herein or to inspect the Properties or books of the Loan
Parties or any Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Administrative Agent hereunder, neither
the Agents nor the Arrangers shall have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or business of the Loan
Parties (or any of



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their Affiliates) which may
come into the possession of such Agent or any of its Affiliates. Each Lender hereby acknowledges
and, by becoming a party hereto, consents to the fact that Vinson & Elkins L.L.P. is acting as
special counsel to the Administrative Agent in connection with this transaction, and as special
counsel to Citigroup Capital Markets Inc., Deutsche Bank Securities Inc. and their respective
Affiliates in their capacities as co-lead arrangers and as administrative agent and syndication
agent for the lenders in connection with the Second Lien Facility and the transactions contemplated
thereby. Each other party hereto will consult with its own legal counsel to the extent it deems
necessary in connection with the Loan Documents and the matters contemplated therein.



     Section 11.09 Authority to Release Guarantors, Collateral and Liens. Each Lender and each Issuing Bank hereby authorizes the Administrative Agent to release any
collateral that is permitted to be sold or released pursuant to the terms of the Loan Documents and
to release from the Guaranty Agreements any Guarantor that is permitted to be sold or disposed of,
or converted into an Unrestricted Subsidiary, pursuant to the terms of the Loan Documents. Each
Lender and each Issuing Bank hereby authorizes the Administrative Agent to execute and deliver to a
Loan Party, at such Loan Party’s sole cost and expense, any and all releases of Guaranty
Agreements, Liens, termination statements, assignments or other documents reasonably requested by
such Loan Party in connection with any sale or other disposition of Property to the extent such
sale or other disposition is permitted by the terms of Section 8.12 or is otherwise authorized by
the terms of the Loan Documents.



     Section 11.10 The Arrangers and Agents. Neither the Arrangers, the Syndication Agent nor either Co-Documentation Agent shall have any
duties, responsibilities or liabilities under this Agreement and the other Loan Documents other
than their duties, responsibilities and liabilities in their capacity as Lenders hereunder.



     Section 11.11 Filing of Proofs of Claim. In case of any Default or Event of Default under Section 9.01(g), Section 9.01(h) or Section
9.01(i), the Administrative Agent (regardless of whether the principal of any Loan or LC Exposure
shall then be due and payable and regardless of whether the Administrative Agent has made any
demand on the Loan Parties) shall be entitled and empowered, by intervention in such proceeding or
otherwise:



          (a) to (i) file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, LC Exposure and all other Indebtedness that is owing and unpaid and
(ii) file such other documents as may be necessary or advisable in order to have the claims of the
Lenders and the Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders, the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders, the Administrative Agent under Section
2.05 and Section 11.03) allowed in such judicial proceeding; and




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



Each Lender hereby authorizes any custodian, receiver, assignee, trustee, conservator, sequestrator
or other similar official in any such judicial proceeding: (i) to make such payments


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to the Administrative Agent; and (ii) if the Administrative Agent shall consent to the making of such
payments directly to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its
agents and counsel, and any other amounts due the Administrative Agent under Section 2.05 and
Section 11.03. Nothing contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization,
arrangement, adjustment or composition affecting the Indebtedness or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding. Each Lender retains its right to file and prove a claim separately.




     Section 11.12 Intercreditor Agreement. Each of the Lenders hereby acknowledges that it has received and reviewed the Intercreditor
Agreement and agrees to be bound by the terms thereof. Each Lender (and each Person that becomes a
Lender hereunder pursuant to Section 12.04) hereby authorizes and directs Wachovia to enter into
the Intercreditor Agreement on behalf of such Lender and agrees that Wachovia may take such actions
on its behalf as is contemplated by the terms of the Intercreditor Agreement.



ARTICLE XII

MISCELLANEOUS




     Section 12.01 Notices.



          (a) Except in the case of notices and other communications expressly permitted to be given by
telephone (and subject to Section 11.01(b)), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by telecopy, as follows:





     (i) if to the Borrower, to it at Resolute Aneth, LLC, c/o Resolute Natural Resources
Company, 80 East Sir Francis Drake Blvd., Suite 2C, Larkspur, California, 94939, Attention
Theodore Gazulis (Telecopy No. (415) 461-5045); with a copy to Resolute Natural Resources
Company, 1675 Broadway, Suite 1950, Denver, Colorado 80202, Attention James M. Piccone
(Telecopy No. (303) 534-4600);




     (ii) if to Parent, to it at Resolute Holdings Sub, LLC, c/o Resolute Natural Resources
Company, 80 East Sir Francis Drake Blvd., Suite 2C, Larkspur, California, 94939, Attention
Theodore Gazulis (Telecopy No. (415) 461-5045); with a
copy to Resolute Natural Resources Company, 1675 Broadway, Suite 1950, Denver, Colorado
80202, Attention James M. Piccone (Telecopy No. (303) 534-4600);




     (iii) if to RNRC, to it at Resolute Natural Resources Company, 80 East Sir Francis
Drake Blvd., Suite 2C, Larkspur, California, 94939, Attention Theodore Gazulis (Telecopy No.
(415) 461-5045); with a copy to Resolute Natural Resources Company, 1675 Broadway, Suite
1950, Denver, Colorado 80202, Attention James M. Piccone (Telecopy No. (303) 534-4600);



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     (iv) if to an Exploration Subsidiary, to it c/o Resolute Natural Resources Company, 80
East Sir Francis Drake Blvd., Suite 2C, Larkspur, California, 94939, Attention Theodore
Gazulis (Telecopy No. (415) 461-5045); with a copy to Resolute Natural Resources Company,
1675 Broadway, Suite 1950, Denver, Colorado 80202, Attention James M. Piccone (Telecopy No.
(303) 534-4600);




     (v) if to the Administrative Agent, to it at Wachovia Bank, National Association, c/o
Wachovia Capital Markets, LLC, 201 S College St., Charlotte, NC 28244-0002, Mailcode:
NC0680, Attention: Merci Ownes (Telecopy No. (704) 383-0288); with a copy to: Wachovia
Bank, National Association, 1001 Fannin Street, Suite 2255, Houston, Texas 77002, Attention:
Philip Trinder (Telecopy No. (713) 346-2760);




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



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




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




     Section 12.02 Waivers; Amendments.



          (a) No failure on the part of any Agent, any Issuing Bank or any Lender to exercise and no
delay in exercising, and no course of dealing with respect to, any right, power or privilege, or
any abandonment or discontinuance of steps to enforce such right, power or privilege, under any of
the Loan Documents shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege under any of the Loan Documents
preclude any other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies of the Agents, each Issuing Bank and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or any other Loan Document
or consent to any departure by any Loan Party therefrom shall in any event be effective unless the
same shall be permitted by Section 11.02(b), and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. Without limiting the generality
of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as
a waiver of any Default, regardless of whether any Agent, any Lender or any Issuing Bank may have
had notice or knowledge of such Default at the time.




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          (b) Neither this Agreement nor any provision hereof nor any Security Instrument nor any
provision thereof may be waived, amended or modified except pursuant to an agreement or agreements
in writing entered into by the Borrower and the Majority Lenders or by the Borrower and the
Administrative Agent with the consent of the Majority Lenders; provided that no such
agreement shall (i) increase the Commitment or the Maximum Credit Amount of any Lender without the
written consent of such Lender, (ii) increase the Borrowing Base without the written consent of
each Lender, decrease or maintain the Borrowing Base without the consent of the Required Lenders,
or modify Section 2.07 without the consent of each Lender, (iii) reduce the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable
hereunder, or reduce any other Indebtedness hereunder or under any other Loan Document, without the
written consent of each Lender affected thereby, (iv) postpone the scheduled date of payment of the
principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or any other Indebtedness hereunder or under any other Loan Document, or reduce the
amount of, waive or excuse any such payment, or postpone or extend the Termination Date without the
written consent of each Lender affected thereby, (v) change Section 4.01(b) or Section 4.01(c) in a
manner that would alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (vi) release all or substantially all of the Guarantors, release all or
substantially all of the collateral, or reduce the percentage set forth in Section 7.14(a) to less
than 95%, without the written consent of each Lender, (vii) change any of the provisions of Section
9.02(c), this Section 11.02(b) or the definitions of “Required Lenders” or “Majority Lenders” or
any other provision hereof specifying the number or percentage of Lenders or Secured Hedging
Providers required to waive, amend or modify any rights hereunder or under any other Loan Documents
or to make any determination or grant any consent hereunder or any other Loan Documents, without
the written consent of each Lender and, if applicable, each Secured Hedging Provider or (viii)
change the description of the obligations secured or guaranteed by the Security Instruments or the
priority of payments set forth in Section 9.02(c) without the written consent of each Lender or
Secured Hedging Provider adversely affected thereby, provided that the addition of a new
secured obligation shall not be deemed to adversely affect any other secured party;
provided further that no such agreement shall amend, modify or otherwise affect the
rights or duties of any Agent or any Issuing Bank hereunder or under any other Loan Document
without the prior written consent of such Agent or such Issuing Bank, as the case may be.
Notwithstanding the foregoing, any supplement to Schedule 7.15 (Subsidiaries) shall be
effective simply by delivering to the
Administrative Agent a supplemental schedule clearly marked as such and, upon receipt, the
Administrative Agent will promptly deliver a copy thereof to the Lenders.




     Section 12.03 Expenses, Indemnity; Damage Waiver.



          (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent and its Affiliates, including, without limitation, the reasonable fees,
charges and disbursements of counsel and other outside consultants for the Administrative Agent,
the reasonable travel, photocopy, mailing, courier, telephone and other similar expenses, and the
cost of environmental audits and surveys and appraisals, in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution, delivery and
administration (both before and after the execution hereof and including advice of counsel to the
Administrative Agent as to the rights and duties of the Administrative Agent and


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the Lenders with
respect thereto) of this Agreement and the other Loan Documents and any amendments, modifications
or waivers of or consents related to the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all costs, expenses, Taxes,
assessments and other charges incurred by the Administrative Agent in connection with any filing,
registration, recording or perfection of any security interest contemplated by this Agreement or
any Security Instrument or any other document referred to therein, (iii) all reasonable
out-of-pocket expenses incurred by each Issuing Bank in connection with the issuance, amendment,
renewal or extension of any Letter of Credit issued by such Issuing Bank or any demand for payment
thereunder, (iv) all out-of-pocket expenses incurred by any Agent, any Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for any Agent, any Issuing Bank or any
Lender, in connection with the enforcement or protection of its rights during the continuance of an
Event of Default in connection with this Agreement or any other Loan Document, including its rights
under this Section 11.03, or in connection with the Loans made or Letters of Credit issued
hereunder, including, without limitation, all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of Credit.




          (b) THE LOAN PARTIES SHALL INDEMNIFY EACH ARRANGER, EACH AGENT, EACH ISSUING BANK AND EACH
LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN
"INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS,
DAMAGES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY
COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER
OR THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY
ANY OTHER LOAN DOCUMENT, (ii) THE FAILURE OF THE LOAN PARTIES OR ANY SUBSIDIARY TO COMPLY WITH
THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH ANY GOVERNMENTAL REQUIREMENT,
(iii) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE LOAN
PARTIES SET FORTH IN ANY OF THE LOAN DOCUMENTS OR ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS
DELIVERED IN CONNECTION THEREWITH, (iv) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS
THEREFROM, INCLUDING, WITHOUT LIMITATION, (A) ANY REFUSAL BY ANY ISSUING BANK TO HONOR A DEMAND FOR
PAYMENT UNDER A LETTER OF CREDIT ISSUED BY SUCH ISSUING BANK IF THE DOCUMENTS PRESENTED IN
CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT, OR (B)
THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE,
NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE DOCUMENTS


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PRESENTED IN CONNECTION THEREWITH, (v) THE OPERATIONS OF THE BUSINESS OF THE LOAN PARTIES AND THE SUBSIDIARIES, (vi) ANY ASSERTION THAT
THE LENDERS WERE NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY
INSTRUMENTS, (vii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE LOAN PARTIES OR ANY SUBSIDIARY OR ANY OF
THEIR PROPERTIES, INCLUDING WITHOUT LIMITATION, THE PRESENCE, GENERATION, STORAGE, RELEASE,
THREATENED RELEASE, USE, TRANSPORT, DISPOSAL, ARRANGEMENT OF DISPOSAL OR TREATMENT OF OIL, OIL AND
GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (viii) THE BREACH OR
NON-COMPLIANCE BY THE LOAN PARTIES OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE
LOAN PARTIES OR ANY SUBSIDIARY, (ix) THE PAST OWNERSHIP BY THE LOAN PARTIES OR ANY SUBSIDIARY OF
ANY OF THEIR PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH LAWFUL AND FULLY
PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (x) THE PRESENCE, USE, RELEASE,
STORAGE, TREATMENT, DISPOSAL, GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR TRANSPORT
OR ARRANGEMENT FOR DISPOSAL OF OIL, OIL AND GAS WASTES, SOLID WASTES OR HAZARDOUS SUBSTANCES ON OR
AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE LOAN PARTIES OR ANY SUBSIDIARY OR ANY ACTUAL OR
ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE
LOAN PARTIES OR ANY OF ITS SUBSIDIARIES, (xi) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE
LOAN PARTIES OR ANY SUBSIDIARY, OR (xii) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN
CONNECTION WITH THE LOAN DOCUMENTS, OR (xiii) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION,
INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY
SHALL EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER,
WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION,
ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF
THE INDEMNITEES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE
INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO
THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES (A) ARE DETERMINED BY
A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE, (B) RELATE TO CLAIMS BETWEEN OR AMONG
ANY OF THE LENDERS, THE AGENT, ARRANGERS OR ANY OF THEIR SHAREHOLDERS, PARTNERS OR MEMBERS OR (C)
IN RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE ARISING


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FROM THE ACTS OR OMISSIONS OF THE AGENT OR
ANY LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED
POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS
MORTGAGEE-IN-POSSESSION OR OTHERWISE).




          (c) To the extent that the Borrower or the Loan Parties fail to pay any amount required to be
paid by it to any Agent or any Issuing Bank under Section 11.03(a) or (b), as applicable, each
Lender severally agrees to pay to such Agent or such Issuing Bank, as the case may be, such
Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed
expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was
incurred by or asserted against such Agent or such Issuing Bank in its capacity as such.




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




          (e) All amounts due under this Section 11.03 shall be payable promptly after written demand
therefor.




          (f) Notwithstanding any other provisions of this Section 11.03, no transfer or assignment of
the interests or obligations of any Lender or any grant of participations therein shall be
permitted if such transfer, assignment or grant would require the Loan Parties to file a
registration statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any state.




     Section 12.04 Successors and Assigns.



          (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns permitted hereby (including any
Affiliate of any Issuing Bank that issues any Letter of Credit), except that (i) the Loan Parties
may not assign or otherwise transfer (except as permitted under Section 9.11) any of their rights
or obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Loan Parties without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance
with this Section 11.04. Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of any Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in Section 11.04(c)) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, each Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.




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          (b) (i) Subject to the conditions set forth in Section 12.04(b)(ii), any Lender may assign to
one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld or delayed) of: (A) the Borrower,
provided that no consent of the Borrower shall be required for an assignment to a Lender,
an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is
continuing, any other assignee; and (B) the Administrative Agent, provided that no such
consent shall be required for an assignment to an assignee that is a Lender immediately prior to
giving effect to such assignment.





     (ii) Assignments shall be subject to the following additional conditions: (A) except
in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender’s Commitment, the amount of the Commitment
of the assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $10,000,000, and the Commitments of any assigning Lender
remaining a party hereto after giving effect to the assignment shall be at least
$10,000,000, unless, in each case, each of the Borrower, the Administrative Agent otherwise
consents, provided that no such consent of the Borrower shall be required if an
Event of Default has occurred and is continuing; (B) each partial assignment shall be made
as an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement; (C) the parties to each assignment shall execute and
deliver to the Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; (D) the assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an Administrative Questionnaire and shall deliver notice of the
Assignment and Assumption to the Borrower; and (E) in the case of an assignment to a
CLO, the assigning Lender shall retain the sole right to approve any amendment,
modification or waiver of any provision of this Agreement, provided that the
Assignment and Assumption between such Lender and such CLO may provide that such Lender will
not, without the consent of such CLO, agree to any amendment, modification or waiver
described in the first proviso to Section 11.02(b) that affects such CLO.




     (iii) Subject to Section 11.04(b)(iv) and the acceptance and recording thereof, from
and after the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement (and, in
the case of an Assignment and Assumption covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Section 4.01, Section 4.02, Section 4.03 and
Section 11.03). Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 11.04 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and obligations in
accordance with Section 11.04(c).



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




     (v) Upon its receipt of a duly completed Assignment and Assumption executed by an
assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in Section 11.04(b) and any written consent to such assignment required by
Section 11.04(b), the Administrative Agent shall accept such Assignment and Assumption and
record the information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as provided in
this Section 11.04(b).



          (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent or any
Issuing Bank, sell participations to one or more banks or other financial investors (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations, (C) the Borrower, the Administrative Agent, each Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement and (D) such Participant agrees to be bound by
Section 12.11. Any agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve
any amendment, modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the proviso to Section
12.02(b) that affects such Participant. In addition such agreement must provide that the
Participant be bound by the provisions of Section 12.03. Subject to Section 12.04(c)(ii), the
Borrower agrees that each Participant shall be entitled to the benefits of Section 5.01, Section
5.02 and Section 5.03 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to Section 12.04(b). To the extent permitted by law, each Participant also
shall be entitled to the benefits of Section 12.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 4.01(c) as though it were a Lender.





     (ii) A Participant shall not be entitled to receive any greater payment under Section
5.01 or Section 5.03 than the applicable Lender would have been entitled to receive with
respect to the participation sold to such Participant, unless the sale of the



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participation to such Participant is made with the Borrower’s prior written consent. A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 5.03 unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 5.03(e)
as though it were a Lender.



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section 11.04(d) shall not
apply to any such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.




     Section 12.05 Survival; Revival; Reinstatement.



          (a) All covenants, agreements, representations and warranties made by the Borrower herein and
in the certificates or other instruments delivered in connection with or pursuant to this Agreement
or any other Loan Document shall be considered to have been relied upon by the other parties hereto
and shall survive the execution and delivery of this Agreement and the making of any Loans and
issuance of any Letters of Credit, regardless of any investigation made by any such other party or
on its behalf and notwithstanding that the Administrative Agent, any other Agent, any Issuing Bank
or any Lender may have had notice or knowledge of any Default or incorrect representation or
warranty at the time any credit is extended hereunder, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have
not expired or terminated. The provisions of Section 4.01, Section 4.02, Section 4.03 and Section
11.03 and ARTICLE X shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Letters of Credit and the Commitments or the termination of this Agreement, any
other Loan Document or any provision hereof or thereof.




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




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     Section 12.06 Counterparts; Integration; Effectiveness.



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




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




          (c) Except as provided in Section 5.01(a), this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent shall have
received counterparts hereof which, when taken together, bear the signatures of each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.




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



     Section 12.08 Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations (of whatsoever kind, including, without
limitations obligations under Hedging Agreements) at any time owing by such Lender or Affiliate to
or for the credit or the account of the Loan Parties or any Subsidiary against any of and all the
obligations of the Loan Parties or any Subsidiary owed to such Lender now or hereafter existing
under this Agreement or any other Loan Document, irrespective of whether or not such Lender shall
have made any demand under this Agreement or any other Loan Document and although such obligations
may be unmatured. The rights of each Lender under this Section 11.08 are in addition to other
rights and remedies (including other rights of setoff) which such Lender or its Affiliates may
have.



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     Section 12.09 Governing Law; Jurisdiction; Consent to Service of
Process.



          (a) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.




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




          (c) EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 11.01 OR
SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 11.01 (OR ITS ASSIGNMENT AND ASSUMPTION),
SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF A PARTY OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY OTHER
JURISDICTION.




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



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REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS; AND (iv) ACKNOWLEDGES
THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
CONTAINED IN THIS SECTION 11.09.



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



     Section 12.11 Confidentiality. Each of the Agents, each Issuing Bank and the Lenders agrees to maintain the confidentiality of
the Information (as defined below), except that Information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants, 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 self-regulatory body, (c)
to the extent required by applicable laws or regulations or by any subpoena or similar legal
process, (d) to any other party to this Agreement or any other Loan Document, (e) in connection
with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or
proceeding relating to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same
as those of this Section 11.11, to (i) any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any Hedging Agreement relating to the
Borrower and its obligations, (g) with the consent of the Borrower or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of this Section 11.11
or (ii) becomes available to any Agent, any Issuing Bank or any Lender on a nonconfidential basis
from a source other than a Loan Party. For the purposes of this Section 11.11,
“Information” means all information received from a Loan Party or any Subsidiary relating
to a Loan Party or any Subsidiary and their businesses, other than any such information that is
available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by a Loan Party or a Subsidiary. Any Person required to maintain the
confidentiality of Information as provided in this Section 11.11 shall be considered to have
complied with its obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to its own
confidential information. Notwithstanding anything herein to the contrary, any party hereto (and
each employee, representative or other agent of such party) may disclose without limitation of any
kind, any information with respect to the “tax treatment” and “tax structure” (in each case, within
the meaning of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby and
all materials of any kind (including opinions or other tax analyses) that are provided to that
party relating to such tax treatment or tax structure; provided that with respect to any
document or similar item that in either case contains information concerning the tax treatment or
tax structure of the transactions, as well as other information, this sentence shall



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only apply to
such portions of the document or similar item that relate to the tax treatment or tax structure of
the transactions contemplated hereby.



     Section 12.12 Exculpation Provisions . EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT
AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS
RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS;
AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY
RESULT, SUBJECT TO THE TERMS HEREOF AND THEREOF AND APPLICABLE LAW, IN ONE PARTY ASSUMING THE
LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND
RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND
COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE
OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”



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



     Section 12.14 Collateral Matters; Hedging Agreements. No Lender or any Affiliate of a Lender shall have any voting rights under any Loan Document as a
result of the existence of obligations owed to it under any such Hedging Agreements.



     Section 12.15 US Patriot Act Notice. Each Lender hereby notifies the Loan Parties that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that identifies each Loan Party,
which information includes the name and address of each Loan Party and other information that will
allow such Lender to identify each Loan Party in accordance with the Patriot Act.



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     Section 12.16 Existing Credit Agreement; Existing Facility Termination. This Agreement amends and restates the Existing Credit Agreement in its entirety. On the date
of the initial funding of Loans hereunder, all amounts outstanding under the Existing Credit
Agreement shall be paid in full with the proceeds of such Loans and the “Commitments” (as defined
in the Existing Credit Agreement) thereunder shall be terminated (except as otherwise expressly
provided in Section 12.05 of the Existing Credit Agreement with respect to the survival of certain
covenants and agreements made by the Borrower and/or its Affiliates in the Existing Credit
Agreement) and the Existing Letters of Credit shall be deemed to be issued under this Agreement.
The undersigned waive any right to receive any notice of such termination and any right to receive
any notice of prepayment of amounts owed under the Existing Credit Agreement. Each Lender that was
a party to the Existing Credit Agreement hereby agrees to return to the Borrower, with reasonable
promptness, any note delivered by the Borrower to such Lender in connection with the Existing
Credit Agreement.



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



	 	 	 	 	 
	BORROWER:	 	Resolute Aneth, LLC
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Theodore Gazulis, Vice President —
	 

	 	 	 	Finance and Chief Financial Officer
	 

	 	 	 	 
	 

	 	 	 	Theodore Gazulis,
	 

	 	 	 	Vice President — Finance and Chief Financial
	 

	 	 	 	Officer






 

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	GUARANTOR:	 	Resolute Holdings Sub, LLC
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Theodore Gazulis, Vice President —
	 

	 	 	 	Finance and Chief Financial Officer
	 

	 	 	 	 
	 

	 	 	 	Theodore Gazulis,
	 

	 	 	 	Vice President — Finance and Chief Financial
	 

	 	 	 	Officer






 

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	GUARANTOR:	 	Resolute Natural Resources Company
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Theodore Gazulis, Vice President —
	 

	 	 	 	Finance and Chief Financial Officer
	 

	 	 	 	 
	 

	 	 	 	Theodore Gazulis,
	 

	 	 	 	Vice President — Finance and Chief Financial
	 

	 	 	 	Officer






 

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	GUARANTOR:	 	BWNR, LLC
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Theodore Gazulis, Vice President —
	 

	 	 	 	Finance and Chief Financial Officer
	 

	 	 	 	 
	 

	 	 	 	Theodore Gazulis,
	 

	 	 	 	Vice President — Finance and Chief Financial
	 

	 	 	 	Officer






 

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	GUARANTOR:	 	WYNR, LLC
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Theodore Gazulis, Vice President —
	 

	 	 	 	Finance and Chief Financial Officer
	 

	 	 	 	 
	 

	 	 	 	Theodore Gazulis,
	 

	 	 	 	Vice President — Finance and Chief Financial
	 

	 	 	 	Officer






 

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	ADMINISTRATIVE AGENT:	 	Wachovia Bank, National Association,

as Administrative Agent and a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Jay Chernosky, Managing Director
	 

	 	 	 	 
	 

	 	 	 	Jay Chernosky,
	 

	 	 	 	Managing Director






 

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	SYNDICATION AGENT:	 	Citigroup Global Markets Inc.,

as Syndication Agent
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Paul Sharkey, Director
	 

	 	 	 	 
	 

	 	Name:
	 	Paul Sharkey
	 

	 	Title:
	 	Director






 

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	CO-DOCUMENTATION AGENT:	 	U.S. Bank National Association,

as Co-Documentation Agent and a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Mark E. Thompson, Vice President
	 

	 	 	 	 
	 

	 	Name:
	 	Mark E. Thompson
	 

	 	Title:
	 	Vice President






 

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	CO-DOCUMENTATION AGENT:	 	Deutsche Bank Securities, Inc.,

as Co-Documentation Agent
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David E. Sisler, Director
	 

	 	 	 	 
	 

	 	Name:
	 	David E. Sisler
	 

	 	Title:
	 	Director
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Russell A. Johnson, Director
	 

	 	 	 	 
	 

	 	Name:
	 	Russell A. Johnson
	 

	 	Title:
	 	Director






 

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	CO-DOCUMENTATION AGENT:	 	Fortis Capital Corp.,

as Co-Documentation Agent and a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Scott Myatt, Vice President
	 

	 	 	 	 
	 

	 	Name:
	 	Scott Myatt
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 





 

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	LENDER:	 	Citicorp USA, Inc.,

as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ John F. Miller, Vice President
	 

	 	 	 	 
	 

	 	Name:
	 	John F. Miller
	 

	 	Title:
	 	Vice President






 

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	LENDER:	 	Deutsche Bank Trust Company Americas,

as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Saad Iqbal, Vice President
	 

	 	 	 	 
	 

	 	Name:
	 	Saad Iqbal
	 

	 	Title:
	 	Vice President
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Evelyn Thierry, Vice President
	 

	 	 	 	 
	 

	 	Name:
	 	Evelyn Thierry
	 

	 	Title:
	 	Vice President






 

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	LENDER:	 	Comerica Bank,

as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Juli Bieser, Vice President
	 

	 	 	 	 
	 

	 	Name:
	 	Juli Bieser
	 

	 	Title:
	 	Vice President






 

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	LENDER:	 	Bank of Oklahoma, N.A.,

as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Monica M. Morton,
	 

	 	 	 	Commercial Banking Officer
	 

	 	 	 	 
	 

	 	Name:
	 	Monica M. Morton
	 

	 	Title:
	 	Commercial Banking Officer






 

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	LENDER:	 	UBS LOAN FINANCE LLC,

as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Richard L. Tavrow, Director
	 

	 	 	 	 
	 

	 	Name:
	 	Richard L. Tavrow
	 

	 	Title:
	 	Director
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Irja R. Otsa, Associate Director
	 

	 	 	 	 
	 

	 	Name:
	 	Irja R. Otsa
	 

	 	Title:
	 	Associate Director






 

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	LENDER:	 	WELLS FARGO BANK, N.A.,

as a Lender
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Duc Duong, Vice President
	 

	 	 	 	 
	 

	 	Name:
	 	Duc Duong
	 

	 	Title:
	 	Vice President






 

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OMITTED SCHEDULES




          The portions identified below in the following schedules have been omitted from the Amended
and Restated Credit Agreement filed as Exhibit 10.1 to this Registration Statement on Form S-4 (File No. [___]):





	 	•	 	Exhibit A — Form of Note
	 
	 	•	 	Exhibit B — Form of Borrowing Request
	 
	 	•	 	Exhibit C — Form of Interest Election Request
	 
	 	•	 	Exhibit D — Form of Compliance Certificate
	 
	 	•	 	Exhibit E — Form of Assignment and Assumption
	 
	 	•	 	Exhibit F-1 — Form of Maximum Credit Amount Increase Certificate
	 
	 	•	 	Exhibit F-2 — Form of Additional Lender Certificate
	 
	 	•	 	Exhibit G — Security Instruments
	 
	 	•	 	Exhibit H — Account Designation Letter
	 
	 	•	 	Schedule 1.02 — Approved Counterparties
	 
	 	•	 	Schedule 2.08 — Existing Letters of Credit
	 
	 	•	 	Schedule 7.03 — Post Closing Consents
	 
	 	•	 	Schedule 7.05 — Litigation
	 
	 	•	 	Schedule 7.15 — Subsidiaries and Partnerships
	 
	 	•	 	Schedule 7.16 — Location of Business and Offices
	 
	 	•	 	Schedule 7.17 — Properties
	 
	 	•	 	Schedule 7.19 — Gas Imbalances
	 
	 	•	 	Schedule 7.20 — Marketing Contracts
	 
	 	•	 	Schedule 7.21 — Hedging Agreements
	 
	 	•	 	Schedule 8.13 — Unrecorded Documents
	 
	 	•	 	Schedule 8.16 — Hedging Requirements
	 
	 	•	 	Schedule 9.05 — Investments





          Resolute Aneth, LLC agrees to furnish supplementally a copy of any omitted schedule to the
Security and Exchange Commission upon request.





 

Resolute Aneth, LLC

Amended & Restated Credit Agreement